<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 12, 1995
DIMENSIONAL VISIONS GROUP, LTD.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-10196 23-2517953
-------- ------- ----------
State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization
718 Arch Street, Suite 202N, Philadelphia, PA 19106
----------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number: (215) 440-7791
--------------
--------------------------------------------------------------
(Former name or former address, if changed since last report)
================================================================================
<PAGE> 2
ITEM 2.
On September 12, 1995, pursuant to the terms and conditions of an
Agreement and Plan of Merger dated September 6, 1995 (the "Agreement"),
registrant acquired all the issued and outstanding capital stock of InfoPak,
Inc. ("InfoPak") in consideration for 500,000 shares of registrant's Series P
Convertible Preferred Stock (the "Series P Stock"). Each share of Series P
Stock is convertible into 10 shares of registrant's Common Stock. The Series P
Stock has voting rights.
The amount of consideration was determined by negotiations between the
registrant and InfoPak. Among the factors considered in determining the
consideration was the historic revenues, management and technologies of
InfoPak. Avonwood Capital Corporation ("Avonwood") acted as an advisor to the
registrant and to InfoPak. Avonwood was a shareholder of InfoPak. Mr. James
W. Porter, Jr., a Director of the registrant, is the President and the
principal shareholder of Avonwood.
The business of InfoPak consists of the manufacture and marketing of
hardware and software information and audio playback systems and method
products and programs.
InfoPak was founded in 1992. InfoPak has developed a system that
allows those that use large and cumbersome printed dated material an electronic
alternative which is easier to use. The InfoPak Information System (the
"System") was designed to manage voluminous databases that change often and to
distribute information to remote locations where the System utilizes standard
telephone lines and personal computers (PC's) to distribute the information.
Information is stored on an InfoCard(TM) and displayed by a hand-held
InfoReader(TM). The System has been designed to provide the owners and
publishers of the information many levels of security to ensure that piracy and
unauthorized use does not occur. In essence, InfoPak distributes data
electronically then repackages directories onto InfoCards(TM) to be used in
InfoReaders(TM).
InfoPak currently produces and markets the System to the residential
real estate agent marketplace as the InfoPak Portable MLS. InfoPak is selling
the Portable MLS to Realtors(R) as an option to the printed Multiple Listing
Service Directory. The InfoCard(TM) stores the real estate listings and the
operating program for portable access through the InfoReader(TM).
<PAGE> 3
ITEM 7.
FINANCIAL STATEMENTS AND EXHIBITS
(a) The audited financial statements for the year ended December
31, 1994 of Infopak, Inc. will be filed by amendment.
(b) Pro Forma Financial Information.
The pro forma financial information required by this Item 7
are not being filed herein inasmuch as they are currently being prepared by the
registrant. Such pro forma financial information will be filed by amendment.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Title
-------------- -----
<S> <C> <C>
"A" Agreement and Plan of Merger By and
Among InfoPak, Inc., Certain
Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co. and
Dimensional Visions Group, Ltd.
* "B" InfoPak, Inc. Financial Statements
for the year ended December 31,
1994.
* "C" Pro Forma Financial Statements.
</TABLE>
- - - ------------------------------
* To be filed by amendment
3
<PAGE> 4
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
DIMENSIONAL VISIONS GROUP, LTD.
Dated: September 27, 1995 By:/s/ Steven M. Peck
--------------------------
Steven M. Peck
Chief Executive Officer
4
<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 12, 1995
DIMENSIONAL VISIONS GROUP, LTD.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-10196 23-2517953
-------- ------- ----------
State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization
718 Arch Street, Suite 202N, Philadelphia, PA 19106
----------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number: (215) 440-7791
--------------
--------------------------------------------------------------
(Former name or former address, if changed since last report)
================================================================================
<PAGE> 2
ITEM 2.
On September 12, 1995, pursuant to the terms and conditions of an
Agreement and Plan of Merger dated September 6, 1995 (the "Agreement"),
registrant acquired all the issued and outstanding capital stock of InfoPak,
Inc. ("InfoPak") in consideration for 500,000 shares of registrant's Series P
Convertible Preferred Stock (the "Series P Stock"). Each share of Series P
Stock is convertible into 10 shares of registrant's Common Stock. The Series P
Stock has voting rights.
The amount of consideration was determined by negotiations between the
registrant and InfoPak. Among the factors considered in determining the
consideration was the historic revenues, management and technologies of
InfoPak. Avonwood Capital Corporation ("Avonwood") acted as an advisor to the
registrant and to InfoPak. Avonwood was a shareholder of InfoPak. Mr. James
W. Porter, Jr., a Director of the registrant, is the President and the
principal shareholder of Avonwood.
The business of InfoPak consists of the manufacture and marketing of
hardware and software information and audio playback systems and method
products and programs.
InfoPak was founded in 1992. InfoPak has developed a system that
allows those that use large and cumbersome printed dated material an electronic
alternative which is easier to use. The InfoPak Information System (the
"System") was designed to manage voluminous databases that change often and to
distribute information to remote locations where the System utilizes standard
telephone lines and personal computers (PC's) to distribute the information.
Information is stored on an InfoCard(TM) and displayed by a hand-held
InfoReader(TM). The System has been designed to provide the owners and
publishers of the information many levels of security to ensure that piracy and
unauthorized use does not occur. In essence, InfoPak distributes data
electronically then repackages directories onto InfoCards(TM) to be used in
InfoReaders(TM).
InfoPak currently produces and markets the System to the residential
real estate agent marketplace as the InfoPak Portable MLS. InfoPak is selling
the Portable MLS to Realtors(R) as an option to the printed Multiple Listing
Service Directory. The InfoCard(TM) stores the real estate listings and the
operating program for portable access through the InfoReader(TM).
<PAGE> 3
ITEM 7.
FINANCIAL STATEMENTS AND EXHIBITS
(a) The audited financial statements for the year ended December
31, 1994 of Infopak, Inc. will be filed by amendment.
(b) Pro Forma Financial Information.
The pro forma financial information required by this Item 7
are not being filed herein inasmuch as they are currently being prepared by the
registrant. Such pro forma financial information will be filed by amendment.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Title
-------------- -----
<S> <C> <C>
"A" Agreement and Plan of Merger By and
Among InfoPak, Inc., Certain
Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co. and
Dimensional Visions Group, Ltd.
* "B" InfoPak, Inc. Financial Statements
for the year ended December 31,
1994.
* "C" Pro Forma Financial Statements.
</TABLE>
- - - ------------------------------
* To be filed by amendment
3
<PAGE> 4
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
DIMENSIONAL VISIONS GROUP, LTD.
Dated: September 27, 1995 By:/s/ Steven M. Peck
--------------------------
Steven M. Peck
Chief Executive Officer
4
<PAGE> 5
- - - -------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INFOPAK, INC.
CERTAIN SHAREHOLDERS OF INFOPAK, INC.
INFOPAK ACQUISITION CO.
AND
DIMENSIONAL VISIONS GROUP, LTD.
DATED SEPTEMBER 6, 1995
- - - -------------------------------------------------------------------------------
EXHIBIT "A"
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1.
THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2.
CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Conversion Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Conversion Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Closing Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Effect of Conversion on InfoPak Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 3.
CLOSING OBLIGATIONS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Obligations of the Parties at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 4.
INFOPAK'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Existence and Good Standing of InfoPak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.7 Title to Properties; Encumbrance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.13 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.16 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.17 Employment and Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.19 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.20 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.21 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 7
<TABLE>
<S> <C>
4.22 Product Liability; Warranty Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.23 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.24 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.26 Accuracy of Warranties 18
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF DVG AND BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Existence and Good Standing of DVG and Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.6 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.7 Title to Properties; Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.8 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.9 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.10 No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.13 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.16 Employment and Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.18 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.19 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.20 Product Liability; Warranty Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.21 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.22 SEC Filings; Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.23 Increase in Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.24 Accuracy of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 6.
CONDUCT OF BUSINESS; EXCLUSIVE DEALING; REVIEW;
ADDITIONAL AGREEMENTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.2 Maintain Business as Going Concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.3 Exclusive Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.4 Due Diligence Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.5 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.6 Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.7 Proxy Materials and Investment Representation Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.8 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.9 Recapitalization of InfoPak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.10 InfoPak Distributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
ii
<PAGE> 8
<TABLE>
<S> <C>
ARTICLE 7.
CONDITIONS TO DVG'S AND BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.1 InfoPak Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.3 Truth or Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.4 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.5 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.6 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.7 Registration Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.8 Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.9 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 Cancellation of Funding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 Cancellation of Royalty and Promissory Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 8.
CONDITIONS TO INFOPAK'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 DVG and Buyer Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2 Truth of Representation and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.5 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.6 Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.7 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.8 Approval of Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 9.
EVENTS OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.1 Events of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 10.
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.1 Indemnification of DVG and Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.2 Indemnification of InfoPak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.3 Method of Asserting Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.4 Survival of Representations and Warranties of InfoPak . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.5 Survival of Representations and Warranties of DVG and Buyer . . . . . . . . . . . . . . . . . . . . . . . 36
10.6 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 11.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.1 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
iii
<PAGE> 9
<TABLE>
<S> <C>
11.2 Board Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.3 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.4 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.6 "Person" Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.7 Captions; Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.9 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.10 Bulk Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.11 Post-Closing Remittances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.12 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.13 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.14 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.15 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.16 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.17 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.18 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.19 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.20 Termination of InfoPak Shareholders' Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
iv
<PAGE> 10
LIST OF SCHEDULES
<TABLE>
<S> <C>
Schedule 1.1 Certificate of Merger
Schedule 2.1 Certificate of Designation for
Series P preferred stock
Schedule 2.3 Excluded Liabilities
Schedule 2.3(b) Certificate of InfoPak
Schedule 3.2(a)(iv) Opinion of DVG's and Buyer's Counsel
Schedule 3.2(a)(vi)(A) Sean Lee Employment Agreement
Schedule 3.2.(a)(vi)(B) Bruce Sandig Employment Agreement
Schedule 3.2.(a)(vi)(C) John Matlock Employment Agreement
Schedule 3.2(a)(vi)(D) Ronnie Matlock Employment Agreement
Schedule 3.2(a)(vi)(E) Roy Pringle Employment Agreement
Schedule 3.2(a)(vi)(F) Paul Damiani Employment Agreement
Schedule 3.2(a)(vi)(G) Timothy Wright Consulting Agreement
Schedule 3.2.(a)(vii) Pledge Agreement
Schedule 3.2(b)(iv) Opinion of InfoPak's Counsel
Schedule 4.2 Existence and Good Standing of InfoPak
Schedule 4.2(a) Power of Attorney
Schedule 4.5 Liabilities and Obligations of InfoPak
Schedule 4.6 Absence of Certain Changes of InfoPak
Schedule 4.7 Title to Properties; Encumbrances of
InfoPak
Schedule 4.8 Leases of InfoPak
Schedule 4.9 Material Contracts of InfoPak
Schedule 4.10 No Violations of InfoPak
Schedule 4.11 Litigation of InfoPak
Schedule 4.12 Taxes of InfoPak
Schedule 4.13 Conduct of Business of InfoPak
Schedule 4.14 Intellectual Property of InfoPak
Schedule 4.15 Compliance with Laws of InfoPak
Schedule 4.16 Employee Benefit Plans of InfoPak
Schedule 4.17 Schedule of Employees of InfoPak
Schedule 4.18 Insurance of InfoPak
Schedule 4.19 Approvals of InfoPak
Schedule 4.21 Environmental Compliance of InfoPak
Schedule 4.22 Product Liability; Warranty Liability of InfoPak
Schedule 4.23 Affiliate Transactions
Schedule 4.24 Capitalization of InfoPak
Schedule 4.24(a) Voting, Proxies and Other Agreements
Schedule 5.2 Existence and Good Standing of DVG
Schedule 5.3 Capitalization of DVG
Schedule 5.6 Absence of Certain Changes of DVG
Schedule 5.7 Title to Properties; Encumbrances of DVG
Schedule 5.8 Leases of DVG
</TABLE>
v
<PAGE> 11
<TABLE>
<S> <C>
Schedule 5.9 Material Contracts of DVG
Schedule 5.10 No Violations of DVG
Schedule 5.11 Litigation of DVG
Schedule 5.12 Taxes of DVG
Schedule 5.13 Intellectual Property of DVG
Schedule 5.14 Compliance with Laws of DVG
Schedule 5.15 Employee Benefit Plans of DVG
Schedule 5.16 Employment and Labor Matters of DVG
Schedule 5.18 Approvals of DVG
Schedule 5.20 Product Liability; Warranty Liability of DVG
Schedule 6.7 Investment Representation Letter
Schedule 6.9 Recapitalization
Schedule 7.11 Notes Not Cancelled
</TABLE>
vi
<PAGE> 12
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Defined Term Section
------------ -------
<S> <C>
"Accounting Firm" 2.3
"DVG" Preamble
"DVG Approvals" 5.18
"DVG Common Shares" 2.2(1)
"DVG Financial Statements" 5.4
"Board" 6.11
"Business" Preamble
"Buyer" Preamble
"Claim" 10.3
"Closing Balance Sheet" 2.3
"Closing Date" 3.1
"Closing Date Merger Consideration" 2.2(1)
"Closing" 3.1
"Code" Preamble
"Computer Software" 4.14
"Conversion Amount" 2.1
"Documentation" 4.14
"Effective Time" 1.2(a)
"Employment Agreements" 3.2(a)(vi)
"ERISA" 4.16(a)
"Excluded Liabilities" 2.3
"GAAP" 4.4
"Hazardous Substances" 4.21(a)
"Indemnifying Shareholders" 3.2(a)(vii)
"Intellectual Property" 4.14(a)
"Investment Representation Letter" 6.7
"Knowledge of" 11.1
"Merger" 1.1
"PBGC" 4.16(b)
"Permitted Liens" 4.8
"Person" 11.6
"Plans" 4.16(a)
"Pledge Agreement" 3.2(a)(vii)
"Preferred" 5.3
"Proxy Statement" 6.7
"Recapitalization" 6.9
"Returns" 4.12
"Review" 7.7
"Series A Preferred" 5.3(b)
"Series B Preferred" 5.3(c)
"Surviving Corporation" 1.1
"InfoPak" Preamble
"InfoPak Approvals" 4.19
"InfoPak Employees" 4.17(a)
</TABLE>
vii
<PAGE> 13
<TABLE>
<S> <C>
"InfoPak Financial Statements" 4.4
"InfoPak Information" 6.7
"InfoPak Stock" 2.1
"InfoPak Shareholders" Preamble
"Taxes" 4.12
"Transaction Taxes" 11.3
</TABLE>
viii
<PAGE> 14
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is dated as of September 6,
1995, by and among InfoPak, Inc. an Arizona corporation ("InfoPak"), the
shareholders of the InfoPak listed on the signature page hereto (the "InfoPak
Shareholders"), INFOPAK ACQUISITION CO., a Delaware corporation ("Buyer") and
DIMENSIONAL VISIONS GROUP, INC., a Delaware corporation ("DVG"). For purposes
of this Agreement, the "parties" shall mean InfoPak and InfoPak Shareholders,
on the one hand, and Buyer and DVG, on the other hand.
WITNESSETH:
WHEREAS, InfoPak is engaged in the business of manufacturing
and marketing hardware and software information and recordable microchip and
audio playback systems and method products and programs (the "Business").
WHEREAS, Buyer desires to merge with and into InfoPak at the
Closing, as hereinafter defined, and InfoPak desires Buyer to merge with and
into it, all as more fully described herein, upon and subject to the terms and
conditions contained in this Agreement.
WHEREAS, the InfoPak Shareholders, in the aggregate, will own,
as of the Closing, 74% of the issued and outstanding capital stock of InfoPak.
WHEREAS, DVG is the record and beneficial owner of all the
issued and outstanding capital stock of Buyer.
WHEREAS, InfoPak wishes to have such transaction qualify under
Section 368(a)(l)(A) of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties and covenants which are made and to be
performed by the respective parties hereto, it is hereby agreed as follows:
ARTICLE 1.
THE TRANSACTION
1.1 The Merger. At the Effective Time as such term is
defined in Section 1.2 below, Buyer will merge with and into
<PAGE> 15
InfoPak (the "Merger") in accordance with the terms and conditions of this
Agreement, as set forth in the Certificate of Merger attached hereto as
Schedule 1.1. Infopak shall be the surviving corporation of the Merger (the
"Surviving Corporation") and shall be governed by the laws of the State of
Delaware and Arizona after the closing.
1.2 Effect of the Merger.
(a) Effective Time. The Certificate of Merger
shall be executed and verified on the Closing Date by each party to the Merger
and thereafter delivered to the Secretary of State of the State of Delaware and
the State of Arizona, as the case may be, for filing and recording in
accordance with applicable law as soon as practicable on or after the Closing
Date. The Merger shall become effective for purposes of the laws of the State
of Delaware at the date and time of the completion of the filing of the
certificate of merger as set forth above (the "Effective Time").
(b) Certificate of Incorporation of the Surviving
Corporation. The certificate of incorporation of the Surviving Corporation
shall be the certificate of incorporation of Buyer immediately prior to the
Effective Time.
(c) By-Laws of the Surviving Corporation. The
bylaws of the Surviving Corporation shall be the bylaws of Buyer immediately
prior to the Effective Time.
(d) Board of Directors and Officers of the
Surviving Corporation. The members of the board of directors and officers of
Buyer immediately prior to the Effective Time shall become the board of
directors and the officers of the Surviving Corporation, respectively,
immediately upon the Effective Time, and such persons shall serve in such
positions for the prospective terms provided by law or in the bylaws of the
Surviving Corporation and until their respective successors are elected and
qualified.
ARTICLE 2.
CONVERSION
2.1 Conversion Amount. The aggregate consideration for
all of the issued and outstanding capital stock of InfoPak immediately before
the Merger (the "InfoPak Stock") is the aggregate amount of DVG Series P Shares
as defined below and as set forth in Section 2.2 below (the "Conversion
Amount"). Schedule 2.1 sets forth the terms of the DVG Series P Shares.
2
<PAGE> 16
2.2 Conversion Terms. The InfoPak Stock shall be
converted as follows:
At Closing, DVG will deliver certificates representing, in the
aggregate, 500,000 shares of DVG's, $20.00 par value Series P. Convertible
Preferred Stock ("DVG Series P Shares"), (the "Closing Date Merger
Consideration"), each share of the DVG Series P Shares shall be convertible
into ten (10 ) shares of DVG Common Stock in such denominations and registered
in such names as DVG is directed by InfoPak. Of the 500,000 shares, 50,000
shares will be retained by DVG pursuant to the terms of the Pledge Agreement as
set forth in Schedule 3.2(a)(vii).
The aggregate numbers of DVG Series P Shares to be delivered by DVG
pursuant to Section 2.2 hereof shall be reduced to reflect the fact that, in
lieu of issuing fractional shares, DVG shall pay cash equal to the fraction
multiplied by $20.00, in accordance with the directions given by InfoPak
pursuant to Section 2.2 hereof.
2.3 Closing Balance Sheet. Within fifteen (15) business
days after the Closing Date, InfoPak shall deliver to Buyer and DVG a balance
sheet of InfoPak as of the Closing Date (the "Closing Balance Sheet"), which
Closing Balance Sheet shall be prepared in a manner consistent with generally
accepted accounting principles consistently applied with the principles used in
the preparation of the InfoPak Financial Statements (as hereinafter defined),
along with the certificate of InfoPak to such effect as set forth in Schedule
2.3. All working papers of InfoPak relevant to the foregoing shall be made
available to Buyer and DVG during the five (5) business day period after
Buyer's and DVG' receipt of the Closing Balance Sheet. The Closing Balance
Sheet shall be conclusive for the purposes hereof, except to the extent, if
any, that Buyer and DVG shall deliver in writing to the Shareholders within
ten (10) business days after delivery to Buyer and DVG of the Closing Balance
Sheet, a statement taking exception, in whole or in part, to the Closing
Balance Sheet; and such exception statement of Buyer and DVG shall specify the
nature and extent of such exception. In the event any such exception shall be
so taken by Buyer and DVG, Buyer and DVG and the InfoPak Shareholders shall
seek to agree upon the proper treatment of the item or items subject to such
exception, and failing such agreement as to any such item or items within five
(5) business days after the delivery of Buyer's and DVG' objection, shall
submit to Buyer's independent auditors (the "Accounting Firm"), for final and
binding determination, the question of the proper treatment of such item or
items in determining the accuracy of the Closing Balance Sheet. All working
papers of InfoPak relevant to the item or items submitted to the Accounting
Firm for determination shall be made available to the Accounting Firm and
one-half of all charges of the
3
<PAGE> 17
Accounting Firm shall be borne equally by Buyer and DVG, and one-half shall be
paid by the InfoPak Shareholders. Any agreement by Buyer and DVG and InfoPak
Shareholders as to the proper treatment of any item to which Buyer and DVG
shall have taken exception as above provided, and any determination by the
Accounting Firm as to the proper treatment of any such item submitted to it for
determination, shall be conclusive for the purposes hereof.
Any liabilities or obligations of InfoPak on the Closing Date,
as set forth on the Closing Balance Sheet, that are (i) not reflected in the
InfoPak Financial Statements; (ii) not disclosed on Schedule 4.5 hereto; (iii)
not incurred in the ordinary course of business since August 31, 1995 and of
the same nature as those set forth on the InfoPak Financial Statements; (iv)
pursuant to certain promissory notes issued by InfoPak as set forth in Schedule
2.3(b) are referred to herein as "Excluded Liabilities" and will result in a
decrease in the Conversion Amount as provided in Section 2.2 hereof.
Within five (5) business days after the final determination of
the Closing Balance Sheet pursuant to Section 2.3 hereof, DVG will deliver in
trust pursuant to the Pledge Agreement set forth in Schedule 3.2(a)(vii)
Certificates representing in the aggregate (i) 50,000 indemnity shares minus
(ii) the number of DVG Series P Shares determined by dividing (a) the amount of
Excludable Liabilities (as defined herein), if any, determined pursuant to
Section 2.3 hereof by (b) $20.00.
2.4 Effect of Conversion on InfoPak Stock. All shares of
InfoPak Stock, when so converted at the Effective Time, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist.
ARTICLE 3.
CLOSING OBLIGATIONS OF THE PARTIES
3.1 Closing Date. The closing (the "Closing") shall take
place and be effective for all purposes at 10:00 am., local time, on September
15, 1995 at the offices of DVG, Philadelphia, Pennsylvania, or at such other
time and place as the parties hereto mutually agree (the "Closing Date").
3.2 Obligations of the Parties at the Closing.
(a) At the Closing, DVG and/or Buyer, as the case
may be, shall deliver to InfoPak (or InfoPak's agent):
4
<PAGE> 18
(i) the Closing Date Merger Consideration (as
defined in Section 2.2);
(ii) copies of resolutions of the Board of
Directors of DVG and Buyer, certified by
their respective Secretaries, authorizing the
execution, delivery and performance of this
Agreement and the other documents referred to
herein to be executed by DVG and Buyer, and
the consummation of the transactions
contemplated hereby and thereby;
(iii) certificates of the officers of DVG and Buyer
in accordance with Sections 8.2 and 8.3;
(iv) the opinion of Clark, Ladner, Fortenbaugh &
Young, legal counsel for DVG and Buyer, the
terms of which are substantially as set forth
in Schedule 3.1 (a)(iv);
(v) [Intentionally omitted.]
(vi) executed counterparts of employment
agreements (the "Employment Agreements")
between Infopak and each of Sean Lee, Bruce
Sandig, John Matlock, Ronnie Matlock, Paul
Damiani, Roy Pringle and the Consulting
Agreement of Timothy Wright in, substantially
the forms set forth on Schedule
3.2(a)(vi)(A), (B), (C), (D), (E), (F) and
(G) respectively;
(vii) an executed counterpart of a pledge agreement
(the "Pledge Agreement") among the InfoPak
Shareholders (the "Indemnifying
Shareholders"), on the one hand, and DVG and
Buyer, on the other hand, in substantially
the form set forth as Schedule 3.2(a)(vii);
(viii) such other certificates and documents as
InfoPak or its counsel may reasonably
request, none of which shall include any
representation, warranty or covenant by DVG
or Buyer beyond those made herein or any
other provision more favorable to InfoPak
then those contained herein.
(b) At the Closing, InfoPak will deliver or will
cause to be delivered to DVG and/or Buyer:
5
<PAGE> 19
(i) certificates representing the InfoPak Stock
evidencing all equity interests in InfoPak,
properly endorsed in blank for transfer,
together with any stock transfer powers or
other instruments, appropriately executed, as
may be necessary to transfer the InfoPak
Stock to Buyer;
(ii) an officers certificate (or certificates) of
InfoPak in accordance with Sections 7.3 and
7.4;
(iii) copy of resolutions of the Board of Directors
and shareholders of InfoPak, certified by
InfoPak's Secretary, authorizing the
execution, delivery and performance of this
Agreement and the other documents referred to
herein to be executed by InfoPak, and the
consummation of the transactions contemplated
hereby and thereby;
(iv) the opinion of Chapman and Cutler, legal
counsel for InfoPak and the InfoPak
Shareholders, the terms of which are
substantially as set forth in Schedule
3.2(b)(iv);
(v) executed counterparts by Sean Lee Bruce
Sandig, John Matlock, Ronnie Matlock, Paul
Damiani and Roy Pringle of their respective
Employment Agreements;
(vi) Investment Representation Letters (as defined
and described in Section 6.7) executed by
each shareholder of InfoPak;
(vii) the stock books, stock ledgers, minute books,
bylaws, certificate of incorporation, seal
and all original financial, accounting,
personnel, engineering, licensing, marketing
and other corporate records of InfoPak,
including but not limited to, invoices,
checks, bank statements, vendor statements,
journals, general ledgers, software and the
related hardware where such records are
maintained and processed, aging, cash
receipts records and vouchers;
6
<PAGE> 20
(viii) executed counterparts of the Pledge
Agreement; and
(ix) such other certificates and documents as DVG
and Buyer or their counsel may reasonably
request, none of which shall include any
representation, warranty or covenant by
InfoPak beyond those made herein or any other
provision more favorable to DVG or Buyer that
those contained herein.
3.3 Further Assurances. If at any time after the Closing
Date DVG or Buyer shall consider or be advised that any further assurances in
law or any other acts are reasonably necessary, desirable or proper to carry
out the purposes of this Agreement, InfoPak agrees that it shall, and, in the
case of documents requiring the execution and delivery by any third party,
shall use its best efforts to cause such party to, execute and to deliver all
such assurances in law and do all acts reasonably necessary, desirable or
proper to carry out the purposes of this Agreement.
ARTICLE 4.
INFOPAK'S REPRESENTATIONS AND WARRANTIES
InfoPak represents and warrants to DVG and Buyer as follows:
4.1 Authorization. InfoPak has full corporate power and
authority to enter into this Agreement, to perform its obligations hereunder
and to carry out the transactions contemplated hereby. This Agreement has been
duly authorized and approved by all requisite corporate action of InfoPak.
This Agreement constitutes the valid and binding agreement of the InfoPak,
enforceable against InfoPak in accordance with its terms.
4.2 Existence and Good Standing of InfoPak. InfoPak is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Arizona and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. InfoPak is duly qualified or licensed as a corporation
to do business, and is in good standing in each jurisdiction in which the
character or location of the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be so duly qualified or licensed would not have a
material adverse effect on the assets, business, financial condition or results
of operations
7
<PAGE> 21
of InfoPak. Set forth on Schedule 4.2 attached hereto is each jurisdiction in
which InfoPak is qualified or licensed to do business as a foreign corporation.
4.3 No Subsidiaries. InfoPak does not have any direct or
indirect equity or other ownership interest in any other corporation,
partnership, joint venture or other business organization.
4.4 Financial Statements. InfoPak has heretofore
furnished DVG and Buyer with a balance sheet of InfoPak as of December 31,
1994, 1993 and 1992, and the related statements of income and cash flows for
the InfoPak for the years then ended, together with the audit report of Biller,
Frith-Smith & Archibald with respect thereto, together with an unaudited
balance sheet of InfoPak as at August 31, 1995 and the related statements of
income and cash flows for InfoPak for the period then ended (collectively, the
"InfoPak Financial Statements"). Such InfoPak Financial Statements, including
the footnotes thereto, except as indicated therein, have been prepared in
accordance with generally accepted accounting principles ("GAAP"), applied on a
consistent basis for all periods presented and fairly present in all material
respects the financial condition and results of the operations of the InfoPak
and its financial position for such periods.
4.5 Liabilities and Obligations. InfoPak has no
liabilities or obligations (direct or indirect, contingent or absolute, matured
or unmatured) of any nature whatsoever, whether arising out of contract, tort,
statute or otherwise, which are not reflected, reserved against or given effect
to in the InfoPak Financial Statements except: (a) liabilities and obligations
which are specifically disclosed in Schedule 4.5 attached hereto; or (b)
liabilities and obligations incurred in the ordinary course of business since
August 31, 1995, which are of the same nature as those set forth on the InfoPak
Financial Statements. The InfoPak Financial Statements contain, as may be
required, reserves for liabilities or obligations of Infopak in accordance with
GAAP.
4.6 Absence of Certain Changes. Except as disclosed in
Schedule 4.6 attached hereto since August 31, 1995, there has not been: (a) any
adverse material change in the condition (financial or otherwise) of the
properties, assets, liabilities, results of operation or business prospects of
InfoPak; (b) any material damage, destruction or loss (whether or not covered
by insurance) adversely affecting the properties, assets, liabilities,
financial condition, results of operations or business prospects of the
InfoPak; (c) any material increase in the compensation, commissions or
perquisites payable to or to become payable by InfoPak to any director, officer
or employee of InfoPak, or any payment of any
8
<PAGE> 22
bonus, profit sharing or other extraordinary compensation to any employee of
InfoPak (other than any such increase or payment paid or to become payable in
the ordinary course of business consistent with past practices); (d) any
declaration, setting aside, or payment of any dividend or other distribution by
InfoPak, in respect of its capital stock, or any direct or indirect redemption,
retirement, purchase or other acquisition of any of such stock, or any issuance
of shares of stock or the granting, issuance or exercise of any right, warrant,
option or similar commitment relating to any of InfoPak's authorized or issued
capital stock; (e) any change in the accounting methods or practices followed
by InfoPak or any change in depreciation or amortization policies or rates
theretofore adopted; (f) any cancellation of any debts owed to or claims held
by InfoPak; or (g) any sale, lease, abandonment or other disposition by InfoPak
of any real property, or, other than in the ordinary course of business, of any
machinery, equipment or other operating properties, or of any intangible
assets.
4.7 Title to Properties; Encumbrance. Except as set forth
in Schedule 4.7 attached hereto, InfoPak has good and marketable title to all
of the assets used in the Business, including, without limitation, all the
material properties and assets reflected in the InfoPak Financial Statements,
subject to no encumbrance, lien, charge or other restriction of any kind or
character, except for (a) liens reflected in the InfoPak Financial Statements
or on Schedule 4.7, (b) liens consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on the use of real
property or irregularities in title thereto which do not materially detract
from the value of, or impair the use of, such property by InfoPak, (c) liens
for current taxes, assessments or governmental charges or levies on property
not yet due and delinquent and (d) liens which do not materially affect the
operation of the Business (liens of the type described in clauses (a) through
(d) above, inclusive, are hereinafter sometimes referred to as "Permitted
Liens"). Except as set forth in Schedule 4.7, InfoPak's assets are in good
working order and condition, ordinary wear and tear excepted.
4.8 Leases. Schedule 4.8 attached hereto contains a list
of all leases to which the InfoPak is a party. Each lease set forth in
Schedule 4.8 is in full force and effect; all rents and additional rents due to
date on each such lease have been paid; in each case, InfoPak has not received
notice that it is in default thereunder; and there exists no event, occurrence,
condition or act (including the Merger hereunder), which, with the giving of
notice, the lapse of time or the happening of any further event or condition,
would become a default by the InfoPak under such lease.
9
<PAGE> 23
4.9 Material Contracts. Except as set forth in
Schedule 4.8, 4.9, or 4.14 attached hereto, InfoPak neither has nor is bound by
any of the following:
(a) any agreement, contract or commitment
relating to employment, consulting or service relationship of any Person with
InfoPak which (i) has a term in excess of one year or (ii) requires or could
require payments by InfoPak in excess of $10,000;
(b) any agreement, contract or commitment limiting the
freedom of InfoPak to engage in any line of business or to compete with any
other Person;
(c) any agreement, contract or commitment, including
those entered into in the ordinary course of business, which involves payment
by InfoPak of $10,000 or more in any calendar year and is not cancelable by
InfoPak without penalty within 30 days.
(d) any agreement, contract or commitment for leasing
personal property (including, without limitation, leases for machinery and
office equipment, furniture, fixtures, vehicles and tools) which individual
lease requires an annual payment in excess of $10,000 or the term of which at
any time exceeds one year;
(e) any agreement, contract or commitment providing for
the services of dealers, distributors, sales representatives or similar
representatives involving the payment or receipt by InfoPak in excess of
$10,000 per annum with regard to any one dealer, distributor, sales
representative or similar representative;
(f) any agreement, contract or commitment relating to the
ownership, use or licensing of any Intellectual Property or confidential
processes, know-how, inventions, discoveries or formulae; or
(g) any other agreement that is material to InfoPak or to
the Business.
Neither InfoPak nor, to InfoPak's knowledge, any other party
thereto, has violated any term or condition of any contract or agreement set
forth in Schedule 4.8, 4.9 or 4.14 in any material respect.
4.10 No Violations. Except as set forth in Schedule 4.10
attached hereto, the execution and delivery of this Agreement by InfoPak and
the consummation of the transactions contemplated hereby (a) will not violate
any provision of the organizational documents of InfoPak, (b) will not violate
any statute, rule, regulation, order or decree of any public body or authority
by
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<PAGE> 24
which InfoPak is bound or which is binding upon any of its properties or assets
and (c) will not result in a violation or breach of, or constitute a default
under, any license, franchise, permit, indenture, agreement or other instrument
to which InfoPak is a party, or by which InfoPak or any of its assets or
properties is bound.
4.11 Litigation. Except as set forth in Schedule 4.11
attached hereto, (a) there is no action, suit or proceeding at law or in equity
by any Person or any arbitration or any administrative or other proceeding by
or before any governmental or other instrumentality or agency, pending, or, to
the knowledge of InfoPak, threatened against InfoPak or its officers or
directors; (b)none of such disclosed actions could have a adverse effect upon
the assets, financial condition, results of operations or prospects of InfoPak
or the right to conduct the Business as presently conducted; and (c) there are
no judgments, consents, decrees, injunctions, or any other judicial or
administrative mandates outstanding against InfoPak.
4.12 Taxes. InfoPak has filed or caused to be filed, or
will file or cause to be filed on or prior to the Closing Date, all federal,
state, and local income, excise, property, sales, use, privilege, value added,
information, payroll and other tax returns and tax reports, computations and
notices which are required to be filed by, or with respect to, InfoPak on or
prior to the Closing Date (taking into account any extension of time to file
granted to or on behalf of InfoPak) (collectively, the "Returns"). Except as
set forth in Schedule 4.12 attached hereto, all federal, state and local
income, excise, property, sales, use, privilege, value added, information,
payroll and other taxes (including interest and penalties) ("Taxes") owed for
years, or portions of years, prior to Closing (whether stated on a filed Return
or found to be owed in a subsequent audit), with respect to the InfoPak have
been, or prior to the Closing Date will be, paid. Except as disclosed on
Schedule 4.12, (a) there are no waivers in effect of the applicable statutory
period of limitations for federal income taxes of InfoPak for any taxable
period, and (b) no deficiency assessment or proposed adjustment with respect to
any tax liability of InfoPak for any taxable period is pending or, to the
knowledge of InfoPak, threatened. The accrued liabilities for Taxes set forth
on the June 30, 1995 InfoPak Balance Sheet reflect all liabilities for Taxes
payable by InfoPak through June 30, 1995. Except as disclosed in Schedule 4.12
there are no tax liens on any of the InfoPak's assets, except for liens for
current taxes not yet due and payable.
4.13 Conduct of Business. Since June 30, 1995, and except
as set forth in Schedule 4.13 attached hereto or as contemplated or expressly
required or permitted by this Agreement,
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InfoPak has not taken any action which, if taken subsequent to the execution of
this Agreement and on or prior to the Closing Date, would constitute a breach
of InfoPak's agreements set forth in Section 6.1.
4.14 Intellectual Property.
(a) Except as set forth on Schedule 4.14 attached
hereto, there are no patents, patent applications, patent disclosures or
inventions; trademarks, service marks, trade dress, trade names, corporate
names, or any applications to register any of the foregoing; copyright or
copyright registrations; mask works or mask work registrations; trade secrets,
know-how or confidential business information, Computer Software, data or
Documentation (including, without limitation, electronic media), or other
proprietary rights or any licenses to or from third parties with respect to any
of the foregoing, used by InfoPak or otherwise relating to the Business as now
conducted or as presently proposed to be conducted (collectively, the
"Intellectual Property");
(b) Each item constituting part of the
Intellectual Property has been, to the extent indicated in Schedule 4.14, duly
registered with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office, the U.S. Copyright Office, or such other
government entity, domestic or foreign, as is indicated in Schedule 4.14 and,
to the knowledge of InfoPak, such registrations, filings and issuances remain
in full force and effect;
(c) InfoPak owns and possesses all right, title
and interest in and to the rights set forth on Schedule 4.14, and no claim by
any third party contesting the validity, enforceability, use, or ownership of
any proprietary rights set forth on Schedule 4.14 has been made, is currently
outstanding or to InfoPak's knowledge is threatened;
(d) Except as disclosed on Schedule 4.14, InfoPak
has developed and compiled all Computer Software, data and Documentation set
forth on Schedule 4.14 using only employees of InfoPak, and no independent
contractor or third party has been involved in the development or compilation
of such Computer Software, data or Documentation;
(e) InfoPak has not received any notices of, nor
is it aware of any facts which indicate a likelihood of, any infringement or
misappropriation by, or conflict with, any third party with respect to any of
the rights set forth on Schedule 4.14; and
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<PAGE> 26
(f) InfoPak has not infringed, misappropriated or
otherwise been in conflict with any rights of any third parties, nor is InfoPak
aware of any infringement, misappropriation or conflict that will occur as a
result of the continued operation of the Business as now conducted or as
presently proposed to be conducted.
As used herein, the term "Computer Software" shall mean all computer programs,
consisting of a series of data, statements and instructions in source and
object code form, and shall include without limitation, all screen displays of
such programs, and the executable code of such programs. As used herein, the
term "Documentation" shall mean all user, programmer and technical
documentation associated with the Computer Software, including without
limitation, all user manuals, quick reference guides, flow charts, compiler and
linker specifications and options, file formats, test data and results, data
flow diagrams, library specifications, development environment specifications,
and hardware requirements. Schedule 4.14 describes all rights to Intellectual
Property that have been or are licensed to third parties and those rights that
have been or are licensed from third parties, and identifies the third parties
to whom or from whom such rights have been or are licensed. All Intellectual
Property to be assigned by InfoPak is or will be properly assigned and/or
licensed to InfoPak at the time InfoPak assigns such rights to Buyer. The
transactions contemplated by this Agreement will have no material adverse
effect on InfoPak's right, title and interest in and to any of the rights set
forth on Schedule 4.14. InfoPak has taken all necessary or desirable action to
protect the rights set forth on Schedule 4.14 and will continue to maintain
those rights prior to Closing so as to not materially adversely affect the
validity or enforcement of the rights set forth therein.
4.15 Compliance with Laws. Except as set forth in
Schedule 4.15, InfoPak's operations, the conduct of the Business, and InfoPak's
assets and their uses comply, in all material respects, with all applicable
laws, rules and regulations.
4.16 Employee Benefit Plans.
(a) Each employee benefit plan within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), maintained by InfoPak, (collectively, the "Plans") is set
forth in Schedule 4.16 attached hereto, is in compliance with applicable law
and has been administered and operated in all material respects in accordance
with its terms and with applicable law.
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<PAGE> 27
(b) Full payment has been made of all amounts
which InfoPak was required under the terms of the Plans to have paid as
contributions to such Plans on or prior to the date hereof (excluding any
amounts not yet due). Neither InfoPak nor, to the knowledge of InfoPak, any
other "disqualified person" or "party in interest" (as defined in Section
4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has engaged in
any transactions in connection with any Plan that could result in the
imposition of a penalty pursuant to Section 502(i) of ERISA, damages pursuant
to Section 409 of ERISA or a tax pursuant to Section 4975(a) of the Code. No
liability, claim, action or litigation, has been made, commenced or, to the
knowledge of InfoPak, threatened with respect to any Plan (other than for
benefits payable in the ordinary course).
4.17 Employment and Labor Matters.
(a) Schedule of Employees. Set forth on Schedule
4.17 is the name, general job description and annual salary, bonus and other
remuneration paid or provided by InfoPak to each employee of InfoPak (the
"InfoPak Employees").
(b) Employment Status. Except as set forth on
Schedule 4.17, each of the InfoPak Employees is a employee "at-will" and no
InfoPak Employee has any contractual rights to continued employment with
InfoPak. InfoPak does not provide its employees with retiree medical benefits.
(c) Compliance with Employment Laws. InfoPak is,
and at all times has been, in compliance with all material applicable federal,
state and local laws, rules and regulations relating to employment and is not
engaging in and has not engaged in any practice, or program, and has not
adopted or implemented any policy or procedure which is in violation of any
such laws, rules or regulations. InfoPak has withheld all amounts required by
law from the wages and salaries and other payments to its employees and former
employees and is not liable for any such wages, payments or taxes relating to
such payments. InfoPak is in compliance with all requirements prescribed by all
federal, state, and/or local statutes, orders, governmental rules or
regulations requiring periodic reports and disclosures with regard to InfoPak
Employees and all such reports have been filed or finished in a timely manner
and in accordance with applicable laws.
(d) Litigation Relating to InfoPak. There are no
unfair labor practices, charges or complaints pending or, to InfoPak's
knowledge, threatened against InfoPak before the National Labor Relations
Board. There are no charges against InfoPak of employment-related
discrimination, pending or to InfoPak's knowledge, threatened before any
federal, state or local agency or authority. There are no complaints, charges
or citations pending or to InfoPak's
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<PAGE> 28
knowledge, threatened against InfoPak under the Occupational Safety and Health
Act, any similar law or any state or local occupational safety act or
regulation and there are no other employment-related, administrative
proceedings, governmental investigations, compliance reviews, audits or
enforcement proceedings of any kind, pending or to InfoPak's knowledge,
threatened against InfoPak. There are no actions, suits or other proceedings
pending or threatened against InfoPak or against or involving any officers or
directors of InfoPak relating to any employment relationship or terms or
conditions of employment.
(e) Labor Relations. Except as disclosed in
Schedule 4.17, InfoPak is not a party to or otherwise bound by any contract,
arrangement or collective bargaining agreement with a labor union or
organization involving InfoPak Employees and InfoPak is not otherwise bound by
any other contractual commitment respecting employment or compensation of any
InfoPak Employees, and no InfoPak Employees are represented by any labor union
or similar organization. There is no pending representation question involving
an attempt to organize a bargaining unit which includes any InfoPak Employees
and there are no strikes, work stoppages, labor disputes, threatened or pending
against InfoPak.
4.18 Insurance. Schedule 4.18 attached hereto contains a
list of all current policies and contracts or property and casualty insurance
maintained by InfoPak (specifying (a) the insurer, (b) the amount of the
coverage, (c) the type of insurance, (d) the policy number and (e) any
currently pending claims thereunder). All such policies are in full force and
effect. InfoPak shall keep or cause to be kept such policies (or substantial
equivalents) in such amounts duly in force until the Closing Date and shall
give DVG and Buyer notice of any material change in such policies which take
effect following the Closing.
4.19 Approvals. InfoPak possesses or has applied for all
governmental and other permits, licenses, consents, certificates, orders,
authorizations and approvals (the "InfoPak Approvals") to own or hold under
lease and operate its properties and assets and to carry on the Business as now
conducted. InfoPak has not received any notice of proceedings relating to the
revocation or modification of any such InfoPak Approvals which, singly or in
the aggregate, if the subject of an unfavorable ruling or finding, would be
reasonably likely to adversely affect the assets, financial condition, results
of operation or prospects of InfoPak. The InfoPak Approvals are identified in
Schedule 4.19 attached hereto. InfoPak is operating in compliance with the
provisions, terms and conditions of the InfoPak Approvals.
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4.20 Broker's or Finder's Fees. No agent, broker, person
or firm acting on behalf of InfoPak is, or will be, entitled to any commission
or broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
4.21 Environmental Compliance. Except as disclosed in
Schedule 4.21:
(a) Neither InfoPak, nor any of its agents,
contractors, employees or representatives, has released, emitted, discharged,
dumped or disposed of any hazardous substances ("Hazardous Substances") or
Hazardous Wastes onto or into the InfoPak's assets, or any part thereof, or
onto or into any other property. For purposes of this Agreement "Hazardous
Substances" has the meaning set forth in Section 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
"Hazardous Wastes" has the meaning set forth in Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6903(5), and both terms shall
also expressly include petroleum, crude oil and any fraction thereof. The term
"Environmental Laws" means all applicable foreign, federal, state, county and
local statutes, regulations or ordinances (including common law duties
established by courts) relating to human health and the environment or the
generation, treatment, storage, recycling, transportation, release or disposal
of Hazardous Substances.
(b) No Hazardous Substances or Hazardous Wastes
have been or are currently located at, in, or under or about either InfoPak's
assets or any other property currently or previously owned or operated by
InfoPak in a manner which: (i) violates any applicable Environmental Laws or
(ii) requires response, remedial, corrective action or cleanup of any kind
under any applicable Environmental Laws.
(c) With respect to InfoPak's assets or any other
property, whether previously or currently owned or operated or used by InfoPak
for the treatment, storage or disposal of Hazardous Substances or Hazardous
Wastes, no litigation, investigation, administrative or other proceeding of any
kind is pending or threatened by any federal, foreign, state or local
governmental entity or private party arising from: (i) any applicable
Environmental Laws; (ii) any response, remedial or cleanup activities or (iii)
any release or threatened release of Hazardous Substances or Hazardous Wastes.
In addition, InfoPak is not now aware, after due inquiry, of any facts on which
such litigation,
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<PAGE> 30
investigation, administrative or other proceeding of any kind might reasonably
be based.
(d) With respect to InfoPak's assets or any other
property, whether previously or currently owned or operated or used by InfoPak
for the treatment, storage or disposal of Hazardous Substances or Hazardous
Wastes, InfoPak is not subject to any judgment, injunction, writ, order or
agreement arising from: (i) any applicable Environmental Laws; (ii) any
remedial, response or cleanup activities or (iii) any liabilities, damages,
costs, fees or expenses related to the release or threatened release of
Hazardous Substances or Hazardous Wastes. In addition, InfoPak is not aware,
after due inquiry, of any facts on which such a judgment, injunction, writ,
order or agreement might reasonably be based.
(e) InfoPak has previously complied with, and is
currently in compliance with, all applicable Environmental Laws, including
permit requirements, relating to the ownership and operation of InfoPak's
assets or any other property currently or previously owned or operated by
InfoPak and InfoPak has not received any notice, claim or information to the
effect that either is or may be liable to any person as a result of: (i) a
violation of any applicable Environmental Laws or (ii) the release or
threatened release of Hazardous Substances.
(f) Schedule 4.21 includes the number, location,
capacity, contents and composition of all above ground and underground storage
tanks located on any real property previously or currently owned or leased by
InfoPak, and there has not been a release or threatened release from any of
such underground storage tanks.
4.22 Product Liability; Warranty Liability.
(a) Except as disclosed in Schedule 4.22, there
are no actions, suits, inquiries, proceedings or investigations by or before
any court or governmental or other regulatory or administrative agency or
commission pending or, to the knowledge of InfoPak, threatened, against or
involving InfoPak relating to any product alleged to have been manufactured or
sold by InfoPak and alleged to have been defective or improperly designed or
manufactured.
(b) The reserves for product warranty liabilities
reflected on the InfoPak Financial Statements are stated in accordance with
GAAP.
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4.23 Affiliate Transactions. Schedule 4.23 describes all
material contracts, agreements, arrangements or transactions between InfoPak
and any of InfoPak's affiliates, setting forth the terms thereof.
4.24 Capitalization. The entire authorized capital stock
of InfoPak is as appears on Schedule 4.24. sets forth, as of the Closing, the
name, state of residence, number of shares owned, and percentage of outstanding
capital stock of InfoPak owned with regard to each stockholder of InfoPak, as
well as whether or not each such stockholder is an "accredited investor" as
defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended. The InfoPak Shareholders as of the Closing will own, in the aggregate,
approximately 74% of the issued and outstanding capital stock of InfoPak. No
equity securities of InfoPak, other than as set forth on Schedule 4.24 will, at
Closing, be issued and outstanding. All of the issued and outstanding capital
stock of InfoPak has been, and at Closing will be, duly authorized, validly
issued, fully paid, and nonassessable. None of the issued and outstanding
capital stock of InfoPak has been or will be issued in violation of any
preemptive rights. All of the issued and outstanding capital stock of InfoPak
(and as of the Closing Date all the InfoPak Stock) is and will be owned free
and clear of any liens other than the restrictions on transfer imposed by
federal and state securities laws. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require InfoPak
to issue, sell, or otherwise cause to become outstanding any of its capital
stock. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to InfoPak. There
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of InfoPak other than as set forth
in Schedule 4.24(a).
4.25 Inventory. The inventory of InfoPak Consists of raw
materials and supplies, manufactured and processed parts, work in progress and
finished goods, all of which is merchantable and fit for the purpose for which
it was procured or manufactured, and none of which is obsolete, damaged, or
defective.
4.26 Accuracy of Warranties. No representation or
warranty by InfoPak in this Agreement, and no Exhibit, certificate, Schedule,
instrument or document prepared or delivered, or to be delivered, by InfoPak
pursuant hereto or in connection with the transactions contemplated herein,
contains or will contain any untrue statement of a material fact or omits or
will omit to state
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<PAGE> 32
a material fact necessary to make the statements contained herein and therein
not misleading.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF DVG AND BUYER
DVG and Buyer, jointly and severally, represent and warrant to InfoPak
as follows:
5.1 Authorization. DVG and Buyer each has full corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder and to carry out the transactions contemplated hereby. This Agreement
has been duly authorized and approved by all requisite corporate action of DVG
and Buyer. This Agreement constitutes the valid and binding agreement of DVG
and Buyer, enforceable against DVG and Buyer in accordance with its terms.
5.2 Existence and Good Standing of DVG and Buyer. DVG
and Buyer are corporations duly organized, validly existing and in good
standing under the laws of the state of Delaware, and each has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. DVG and Buyer is each duly
qualified or licensed as a corporation to do business, and is in good standing
in each jurisdiction in which the character or location of the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so duly qualified
or licensed would not have a material adverse effect on the assets, business,
financial condition or results of operations of DVG and Buyer. Set forth on
Schedule 5.2 attached hereto is each jurisdiction in which DVG is qualified or
licensed to do business as a foreign corporation.
5.3 Capitalization. The authorized capital stock of DVG
consists of 20,000,000 DVG Common Shares $.001 par value per share and
2,000,000 Preferred Shares, $1.00 par value per share ("Preferred"). The DVG
Series P Convertible Preferred Shares to be issued to InfoPak pursuant to the
terms of the Agreement are free and clear of all liens, claims and
encumbrances, have been duly authorized and, upon issuance, will be duly
issued, fully paid and non-assessable. As of the date hereof, there are:
(a) 17,521,098 fully paid and non-assessable DVG
Common Shares duly issued and outstanding;
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<PAGE> 33
(b) 77,250 fully paid and non-assessable shares
of Series A Convertible Preferred Stock, $10.00 par value per share ("Series A
Preferred"), duly issued and outstanding 100,000 shares authorized;
(c) 193,200 fully paid and non-assessable
warrants to purchase DVG's 8% Series B Convertible Preferred Stock, $10.00 par
value per share ("Series B Preferred Warrants"), duly issued and outstanding;
(d) 200,000 duly authorized 8% Series B
Convertible Preferred Stock, none issued and outstanding;
(e) 32,210 fully paid and non-assessable shares
of Series S convertible, participating Preferred Stock $10.00 par value per
share duly issued and outstanding 50,000 shares authorized;
(f) 1,813,169 fully paid and non-assessable
shares of Class B Common Stock Purchase Warrants ("Class B Warrants"), duly
issued and outstanding;
(g) 14,589,897 fully paid and non-assessable
shares of Common Stock Purchase Warrants (" Warrants"), escrowed or duly issued
and outstanding;
Other than set forth above, no other equity securities of DVG are
issued and outstanding.
Set forth on Schedule 5.3 is a true and correct description of (a) the
number of DVG Common Shares and (b) the number of shares, liquidation
preference, number of DVG Common Shares issuable upon conversion or exercise
of, the conversion or exercise price of, and the dilution price of all shares
of Preferred, options, warrants, or other rights to receive DVG Common Shares.
5.4 Financial Statements. DVG has heretofore furnished
InfoPak with a balance sheet of DVG as at June 30, 1994 and 1993, and the
related statements of income and cash flows for DVG for the years then ended,
together with the audit report of Gitomer & Berenholz, P.C. with respect
thereto, together with an unaudited balance sheet of DVG as at December 31,
1994 and March 31,1995 and the related statements of income and cash flows for
DVG for the periods then ended (collectively, the "DVG Financial Statements").
Such DVG Financial Statements, including the footnotes thereto, except as
indicated therein, have been prepared in accordance with GAAP, applied on a
consistent basis for all periods presented and fairly present in all material
respects the financial condition and
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<PAGE> 34
results of the operations of DVG and its financial position for such periods.
5.5 Liabilities and Obligations. All debts, liabilities
or obligations of any nature, known or unknown, fixed or contingent, that would
be required by GAAP to be set forth in the DVG Financial Statements or referred
to in the notes thereto are set forth in the DVG Financial Statements or
referred to in the notes thereto.
5.6 Absence of Certain Changes. Except as disclosed in
Schedule 5.6 attached hereto since March 31, 1995, there has not been: (a) any
adverse change in the condition (financial or otherwise) of the properties,
assets, liabilities, results of operation or business prospects of DVG; (b) any
damage, destruction or loss (whether or not covered by insurance) adversely
affecting the properties, assets, liabilities, financial condition, results of
operations or business prospects of DVG; (c) any material increase in the
compensation, commissions or perquisites payable to or to become payable by DVG
to any director, officer or employee of DVG, or any payment of any bonus,
profit sharing or other extraordinary compensation to any employee of DVG
(other than any such increase or payment paid or to become payable in the
ordinary course of business consistent with past practices); (d) any
declaration, setting aside, or payment of any dividend or other distribution by
DVG, in respect of its capital stock, or any direct or indirect redemption,
retirement, purchase or other acquisition of any of such stock, or any issuance
of shares of stock or the granting, issuance or exercise of any right, warrant,
option or similar commitment relating to any of DVG's authorized or issued
capital stock; (e) any change in the accounting methods or practices followed
by DVG or any change in depreciation or amortization policies or rates
theretofore adopted; (f) any cancellation of any debts owed to or claims held
by DVG; or (g) any sale, lease, abandonment or other disposition by DVG of any
real property, or, other than in the ordinary course of business, of any
machinery, equipment or other operating properties, or of any intangible
assets.
5.7 Title to Properties; Encumbrances. Except as set
forth on Schedule 5.7, DVG has good and marketable title to its assets,
including all patents, trademarks, service marks, copyrights, trade names or
trade secrets, and none of such assets is subject to any mortgage, pledge,
security interest, lien, encumbrance or security device whatsoever.
5.8 Leases. Schedule 5.8 attached hereto contains a list
of all leases to which DVG is a party. Each lease set forth in Schedule 5.8 is
in full force and effect; all rents and additional
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<PAGE> 35
rents due to date on each such lease have been paid; in each case, DVG has not
received notice that it is in default thereunder; and there exists no event,
occurrence, condition or act which, with the giving of notice, the lapse of
time or the happening of any further event or condition, would become a default
by DVG under such lease.
5.9 Material Contracts. Except as set forth in Schedule
5.8, 5.9 or 5.13 attached hereto, DVG neither has nor is bound by any of the
following:
(a) any agreement, contract or commitment
relating to an employment, consulting or service relationship of any Person
with DVG which (i) has a term in excess of one year or (ii) requires or could
require payments by DVG in excess of $10,000;
(b) any agreement, contract or commitment
limiting the freedom of DVG to engage in any line of business or to compete
with any other Person;
(c) any agreement, contract or commitment,
including those entered into in the ordinary course of business, which involves
payment by DVG of $25,000 or more in any calendar year and is not cancelable by
DVG without penalty within 30 days.
(d) any agreement, contract or commitment for
leasing personal property (including, without limitation, leases for machinery
and office equipment, furniture, fixtures, vehicles and tools) which individual
lease requires annual payment in excess of $25,000 or the term of which at any
time exceeded one year;
(e) any agreement, contract or commitment
providing for the services of dealers, distributors, sales representatives or
similar representatives involving the payment or receipt by DVG in excess of
$25,000 per annum with regard to any one dealer, distributor, sales
representative or similar representative;
(f) any agreement, contract or commitment
relating to the ownership, use or licensing of any intellectual property or
confidential processes, know-how, inventions, discoveries or formulae; or
(g) any other agreement that is material to DVG.
Neither DVG nor, to DVG's knowledge, any other party thereto, has
violated any term or condition of any contract or agreement set forth in
Schedule 5.8, 5.9 or 5.13 in any material respect other than violations that
have been waived.
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5.10 No Violations. Except as provided in Schedule 5.10
attached hereto, the execution and delivery of this Agreement by DVG and Buyer
and the consummation of the transactions contemplated hereby (a) will not
violate any provision of the organizational documents of DVG or Buyer, (b) will
not violate any statute, rule, regulation, order or decree of any public body
or authority by which DVG or Buyer is bound or which is binding upon any of
either of their properties or assets and (c) will not result in a violation or
breach of, or constitute a default under, any license, franchise, permit,
indenture, agreement or other instrument to which DVG or Buyer is a party, or
by which DVG or Buyer or any of their assets or properties is bound. Except as
set forth on Schedule 5.10, no consents or waivers will be required or
advisable for DVG or Buyer to consummate the transactions contemplated by this
Agreement.
5.11 Litigation. Except as set forth in Schedule 5.11
attached hereto, (a) there is no action, suit or proceeding at law or in equity
by any Person or any arbitration or any administrative or other proceeding by
or before any governmental or other instrumentality or agency, pending, or, to
the knowledge of DVG, threatened against DVG or its officers or directors; (b)
none of such disclosed actions could have an adverse effect upon the assets,
financial condition, results of operations or prospects of DVG or the right to
conduct its business as presently conducted; and (c) there are no judgments,
consents, decrees, injunctions, or any other judicial or administrative
mandates outstanding against DVG.
5.12 Taxes. Except as set forth on Schedule 5.12, DVG has
filed, or has caused to be filed, all federal, state and local income tax
returns and all other federal, state and local tax returns which are required
to be filed, and has paid or caused to be paid all taxes shown on such returns
or on any assessment therefor received by DVG to the extent that such taxes
have become due, or has set aside on its books reserves (segregated to the
extent required by generally accepted accounting principles) deemed by DVG
adequate with respect thereto. Except as set forth on Schedule 5.12, the
federal income tax returns of DVG have not been audited by the Internal Revenue
Service, and neither the state nor local income tax returns of DVG have been
audited by any state or local tax or revenue agency or authority.
5.13 Intellectual Property.
(a) Except as set forth on Schedule 5.13 attached
hereto, there are no patents, patent applications, patent disclosures or
inventions; trademarks, service marks, trade dress, trade names, corporate
names, or any applications to register any
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of the foregoing; copyright or copyright registrations; mask works or mask work
registrations; trade secrets, know-how or confidential business information,
Computer Software, data or Documentation (including, without limitation,
electronic media), or other proprietary rights or any licenses to or from third
parties with respect to any of the foregoing, used by DVG or otherwise relating
to the Business as now conducted or as presently proposed to be conducted
(collectively, the "Intellectual Property");
(b) Each item constituting part of the
Intellectual Property has been, to the extent indicated in Schedule 5.13, duly
registered with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office, the U.S. Copyright Office, or such other
government entity, domestic or foreign, as is indicated in Schedule 5.13 and,
to the knowledge of DVG, such registrations, filings and issuances remain in
full force and effect;
(c) DVG owns and possesses all right, title and
interest in and to the rights set forth on Schedule 5.13, and no claim by any
third party contesting the validity, enforceability, use, or ownership of any
proprietary rights set forth on Schedule 5.13 has been made, is currently
outstanding or to DVG's knowledge is threatened;
(d) Except as disclosed on Schedule 5.13, DVG has
developed and compiled all Computer Software, data and Documentation set forth
on Schedule 5.13 using only employees of DVG, and no independent contractor or
third party has been involved in the development or compilation of such
Computer Software, data or Documentation;
(e) DVG has not received any notices of, nor is
it aware of any facts which indicate a likelihood of, any infringement or
misappropriation by, or conflict with, any third party with respect to any of
the rights set forth on Schedule 5.13; and
(f) DVG has not infringed, misappropriated or
otherwise been in conflict with any rights of any third parties, nor is DVG
aware of any infringement, misappropriation or conflict that will occur as a
result of the continued operation of the Business as now conducted or as
presently proposed to be conducted.
As used herein, the term "Computer Software" shall mean all computer programs,
consisting of a series of data, statements and instructions in source and
object code form, and shall include without limitation, all screen displays of
such programs, and the executable code of such programs. As used herein, the
term "Documentation" shall mean all user, programmer and technical
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documentation associated with the Computer Software, including without
limitation, all user manuals, quick reference guides, flow charts, compiler and
linker specifications and options, file formats, test data and results, data
flow diagrams, library specifications, development environment specifications,
and hardware requirements. Schedule 5.13 describes all rights to Intellectual
Property that have been or are licensed to third parties and those rights that
have been or are licensed from third parties, and identifies the third parties
to whom or from whom such rights have been or are licensed. The transactions
contemplated by this Agreement will have no material adverse effect on DVG's
right, title and interest in and to any of the rights set forth on Schedule
5.13. DVG has taken all necessary or desirable action to protect the rights
set forth on Schedule 5.13 and will continue to maintain those rights prior to
Closing so as to not materially adversely affect the validity or enforcement of
the rights set forth therein.
5.14 Compliance with Laws. Except as set forth in
Schedule 5.14, DVG's operations, the conduct of DVG's business as and where
such business is presently conducted, and DVG's assets and their uses comply,
in all material respects, with all applicable laws, rules and regulations.
5.15 Employee Benefit Plans. Except as set forth in
Schedule 5.15, DVG does not maintain or make contributions to, and has not in
the past maintained or made contributions to, any Employee Pension Benefit
Plan, as such term is defined in Section 3 of ERISA.
5.16 Employment and Labor Matters. Except as set forth in
Schedule 5.16, DVG is not a party to any employment agreements with any of its
employees and is not a party to any collective bargaining agreement with any
labor union.
5.17 Insurance. DVG has maintained and maintains insurance
covering DVG's business, assets, premises and their employees sufficient to
comply with all applicable laws and contracts and adequate to protect DVG's
interests therein.
5.18 Approvals. Except as disclosed in Schedule 5.18, DVG
possesses or has applied for all governmental and other permits, licenses,
consents, certificates, orders, authorizations and approvals (the "DVG
Approvals") to own or hold under lease and operate its properties and assets
and to carry on its business as now conducted and has not received any notice
of proceedings relating to the revocation or modification of any such DVG
Approvals which, singly or in the aggregate, if the subject of an unfavorable
ruling or finding, would be reasonably likely to
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adversely affect the assets, financial condition, results of operation or
prospects of DVG. DVG is operating in compliance with the provisions, terms
and conditions of the DVG Approvals.
5.19 Broker's or Finder's Fees. No agent, broker, person
or firm acting on behalf of DVG is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
5.20 Product Liability; Warranty Liability.
(a) Except as disclosed in Schedule 5.20, there
are no actions, suits, inquiries, proceedings or investigations by or before
any court or governmental or other regulatory or administrative agency or
commission pending or, to the knowledge of DVG, threatened, against or
involving DVG relating to any product alleged to have been manufactured or sold
by DVG and alleged to have been defective or improperly designed or
manufactured.
(b) The reserves for product warranty liabilities
reflected on the DVG Financial Statements are stated in accordance with GAAP.
5.21 Environmental Compliance.
(a) There is not now and never has been an actual
or threatened release of any Hazardous Substance or any other environmental
condition in, on, under or from any premises which have been leased or owned by
DVG that is reasonably likely to materially adversely affect such premises or
any material use thereof or that is reasonably likely to support a claim or
cause of action under common law or any Federal, state or local environmental
statute, regulation, ordinance or other environmental regulatory requirement
against DVG.
(b) No investigation, administrative, order,
consent order, lien, super-lien or agreement, litigation or settlement with
respect to any Hazardous Substance of any kind located on or under all or any
portion of any premises which have been leased or owned by DVG exists, is
pending or, to DVG's knowledge, is proposed or threatened in writing with
respect to any premises leased or owned by DVG.
5.22 SEC Filings; Compliance. Since April 1992, DVG has
heretofore filed all required reports, registration statements and schedules
with the Securities and Exchange Commission pursuant to the Securities Act and
the Exchange Act. All such filings by DVG
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complied as of their respective dates in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations adopted thereunder. As of their respective dates, all
such filings (including all exhibits and schedules thereto and documents
incorporated by reference therein) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.23 Increase in Capital Stock. InfoPak understands that
DVG does not currently have sufficient amounts of Common Stock to permit full
conversion of the DVG Series P Shares. DVG hereby represents and warrants that
it will use its best efforts to convene a meeting of its stockholders, within
ninety (90) days from the Closing, to consider, among other matters, an
increase in its authorized Common Stock in sufficient amount to provide for the
full conversion of the DVG Series P Shares. In this regard, George S. Smith
hereby represents that he will vote the shares of DVG securities which he
beneficially owns and are entitled to vote at such meeting of stockholders.
5.24 Accuracy of Warranties. No representation or
warranty by DVG or Buyer in this Agreement, and no Exhibit, certificate,
Schedule, instrument or document prepared or delivered, or to be delivered, by
DVG or Buyer pursuant hereto or in connection with the transactions
contemplated herein, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein and therein not misleading.
ARTICLE 6.
CONDUCT OF BUSINESS; EXCLUSIVE DEALING; REVIEW;
ADDITIONAL AGREEMENTS OF THE PARTIES
6.1 Conduct of Business. From the date of this Agreement
until the earlier of (i) the Closing Date or (ii) termination of this Agreement
in accordance with Section 9.1 hereof, except for actions taken with DVG's or
Buyer's prior written consent, which consent will not be unreasonably withheld
or delayed, and except for actions taken in connection with the
Recapitalization (as hereinafter defined), InfoPak shall operate the Business
in the ordinary course of business, consistent with past practice, and InfoPak
shall not make any material change in the compensation of officers or other key
employees of InfoPak and shall not enter into any material contract or
commitment, waive any material rights, or
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enter into any other material transaction other than in the ordinary course of
business and in conformity with past practices.
6.2 Maintain Business as Going Concern. From the date of
this Agreement until the earlier of (i) the Closing Date or (ii) termination of
this Agreement in accordance with Section 9.1 hereof, InfoPak will preserve the
business organization of InfoPak and will use its best efforts to keep
available the services of the present officers, employees, and agents thereof
and will use its best efforts to preserve the goodwill of InfoPak's suppliers,
customers and others having important business relations therewith.
6.3 Exclusive Dealing. During the period from the date
of this Agreement to September 15, 1995, InfoPak shall not take any action to,
directly or indirectly, encourage, initiate or engage in discussions or
negotiations with, or provide any information to, any Person other than DVG or
Buyer, concerning any purchase of InfoPak's assets or any sale of substantial
assets, sale of stock, merger or similar transaction involving the Business.
6.4 Due Diligence Review. Each party may, prior to the
Closing Date, through its representatives, review the properties, books and
records of the other party to familiarize itself with such other party and to
review, verify and agree upon the information presented on all Schedules, and
this Agreement (including the financial statements). Each party shall permit
the other party and its representatives to have reasonable access to the
premises and to the books and records of such party, and the officers of such
party, during normal working hours and to furnish such other party with such
financial and operating data and other information as such other party shall
from time to time reasonably request.
6.5 Best Efforts. Each of the parties agrees to use its
best efforts to take, or cause to be taken, all action to do, or cause to be
done, and to assist and cooperate with the other parties hereto in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, including, but not limited to, (a) the obtaining of all necessary
waivers, consents and approvals from governmental or regulatory agencies or
authorities and the making of all necessary registrations and filings
(including, but not limited to, filings with governmental or regulatory
agencies or authorities, if any) and the taking of all reasonable steps as may
be necessary to obtain any approval or waiver from, or to avoid any action or
proceeding by, any governmental agency or authority, and (b) the obtaining of
all necessary consents, approvals or waivers from all other third parties.
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6.6 Shareholder Approval. InfoPak shall submit the
Merger to its shareholders for approval. The Board of Directors of InfoPak
shall recommend to InfoPak's shareholders, in a form which is reasonably
satisfactory to DVG, that the Merger be approved by them. Each InfoPak
Shareholder shall (i) vote his or her shares of stock in InfoPak in favor of
the Merger, and (ii) not transfer any shares of stock in InfoPak. Each InfoPak
Shareholder shall take, and shall cause the InfoPak to take, any and all other
actions as may be necessary or advisable to consummate the transactions
contemplated herein.
6.7 Proxy Materials and Investment Representation Letter.
InfoPak shall prepare, as soon as is reasonably practicable and in form and
substance satisfactory to DVG, and DVG shall cooperate in the preparation of, a
proxy statement (the "Proxy Statement") to be used in connection with the
solicitation of proxies from InfoPak's shareholders to vote in favor of the
Merger. InfoPak shall, together with the Proxy Statement, deliver to all of
InfoPak's shareholders for execution by them and delivery to DVG pursuant to
Section 3.2(b)(vi) hereof, an Investment Representation Letter (the "Investment
Representation Letter") in substantially the form set forth as Schedule 6.7.
6.8 Reorganization. InfoPak, DVG and Buyer agree that
they shall report the transaction contemplated by this Agreement for income tax
purposes as a reorganization under Section 368(a)(1)(A) of the Code.
6.9 Recapitalization of InfoPak. InfoPak shall, on or
prior to the Closing, effect a recapitalization of InfoPak (the
"Recapitalization"), as described on Schedule 6.9.
6.10 InfoPak Distributors. Any Agreement entered into
with or amended by DVG or affiliate of DVG with any distributor of InfoPak
products shall be approved by the Chief Executive Officer of InfoPak or an
authorized representative of InfoPak, prior to execution by any authorized
representative of DVG regardless of whether the Closing has been consummated.
ARTICLE 7.
CONDITIONS TO DVG'S AND BUYER'S OBLIGATIONS
The obligation of DVG and Buyer to close the Merger on the Closing
Date is conditioned upon the satisfaction or waiver, at or prior to the
Closing, of the following conditions:
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7.1 InfoPak Deliveries. InfoPak shall have made or shall
have caused to be made all deliveries to DVG and Buyer described in Section
3.2(b) hereof.
7.2 No Material Adverse Change. From the date of this
Agreement to the Closing Date, there shall not have been a material adverse
change in InfoPak or in the Business.
7.3 Truth or Representations and Warranties. The
representations and warranties of the InfoPak contained in this Agreement or in
any Schedule delivered pursuant hereto shall be true and correct in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date, and
InfoPak shall have delivered to DVG and Buyer a certificate, dated the Closing
Date, to such effect.
7.4 Performance of Agreements. Each and all of the
agreements of InfoPak to be performed at or prior to the Closing pursuant to
the terms hereof shall have been duly performed in all material respects, and
InfoPak shall have delivered to DVG and Buyer a certificate, dated the Closing
Date, to such effect.
7.5 No Injunction. No court or other governmental body or
public authority shall have issued an order which shall then be in effect
restraining or prohibiting the completion of the transactions contemplated
hereby.
7.6 Consent and Approvals. All material authorizations,
consents, waivers, approvals or other action required or advisable in
connection with the execution, delivery and performance of this Agreement by
DVG, Buyer and InfoPak and the consummation by such parties of the transactions
contemplated hereby, all as so indicated in Schedules 4.10 and 5.10, shall have
been obtained, and InfoPak shall have obtained any authorizations, consents,
waivers, approvals or other action required in connection with the execution,
delivery and performance of this Agreement to prevent a material breach or
default by InfoPak under any contract to which InfoPak is a party and for the
continuation of any agreement to which InfoPak is a party and is not to be
terminated pursuant to the terms of this Agreement.
7.7 Registration Exemption. DVG, based upon its review
of the executed Investment Representation Letter, shall be satisfied that all
issuances and transfers of DVG's Series P Shares pursuant to this Agreement are
exempt from registration under all applicable federal and state securities
laws.
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7.8 Dissenting Shareholders. The holders of at least
ninety-five percent (95%) of the issued and outstanding shares of capital stock
of InfoPak shall have refrained from dissenting from the Merger and demanding
an appraisal of the fair value of their shares under Section 10-080 of the
Arizona General Corporation Law.
7.9 No Litigation. No action, suit, proceeding at law or
in equity by any Person or any arbitration or any administrative or other
proceeding by or before any governmental or other instrumentality or agency
shall be pending or threatened against InfoPak or its officers or directors,
and no judgments, consents, decrees, injunctions, or any other judicial or
administrative mandates shall be outstanding against InfoPak.
7.10 Cancellation of Funding Agreement. In exchange for
cancellation of the Funding Agreement dated August 21, 1992, as amended
February 12, 1993, and all obligations related thereto, Sean F. and Janet Lee
shall receive 17,000 shares of DVG Series P Preferred Stock and Robert and
Marjorie Huskins shall receive 17,677 shares of DVG Series P Preferred Stock
immediately upon the Closing. These shares are in addition to the shares to be
received as part of the Closing Date Merger Consideration.
7.11 Cancellation of Royalty and Promissory Agreements.
Other than as set forth in Schedule 7.11, immediately upon Closing, the
Promissory Agreements dated January 2, 1995 by and between InfoPak and Roy D.
Pringle, John E. Matlock, Bruce D. Sandig, Paul C. Damiani and Sean F. Lee and
the Royalty Agreements dated February 12, 1993 by and between InfoPak and the
InfoPak Shareholders, and any and all obligations related thereto, shall be
canceled and declared null and void.
ARTICLE 8.
CONDITIONS TO INFOPAK'S OBLIGATIONS
The obligation of InfoPak to close the Merger on the Closing Date is
conditioned upon satisfaction or waiver, at or prior to the Closing, of the
following conditions:
8.1 DVG and Buyer Deliveries. DVG and Buyer shall have
made or shall have caused to be made all deliveries to InfoPak described in
Section 3.2(a) hereof.
8.2 Truth of Representation and Warranties. The
representations and warranties of DVG and Buyer contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made on and as of such
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date, and DVG and Buyer shall have delivered to InfoPak a certificate, dated
the Closing Date, to such effect.
8.3 Performance of Agreements. Each and all of the
agreements of DVG and Buyer to be performed at or prior to the Closing pursuant
to the terms hereof shall have been duly performed in all material respects,
and DVG and Buyer shall have delivered to InfoPak a certificate, dated the
Closing Date, to such effect.
8.4 No Injunction. No court or other government body or
public authority shall have issued an order which shall then be in effect
restraining or prohibiting the completion of the transactions contemplated
hereby.
8.5 Consent and Approvals. All material authorizations,
consents, waivers, approvals or other action required in connection with the
execution, delivery and performance of this Agreement by DVG, Buyer and InfoPak
and the consummation by such parties of the transactions contemplated hereby,
all as so indicated in Schedules 4.10 and 5.10, shall have been obtained, and
InfoPak shall have obtained any authorizations, consents, waivers, approvals or
other action required in connection with the execution, delivery and
performance of this Agreement to prevent a material breach or default by
InfoPak under any contract to which InfoPak is a party and for the continuation
of any agreement to which InfoPak is a party and is not to be terminated
pursuant to the terms of this Agreement.
8.6 Shareholder Approval. The shareholders of InfoPak
shall have approved this Agreement and the consummation of the transactions
contemplated hereby and the holders of at least ninety-five percent (95%) of
the issued and outstanding shares of capital stock of InfoPak shall have
refrained from demanding an appraisal of the fair value of their shares under
Section 10-080 of the Arizona General Corporation Law.
8.7 No Litigation. No action, suit, proceeding at law or
in equity by any Person or any arbitration or any administrative or other
proceeding by or before any governmental or other instrumentality or agency
shall be pending or threatened against InfoPak or its officers or directors,
and no judgments, consents, decrees, injunctions, or any other judicial or
administrative mandates shall be outstanding against InfoPak.
8.8 Approval of Merger Agreement. DVG covenants and
agrees, as the sole stockholder of Buyer, to vote the shares of Buyer held by
DVG, which shall constitute 100% of the issued and outstanding capital stock of
Buyer in favor of the adoption of this Agreement.
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ARTICLE 9.
EVENTS OF TERMINATION
9.1 Events of Termination. This Agreement may be
terminated (i) by mutual written agreement of InfoPak, Buyer and DVG or (ii) by
Buyer and DVG by written notice to InfoPak, if the conditions set forth in
Article 7 hereof shall not have been complied with or performed on or prior to
the Closing Date in any material respect, or (iii) by InfoPak by written notice
to Buyer and DVG, if the conditions set forth in Article 8 hereof shall not
have been complied with or performed on or prior to the Closing Date in any
material respect, and, in either case, such noncompliance or nonperformance
shall not have been cured or eliminated (or by its nature cannot be cured or
eliminated) on or before 10 calendar days following such notice, or (iv) by
either party by reason of the breach by the other in any material respect of
any of its covenants or agreements contained in this Agreement, or (v) by
either party if the transactions contemplated by this Agreement shall not have
been consummated on or before September 15, 1995.
9.2 Effect of Termination. In the event that this
Agreement shall be terminated pursuant to Section 9.1(i), (ii), (iii) or (v)
(but in the case of terminations pursuant to Section 9.1 (ii) or (iii), only if
the failure to comply with or perform a condition that created the termination
right did not constitute a breach of this Agreement), all further obligations
of the parties hereto under this Agreement shall terminate without further
liability or obligation of either party to the other party hereunder. If this
Agreement is terminated for any reason, each of the parties hereto shall hold
in confidence all information it and its representatives have obtained from any
other party hereto and promptly shall return or cause to be returned to the
party supplying the same any and all documents or summaries in the possession
of such party or its representatives.
ARTICLE 10.
INDEMNIFICATION
10.1 Indemnification of DVG and Buyer. From and after the
Closing, subject (except as expressly provided otherwise) to the provisions of
Section 10.3, to the extent of the amounts being pledged by the Indemnifying
Shareholders pursuant to the Pledge Agreement and subject to the terms of the
Pledge Agreement, each of the Indemnifying Shareholders, jointly and severally,
covenants and
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agrees with DVG and Buyer that they shall reimburse and indemnify and hold DVG
and Buyer harmless from, against and in respect of the following:
(a) any and all damage, loss, liability, claim or
deficiency incurred by DVG or Buyer resulting from, or which exists or arises
due to (i) any nonfulfillment of any covenant or agreement made by InfoPak in
this Agreement or any other written agreement furnished to DVG or Buyer by or
on behalf of InfoPak pursuant to this Agreement, (ii) a breach of a
representation or warranty made by InfoPak, (iii) a breach of a representation
or warranty made in an Investment Representation Letter, (iv) any information
contained in the Proxy Statement other than information concerning DVG or Buyer
or (v) the directions given by InfoPak to DVG as to the distribution of
certificates representing Buyer Common Shares, pursuant to Section 2.2 hereof;
(b) any and all liabilities of InfoPak not fully
disclosed in the InfoPak Financial Statements or Schedule 4.5 or not made in
the ordinary course of business;
(c) any fees, expenses or other payments incurred
or owed by InfoPak to any brokers or comparable third parties retained or
employed by it in connection with the transactions contemplated by this
Agreement;
(d) any claim made by a third party alleging
facts which, if true, would entitle DVG or Buyer to indemnification pursuant to
the above; and
(e) any and all actions, suits, claims,
proceedings, investigations, audits, demands, assessments, fines, judgments,
costs and other expenses (including, without limitation, reasonable audit and
legal fees) incurred by DVG or Buyer resulting from the circumstances described
in paragraphs 10.1(a) through (d) above.
In order to hold any of the Indemnifying Shareholders liable under
this Section 10.1, neither DVG nor Buyer shall have any obligation, at any
time, to resort for payment to any collateral security, property, liens or
other rights or remedies whatsoever, but, in such event, DVG and Buyer shall be
limited to seeking payment solely from the DVG Series P Shares pledged pursuant
to the Pledge Agreement.
10.2 Indemnification of InfoPak. From and after the
Closing, subject (except as expressly provided otherwise) to the provisions of
Section 10.3, DVG and Buyer, jointly and severally, covenant and agree with
InfoPak that they shall reimburse and
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indemnify and hold InfoPak harmless from, against and in respect of the
following:
(a) any and all damage, loss, liability, claim or
deficiency incurred by InfoPak resulting from, or which exists or arises due
to, (i) any nonfulfillment of any covenant or agreement made by DVG or Buyer in
this Agreement or any other written agreement furnished to InfoPak by or on
behalf of DVG or Buyer pursuant to this Agreement, (ii) a breach of a
representation or warranty made by DVG or Buyer or (iii) a claim by a
stockholder of InfoPak based upon any information contained in the Proxy
Statement concerning DVG or the Buyer;
(b) any fees, expenses or other payments incurred
or owed by DVG or Buyer to any brokers or comparable third parties retained or
employed by it in connection with the transactions contemplated by this
Agreement;
(c) any claim by a third party alleging facts
which, if true, would entitle InfoPak to indemnification pursuant to the above;
and
(d) any and all actions, suits, claims,
proceedings, investigations, audits, demand, assessments, fines, judgments,
costs and other expenses (including without limitation, reasonable audit and
legal fees) incurred by InfoPak resulting from the circumstances described in
Sections 10.2(a) through (c) above.
10.3 Method of Asserting Claims. "Claim" with regard to
DVG or Buyer as indemnitee refers to the items listed in Sections 10.1(a)
through (e) and with regard to InfoPak as indemnitee refers to the items listed
in Sections 10.2(a) through (d). Either DVG or Buyer, on the one hand, or
InfoPak, on the other hand, as indemnitee will give prompt written notice to
the other party as indemnitor (and to the Indemnifying Shareholders if DVG or
Buyer is the indemnitee) of any Claim which it discovers or of which it
receives notice after the Closing and which might give rise to a Claim by it
against the indemnitor under Article 10 hereof, stating the nature, basis and
(to the extent known) amount thereof; provided that failure to give prompt
notice shall not jeopardize its right to indemnification unless such failure
shall have materially prejudiced the ability of the indemnitor to defend such
Claim. The obligation of each indemnitor under this Article 10 with regard to a
Claim based upon a representation or warranty shall be subject to the
limitation that the indemnitee gives notice of the Claim before the end of the
relevant survival period of such representation or warranty.
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In case of any Claim or suit by a third party or by any governmental
body, or any legal, administrative or arbitration proceeding with respect to
which an indemnitor may have liability under the indemnity agreement contained
in this Article 10, indemnitor shall be entitled to participate therein, and,
to the extent desired by it, to assume the defense thereof, and after notice
from indemnitor of the election so to assume the defense thereof, indemnitor
will not be liable to indemnitee for any legal or other expenses subsequently
incurred by indemnitee in connection with the defense thereof, other than
reasonable costs of investigation, unless indemnitor does not actually assume
the defense thereof following notice of such election. The parties will render
to each other such assistance as may reasonably be required of each other at
indemnitor's expense in order to ensure proper and adequate defense of any such
suit, Claim or proceeding. If indemnitor actually assumes the defense of
indemnitee, indemnitee will not make any settlement of any Claim which might
give rise to liability of indemnitor under the indemnity agreement contained in
this Article 10 without the written consent of indemnitor, which consent shall
not be unreasonably withheld. Indemnitor will not agree to a compromise or
settlement of any such suit, Claim or proceeding that would require the payment
of any amounts by indemnitee, or would adversely affect the manner in which
indemnitee may conduct the Business, without the written consent of indemnitee.
10.4 Survival of Representations and Warranties of
InfoPak. The representations and warranties made by InfoPak under this
Agreement shall survive the Closing until, in the absence of fraud or
intentional misrepresentation, the date falling eighteen (18) months after the
Closing Date, except that representations and warranties contained in the first
sentence of Section 4.7 (Title to Properties) shall survive the Closing
indefinitely. Representations and warranties shall not terminate for purposes
of any Claim made by DVG or Buyer prior to the expiration of the respective
representation or warranty. All statements made by or on behalf of InfoPak
herein or in the Schedules, or in any other document, instrument, certificate,
schedule or list delivered to DVG or Buyer hereunder shall be deemed
representations and warranties of InfoPak.
10.5 Survival of Representations and Warranties of DVG and
Buyer. The representations and warranties made by DVG and Buyer under this
Agreement shall survive the Closing until, in the absence of fraud or
intentional misrepresentation, the date falling eighteen (18) months after the
Closing Date. Representations and warranties shall not terminate for purposes
of any Claim made by InfoPak prior to the expiration of the respective
representation or
36
<PAGE> 50
warranty. All statements made by or on behalf of DVG or Buyer herein or in any
other document, instrument, certificate or schedule or list delivered to
InfoPak hereunder shall be deemed representations and warranties of DVG or
Buyer.
10.6 Other. In computing the amount due to an indemnitee
under this Article 10, the aggregate amount due shall be reduced by the
proceeds of any related insurance or recoveries actually received by such
indemnitee, except to the extent that such indemnitee shall have assigned such
proceeds to the indemnitor.
ARTICLE 11.
MISCELLANEOUS
11.1 Knowledge. As used in this Agreement, the phrase
"Knowledge of" a party, shall mean the knowledge that the executive officers of
such party have or should have after having made a good faith effort to
ascertain the fact in question pursuant to an inquiry directed to such
officers, directors, supervisors and advisors as would be reasonably likely to
have the information relating to the fact in question.
11.2 Board Representation. At the Closing of this
Agreement, such corporate action shall have been taken as may be required under
the Delaware Corporation Act, and under the Certificate of Incorporation and
ByLaws of DVG in effect immediately prior to the Closing Date to appoint Sean
F. Lee to the Board of Directors of DVG. In addition, DVG shall use its best
efforts to cause its members of the Board of Directors of DVG at the next
annual meeting of stockholders to nominate and recommend Sean F. Lee for
election to the Board of Directors of DVG all as provided in the employment
agreement between InfoPak and Sean F. Lee, which agreement shall govern Sean F.
Lee's position as a member of DVG's Board of Directors.
11.3 Transfer Taxes. All stamp, transfer, documentary,
sales, use, registration, and other such taxes and fees incurred in connection
with this Agreement and the transactions contemplated hereby (collectively, the
"Transaction Taxes"), shall be paid by InfoPak, and InfoPak shall, at its own
expense, procure any stock transfer stamps required by, and properly file on a
timely basis all necessary tax returns and other documentation with respect to,
any Transaction Tax and provide to DVG and Buyer evidence of payment of all
Transaction Taxes.
11.4 Notification. Until the Closing, DVG or Buyer shall
promptly inform InfoPak in writing of any material variances discovered by DVG
or Buyer or its representatives in the
37
<PAGE> 51
representations and warranties of InfoPak contained in this Agreement. Such
notice shall not waive DVG's or Buyer's rights under this Agreement.
11.5 Governing Law. The interpretation and construction of
this Agreement, and all matters relating hereto, shall be governed by the laws
of the Commonwealth of Pennsylvania applicable to contracts made and to be
performed entirely within the Commonwealth of Pennsylvania.
11.6 "Person" Defined. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a limited liability
company, a trust, any other form of business entity, an unincorporated
organization and a government or other department or agency thereof.
11.7 Captions; Schedules. The Article and Section
captions used herein are for reference purposes only, and shall not in any way
affect the meaning or interpretation of this Agreement.
11.8 Publicity. Except as otherwise required by law or
regulation, neither of the parties hereto shall issue any press release or make
any other public statement, in each case relating to or connected with or
arising out of this Agreement or the matters contained herein, without
obtaining the prior approval of the other party to the contents and the manner
of presentation and publication thereof.
11.9 [Intentionally Omitted]:
11.10 Bulk Sales. The parties mutually agree to waive each
other's compliance with the applicable Uniform Commercial Code Bulk Sale Law or
other similar bulk sales laws, if any, in effect in states in which InfoPak's
assets are located.
11.11 Post-Closing Remittances. If, after the Closing Date,
InfoPak or its affiliates shall receive any remittance from any account debtors
with respect to any accounts or notes receivables payable to DVG or Buyer,
then, InfoPak or its affiliate, as applicable, shall endorse such remittance to
the order of DVG or Buyer and forward it to DVG or Buyer promptly following
receipt thereof.
11.12 Dispute Resolution.
(a) Arbitration. If any controversy,
disagreement or issue shall arise between the parties hereto in the
performance,
38
<PAGE> 52
interpretation and application of any part of this Agreement, the parties
hereto agree to exercise their best efforts to select a means of resolution
other than judicial litigation and if no such means can be agreed upon, the
parties hereby agree to submit such controversy, disagreement or issue to
arbitration in accordance with the Commercial Arbitration Rules, then
obtaining, of the American Arbitration Association. The arbitrators shall give
the reasons for their award, shall be obligated to apply the laws of the State
of Arizona and the arbitrators shall not be empowered to award punitive
damages. Either party may serve upon the other notice stating that such party
desires to have such controversy settled by arbitration and setting forth the
name and address of the person whom such party has designated to act as an
arbitrator. Within fifteen (15) days after receipt of such notice, the other
party shall designate a person to act as arbitrator and shall notify the party
requesting arbitration of such designation and the name and address of the
person so designated. If the party upon whom such written request for
arbitration is served, shall fail to designate its arbitrator within fifteen
(15) days after receipt of such notice, then the arbitrator designated by the
party requesting arbitration shall apply to the American Arbitration
Association, Phoenix Chapter, or its successor to designate and appoint such
second arbitrator. The two (2) arbitrators designated as aforesaid shall meet
within ten (10) days after the second arbitrator is appointed and if within
thirty (30) days after the second arbitrator is appointed they shall not
resolve the question or items in dispute, they shall promptly select a third
arbitrator. If the two arbitrators have not selected a third arbitrator within
such thirty (30) day period, then either arbitrator, on five (5) days notice in
writing to the other, or both arbitrators, shall apply to the American
Arbitration Association, Phoenix Chapter, or its successor to designate and
appoint a third arbitrator.
(b) Service of Process; Effect. InfoPak hereby
consents to the jurisdiction of the courts of the State of Arizona for the
review or enforcement of the award of the arbitrators. The decision and award
or resolution of a majority of the arbitrators shall be binding upon both the
parties hereto and shall be enforceable in any court of competent jurisdiction
or determinative of the issues to be resolved, as the case may be.
(c) Arbitrator . The arbitrators shall use their
best efforts to render their decision within a period of ninety (90) days after
the appointment of such third arbitrator. All hearings and proceedings held by
the arbitrators shall take place in Phoenix, Arizona. Any arbitrator
designated to serve in accordance with the provisions of this Agreement shall
be qualified by training and experience for the matter for which such
arbitrator is designated to act.
39
<PAGE> 53
11.13 Notices. Any notice or other communications required
or permitted hereunder shall be sufficiently given if delivered in person or
sent by telecopy or by registered or certified mail, postage prepaid, addressed
as follows:
If to DVG or Buyer, to:
George S. Smith
Chief Executive Officer
Dimensional Visions Group, Ltd..
718 Arch Street, Suite 202N
Philadelphia, Pennsylvania 19106
Telephone: (215) 440-7791
Telecopy: (215) 440-7797
with a copy to its counsel:
John L. Thomas Esquire
Clark, Ladner, Fortenbaugh & Young
One Commerce Square
2005 Market Street
Philadelphia, Pennsylvania 19103
Telephone: (215) 241-1870
Telecopy: (215) 241-1857
If to the InfoPak, to:
Sean F. Lee
Chief Executive Officer
InfoPak, Inc.
8855 N. Black
Canyon Highway, Suite 200
Phoenix, Arizona 85021
Telephone: (602) 997-1990
Telecopy: (602) 997-5658
with a copy to its counsel:
Stephen R Boatwright, Esquire
Chapman and Cutler
2 North Central Avenue
Phoenix, Arizona 85004
Telephone: (602) 254-4060
Telecopy: (602) 256-4060
40
<PAGE> 54
If to InfoPak Shareholders, to:
Sean F. Lee
InfoPak, Inc.
8855 N. Black
Canyon Highway, Suite 200
Phoenix, Arizona 85021
Telephone: (602) 997-1990
Telecopy: (602) 997-5658
or such other address or number as shall be furnished in writing by any such
party, and such notice or communication shall be deemed to have been given as
of the date so delivered, sent by telecopy or mailed.
11.14 Parties in Interest. This Agreement may not be
transferred, assigned, pledged or hypothecated by either party hereto without
the prior written consent of the other party. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors and permitted assigns.
11.15 Counterparts. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one instrument.
11.16 Entire Agreement. This Agreement, including the
Schedules and other documents referred to herein which form a part hereof,
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein and therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
11.17 Amendments. This Agreement may not be changed orally,
but only by an agreement in writing signed by the parties hereto. Any provision
of this Agreement can be waived, amended, supplemented or modified by written
agreement of the parties hereto.
11.18 Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
11.19 Third Party Beneficiaries. Each party hereto intends
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any Person other than the parties hereto.
41
<PAGE> 55
11.20 Termination of InfoPak Shareholders' Agreement.
Immediately upon the Effective Time, the Shareholders' Agreement of InfoPak,
Inc. entered into as of August 21, 1992, as amended in October 1993, shall be
terminated and declared null and void and no shareholder of InfoPak shall have
any further rights thereunder.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement, all as of the day and year first above written.
DIMENSIONAL VISIONS GROUP, LTD.
By:/s/ George S. Smith
--------------------------------
Title: Chief Executive Officer
INFOPAK ACQUISITION CO.
By:/s/ George S. Smith
--------------------------------
Title: Chief Executive Officer
INFOPAK, INC.
By:/s/ Sean F. Lee
--------------------------------
Title: Chief Executive Officer
INFOPAK SHAREHOLDERS:
Sean F. Lee Family Limited Partnership
By:/s/ Sean F. Lee
----------------------------
Sean F. Lee, General Partner
/s/ Timothy Wright
--------------------------------
Timothy Wright
/s/ John Edward Matlock
--------------------------------
John Edward Matlock
/s/ Bruce Darryl Sandig
--------------------------------
Bruce Darryl Sandig
42
<PAGE> 56
SCHEDULE 1.1
ARTICLES OF MERGER
OF
INFOPAK ACQUISITION CO.
(A DELAWARE CORPORATION)
INTO
INFOPAK, INC.
(AN ARIZONA CORPORATION)
Pursuant to the provisions of A.R.S. Section 10-074, the undersigned
domestic and foreign corporations adopt the following Articles of Merger:
FIRST: The names of the undersigned corporations and the States under
the laws of which they are respectively organized are as follows:
<TABLE>
<CAPTION>
Name of Corporation State
------------------- -----
<S> <C>
InfoPak Acquisition Co. Delaware
InfoPak, Inc. Arizona
</TABLE>
SECOND: The laws of the State of Delaware, under which the foreign
corporation is organized, permit such merger.
THIRD: The name of the surviving corporation is InfoPak, Inc., and
such corporation is to be governed by the laws of the State of Arizona.
FOURTH: The Agreement and Plan of Merger was approved by the
undersigned domestic corporation in the manner prescribed by the Arizona
Business Corporation Act, and was approved by the undersigned foreign
corporation in the manner prescribed by the laws of the State of Delaware all
as set forth on Exhibit "A" attached hereto.
FIFTH: As to each corporation, the number of shares outstanding and
the designation and number of outstanding shares of each class or series
entitled to vote as a class or series on such Plan, are as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
ENTITLED TO VOTE AS A CLASS OR SERIES
NUMBER OF -------------------------------------
SHARES DESIGNATION NUMBER OF
NAME OF CORPORATION OUTSTANDING OF CLASS OR SERIES SHARES
- - - ------------------- ----------- ------------------ ---------
<S> <C> <C> <C>
InfoPak Acquisition Co. 100 Common 100
InfoPak, Inc. 5,579,504 Common 5,579,504
</TABLE>
<PAGE> 57
SIXTH: As to each corporation, the total number of shares voted for
and against such Plan, respectively, and, as to each class or series entitled
to vote thereon as a class or series, the number of shares of such class or
series voted for and against such Plan, respectively, are as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
------------------------------------------------------
ENTITLED TO VOTE AS A CLASS OR SERIES
TOTAL TOTAL -------------------------------------
VOTED VOTED DESIGNATION NUMBER OF
NAME OF CORPORATION FOR AGAINST OF CLASS OR SERIES SHARES
- - - ------------------- --- ------- ------------------ ---------
<S> <C> <C> <C> <C>
InfoPak Acquisition Co. 100 0 Common 100
InfoPak, Inc. Common 5,579,504
</TABLE>
SEVENTH: This Merger will be effective upon filing.
Dated as of the ____ day of September, 1995.
InfoPak, Inc.
By:
----------------------
Sean F. Lee
President
By:
----------------------
Paul Damiani
Secretary
InfoPak Acquisition Co.
By:
----------------------
George F. Smith
President
By:
----------------------
John Thomas
Secretary
<PAGE> 58
SCHEDULE 1.1
CERTIFICATE OF MERGER
OF
INFOPAK ACQUISITION CO.
(a Delaware Corporation)
INTO
INFOPAK, INC.
(an Arizona Corporation)
The undersigned corporation, InfoPak, Inc., an Arizona corporation,
files this Certificate of Merger pursuant to Section 252(c) of the General
Corporation Law of the State of Delaware and does hereby certify:
FIRST: That the names and states of incorporation of each of the
constituent corporations of the merger is as follows:
<TABLE>
<CAPTION>
NAME STATE OF INCORPORATION
<S> <C>
InfoPak Acquisition Co. Delaware
InfoPak, Inc. Arizona
</TABLE>
SECOND: That an Agreement and Plan of Merger between the parties to
the merger has been approved, adopted, certified, executed and acknowledged by
each of the boards of directors of the constituent corporations in accordance
with the requirements of Section 252 of the General Corporation Law of
Delaware.
THIRD: That the name of the surviving corporation of the merger is
InfoPak, Inc., an Arizona corporation.
<PAGE> 59
FOURTH: That the Certificate of Incorporation of InfoPak, Inc., an
Arizona corporation, which is the surviving corporation, shall continue in full
force and effect as the Certificate of Incorporation of the surviving
corporation.
FIFTH: That the executed Agreement and Plan of Merger is on file at
the principal place of business of the surviving corporation, the address of
which is InfoPak, Inc., North Black Canyon Highway, Suite 200, Phoenix, Arizona
85021.
SIXTH: That a copy of the Agreement and Plan of Merger will be
furnished by the surviving corporation, on request and without cost, to any
stockholder of any constituent corporation.
SEVENTH: That the authorized capital stock of InfoPak, Inc. is
forty million (40,000,000) shares of Common Stock. A total of Five million,
five hundred seventy-nine thousand, five hundred and four (5,579,504) shares of
the common stock of InfoPak, Inc. are issued and outstanding. The authorized
capital stock of InfoPak Acquisition Co. is three thousand (3,000) shares of
Common Stock, $ 0.01 par value. There are one hundred (100) shares of InfoPak
Acquisition Co. Common Stock issued and outstanding.
EIGHTH: That the surviving corporation may be served with process in
the State of Delaware in any proceeding for enforcement of any obligation of
InfoPak Acquistion Co. as well as for the enforcement of any obligation of the
surviving corporation arising from the merger, including any suit or other
proceeding to enforce the right of any stockholder as determined in appraisal
proceedings pursuant to the provisions of Section 262 of Title 8 of the
<PAGE> 60
Delaware Code and it does hereby irrevocably appoint the Secretary of State of
Delaware as its agent to accept service of process in any such suit or other
proceeding. The address to which a copy of such process shall be mailed by the
Secretary of State of Delaware is c/o InfoPak, Inc., North Black Canyon
Highway, Suite 200, Phoenix, Arizona 85021 until the surviving corporation
shall have hereafter designated in writing to the said Secretary of State a
different address for such purpose. Service of such process may be made by
personally delivering to and leaving with the Secretary of State of Delaware
duplicate copies of such process, one of which copies the Secretary of State of
Delaware shall forthwith send by registered mail to the surviving corporation
at the above address.
NINTH: That this Certificate of Merger shall be effective upon filing.
IN WITNESS WHEREOF, InfoPak, Inc. has caused this certificate to be
signed by Sean F. Lee, its President, and attested by Paul Damiani, its
Secretary, on the ______ day of September, 1995.
<TABLE>
<S> <C>
INFOPAK, INC.
By:
-----------------------------
Sean F. Lee, President
Attest:
By:
---------------------------
Paul Damiani, Secretary
</TABLE>
<PAGE> 61
SCHEDULE 2.1
CERTIFICATE OF DESIGNATION OF TERMS OF
FOURTH SERIES P CONVERTIBLE PARTICIPATING PREFERRED STOCK
Dimensional Visions Group, Ltd. (the "Corporation" or "Company"), a
Delaware corporation, pursuant to Section 151(g) of the General Corporation Law
of the State of Delaware, as amended, hereby certifies that:
1. The Board of Directors of the Corporation, pursuant to
authority expressly vested in it by the provisions of the Company's Restated
Certificate of Incorporation, duly adopted the following resolution creating
the fourth series of the Preference Stock of the Corporation to consist
initially of 600,000 shares and fixing the designations, preferences and
rights, and the qualifications, limitations and restrictions thereof, of the
shares of such series at a meeting duly held on August 26, 1995:
RESOLVED, That pursuant to authority expressly granted to the
Board of Directors by the provisions of this Corporation's
Certificate of Incorporation, the Board of Directors hereby
creates the third series of the Preference Stock of the
Corporation to consist initially of 600,000 shares ("Fourth
Series") and hereby fixes the designations, preferences and
rights, and qualifications, limitations and restrictions
thereof, of the shares of such series (in addition to the
designations, preferences and rights, and the qualification,
limitations and restrictions thereof, set forth in the
Certificate of Incorporation which are applicable to this
Corporation's Preference Stock of all series) as follows:
(1) Designation of Series. The Fourth Series
shall be designated by the Series P Convertible Participating Preferred Stock.
(2) Number of Shares. The number of shares of
the Fourth Series shall be 600,000, which number from time to time may be
increased or decreased (but not below the number of shares of the series then
outstanding) by resolution of the Board of Directors of the Corporation.
(3) Dividends. Dividends will be paid on the
Fourth Series P Convertible Participating Preferred Stock to the extent that
dividends are paid on the Corporation's Common Stock.
(4) Redemption. Shares of the Fourth Series P
Convertible Participating Preferred Stock shall not be redeemable.
<PAGE> 62
(5) No Liquidation Preference. In the event of a
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, holders of shares of the Fourth Series shall have no liquidation
preference over holders of the Corporation's Common Stock. Holders of shares
of the Fourth Series shall participate ratably with holders of the
Corporation's Common Stock in the distribution of assets with each share of the
Fourth Series accounting for ten (10) shares of the Corporation's Common Stock.
Nether the merger nor consolidation of the Corporation with or into any
corporation, nor any sale, transfer or lease of all or part of the
Corporation's assets, shall be deemed a liquidation of the Corporation within
the meaning of this paragraph (5).
(6) Conversion Rights. Any holder of shares of
the Fourth Series may convert any or all of such shares into fully paid and
non-assessable shares of Common Stock of the Corporation (hereafter called
"Common Stock") on the terms, at the times, and in the manner hereinafter set
forth.
(a) Shares of the Fourth Series may be converted
at any time after January 1, 1996, or at such time that the number of shares of
the Company's authorized but unissued Common Stock are available to allow 100%
conversion of the entire issued and outstanding Fourth Series P Convertible
Participating Preferred Stock, into shares of Common Stock at the rate of ten
(10) shares of Common Stock for each share of the Fourth Series, such rate to
be subject to adjustment as hereinafter provided.
(b) Any holder of shares of the Fourth Series who
elects to convert them shall surrender the certificate therefor at the
principal office of any Transfer Agent, or the Corporation as the case may be,
for such shares, with the form of written notice endorsed on such certificate
of his elections to convert them completed. If necessary under the
circumstances, such certificate shall be endorsed for transfer or accompanied
by executed instruments of transfer, together with such other transfer papers
as the transfer Agent may reasonably require. The Corporation or such Transfer
Agent, as the case may be, may require, as a condition to the exercise of the
conversion privilege, the payment of any transfer tax or other governmental
charge (but not any tax payable upon the issue of stock deliverable upon such
conversion) that may be imposed upon any transfer incidental or prior to the
conversion, or the submission of proper proof that the same has been paid. The
conversion privilege shall be deemed to have been exercised, and the shares of
Common Stock issuable upon such conversion shall be deemed to have been issued,
upon the date the Transfer Agent, or the Corporation as the case may be,
receives for conversion the certificate representing such shares with the
required terms for conversion satisfied, except that as to any
2
<PAGE> 63
shares of such series which are surrendered for conversion on a date which is
less than five business days preceding the date fixed for the determination of
holders of Common Stock entitled to received rights to subscribe for or to
purchase shares of Common Stock or other securities of the Corporation
convertible to Common Stock, the conversion privilege shall be deemed to have
been exercised on the business day next succeeding the date fixed for such
determination. Each person entitled to receive the Common Stock issuable upon
such conversion shall from the same date be treated as the record holder of
such Common Stock, and the person who surrenders such shares for conversion
shall on that date cease to be treated as the record holder of the shares
surrendered.
(c) The Corporation shall not issue in connection
with the conversion of shares of the Fourth Series certificates for a fraction
of one share of Common Stock, but in lieu thereof shall pay to any person who
would otherwise be entitled thereto an amount of case equal to such fraction
multiplied by the Market Price of the Common Stock on the last business day of
the week preceding the week in which the conversion privilege was deemed to
have been exercised. As used herein, "Market Price" means the last reported
sale price regular way on such day or, in case no such reported sale takes
place on such day, the reported closing bid price regular way, in either case
on the principal national securities exchange on which the Common Stock is then
listed or, if not listed on any national securities exchange, the closing bid
price in the over-the-counter market as reported by any New York Stock Exchange
member firm selected from time to time by the Board of Directors for that
purpose.
(d) As soon as practicable after the effective
date of conversion of any shares of the Fourth Series, the Corporation shall
deliver to the person or persons entitled thereto, at the principal office of
the Transfer Agent at which such stock was surrendered for conversion,
certificates representing the shares of Common Stock and any cash to which such
person or persons shall be entitled on such conversion.
(e) The conversion rate set forth in subparagraph
(a) of this paragraph (6) shall be subject to adjustment as follows:
(i) if the Corporation subdivides the outstanding
shares of its Common Stock into a greater number of shares or
combines them into a smaller number of shares, the conversion
rate in effect immediately prior to such subdivision or
combination shall be proportionately increased or decreased
effective at the opening of
3
<PAGE> 64
business on the day following the day upon which such
subdivision or combination becomes effective;
(ii) if the Corporation fixes a record date for
the purpose of determining the holders of shares of Common
Stock, entitled to receive any dividend in Common Stock, the
conversion rate in effect immediately prior to such record
date shall be proportionately increased effective at the
opening of business on the day following such record date,
provided that if for any reason the plan to pay such dividend
in Common Stock is legally abandoned before payment, then any
adjustment made in the conversion rate by reason of the
passage of such record date shall be canceled as of the date
the plan is abandoned; and
(iii) the issuance to all holders of Common Stock
of the Corporation of rights to subscribe to Common Stock at a
price lower than 90% of the Market Price (defined above)
thereof as of the close of business on the last business day
of the week preceding such issuance of rights shall be deemed
to constitute the payment of a dividend in Common Stock to the
holders of shares of Common Stock (and the record date
therefore shall be deemed to have been fixed as the date of
issuance of such rights) of that number of shares which is
determined by dividing the Market price per share as of such
time into the difference between (a) the total Market Price as
of such time of the number of shares purchasable upon exercise
of such rights and (B) the total offering price of such
shares.
(f) In case of
(i) any reclassification or change of the
Common Stock of the Corporation other than a
change in its par value, a change from par
value to no par value or case provided for in
subparagraph (c) of this paragraph (6), or
(ii) a merger of consolidation in which the
Corporation is not the continuing corporation,
provisions shall be made so that the Fourth Series
shall thereafter have the right to convert each share
thereof into the kind and amount of shares of stock
or other securities or property receivable upon such
reclassification, change, merger or consolidation by
a holder of the number and kind of
4
<PAGE> 65
shares of capital stock of the Corporation into which
such shares of the Fourth Series were convertible
immediately prior thereto. In any such case the
Board of Directors shall determine the manner in
which the adjustments provided for in subparagraph
(e) of the paragraph (6) shall thereafter be made.
(g) Whenever the conversion rate is required to
be adjusted:
(i) the Corporation shall file a certificate
setting forth such adjusted conversion rate and the
facts upon which the adjustment is based with the
Transfer Agents for shares of the Fourth Series and
the Transfer Agents for the Common Stock and
thereafter (until further adjusted) the adjusted
conversion rate shall be as set forth in such
certificate; and
(ii) the Corporation shall mail notice of
such adjusted conversion rate to each holder of
shares of the Fourth Series.
(7) Voting Rights. Except as provided below,
holders of shares of the Fourth Series shall have the general
power to vote in the election of directors and for all other
purposes, on the basis of ten (10) votes per share of the
Fourth Series. Holders of shares of the Fourth Series shall
not have the general power to vote on any matters on which
they are entitled to vote as a series or as part of the class
of Preference Stock, regardless of series.
2. This instrument will become effective as of the beginning of
business on September 5, 1995.
5
<PAGE> 66
IN WITNESS WHEREOF, the Company has caused its corporate seal
to be hereunto affixed and this certificate to be signed by George S. Smith,
its Chief Executive Officer, and attested by Joann Furman, its
Secretary/Treasurer, this 5th day of September, 1995.
<TABLE>
<S> <C>
DIMENSIONAL VISIONS GROUP, LTD.
By:
----------------------------
George S. Smith
Chief Executive Officer
[CORPORATE SEAL]
Attest:
- - - -------------------------------
Joann Furman
Secretary/Treasurer
</TABLE>
6
<PAGE> 67
SCHEDULE 2.3 B
EXCLUDED LIABILITIES
Back Payments Due and Owing :
Roy D. Pringle $ 9,743.67
Sean F. Lee $ 97,291.66
John E. Matlock $ 6,669.30
Bruce D. Sandig $ 30,639.38
Paul C. Damiani $ 7,539.98
Royalties Due and Owing :
John E. Matlock $ 50,283.00
Timothy Wright $ 50,283.00
Sean F. Lee $ 50,283.00
Bruce D. Sandig $ 50,283.00
Funding Agreement
Sean and Janet Lee $ 137,020.63 plus
interest of
$ 33,018.82
Robert and Marjorie Huskins
$ 144,413.40 plus
interest of
$ 32,359.81
Other
Midland Trust Company, Ltd. $ 175,000.00
Promissory Note and Stock Pledge Agreement
Myles & Elizabeth Hassett $ 18,744.38
Edward & Sandra Ranger $ 18,744.38
<PAGE> 68
SCHEDULE 3.2(a)(iv)
OPINION OF DVG'S AND BUYER'S COUNSEL
The opinion of Clark, Ladner, Fortenbaugh & Young, legal counsel for
DVG and Buyer, shall be to the effect that:
1. DVG and buyer is each a corporation duly organized, validly
existing and in good standing under General Corporation Law of Delaware, and
each has the requisite corporate power and authority to own and operate its
properties, to lease any properties that it operates under lease and to conduct
its business, and to enter into and perform all of its obligations under the
Agreement and under the other agreements and documents to be entered into by
DVG and Buyer pursuant to the Agreement (collectively, the "Documents").
2. The execution, delivery and performance by DVG and Buyer of
the Documents have been duly authorized by all necessary corporate actin on
each of their part, are not in contravention of any provision of the Articles
of Incorporation or By-laws of either of them and will not result in the breach
of, or constitute a default under, or result in the creation or imposition of
any lien pursuant to the provisions of (i) any material indenture, mortgage,
loan agreement or other agreement to which either of them is a party and to
which we have knowledge, taking into account consents, waivers and approvals
obtained by DVG and Buyer prior to Closing, or (ii) any order, writ, judgment
or decree known to us to which DVG or Buyer is a party or to which DVG or Buyer
or the property of either of them is subject.
3. The execution, delivery and performance of the Documents by
DVG and Buyer do not violate any provision of any applicable federal or
Delaware state statute, rule
<PAGE> 69
or regulation which is normally applicable to transactions of the type
contemplated by the Documents. No authorization, approval or consent of any
governmental or regulatory body is necessary or required under the federal or
Delaware law in connection with the lawful execution, delivery and performance
by DVG and Buyer of the Documents other than those that have already been
obtained.
4. The Documents have been duly executed and delivered by DVG and
Buyer and constitute the valid and binding obligations of each of them,
enforceable against each of them in accordance with their terms, except to the
extent that enforcement thereof may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights
of creditors and the application of general principals of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and further
subject to the qualifications set forth in the next succeeding sentence. We
express no opinion herein as to the validity or enforceability of any provision
regarding choice of Arizona law to govern the Documents or any provision of the
Documents to the extent that such provision purports to waive any rights,
remedies, or defenses or of any provision for contribution or indemnification.
2
<PAGE> 70
SCHEDULE 3.2(a)(vi)(A)
EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of September, 1995, by and between
Sean F. Lee an adult individual residing in the State of Arizona (hereinafter
referred to as "Employee") and InfoPak, Inc., a Delaware corporation with an
address at 8855 N. Black Canyon Highway, Suite 2000, Phoenix, Arizona 85021
(hereinafter referred to as "Employer").
WITNESSETH
WHEREAS, Employer desires to employ Employee in the capacity of Chief
Executive Officer, or in any other position consistent with Employee's status;
WHEREAS, Employee desires to be employed by Employer in the aforesaid
capacity; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending legally to be bound, agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the
capacity set forth above. The employment shall commence on September ___,
1995, and terminate on September ___, 1998, unless sooner terminated in
accordance with the provisions of Paragraph 5. After September ___, 1998, this
Agreement and all its terms and provisions shall be automatically extended from
month-to-month,
<PAGE> 71
unless sooner terminated in accordance with the provisions of this contract.
2. DUTIES OF EMPLOYEE.
(a) In accepting employment from Employer, Employee shall
undertake the responsibility of performing for and on behalf of Employer
whatever duties shall be assigned to Employee by Employer at any time and from
time to time. It is further understood and agreed that any modification in, or
expression of, Employee's duties shall not result in any modification in, or
increase or decrease of, Employee's compensation as stated in paragraph 3,
unless Employer specifically shall agree otherwise in a duly executed amendment
of this Agreement.
(b) Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote his full-time efforts
to his duties as an Employee of the Employer. Employee further covenants and
agrees that he will not, directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of Employer.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be paid the
following annual salary, on a semi-monthly basis, during the term hereof:
$100,000.00. Employee shall also be entitled to participate in the Employer's
Bonus Plan as set forth in Exhibit "A" attached hereto and receive a signing
bonus of Series P Convertible Preferred Shares of Dimensional Visions Group,
Ltd. as set forth in Exhibit "C" attached hereto.
2
<PAGE> 72
4. ADDITIONAL BENEFITS. In addition to, and not in limitation
of, the compensation referred to in paragraph 3, Employee shall receive the
following additional benefits: such group health insurance as may be provided
by Employer from time to time. Employee shall have the right to vacation,
holidays and other paid leave days as permitted by the employee policy manual
in effect upon the signing of this Agreement at InfoPak, Inc.
5. TERMINATION BY EMPLOYER. Notwithstanding any other provision
hereof, Employer may terminate Employee's employment under this Agreement at
any time for cause. The termination shall be evidenced by written notice
thereof to Employee, which shall specify the cause for termination. For
purposes hereof, the term "Cause" shall include, without limitation, the
inability of Employee, through sickness or other incapacity, to perform his
duties under this Agreement for a period in excess of ninety (90) substantially
consecutive days; dishonesty; theft; conviction of a felony; substance abuse;
intoxication; unethical business conduct including disruption of Employer's
management of its business; and a material breach of this Agreement. The term
"cause" shall also include the failure of Employee for any reason, within ten
(10) days after receipt by Employee of written notice thereof from Employer, to
correct, cease, or otherwise alter any insubordination, failure to comply with
instructions, or other action or omission to act that in the opinion of
Employer does or may materially or adversely affect its business or operations.
This Agreement will terminate on the death of Employee.
6. RESTRICTIVE COVENANT. Employee acknowledges that the services
he is about to render are of a special and unusual
3
<PAGE> 73
character with a unique value to Employer, the loss of which cannot be
adequately compensated by damages in an action at law. In view of the unique
value to Employer of the services of Employee, for which Employer has
contracted hereunder because of the confidential information to be obtained by
or disclosed to Employee, as set forth herein, and as a material inducement to
Employer to enter into this Agreement and to pay Employee the compensation
stated in Paragraph 3, Employee covenants and agrees as follows:
During the term of the Employee's employment with Employer, and for a
period of two (2) years following the termination of such employment, for any
reason whatsoever, the Employee shall not, directly or indirectly:
(a) Solicit or divert any clients ("Clients") served by
Employer;
(b) Cause any Clients of Employer not to do business with
Employer;
(c) Solicit any Clients which are known by the Employee to
have been contacted or solicited, in any way, by Employer;
(d) Induce or attempt to influence any employee of Employer
or independent contractor doing business with Employer to terminate such
employee's or independent contractor relationship with Employer;
(e) Become employed with or engaged in (as a principal,
partner, director, officer, agent, employee, independent contractor, consultant
or otherwise) or be financially interested in any business which is the same or
similar to the business carried on by Employer or being planned by Employer at
the time of the termination of the Employee's employment with Employer;
4
<PAGE> 74
provided, however, this restriction shall only be operative if such business
does business with Clients of Employer or if such business does business within
a fifty (50) mile radius of any geographic area where Employer is actually
engaged in business or maintains sales or service representatives or employees.
(f) Contact or be employed by any Clients of Employer.
(g) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
7. TRADE SECRETS.
(a) Employee acknowledges that his employment by Employer
will enable him to obtain confidential information concerning Employer, its
subsidiaries and affiliates, and information about trade secrets which are the
proprietary property of Employer, including but not limited to the following:
research, experiments, inventions, discoveries and improvements conceived,
developed or worked on by Employer or developed by the Employee for or on
behalf of Employer, or otherwise, whether or not related to Employer's business
as it now exists; data and information about costs, profits, markets, sales,
key personnel, pricing policies; technical, scientific, patent and proprietary
information and/or processes; operational methods and other business affairs
and methods, including plans for future developments (all of which is
hereinafter collectively referred to as "Confidential Property and
Information"). Confidential Property and Information is, and shall remain, the
sole and confidential property of Employer. Employee agrees that he shall not
use for himself or divulge any of the Confidential Information to anyone
outside of Employer except in the normal course of the conduct of Employer's
business and then
5
<PAGE> 75
only with the prior written consent of Employer's Board of Directors.
(b) As a condition to the employment of Employee, Employee
further agrees to execute Employer's standard EDAC Agreement attached hereto as
Exhibit "B" and such other Confidentiality Agreement as may, during the term of
Employee's employment, be required by Employer of all executives in Employer's
employ. It is specifically understood that the consideration supportive of
such latter execution by Employee will be the continued employment of Employee,
it being specifically understood that the failure or refusal of Employee to
execute such latter document would constitute Cause for termination by Employer
of Employee's employment hereunder.
(c) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
8. RETURN OF CONFIDENTIAL INFORMATION. The Employee shall make
full disclosure to Employer of all Confidential Property and Information, and
shall do everything necessary or desirable to vest the absolute title of
Confidential Property and Information in Employer. Upon the termination or
expiration of this Agreement, Employee shall return to Employer all
Confidential Property and Information in the Employee's possession or control.
The provisions of this Paragraph 9 shall survive the termination or expiration
of this Agreement.
9. ACCOUNTING FOR PROFITS. Employee covenants and agrees that if
he shall violate any of his covenants or agreements under Paragraph 6, Employer
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration,
6
<PAGE> 76
or other benefits that Employee directly or indirectly has realized and/or may
realize as a result of, growing out of, or in connection with, any such
violation. These remedies shall be in addition to, and not in limitation of,
any injunctive relief or other rights or remedies to which Employer is or may
be entitled at law, in equity, or under this Agreement.
10. REASONABLENESS OR RESTRICTIONS.
(a) Employee has carefully read and considered the
provisions of Paragraphs 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these paragraphs, including, but not limited to, the
time period of restriction and the geographical areas of restriction set forth
in Paragraph 6, are fair and reasonable and are reasonably required for the
protection of the interests of Employer and its officers, directors, and other
employees.
(b) In the event that, notwithstanding the foregoing, any
of the provisions of Paragraphs 5, 6, and 7 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless continue to
be valid and enforceable as though the invalid or unenforceable parts had not
been included therein. In the event that any provision of Paragraph 6 relating
to the time period and/or the areas of restriction shall be declared by
arbitration to exceed the maximum time period or areas such court deems
reasonable and enforceable, the time period and/or areas of restriction deemed
reasonable and enforceable by the court shall become and thereafter be the
maximum time period and/or areas.
11. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, Employer and Employee, and
7
<PAGE> 77
their respective heirs, personal and legal representatives, successors, and
assigns.
12. APPOINTMENT TO BOARD OF DIRECTORS. Employee shall be
appointed to the Board of Directors of Dimensional Visions Group, Ltd. ("DVG"),
the parent of Employer. During the term of this Agreement, Employee will be
nominated to DVG to serve as a member of its Board of Directors in connection
with any Annual Meeting of DVG's stockholders. At such time as Employee no
longer is in the employ of Employer, he shall have been deemed to have resigned
as a member of DVG's Board of Directors and to have resigned from all other
offices of DVG or Employer, as the case may be.
13. NON RELOCATION OF EMPLOYEE. Employer will not without
Employees consent change the principal location at which Employee performs his
duties as of the date of this Agreement.
14. GOVERNING LAW. In view of the fact that the principal office
of Employer is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
15. ARBITRATION. Employer and Employee agree that all disputes
under this contract will be subject to arbitration under the rules of the
American Arbitration Association. Any such arbitration will be conducted by
three arbitrators sitting in Phoenix, Arizona, with all costs, expenses and
attorney's fees to be paid by the losing party. Any decision of the
arbitrators shall be final and may be entered as a judgment in the Court of
competent jurisdiction.
8
<PAGE> 78
16. SEVERABILITY. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5, 6, and 7, shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
17. NOTICE. Any notice required to be given shall be sufficient
it if is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his residence in the case of
Employee, which residence will be on file with Employer at all times, and to
its principal office in Arizona in the case of Employer.
18. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of his Agreement at such time or at any other time.
19. REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set forth in this
Agreement shall be cumulative with all other such
9
<PAGE> 79
rights and remedies, as well as with all rights and remedies of the parties
otherwise available at law or in equity.
20. WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
21. WARRANTIES. The Employee represents, warrants, covenants and
agrees that he has a right to enter into this Agreement, that he is not a party
to any agreement or understanding whether or not written which would prohibit
or restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
22. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon Employer, its successors and assigns, it being Specifically
agreed and understood that in the event that Employer engages in a so-called
"bulk sale" of its assets this Agreement may, at Employer's option, for all
purposes, be deemed an asset of Employer.
10
<PAGE> 80
23. COUNTERPART. This Agreement may be signed in counterpart
which when signed by all parties will constitute one Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
ATTEST: INFOPAK, INC.
By:
- - - ------------------------- --------------------------------
[An authorized representative]
WITNESS:
- - - ------------------------- -----------------------------------
Sean F. Lee
ATTEST: DIMENSIONAL VISIONS GROUP, LTD.
AS TO EXHIBIT "C" ONLY
BY:
- - - ------------------------- -------------------------------
George S. Smith,
Chief Executive Officer
</TABLE>
11
<PAGE> 81
EXHIBIT "A"
INFOPAK BONUS PLAN
The InfoPak bonus pool exists as an incentive pool to encourage
creativity and performance from all InfoPak employees. Further, the management
of InfoPak have all agreed to a compensation package that enhances their
earnings in conjunction with the success of InfoPak as a corporation. The plan
is set up as follows:
The bonus pool is set at 10% of the pre-tax profits. These funds will
be distributed on a semi-annual basis, (in August and January) as described in
the following paragraph.
Fifty percent of the bonus plan is set aside for target management
compensation and fifty percent for a general pool to be distributed to all
employees, including management, based upon the decisions of the InfoPak
compensation committee. The fifty percent to be allocated to management is
limited to the amount necessary to bring management to a predetermined target
salary outlined below. Once these levels are attained by all management, one
hundred percent of the remaining bonus pool is set aside for all employees as
described earlier. The distribution to management will occur at an equivalent
rate of all management as follows:
<PAGE> 82
<TABLE>
<CAPTION>
==============================================================================================
Name Base Increase Rate Base +Bonus
Plan
==============================================================================================
<S> <C> <C> <C> <C>
Sean Lee $100,000 $200,000 .597 $300,000
- - - ----------------------------------------------------------------------------------------------
John Matlock $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Bruce Sandig $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Paul Damiani $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Roy Pringle $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Ronnie Matlock $ 35,000 $ 15,000 .045 $ 50,000
==============================================================================================
TOTAL $360,000 $350,000 1.00 $700,000
==============================================================================================
</TABLE>
EXAMPLE:
If in 1995, InfoPak had a pre-tax income of $2,500,000, the bonus pool
would be $250,000. Of this, $125,000 would be set aside for the general fund
and $125,000 would be set up for management compensation. Sean Lee would
receive .63 of this or $78,750, John Matlock and Bruce Sandig would receive
.115 or $14,375 each, and Roy Pringle and Paul Damiani would receive .07 or
$8,750 each. As the net income was not sufficient to bring the management team
to their target compensation for 1995, management will not reach their full
target for 1995.
On the other hand, if pre-tax income for 1995 was to be $7,000,000,
the bonus pool would be $700,000, with $335,000 set aside for management and
$365,000 for the general pool. All of management would receive their target
income, and a greater than 50% portion of the pool would be set aside for the
general pool.
2
<PAGE> 83
EXHIBIT "B"
[DV3D LOGO](TM)
EMPLOYEE/DIRECTOR/ASSOCIATE/CONSULTANT
CONFIDENTIAL INFORMATION AGREEMENT
This Employee/Director/Associate/Consultant Confidential Information
Agreement is entered into as of the #th day of MONTH, 199_ by and between NAME
OF INDIVIDUAL (hereinafter called the "Employee/Director/Associate/Consultant-
EDAC") and Dimensional Visions Group, Ltd., a corporation organized and
existing under the laws of the State of Delaware, its subsidiaries, divisions
and affiliated companies (being the principal employer(s) of Employee)
(hereinafter called the "Employer/Company") and acting in this Agreement on its
own behalf and on behalf of all of its subsidiaries, both direct and indirect,
now or hereafter existing (hereinafter collectively called the
"Employer/Company").
In consideration of EDAC's employment/engagement/association by/with
Employer/Company, and other good and valuable consideration to be received by
EDAC from Employer/Company during the course of such employment/engagement/
association, EDAC agrees as follows:
1. EDAC acknowledges that certain valuable confidential
information (both technical and non-technical) which belongs to the
Employer/Company and which the Employer/Company considers to be of considerable
value and is held to be confidential and proprietary trade secrets which
employer/company has a right to protect may be made available to the EDAC, or
the EDAC already may have become acquainted with such confidential information
by virtue of employment/engagement/association by/with the Employer/Company, or
the EDAC may develop or may have developed such confidential information during
the course of EDAC's employment/engagement/association by/with Employer/Company.
2. EDAC shall not disclose or use at any time, either during or
after termination of employment/engagement/association, except as required in
EDAC's duties to the Employer/Company, said confidential information, whether
or not developed by EDAC, unless EDAC shall first obtain written consent of an
officer of Employer/Company or such confidential information has become general
public knowledge by any means other than through the fault of EDAC.
Confidential information shall include Employer/Company know-how, designs,
formulas, processes, devices, machines, inventions, intellectual properties
including software and hardware, research or development projects, plans for
future development, materials of a business nature, including marketing
concepts, and any other information relating to the Employer/Company not
available to the public relating to the employer/company's business of
three-dimensional imaging or such other business as employer/company may engage
in the future.
3. EDAC shall not publish or cause to be published any articles,
oral presentations or materials related to the business activities of the
Employer/Company without obtianing the written consent of the Employer/Company.
4. EDAC agrees to disclose promptly to Employer/Company any and
all inventions, discoveries, improvemnts and business or marketing concepts
related to the business or activities of Employer/Company or related to the
contemplated busines or activities of the Employer/Company, and which are
conceived or made by EDAC, either alone or in conjunction with others, at any
time or place during the period during the period EDAC is employed/engaged/
associated by/with Employer/Company.
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
718 Arch Street - Suite 202N
Philadelphia, PA 19106
(215) 440-7791 - Fax: (215) 440-7797
<PAGE> 84
5. EDAC agrees to assign all of EDAC's interest in the inventions,
discoveries, improvements and business or marketing concepts referred to in
Paragraph 2 hereof, to Employer/Company or its nominee. Whenever requested to
do so by Employer/Company, EDAC shall execute, at Employer/Company's expense,
any and all applications, assignments or other documents with Employer/Company
as Employer/Company shall determine necessary to apply for and obtain letters
patent to protect the Employer/Company's interest in such inventions,
discoveries and improvements. These obligations shall continue beyond
termination of employment with respect to inventions, discoveries, improvements
and business or marketing concepts conceived or made by EDAC during the period
of employment. It is understood that if EDAC claims to have conceived any such
inventions, discoveries, improvements and business or marketing concepts within
a twelve (12) month period following termination of EDAC's
employment/engagement/association, the burden of proving conception after such
termination shall be on EDAC.
6. Upon termination of employment/engagement/association, EDAC
shall promptly deliver to Employer/Company all drawings, blueprints, manuals,
letters, contracts, agreements, notes, notebooks, records, reports, memoranda,
formulas and all other materials relating to the Employer/Company's business,
including all copies thereof, which are in the possession or under the control
of EDAC which is the property of the Company.
7. Should EDAC violate the terms and undertakings of this
Confidential Information Agreement, EDAC understands that employer/company may
commence an action for damages and/or injunctive relief against EDAC in any
court of competent jurisdiction and that it may seek not only actual damages
sustained by reason of such violation but also incidental and exemplary
(punitive) damages. EDAC further agrees not to use, directly or indirectly, the
confidential information for EDAC's own purpose. For purposes of this
Agreement, "EDAC" shall include any entity by whom EDAC is employed or acts as
principle now or hereafter.
8. This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without regard to conflict of law statue. The
parties of this Agreement hereby agree to the in persona jursidiction of the
Court of Common Pleas, Philadelphia County, Philadelphia, Pennsylvania or if
such court shall not have proper jurisdiction then to the Federal District
Court, Eastern District Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above, signed, sealed and delivered in the
presence of:
------------------------------------------------
Name of Individual
[Employee/Director/Associate/Consultant]
DIMENSIONAL VISIONS GROUP, LTD. and its
subsidiaries, divisions and affiliated companies
By:
---------------------------------------------
Title:
------------------------------------------
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
<PAGE> 85
EXHIBIT "C"
Employee shall receive 7,000 shares of Series P Convertible Preferred
Stock of Dimensional Visions Group, Ltd., a Delaware corporation, with the
terms and provisions as described in Schedule 2.1 of the Agreement and Plan of
Merger By and Among InfoPak, Inc., Certain Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co., and Dimensional Visions Group, Ltd., dated September
6, 1995 (the "Shares"). The Shares shall be subject to full and complete
forfeiture if at any time for a two year period following the execution of this
Employment Agreement, Employee violates Section 6, 7 or 8 of this Agreement and
the Certificates representing the Shares shall have a legend to that effect
contained thereon.
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<PAGE> 86
SCHEDULE 3.2(a)(vi)(B)
EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of September, 1995, by and between
Bruce Sandig, an adult individual residing in the State of Arizona (hereinafter
referred to as "Employee") and InfoPak, Inc., a Delaware corporation with an
address at 8855 N. Black Canyon Highway, Suite 2000, Phoenix, Arizona 85021
(hereinafter referred to as "Employer").
WITNESSETH
WHEREAS, Employer desires to employ Employee in the capacity of Senior
Vice President of Engineering and Research & Development, or in any other
position consistent with Employee's status;
WHEREAS, Employee desires to be employed by Employer in the aforesaid
capacity; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending legally to be bound, agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the
capacity set forth above. The employment shall commence on September ___,
1995, and terminate on September ___, 1998, unless sooner terminated in
accordance with the provisions of Paragraph 5. After September ___, 1998, this
Agreement and all its terms and provisions shall be automatically extended from
month-to-month,
<PAGE> 87
unless sooner terminated in accordance with the provisions of this contract.
2. DUTIES OF EMPLOYEE.
(a) In accepting employment from Employer, Employee shall
undertake the responsibility of performing for and on behalf of Employer
whatever duties shall be assigned to Employee by Employer at any time and from
time to time. It is further understood and agreed that any modification in, or
expression of, Employee's duties shall not result in any modification in, or
increase or decrease of, Employee's compensation as stated in paragraph 3,
unless Employer specifically shall agree otherwise in a duly executed amendment
of this Agreement.
(b) Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote his full-time efforts
to his duties as an Employee of the Employer. Employee further covenants and
agrees that he will not, directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of Employer.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be paid the
following annual salary, on a semi-monthly basis, during the term hereof:
$65,000.00. Employee shall also be entitled to participate in the Employer's
Bonus Plan as set forth in Exhibit "A" attached hereto and receive a signing
bonus of
2
<PAGE> 88
Series P Convertible Preferred Shares of Dimensional Visions Group, Ltd. as set
forth in Exhibit "C" attached hereto.
4. ADDITIONAL BENEFITS. In addition to, and not in limitation
of, the compensation referred to in paragraph 3, Employee shall receive the
following additional benefits: such group health insurance as may be provided
by Employer from time to time. Employee shall have the right to vacation,
holidays and other paid leave days as permitted by the employee policy manual
in effect upon the signing of this Agreement at InfoPak, Inc.
5. TERMINATION BY EMPLOYER. Notwithstanding any other provision
hereof, Employer may terminate Employee's employment under this Agreement at
any time for cause. The termination shall be evidenced by written notice
thereof to Employee, which shall specify the cause for termination. For
purposes hereof, the term "Cause" shall include, without limitation, the
inability of Employee, through sickness or other incapacity, to perform his
duties under this Agreement for a period in excess of ninety (90) substantially
consecutive days; dishonesty; theft; conviction of a felony; substance abuse;
intoxication; unethical business conduct including disruption of Emploeyr's
management of its business; and a material breach of this Agreement. The term
"cause" shall also include the failure of Employee for any reason, within ten
(10) days after receipt by Employee of written notice thereof from Employer, to
correct, cease, or otherwise alter any insubordination, failure to comply with
instructions, or other action or omission to act that in the opinion of
Employer does or may materially or adversely affect its business or operations.
This Agreement will terminate on the death of Employee.
3
<PAGE> 89
6. RESTRICTIVE COVENANT. Employee acknowledges that the services
he is about to render are of a special and unusual character with a unique
value to Employer, the loss of which cannot be adequately compensated by
damages in an action at law. In view of the unique value to Employer of the
services of Employee, for which Employer has contracted hereunder because of
the confidential information to be obtained by or disclosed to Employee, as set
forth herein, and as a material inducement to Employer to enter into this
Agreement and to pay Employee the compensation stated in Paragraph 3, Employee
covenants and agrees as follows:
During the term of the Employee's employment with Employer, and for a
period of two (2) years following the termination of such employment, for any
reason whatsoever, the Employee shall not, directly or indirectly:
(a) Solicit or divert any clients ("Clients") served by
Employer;
(b) Cause any Clients of Employer not to do business with
Employer;
(c) Solicit any Clients which are known by the Employee to
have been contacted or solicited, in any way, by Employer;
(d) Induce or attempt to influence any employee of Employer
or independent contractor doing business with Employer to terminate such
employee's or independent contractor relationship with Employer;
(e) Become employed with or engaged in (as a principal,
partner, director, officer, agent, employee, independent
4
<PAGE> 90
contractor, consultant or otherwise) or be financially interested in any
business which is the same or similar to the business carried on by Employer or
being planned by Employer at the time of the termination of the Employee's
employment with Employer; provided, however, this restriction shall only be
operative if such business does business with Clients of Employer or if such
business does business within a fifty (50) mile radius of any geographic area
where Employer is actually engaged in business or maintains sales or service
representatives or employees.
(f) Contact or be employed by any Clients of Employer.
(g) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
7. TRADE SECRETS.
(a) Employee acknowledges that his employment by Employer
will enable him to obtain confidential information concerning Employer, its
subsidiaries and affiliates, and information about trade secrets which are the
proprietary property of Employer, including but not limited to the following:
research, experiments, inventions, discoveries and improvements conceived,
developed or worked on by Employer or developed by the Employee for or on
behalf of Employer, or otherwise, whether or not related to Company's business
as it now exists; data and information about costs, profits, markets, sales,
key personnel, pricing policies; technical, scientific, patent and proprietary
information and/or processes; operational methods and other business affairs
and methods, including plans for future developments (all of which is
5
<PAGE> 91
hereinafter collectively referred to as "Confidential Property and
Information"). Confidential Property and Information is, and shall remain, the
sole and confidential property of Employer. Employee agrees that he shall not
use for himself or divulge any of the Confidential Information to anyone
outside of Employer except in the normal course of the conduct of Employer's
business and then only with the prior written consent of Employer's Board of
Directors.
(b) As a condition to the employment of Employee, Employee
further agrees to execute Employer's standard EDAC Agreement attached hereto as
Exhibit "B" and such other Confidentiality Agreement as may, during the term of
Employee's employment, be required by Employer of all executives in Employer's
employ. It is specifically understood that the consideration supportive of
such latter execution by Employee will be the continued employment of Employee,
it being specifically understood that the failure or refusal of Employee to
execute such latter document would constitute Cause for termination by Employer
of Employee's employment hereunder.
(c) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
8. RETURN OF CONFIDENTIAL INFORMATION. The Employee shall make
full disclosure to Employer of all Confidential Property and Information, and
shall do everything necessary or desirable to vest the absolute title of
Confidential Property and Information in Employer. Upon the termination or
expiration of this Agreement,
6
<PAGE> 92
Employee shall return to Employer all Confidential Property and Information in
the Employee's possession or control. The provisions of this Paragraph 9 shall
survive the termination or expiration of this Agreement.
9. ACCOUNTING FOR PROFITS. Employee covenants and agrees that if
he shall violate any of his covenants or agreements under Paragraph 6, Employer
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration, or other benefits that Employee directly or
indirectly has realized and/or may realize as a result of, growing out of, or
in connection with, any such violation. These remedies shall be in addition
to, and not in limitation of, any injunctive relief or other rights or remedies
to which Employer is or may be entitled at law, in equity, or under this
Agreement.
10. REASONABLENESS OR RESTRICTIONS.
(a) Employee has carefully read and considered the
provisions of Paragraphs 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these paragraphs, including, but not limited to, the
time period of restriction and the geographical areas of restriction set forth
in Paragraph 6, are fair and reasonable and are reasonably required for the
protection of the interests of Employer and its officers, directors, and other
employees.
(b) In the event that, notwithstanding the foregoing, any
of the provisions of Paragraphs 5, 6, and 7 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall
7
<PAGE> 93
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that any
provision of Paragraph 6 relating to the time period and/or the areas of
restriction shall be declared by arbitration to exceed the maximum time period
or areas such court deems reasonable and enforceable, the time period and/or
areas of restriction deemed reasonable and enforceable by the court shall
become and thereafter be the maximum time period and/or areas.
11. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, Employer and Employee, and their respective
heirs, personal and legal representatives, successors, and assigns.
12. NON RELOCATION OF EMPLOYEE. Employer will not without
Employees consent change the principal location at which Employee performs his
duties as of the date of this Agreement.
13. GOVERNING LAW. In view of the fact that the principal office
of Employer is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
14. ARBITRATION. Employer and Employee agree that all disputes
under this contract will be subject to arbitration under the rules of the
American Arbitration Association. Any such arbitration will be conducted by
three arbitrators sitting in Phoenix, Arizona, with all costs, expenses and
attorney's fees to be paid by the losing party. Any decision of the
arbitrators shall be final and may be entered as a judgment in the Court of
competent jurisdiction.
8
<PAGE> 94
15. SEVERABILITY. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5, 6, and 7, shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
16. NOTICE. Any notice required to be given shall be sufficient
it if is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his residence in the case of
Employee, which residence will be on file with Employer at all times, and to
its principal office in Arizona in the case of Employer.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of his Agreement at such time or at any other time.
18. REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set
9
<PAGE> 95
forth in this Agreement shall be cumulative with all other such rights and
remedies, as well as with all rights and remedies of the parties otherwise
available at law or in equity.
19. WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
20. WARRANTIES. The Employee represents, warrants, covenants and
agrees that he has a right to enter into this Agreement, that he is not a party
to any agreement or understanding whether or not written which would prohibit
or restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
21. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon Employer, its successors and assigns, it being Specifically
agreed and understood that in the event that Employer engages in a so-called
"bulk sale" of its assets this Agreement
10
<PAGE> 96
may, at Employer's option, for all purposes, be deemed an asset of Employer.
22. COUNTERPART. This Agreement may be signed in counterpart
which when signed by all parties will constitute one Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
ATTEST: INFOPAK, INC.
By:
- - - ------------------------- -------------------------------
[An authorized representative]
WITNESS:
- - - ------------------------- -----------------------------------
Bruce Sandig
ATTEST: DIMENSIONAL VISIONS GROUP, LTD.
AS TO EXHIBIT "C" ONLY
BY:
- - - ------------------------- -------------------------------
George S. Smith,
Chief Executive Officer
</TABLE>
11
<PAGE> 97
EXHIBIT "A"
INFOPAK BONUS PLAN
The InfoPak bonus pool exists as an incentive pool to encourage
creativity and performance from all InfoPak employees. Further, the management
of InfoPak have all agreed to a compensation package that enhances their
earnings in conjunction with the success of InfoPak as a corporation. The plan
is set up as follows:
The bonus pool is set at 10% of the pre-tax profits. These funds will
be distributed on a semi-annual basis, (in August and January) as described in
the following paragraph.
Fifty percent of the bonus plan is set aside for target management
compensation and fifty percent for a general pool to be distributed to all
employees, including management, based upon the decisions of the InfoPak
compensation committee. The fifty percent to be allocated to management is
limited to the amount necessary to bring management to a predetermined target
salary outlined below. Once these levels are attained by all management, one
hundred percent of the remaining bonus pool is set aside for all employees as
described earlier. The distribution to management will occur at an equivalent
rate of all management as follows:
<PAGE> 98
<TABLE>
<CAPTION>
==============================================================================================
Name Base Increase Rate Base +Bonus
Plan
==============================================================================================
<S> <C> <C> <C> <C>
Sean Lee $100,000 $200,000 .597 $300,000
- - - ----------------------------------------------------------------------------------------------
John Matlock $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Bruce Sandig $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Paul Damiani $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Roy Pringle $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Ronnie Matlock $ 35,000 $ 15,000 .045 $ 50,000
==============================================================================================
TOTAL $360,000 $350,000 1.00 $700,000
==============================================================================================
</TABLE>
EXAMPLE:
If in 1995, InfoPak had a pre-tax income of $2,500,000, the bonus pool
would be $250,000. Of this, $125,000 would be set aside for the general fund
and $125,000 would be set up for management compensation. Sean Lee would
receive .63 of this or $78,750, John Matlock and Bruce Sandig would receive
.115 or $14,375 each, and Roy Pringle and Paul Damiani would receive .07 or
$8,750 each. As the net income was not sufficient to bring the management team
to their target compensation for 1995, management will not reach their full
target for 1995.
On the other hand, if pre-tax income for 1995 was to be $7,000,000,
the bonus pool would be $700,000, with $335,000 set aside for management and
$365,000 for the general pool. All of management would receive their target
income, and a greater than 50% portion of the pool would be set aside for the
general pool.
2
<PAGE> 99
EXHIBIT "B"
[DV3D LOGO](TM)
EMPLOYEE/DIRECTOR/ASSOCIATE/CONSULTANT
CONFIDENTIAL INFORMATION AGREEMENT
This Employee/Director/Associate/Consultant Confidential Information
Agreement is entered into as of the #th day of MONTH, 199_ by and between NAME
OF INDIVIDUAL (hereinafter called the "Employee/Director/Associate/Consultant-
EDAC") and Dimensional Visions Group, Ltd., a corporation organized and
existing under the laws of the State of Delaware, its subsidiaries, divisions
and affiliated companies (being the principal employer(s) of Employee)
(hereinafter called the "Employer/Company") and acting in this Agreement on its
own behalf and on behalf of all of its subsidiaries, both direct and indirect,
now or hereafter existing (hereinafter collectively called the
"Employer/Company").
In consideration of EDAC's employment/engagement/association by/with
Employer/Company, and other good and valuable consideration to be received by
EDAC from Employer/Company during the course of such employment/engagement/
association, EDAC agrees as follows:
1. EDAC acknowledges that certain valuable confidential
information (both technical and non-technical) which belongs to the
Employer/Company and which the Employer/Company considers to be of considerable
value and is held to be confidential and proprietary trade secrets which
employer/company has a right to protect may be made available to the EDAC, or
the EDAC already may have become acquainted with such confidential information
by virtue of employment/engagement/association by/with the Employer/Company, or
the EDAC may develop or may have developed such confidential information during
the course of EDAC's employment/engagement/association by/with Employer/Company.
2. EDAC shall not disclose or use at any time, either during or
after termination of employment/engagement/association, except as required in
EDAC's duties to the Employer/Company, said confidential information, whether
or not developed by EDAC, unless EDAC shall first obtain written consent of an
officer of Employer/Company or such confidential information has become general
public knowledge by any means other than through the fault of EDAC.
Confidential information shall include Employer/Company know-how, designs,
formulas, processes, devices, machines, inventions, intellectual properties
including software and hardware, research or development projects, plans for
future development, materials of a business nature, including marketing
concepts, and any other information relating to the Employer/Company not
available to the public relating to the employer/company's business of
three-dimensional imaging or such other business as employer/company may engage
in the future.
3. EDAC shall not publish or cause to be published any articles,
oral presentations or materials related to the business activities of the
Employer/Company without obtianing the written consent of the Employer/Company.
4. EDAC agrees to disclose promptly to Employer/Company any and
all inventions, discoveries, improvemnts and business or marketing concepts
related to the business or activities of Employer/Company or related to the
contemplated busines or activities of the Employer/Company, and which are
conceived or made by EDAC, either alone or in conjunction with others, at any
time or place during the period during the period EDAC is employed/engaged/
associated by/with Employer/Company.
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
718 Arch Street - Suite 202N
Philadelphia, PA 19106
(215) 440-7791 - Fax: (215) 440-7797
<PAGE> 100
5. EDAC agrees to assign all of EDAC's interest in the inventions,
discoveries, improvements and business or marketing concepts referred to in
Paragraph 2 hereof, to Employer/Company or its nominee. Whenever requested to
do so by Employer/Company, EDAC shall execute, at Employer/Company's expense,
any and all applications, assignments or other documents with Employer/Company
as Employer/Company shall determine necessary to apply for and obtain letters
patent to protect the Employer/Company's interest in such inventions,
discoveries and improvements. These obligations shall continue beyond
termination of employment with respect to inventions, discoveries, improvements
and business or marketing concepts conceived or made by EDAC during the period
of employment. It is understood that if EDAC claims to have conceived any such
inventions, discoveries, improvements and business or marketing concepts within
a twelve (12) month period following termination of EDAC's
employment/engagement/association, the burden of proving conception after such
termination shall be on EDAC.
6. Upon termination of employment/engagement/association, EDAC
shall promptly deliver to Employer/Company all drawings, blueprints, manuals,
letters, contracts, agreements, notes, notebooks, records, reports, memoranda,
formulas and all other materials relating to the Employer/Company's business,
including all copies thereof, which are in the possession or under the control
of EDAC which is the property of the Company.
7. Should EDAC violate the terms and undertakings of this
Confidential Information Agreement, EDAC understands that employer/company may
commence an action for damages and/or injunctive relief against EDAC in any
court of competent jurisdiction and that it may seek not only actual damages
sustained by reason of such violation but also incidental and exemplary
(punitive) damages. EDAC further agrees not to use, directly or indirectly, the
confidential information for EDAC's own purpose. For purposes of this
Agreement, "EDAC" shall include any entity by whom EDAC is employed or acts as
principle now or hereafter.
8. This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without regard to conflict of law statue. The
parties of this Agreement hereby agree to the in persona jursidiction of the
Court of Common Pleas, Philadelphia County, Philadelphia, Pennsylvania or if
such court shall not have proper jurisdiction then to the Federal District
Court, Eastern District Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above, signed, sealed and delivered in the
presence of:
------------------------------------------------
Name of Individual
[Employee/Director/Associate/Consultant]
DIMENSIONAL VISIONS GROUP, LTD. and its
subsidiaries, divisions and affiliated companies
By:
---------------------------------------------
Title:
------------------------------------------
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
<PAGE> 101
EXHIBIT "C"
Employee shall receive 3,500 shares of Series P Convertible Preferred
Stock of Dimensional Visions Group, Ltd., a Delaware corporation, with the
terms and provisions as described in Schedule 2.1 of the Agreement and Plan of
Merger By and Among InfoPak, Inc., Certain Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co., and Dimensional Visions Group, Ltd., dated September
6, 1995 (the "Shares"). The Shares shall be subject to full and complete
forfeiture if at any time for a two year period following the execution of this
Employment Agreement, Employee violates Section 6, 7 or 8 of this Agreement and
the Certificates representing the Shares shall have a legend to that effect
contained thereon.
12
<PAGE> 102
SCHEDULE 3.2(a)(vi)(C)
EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of September, 1995, by and between
John Matlock, an adult individual residing in the State of Arizona (hereinafter
referred to as "Employee") and InfoPak, Inc., a Delaware corporation with an
address at 8855 N. Black Canyon Highway, Suite 2000, Phoenix, Arizona 85021
(hereinafter referred to as "Employer").
WITNESSETH
WHEREAS, Employer desires to employ Employee in the capacity of Senior
Vice President of Marketing, or in any other position consistent with
Employee's status;
WHEREAS, Employee desires to be employed by Employer in the aforesaid capacity;
and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending legally to be bound, agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the
capacity set forth above. The employment shall commence on September ___,
1995, and terminate on September ___, 1998, unless sooner terminated in
accordance with the provisions of Paragraph 5. After September ___, 1998, this
Agreement and all its terms and provisions shall be automatically extended from
month-to-month,
<PAGE> 103
unless sooner terminated in accordance with the provisions of this contract.
2. DUTIES OF EMPLOYEE.
(a) In accepting employment from Employer, Employee shall
undertake the responsibility of performing for and on behalf of Employer
whatever duties shall be assigned to Employee by Employer at any time and from
time to time. It is further understood and agreed that any modification in, or
expression of, Employee's duties shall not result in any modification in, or
increase or decrease of, Employee's compensation as stated in paragraph 3,
unless Employer specifically shall agree otherwise in a duly executed amendment
of this Agreement.
(b) Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote his full-time efforts
to his duties as an Employee of the Employer. Employee further covenants and
agrees that he will not, directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of Employer.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be paid the
following annual salary, on a semi-monthly basis, during the term hereof:
$65,000.00. Employee shall also be entitled to participate in the Employer's
Bonus Plan as set forth in Exhibit "A" attached hereto and receive a signing
bonus of
2
<PAGE> 104
Series P Convertible Preferred Shares of Dimensional Visions Group, Ltd. as set
forth in Exhibit "C" attached hereto.
4. ADDITIONAL BENEFITS. In addition to, and not in limitation
of, the compensation referred to in paragraph 3, Employee shall receive the
following additional benefits: such group health insurance as may be provided
by Employer from time to time. Employee shall have the right to vacation,
holidays and other paid leave days as permitted by the employee policy manual
in effect upon the signing of this Agreement at InfoPak, Inc.
5. TERMINATION BY EMPLOYER. Notwithstanding any other provision
hereof, Employer may terminate Employee's employment under this Agreement at
any time for cause. The termination shall be evidenced by written notice
thereof to Employee, which shall specify the cause for termination. For
purposes hereof, the term "Cause" shall include, without limitation, the
inability of Employee, through sickness or other incapacity, to perform his
duties under this Agreement for a period in excess of ninety (90) substantially
consecutive days; dishonesty; theft; conviction of a felony; substance abuse;
intoxication; unethical business conduct including disruption of Employer's
management of its business; and a material breach of this Agreement. The term
"cause" shall also include the failure of Employee for any reason, within ten
(10) days after receipt by Employee of written notice thereof from Employer, to
correct, cease, or otherwise alter any insubordination, failure to comply with
instructions, or other action or omission to act that in the opinion of
Employer does or may materially or adversely affect its business or operations.
This Agreement will terminate on the death of Employee.
3
<PAGE> 105
6. RESTRICTIVE COVENANT. Employee acknowledges that the services
he is about to render are of a special and unusual character with a unique
value to Employer, the loss of which cannot be adequately compensated by
damages in an action at law. In view of the unique value to Employer of the
services of Employee, for which Employer has contracted hereunder because of
the confidential information to be obtained by or disclosed to Employee, as set
forth herein, and as a material inducement to Employer to enter into this
Agreement and to pay Employee the compensation stated in Paragraph 3, Employee
covenants and agrees as follows:
During the term of the Employee's employment with Employer, and for a
period of two (2) years following the termination of such employment, for any
reason whatsoever, the Employee shall not, directly or indirectly:
(a) Solicit or divert any clients ("Clients") served by
Employer;
(b) Cause any Clients of Employer not to do business with
Employer;
(c) Solicit any Clients which are known by the Employee to
have been contacted or solicited, in any way, by Employer;
(d) Induce or attempt to influence any employee of Employer
or independent contractor doing business with Employer to terminate such
employee's or independent contractor relationship with Employer;
(e) Become employed with or engaged in (as a principal,
partner, director, officer, agent, employee, independent
4
<PAGE> 106
contractor, consultant or otherwise) or be financially interested in any
business which is the same or similar to the business carried on by Employer or
being planned by Employer at the time of the termination of the Employee's
employment with Employer; provided, however, this restriction shall only be
operative if such business does business with Clients of Employer or if such
business does business within a fifty (50) mile radius of any geographic area
where Employer is actually engaged in business or maintains sales or service
representatives or employees.
(f) Contact or be employed by any Clients of Employer.
(g) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
7. TRADE SECRETS.
(a) Employee acknowledges that his employment by Employer
will enable him to obtain confidential information concerning Employer, its
subsidiaries and affiliates, and information about trade secrets which are the
proprietary property of Employer, including but not limited to the following:
research, experiments, inventions, discoveries and improvements conceived,
developed or worked on by Employer or developed by the Employee for or on
behalf of Employer, or otherwise, whether or not related to Employer's business
as it now exists; data and information about costs, profits, markets, sales,
key personnel, pricing policies; technical, scientific, patent and proprietary
information and/or processes; operational methods and other business affairs
and methods, including plans for future developments (all of which is
5
<PAGE> 107
hereinafter collectively referred to as "Confidential Property and
Information"). Confidential Property and Information is, and shall remain, the
sole and confidential property of Employer. Employee agrees that he shall not
use for himself or divulge any of the Confidential Information to anyone
outside of Employer except in the normal course of the conduct of Employer's
business and then only with the prior written consent of Employer's Board of
Directors.
(b) As a condition to the employment of Employee, Employee
further agrees to execute Employer's standard EDAC Agreement attached hereto as
Exhibit "B" and such other Confidentiality Agreement as may, during the term of
Employee's employment, be required by Employer of all executives in Employer's
employ. It is specifically understood that the consideration supportive of
such latter execution by Employee will be the continued employment of Employee,
it being specifically understood that the failure or refusal of Employee to
execute such latter document would constitute Cause for termination by Employer
of Employee's employment hereunder.
(c) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
8. RETURN OF CONFIDENTIAL INFORMATION. The Employee shall make
full disclosure to Employer of all Confidential Property and Information, and
shall do everything necessary or desirable to vest the absolute title of
Confidential Property and Information in Employer. Upon the termination or
expiration of this Agreement,
6
<PAGE> 108
Employee shall return to Employer all Confidential Property and Information in
the Employee's possession or control. The provisions of this Paragraph 9 shall
survive the termination or expiration of this Agreement.
9. ACCOUNTING FOR PROFITS. Employee covenants and agrees that if
he shall violate any of his covenants or agreements under Paragraph 6, Employer
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration, or other benefits that Employee directly or
indirectly has realized and/or may realize as a result of, growing out of, or
in connection with, any such violation. These remedies shall be in addition
to, and not in limitation of, any injunctive relief or other rights or remedies
to which Employer is or may be entitled at law, in equity, or under this
Agreement.
10. REASONABLENESS OR RESTRICTIONS.
(a) Employee has carefully read and considered the
provisions of Paragraphs 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these paragraphs, including, but not limited to, the
time period of restriction and the geographical areas of restriction set forth
in Paragraph 6, are fair and reasonable and are reasonably required for the
protection of the interests of Employer and its officers, directors, and other
employees.
(b) In the event that, notwithstanding the foregoing, any
of the provisions of Paragraphs 5, 6, and 7 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall
7
<PAGE> 109
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that any
provision of Paragraph 6 relating to the time period and/or the areas of
restriction shall be declared by arbitration to exceed the maximum time period
or areas such court deems reasonable and enforceable, the time period and/or
areas of restriction deemed reasonable and enforceable by the court shall
become and thereafter be the maximum time period and/or areas.
11. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, Employer and Employee, and their respective
heirs, personal and legal representatives, successors, and assigns.
12. NON RELOCATION OF EMPLOYEE. Employer will not without
Employees consent change the principal location at which Employee performs his
duties as of the date of this Agreement.
13. GOVERNING LAW. In view of the fact that the principal office
of Employer is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
14. ARBITRATION. Employer and Employee agree that all disputes
under this contract will be subject to arbitration under the rules of the
American Arbitration Association. Any such arbitration will be conducted by
three arbitrators sitting in Phoenix, Arizona, with all costs, expenses and
attorney's fees to be paid by the losing party. Any decision of the
arbitrators shall be final and may be entered as a judgment in the Court of
competent jurisdiction.
8
<PAGE> 110
15. SEVERABILITY. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5, 6, and 7, shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
16. NOTICE. Any notice required to be given shall be sufficient
it if is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his residence in the case of
Employee, which residence will be on file with Employer at all times, and to
its principal office in Arizona in the case of Employer.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of his Agreement at such time or at any other time.
18. REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set
9
<PAGE> 111
forth in this Agreement shall be cumulative with all other such rights and
remedies, as well as with all rights and remedies of the parties otherwise
available at law or in equity.
19. WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
20. WARRANTIES. The Employee represents, warrants, covenants and
agrees that he has a right to enter into this Agreement, that he is not a party
to any agreement or understanding whether or not written which would prohibit
or restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
21. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon Employer, its successors and assigns, it being Specifically
agreed and understood that in the event that Employer engages in a so-called
"bulk sale" of its assets this Agreement
10
<PAGE> 112
may, at Employer's option, for all purposes, be deemed an asset of Employer.
22. COUNTERPART. This Agreement may be signed in counterpart
which when signed by all parties will constitute one Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
ATTEST: INFOPAK, INC.
By:
- - - ------------------------- --------------------------------
[An authorized representative]
WITNESS:
- - - ------------------------- -----------------------------------
John Matlock
ATTEST: DIMENSIONAL VISIONS GROUP, LTD.
AS TO EXHIBIT "C" ONLY
BY:
- - - ------------------------- -------------------------------
George S. Smith,
Chief Executive Officer
</TABLE>
11
<PAGE> 113
EXHIBIT "A"
INFOPAK BONUS PLAN
The InfoPak bonus pool exists as an incentive pool to encourage
creativity and performance from all InfoPak employees. Further, the management
of InfoPak have all agreed to a compensation package that enhances their
earnings in conjunction with the success of InfoPak as a corporation. The plan
is set up as follows:
The bonus pool is set at 10% of the pre-tax profits. These funds will
be distributed on a semi-annual basis, (in August and January) as described in
the following paragraph.
Fifty percent of the bonus plan is set aside for target management
compensation and fifty percent for a general pool to be distributed to all
employees, including management, based upon the decisions of the InfoPak
compensation committee. The fifty percent to be allocated to management is
limited to the amount necessary to bring management to a predetermined target
salary outlined below. Once these levels are attained by all management, one
hundred percent of the remaining bonus pool is set aside for all employees as
described earlier. The distribution to management will occur at an equivalent
rate of all management as follows:
<PAGE> 114
<TABLE>
<CAPTION>
==============================================================================================
Name Base Increase Rate Base +Bonus
Plan
==============================================================================================
<S> <C> <C> <C> <C>
Sean Lee $100,000 $200,000 .597 $300,000
- - - ----------------------------------------------------------------------------------------------
John Matlock $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Bruce Sandig $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Paul Damiani $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Roy Pringle $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Ronnie Matlock $ 35,000 $ 15,000 .045 $ 50,000
==============================================================================================
TOTAL $360,000 $350,000 1.00 $700,000
==============================================================================================
</TABLE>
EXAMPLE:
If in 1995, InfoPak had a pre-tax income of $2,500,000, the bonus pool
would be $250,000. Of this, $125,000 would be set aside for the general fund
and $125,000 would be set up for management compensation. Sean Lee would
receive .63 of this or $78,750, John Matlock and Bruce Sandig would receive
.115 or $14,375 each, and Roy Pringle and Paul Damiani would receive .07 or
$8,750 each. As the net income was not sufficient to bring the management team
to their target compensation for 1995, management will not reach their full
target for 1995.
On the other hand, if pre-tax income for 1995 was to be $7,000,000,
the bonus pool would be $700,000, with $335,000 set aside for management and
$365,000 for the general pool. All of management would receive their target
income, and a greater than 50% portion of the pool would be set aside for the
general pool.
2
<PAGE> 115
EXHIBIT "B"
[DV3D LOGO](TM)
EMPLOYEE/DIRECTOR/ASSOCIATE/CONSULTANT
CONFIDENTIAL INFORMATION AGREEMENT
This Employee/Director/Associate/Consultant Confidential Information
Agreement is entered into as of the #th day of MONTH, 199_ by and between NAME
OF INDIVIDUAL (hereinafter called the "Employee/Director/Associate/Consultant-
EDAC") and Dimensional Visions Group, Ltd., a corporation organized and
existing under the laws of the State of Delaware, its subsidiaries, divisions
and affiliated companies (being the principal employer(s) of Employee)
(hereinafter called the "Employer/Company") and acting in this Agreement on its
own behalf and on behalf of all of its subsidiaries, both direct and indirect,
now or hereafter existing (hereinafter collectively called the
"Employer/Company").
In consideration of EDAC's employment/engagement/association by/with
Employer/Company, and other good and valuable consideration to be received by
EDAC from Employer/Company during the course of such employment/engagement/
association, EDAC agrees as follows:
1. EDAC acknowledges that certain valuable confidential
information (both technical and non-technical) which belongs to the
Employer/Company and which the Employer/Company considers to be of considerable
value and is held to be confidential and proprietary trade secrets which
employer/company has a right to protect may be made available to the EDAC, or
the EDAC already may have become acquainted with such confidential information
by virtue of employment/engagement/association by/with the Employer/Company, or
the EDAC may develop or may have developed such confidential information during
the course of EDAC's employment/engagement/association by/with Employer/Company.
2. EDAC shall not disclose or use at any time, either during or
after termination of employment/engagement/association, except as required in
EDAC's duties to the Employer/Company, said confidential information, whether
or not developed by EDAC, unless EDAC shall first obtain written consent of an
officer of Employer/Company or such confidential information has become general
public knowledge by any means other than through the fault of EDAC.
Confidential information shall include Employer/Company know-how, designs,
formulas, processes, devices, machines, inventions, intellectual properties
including software and hardware, research or development projects, plans for
future development, materials of a business nature, including marketing
concepts, and any other information relating to the Employer/Company not
available to the public relating to the employer/company's business of
three-dimensional imaging or such other business as employer/company may engage
in the future.
3. EDAC shall not publish or cause to be published any articles,
oral presentations or materials related to the business activities of the
Employer/Company without obtianing the written consent of the Employer/Company.
4. EDAC agrees to disclose promptly to Employer/Company any and
all inventions, discoveries, improvemnts and business or marketing concepts
related to the business or activities of Employer/Company or related to the
contemplated busines or activities of the Employer/Company, and which are
conceived or made by EDAC, either alone or in conjunction with others, at any
time or place during the period during the period EDAC is employed/engaged/
associated by/with Employer/Company.
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
718 Arch Street - Suite 202N
Philadelphia, PA 19106
(215) 440-7791 - Fax: (215) 440-7797
<PAGE> 116
5. EDAC agrees to assign all of EDAC's interest in the inventions,
discoveries, improvements and business or marketing concepts referred to in
Paragraph 2 hereof, to Employer/Company or its nominee. Whenever requested to
do so by Employer/Company, EDAC shall execute, at Employer/Company's expense,
any and all applications, assignments or other documents with Employer/Company
as Employer/Company shall determine necessary to apply for and obtain letters
patent to protect the Employer/Company's interest in such inventions,
discoveries and improvements. These obligations shall continue beyond
termination of employment with respect to inventions, discoveries, improvements
and business or marketing concepts conceived or made by EDAC during the period
of employment. It is understood that if EDAC claims to have conceived any such
inventions, discoveries, improvements and business or marketing concepts within
a twelve (12) month period following termination of EDAC's
employment/engagement/association, the burden of proving conception after such
termination shall be on EDAC.
6. Upon termination of employment/engagement/association, EDAC
shall promptly deliver to Employer/Company all drawings, blueprints, manuals,
letters, contracts, agreements, notes, notebooks, records, reports, memoranda,
formulas and all other materials relating to the Employer/Company's business,
including all copies thereof, which are in the possession or under the control
of EDAC which is the property of the Company.
7. Should EDAC violate the terms and undertakings of this
Confidential Information Agreement, EDAC understands that employer/company may
commence an action for damages and/or injunctive relief against EDAC in any
court of competent jurisdiction and that it may seek not only actual damages
sustained by reason of such violation but also incidental and exemplary
(punitive) damages. EDAC further agrees not to use, directly or indirectly, the
confidential information for EDAC's own purpose. For purposes of this
Agreement, "EDAC" shall include any entity by whom EDAC is employed or acts as
principle now or hereafter.
8. This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without regard to conflict of law statue. The
parties of this Agreement hereby agree to the in persona jursidiction of the
Court of Common Pleas, Philadelphia County, Philadelphia, Pennsylvania or if
such court shall not have proper jurisdiction then to the Federal District
Court, Eastern District Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above, signed, sealed and delivered in the
presence of:
------------------------------------------------
Name of Individual
[Employee/Director/Associate/Consultant]
DIMENSIONAL VISIONS GROUP, LTD. and its
subsidiaries, divisions and affiliated companies
By:
---------------------------------------------
Title:
------------------------------------------
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
<PAGE> 117
EXHIBIT "C"
Employee shall receive 3,500 shares of Series P Convertible Preferred
Stock of Dimensional Visions Group, Ltd., a Delaware corporation, with the
terms and provisions as described in Schedule 2.1 of the Agreement and Plan of
Merger By and Among InfoPak, Inc., Certain Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co., and Dimensional Visions Group, Ltd., dated September
6, 1995 (the "Shares"). The Shares shall be subject to full and complete
forfeiture if at any time for a two year period following the execution of this
Employment Agreement, Employee violates Section 6, 7 or 8 of this Agreement and
the Certificates representing the Shares shall have a legend to that effect
contained thereon.
12
<PAGE> 118
SCHEDULE 3.2(a)(vi)(D)
EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of September, 1995, by and between
Ronnie M. Matlock, an adult individual residing in the State of Arizona
(hereinafter referred to as "Employee") and InfoPak, Inc., a Delaware
corporation with an address at 8855 N. Black Canyon Highway, Suite 2000,
Phoenix, Arizona 85021 (hereinafter referred to as "Employer").
WITNESSETH
WHEREAS, Employer desires to employ Employee in the capacity of
Comptroller, or in any other position consistent with Employee's status;
WHEREAS, Employee desires to be employed by Employer in the aforesaid capacity;
and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending legally to be bound, agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the
capacity set forth above. The employment shall commence on September ___,
1995, and terminate on September ___, 1998, unless sooner terminated in
accordance with the provisions of Paragraph 5. After September ___, 1998, this
Agreement and all its terms and provisions shall be automatically extended from
month-to-month,
<PAGE> 119
unless sooner terminated in accordance with the provisions of this contract.
2. DUTIES OF EMPLOYEE.
(a) In accepting employment from Employer, Employee shall
undertake the responsibility of performing for and on behalf of Employer
whatever duties shall be assigned to Employee by Employer at any time and from
time to time. It is further understood and agreed that any modification in, or
expression of, Employee's duties shall not result in any modification in, or
increase or decrease of, Employee's compensation as stated in paragraph 3,
unless Employer specifically shall agree otherwise in a duly executed amendment
of this Agreement.
(b) Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote her full-time efforts
to her duties as an Employee of the Employer. Employee further covenants and
agrees that she will not, directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of Employer.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be paid the
following annual salary, on a semi-monthly basis, during the term hereof:
$35,000.00. Employee shall also be entitled to participate in the Employer's
Bonus Plan as set forth in Exhibit "A" attached hereto.
2
<PAGE> 120
4. ADDITIONAL BENEFITS. In addition to, and not in limitation
of, the compensation referred to in paragraph 3, Employee shall receive the
following additional benefits: such group health insurance as may be provided
by Employer from time to time. Employee shall have the right to vacation,
holidays and other paid leave days as permitted by the employee policy manual
in effect upon the signing of this Agreement at InfoPak, Inc.
5. TERMINATION BY EMPLOYER. Notwithstanding any other provision
hereof, Employer may terminate Employee's employment under this Agreement at
any time for cause. The termination shall be evidenced by written notice
thereof to Employee, which shall specify the cause for termination. For
purposes hereof, the term "Cause" shall include, without limitation, the
inability of Employee, through sickness or other incapacity, to perform her
duties under this Agreement for a period in excess of ninety (90) substantially
consecutive days; dishonesty; theft; conviction of a felony; substance abuse;
intoxication; unethical business conduct including disruption of Company's
management of its business; and a material breach of this Agreement. The term
"cause" shall also include the failure of Employee for any reason, within ten
(10) days after receipt by Employee of written notice thereof from Company, to
correct, cease, or otherwise alter any insubordination, failure to comply with
instructions, or other action or omission to act that in the opinion of
Employer does or may materially or adversely affect its business or operations.
This Agreement will terminate on the death of Employee.
6. RESTRICTIVE COVENANT. Employee acknowledges that the services
she is about to render are of a special and unusual
3
<PAGE> 121
character with a unique value to Employer, the loss of which cannot be
adequately compensated by damages in an action at law. In view of the unique
value to Employer of the services of Employee, for which Employer has
contracted hereunder because of the confidential information to be obtained by
or disclosed to Employee, as set forth herein, and as a material inducement to
Employer to enter into this Agreement and to pay Employee the compensation
stated in Paragraph 3, Employee covenants and agrees as follows:
During the term of the Employee's employment with Employer, and for a
period of two (2) years following the termination of such employment, for any
reason whatsoever, the Employee shall not, directly or indirectly:
(a) Solicit or divert any clients ("Clients") served by
Employer;
(b) Cause any Clients of Employer not to do business with
Employer;
(c) Solicit any Clients which are known by the Employee to
have been contacted or solicited, in any way, by Employer;
(d) Induce or attempt to influence any employee of Employer
or independent contractor doing business with Employer to terminate such
employee's or independent contractor relationship with Employer;
(e) Become employed with or engaged in (as a principal,
partner, director, officer, agent, employee, independent contractor, consultant
or otherwise) or be financially interested in any business which is the same or
similar to the business
4
<PAGE> 122
carried on by Employer or being planned by Employer at the time of the
termination of the Employee's employment with Employer; provided, however, this
restriction shall only be operative if such business does business with Clients
of Employer or if such business does business within a fifty (50) mile radius
of any geographic area where Employer is actually engaged in business or
maintains sales or service representatives or employees.
(f) Contact or be employed by any Clients of Employer.
(g) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
7. TRADE SECRETS.
(a) Employee acknowledges that her employment by Employer
will enable her to obtain confidential information concerning Employer, its
subsidiaries and affiliates, and information about trade secrets which are the
proprietary property of Employer, including but not limited to the following:
research, experiments, inventions, discoveries and improvements conceived,
developed or worked on by Employer or developed by the Employee for or on
behalf of Employer, or otherwise, whether or not related to Company's business
as it now exists; data and information about costs, profits, markets, sales,
key personnel, pricing policies; technical, scientific, patent and proprietary
information and/or processes; operational methods and other business affairs
and methods, including plans for future developments (all of which is
hereinafter collectively referred to as "Confidential Property and
Information"). Confidential Property and Information is, and shall
5
<PAGE> 123
remain, the sole and confidential property of Employer. Employee agrees that
she shall not use for herself or divulge any of the Confidential Information to
anyone outside of Employer except in the normal course of the conduct of
Employer's business and then only with the prior written consent of Employer's
Board of Directors.
(b) As a condition to the employment of Employee, Employee
further agrees to execute Employer's standard EDAC Agreement attached hereto as
Exhibit "B" and such other Confidentiality Agreement as may, during the term of
Employee's employment, be required by Employer of all executives in Employer's
employ. It is specifically understood that the consideration supportive of
such latter execution by Employee will be the continued employment of Employee,
it being specifically understood that the failure or refusal of Employee to
execute such latter document would constitute Cause for termination by Employer
of Employee's employment hereunder.
(c) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
8. RETURN OF CONFIDENTIAL INFORMATION. The Employee shall make
full disclosure to Employer of all Confidential Property and Information, and
shall do everything necessary or desirable to vest the absolute title of
Confidential Property and Information in Employer. Upon the termination or
expiration of this Agreement, Employee shall return to Employer all
Confidential Property and Information in the Employee's possession or control.
The
6
<PAGE> 124
provisions of this Paragraph 9 shall survive the termination or expiration of
this Agreement.
9. ACCOUNTING FOR PROFITS. Employee covenants and agrees that if
she shall violate any of her covenants or agreements under Paragraph 6,
Employer shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remuneration, or other benefits that Employee
directly or indirectly has realized and/or may realize as a result of, growing
out of, or in connection with, any such violation. These remedies shall be in
addition to, and not in limitation of, any injunctive relief or other rights or
remedies to which Employer is or may be entitled at law, in equity, or under
this Agreement.
10. REASONABLENESS OR RESTRICTIONS.
(a) Employee has carefully read and considered the
provisions of Paragraphs 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these paragraphs, including, but not limited to, the
time period of restriction and the geographical areas of restriction set forth
in Paragraph 6, are fair and reasonable and are reasonably required for the
protection of the interests of Employer and its officers, directors, and other
employees.
(b) In the event that, notwithstanding the foregoing, any
of the provisions of Paragraphs 5, 6, and 7 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless continue to
be valid and enforceable as though the invalid or unenforceable parts had not
been included therein. In
7
<PAGE> 125
the event that any provision of Paragraph 6 relating to the time period
and/or the areas of restriction shall be declared by arbitration to exceed the
maximum time period or areas such court deems reasonable and enforceable, the
time period and/or areas of restriction deemed reasonable and enforceable by
the court shall become and thereafter be the maximum time period and/or areas.
11. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, Employer and Employee, and their respective
heirs, personal and legal representatives, successors, and assigns.
12. NON RELOCATION OF EMPLOYEE. Employer will not without
Employees consent change the principal location at which Employee performs his
duties as of the date of this Agreement.
13. GOVERNING LAW. In view of the fact that the principal office
of Employer is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
14. ARBITRATION. Employer and Employee agree that all disputes
under this contract will be subject to arbitration under the rules of the
American Arbitration Association. Any such arbitration will be conducted by
three arbitrators sitting in Phoenix, Arizona, with all costs, expenses and
attorney's fees to be paid by the losing party. Any decision of the
arbitrators shall be final and may be entered as a judgment in the Court of
competent jurisdiction.
15. SEVERABILITY. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5, 6, and 7, shall be
deemed severable, and the invalidity or
8
<PAGE> 126
unenforceability of any one or more of the provisions of this Agreement shall
not affect the validity and enforceability of the other provisions.
16. NOTICE. Any notice required to be given shall be sufficient
it if is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to her residence in the case of
Employee, which residence will be on file with Employer at all times, and to
its principal office in Arizona in the case of Employer.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of her Agreement at such time or at any other time.
18. REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set forth in this
Agreement shall be cumulative with all other such rights and remedies, as well
as with all rights and remedies of the parties otherwise available at law or in
equity.
9
<PAGE> 127
19. WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
20. WARRANTIES. The Employee represents, warrants, covenants and
agrees that she has a right to enter into this Agreement, that she is not a
party to any agreement or understanding whether or not written which would
prohibit or restrict her performance of her obligations under this Agreement
and that she will not use in the performance of her obligations hereunder any
proprietary information of any other party which she is legally prohibited from
using.
21. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon Employer, its successors and assigns, it being Specifically
agreed and understood that in the event that Employer engages in a so-called
"bulk sale" of its assets this Agreement
10
<PAGE> 128
may, at Employer's option, for all purposes, be deemed an asset of Employer.
22. COUNTERPART. This Agreement may be signed in counterpart
which when signed by all parties will constitute one Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
ATTEST: INFOPAK, INC.
By:
- - - ------------------------- --------------------------------
[An authorized representative]
WITNESS:
- - - ------------------------- -----------------------------------
Ronnie M. Matlock
</TABLE>
11
<PAGE> 129
EXHIBIT "A"
INFOPAK BONUS PLAN
The InfoPak bonus pool exists as an incentive pool to encourage
creativity and performance from all InfoPak employees. Further, the management
of InfoPak have all agreed to a compensation package that enhances their
earnings in conjunction with the success of InfoPak as a corporation. The plan
is set up as follows:
The bonus pool is set at 10% of the pre-tax profits. These funds will
be distributed on a semi-annual basis, (in August and January) as described in
the following paragraph.
Fifty percent of the bonus plan is set aside for target management
compensation and fifty percent for a general pool to be distributed to all
employees, including management, based upon the decisions of the InfoPak
compensation committee. The fifty percent to be allocated to management is
limited to the amount necessary to bring management to a predetermined target
salary outlined below. Once these levels are attained by all management, one
hundred percent of the remaining bonus pool is set aside for all employees as
described earlier. The distribution to management will occur at an equivalent
rate of all management as follows:
<PAGE> 130
<TABLE>
<CAPTION>
==============================================================================================
Name Base Increase Rate Base +Bonus
Plan
==============================================================================================
<S> <C> <C> <C> <C>
Sean Lee $100,000 $200,000 .597 $300,000
- - - ----------------------------------------------------------------------------------------------
John Matlock $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Bruce Sandig $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Paul Damiani $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Roy Pringle $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Ronnie Matlock $ 35,000 $ 15,000 .045 $ 50,000
==============================================================================================
TOTAL $360,000 $350,000 1.00 $700,000
==============================================================================================
</TABLE>
EXAMPLE:
If in 1995, InfoPak had a pre-tax income of $2,500,000, the bonus pool
would be $250,000. Of this, $125,000 would be set aside for the general fund
and $125,000 would be set up for management compensation. Sean Lee would
receive .63 of this or $78,750, John Matlock and Bruce Sandig would receive
.115 or $14,375 each, and Roy Pringle and Paul Damiani would receive .07 or
$8,750 each. As the net income was not sufficient to bring the management team
to their target compensation for 1995, management will not reach their full
target for 1995.
On the other hand, if pre-tax income for 1995 was to be $7,000,000,
the bonus pool would be $700,000, with $335,000 set aside for management and
$365,000 for the general pool. All of management would receive their target
income, and a greater than 50% portion of the pool would be set aside for the
general pool.
2
<PAGE> 131
EXHIBIT "B"
[DV3D LOGO](TM)
EMPLOYEE/DIRECTOR/ASSOCIATE/CONSULTANT
CONFIDENTIAL INFORMATION AGREEMENT
This Employee/Director/Associate/Consultant Confidential Information
Agreement is entered into as of the #th day of MONTH, 199_ by and between NAME
OF INDIVIDUAL (hereinafter called the "Employee/Director/Associate/Consultant-
EDAC") and Dimensional Visions Group, Ltd., a corporation organized and
existing under the laws of the State of Delaware, its subsidiaries, divisions
and affiliated companies (being the principal employer(s) of Employee)
(hereinafter called the "Employer/Company") and acting in this Agreement on its
own behalf and on behalf of all of its subsidiaries, both direct and indirect,
now or hereafter existing (hereinafter collectively called the
"Employer/Company").
In consideration of EDAC's employment/engagement/association by/with
Employer/Company, and other good and valuable consideration to be received by
EDAC from Employer/Company during the course of such employment/engagement/
association, EDAC agrees as follows:
1. EDAC acknowledges that certain valuable confidential
information (both technical and non-technical) which belongs to the
Employer/Company and which the Employer/Company considers to be of considerable
value and is held to be confidential and proprietary trade secrets which
employer/company has a right to protect may be made available to the EDAC, or
the EDAC already may have become acquainted with such confidential information
by virtue of employment/engagement/association by/with the Employer/Company, or
the EDAC may develop or may have developed such confidential information during
the course of EDAC's employment/engagement/association by/with Employer/Company.
2. EDAC shall not disclose or use at any time, either during or
after termination of employment/engagement/association, except as required in
EDAC's duties to the Employer/Company, said confidential information, whether
or not developed by EDAC, unless EDAC shall first obtain written consent of an
officer of Employer/Company or such confidential information has become general
public knowledge by any means other than through the fault of EDAC.
Confidential information shall include Employer/Company know-how, designs,
formulas, processes, devices, machines, inventions, intellectual properties
including software and hardware, research or development projects, plans for
future development, materials of a business nature, including marketing
concepts, and any other information relating to the Employer/Company not
available to the public relating to the employer/company's business of
three-dimensional imaging or such other business as employer/company may engage
in the future.
3. EDAC shall not publish or cause to be published any articles,
oral presentations or materials related to the business activities of the
Employer/Company without obtianing the written consent of the Employer/Company.
4. EDAC agrees to disclose promptly to Employer/Company any and
all inventions, discoveries, improvemnts and business or marketing concepts
related to the business or activities of Employer/Company or related to the
contemplated busines or activities of the Employer/Company, and which are
conceived or made by EDAC, either alone or in conjunction with others, at any
time or place during the period during the period EDAC is employed/engaged/
associated by/with Employer/Company.
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
718 Arch Street - Suite 202N
Philadelphia, PA 19106
(215) 440-7791 - Fax: (215) 440-7797
<PAGE> 132
5. EDAC agrees to assign all of EDAC's interest in the inventions,
discoveries, improvements and business or marketing concepts referred to in
Paragraph 2 hereof, to Employer/Company or its nominee. Whenever requested to
do so by Employer/Company, EDAC shall execute, at Employer/Company's expense,
any and all applications, assignments or other documents with Employer/Company
as Employer/Company shall determine necessary to apply for and obtain letters
patent to protect the Employer/Company's interest in such inventions,
discoveries and improvements. These obligations shall continue beyond
termination of employment with respect to inventions, discoveries, improvements
and business or marketing concepts conceived or made by EDAC during the period
of employment. It is understood that if EDAC claims to have conceived any such
inventions, discoveries, improvements and business or marketing concepts within
a twelve (12) month period following termination of EDAC's
employment/engagement/association, the burden of proving conception after such
termination shall be on EDAC.
6. Upon termination of employment/engagement/association, EDAC
shall promptly deliver to Employer/Company all drawings, blueprints, manuals,
letters, contracts, agreements, notes, notebooks, records, reports, memoranda,
formulas and all other materials relating to the Employer/Company's business,
including all copies thereof, which are in the possession or under the control
of EDAC which is the property of the Company.
7. Should EDAC violate the terms and undertakings of this
Confidential Information Agreement, EDAC understands that employer/company may
commence an action for damages and/or injunctive relief against EDAC in any
court of competent jurisdiction and that it may seek not only actual damages
sustained by reason of such violation but also incidental and exemplary
(punitive) damages. EDAC further agrees not to use, directly or indirectly, the
confidential information for EDAC's own purpose. For purposes of this
Agreement, "EDAC" shall include any entity by whom EDAC is employed or acts as
principle now or hereafter.
8. This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without regard to conflict of law statue. The
parties of this Agreement hereby agree to the in persona jursidiction of the
Court of Common Pleas, Philadelphia County, Philadelphia, Pennsylvania or if
such court shall not have proper jurisdiction then to the Federal District
Court, Eastern District Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above, signed, sealed and delivered in the
presence of:
------------------------------------------------
Name of Individual
[Employee/Director/Associate/Consultant]
DIMENSIONAL VISIONS GROUP, LTD. and its
subsidiaries, divisions and affiliated companies
By:
---------------------------------------------
Title:
------------------------------------------
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
<PAGE> 133
SCHEDULE 3.2(a)(vi)(E)
EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of September, 1995, by and between
Roy David Pringle, an adult individual residing in the State of Arizona
(hereinafter referred to as "Employee") and InfoPak, Inc., a Delaware
corporation with an address at 8855 N. Black Canyon Highway, Suite 2000,
Phoenix, Arizona 85021 (hereinafter referred to as "Employer").
WITNESSETH
WHEREAS, Employer desires to employ Employee in the capacity of Vice
President of Software Development, or in any other position consistent with
Employee's status;
WHEREAS, Employee desires to be employed by Employer in the aforesaid
capacity; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending legally to be bound, agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the
capacity set forth above. The employment shall commence on September ___,
1995, and terminate on September ___, 1998, unless sooner terminated in
accordance with the provisions of Paragraph 5. After September ___, 1998, this
Agreement and all its terms and provisions shall be automatically extended from
month-to-month,
<PAGE> 134
unless sooner terminated in accordance with the provisions of this contract.
2. DUTIES OF EMPLOYEE.
(a) In accepting employment from Employer, Employee shall
undertake the responsibility of performing for and on behalf of Employer
whatever duties shall be assigned to Employee by Employer at any time and from
time to time. It is further understood and agreed that any modification in, or
expression of, Employee's duties shall not result in any modification in, or
increase or decrease of, Employee's compensation as stated in paragraph 3,
unless Employer specifically shall agree otherwise in a duly executed amendment
of this Agreement.
(b) Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote his full-time efforts
to his duties as an Employee of the Employer. Employee further covenants and
agrees that he will not, directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of Employer.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be paid the
following annual salary, on a semi-monthly basis, during the term hereof:
$50,000.00. Employee shall also be entitled to participate in the Employer's
Bonus Plan as set forth in Exhibit "A" attached hereto and receive a signing
bonus of
2
<PAGE> 135
Series P Convertible Preferred Shares of Dimensional Visions Group, Ltd. as set
forth in Exhibit "C" attached hereto.
4. ADDITIONAL BENEFITS. In addition to, and not in limitation
of, the compensation referred to in paragraph 3, Employee shall receive the
following additional benefits: such group health insurance as may be provided
by Employer from time to time. Employee shall have the right to vacation,
holidays and other paid leave days as permitted by the employee policy manual
in effect upon the signing of this Agreement at InfoPak, Inc.
5. TERMINATION BY EMPLOYER. Notwithstanding any other provision
hereof, Employer may terminate Employee's employment under this Agreement at
any time for cause. The termination shall be evidenced by written notice
thereof to Employee, which shall specify the cause for termination. For
purposes hereof, the term "Cause" shall include, without limitation, the
inability of Employee, through sickness or other incapacity, to perform his
duties under this Agreement for a period in excess of ninety (90) substantially
consecutive days; dishonesty; theft; conviction of a felony; substance abuse;
intoxication; unethical business conduct including disruption of Employer's
management of its business; and a material breach of this Agreement. The term
"cause" shall also include the failure of Employee for any reason, within ten
(10) days after receipt by Employee of written notice thereof from Employer, to
correct, cease, or otherwise alter any insubordination, failure to comply with
instructions, or other action or omission to act that in the opinion of
Employer does or may materially or adversely affect its business or operations.
This Agreement will terminate on the death of Employee.
3
<PAGE> 136
6. RESTRICTIVE COVENANT. Employee acknowledges that the services
he is about to render are of a special and unusual character with a unique
value to Employer, the loss of which cannot be adequately compensated by
damages in an action at law. In view of the unique value to Employer of the
services of Employee, for which Employer has contracted hereunder because of
the confidential information to be obtained by or disclosed to Employee, as set
forth herein, and as a material inducement to Employer to enter into this
Agreement and to pay Employee the compensation stated in Paragraph 3, Employee
covenants and agrees as follows:
During the term of the Employee's employment with Employer, and for a
period of two (2) years following the termination of such employment, for any
reason whatsoever, the Employee shall not, directly or indirectly:
(a) Solicit or divert any clients ("Clients") served by
Employer;
(b) Cause any Clients of Employer not to do business with
Employer;
(c) Solicit any Clients which are known by the Employee to
have been contacted or solicited, in any way, by Employer;
(d) Induce or attempt to influence any employee of Employer
or independent contractor doing business with Employer to terminate such
employee's or independent contractor relationship with Employer;
(e) Become employed with or engaged in (as a principal,
partner, director, officer, agent, employee, independent
4
<PAGE> 137
contractor, consultant or otherwise) or be financially interested in any
business which is the same or similar to the business carried on by Employer or
being planned by Employer at the time of the termination of the Employee's
employment with Employer; provided, however, this restriction shall only be
operative if such business does business with Clients of Employer or if such
business does business within a fifty (50) mile radius of any geographic area
where Employer is actually engaged in business or maintains sales or service
representatives or employees.
(f) Contact or be employed by any Clients of Employer.
(g) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
7. TRADE SECRETS.
(a) Employee acknowledges that his employment by Employer
will enable him to obtain confidential information concerning Employer, its
subsidiaries and affiliates, and information about trade secrets which are the
proprietary property of Employer, including but not limited to the following:
research, experiments, inventions, discoveries and improvements conceived,
developed or worked on by Employer or developed by the Employee for or on
behalf of Employer, or otherwise, whether or not related to Company's business
as it now exists; data and information about costs, profits, markets, sales,
key personnel, pricing policies; technical, scientific, patent and proprietary
information and/or processes; operational methods and other business affairs
and methods, including plans for future developments (all of which is
5
<PAGE> 138
hereinafter collectively referred to as "Confidential Property and
Information"). Confidential Property and Information is, and shall remain, the
sole and confidential property of Employer. Employee agrees that he shall not
use for himself or divulge any of the Confidential Information to anyone
outside of Employer except in the normal course of the conduct of Employer's
business and then only with the prior written consent of Employer's Board of
Directors.
(b) As a condition to the employment of Employee, Employee
further agrees to execute Employer's standard EDAC Agreement attached hereto as
Exhibit "B" and such other Confidentiality Agreement as may, during the term of
Employee's employment, be required by Employer of all executives in Employer's
employ. It is specifically understood that the consideration supportive of
such latter execution by Employee will be the continued employment of Employee,
it being specifically understood that the failure or refusal of Employee to
execute such latter document would constitute Cause for termination by Employer
of Employee's employment hereunder.
(c) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
8. RETURN OF CONFIDENTIAL INFORMATION. The Employee shall make
full disclosure to Employer of all Confidential Property and Information, and
shall do everything necessary or desirable to vest the absolute title of
Confidential Property and Information in Employer. Upon the termination or
expiration of this Agreement,
6
<PAGE> 139
Employee shall return to Employer all Confidential Property and Information in
the Employee's possession or control. The provisions of this Paragraph 9 shall
survive the termination or expiration of this Agreement.
9. ACCOUNTING FOR PROFITS. Employee covenants and agrees that if
he shall violate any of his covenants or agreements under Paragraph 6, Employer
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration, or other benefits that Employee directly or
indirectly has realized and/or may realize as a result of, growing out of, or
in connection with, any such violation. These remedies shall be in addition
to, and not in limitation of, any injunctive relief or other rights or remedies
to which Employer is or may be entitled at law, in equity, or under this
Agreement.
10. REASONABLENESS OR RESTRICTIONS.
(a) Employee has carefully read and considered the
provisions of Paragraphs 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these paragraphs, including, but not limited to, the
time period of restriction and the geographical areas of restriction set forth
in Paragraph 6, are fair and reasonable and are reasonably required for the
protection of the interests of Employer and its officers, directors, and other
employees.
(b) In the event that, notwithstanding the foregoing, any
of the provisions of Paragraphs 5, 6, and 7 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall
7
<PAGE> 140
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that any
provision of Paragraph 6 relating to the time period and/or the areas of
restriction shall be declared by arbitration to exceed the maximum time period
or areas such court deems reasonable and enforceable, the time period and/or
areas of restriction deemed reasonable and enforceable by the court shall
become and thereafter be the maximum time period and/or areas.
11. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, Employer and Employee, and their respective
heirs, personal and legal representatives, successors, and assigns.
12. NON RELOCATION OF EMPLOYEE. Employer will not without
Employees consent change the principal location at which Employee performs his
duties as of the date of this Agreement.
13. GOVERNING LAW. In view of the fact that the principal office
of Employer is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
14. ARBITRATION. Employer and Employee agree that all disputes
under this contract will be subject to arbitration under the rules of the
American Arbitration Association. Any such arbitration will be conducted by
three arbitrators sitting in Phoenix, Arizona, with all costs, expenses and
attorney's fees to be paid by the losing party. Any decision of the
arbitrators shall be final and may be entered as a judgment in the Court of
competent jurisdiction.
8
<PAGE> 141
15. SEVERABILITY. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5, 6, and 7, shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
16. NOTICE. Any notice required to be given shall be sufficient
it if is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his residence in the case of
Employee, which residence will be on file with Employer at all times, and to
its principal office in Arizona in the case of Employer.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of his Agreement at such time or at any other time.
9
<PAGE> 142
18. REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set forth in this
Agreement shall be cumulative with all other such rights and remedies, as well
as with all rights and remedies of the parties otherwise available at law or in
equity.
19. WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
20. WARRANTIES. The Employee represents, warrants, covenants and
agrees that he has a right to enter into this Agreement, that he is not a party
to any agreement or understanding whether or not written which would prohibit
or restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
21. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon Employer, its successors and assigns, it being Specifically
agreed and understood that in the event that Employer engages in a so-called
"bulk sale" of its assets this Agreement
10
<PAGE> 143
may, at Employer's option, for all purposes, be deemed an asset of Employer.
22. COUNTERPART. This Agreement may be signed in counterpart
which when signed by all parties will constitute one Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
ATTEST: INFOPAK, INC.
By:
- - - ------------------------- --------------------------------
[An authorized representative]
WITNESS:
- - - ------------------------- -----------------------------------
Roy David Pringle
ATTEST: DIMENSIONAL VISIONS GROUP, LTD.
AS TO EXHIBIT "C" ONLY
BY:
- - - ------------------------- -------------------------------
George S. Smith,
Chief Executive Officer
</TABLE>
11
<PAGE> 144
EXHIBIT "A"
INFOPAK BONUS PLAN
The InfoPak bonus pool exists as an incentive pool to encourage
creativity and performance from all InfoPak employees. Further, the management
of InfoPak have all agreed to a compensation package that enhances their
earnings in conjunction with the success of InfoPak as a corporation. The plan
is set up as follows:
The bonus pool is set at 10% of the pre-tax profits. These funds will
be distributed on a semi-annual basis, (in August and January) as described in
the following paragraph.
Fifty percent of the bonus plan is set aside for target management
compensation and fifty percent for a general pool to be distributed to all
employees, including management, based upon the decisions of the InfoPak
compensation committee. The fifty percent to be allocated to management is
limited to the amount necessary to bring management to a predetermined target
salary outlined below. Once these levels are attained by all management, one
hundred percent of the remaining bonus pool is set aside for all employees as
described earlier. The distribution to management will occur at an equivalent
rate of all management as follows:
<PAGE> 145
<TABLE>
<CAPTION>
==============================================================================================
Name Base Increase Rate Base +Bonus
Plan
==============================================================================================
<S> <C> <C> <C> <C>
Sean Lee $100,000 $200,000 .597 $300,000
- - - ----------------------------------------------------------------------------------------------
John Matlock $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Bruce Sandig $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Paul Damiani $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Roy Pringle $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Ronnie Matlock $ 35,000 $ 15,000 .045 $ 50,000
==============================================================================================
TOTAL $330,000 $320,000 1.00 $650,000
==============================================================================================
</TABLE>
EXAMPLE:
If in 1995, InfoPak had a pre-tax income of $2,500,000, the bonus pool
would be $250,000. Of this, $125,000 would be set aside for the general fund
and $125,000 would be set up for management compensation. Sean Lee would
receive .63 of this or $78,750, John Matlock and Bruce Sandig would receive
.115 or $14,375 each, and Roy Pringle and Paul Damiani would receive .07 or
$8,750 each. As the net income was not sufficient to bring the management team
to their target compensation for 1995, management will not reach their full
target for 1995.
On the other hand, if pre-tax income for 1995 was to be $7,000,000,
the bonus pool would be $700,000, with $335,000 set aside for management and
$365,000 for the general pool. All of management would receive their target
income, and a greater than 50% portion of the pool would be set aside for the
general pool.
2
<PAGE> 146
EXHIBIT "B"
[DV3D LOGO](TM)
EMPLOYEE/DIRECTOR/ASSOCIATE/CONSULTANT
CONFIDENTIAL INFORMATION AGREEMENT
This Employee/Director/Associate/Consultant Confidential Information
Agreement is entered into as of the #th day of MONTH, 199_ by and between NAME
OF INDIVIDUAL (hereinafter called the "Employee/Director/Associate/Consultant-
EDAC") and Dimensional Visions Group, Ltd., a corporation organized and
existing under the laws of the State of Delaware, its subsidiaries, divisions
and affiliated companies (being the principal employer(s) of Employee)
(hereinafter called the "Employer/Company") and acting in this Agreement on its
own behalf and on behalf of all of its subsidiaries, both direct and indirect,
now or hereafter existing (hereinafter collectively called the
"Employer/Company").
In consideration of EDAC's employment/engagement/association by/with
Employer/Company, and other good and valuable consideration to be received by
EDAC from Employer/Company during the course of such employment/engagement/
association, EDAC agrees as follows:
1. EDAC acknowledges that certain valuable confidential
information (both technical and non-technical) which belongs to the
Employer/Company and which the Employer/Company considers to be of considerable
value and is held to be confidential and proprietary trade secrets which
employer/company has a right to protect may be made available to the EDAC, or
the EDAC already may have become acquainted with such confidential information
by virtue of employment/engagement/association by/with the Employer/Company, or
the EDAC may develop or may have developed such confidential information during
the course of EDAC's employment/engagement/association by/with Employer/Company.
2. EDAC shall not disclose or use at any time, either during or
after termination of employment/engagement/association, except as required in
EDAC's duties to the Employer/Company, said confidential information, whether
or not developed by EDAC, unless EDAC shall first obtain written consent of an
officer of Employer/Company or such confidential information has become general
public knowledge by any means other than through the fault of EDAC.
Confidential information shall include Employer/Company know-how, designs,
formulas, processes, devices, machines, inventions, intellectual properties
including software and hardware, research or development projects, plans for
future development, materials of a business nature, including marketing
concepts, and any other information relating to the Employer/Company not
available to the public relating to the employer/company's business of
three-dimensional imaging or such other business as employer/company may engage
in the future.
3. EDAC shall not publish or cause to be published any articles,
oral presentations or materials related to the business activities of the
Employer/Company without obtianing the written consent of the Employer/Company.
4. EDAC agrees to disclose promptly to Employer/Company any and
all inventions, discoveries, improvemnts and business or marketing concepts
related to the business or activities of Employer/Company or related to the
contemplated busines or activities of the Employer/Company, and which are
conceived or made by EDAC, either alone or in conjunction with others, at any
time or place during the period during the period EDAC is employed/engaged/
associated by/with Employer/Company.
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
718 Arch Street - Suite 202N
Philadelphia, PA 19106
(215) 440-7791 - Fax: (215) 440-7797
<PAGE> 147
5. EDAC agrees to assign all of EDAC's interest in the inventions,
discoveries, improvements and business or marketing concepts referred to in
Paragraph 2 hereof, to Employer/Company or its nominee. Whenever requested to
do so by Employer/Company, EDAC shall execute, at Employer/Company's expense,
any and all applications, assignments or other documents with Employer/Company
as Employer/Company shall determine necessary to apply for and obtain letters
patent to protect the Employer/Company's interest in such inventions,
discoveries and improvements. These obligations shall continue beyond
termination of employment with respect to inventions, discoveries, improvements
and business or marketing concepts conceived or made by EDAC during the period
of employment. It is understood that if EDAC claims to have conceived any such
inventions, discoveries, improvements and business or marketing concepts within
a twelve (12) month period following termination of EDAC's
employment/engagement/association, the burden of proving conception after such
termination shall be on EDAC.
6. Upon termination of employment/engagement/association, EDAC
shall promptly deliver to Employer/Company all drawings, blueprints, manuals,
letters, contracts, agreements, notes, notebooks, records, reports, memoranda,
formulas and all other materials relating to the Employer/Company's business,
including all copies thereof, which are in the possession or under the control
of EDAC which is the property of the Company.
7. Should EDAC violate the terms and undertakings of this
Confidential Information Agreement, EDAC understands that employer/company may
commence an action for damages and/or injunctive relief against EDAC in any
court of competent jurisdiction and that it may seek not only actual damages
sustained by reason of such violation but also incidental and exemplary
(punitive) damages. EDAC further agrees not to use, directly or indirectly, the
confidential information for EDAC's own purpose. For purposes of this
Agreement, "EDAC" shall include any entity by whom EDAC is employed or acts as
principle now or hereafter.
8. This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without regard to conflict of law statue. The
parties of this Agreement hereby agree to the in persona jursidiction of the
Court of Common Pleas, Philadelphia County, Philadelphia, Pennsylvania or if
such court shall not have proper jurisdiction then to the Federal District
Court, Eastern District Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above, signed, sealed and delivered in the
presence of:
------------------------------------------------
Name of Individual
[Employee/Director/Associate/Consultant]
DIMENSIONAL VISIONS GROUP, LTD. and its
subsidiaries, divisions and affiliated companies
By:
---------------------------------------------
Title:
------------------------------------------
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
<PAGE> 148
EXHIBIT "C"
Employee shall receive 500 shares of Series P Convertible Preferred
Stock of Dimensional Visions Group, Ltd., a Delaware corporation, with the
terms and provisions as described in Schedule 2.1 of the Agreement and Plan of
Merger By and Among InfoPak, Inc., Certain Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co., and Dimensional Visions Group, Ltd., dated September
6, 1995 (the "Shares"). The Shares shall be subject to full and complete
forfeiture if at any time for a two year period following the execution of this
Employment Agreement, Employee violates Section 6, 7 or 8 of this Agreement and
the Certificates representing the Shares shall have a legend to that effect
contained thereon.
12
<PAGE> 149
SCHEDULE 3.2(a)(vi)(F)
EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of September, 1995, by and between
Paul Damiani, an adult individual residing in the State of Arizona (hereinafter
referred to as "Employee") and InfoPak, Inc., a Delaware corporation with an
address at 8855 N. Black Canyon Highway, Suite 2000, Phoenix, Arizona 85021
(hereinafter referred to as "Employer").
WITNESSETH
WHEREAS, Employer desires to employ Employee in the capacity of Vice
President of Operations and Logistics, or in any other position consistent with
Employee's status;
WHEREAS, Employee desires to be employed by Employer in the aforesaid
capacity; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending legally to be bound, agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the
capacity set forth above. The employment shall commence on September ___,
1995, and terminate on September ___, 1998, unless sooner terminated in
accordance with the provisions of Paragraph 5. After September ___, 1998, this
Agreement and all its terms and provisions shall be automatically extended from
month-to-month,
<PAGE> 150
unless sooner terminated in accordance with the provisions of this contract.
2. DUTIES OF EMPLOYEE.
(a) In accepting employment from Employer, Employee shall
undertake the responsibility of performing for and on behalf of Employer
whatever duties shall be assigned to Employee by Employer at any time and from
time to time. It is further understood and agreed that any modification in, or
expression of, Employee's duties shall not result in any modification in, or
increase or decrease of, Employee's compensation as stated in paragraph 3,
unless Employer specifically shall agree otherwise in a duly executed amendment
of this Agreement.
(b) Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote his full-time efforts
to his duties as an Employee of the Employer. Employee further covenants and
agrees that he will not, directly or indirectly, engage or participate in any
activities at any time during the term of this Agreement in conflict with the
best interests of Employer.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be paid the
following annual salary, on a semi-monthly basis, during the term hereof:
$50,000.00. Employee shall also be entitled to participate in the Employer's
Bonus Plan as set forth in Exhibit "A" attached hereto and receive a signing
bonus of
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Series P Convertible Preferred Shares of Dimensional Visions Group, Ltd. as set
forth in Exhibit "C" attached hereto.
4. ADDITIONAL BENEFITS. In addition to, and not in limitation
of, the compensation referred to in paragraph 3, Employee shall receive the
following additional benefits: such group health insurance as may be provided
by Employer from time to time. Employee shall have the right to vacation,
holidays and other paid leave days as permitted by the employee policy manual
in effect upon the signing of this Agreement at InfoPak, Inc.
5. TERMINATION BY EMPLOYER. Notwithstanding any other provision
hereof, Employer may terminate Employee's employment under this Agreement at
any time for cause. The termination shall be evidenced by written notice
thereof to Employee, which shall specify the cause for termination. For
purposes hereof, the term "Cause" shall include, without limitation, the
inability of Employee, through sickness or other incapacity, to perform his
duties under this Agreement for a period in excess of ninety (90) substantially
consecutive days; dishonesty; theft; conviction of a felony; substance abuse;
intoxication; unethical business conduct including disruption of Employer's
management of its business; and a material breach of this Agreement. The term
"cause" shall also include the failure of Employee for any reason, within ten
(10) days after receipt by Employee of written notice thereof from Employer, to
correct, cease, or otherwise alter any insubordination, failure to comply with
instructions, or other action or omission to act that in the opinion of
Employer does or may materially or adversely affect its business or operations.
This Agreement will terminate on the death of Employee.
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6. RESTRICTIVE COVENANT. Employee acknowledges that the services
he is about to render are of a special and unusual character with a unique
value to Employer, the loss of which cannot be adequately compensated by
damages in an action at law. In view of the unique value to Employer of the
services of Employee, for which Employer has contracted hereunder because of
the confidential information to be obtained by or disclosed to Employee, as set
forth herein, and as a material inducement to Employer to enter into this
Agreement and to pay Employee the compensation stated in Paragraph 3, Employee
covenants and agrees as follows:
During the term of the Employee's employment with Employer, and for a
period of two (2) years following the termination of such employment, for any
reason whatsoever, the Employee shall not, directly or indirectly:
(a) Solicit or divert any clients ("Clients") served by
Employer;
(b) Cause any Clients of Employer not to do business with
Employer;
(c) Solicit any Clients which are known by the Employee to
have been contacted or solicited, in any way, by Employer;
(d) Induce or attempt to influence any employee of Employer
or independent contractor doing business with Employer to terminate such
employee's or independent contractor relationship with Employer;
(e) Become employed with or engaged in (as a principal,
partner, director, officer, agent, employee, independent
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contractor, consultant or otherwise) or be financially interested in any
business which is the same or similar to the business carried on by Employer or
being planned by Employer at the time of the termination of the Employee's
employment with Employer; provided, however, this restriction shall only be
operative if such business does business with Clients of Employer or if such
business does business within a fifty (50) mile radius of any geographic area
where Employer is actually engaged in business or maintains sales or service
representatives or employees.
(f) Contact or be employed by any Clients of Employer.
(g) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
7. TRADE SECRETS.
(a) Employee acknowledges that his employment by Employer
will enable him to obtain confidential information concerning Employer, its
subsidiaries and affiliates, and information about trade secrets which are the
proprietary property of Employer, including but not limited to the following:
research, experiments, inventions, discoveries and improvements conceived,
developed or worked on by Employer or developed by the Employee for or on
behalf of Employer, or otherwise, whether or not related to Company's business
as it now exists; data and information about costs, profits, markets, sales,
key personnel, pricing policies; technical, scientific, patent and proprietary
information and/or processes; operational methods and other business affairs
and methods, including plans for future developments (all of which is
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<PAGE> 154
hereinafter collectively referred to as "Confidential Property and
Information"). Confidential Property and Information is, and shall remain, the
sole and confidential property of Employer. Employee agrees that he shall not
use for himself or divulge any of the Confidential Information to anyone
outside of Employer except in the normal course of the conduct of Employer's
business and then only with the prior written consent of Employer's Board of
Directors.
(b) As a condition to the employment of Employee, Employee
further agrees to execute Employer's standard EDAC Agreement attached hereto as
Exhibit "B" and such other Confidentiality Agreement as may, during the term of
Employee's employment, be required by Employer of all executives in Employer's
employ. It is specifically understood that the consideration supportive of
such latter execution by Employee will be the continued employment of Employee,
it being specifically understood that the failure or refusal of Employee to
execute such latter document would constitute Cause for termination by Employer
of Employee's employment hereunder.
(c) The provisions of this Paragraph 7 shall survive the
termination or expiration of this Agreement.
8. RETURN OF CONFIDENTIAL INFORMATION. The Employee shall make
full disclosure to Employer of all Confidential Property and Information, and
shall do everything necessary or desirable to vest the absolute title of
Confidential Property and Information in Employer. Upon the termination or
expiration of this Agreement,
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<PAGE> 155
Employee shall return to Employer all Confidential Property and Information in
the Employee's possession or control. The provisions of this Paragraph 9 shall
survive the termination or expiration of this Agreement.
9. ACCOUNTING FOR PROFITS. Employee covenants and agrees that if
he shall violate any of his covenants or agreements under Paragraph 6, Employer
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration, or other benefits that Employee directly or
indirectly has realized and/or may realize as a result of, growing out of, or
in connection with, any such violation. These remedies shall be in addition
to, and not in limitation of, any injunctive relief or other rights or remedies
to which Employer is or may be entitled at law, in equity, or under this
Agreement.
10. REASONABLENESS OR RESTRICTIONS.
(a) Employee has carefully read and considered the
provisions of Paragraphs 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these paragraphs, including, but not limited to, the
time period of restriction and the geographical areas of restriction set forth
in Paragraph 6, are fair and reasonable and are reasonably required for the
protection of the interests of Employer and its officers, directors, and other
employees.
(b) In the event that, notwithstanding the foregoing, any
of the provisions of Paragraphs 5, 6, and 7 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall
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<PAGE> 156
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that any
provision of Paragraph 6 relating to the time period and/or the areas of
restriction shall be declared by arbitration to exceed the maximum time period
or areas such court deems reasonable and enforceable, the time period and/or
areas of restriction deemed reasonable and enforceable by the court shall
become and thereafter be the maximum time period and/or areas.
11. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, Employer and Employee, and their respective
heirs, personal and legal representatives, successors, and assigns.
12. NON RELOCATION OF EMPLOYEE. Employer will not without
Employees consent change the principal location at which Employee performs his
duties as of the date of this Agreement.
13. GOVERNING LAW. In view of the fact that the principal office
of Employer is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
14. ARBITRATION. Employer and Employee agree that all disputes
under this contract will be subject to arbitration under the rules of the
American Arbitration Association. Any such arbitration will be conducted by
three arbitrators sitting in Phoenix, Arizona, with all costs, expenses and
attorney's fees to be paid by the losing party. Any decision of the
arbitrators shall be final and may be entered as a judgment in the Court of
competent jurisdiction.
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15. SEVERABILITY. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5, 6, and 7, shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
16. NOTICE. Any notice required to be given shall be sufficient
it if is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his residence in the case of
Employee, which residence will be on file with Employer at all times, and to
its principal office in Arizona in the case of Employer.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of his Agreement at such time or at any other time.
18. REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set
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forth in this Agreement shall be cumulative with all other such rights and
remedies, as well as with all rights and remedies of the parties otherwise
available at law or in equity.
19. WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
20. WARRANTIES. The Employee represents, warrants, covenants and
agrees that he has a right to enter into this Agreement, that he is not a party
to any agreement or understanding whether or not written which would prohibit
or restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
21. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon Employer, its successors and assigns, it being Specifically
agreed and understood that in the event that Employer engages in a so-called
"bulk sale" of its assets this Agreement
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may, at Employer's option, for all purposes, be deemed an asset of Employer.
22. COUNTERPART. This Agreement may be signed in counterpart
which when signed by all parties will constitute one Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement as of the date first written above.
<TABLE>
<S> <C>
ATTEST: INFOPAK, INC.
By:
- - - ------------------------- --------------------------------
[An authorized representative]
WITNESS:
- - - ------------------------- -----------------------------------
Paul Damiani
ATTEST: DIMENSIONAL VISIONS GROUP, LTD.
AS TO EXHIBIT "C" ONLY
By:
- - - ------------------------- --------------------------------
George S. Smith,
Chief Executive Officer
</TABLE>
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<PAGE> 160
EXHIBIT "A"
INFOPAK BONUS PLAN
The InfoPak bonus pool exists as an incentive pool to encourage
creativity and performance from all InfoPak employees. Further, the management
of InfoPak have all agreed to a compensation package that enhances their
earnings in conjunction with the success of InfoPak as a corporation. The plan
is set up as follows:
The bonus pool is set at 10% of the pre-tax profits. These funds will
be distributed on a semi-annual basis, (in August and January) as described in
the following paragraph.
Fifty percent of the bonus plan is set aside for target management
compensation and fifty percent for a general pool to be distributed to all
employees, including management, based upon the decisions of the InfoPak
compensation committee. The fifty percent to be allocated to management is
limited to the amount necessary to bring management to a predetermined target
salary outlined below. Once these levels are attained by all management, one
hundred percent of the remaining bonus pool is set aside for all employees as
described earlier. The distribution to management will occur at an equivalent
rate of all management as follows:
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<TABLE>
<CAPTION>
==============================================================================================
Name Base Increase Rate Base +Bonus
Plan
==============================================================================================
<S> <C> <C> <C> <C>
Sean Lee $100,000 $200,000 .597 $300,000
- - - ----------------------------------------------------------------------------------------------
John Matlock $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Bruce Sandig $ 65,000 $ 35,000 .104 $100,000
- - - ----------------------------------------------------------------------------------------------
Paul Damiani $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Roy Pringle $ 50,000 $ 25,000 .075 $ 75,000
- - - ----------------------------------------------------------------------------------------------
Ronnie Matlock $ 35,000 $ 15,000 .045 $ 50,000
==============================================================================================
TOTAL $360,000 $350,000 1.00 $700,000
==============================================================================================
</TABLE>
EXAMPLE:
If in 1995, InfoPak had a pre-tax income of $2,500,000, the bonus pool
would be $250,000. Of this, $125,000 would be set aside for the general fund
and $125,000 would be set up for management compensation. Sean Lee would
receive .63 of this or $78,750, John Matlock and Bruce Sandig would receive
.115 or $14,375 each, and Roy Pringle and Paul Damiani would receive .07 or
$8,750 each. As the net income was not sufficient to bring the management team
to their target compensation for 1995, management will not reach their full
target for 1995.
On the other hand, if pre-tax income for 1995 was to be $7,000,000,
the bonus pool would be $700,000, with $335,000 set aside for management and
$365,000 for the general pool. All of management would receive their target
income, and a greater than 50% portion of the pool would be set aside for the
general pool.
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EXHIBIT "B"
[DV3D LOGO](TM)
EMPLOYEE/DIRECTOR/ASSOCIATE/CONSULTANT
CONFIDENTIAL INFORMATION AGREEMENT
This Employee/Director/Associate/Consultant Confidential Information
Agreement is entered into as of the #th day of MONTH, 199_ by and between NAME
OF INDIVIDUAL (hereinafter called the "Employee/Director/Associate/Consultant-
EDAC") and Dimensional Visions Group, Ltd., a corporation organized and
existing under the laws of the State of Delaware, its subsidiaries, divisions
and affiliated companies (being the principal employer(s) of Employee)
(hereinafter called the "Employer/Company") and acting in this Agreement on its
own behalf and on behalf of all of its subsidiaries, both direct and indirect,
now or hereafter existing (hereinafter collectively called the
"Employer/Company").
In consideration of EDAC's employment/engagement/association by/with
Employer/Company, and other good and valuable consideration to be received by
EDAC from Employer/Company during the course of such employment/engagement/
association, EDAC agrees as follows:
1. EDAC acknowledges that certain valuable confidential
information (both technical and non-technical) which belongs to the
Employer/Company and which the Employer/Company considers to be of considerable
value and is held to be confidential and proprietary trade secrets which
employer/company has a right to protect may be made available to the EDAC, or
the EDAC already may have become acquainted with such confidential information
by virtue of employment/engagement/association by/with the Employer/Company, or
the EDAC may develop or may have developed such confidential information during
the course of EDAC's employment/engagement/association by/with Employer/Company.
2. EDAC shall not disclose or use at any time, either during or
after termination of employment/engagement/association, except as required in
EDAC's duties to the Employer/Company, said confidential information, whether
or not developed by EDAC, unless EDAC shall first obtain written consent of an
officer of Employer/Company or such confidential information has become general
public knowledge by any means other than through the fault of EDAC.
Confidential information shall include Employer/Company know-how, designs,
formulas, processes, devices, machines, inventions, intellectual properties
including software and hardware, research or development projects, plans for
future development, materials of a business nature, including marketing
concepts, and any other information relating to the Employer/Company not
available to the public relating to the employer/company's business of
three-dimensional imaging or such other business as employer/company may engage
in the future.
3. EDAC shall not publish or cause to be published any articles,
oral presentations or materials related to the business activities of the
Employer/Company without obtianing the written consent of the Employer/Company.
4. EDAC agrees to disclose promptly to Employer/Company any and
all inventions, discoveries, improvemnts and business or marketing concepts
related to the business or activities of Employer/Company or related to the
contemplated busines or activities of the Employer/Company, and which are
conceived or made by EDAC, either alone or in conjunction with others, at any
time or place during the period during the period EDAC is employed/engaged/
associated by/with Employer/Company.
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
718 Arch Street - Suite 202N
Philadelphia, PA 19106
(215) 440-7791 - Fax: (215) 440-7797
<PAGE> 163
5. EDAC agrees to assign all of EDAC's interest in the inventions,
discoveries, improvements and business or marketing concepts referred to in
Paragraph 2 hereof, to Employer/Company or its nominee. Whenever requested to
do so by Employer/Company, EDAC shall execute, at Employer/Company's expense,
any and all applications, assignments or other documents with Employer/Company
as Employer/Company shall determine necessary to apply for and obtain letters
patent to protect the Employer/Company's interest in such inventions,
discoveries and improvements. These obligations shall continue beyond
termination of employment with respect to inventions, discoveries, improvements
and business or marketing concepts conceived or made by EDAC during the period
of employment. It is understood that if EDAC claims to have conceived any such
inventions, discoveries, improvements and business or marketing concepts within
a twelve (12) month period following termination of EDAC's
employment/engagement/association, the burden of proving conception after such
termination shall be on EDAC.
6. Upon termination of employment/engagement/association, EDAC
shall promptly deliver to Employer/Company all drawings, blueprints, manuals,
letters, contracts, agreements, notes, notebooks, records, reports, memoranda,
formulas and all other materials relating to the Employer/Company's business,
including all copies thereof, which are in the possession or under the control
of EDAC which is the property of the Company.
7. Should EDAC violate the terms and undertakings of this
Confidential Information Agreement, EDAC understands that employer/company may
commence an action for damages and/or injunctive relief against EDAC in any
court of competent jurisdiction and that it may seek not only actual damages
sustained by reason of such violation but also incidental and exemplary
(punitive) damages. EDAC further agrees not to use, directly or indirectly, the
confidential information for EDAC's own purpose. For purposes of this
Agreement, "EDAC" shall include any entity by whom EDAC is employed or acts as
principle now or hereafter.
8. This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without regard to conflict of law statue. The
parties of this Agreement hereby agree to the in persona jursidiction of the
Court of Common Pleas, Philadelphia County, Philadelphia, Pennsylvania or if
such court shall not have proper jurisdiction then to the Federal District
Court, Eastern District Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first written above, signed, sealed and delivered in the
presence of:
------------------------------------------------
Name of Individual
[Employee/Director/Associate/Consultant]
DIMENSIONAL VISIONS GROUP, LTD. and its
subsidiaries, divisions and affiliated companies
By:
---------------------------------------------
Title:
------------------------------------------
[DV3D LOGO](TM) Dimensional Visions Group, Ltd.
<PAGE> 164
EXHIBIT "C"
Employee shall receive 500 shares of Series P Convertible Preferred
Stock of Dimensional Visions Group, Ltd., a Delaware corporation, with the
terms and provisions as described in Schedule 2.1 of the Agreement and Plan of
Merger By and Among InfoPak, Inc., Certain Shareholders of InfoPak, Inc.,
InfoPak Acquisition Co., and Dimensional Visions Group, Ltd., dated September
6, 1995 (the "Shares"). The Shares shall be subject to full and complete
forfeiture if at any time for a two year period following the execution of this
Employment Agreement, Employee violates Section 6, 7 or 8 of this Agreement and
the Certificates representing the Shares shall have a legend to that effect
contained thereon.
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<PAGE> 165
Schedule 3.2(a)(vi)(G)
CONSULTING AGREEMENT
THIS AGREEMENT is made this ______ day of September, 1995, by and among
InfoPak, Inc., an Arizona corporation, ("InfoPak") and Timothy Wright
("Wright").
RECITALS:
A. Wright is a founder and director of InfoPak, Inc., an Arizona
corporation engaged in the business of manufacturing and marketing hardware and
software information and recordable microchip and audio playback systems and
products and programs (the "Business").
B. InfoPak Acquisition Co., a wholly owned subsidiary of Dimensional
Visions Group, Ltd., a Delaware corporation ("DVG"), desires to merge with and
into InfoPak as discussed in that certain Agreement and Plan of Merger dated
September 6, 1995 (the "Merger").
C. Wright is willing to perform certain services for InfoPak after
the Merger for a period of two years.
NOW THEREFORE, in consideration of the promises and payments
hereinafter set forth, the parties hereto agree as follows:
1. Consulting Period and Duties. Wright shall serve and InfoPak
agrees to retain Wright as a consultant to assist with product ideas and
enhancements for products of InfoPak from September ____, 1995 to September
____, 1997 (such period being hereinafter referred to as the "Consulting
Period") on a part-time basis as his services may from time to time be
requested by the management of InfoPak. Any requests for services shall be
subject, however, to the following conditions:
a. Such services as shall be required of and performed by Wright
during the consulting Period shall be performed by him at his
reasonable convenience and at such place or places as he may from time
to time elect in recognition of the type of service and advice to be
provided by him.
b. During the Consulting Period, Wright shall not be required to
or expected to devote more than a reasonable amount of time to the
services of InfoPak, which shall not exceed ten hours per month, which
time may vary from day to day or week to week, it being understood that
although Wright has agreed to devote a
<PAGE> 166
reasonable amount of time to InfoPak, Wright shall be free to devote
most of his time and energy to businesses and other activities of his
own choosing.
2. Payment for Consulting Services. In consideration for Wright's
agreement to provide consulting services, InfoPak shall pay Wright 2,500 shares
of Series P Preferred Stock of DVG with the same rights and privileges as that
received by shareholders of InfoPak in the Merger (the "Shares").
Notwithstanding any language to the contrary contained herein, the Shares shall
be forfeited in full should Wright fail to perform the services described in
Section 2 or materially breach this Agreement.
3. Relationship Between Parties and Others. Wright has been retained
by InfoPak only for the purposes and to the extent set forth in this Agreement
and Wright's relationship to InfoPak shall be that of an independent
contractor. Accordingly, Wright shall be responsible for payment of all taxes
including federal, state and local taxes and any other taxes as required.
Wright shall not have the authority to act for or bind InfoPak in any respect
and shall not represent to any third parties that he is an agent acting for or
on behalf of InfoPak.
4. Trade Secrets. Wright acknowledges that this Agreement will enable
him to obtain confidential information concerning InfoPak, its subsidiaries and
affiliates, and information about trade secrets which are the proprietary
property of InfoPak, including but not limited to the following: research,
experiments, inventions, discoveries and improvements conceived, developed or
worked on by InfoPak or developed by Wright for or on behalf of InfoPak, or
otherwise, whether or not related to InfoPak's business as it now exists; data
and information about costs, profits, markets, sales, key personnel, pricing
policies; technical, scientific, patent and proprietary information and/or
processes; operational methods and other business affairs and methods,
including plans for future developments (all of which is hereinafter
collectively referred to as "Confidential Property and Information").
Confidential Property and Information is, and shall remain, the sole and
confidential property of InfoPak. Wright agrees that he shall not use for
himself or divulge any of the Confidential Information to anyone outside of
InfoPak except in the normal course of the conduct of InfoPak's Board of
Directors.
a. As a condition to entry into this Agreement, Wright further
agrees to execute InfoPak's standard EDAC Agreement attached hereto as
Exhibit "A" and such other Confidentiality Agreement as may, during the
term of Wright's Consulting Arrangement, be required by InfoPak of all
executives in InfoPak's employ. It is specifically understood that the
consideration supportive of such latter execution by Wright will be the
continued retention of Wright as a consultant, it being specifically
understood that the failure or refusal of Wright to execute such
latter document would constitute termination and breach of this
Agreement.
b. The provisions of this Paragraph 4 shall survive the
termination or expiration of this Agreement.
<PAGE> 167
5. Return of Confidential Information. Wright shall make full
disclosure to InfoPak of all Confidential Property and Information, and shall
do everything necessary or desirable to vest the absolute title of Confidential
Property and Information in InfoPak. Upon the termination or expiration of
this Agreement, Wright shall return to InfoPak all Confidential Property and
Information in consultant's possession or control. The provisions of this
Paragraph 5 shall survive the termination or expiration of this Agreement.
6. Reasonableness or Restrictions.
a. Wright has carefully read and considered the provisions of
Paragraphs 4 and 5, and, having done so, agrees that the restrictions
set forth in these paragraphs are fair and reasonable and are
reasonably required for the protection of the interests of InfoPak and
its officers, directors, and employees.
b. In the event that, notwithstanding the foregoing, any of the
provisions of Paragraphs 4 and 5 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless
continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein.
7. Burden and Benefit. This Agreement shall be binding upon, and
shall inure to the benefit of, InfoPak and Wright, and their respective heirs,
personal and legal representatives, successors, and assigns.
8. Governing Law. In view of the fact that the principal office of
InfoPak is located in Arizona, it is understood and agreed that the
construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Arizona.
9. Arbitration. InfoPak and Wright agree that all disputes under this
contract will be subject to arbitration under the rules of the American
Arbitration Association. Any such arbitrators sitting in Phoenix, Arizona,
with all costs, expenses and attorney's fees to be paid by the losing party.
Any decision of the arbitrators shall be final and may be entered as a judgment
in the Court of competent jurisidiction.
10. Severability. The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 4 and 5, shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
11. Notice. Any notice required to be given shall be sufficient if it
is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his residence in the case of Wright,
which residence will be on file with InfoPak at all times, and to its principal
office in Arizona in the case of InfoPak.
<PAGE> 168
12. Entire Agreement This Agreement contains the entire agreement
and understanding by and between InfoPak and Wright with respect to the
retention of Wright, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the intended to be bound. No waiver of
any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of his Agreement at such time or at any other time.
13. Remedies Cumulative. Except as otherwise expressly provided
herein, each of the rights and remedies of the parties set forth in this
Agreement shall be cumulative with all other such rights and remedies, as well
as with all rights and remedies of the parties otherwise available at law or
in equity.
14. Waiver. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. To be effective, any waiver must be
contained in a written instrument signed by the party waiving compliance by the
other party of the term or covenant as specified. The waiver by either party
of the breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
15. Warranties. Wright represents, warrants, covenants and agrees
that he has a right to enter into this Agreement, that he is not a party to any
agreement or understanding whether or not written which would prohibit or
restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
16. Assignment. This Agreement shall inure to the benefit of and be
binding upon InfoPak, its successors and assigns, it being specifically agreed
and understood that in the event that InfoPak engages in a so-called "bulk
sale" of its assets this Agreement may, at InfoPak's option, for all purposes,
be deemed an asset of InfoPak.
<PAGE> 169
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Agreement as of the date first written above.
WITNESS: INFOPAK, INC.
- - - -------------------------- By:
--------------------------------
(An authorized representative)
WITNESS:
- - - -------------------------- --------------------------------
Timothy Wright
DIMENSIONAL VISIONS GROUP, LTD.,
a Delaware corporation, solely
with respect to Paragraph 2
--------------------------------
Chief Executive Officer
<PAGE> 170
SCHEDULE 3.2(a) (vii)
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of September 6, 1995, among Sean F. Lee,
Family Limited Partnership, Timothy Wright, Bruce Darryl Sandig and John Edward
Matlock (collectively, the "Pledgors"), and Dimensional Visions Group, Ltd., a
Delaware corporation ("DVG") and InfoPak Acquisition Co., a Delaware
corporation ("Buyer"').
WITNESSETH:
WHEREAS, Infopak, Inc., an Arizona corporation (the "Company"), the
Pledgors, DVG and Buyer are parties to an Agreement and Plan of Merger, dated
as of September 6, 1995 (as the same may from time to time be amended,
supplemented or otherwise modified, the "Merger Agreement");
WHEREAS, pursuant to the terms of the Merger Agreement, the Company
will merge with and into the Buyer (the "Merger");
WHEREAS, pursuant to the Merger, Pledgors will receive 364,918 shares
of Series P Convertible Preferred Stock, $20.00 par value per share, of DVG
("DVG Series P");
WHEREAS, pursuant to the Merger Agreement, the Company made various
representations and warranties to DVG and Buyer, and Pledgors, jointly and
severally, agreed to indemnify DVG and Buyer on the terms and subject to the
conditions set forth therein;
WHEREAS, as security for their indemnification obligations, the
Pledgors agreed to pledge the Indemnity Shares (as defined below);
WHEREAS, the Pledgors are the legal and beneficial owners of the
Indemnity Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and to induce DVG and
Buyer to consummate the transactions contemplated by the Merger Agreement, the
Pledgors hereby agree with DVG and Buyer as follows:
1. Defined Terms: Unless otherwise defined herein, terms which
are defined in the Merger Agreement and used herein are so used as so defined,
and the meanings assigned to terms defined herein or in the Merger Agreement
shall be equally applicable to
<PAGE> 171
both the singular and plural forms of such terms; and the following terms shall
have the following meanings:
"Collateral" means the Indemnity Shares and all Proceeds.
"Indemnity Obligations" means the obligations of the Pledgors
to indemnify DVG and Buyer pursuant to Sections 2.3 and 10.1
of the Merger Agreement.
"Obligations" means the Indemnity Obligations.
"Pledge Agreement" means this Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
"Indemnity Shares" means 50,000 DVG Series P Shares.
"Proceeds" means all "proceeds" as such term is defined
in Section 9-306(1) of the Uniform Commercial Code in effect
in the State of Illinois on the date hereof and, in any event,
shall include, without limitation, all dividends or other
income from the Indemnity Shares, collections thereon or
distributions with respect thereto.
"UCC" means the Uniform Commercial Code from time to
time in effect in the State of Arizona.
2. Deposit: Pledge: Grant of Security Interest: Stock
Powers. The Pledgors hereby deliver to DVG the Indemnity Shares, and
hereby jointly and severally pledge and grant to DVG and Buyer a first priority
security interest in the Collateral as collateral security for the prompt and
complete payment of the Obligations. Concurrently with the delivery to DVG of
each certificate representing one or more Indemnity Shares, the Pledgors shall
deliver an undated stock power covering such certificate, duly executed in
blank.
3. Representations and Warranties. The Pledgors jointly
and severally represent and warrant that the Pledgors, in the aggregate, are
the record and beneficial owners of, and have good and marketable title to,
the Indemnity Shares, free of any and all liens or options in favor or claims
of, any other person, except the lien created by this Pledge Agreement.
4. Covenants. The Pledgors jointly and severally covenant
and agree with DVG and Buyer that, from and after the date of this Pledge
Agreement until termination of the obligations of the Pledgors under this
Pledge Agreement:
2
<PAGE> 172
(a) If the Pledgors shall be entitled to receive
(i) any dividend paid or payable other than in
cash in exchange for, and instruments and other
property received, receivable or otherwise
distributed in exchange for, any Collateral;
(ii) dividends and other distributions paid or
payable in cash in respect of any Collateral; or
(iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Collateral,
such dividends or distributions shall be forthwith
delivered to DVG, to hold as Collateral and shall, if
received by the Pledgors, be received in trust for
the benefit of DVG and Buyer, be segregated from the
other property or funds of the Pledgors, and be
forthwith delivered to DVG as collateral in the same
form as so received (with any necessary endorsement).
(b) Without the prior written consent of DVG, no
Pledgor will (i) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the
Collateral, or (ii) create, incur or permit to exist any lien
or option in favor of, or any claim of any person with respect
to, any of the Collateral, or any interest therein, except for
the lien provided for by this Pledge Agreement.
(c) At any time and from time to time, upon the
written request of DVG or Buyer, and at the sole expense of
the Pledgors, the Pledgors will promptly and duly execute and
deliver such further instruments and documents to DVG or Buyer
and take such further actions as DVG or Buyer may reasonably
request for the purposes of obtaining or preserving the full
benefits of this Pledge Agreement and of the rights and powers
herein granted.
5. Voting Rights. The Pledgors shall be permitted to
exercise all voting and corporate rights with respect to the Indemnity Shares;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which would result in any violation of any material
provision of the Merger Agreement or this Pledge Agreement.
3
<PAGE> 173
6. Notice of Claim and Indemnity Payment for Indemnity
Obligations. (a) In the event that DVG or Buyer at any time or from time to
time during the term of this Pledge Agreement shall determine that it is
entitled to receive a payment from the Pledgors in respect of the Indemnity
Obligations (an "Indemnity Payment"), DVG or Buyer shall deliver notice (an
"Indemnity Notice") to the Pledgors in accordance with Section 16 hereof (i)
stating that DVG or Buyer in good faith believes that it is entitled to receive
such Indemnity Payment under a specified provision of Section 10.1 of the
Merger Agreement and (ii) setting forth the amount involved and briefly
describing the nature thereof. The validity of such Indemnity Notice shall not
be affected in any manner whatsoever by reason of the extent or adequacy of the
description of the nature of the claim.
(b) If the Pledgors do not either (i) pay DVG or
Buyer the proposed Indemnity Payment within ten (10) days of
the Indemnity Notice or (ii) notify DVG or Buyer in writing
within ten (10) days of the Indemnity Notice that the proposed
Indemnity Payment is disputed, then the full amount of the
proposed Indemnity Payment, shall be immediately due and
payable and DVG and Buyer shall have the remedies provided for
in this Pledge Agreement in respect thereof. If the Pledgors
do notify DVG or Buyer in writing within ten (10) days of the
Indemnity Notice that all or a portion of the proposed
Indemnity Payment is disputed, then the portion not disputed
by Pledgors, if any of such Indemnity Payment shall be
immediately due and payable and DVG and Buyer shall have the
remedies provided for in this Pledge Agreement in respect
thereof. If the parties do not reach agreement on the amount
of the disputed Indemnity Payment, if any, to be paid within
fifteen (15) days of the Indemnity Notice, then the
disagreement concerning the disputed Indemnity Payment shall
be submitted within twenty (20) days of the Indemnity Notice
by Pledgors, on the one hand, and DVG and Buyer, on the other
hand, to arbitration in Phoenix, Arizona, in accordance with
the commercial arbitration rules of the American Arbitration
Association by one arbitrator who will be selected by the
joint action of two other arbitrators, one of whom shall be
selected by DVG and Buyer, on the one hand, and one of whom
shall be selected by Pledgors, on the other hand. The parties
hereto agree that the determination of the arbitrator shall be
a final determination for purposes of this Pledge Agreement.
Pending such final determination, DVG shall continue to hold
the Collateral until otherwise agreed to with the Pledgors or
otherwise directed by a final determination of an arbitrator
as contemplated
4
<PAGE> 174
hereby. Upon such determination, the amount so determined to
be payable shall be immediately due and payable, and DVG and
Buyer shall have the remedies provided for in this Pledge
Agreement in respect thereof.
7. Settlement of Indemnity Payments. If an Indemnity
Payment becomes due and payable under Section 10.1 of the Merger Agreement and
Section 6 above, DVG shall be entitled to take legal title to that number of
Indemnity Shares equal in value to the Indemnity Payment, which shares shall be
valued for purposes of any Indemnity Payment at [$20.00] per share. With
respect to any portion of a proposed Indemnity Payment disputed by Pledgors,
DVG or Buyer shall be entitled to take legal title to the proposed Indemnity
Payment upon a final determination, whether by settlement or arbitration.
8. Reasonable Care. DVG shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which DVG accords its own property, it being understood that DVG shall not
have any responsibility for (i) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not DVG has or is deemed to have knowledge of such
matters, or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Collateral.
9. Expenses. The Pledgors, on the one hand, and DVG and
Buyer, on the other hand, shall each pay one-half of all costs and expenses of
any arbitration conducted pursuant to the provisions of Section 6 hereof. The
parties hereby covenant to pay their respective share of such expenses (as
provided above) within thirty (30) days of receipt of invoice for such
expenses.
10. Powers Coupled with an Interest. All authorizations
and agencies herein contained with respect to the Collateral are irrevocable
and powers coupled with an interest.
11. Severability. Any provision of this Pledge Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
5
<PAGE> 175
12. Paragraph Headings. The paragraph headings used in
this Pledge Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
13. No Waiver: Cumulative Remedies. Neither DVG nor Buyer
shall by any act (except by a written instrument pursuant to paragraph 14
hereof be deemed to have waived any right or remedy hereunder or any breach by
Pledgors of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of DVG or Buyer, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by DVG or Buyer of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which DVG or
Buyer would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently, and
are not exclusive of any other rights or remedies provided by law.
14. Waivers and Amendments: Successors and Assigns. None
of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgors, DVG and Buyer. This Pledge Agreement shall be binding upon the
successors and assigns of the Pledgors and shall inure to the benefit of DVG,
Buyer and their successors and assigns.
15. Termination of Security Interest:Release of
Collateral.
(a) The security interest granted in the Collateral
pursuant hereto (the "Security Interest") shall terminate, and rights
to the Collateral shall revert to the Pledgors on the date falling eighteen
(18) months after the date of this Pledge Agreement; provided that no such
termination with respect to the Indemnity Shares shall be effective if prior to
the designated termination date set forth above:
(i) DVG or Buyer shall have delivered one or more
written notices of claim for indemnification under Section
10.1 of the Merger Agreement and Section 6 hereof; and
(ii) the liability of the Pledgors in respect of
such claim or claims has not been finally determined and
satisfied pursuant to the Merger Agreement and
6
<PAGE> 176
the provisions of Section 6 hereof in which case this Pledge
Agreement and the security interest shall continue in effect
until such final determination and satisfaction. This Pledge
Agreement shall terminate after the last of the above to be
finally resolved.
(b) Upon any such termination of this Pledge Agreement
and such security interest or release of Collateral pursuant to this
Section 15, DVG and Buyer shall promptly execute and deliver to the Pledgors
such documents as the Pledgors shall reasonably request to evidence the
termination of the security interest or the release of such Collateral, as the
case may be, or to transfer any of the Collateral so released to the Pledgors
and shall promptly deliver to the Pledgors all Collateral so released then in
its possession.
16. Notices. Notices shall be given in accordance with
Section 11.13 of the Merger Agreement, addressed to a party at the address
provided for such party in the signature pages hereof.
17. Integration. This Pledge Agreement represents the
agreement of the Pledgors, DVG and Buyer with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by DVG or Buyer relative to the subject matter hereof not expressly set forth
or referred to herein or in the Merger Agreement.
18. Counterparts. This Pledge Agreement may be executed
by the parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
19. Governing Law. THIS PLEDGE AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF DVG, BUYER AND THE PLEDGORS UNDER THIS PLEDGE AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF DELAWARE.
7
<PAGE> 177
20. Jurisdiction. The parties to this Pledge Agreement
hereby consent to the jurisdiction of the Courts of the State of Arizona.
IN WITNESS WHEREOF, the undersigned have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
Address for Notices to Pledgors: Pledgors
Sean F. Lee
InfoPak, Inc.
8855 N. Black Canyon Highway
Suite 2000
Phoenix, Arizona 85021 SEAN F. LEE FAMILY LIMITED
PARTNERSHIP
BY:
-----------------------
Sean F. Lee,
General Partner
-----------------------
Timothy Wright
-----------------------
Bruce Darryl Sandig
-----------------------
John Edward Matlock
Address for Notices to DVG and Buyer: Dimensional Visions Group,
Ltd.
George S. Smith
Dimensional Visions Group, Ltd. By:
718 Arch Street ---------------------------
Suite 202N Title: Chief Executive Officer
Philadelphia, Pennsylvania 19106
InfoPak Acquisition Co.
By:
---------------------------
Title: Chief Executive Officer
8
<PAGE> 178
SCHEDULE 3.2(b)(iv)
OPINION OF INFOPAK'S AND INFOPAK SHAREHOLDERS' COUNSEL
The opinion of Chapman and Cutler, legal counsel for InfoPak and
InfoPak Shareholders, shall be to the effect that:
1. InfoPak is a corporation duly organized, validly existing and
in good standing under the General Corporation Law of Arizona and has the
requisite corporate power and authority to own and operate its properties, to
lease any properties that it operates under lease and to conduct its business,
and to enter into and perform all of its obligations under the Agreement and
under the other agreements and documents to be entered into by InfoPak pursuant
to the Agreement (collectively, the "Documents").
2. The execution, delivery and performance by the InfoPak of the
Documents have been duly authorized by all necessary corporation action on the
part of the InfoPak, are not in contravention of any provision of the
Certificate of Incorporation or By-laws of the InfoPak and will not result in
the breach of, or constitute a default under, or result in the creation or
imposition of any lien pursuant to the provisions of (i) any material
indenture, mortgage, loan agreement or other agreement to which the InfoPak is
a party and of which we have knowledge, taking into account consents, waivers
and approvals obtained by the InfoPak prior to Closing, or (ii) any order,
writ, judgment or decree known to us to which the InfoPak is a party or to
which the InfoPak or its property is subject.
3. The execution, delivery and performance of the Documents by
InfoPak and the InfoPak Shareholders do not violate any provision of any
applicable federal or Pennsylvania or Delaware state statute, rule or
regulation which is normally applicable to transactions of the type
contemplated by the Documents. No authorization, approval or consent of any
governmental or regulatory body is necessary or required under the federal,
Arizona law in connection with the lawful execution, delivery and performance
by InfoPak and the InfoPak Shareholders of the Documents other than those that
have already been obtained.
4. The authorized capital stock of InfoPak consists of__________
shares of common stock, par value $____ per share, of which _____ shares are
issued and outstanding. To the best of our knowledge after due inquiry, all of
the issued and outstanding shares of common stock of InfoPak are owned of
record as set forth on Schedule 4.24 to the Agreement. All of the issued and
outstanding shares of the common stock of InfoPak are duly and validly issued,
fully paid and nonassessable and are without, and
<PAGE> 179
were not issued in violation of, preemptive rights. To the best of our
knowledge, (i) there are no outstanding options, warrants, conversion
privileges or other rights to purchase or acquire from InfoPak any shares of
capital stock or other equity securities of InfoPak or any outstanding
securities that are convertible into or exchangeable for such shares,
securities or rights; and (ii) there are no contracts, commitments,
understandings, arrangements or restrictions by which InfoPak is bound to issue
any additional shares of its capital stock or other equity securities or any
options, warrants, conversion privileges or other rights to purchase or acquire
any capital stock or other equity securities of InfoPak or any securities
convertible into or exchangeable for such shares, securities or rights.
4. The Documents have been duly executed and delivered by InfoPak
and the InfoPak Shareholders and constitute the valid and binding obligations
of InfoPak and the InfoPak Shareholders, enforceable against InfoPak and the
InfoPak Shareholders in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of creditors
and the application of general principals of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and further subject
to the qualifications set forth in the next succeeding sentence. We express no
opinion herein as to the validity or enforceability of any provision regarding
choice of Delaware law to govern the Documents or any provision of the
Documents to the extent that such provision purports to waive any rights,
remedies, or defenses or of any provision for contribution or indemnification.
2
<PAGE> 180
SCHEDULE 4.2
EXISTENCE AND GOOD STANDING OF INFOPAK
None
<PAGE> 181
SCHEDULE 4.5
LIABILITIES AND OBLIGATIONS OF INFOPAK
<TABLE>
<S> <C>
Biller, Frith Smith & Archibald $ 7,500.00
Chapman and Cutler Legal Fee's and Costs
SmallTalk(TM) 3 % Gross Revenue of SmallTalk
</TABLE>
<PAGE> 182
SCHEDULE 4.6
ABSENCE OF CERTAIN CHANGES OF INFOPAK
(a) N/A
(b) N/A
(c) 1. Ronnie M. Matlock - Hired August 1,1995 ($35,000.00 per yr.)
2. InfoPak, Inc. acquired all rights to SmallTalk(TM), and has agreed
that John E. Matlock, Sean F. Lee and Bruce D. Sandig will each receive 1 % of
the gross revenue of SmallTalk(TM). This royalty will be paid when the pre-tax
profit of SmallTalk(TM) is greater than the combined royalty stated herein.
(d) Roy D. Pringle - for services
Peter R. Betts - for services
Avonwood Capital - for services
Frank Helstab - for services
(e) N/A
(f) N/A
(g) N/A
<PAGE> 183
SCHEDULE 4.7
TITLE TO PROPERTIES; ENCUMBRANCES OF INFOPAK
(a) None
(b) None
(c) None
(d) None
<PAGE> 184
SCHEDULE 4.8
LEASES OF INFOPAK
<TABLE>
<S> <C>
DCC Investments
( Office Rent - month to month ) $ 1,227.05 per month
Orion Security Specialists, Inc.
( Monthly Monitoring Service - month to month ) $ 56.94 per quarter
Master Lease, Division of Tokai Financial Services, Inc.
( Copier Lease - December 1996 ) $ 175.52 per month
</TABLE>
<PAGE> 185
SCHEDULE 4.9
MATERIAL CONTRACTS OF INFOPAK
<TABLE>
<S> <C> <C>
Employment Sean F. Lee ( Contract - full time )
John E. Matlock ( Contract - full time )
Bruce D. Sandig ( Contract - full time )
Paul C. Damiani ( Contract - full time )
Ronnie M. Matlock ( Commitment - full time )
Roy D. Pringle ( Contract - full time )
Mairead H. Lee ( Commitment - full time )
Michael J. Offenbecher ( Commitment - full time )
Janet H. Lee ( Part time )
Severance Kevin P. Lloyd ( Through March 1996 )
Consulting Avonwood Capital ( Through May 13, 1996 )
Frank Helstab ( Through April 17, 1999 )
</TABLE>
<TABLE>
<S> <C>
Shareholder Agreements Sean F. Lee
Timothy Wright
John E. Matlock
Bruce D. Sandig
Robert Huskins
Kevin Lloyd
Desmond Sheahan
Lorenz Hittel
Paul C. Damiani
Roy D. Pringle
Hisato Shihodo
Avonwood Capital
Frank Helstab
Peter Betts
Midland Trust Company, Ltd.
</TABLE>
<TABLE>
<S> <C>
Funding Agreement Sean and Janet Lee
Robert and Marjorie Huskins
</TABLE>
<TABLE>
<S> <C>
Uncollateralized Promissory Notes John E. Matlock
Bruce D. Sandig
Kevin P. Lloyd
</TABLE>
<PAGE> 186
SCHEDULE 4.9
MATERIAL CONTRACTS OF INFOPAK
<TABLE>
<S> <C>
Promissory Agreement Roy D. Pringle
Sean F. Lee
John E. Matlock
Bruce D. Sandig
Paul C. Damiani
Royalty Agreement John E. Matlock
Timothy Wright
Sean F. Lee
Bruce D. Sandig
Contractor Agreements Brad Botsch
Com Log
Mach 5 Designs
Matthew Sauble
Van Zile Information Systems, Inc.
Other Contracts AGT Directory Limited
Atlanta Bauer & Co.
Cell Tech
CDI Solutions, Inc.
DataNet, Inc.
East Orange County Association of Realtors
Kronoservices, S.A. de C.V.
First Portland Corporation
InfoMate, Inc.
Metromail Corporation
InfoNet Real Estate Services
Prince Georges County Association of Realtors
PRC Realty Systems, Inc.
Biller, Frith Smith & Archibald
Multacc Corporation
SmallTalk(TM)
Consulting Agreement Timothy Wright
</TABLE>
<PAGE> 187
SCHEDULE 4.10
NO VIOLATIONS OF INFOPAK
None
<PAGE> 188
SCHEDULE 4.11
LITIGATION OF INFOPAK
(a) None
(b) None
(c) None
<PAGE> 189
SCHEDULE 4.12
TAXES OF INFOPAK
<TABLE>
<S> <C>
Federal Withholding September 16, 1995
Third Quarter adjustments if any
State Withholding September 16, 1995
Third Quarter adjustments if any
FICA / Medicare September 16, 1995
Third Quarter adjustments if any
State Unemployment September 16, 1995
Third Quarter adjustments if any
Federal Unemployment September 16, 1995
Third Quarter adjustments if any
State Sales Tax August, September
City Sales Tax August, September
(a) N/A
(b) N/A
</TABLE>
<PAGE> 190
SCHEDULE 4.13
CONDUCT OF BUSINESS OF INFOPAK
(a) Employment of Ronnie M. Matlock
(b) Asset Purchase relating to Distributorship Agreement between Moore Data
Management Services Division and InfoPak, Inc., dated April 22, 1993, by
InfoNet Real Estate Services Division. InfoPak, Inc. signed consent and
release of Moore Data Management Services from its Distributorship Agreement.
(c) InfoPak, Inc. acquired all rights to SmallTalk(TM), and has agreed that
John E. Matlock, Sean F. Lee and Bruce D. Sandig will each receive 1 % of the
gross revenue of SmallTalk(TM). This royalty will be paid when the pre-tax
profit of SmallTalk(TM) is greater than the combined royalty stated herein.
<PAGE> 191
SCHEDULE 4.14
INTELLECTUAL PROPERTY OF INFOPAK
PATENT APPLICATION NAMES
(a) ELECTRONIC TELEPHONE DIRECTORY WITH INTERCHANGEABLE
LISTINGS. Serial # 07/696,948
(b) SYSTEM AND METHOD FOR PROVIDING DATA AND PROGRAM CODE
TO A CARD FOR USE BY A READER. Serial # 08/017607
(c) SYSTEM AND METHOD FOR CREDIT CARD VERIFICATION SYSTEM.
Serial # 08/294557
(d) CIRCUIT AND DEVICE UTILIZING EXTERNAL CARDS HAVING
PROGRAM CODE AND DATA STORED THEREON. *
Serial # 08/018326
* Rejected, no further action.
TRADEMARK NAMES - InfoPak(TM), InfoReader(TM), InfoCard(TM), InfoServer(TM),
Credifier(TM), InfoSafe(TM), SmallTalk(TM), MetroCard(TM), DirectoryPlus(TM),
Mortgage Assistant(TM)
INVENTIONS ( without pending patent applications)
(a) InfoSafe(TM) (Real Estate Lockbox Keysafe System)
(b) SmallTalk(TM) ( Recordable microchip and audio playback
systems )
COMPUTER SOFTWARE, DATA AND DOCUMENTATION - non-registered copyrights on the
following :
InfoReader(TM) MLS Software
InfoLoader(TM) Software
InfoServer(TM) Software
Mortgage Assistant(TM) Software
DirectoryPlus(TM) Software
MetroCard(TM) Software
HP 95 MLS Software
Credifier(TM) Software
<PAGE> 192
SCHEDULE 4.15
COMPLIANCE WITH LAWS OF INFOPAK
None
<PAGE> 193
SCHEDULE 4.16
EMPLOYEE BENEFIT PLANS OF INFOPAK
SEP / IRA
Bonus Plan
Travelers Insurance ( Recently renamed MetraHealth )
Long Term Disability ( Pending Issuance by Hartford Insurance )
<PAGE> 194
SCHEDULE 4.17
SCHEDULE OF EMPLOYEES OF INFOPAK
<TABLE>
<S> <C> <C>
Sean F. Lee Chief Executive Officer $ 100,000.00
John E. Matlock Senior V.P. Marketing $ 65,000.00
Bruce D. Sandig Senior V.P. Engineering /Development $ 65,000.00
Paul C. Damiani V.P. Operations and Logistics $ 50,000.00
Roy D. Pringle V.P. Software Development $ 50,000.00
Ronnie M. Matlock Comptroller $ 35,000.00
Michael J. Offenbecher Programmer $ 35,000.00
Mairead H. Lee Customer Relations Manager $ 25,000.00
</TABLE>
<PAGE> 195
SCHEDULE 4.18
INSURANCE OF INFOPAK
ITT HARTFORD - COMMERCIAL MULTI-PERIL (59 UUNHQ8231) - NO PENDING CLAIMS
<TABLE>
<CAPTION>
PROPERTY
--------
<S> <C>
Business Personal Property $ 150,000
Electronic Data Processing Coverage $ 50,000
Property at other Premises $ 150,000
Property in Transit $ 150,000
</TABLE>
* Covers : special perils, Replacement Cost Valuation,
$ 250.00 Deductible each occurrence, and
90 % coinsurance provision
<TABLE>
<S> <C>
INLAND MARINE
-------------
Accounts Receivable $ 25,000
Valuable Papers Including Electronic Media $ 50,000
Salesmans Samples $ 5,000
CRIME
-----
No coverage
UMBRELLA
--------
Each Occurence $ 4,000,000
Aggregate $ 4,000,000
Self Insured Retention $ 10,000
GENERAL LIABILITY
-----------------
General Aggregate
Bodily Injury & Property Damage $ 2,000,000
Each Occurence
Bodily Injury & Property Damage $ 1,000,000
Products & Completed Operations
Aggregate $ 2,000,000
Personal & Advertising Injury $ 1,000,000
Fire damage Liability $ 300,000
Medical Expense ( Each ) $ 5,000
</TABLE>
* Covers - Premises / Operations
Products / Completed Operations
Independent Contractors
Contractual Liability
Employees as additional Insureds
Broad Form Property Damage Liability
Host Liquor Liability
Incidental Medical Malpractice Liability
Non-owned Watercraft Liability (under 26')
Limited World-Wide Products
<PAGE> 196
SCHEDULE 4.18
INSURANCE OF INFOPAK
<TABLE>
<CAPTION>
AUTOMOBILE
----------
<S> <C>
Non-owned/Hired Auto Coverage Only $ 1,000,000
Comprehensive ( Physical Damage ) $ 27,000
Collision ( Physical Damage ) $ 27,000
WORKERS COMPENSATION
--------------------
Clerical Office Employees $ 89,300
</TABLE>
<PAGE> 197
SCHEDULE 4.19
APPROVALS OF INFOPAK
State of Arizona , Office of the Corporation Commission, Certificate
Arizona Department of Revenue
Withholding License
Transaction Privilege License
City of Phoenix
Privilege License
State of Arizona Environmentally Hazardous Products License
Internal Revenue Service - Employee Identification Number
U.S. Customs Service - Binding Ruling specifying duty rates for InfoPak(TM)
InfoReaders(TM), InfoCards(TM) and InfoLoaders(TM), alone or as kits, from
Mexico into the United States.
<PAGE> 198
SCHEDULE 4.21
ENVIRONMENTAL COMPLIANCE OF INFOPAK
None
<PAGE> 199
SCHEDULE 4.22
PRODUCT LIABILITY; WARRANTY LIABILITY OF INFOPAK
None
<PAGE> 200
SCHEDULE 4.23
AFFILIATE TRANSACTIONS
Employment Sean F. Lee
John E. Matlock
Bruce D. Sandig
Paul C. Damiani
Ronnie M. Matlock
Roy D. Pringle
Shareholder Agreements Sean F. Lee
Timothy Wright
John E. Matlock
Bruce D. Sandig
Robert Huskins
Paul C. Damiani
Roy D. Pringle
Funding Agreement Sean and Janet Lee
Robert and Marjorie Huskins
Uncollateralized Promissory Note John E. Matlock
Bruce D. Sandig
Promissory Agreement Roy D. Pringle
Sean F. Lee
John E. Matlock
Bruce D. Sandig
Paul C. Damiani
Royalty Agreement John E. Matlock
Timothy Wright
Sean F. Lee
Bruce D. Sandig
SmallTalk(TM) Royalty Agreement John E. Matlock
Sean F. Lee
Bruce D. Sandig
<PAGE> 201
SCHEDULE 4.24 A
CAPITALIZATION OF INFOPAK
<TABLE>
<S> <C> <C> <C>
Lee Family Limited Partnership
7113 W. Sack Drive 1,597,937 28.64% Accredited
Glendale, AZ 85308
EIN# : 86-0793342
Timothy Wright 824,741 14.79% Accredited
5684 W. Abraham
Glendale, AZ 85308
SS#: ###-##-####
John Edward Matlock
19960 N. Denaro Drive 824,741 14.79% Accredited
Glendale, AZ 85308
SS#: ###-##-####
Bruce Darryl Sandig
3141 West Runion Drive 824,741 14.79% Accredited
Phoenix, AZ 85027
SS#: ###-##-####
Robert Huskins
42 Shady Vista Road 558,660 10.01%
Rolling Hills Estates, CA 90274
SS#: ###-##-####
Kevin Patrick Lloyd
201 E. Pershing Avenue 154,640 2.77%
Phoenix, AZ 85022
SS#: ###-##-####
Desmond Sheahan
6701 E. San Miguel Ave. 51,547 0.92%
Paradise Valley, AZ 85253
SS#: ###-##-####
Lorenz A. Hittel
5249 N. 37 th Place 51,547 0.92%
Paradise Valley 85253
SS#: ###-##-####
Paul Carlo Damiani
5560 W. Irma Lane 51,547 0.92% Accredited
Glendale, AZ 85308
SS#: ###-##-####
</TABLE>
<PAGE> 202
SCHEDULE 4.24 A
CAPITALIZATION OF INFOPAK
<TABLE>
<S> <C> <C> <C>
Roy David Pringle
7186 W. Topeka Drive
Glendale, AZ 85308 51,547 0.92% Accredited
SS#: ###-##-####
Peter Robert Betts
6233 W. Irma Lane 10,000 0.17%
Glendale, AZ 85308
SS# ###-##-####
Avonwood Capital
532 Avonwood Road 168,228 3.02%
Haverford, PA 19041
Hisato Shihodo
No. 3-5-11 95,000 1.70% Accredited
Okamoto, Setagaya-ku
Tokyo, 150, Japan
Hisato Shihodo
No. 3-5-11 40,000 0.72% Accredited
Okamoto, Setagaya-ku
Tokyo, 150, Japan
Hisato Shihodo
No. 3-5-11 37,978 0.68% Accredited
Okamoto, Setagaya-ku
Tokyo, 150, Japan
Hisato Shihodo
No. 3-5-11 37,000 0.66% Accredited
Okamoto, Setagaya-ku
Tokyo, 150, Japan
Frank Helstab
9300 N. 58th Street 112,152 2.01% Accredited
Paradise Valley, AZ 85253
Midland Trust Company, Ltd.
B.A.S.E. 57 87,500 1.57%
Rue Grimaldi, Monte Carlo
98000 Monaco
Total 5,579,506
</TABLE>
<PAGE> 203
SCHEDULE 4.24 A
VOTING
POWER OF ATTORNEY
(a) Desmond Sheahan will have Power of Attorney for Hisato Shihodo
<PAGE> 204
Schedule 5.2
Existence and Good Standing of DVG
Commonwealth of Pennsylvania
<PAGE> 205
Schedule 5.3
Capitalization of DVG
See Section 5.3
<PAGE> 206
Schedule 5.6
Absence of certain changes of DVG
None
<PAGE> 207
Schedule 5.7
Tile to Properties; Encumbrances of DVG
In connection with the issuance of DVG's 10% three year promissory
notes, DVG gave a security interest in all of its assets.
A uniform Commercial Code filing was made on March 24, 1994.
<PAGE> 208
Schedule 5.8
Leases of DVG
1. DVG leases its corporate office space pursuant to a five year
lease expiring February 28, 1995. The annual fixed rent is $23,595 for the
first year, $58,963 in year two, $60,335 in year three, $61,706 in year four
and $63,078 in year five.
2. DVG also leases office space on a month to month basis for
$1,001 per month in Los Gato, California.
<PAGE> 209
Schedule 5.9
Material Contracts of DVG
A. Employment Agreements
1. Joan Furman $48,000 per year expires May 1, 1999.
2. Robert Morriss, Jr. $72,000 per year expires May 1,
1999 per year.
3. T.R. Orten $72,000 per year expires May 1, 1999.
B. Consulting Agreement
1. Avonwood Capital Corporation $100,000 per year for one year
with automatic 12 month renewal based upon funding targets. As additional
compensation Avonwood is entitled warrants to purchase up to 1,600,000 shares
of Common Stock based upon funding targets. Avonwood is entitled to a five
(5%) per cent fee on any capital raised subject to other fees being paid by
DVG.
<PAGE> 210
Schedule 5.10
Violations of DVG
None
<PAGE> 211
Schedule 5.11
Litigation of DVG
None
<PAGE> 212
Schedule 5.12
Taxes of DVG
The Commonwealth of Pennsylvania has asserted that DVG owes
approximately $24,000 in Pennsylvania corporate tax. DVG is contesting such
assessment.
<PAGE> 213
Schedule 5.13
Patents
Patent No. 4,724,449 dated February 8, 1988 "Method and Apparatus for
Stereoscopic Photography"
Patent No. 4,956,705 dated September 11, 1990 "Electronic Method and
Apparatus for Stereoscopic Photography"
Trademarks
DV3D(TM) Serial No. 74/181,468
Corporate Names
Dimensional Visions Group, Ltd.
DVG Plastic, Inc.
DV3D Images, Inc.
Digital Dimensional, Inc.
<PAGE> 214
Schedule 5.14
Compliance with Laws of DVG
None
<PAGE> 215
Schedule 5.15
Employee Benefits Pleas of DVG
1. Keystone Health Plan East (HMO)
2. Blue Cross/Blue Shield
Opti/Choice; hospitalization, medical/ surgical, Major
Medical, dental and vision
$1,987 per month for both plans.
<PAGE> 216
Schedule 5.16
Employment and Labor Matters of DVG
See Schedule 5.9
<PAGE> 217
Schedule 5.18
Approvals of DVG
None
<PAGE> 218
Schedule 5.20
Product Liability, Warranty Liability of DVG
None
<PAGE> 219
SCHEDULE 6.7
-----------------------------
Name of Shareholder
------------------------------
Name of individual completing
form on behalf of Institutional
Shareholder (if applicable)
INVESTMENT REPRESENTATION LETTER
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
Dimensional Visions Group, Ltd.
718 Arch Street, Suite 202N
Philadelphia, Pennsylvania 19106
Ladies and Gentlemen:
The holder of shares of InfoPak, Inc. ("InfoPak") named above (the
"Shareholder") hereby furnishes Dimensional Visions Group, Ltd. (the "Company")
the information, and makes the representations and warranties, set forth herein
to indicate whether the Shareholder is a suitable purchaser of the Company
Series I Convertible Preferred Shares (the "Convertible Preferred Shares") in
the Company in connection with the merger of InfoPak with and into the Company
or a wholly-owned subsidiary of the Company and the resulting conversion of
shares of InfoPak common stock into Convertible Preferred Shares. As a
condition precedent to investing in the Company, the Shareholder hereby
represents, warrants, covenants and agrees as follows:
The Shareholder understands that the Convertible Preferred Shares are
being offered and sold without registration under the Securities Act of 1933,
as amended (the "Act"), or any state securities laws, in reliance upon the
private offering exemption contained in Section 4(2) of the Act and Regulation
D thereunder and certain exemptions under state securities laws, and that such
reliance is based in part on the representations made and information supplied
herein. For the foregoing reasons, the Shareholder represents and warrants that
the statements checked below and the information stated herein are true,
accurate and complete to the best of the Shareholder's knowledge and belief,
and the Shareholder agrees to notify the Company and supply corrective
information promptly if, prior to the consummation of its purchase of
Convertible Preferred Shares, any of such information becomes
<PAGE> 220
inaccurate or incomplete.
1. INSTITUTIONAL SHAREHOLDERS ONLY. The Shareholder represents,
warrants ad certifies that it falls within the categories of Accredited
Investor indicated by the check marks in the appropriate spaces below:
(a) a bank, as defined in Section 3(a)(2) of
----- the Act, or a savings and loan association or other
institution defined in Section 3(a)(5)(A) of the Act
which is acting:
in its own capacity; or
--------
as a fiduciary on behalf of an
------- investor;
(b) a trust, with total assets in excess of
----- $5,000,000, not formed for the specific purpose of
acquiring Convertible Preferred Shares, whose purchase
is directed by a sophisticated person who has such
knowledge and experience in financial, business and
real estate matters that he is capable of evaluating
the merits and risks of an investment in the
Convertible Preferred Shares;
(c) an organization described in Section 501
----- (c)(3) of the Internal Revenue Code of 1986, or a
corporation, Massachusetts or similar business trust
or partnership, not formed for the specific purpose
of acquiring Convertible Preferred Shares, which has
total assets in excess of $5,000,000; or
(d) an entity in which all of the equity owners:
-----
qualify as Accredited Investors under
------ category ___above; or
qualify as individual Accredited Investors
------ under the tests set forth in paragraphs (h),
(i) or (j) of question 3 below.
NOTE: AN INSTITUTIONAL SHAREHOLDER THAT DOES NOT FALL WITHIN ONE OF THE
FOREGOING CATEGORIES IS NOT AN "ACCREDITED INVESTOR" AND THE INDIVIDUAL WHO IS
DIRECTING THE PURCHASE OF CONVERTIBLE PREFERRED SHARES FOR ANY SUCH
INSTITUTIONAL SHAREHOLDER SHOULD ANSWER QUESTION 4 BELOW.
2. INSTITUTIONAL SHAREHOLDERS ONLY. The Shareholder represents
and warrants that the Shareholder is considered a
2
<PAGE> 221
United States resident for federal income tax purposes and that the following
information is true, accurate and complete to the best of the Shareholder's
knowledge:
<TABLE>
<S> <C>
Name of Shareholder: -----------------------------
Address of principal office
(including Zip Code):
-----------------------------
-----------------------------
-----------------------------
Telephone No.: -----------------------------
Federal Taxpayer I.D. No.: -----------------------------
</TABLE>
<TABLE>
<S> <C>
Type of organization
(check one):
Corporation: ---- Limited Partnership: -----
General Partnership: ---- Trust: -----
Other (specify): -----
</TABLE>
<TABLE>
<S> <C>
Nature of business: -------------------------------
Date of organization: -------------------------------
Jurisdiction of incorporation
or organization: ------------------------------
Number of equity owners: ------------------------------
Current net worth
of Shareholder(1) ------------------------------
</TABLE>
(1) "NET WORTH" MEANS THE EXCESS OF TOTAL TANGIBLE ASSETS AT CURRENT VALUE
OVER TOTAL LIABILITIES.
The following information must be furnished with respect to the
individual completing this Letter on behalf of the Institutional Shareholder:
<TABLE>
<S> <C>
Name: ----------------------------
Position with Shareholder: ----------------------------
Address (if different
from address above): -----------------------------------
-----------------------------------
-----------------------------------
Telephone No.: -----------------------------------
</TABLE>
3
<PAGE> 222
3. INDIVIDUAL SHAREHOLDERS ONLY. The Shareholder represents,
warrants and certifies that the following information relative to the
Shareholder and the Shareholder's suitability as an investor in the Company is
true, correct and complete.
(a) Full Name:
-----------------------------------------
(b) Residence Address:
---------------------------------
---------------------------------------------------
(c) Telephone:
-----------------------------------------
(d) Age:
-----------------------------------------------
(e) Occupation:
----------------------------------------
(f) Employer and period employed (if term of employment is less
then one year, provide the name and address of your
prior employer):
-------------------------------------------------------
(g) Social Security Number:
--------------------------------
(h) Does your net worth(1) exceed $1,000,000?
Yes No
---- ----
(i) Was your individual income(2) (not joint with spouse) in each
of the two most recent years in excess of $200,000 and
do you reasonably expect that in the current year it will be
in excess of $200,000? Yes No
----- -----
(j) Was your and your spouse's joint income in each of the two
most recent years in excess of $300,000 and do you reasonably
expect that in the current year such joint income will be in
excess of $300,000? Yes No
---- ----
IF YOU DID NOT ANSWER YES TO AT LEAST ONE OF (h), (i) OR (j) ABOVE YOU
ARE NOT AN ACCREDITED INVESTOR AND YOU SHOULD ANSWER QUESTION 4 BELOW.
4. NON-ACCREDITED INVESTORS ONLY. The Shareholder, in the case of
an Individual Shareholder, or, in the case of an Institutional Shareholder, the
individual who is directing the purchase of Convertible Preferred Shares for
such Institutional Shareholder, represents, warrants and certifies that the
following information is true, correct and complete:
4
<PAGE> 223
(a) Have you ever been subject to bankruptcy, reorganization or
debt restructuring? Yes No
--- ---
If Yes, please provide details:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
- - - -------------------
1 For purposes of this question, net worth means total assets less total
liabilities. You may include your spouse's net worth and may include
the value of your home, furnishings and automobiles.
2 Income may be calculated by starting with Adjusted Gross Income and
adding the deductions taken for partnership losses allocated to you and
IRA and/or Keogh plan contributions.
(b) Are there suits pending or judgments outstanding against you which
would adversely affect your financial condition?
Yes No _
---- ----
If Yes, please provide details:
---------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(c) Business or professional education and degrees:
School Field of Study Degree Year Conferred
------ -------------- ------ --------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(d) Please describe briefly the principal positions (and nature of duties)
you have held during the last three years or, if graduated less than
three years, since graduation from college. Specific employers need
not be identified. Also, list any professional licenses or
registrations, including bar admissions, accounting certificates,
real estate brokerage and SEC or broker/dealer registrations held by
you. What is sought is a sufficient description to enable
5
<PAGE> 224
the Company to determine the extent of your vocationally-related
experience in financial and business matters.
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
(e) (i) Please indicate the frequency of your investment in securities
which are not readily marketable:
Often Occasionally
------ ------
Seldom Never
------ -------
(ii) Please check those of the following types of investments in
which you have participated:
Tax shelters.
-----
Private placements of securities.
-----
Real Estate.
-----
Oil and gas investments.
-----
Equipment leasing shelters.
-----
Were you required to use a purchaser representative
for such private placements?
Yes No
--- ---
(f) Please indicate in the space provided below any additional
information which you think may be helpful in enabling
the Company to determine that your knowledge and experience
in financial and business matters is sufficient to
enable you to evaluate the merits and risks of this investment:
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
(g) Unless you have invested in similar types of private
offerings and/or have knowledge and experience in
6
<PAGE> 225
financial and business matters such that you alone are capable of
evaluating the merits and risks of an investment in the Company, you
will not be entitled to invest in the Company. Please indicate whether
you believe you are so qualified by answering the question below.
I have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks
of an investment in the Company.
Yes No
--- ---
5. The Shareholder represents and warrants that any Convertible
Preferred Shares being acquired are being acquired by the Shareholder solely
for the Shareholder's own account (or as fiduciary on behalf of another
investor in the event so indicated in Paragraph 1 above), for investment
purposes only, and are not being purchased with a view to or for the resale,
distribution, subdivision or fractionalization thereof; the Shareholder has no
agreement or other arrangement, formal or informal, with any person to sell,
transfer, pledge or subject to any lien any part of any Convertible Preferred
Shares being acquired or which would guarantee the Shareholder any profit or
protect the Shareholder against any loss with respect to such Convertible
Preferred Shares; the Shareholder has no plans to enter into any such agreement
or arrangement. The Shareholder understands that the Shareholder must bear the
economic risk of the investment for an indefinite period of time because the
Convertible Preferred Shares have not been registered under the Act or any
applicable state securities laws and, therefore, cannot be resold or otherwise
transferred unless subsequently registered under the Act and any applicable
state securities laws (which the Company is not obligated to do), or an
exemption from such registration is available. The Shareholder further
understands that the exemption under Rule 144 under the Act may be unavailable
because of the conditions and limitations of such rule. The Shareholder further
understands that a legend in substantially the following form will be placed on
each certificate representing the Convertible Preferred Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR
UNDER ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND SUCH STATE SECURITIES LAWS, (II) TO THE EXTENT APPLICABLE,
RULE 144 UNDER THE ACT (OR SIMILAR RULE UNDER SUCH ACT RELATING
7
<PAGE> 226
TO THE DISPOSITION OF SECURITIES) OR (III) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE
COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH
STATE SECURITIES LAWS IS AVAILABLE.
6. The Shareholder is aware that the Company has been and is
relying upon the representations and warranties set forth in this Letter, in
part, in determining whether the offering of Convertible Preferred Shares will
qualify for an exemption from the registration provisions of the Act and
applicable state securities laws. All of the information which the Shareholder
has furnished the Company herein or previously with respect to the
Shareholder's financial position and business experience is correct and
complete as of the date of this Letter, and, if there should be any material
change in such information, the Shareholder will immediately furnish such
revised or corrected information to the Company. The Shareholder agrees to
indemnify and hold harmless the Company and its affiliates and each officer,
director, stockholder and/or employee thereof and their successors and assigns,
from and against any and all losses, damages, liabilities or expenses,
including costs and attorneys fees, incurred by reason of any misrepresentation
by the Shareholder in this Letter or any breach of the Shareholder's warranties
or the Shareholder's failure to fulfill the Shareholder's covenants in this
Letter. The Shareholder agrees that the representations, warranties and
covenants herein shall survive the Shareholder's acquisition of Convertible
Preferred Shares.
[Signature on next page]
8
<PAGE> 227
SIGNATURE PAGE
Name of Shareholder
- - - ---------------------------------------------------
By:
---------------------------------------------------
Signature of Shareholder or of authorized signatory
----------------------------------------------------
Please Print Name of authorized signatory
---------------------------------------------------
Capacity of authorized signatory
Date:
---------------
9
<PAGE> 228
CERTIFICATE OF AUTHORIZED SIGNATORY
(INSTITUTIONAL SHAREHOLDERS ONLY)
I hereby certify that I am a duly authorized representative of
Shareholder and that I am duly authorized to execute and submit this Letter on
behalf of the Shareholder and to thereby legally bind the Shareholder. I agree
to fly indemnify and hold the Company harmless from any and all claims, actions
and causes of action whatsoever which may result from a breach of the
representation contained in this paragraph.
<TABLE>
<S> <C>
Date:
----------------- -------------------------
(Signature)
-------------------------
(Print name)
</TABLE>
10
<PAGE> 229
SCHEDULE 6.9
RECAPITALIZATION
Effect of canceled debt as of closing :
Lee Family Limited Partnership
7113 W. Sack Drive
Glendale, AZ 85308
EIN # : 86-0793342
$ 137,020.63 Loan to InfoPak, Inc.
$ 33,018.82 Interest on Loan (Accrued thru 8/31/95)
----------------------
$ 170,039.45 Total Due from InfoPak, Inc. *
* Dimensional Visions Group, Ltd. to issue 17,004
Series P Convertible Preferred Stock ( " DVG Series P Shares " ) at closing to
effectively cancel the above debt. Each share of the DVG Series P shares shall
be convertible into ten shares of DVG Common Stock.
Robert Huskins
42 Shady Vista Road
Rolling Hills Estates, CA 90274
SS # : ###-##-####
$ 144,413.40 Loan to InfoPak, Inc.
$ 32,359.81 Interest on Loan (Accrued thru 8/31/95)
----------------------
$ 176,773.21 Total Due from InfoPak, Inc. *
* Dimensional Visions Group, Ltd. to issue 17,677
Series P Convertible Preferred Stock ( " DVG Series P Shares " ) at closing to
effectively cancel the above debt. Each share of the DVG Series P shares shall
be convertible into ten shares of DVG Common Stock.
<PAGE> 230
SCHEDULE 7.11
NOTES NOT CANCELLED
Back Payments :
John E. Matlock $ 40,751.04
Bruce D. Sandig $ 21,588.96
<PAGE> 231
APPENDIX II - SECTION 10-081 OF THE ARIZONA CORPORATE LAW
<PAGE> 232
DISSENTERS' RIGHTS SECTION 10-081
CH. 1
SECTION 10-081. RIGHTS OF DISSENTING SHAREHOLDERS
A. To be entitled to compensation as a dissenting shareholder to a merger or
consolidation, a shareholder must:
1. File written objection to the proposed merger or consolidation as
provided herein.
2. Not vote in favor of the proposed merger or consolidation as provided
herein.
3. Make a demand for compensation as provided herein.
B. Any shareholder electing to exercise such right of dissent shall file
with the corporation, prior to the taking of the vote at the meeting
of shareholders at which such proposed merger or consolidation is submitted to a
vote, a written objection to such proposed merger or consolidation stating the
shares and certificate numbers to which such objection applies. The
corporation surviving or resulting from any merger or consolidation shall
within ten days after such meeting notify each shareholder of any corporation
so merging or consolidating who objected thereto in writing and whose shares
either were not entitled to vote or were not voted in favor of the merger or
consolidation and who filed such written objection with the corporation before
the taking of the vote on the merger or consolidation, that the merger or
consolidation has been approved. Shareholders not entitled to such notice
shall be bound by such merger or consolidation and shall continue to enjoy the
rights of a shareholder as though written objection was not filed. Such notice
shall likewise be given to each shareholder whose corporation approved of the
merger or consolidation pursuant to Section 10-075, without a meeting of the
shareholders, and who either did not, or had no right to, consent in writing to
such merger or consolidation.
C. Such notices shall contain an offer by the corporation to purchase the
shares as to which the shareholder objected and shall be accompanied by a
balance sheet of the corporation, the shares of which the dissenting
shareholder holds, as of the latest available date not more than twelve months
prior to such meeting of shareholders, and a profit and loss statement of such
corporation for the twelve months' period ended on the date of such balance
sheet.
D. If within twenty days after the date of mailing by the corporation
surviving or resulting from the merger or consolidation of the notice and
offer, any such shareholder shall demand in writing payment for his shares in
accordance with the offer, the surviving or resulting corporation shall, within
thirty days after the expiration of the period of twenty days, pay to him the
consideration offered for his shares upon surrender of the certificate or
certificates representing such shares.
E. To be entitled to compensation as a dissenting shareholder to a sale or
exchange of all or substantially all of the property and assets of the
corporation as defined in Section 10-080, a shareholder must:
479
<PAGE> 233
SECTION 10-081 CORPORATIONS AND ASSOCIATIONS
TITLE 10
1. File written objection to the proposed sale or exchange as provided
herein.
2. Not vote in favor of the proposed sale or exchange as provided herein.
3. Make a demand for compensation as provided herein.
F. Any shareholder electing to exercise such right of dissent shall file with
the corporation, prior to the taking of the vote at the meeting of shareholders
at which such proposed sale or exchange is submitted to a vote, a written
objection to such proposed sale or exchange stating the shares and certificate
numbers to which such objection applies. The corporation shall within ten days
after such meeting notify each shareholder who objected thereto in writing and
whose shares either were not entitled to vote or were not voted in favor of the
sale or exchange and who filed such written objection with the corporation
before the taking of the vote, that the sale or exchange has been approved.
Shareholders not entitled to such notice shall be bound by such sale or
exchange and shall continue to enjoy the rights of a shareholder as though
written objection was not filed. Such notices shall also contain an offer by
the corporation to purchase the shares as to which the shareholder objected and
shall be accompanied by a balance sheet of the corporation as of the latest
available date not more than twelve months prior to the making of such offer,
and a profit and loss statement of such corporation for the twelve months'
period ended on the date of such balance sheet.
G. If within twenty days after the date of mailing by the corporation of the
notice and offer, any such shareholder shall demand in writing payment for his
shares in accordance with the offer, the corporation shall, within thirty days
after the expiration of the period of twenty days, pay to him the consideration
offered for his shares upon surrender of the certificate or certificates
representing such shares.
H. If the demand of the shareholder exceeds the offer, the corporation and
the shareholder may negotiate the fair value during the thirty days after the
expiration of the twenty days and if agreement is reached during that period the
corporation shall pay the shareholder within fifteen days after the surrender
of the certificate or certificates representing such shares.
I. Upon payment of the agreed value the dissenting shareholders shall cease
to have any interest in such shares. Any shareholder entitled to and given
notice who fails to make demand within the twenty day period shall be bound by
the corporate action taken at the shareholders' meeting and any corporate
proceedings which may have been taken during the interim and shall continue to
be entitled to enjoy the rights of a shareholder.
J. If during the period of thirty days following the period of twenty days
provided for herein the corporation and any such shareholder fail to agree upon
the fair value of such shares, any such shareholder, or the corporation
surviving or resulting from the merger or consolidation, or a corporation
selling substantially all of its assets, may commence an action, within four
months after such thirty day period, in the superior court in any county where a
known place of business of the selling corporation or any corpora-
480
<PAGE> 234
DISSENTERS' RIGHTS SECTION 10-081
CH. 1
tion involved in such merger or consolidation is or was located. If more than
one such action is commenced within the four months period they shall be
consolidated. There shall be no right to trial by jury in any action filed
pursuant to this section.
K. The fair value of a share shall be fixed as of the day prior to that on
which the shareholder's vote was taken, provided that in no event shall the
amount thereof exceed that specified in the demand of the particular
shareholder. There shall be excluded from the fair value any increase or
decrease attributable to the merger or consolidation or sale, or any proposects
of the merger or consolidation or sale prior thereto.
L. The court shall determine which shareholders have complied with the
provisions of the section and have become entitled to the valuation of and
payment for their shares. The court may in its discretion appoint a master to
have such powers and authority as are conferred upon masters by law, by the
rules of civil procedure for the superior courts of Arizona or by the order of
appointment. The master's report shall be subject to exceptions to be heard
before the court, both upon the law and the facts. The court shall by its
judgment determine the value of the stock of the shareholders entitled to
payment by the surviving, selling or resulting corporation therefor and shall
direct the payment of such value together with interest, if any, at a rate and
from a date determined by the court in its discretion, to the shareholders
entitled thereto upon the transfer to such corporation of the certificates
representing such shares. Upon payment of the judgment, the dissenting
shareholder shall cease to have any interest in such shares.
M. The costs of any such action shall be determined by the court and shall
be assessed as the court may deem equitable. The court, in its discretion, may
award to any party such party's expenses, including reasonable attorney's fees
and expenses for experts employed by such party, in the event that the ultimate
determination of fair value varied materially from what had been offered or
demanded by the opposite party.
N. The court may require at any stage of the action, that the shareholders
who demanded payment of their shares submit their certificates to the
corporation for notation thereon of the pendency of the action, and if any
shareholder fails to comply with such direction, the court may dismiss the
proceedings as to such shareholder. If shares represented by a certificate on
which notation has been so made shall be transferred, each new certificate
issued therefor shall bear similar notation, together with the name of the
original dissenting holder of such shares, and a transferee of such shares
shall acquire by such transfer no rights in the corporation other than those
which the original dissenting shareholder had after making demand for payment
of the fair value thereof.
O. Any shareholder who has demanded payment for his shares as herein
provided shall not thereafter be entitled to vote such shares for any purpose
or be entitled to exercise any other rights of a shareholder including, without
limitation, the right to the payment of dividends or other distribution on
those shares, except dividends or other distribution payable to shareholders of
481
<PAGE> 235
SECTION 10-081 CORPORATIONS AND ASSOCIATIONS
TITLE 10
record at a date which is prior to that on which the shareholder's vote was
taken, unless the action to be filed in the superior court as provided for
herein shall not be filed within the time provided, or the action be dismissed
as to such shareholder, or unless such shareholder shall with the written
approval of the corporation deliver to the corporation a written withdrawal of
his objections to and an acceptance of the merger or consolidation, in any of
which cases the right of such shareholder to payment for his shares shall cease
and he shall be bound by the corporate action taken at the shareholders'
meeting and any corporate proceedings which may have been taken in the interim.
P. Shares acquired by a corporation pursuant to payment of the agreed value
therefor or to payment of the judgment entered therefor, as in this section
provided, may be held and disposed of by such corporation as in the case of
other treasury shares, except that, in the case of a merger or consolidation,
they may be held and disposed of as the plan of merger or consolidation may
otherwise provide.
Added by Laws 1975, Ch. 69, Section 2. eff. July 1, 1976. Amended by Laws
1976, Ch. 148, Section 39.
HISTORICAL AND STATUTORY NOTES
SOURCE:
Laws 1912, Ch. 49, Sections 13,15.
Civ.Code 1913, Sections 2105, 2107.
Rev.Code 1928, Section 592.
Laws 1939, Ch. 80, Section 1.
Laws 1939, Ch. 81, Section 7.
Code 1939, Section 53-507.
Laws 1953, Ch. 125, Section 1.
Code 1939, Supp. 1953, Section 53-306.
A.R.S. former Sections 10-347, 10-363.
The 1976 amendment deleted "also" preceding "contain" and "and"
preceding "not more than twelve months" in subsec. C; substituted "payment for
his shares" for "payment of the fair value of his shares" and "paid to him the
consideration offered for his shares" for "pay to him the fair value of his
shares" in subsec. D; deleted "and" preceding "not more than twelve months" in
the last sentence of subsec. F; substituted "payment for his shares" for
"payment of the fair value of his shares" and "the consideration offered for
his shares" for "the fair value of his shares" in subsec. G; deleted the comma
following "entitled to" and substituted "corporate action taken at the
shareholders meeting" for "terms of the merger or consolidation" in subsec. I;
inserted "or a corporation selling substantially all of its assets" and "the
selling corporation or" in the first sentence of subsec. J; inserted "or sale"
in two places in the second sentence of subsec. K; inserted "by the surviving,
selling or resulting corporation" and substituted "entitled thereto upon the
transfer to such corporation of the certificates" for "entitled thereto by the
surviving or resulting corporation upon the transfer to it of the certificates"
in subsec. L; and deleted "on the proposed merger or consolidation" following
"shareholder's vote was taken", and substituted "shall be bound by the corporate
action taken at shareholders meeting" for "shall be bound by the merger or
consolidation" in subsec. O.
REVISER'S NOTE:
Pursuant to authority of Section 41-1304.02, the apostrophe was inserted
following "shareholders" in subsections I and O, and "the" was inserted
preceding "shareholders' meeting" in subsection O.
CROSS REFERENCES
Title insurers, corporate acquisitions other than by merger or consolidation,
see Section 20-1577.
LAW REVIEW COMMENTARIES
Model articles of incorporation with annotations. David L. Cocanower and
John L. Hay, 17 Ariz.Law Rev. 600 (1975).
482
<PAGE> 236
DISSOLUTION AND LIQUIDATION
CH. 1
LIBRARY REFERENCES
Corporations -- 182.4, 584
WESTLAW Topic NO. 101.
C.J.S. Corporations Sections 515, 516, 1612 et seq.
NOTES OF DECISIONS
CONSENT 3
INSOLVENT COMPANY 2
RIGHTS AND REMEDIES OF DISSENTING SHAREHOLDERS 4
VESTING OF ASSETS 1
-------
1. VESTING OF ASSETS
Where no merger took place between corporation and other corporation
acquiring majority of its stock, latter did not succeed to assets and property
of former. Steinfeld v. Copper, State Mining Co. (1930) 37 Ariz. 151, 290 P.
155.
2. INSOLVENT COMPANY
Minority stockholders of a corporation which for all practical purposes is
insolvent, may not object to transfer of the assets to a newly formed company.
Alger v. Brighter Days Min. Corp. (1945) 63 Ariz. 135, 160 P.2d 346.
Transfer of assets of an insolvent corporation is not fraud on rights of
dissenting stockholders where is appears that nothing could have been salvaged
if transfer had not been made. Id.
3. CONSENT
Consent by dissenting minority stockholders to consolidation by accepting
stock of consolidated company did not bind them, where corporations were under
common control, unless they understood their antecedent legal rights. Garrett
v. Reid-Cashion Land & Cattle Co. (1928) 34 Ariz. 245, 270 P. 1044, rehearing
denied 34 Ariz. 482, 272 P. 918.
Minority stockholders' acceptance of stock in consolidated corporation was
not a ratificaton of consolidation previously accomplished without their
consent, where they believed they were bound by decision of majority. Id.
4. RIGHTS AND REMEDIES OF DISSENTING SHAREHOLDERS
Under Arizona law, if stockholder wanted to contest legality of merger of his
corporation with another which was to continue in existence as surviving
corporation, stockholder should have done so in direct action for such purpose
and merger was not subject to collateral attack by the stockholder in his
derivative diversity action for diversion of the first corporation's assets.
Niesz v. Gorsuch (C.A.1962) 295 F.2d 909.
In order for shareholder to be entitled to payment in cash of fair market
value of his stock upon consolidation of his corporation with another, he must
allege and prove that he voted against or dissented from the merger. Waite v.
Old Tucson Development Co. (1974) 22 Ariz.App. 517, 528 P.2d 1276.
Crediting of item of good will to cattle raising corporation on merger with
sheep raising corporation was unauthorized as to dissenting stockholders of
latter company. Garrett v. Reid-Cashion Land & Cattle Co. (1928) 34 Ariz. 245,
270 P. 1044, rehearing denied 34 Ariz. 482, 272 P. 918.
Corporation purchasing at its own price, on consolidation, assets of other
corporation, through instrumentality of common owners and officers, was under
duty to return assets or account to nonconsenting stockholders of other
corporation for their stock. Id.
ARTICLE 7. VOLUNTARY DISSOLUTION AND LIQUIDATION
Former Article 7, Uniform Stock Transfer Act, consisting of Sections
10-231 to 10-254, was repealed by Laws 1967, Ch. 3, Section 6, effective
January 1, 1968 and Laws 1975, Ch. 69, Section 1, effective July 1, 1976.
See Historical and Statutory Notes following Section 10-231.
CROSS REFERENCES
Banks, dissolution, see Section 6-395 et seq.
Business development corporations, dissolution, see Section 10-966.
Close corporations, see Section 10-201 et seq.
Electric cooperative nonprofit membership corporations, dissolution, see
Section 10-777.
483
<PAGE> 237
CORPORATIONS AND ASSOCIATIONS
TITLE 10
Involuntary dissolution, see Section 10-094 et seq.
Savings and loan associations, liquidation, see Section 6-467.
ADMINISTRATIVE CODE REFERENCES
Insurance, withdrawal from, see A.C.R.R. R4-14-303.
LAW REVIEW COMMENTARIES
Business Corporation Act, procedures and forms. David L. Cocanower and John
L. Hay, 17 Ariz.Law Rev. 568 (1975)
Formation and operation of a corporation, Robert Karl Rogers, 12 Ariz. Bar J.
No. 2, p. 4 (1976).
SECTION 10-082. VOLUNTARY DISSOLUTION BY INCORPORATORS
A. A corporation which has not commenced business and which has not issued
any shares, may be voluntarily dissolved by its incorporators at any time in
the following manner:
1. An original and one or more copies of articles of dissolution shall be
executed by a majority of the incorporators, and their signatures shall be
acknowledged, and shall set forth:
(a) The name of the corporation.
(b) The date of its incorporation.
(c) That none of its shares has been issued.
(d) That the corporation has not commenced business.
(e) That the amount, if any, actually paid in on subscriptions for its
shares, less any part thereof disbursed for necessary expenses, has been
returned to those entitled thereto.
(f) That no debts of the corporation remain unpaid.
(g) That a majority of the incorporators elect that the corporation be
dissolved.
2. The original and one or more copies of the articles of dissolution shall
be delivered to the commission. The commission shall, after determining that
such articles appear in all respects to conform to the requirements of this
chapter and to law, file such articles in the manner provided in Section
10-055.
B. Upon the filing of such articles of dissolution with the commission, the
existence of the corporation shall cease.
Added by Laws 1975, Ch. 69, Section 2, eff. July 1, 1976.
HISTORICAL AND STATUTORY NOTES
For effective date provisions of Laws 1975, Ch. 69 and Laws 1976, Ch. 69 and
Laws 1976, ch. 148, see Historical and Statutory Notes following Section
10-002.
1975 REVISER'S NOTE:
In subsection A, paragraph 1, a comma was inserted following "acknowledged"
and in subsection B "the" inserted before "commission" pursuant to authority of
Section 41-1304.02
484
<PAGE> 238
APPENDIX III - ASSET PURCHASE AGREEMENT DATED SEPTEMBER 6, 1995 WITHOUT
SCHEDULES
<PAGE> 239
ASSET PURCHASE AGREEMENT
This Asset Purchase Assignment and Royalty Agreement is made
as of the 6th day of September 1995, by and between InfoPak, Inc. ("InfoPak"),
an Arizona corporation located at 8855 N. Black Canyon Highway, Phoenix,
Arizona 85021, Sean F. Lee, an individual residing at 7113 West Sack Drive,
Glendale, Arizona 85308, John Matlock, an individual residing at 19960 North
Denaro Drive, Glendale, Arizona 85308 and Bruce Sandig, an individual residing
at 13247 N. 2nd Place, Phoenix, Arizona 85022 (collectively the "Sellers").
RECITALS:
A. InfoPak sells the InfoReader, a hand-held computer
device which contains a memory card containing residential real estate
listings, to several retail distributors.
B. The Sellers have developed a digital sound Device
(defined below), known as the "SmallTalk Device(TM)", which permits a Chip
(defined below) mounted on a circuit board and attached to a card to be
inserted into speaker system Hardware (defined below), which transmits recorded
messages or music at various sound quality levels.
<PAGE> 240
C. The Sellers have also developed certain Software
(defined below), which permits the programming and playback of a message on the
Chip.
D. InfoPak has entered into a letter of intent with
InfoPak Acquisition Co., a wholly owned subsidiary of Dimensional Visions
Group, Ltd. ("DV3D"), a Delaware corporation, to be acquired in a
stock-for-stock transaction.
E. Management of DV3D believes that synergies of
business exist between technology used in the Device and certain proprietary
technology of DV3D.
F. Management of InfoPak has developed numerous contacts
with distributors and has the capability and desire to manufacture and market
the Device.
G. Subject to the terms and conditions of this
Agreement, Sellers desire to sell and assign the proprietary technology
included within and "know how" and design specifications of the Hardware and
all assets related to the Device, whether tangible or intangible, and the
Software and all rights thereto to InfoPak and InfoPak desires to purchase the
same and to manufacture, market and sell the Device to the end user.
<PAGE> 241
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and agreements set forth herein, the parties hereto agree as
follows:
1. Sale and Assignment of Hardware, Software and Device.
(a) Hardware. Sellers hereby sell, assign,
transfer, convey and deliver to InfoPak all right, title and interest without
reservation in and to the proprietary technology included within and "know how"
and design specifications of the Hardware described in Schedule "A" attached
hereto (collectively, the "Hardware") and agree that InfoPak shall have the
exclusive right to manufacture and distribute the Hardware.
(b) Software. Sellers hereby sell, assign,
transfer, convey and deliver to InfoPak all right, title and interest without
reservation in and to the proprietary software program described in Schedule
"B" attached hereto (such program, together with related object codes, source
codes, updates and enhancements are referred to collectively as the
"Software").
(c) Device. Sellers hereby sell, assign,
transfer, convey and deliver to InfoPak all right, title and interest without
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<PAGE> 242
reservation in and to the device known as the "SmallTalk Device", as more fully
described on Schedule "C" and the right to enhance, modify, update, market,
distribute and sell the SmallTalk Device and any part or subset of the
components thereof as well as subsequent updates or enhancements thereto made
by Sellers, if any (collectively, the "Device").
(d) Intangible Assets. Sellers hereby sell,
transfer, convey and deliver without reservation to InfoPak all intangibles
including, without limitation, any trade names, service markets, trademarks and
other identifying material include but not limited to the name "SmallTalk(TM)"
and "SmallTalk Device(TM)" (collectively the "Other Intangibles").
2. Purchase Price. As payment for the sale of assets
set forth in Section 1 above, no later than sixty days after the end of each
fiscal quarter, InfoPak shall remit to each Seller payment equal to one percent
(1%) of Net Revenues (for a total of three percent (3%) of Net Revenues
collectively to the Sellers) generated during each fiscal quarter from the sale
of the Device, the Hardware, and the Software (the "Purchase Price").
Notwithstanding any language to the contrary contained herein, for any quarter
in which sales of the Device, Hardware and Software generate gross profit (the
"Gross Profit") which is insufficient to pay the Purchase Price, then Gross
Profit shall be due and payable to Sellers on a pro rata basis or, if no Gross
Profit is generated,
4
<PAGE> 243
no Purchase Price shall be paid. So long as gross revenues are collected from
the sale of the Device, the Purchase Price shall be paid to Sellers or their
assigns until the earlier of seventeen years from the date hereof or the term
of any patent for the Device or Hardware or Other Intangibles. Net Revenues
means gross revenues received from sale or license of the Hardware, Software
and/or Device to distributors and customers less returns.
3. Representations and Warranties; Disclaimer; Damages.
(a) InfoPak. InfoPak hereby represents and
warrants that it shall use reasonable business efforts to market the Device.
(b) Sellers. Sellers, jointly and severally,
hereby (i) represent and warrant that they have the sole legal right to enter
into this Agreement and to sell the Hardware, the Software, the Device and the
Other Intangibles, including components produced by third parties and that no
other person or entity has any rights directly or indirectly in the Hardware,
Software, the Device and the other Intangibles; (ii) that the Hardware,
Software, the Device and the other Intangibles are being conveyed free and
clear from any prior assignment, grant license, claim lien or other
encumbrances whatsoever (iii) DISCLAIM ALL WARRANTIES EXPRESS, IMPLIED, OR
STATUTORY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED CONDITIONS OR WARRANTIES OF
MERCHANTABILITY
5
<PAGE> 244
AND FITNESS FOR A PARTICULAR PURPOSE AND OF ANY OTHER WARRANTY OBLIGATION and
make no warranty or representation to assume or create any obligations on
behalf of manufacturers of any third party components incorporated in or
provided with the Device, except that Assignors warrant that the Hardware, the
Software and the Device conform to the specifications provided to InfoPak and
described in Schedules A, B and C.
(c) R & D Device. INFOPAK UNDERSTANDS AND
ACKNOWLEDGES THAT THE DEVICE HAS BEEN DEVELOPED ONLY IN A PROTOTYPE FORM, HAS
NOT UNDERGONE EXTENSIVE TESTING FOR DEFECTS OR ERRORS RESULTING FROM FAULTY
DESIGN, HAS NOT BEEN PRODUCED IN MASS QUANTITIES, HAS NO PATENT, TRADE NAME,
TRADEMARK OR INTELLECTUAL PROPERTY REGISTRATION NOR HAS ANY ASSIGNOR APPLIED
FOR ANY SUCH REGISTRATION; AND THAT Sellers HAVE NOT LOCATED A RELIABLE AND
AVAILABLE SUPPLY OF CUSTOMIZED COMPONENTS USED TO MANUFACTURE THE DEVICE NOR
COMPLETED MARKET SURVEYS OR TESTING TO DETERMINE THE LEVEL OF INTEREST, IF ANY,
FOR THE DEVICE. INFOPAK FURTHER UNDERSTANDS AND ACKNOWLEDGES THAT Sellers ARE
UNDER NO OBLIGATION TO MODIFY, UPDATE OR RE-ENGINEER THE DEVICE, CORRECT ANY
FLAW IN THE DESIGN OF THE HARDWARE OR MODIFY OR REWRITE THE SOFTWARE.
(d) Limitation on Liability. EXCEPT AS SPECIFIED
WITHIN THIS SECTION, IN NO EVENT SHALL ANY ASSIGNOR OR THE Sellers COLLECTIVELY
BE LIABLE TO ANYONE FOR SPECIAL, COLLATERAL, EXEMPLARY, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHETHER
6
<PAGE> 245
AS A RESULT OF TORTUOUS CONDUCT OR BREACH OF WARRANTY OR BREACH OF ANY OF THE
PROVISIONS OF THIS AGREEMENT EVEN IF Sellers HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. Assignor's entire liability under any
circumstances shall not exceed the lesser of: (i) the actual cost of, or (ii)
the Purchase Price paid by InfoPak to Sellers and allocable to the specific
design flaw causing the damage.
4. Covenants of InfoPak. InfoPak understands and
acknowledges that the Device and the technology contained therein are in their
developmental stages and that the Device, the Hardware, and/or the Software may
undergo significant transformation, may be used for different applications, or
may be incorporated into other products. InfoPak hereby covenants and agrees
to pay the Purchase Price in full and without downward adjustment regardless of
the extent of enhancement, upgrading or transformation of the Hardware,
Software or Device made by InfoPak.
5. Failure to Make Quarterly Payments. Should InfoPak
fail to make any quarterly payments of Purchase Price to any Assignor as
described in Section 2 on or before thirty days after it is due, InfoPak shall
pay a penalty fee of ten percent (10%) of the unpaid Purchase Price, plus
interest shall accrue at an annual interest rate of ten percent (10%) on all
unpaid amounts or if the courts deem such rate unreasonable, at a reasonable
interest rate.
7
<PAGE> 246
6. Indemnity.
(a) By Sellers. Sellers, jointly and severally,
agree to defend, indemnify, and hold InfoPak harmless from damages awarded by a
competent tribunal for any claim, liability or cause of action brought against
InfoPak as a result of any this Agreement including but not limited to
allegation that by use of the Hardware, Software, Device or Other Intangibles
or exercise of a right conferred herein, InfoPak has infringed on some U.S.
patent, copyright, trade secret, property right or trademark of a third party,
provided that InfoPak shall have promptly given to each Assignor notice in
writing of such claim, liability, or action, or any threat thereof, together
with all reasonable authority, information, and assistance to negotiate, defend
or settle the same.
(b) By InfoPak. InfoPak agrees to defend,
indemnify, and hold each Assignor harmless from damages awarded by a competent
tribunal for any claim, liability or cause of action brought against each
Assignor as a result of any allegation that the Device has directly or
indirectly caused harm or damage to a third party.
7. Verification. To the extent reasonably necessary to
verify compliance with this Agreement, InfoPak agrees to permit, assist and
assure each Seller and agents of each Seller access to
8
<PAGE> 247
premises and records to determine gross revenues generated by sale of the
Device, Hardware and/or Software and Gross Profit resulting from the sale of
the Device, Hardware and/or Software. In the event the Sellers and InfoPak
cannot agree as to the amount of the net Gross Profit, the parties shall submit
to InterPak's independent auditors (the "Accounting Firm") for final and
binding determination as to the proper amount of Gross Profit.
8. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of InfoPak, Sellers and their successors
and assigns.
9. Approval of InfoPak Shareholders. This Agreement
shall not be effective until it has been approved by holders of a majority of
the Common Shares of InfoPak.
10. Modification, Waiver or Amendment. The provisions of
this Agreement may not be modified, amended or waived except by a written
instrument executed by the parties. The waiver of any provision of this
Agreement by either party shall not constitute a waiver of any subsequent
occurrences or transactions unless the waiver, by its terms, constitutes a
continuing waiver.
11. Arbitration. Any controversy or claim arising out of
or related to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial
9
<PAGE> 248
Arbitration Rules of the American Arbitration Association, and judgment upon
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Any arbitration hearings shall be held in Phoenix,
Arizona.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be
interpreted and construed in accordance with the laws of the State of Arizona
as applied to residents of Arizona.
(b) Attorneys' Fees. In the event of any
litigation between the parties hereto arising out of the terms, conditions and
obligations expressed in this Agreement, the prevailing party in such
litigation shall be entitled to recover reasonable attorneys' fees incurred in
connection therewith.
(c) Severability. In the event that any
provisions herein shall be legally unenforceable, the remaining provisions
nevertheless shall be carried into effect.
(d) Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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<PAGE> 249
(e) Waiver. The waiver by any party of a breach
of any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach of the same provision or any
other provision of this Agreement.
(f) Headings. The subject headings to the
sections in this Agreement are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its provisions.
(g) Payment and Calculation of Purchase Price.
On or before thirty (30) days after the end of each quarter, InfoPak shall mail
to each Seller written a calculation of (i) Net Revenues collected form the
sale of the Device, Hardware and Software and (ii) Gross Profit. Enclosed with
such written calculation shall be a check in the proper amount made payable to
Seller. Payments and all correspondence shall be sent to the following
addresses:
Bruce Sandig
13247 N. 2nd Place
Phoenix, Arizona 85022
Sean F. Lee
7113 West Sack Drive
Glendale, Arizona 85308
John Matlock
19960 North Denaro Drive
Glendale, Arizona 85308
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<PAGE> 250
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
INFOPAK, INC., an Arizona corporation
By:/s/ Sean F. Lee
-----------------------------------
Sean F. Lee, President
Sellers:
/s/ John Matlock
--------------------------------------
JOHN MATLOCK
/s/ Bruce Sandig
--------------------------------------
BRUCE SANDIG
/s/ Sean F. Lee
--------------------------------------
SEAN F. LEE
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<PAGE> 251
-----------------------------
Name of Shareholder
------------------------------
Name of individual completing
form on behalf of Institutional
Shareholder (if applicable)
INVESTMENT REPRESENTATION LETTER
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
Dimensional Visions Group, Ltd.
718 Arch Street, Suite 202N
Philadelphia, Pennsylvania 19106
Ladies and Gentlemen:
The holder of shares of InfoPak, Inc. ("InfoPak") named above (the
"Shareholder") hereby furnishes Dimensional Visions Group, Ltd. (the "Company")
the information, and makes the representations and warranties, set forth herein
to indicate whether the Shareholder is a suitable purchaser of the Company
Series I Convertible Preferred Shares (the "Convertible Preferred Shares") in
the Company in connection with the merger of InfoPak with and into the Company
or a wholly-owned subsidiary of the Company and the resulting conversion of
shares of InfoPak common stock into Convertible Preferred Shares. As a
condition precedent to investing in the Company, the Shareholder hereby
represents, warrants, covenants and agrees as follows:
The Shareholder understands that the Convertible Preferred Shares are
being offered and sold without registration under the Securities Act of 1933,
as amended (the "Act"), or any state securities laws, in reliance upon the
private offering exemption contained in Section 4(2) of the Act and Regulation
D thereunder and certain exemptions under state securities laws, and that such
reliance is based in part on the representations made and information supplied
herein. For the foregoing reasons, the Shareholder represents and warrants that
the statements checked below and the information stated herein are true,
accurate and complete to the best of the Shareholder's knowledge and belief,
and the Shareholder agrees to notify the Company and supply corrective
information promptly if, prior to the consummation of its purchase of
Convertible Preferred Shares, any of such information becomes
<PAGE> 252
inaccurate or incomplete.
1. INSTITUTIONAL SHAREHOLDERS ONLY. The Shareholder represents,
warrants ad certifies that it falls within the categories of Accredited
Investor indicated by the check marks in the appropriate spaces below:
(a) a bank, as defined in Section 3(a)(2) of
----- the Act, or a savings and loan association or other
institution defined in Section 3(a)(5)(A) of the Act
which is acting:
in its own capacity; or
--------
as a fiduciary on behalf of an investor;
-------
(b) a trust, with total assets in excess of
----- $5,000,000, not formed for the specific purpose of
acquiring Convertible Preferred Shares, whose
purchase is directed by a sophisticated person who
has such knowledge and experience in financial,
business and real estate matters that he is capable
of evaluating the merits and risks of an investment
in the Convertible Preferred Shares;
(c) an organization described in Section 501
----- (c)(3) of the Internal Revenue Code of 1986, or a
corporation, Massachusetts or similar business trust
or partnership, not formed for the specific purpose
of acquiring Convertible Preferred Shares, which has
total assets in excess of $5,000,000; or
(d) an entity in which all of the equity owners:
-----
______ qualify as Accredited Investors under
category ___above; or
______ qualify as individual Accredited Investors
under the tests set forth in paragraphs (h), (i) or
(j) of question 3 below.
NOTE: AN INSTITUTIONAL SHAREHOLDER THAT DOES NOT FALL WITHIN ONE OF THE
FOREGOING CATEGORIES IS NOT AN "ACCREDITED INVESTOR" AND THE INDIVIDUAL WHO IS
DIRECTING THE PURCHASE OF CONVERTIBLE PREFERRED SHARES FOR ANY SUCH
INSTITUTIONAL SHAREHOLDER SHOULD ANSWER QUESTION 4 BELOW.
2. INSTITUTIONAL SHAREHOLDERS ONLY. The Shareholder represents
and warrants that the Shareholder is considered a
2
<PAGE> 253
United States resident for federal income tax purposes and that the following
information is true, accurate and complete to the best of the Shareholder's
knowledge:
Name of Shareholder:
-----------------------------
Address of principal office
(including Zip Code):
-----------------------------
-----------------------------
-----------------------------
Telephone No.:
-----------------------------
Federal Taxpayer I.D. No.:
-----------------------------
Type of organization
(check one):
Corporation: Limited Partnership:
---- -----
General Partnership: Trust:
---- -----
Other (specify):
-----
Nature of business:
-------------------------------
Date of organization:
-------------------------------
Jurisdiction of incorporation
or organization:
------------------------------
Number of equity owners:
------------------------------
Current net worth
of Shareholder(1)
------------------------------
(1) "NET WORTH" MEANS THE EXCESS OF TOTAL TANGIBLE ASSETS AT CURRENT VALUE
OVER TOTAL LIABILITIES.
The following information must be furnished with respect to the
individual completing this Letter on behalf of the Institutional Shareholder:
Name:
----------------------------
Position with Shareholder:
----------------------------
Address (if different
from address above):
-----------------------------------
-----------------------------------
Telephone No.:
-----------------------------------
3
<PAGE> 254
3. INDIVIDUAL SHAREHOLDERS ONLY. The Shareholder represents,
warrants and certifies that the following information relative to the
Shareholder and the Shareholder's suitability as an investor in the Company is
true, correct and complete.
(a) Full Name:
-----------------------------------------
(b) Residence Address:
---------------------------------
---------------------------------------------------
(c) Telephone:
-----------------------------------------
(d) Age:
-----------------------------------------------
(e) Occupation:
----------------------------------------
(f) Employer and period employed (if term of employment is less
than one year, provide the name and address of your prior
employer):
-------------------------------------------------------
(g) Social Security Number:
--------------------------------
(h) Does your net worth(1) exceed $1,000,000?
Yes No
---- ----
(i) Was your individual income(2) (not joint with spouse) in each
of the two most recent years in excess of $200,000 and do you
reasonably expect that in the current year it will be in
excess of $200,000? Yes No
----- -----
(j) Was your and your spouse's joint income in each of the two
most recent years in excess of $300,000 and do you reasonably
expect that in the current year such joint income will be in
excess of $300,000? Yes No
---- ----
IF YOU DID NOT ANSWER YES TO AT LEAST ONE OF (h), (i) OR (j) ABOVE YOU
ARE NOT AN ACCREDITED INVESTOR AND YOU SHOULD ANSWER QUESTION 4 BELOW.
4. NON-ACCREDITED INVESTORS ONLY. The Shareholder, in the case of
an Individual Shareholder, or, in the case of an Institutional Shareholder, the
individual who is directing the purchase of Convertible Preferred Shares for
such Institutional Shareholder, represents, warrants and certifies that the
following information is true, correct and complete:
4
<PAGE> 255
(a) Have you ever been subject to bankruptcy, reorganization or
debt restructuring? Yes No
--- ---
If Yes, please provide details:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
- - - -------------------
(1) For purposes of this question, net worth means total assets less total
liabilities. You may include your spouse's net worth and may include
the value of your home, furnishings and automobiles.
(2) Income may be calculated by starting with Adjusted Gross Income and
adding the deductions taken for partnership losses allocated to you
and IRA and/or Keogh plan contributions.
(b) Are there suits pending or judgments outstanding against you which
would adversely affect your financial condition? Yes No
---- ----
If Yes, please provide details:
--------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
(c) Business or professional education and degrees:
<TABLE>
<CAPTION>
School Field of Study Degree Year Conferred
------ -------------- ------ --------------
<S> <C> <C> <C>
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
(d) Please describe briefly the principal positions (and nature of duties)
you have held during the last three years or, if graduated less than
three years, since graduation from college. Specific employers need
not be identified. Also, list any professional licenses or
registrations, including bar admissions, accounting certificates, real
estate brokerage and SEC or broker/dealer registrations held by you.
What is sought is a sufficient description to enable
5
<PAGE> 256
the Company to determine the extent of your vocationally-related
experience in financial and business matters.
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
(e) (i) Please indicate the frequency of your investment in securities
which are not readily marketable:
Often Occasionally
------ ------
Seldom Never
------ -------
(ii) Please check those of the following types of investments in
which you have participated:
----- Tax shelters.
----- Private placements of securities.
----- Real Estate.
----- Oil and gas investments.
----- Equipment leasing shelters.
Were you required to use a purchaser representative
for such private placements? Yes No
--- ---
(f) Please indicate in the space provided below any additional
information which you think may be helpful in enabling the
Company to determine that your knowledge and experience in
financial and business matters is sufficient to enable
you to evaluate the merits and risks of this investment:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
(g) Unless you have invested in similar types of private offerings
and/or have knowledge and experience in
6
<PAGE> 257
financial and business matters such that you alone are capable
of evaluating the merits and risks of an investment in the
Company, you will not be entitled to invest in the Company.
Please indicate whether you believe you are so qualified by
answering the question below.
I have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks
of an investment in the Company.
Yes No
--- ---
5. The Shareholder represents and warrants that any Convertible
Preferred Shares being acquired are being acquired by the Shareholder solely
for the Shareholder's own account (or as fiduciary on behalf of another
investor in the event so indicated in Paragraph 1 above), for investment
purposes only, and are not being purchased with a view to or for the resale,
distribution, subdivision or fractionalization thereof; the Shareholder has no
agreement or other arrangement, formal or informal, with any person to sell,
transfer, pledge or subject to any lien any part of any Convertible Preferred
Shares being acquired or which would guarantee the Shareholder any profit or
protect the Shareholder against any loss with respect to such Convertible
Preferred Shares; the Shareholder has no plans to enter into any such agreement
or arrangement. The Shareholder understands that the Shareholder must bear the
economic risk of the investment for an indefinite period of time because the
Convertible Preferred Shares have not been registered under the Act or any
applicable state securities laws and, therefore, cannot be resold or otherwise
transferred unless subsequently registered under the Act and any applicable
state securities laws (which the Company is not obligated to do), or an
exemption from such registration is available. The Shareholder further
understands that the exemption under Rule 144 under the Act may be unavailable
because of the conditions and limitations of such rule. The Shareholder further
understands that a legend in substantially the following form will be placed on
each certificate representing the Convertible Preferred Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR
UNDER ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND SUCH STATE SECURITIES LAWS, (II) TO THE EXTENT APPLICABLE,
RULE 144 UNDER THE ACT (OR SIMILAR RULE UNDER SUCH ACT RELATING
7
<PAGE> 258
TO THE DISPOSITION OF SECURITIES) OR (III) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE
COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH
STATE SECURITIES LAWS IS AVAILABLE.
6. The Shareholder is aware that the Company has been and is
relying upon the representations and warranties set forth in this Letter, in
part, in determining whether the offering of Convertible Preferred Shares will
qualify for an exemption from the registration provisions of the Act and
applicable state securities laws. All of the information which the Shareholder
has furnished the Company herein or previously with respect to the
Shareholder's financial position and business experience is correct and
complete as of the date of this Letter, and, if there should be any material
change in such information, the Shareholder will immediately furnish such
revised or corrected information to the Company. The Shareholder agrees to
indemnify and hold harmless the Company and its affiliates and each officer,
director, stockholder and/or employee thereof and their successors and assigns,
from and against any and all losses, damages, liabilities or expenses,
including costs and attorneys fees, incurred by reason of any misrepresentation
by the Shareholder in this Letter or any breach of the Shareholder's warranties
or the Shareholder's failure to fulfill the Shareholder's covenants in this
Letter. The Shareholder agrees that the representations, warranties and
covenants herein shall survive the Shareholder's acquisition of Convertible
Preferred Shares.
[Signature on next page]
8
<PAGE> 259
SIGNATURE PAGE
Name of Shareholder
- - - ---------------------------------------------------
By:
------------------------------------------------------
Signature of Shareholder or of authorized signatory
------------------------------------------------------
Please Print Name of authorized signatory
------------------------------------------------------
Capacity of authorized signatory
Date:
---------------
9
<PAGE> 260
CERTIFICATE OF AUTHORIZED SIGNATORY
(INSTITUTIONAL SHAREHOLDERS ONLY)
I hereby certify that I am a duly authorized representative of
Shareholder and that I am duly authorized to execute and submit this Letter on
behalf of the Shareholder and to thereby legally bind the Shareholder. I agree
to fly indemnify and hold the Company harmless from any and all claims, actions
and causes of action whatsoever which may result from a breach of the
representation contained in this paragraph.
Date:
----------------- -------------------------
(Signature)
-------------------------
(Print name)
10
