<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
PRECISION SYSTEMS, INC.
-----------------------
(Name of Issuer)
Common Stock $0.01 par value
----------------------------
(Title of Class of Securities)
740329107
---------
(CUSIP Number)
Ian M. Dalziel
c/o Alta Investissements S.A.
8 boulevard Emmanuel Servais
L-2535 Luxembourg
(011) 352-22-62-22-340
-------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 16, 1996
---------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [_]
Check the following box if a fee is being paid with the statement [x]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1
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SCHEDULE 13D
CUSIP No. 740329107 Page 2
---------------- -----
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Primwest Holding N.V.
I.R.S. Identification No. None.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Netherlands Antilles
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 2,808,427
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
2,808,427
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,808,427
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.6%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
HC
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 3
---------------- -----
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alta Investissements S.A.
I.R.S. Identification No. None.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Luxembourg
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 2,808,427
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
2,808,427
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,808,427
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.6%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 4
---------------- -----
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Didier Primat
I.R.S. Identification No. None (non-resident alien).
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 2,808,427
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
2,808,427
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,808,427
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.6%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 5
---------------- -----
ITEM 1 Security and Issuer
-------------------
The title of the class of equity securities to which this statement relates is
the Common Stock, $0.01 par value ("Shares") of Precision Systems, Inc.
("Precision"). The address of the principal executive offices of Precision is
11800 30th Court North, St. Petersburg, Florida 33716.
ITEM 2 Identity and Background
-----------------------
Alta Investissements S.A., a Luxembourg corporation ("Alta"), and Primwest
Holding N.V., a company incorporated in the Netherlands Antilles ("Primwest"
and, together with Alta, the "Companies"), have as their principal businesses
the investment in and holding of securities. Alta's principal executive offices
are located at 8 boulevard Emmanuel Servais, L-2535 Luxembourg. Primwest's
principal executive offices are located at 62 de Ruyterkade, Curacao,
Netherlands Antilles.
Alta is a majority-owned subsidiary of Primwest. Mr. Didier Primat (together
with the Companies, the "Reporting Persons") is a director of each of the
Companies and is the President of Primwest. Mr. Primat owns a majority of the
issued and outstanding capital stock of Primwest. Mr. Primat's address is 7,
cours de Rive, 1204 Geneva, Switzerland. Mr. Primat is a French citizen.
The name, business address, present principal occupation or employment
(including the name, principal business and address of any corporation or other
organization in which such employment is conducted) and citizenship of each
director and executive officer of each of the Companies are set forth in
Schedule A to this statement and are incorporated herein by reference.
During the last five years, neither the Reporting Persons nor any of the
persons listed on Schedule A hereto has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which such Reporting Person or such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3 Source and Amount of Funds or Other Consideration
-------------------------------------------------
Precision acquired 95,329 shares of the common stock of Vicorp N.V., a
Netherlands Antilles corporation ("Vicorp") from Alta in exchange for 2,808,427
Shares (the "Exchange") pursuant to the Share Exchange Agreement, as defined and
described in Item 4 hereof and incorporated herein by reference.
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 6
---------------- -----
ITEM 4 Purpose of Transaction
----------------------
Pursuant to a Share Exchange Agreement between Alta and Precision (the "Share
Exchange Agreement"), Alta transferred to Precision all shares in Vicorp held by
Alta, consisting of approximately 90% of the issued and outstanding capital
stock of Vicorp. Prior to the Exchange, Vicorp N.V. developed and distributed
software and integration services that enable the provision of intelligent
network-compatible interactive voice, data and videotext applications. The
Share Exchange Agreement is attached hereto as Exhibit 2 to this statement and
is incorporated herein by reference.
In connection with the Exchange, Alta, Primwest, Precision and certain of its
other shareholders entered into an agreement (the "Shareholders' Agreement")
pursuant to which Primwest is entitled to certain registration rights and to
nominate one member of the Board of Directors of Precision for so long as
Primwest beneficially owns at least 10 percent of the Shares. Mr. Ian M.
Dalziel has accordingly been nominated to the Board of Directors of Precision.
Subject to certain exceptions, Alta may not transfer any of the Shares acquired
by Alta in the Exchange for a twelve month period. The Shareholder's Agreement
is attached hereto as Exhibit 3 to this statement and is incorporated herein by
reference.
None of the Reporting Persons or the persons listed on Schedule A hereto
currently has any plans or proposals which relate to or would result in any of
the actions listed in subparagraphs (a) through (j) of Item 4 of Schedule 13D,
except that the shareholders of Alta have by resolution approved (i) the grant
by Alta to each of Didier Primat, Ian M. Dalziel and one other former director
of Vicorp of an immediately exercisable option to acquire 14,730 Shares held by
Alta at an exercise price of 9 Swiss francs per share, and (ii) the distribution
of the Shares held by Alta to its shareholders. Each such transaction is
currently expected to be completed by August 31, 1996.
ITEM 5 Interest in Securities of the Issuer
------------------------------------
(a) Alta beneficially owns 19.6% of the Shares (2,808,427 Shares). Because
Primwest owns a majority of the issued and outstanding shares of capital stock
of Alta, Primwest may be deemed to be a beneficial owner of such Shares pursuant
to Rule 13d-3 under the Securities Exchange Act of 1934 (the "Act"). Because
Mr. Primat owns a majority of the issued and outstanding shares of capital stock
of Primwest, Mr. Primat may also be deemed to be a beneficial owner of such
Shares pursuant to Rule 13d-3 under the Act.
(b) The voting and dispositive power with respect to the Shares held by Alta
are shared by Alta, Primwest and Mr. Primat.
(c) Other than the Exchange as defined in Item 3 hereof, the granting of
options as described in Item 6 and the approval of the granting of options as
described in Item 4 hereof, there have been no transactions in the Shares
effected during the last sixty days by any Reporting Person or by any of the
persons named in Schedule A hereto.
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 7
---------------- -----
ITEM 5 (continued from previous page)
(d) Certain other persons are known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
such Shares, but no such person's interest relates to more than five percent of
the class.
(e) Not applicable.
ITEM 6 Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
------------------------------------------------------
Pursuant to the Precision Systems Inc. Stock Option Plan for Outside
Directors, Precision has granted to Ian M. Dalziel an options to acquire 25,000
Shares (approximately 0.17 percent of the issued and outstanding Shares) at an
exercise price of $14.50 per Share. Such options consist of (i) a presently
exerciseable option to acquire 8,334 Shares, expiring on June 13, 2001, (ii) an
option to acquire an additional 8,333 Shares vesting on June 13, 1997 and
expiring on June 13, 2002, and (iii) an option to acquire an additional 8,333
Shares vesting on June 13, 1998 and expiring on June 13, 2003. Pursuant to Mr.
Dalziel's arrangement with Primwest, it is anticipated that upon any exercise of
such options, the Shares so acquired (or the proceeds of any sale of such
Shares) will be assigned to Primwest.
Except as described in the preceding paragraph or in Item 4 hereof, there are
no contracts, arrangements, understandings, or relationships (legal or
otherwise) among the persons named in Item 2 or Schedule A hereto or between
such persons and any other person with respect to any securities of Precision,
including but not limited to transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, the giving or withholding of
profits, or a pledge or contingency the occurrence of which would give another
person voting power or investment power over securities of Precision.
ITEM 7 Material to be Filed as Exhibits
--------------------------------
Joint Filing Agreement Exhibit 1
Share Exchange Agreement Exhibit 2
Shareholders' Agreement Exhibit 3
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 8
---------------- -----
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
June 21, 1996 By: Primwest Holding N.V.
------------------
Date
By: /s/ Didier Primat
-----------------
Name: Didier Primat
Title: President
June 21, 1996 By: Alta Investissements S.A.
------------------
Date
By: /s/ Ian M. Dalziel
------------------
Name: Ian M. Dalziel
Title: President
June 21, 1996 By: /s/ Didier Primat
------------------ -----------------
Name: Didier Primat
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 9
---------------- -----
Index of Exhibits
Exhibit/Schedule Document
---------------- --------
Schedule A Additional Information Required
Pursuant to General Instruction C
Exhibit 1 Joint Filing Agreement
Exhibit 2 Share Exchange Agreement
Exhibit 3 Shareholders' Agreement
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 10
---------------- ------
SCHEDULE A
The sole director and sole executive officer of Primwest Holding N.V. is Mr.
Didier Primat. The directors of Alta Investissements S.A. are Didier Primat,
Ian M. Dalziel and Yves Kempf. The sole executive officer of Alta
Investissements S.A. is Ian M. Dalziel, its President. Mr. Dalziel is also a
director of Precision.
Mr. Primat's address, present principal occupation or employment (including
the name, principal business and address of any corporation or other
organization in which such employment is conducted) and citizenship are set
forth in Item 2 of the statement of which this Schedule A is a part.
Mr. Dalziel's present principal employment or occupation is as President of,
and his business address is care of, Alta Investissements S.A., 8 boulevard
Emmanuel Servais, L-2535 Luxembourg. Mr. Dalziel is a citizen of the United
Kingdom.
Mr. Kempf's present principal employment or occupation is as President of
Bearbull International Ltd. and of Bearbull Asset Management Ltd, the address of
each of which is Charlotte House, Nassau, the Bahamas, British West Indies.
The principal business of Bearbull International and of Bearbull Asset
Management is the management of their clients' assets and investments. Mr.
Kempf's business address is Charlotte House, Nassau, the Bahamas, British West
Indies. Mr. Kempf is a citizen of France.
<PAGE>
SCHEDULE 13D
CUSIP No. 740329107 Page 11
---------------- ------
EXHIBIT 1
JOINT FILING AGREEMENT
Pursuant to the provisions of Rule 13d-1(e) under the Securities Exchange Act
of 1934 (the "Act"), Alta Investissements S.A., a Luxembourg corporation,
Primwest Holding N.V., a Netherlands Antilles corporation, and Didier Primat
hereby each agree to file jointly a statement on Schedule 13D under the Act with
respect to 2,808,427 shares of the Common Stock, par value $0.01, of Precision
Systems, Inc.
June 21, 1996 By: Primwest Holding N.V.
------------------
Date
By: /s/ Didier Primat
-----------------
Name: Didier Primat
Title: President
June 21, 1996 By: Alta Investissements S.A.
------------------
Date
By: /s/ Ian M. Dalziel
------------------
Name: Ian M. Dalziel
Title: President
June 21, 1996 By: /s/ Didier Primat
------------------ -----------------
Name: Didier Primat
<PAGE>
Exhibit 2
- --------------------------------------------------------------------------------
SHARE EXCHANGE AGREEMENT
BETWEEN
PRECISION SYSTEMS, INC.
AND
ALTA INVESTISSEMENTS S.A.
APRIL 13, 1996
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I SALE AND EXCHANGE OF SHARES..................................... 1
Section 1.1. Exchange of Shares.................................... 1
Section 1.2. Closing............................................... 1
Section 1.3. Transfer of Shares.................................... 2
Section 1.4. Restrictions on Transfer.............................. 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF ALTA.......................... 2
Section 2.1. Organization and Qualification; Subsidiaries.......... 2
Section 2.2. Certificate of Incorporation and Bylaws............... 3
Section 2.3. Capitalization........................................ 3
Section 2.4. Authority Relative to this Agreement.................. 4
Section 2.5. No Conflict; Required Filings and Consents............ 4
Section 2.6. Compliance; Permits................................... 5
Section 2.7. Financial Statements.................................. 5
Section 2.8. Absence of Certain Changes or Events.................. 6
Section 2.9. Absence of Litigation................................. 6
Section 2.10. Taxes................................................. 6
Section 2.11. Brokers............................................... 7
Section 2.12. [Intentionally Omitted]............................... 7
Section 2.13. Employee Benefit Plans................................ 7
Section 2.14. Affiliate Arrangements................................ 8
Section 2.15. Absence of Questionable Payments...................... 8
Section 2.16. Agreements, Leases and Licenses....................... 9
Section 2.17. Environmental and Health and Safety Matters........... 9
Section 2.18. Intellectual Property................................. 10
Section 2.19. Customer and Supplier Relationships; Warranty Claims.. 10
Section 2.20. Accounts Receivable and Notes Receivable.............. 11
Section 2.21. Disclosure; Accuracy of Documents and Information..... 11
Section 2.22. Organization and Qualification; Subsidiaries.......... 11
Section 2.23. Certificate of Incorporation and Bylaws............... 11
Section 2.24. [Intentionally Omitted]............................... 11
Section 2.25 Ownership of Shares................................... 11
</TABLE>
<PAGE>
TABLE OF CONTENTS
----------------
(continued)
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<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 2.26. Regulation S.......................................... 12
Section 2.27 Disclosure............................................ 12
ARTICLE III [Intentionally Omitted]......................................... 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PSI........................... 12
Section 4.1. Organization and Qualification; Subsidiaries.......... 12
Section 4.2. Certificate of Incorporation and Bylaws............... 13
Section 4.3. Capitalization........................................ 13
Section 4.4. Authority Relative to this Agreement.................. 13
Section 4.5. No Conflict; Required Filings and Consents............ 14
Section 4.6. Compliance; Permits................................... 14
Section 4.7. SEC Filings; Financial Statements..................... 15
Section 4.8. Absence of Certain Changes or Events.................. 15
Section 4.9. Absence of Litigation................................. 16
Section 4.10. Information Provided to Stockholders.................. 16
Section 4.11. Taxes................................................. 16
Section 4.12. Brokers............................................... 16
Section 4.13. [Intentionally Omitted]............................... 16
Section 4.14. Employee Benefit Plans................................ 16
Section 4.15. Environmental and Health and Safety Matters........... 17
Section 4.16. Intellectual Property................................. 17
Section 4.17. Disclosure; Accuracy of Documents and Information..... 18
ARTICLE V CONDUCT AND TRANSACTIONS PRIOR TO CLOSING: ADDITIONAL
AGREEMENTS...................................................... 18
Section 5.1. Information and Access................................ 18
Section 5.2. Conduct of Business of the Company.................... 19
Section 5.3. Conduct of Business of PSI............................ 20
Section 5.4. Negotiation with Others............................... 21
Section 5.5. Stockholders' Meetings................................ 22
Section 5.6. Agreements to Take Reasonable Action.................. 22
Section 5.7. Consents.............................................. 23
Section 5.8. NASDAQ Quotation...................................... 23
Section 5.9. Public Announcements.................................. 23
Section 5.10. Notification of Certain Matters....................... 23
</TABLE>
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<PAGE>
TABLE OF CONTENTS
-----------------
(continued)
-----------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI CONDITIONS PRECEDENT............................................ 24
Section 6.1. Conditions to Each Party's Obligation to
Close................................................ 24
(a) Shareholder Approval............................. 24
(b) Governmental Entity Approvals.................... 24
(c) No Injunctions or Restraints; Illegality......... 24
Section 6.2. Conditions of Obligations of PSI...................... 24
(a) Representations and Warranties................... 24
(b) Performance of Obligations of Alta............... 24
(c) Consents......................................... 24
(d) Stockholder Agreement............................ 25
(e) Legal Opinion.................................... 25
(f) Supervisory Board................................ 25
(g) Minimum Number of Vicorp Shares.................. 25
(h) Termination of Subscription Right................ 25
Section 6.3. Conditions of Obligations of Alta..................... 25
(a) Representations and Warranties................... 25
(b) Performance of Obligations of PSI................ 25
(c) Consents......................................... 25
(d) Stockholder Agreement............................ 25
(e) Legal Opinion.................................... 25
ARTICLE VII POST CLOSING COVENANTS.......................................... 26
Section 7.1. Stock Options......................................... 26
Section 7.2. Covenants of Alta..................................... 26
Section 7.3. Cooperation........................................... 26
Section 7.4. Alta Debt............................................. 26
Section 7.5. Minority Shareholders................................. 26
Section 7.6. Debt Repayment........................................ 26
ARTICLE VIII INDEMNIFICATION............................................... 26
Section 8.1. Survival of Representations, Warranties and Covenants. 26
Section 8.2. Indemnification from Alta............................. 27
Section 8.3. [Intentionally Omitted]............................... 27
Section 8.4. Indemnification from PSI.............................. 28
Section 8.5. Notice................................................ 28
</TABLE>
- iii -
<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------
(continued)
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Page
----
<S> <C>
Section 8.6. Defense of Claims..................................... 28
Section 8.7. Miscellaneous......................................... 29
ARTICLE IX TERMINATION..................................................... 29
Section 9.1. Termination........................................... 29
Section 9.2. Effect of Termination................................. 30
ARTICLE X GENERAL PROVISIONS............................................... 30
Section 10.1. Amendment............................................. 30
Section 10.2. Extension; Waiver..................................... 30
Section 10.3. Entire Agreement...................................... 30
Section 10.4. Severability.......................................... 30
Section 10.5. Notices............................................... 30
Section 10.6. Counterparts.......................................... 31
Section 10.7. Benefits; Assignment.................................. 31
Section 10.8. Governing Law......................................... 31
Section 10.9. Choice of Forum; Venue................................ 32
Section 10.10. Interpretation........................................ 32
Section 10.11. Fees and Expenses..................................... 33
</TABLE>
EXHIBIT A [Intentionally Omitted]
EXHIBIT B Share Exchange Certificate - Netherlands Antilles
EXHIBIT C Form of Stockholders' Agreement
EXHIBIT D PSI Options
- iv -
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
"Acquisition Proposal"......................................... Section 5.4(a)
"Act".......................................................... Section 1.4
"Affiliates"................................................... Section 2.14
"Alta"......................................................... Preamble
"Alta Indemnitees"............................................. Section 8.4
"Agreement".................................................... Preamble
"Approvals".................................................... Section 2.1
"Business Day"................................................. Section 1.2
"Class B Stock"................................................ Section 4.3
"Closing"...................................................... Section 1.2
"Closing Date"................................................. Section 1.2
"Code"......................................................... Section 2.13
"Common Stock"................................................. Witnesseth
"Commonly Controlled Entity"................................... Section 2.13
"Company"...................................................... Preamble
"Company Benefit Plans"........................................ Section 2.13(a)
"Company Contracts"............................................ Section 2.16
"Company Disclosure Letter".................................... Section 2.3
"Company Permits".............................................. Section 2.6(b)
"Employment Agreements"........................................ Section 2.13(e)
"Environmental Laws"........................................... Section 2.17
"ERISA"........................................................ Section 2.13(a)
"ERISA Plan"................................................... Section 2.13(a)
"Exchange"..................................................... Section 1.1
"Exchange Act"................................................. Section 2.5(b)
"Exchange Ratio"............................................... Section 1.1(a)
"Financial Statements"......................................... Section 2.7
"Governmental Entity".......................................... Section 2.5(b)
"IAS".......................................................... Section 2.7
"Indemnified Party"............................................ Section 8.7(b)
"Indemnifying Party"........................................... Section 8.7(b)
"Injunction"................................................... Section 6.1(c)
"Intellectual Property"........................................ Section 2.18
"Losses"....................................................... Section 8.7(a)
"Material Adverse Effect"...................................... Section 4.1
"Multiemployer Plan"........................................... Section 2.13(a)
"PSI".......................................................... Preamble
"PSI Benefit Plans"............................................ Section 4.14(a)
"PSI Disclosure Letter"........................................ Section 4.3
"PSI Indemnitees".............................................. Section 8.2(a)
"PSI Intellectual Property".................................... Section 4.16
"PSI Preferred Stock".......................................... Section 4.3
"PSI Permits".................................................. Section 4.6(b)
"PSI SEC Reports".............................................. Section 4.7
"PSI Shares"................................................... Section 1.1(a)
"Regulation S"................................................. Section 1.4
"Restricted Period"............................................ Section 1.4
"Schultz"...................................................... Section 8.2(b)
</TABLE>
- v -
<PAGE>
<TABLE>
<S> <C>
"Tax Return".................................................... Section 2.10
"Taxes"......................................................... Section 2.10
"Termination Date".............................................. Section 8.1
"Transfer Agent"................................................ Section 1.3
"Vicorp Shares"................................................. Section 1.1
"Vicorp Stock................................................... Witnesseth
"Vicorp Plan"................................................... Section 2.3
"VIS Plan"...................................................... Section 4.3
</TABLE>
- vi -
<PAGE>
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is dated as of April 13,
1996, by and between PRECISION SYSTEMS, INC., a Delaware corporation ("PSI") and
ALTA INVESTISSEMENTS S.A., a Luxembourg corporation ("Alta") and controlling
shareholder of VICORP N.V., a Netherlands Antilles corporation (the "Company").
WITNESSETH:
WHEREAS, PSI desires to purchase all or substantially all of the issued and
outstanding shares of Swiss Franc 100 each (the "Vicorp Stock") of the Company.
WHEREAS, Alta collectively owns approximately 90.5% of the issued and
outstanding Vicorp Stock.
WHEREAS, PSI wishes to exchange shares of its common stock, par value $0.01
per share ("Common Stock"), for the shares of Vicorp Stock owned by Alta and
Alta wishes to exchange such shares of Vicorp Stock for Common Stock on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
SALE AND EXCHANGE OF SHARES
Section 1.1. Exchange of Shares. In reliance on the representations and
------------------
warranties and other agreements contained herein and upon the terms and subject
to the conditions set forth herein, the parties hereto will make the following
exchange (the "Exchange") on the Closing Date (as defined in Section 1.2).
(a) Subject to the limitations, restrictions and procedures set
forth in Section 1.4, PSI will issue, convey and deliver to Alta 2,808,427.42
shares of Common Stock (such shares of Common Stock referred to herein as the
"PSI Shares"), which number of shares of Common Stock shall represent 29.4604 of
a share of Common Stock for each share of Vicorp Stock (the "Exchange Ratio").
(b) Alta will transfer, assign, convey and deliver to PSI 95,329
shares of Vicorp Stock (such shares of Vicorp Stock are referred to herein as
the "Vicorp Shares").
Section 1.2. Closing. The closing of the Exchange (the "Closing") will take
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place immediately after satisfaction or waiver of the closing conditions set
forth in Article VI, unless otherwise agreed to by the parties (the "Closing
Date"). The Closing shall take place at the offices of Baker & McKenzie, 40
Boulevard du Regent - Regentlaan 40, 1000 Brussels, Belgium, unless another
place is agreed to in writing by the parties. As used in this Agreement,
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"Business Day" shall mean any day, other than a Saturday, Sunday or legal
holiday on which banks are permitted to close in the City and State of New York
and the State of Delaware.
Section 1.3. Transfer of Shares. At the Closing, simultaneously with the
------------------
delivery by Alta of irrevocable instructions in form and content sufficient to
cause, without any further action by PSI or Alta, the transfer of the Vicorp
Shares to PSI, PSI will cause PSI's registrar and transfer agent (the "Transfer
Agent") to register the PSI Shares issued, conveyed and delivered to Alta
pursuant to Section 1.1 on the books of the Transfer Agent in the name of Alta.
Each party shall provide the other at the Closing with evidence of such
issuance, conveyance and delivery or transfer or assignment, as the case may be,
in a form satisfactory to such other party. The Vicorp Shares and the PSI
Shares shall be so delivered, in each case, free and clear of all liens, claims,
charges, preemptive rights and other encumbrances other than pursuant to this
Agreement. No certificates or scrip for fractional shares of PSI Common Stock
shall be issued in the Exchange, and such fractional share interests will not
entitle the owner thereof to any rights of a stockholder of PSI. In lieu of
fractional shares, PSI will pay in cash to each such holder of a fractional
share in an amount equal to the product of such fractional interest and $11.576.
Section 1.4 Restrictions on Transfer. Alta acknowledges and agrees that
------------------------
during the forty (40) day period commencing on the Closing Date (the "Restricted
Period"), the PSI Shares issued in exchange for Vicorp Shares may not be
transferred. During the Restricted Period, no share certificates representing
the PSI Shares will be issued to Alta and such shares may not be traded on
NASDAQ, the Boston Stock Exchange or any other exchange or market or transferred
or sold to any U.S. person or otherwise in the United States. The Transfer
Agent will recognize any transfer during the Restricted Period. After the
expiration of the Restricted Period, (i) share certificates representing the PSI
Shares shall be issued to Alta and (ii) PSI Shares may be offered and sold
outside the United States in accordance with Regulation S ("Regulation S")
promulgated under the Securities Act of 1933, as amended (the "Act") or within
the United States pursuant to an available exemption from the registration
requirements of the Act including Section 4(1) of the Act, if available.
ARTICLE II
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
As of the date hereof and, as of the Closing, Alta represents and warrants to
PSI as follows:
Section 2.1. Organization and Qualification; Subsidiaries.
--------------------------------------------
Each of the Company and its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to own, lease
and operate its assets and properties and to carry on its business as it is now
being conducted. Each of the Company and its subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, consents,
certificates, approvals and orders ("Approvals") necessary to own, lease and
operate the properties it purports to own, operate or lease and to carry on its
business as it is now being conducted, except where the failure to have such
Approvals would not, individually or in the aggregate, have a Material Adverse
Effect (as defined below). Each of the Company and its subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated
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by it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect. When used in this Article II, or elsewhere in this
Agreement in connection with the Company or any of its subsidiaries, the term
"Material Adverse Effect" means any change, event or effect that is materially
adverse to the business, financial condition or results of operations of the
Company and its subsidiaries taken as a whole. Other than wholly owned
subsidiaries and except as disclosed in the Company Disclosure Letter (as
defined in Section 2.3), the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture or other business, association or entity.
Section 2.2. Certificate of Incorporation and Bylaws. The Company has
---------------------------------------
previously furnished to PSI a complete and correct copy of the certificate of
incorporation and bylaws or other relevant constituent documents, as amended to
date, of the Company and each of its subsidiaries. Such certificate of
incorporation, bylaws and other documents are in full force and effect. Neither
the Company nor any of its subsidiaries is in violation of any of the provisions
of its certificate of incorporation or bylaws or equivalent organizational
documents and there are no material deficiencies in the books and records of the
Company or any of its subsidiaries relating to the valid conduct of shareholder
or board of directors meetings or other requirements for the proper maintenance
of such entities under applicable law.
Section 2.3. Capitalization. The authorized capital stock of the Company
--------------
consists of 200,000 shares of Vicorp Stock. As of the date hereof, (a) 105,376
shares of Vicorp Stock were issued and outstanding all of which are validly
issued, fully paid and nonassessable, and not subject to preemptive rights, (b)
no shares of Vicorp Stock were held in treasury by the Company or by wholly
owned subsidiaries of the Company and (c) options to purchase 12,374 shares of
the common stock of Vicorp Interactive Systems, Inc. under the Vicorp
Interactive Systems, Inc. 1990 Stock Option Plan (the "VIS Plan") and options to
purchase 6,550 shares of Vicorp Stock (not including options to purchase 11,050
shares of Vicorp Stock issued to Daniel G. Schultz and believed by the Company
to be void or 3,060 shares reserved for, but not issued to, Michael Rietschel
and Wido Strasding) under the Vicorp Group / Vicorp N.V. Stock Option Plan (the
"Vicorp Plan") were outstanding. No change in such capitalization has occurred
between December 31, 1995 and the date hereof except the issuance of shares of
Company Common Stock pursuant to the exercise of outstanding options. Except as
set forth in this Section 2.3 or as disclosed in the disclosure letter delivered
by the Company to PSI (the "Company Disclosure Letter"), as of the date of this
Agreement, there are no options, warrants or other rights, agreements,
arrangements or commitments, in each case to which the Company or any of its
subsidiaries is a party, of any character relating to the issued or unissued
Vicorp Stock or the capital stock of any of its subsidiaries or obligating the
Company or any of its subsidiaries to issue or sell any shares of capital stock
of, or other equity interests in, the Company or any of its subsidiaries. All
shares of stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and nonassessable. Except
as set forth in Section 2.3 of the Company Disclosure Letter, there are no
obligations, contingent or otherwise, of the Company or any of its subsidiaries
to repurchase, redeem or otherwise acquire any shares of Vicorp Stock or the
capital stock of any subsidiary or to provide funds to or make any material
contractual investment (in the form of a loan, capital contribution or
otherwise) in any such subsidiary or any other entity other than guarantees or
obligations of subsidiaries entered into in the ordinary course of business.
All of the outstanding shares of capital stock of each of the Company's
subsidiaries are duly authorized, validly issued, fully paid and
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nonassessable, and, except as set forth in Section 2.3 of the Company Disclosure
Letter, all such shares are owned by the Company or a subsidiary thereof free
and clear of all security interests, liens, claims, pledges, agreements,
limitations in the Company's voting rights, charges or other encumbrances of any
nature whatsoever. With respect to partially owned subsidiaries of the Company
identified in Section 2.3 of the Company Disclosure Letter, the Company owns not
less than 51 % of the issued and outstanding capital stock of each such
subsidiary free and clear of all security interests, liens, claims, pledges,
agreements, limitations in the Company's voting rights, charges or other
encumbrances of any nature whatsoever.
Section 2.4. Authority Relative to this Agreement. Alta has all necessary
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and, subject to obtaining the approval and
adoption of this Agreement and the transactions contemplated herein by the
holders of Vicorp Stock in accordance with applicable law and the Company's
Articles of Incorporation and Bylaws, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Alta and
the consummation by Alta of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of Alta and
no other corporate proceedings on the part of Alta are necessary to authorize
this Agreement or to consummate the transactions so contemplated (other than the
approval and adoption of this Agreement and the transactions contemplated herein
by the holders of a majority of Vicorp Stock in accordance with applicable law
and the Company's Articles of incorporation and bylaws). This Agreement has
been duly and validly executed and delivered by Alta and, assuming the due
authorization, execution and delivery by PSI, constitutes the legal and binding
obligation of Alta, enforceable against Alta in accordance with its terms,
subject to (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to creditors' rights generally and (b) the
availability of injunctive relief and other equitable remedies.
Section 2.5. No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement by Alta do not,
and the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby will not, subject to obtaining the approval and
adoption of this Agreement and the transactions contemplated hereby by the
holders of Vicorp Stock in accordance with applicable law and the Company's
Articles of Incorporation and Bylaws and compliance with the requirements set
forth in Section 2.5(b) below, (i) conflict with or violate the certificate of
incorporation, bylaws or equivalent organizational documents of the Company or
any of its subsidiaries; (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any of its
subsidiaries or by which any of their respective properties is bound or
affected; or (iii) except as set forth in Section 2.5 of the Company Disclosure
Letter, result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or alter the
rights or obligations of any third party or the Company or its subsidiaries
under, or give to others any rights of termination, amendment, acceleration,
increased payments pursuant to or cancellation of, or result in the creation of
a lien or other encumbrance on any of the properties or assets of the Company or
any of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties are bound or affected, except, in the case of clauses (ii) and (iii)
above, for any such conflicts, violations, breaches, defaults or other
alterations or occurrences that would not prevent or delay consummation of the
Exchange in any material respect, or otherwise
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prevent the Company from performing its obligations under this Agreement in any
material respect, and would not have, individually or in the aggregate, a
Material Adverse Effect.
(b) The execution and delivery of this Agreement by Alta do not,
and the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby will not, require any consent, approval,
authorization or permit of, or registration or filing with or notification to,
any court, administrative agency, commission, governmental or regulatory
authority, domestic or foreign (a "Governmental Entity"), except (i) the filing
of documents to satisfy the applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications (A) would not prevent or delay consummation of the
Exchange in any material respect or otherwise prevent or delay in any material
respect the Company from performing its obligations under this Agreement or (B)
would not, individually or in the aggregate, have a Material Adverse Effect.
(c) Alta has no reason to believe that the consents, approvals,
permits, registrations, filings and notifications referred to in Section 2.5(b)
above will not be obtained or made in a timely manner.
Section 2.6. Compliance; Permits.
-------------------
(a) Neither the Company nor any of its subsidiaries is in
conflict with, or in default or violation (or in a situation which, after the
giving of notice or passage of time or both, would constitute a default or
violation) of, (i) any law, rule, regulation, order, judgment or decree
applicable to the Company or any of its subsidiaries or by which any of their
respective properties is bound, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties is bound, except for any conflicts, defaults or violations which do
not and would not have, individually or in the aggregate, a Material Adverse
Effect.
(b) The Company and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities which
are material to operation of the business of the Company and its subsidiaries
taken as a whole (collectively, the "Company Permits"). The Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure to so comply would not, individually or in the aggregate, have
a Material Adverse Effect.
Section 2.7. Financial Statements.
--------------------
(a) Alta has delivered to PSI the Company's audited financial
statements (balance sheet, statement of operations, statement of stockholders
equity and statement of cash flows) as at December 31, 1993, 1994, and 1995 and
for the twelve month periods ending thereon (including, in each case, any
related notes thereto) (the "Financial Statements"). The Financial Statements
have been prepared in accordance with and comply as to form in all material
respects with applicable international accounting standards ("IAS") and with the
published rules and regulations with respect thereto applied on a consistent
basis throughout the periods involved. The Financial Statements each fairly
presented the consolidated financial position of the Company and its
consolidated subsidiaries in all material respects as at the respective dates
thereof and the consolidated results of its operations and cash flows for the
periods indicated
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(b) Neither the Company nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise) of a nature required to
be disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with IAS which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of the Company and its subsidiaries taken as a whole, except
liabilities (i) set forth in Section 2.7 of the Company Disclosure Letter or
provided for in the Company's balance sheet as of December 31, 1995, or (ii)
incurred since December 31, 1995 in the ordinary course of business. Except as
disclosed in the Financial Statements or the Company Disclosure letter, neither
the Company nor any of its subsidiaries is a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation (other than with respect
to the obligations of the Company or a subsidiary thereof) .
Section 2.8. Absence of Certain Changes or Events. Except as set forth in
------------------------------------
Section 2.8 of the Company Disclosure Letter, since December 31, 1995, (a) the
Company and its subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and have not taken
any of the actions set forth in paragraphs (a) through (j) of Section 5.2, and
(b) there has not been (i) any transaction, commitment, dispute or other event
or condition (financial or otherwise) of any character (whether or not in the
ordinary course of business), individually or in the aggregate, having or which
could reasonably be expected to have a Material Adverse Effect, or (ii) any
material change by the Company in its accounting methods, principles or
practices except as required by concurrent changes in IAS.
Section 2.9. Absence of Litigation. Except as disclosed in Section 2.9 of
---------------------
the Company Disclosure Letter, there are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of Alta (after due
inquiry), threatened against the Company or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that, individually or in the aggregate, would have a
Material Adverse Effect, nor is there any judgment, decree, injunction or order
of any Governmental Entity or arbitrator outstanding against the Company or any
of its subsidiaries having or which would have a Material Adverse Effect.
Section 2.10. Taxes. Except as set forth in Section 2.10 of the Company
-----
Disclosure Letter, the Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax (as defined below)
purposes of which the Company or any of its subsidiaries is or has been a member
has timely filed all Tax Returns (as defined below) required to be filed by it
or requests for extensions to file such returns have been timely filed, granted
and have not expired, except to the extent that such failures to file or to have
extensions granted that remain in effect individually and in the aggregate would
not have a Material Adverse Effect, and all such returns were complete and
accurate in all material respects. With respect to all taxes imposed upon the
Company or any of its subsidiaries or for which the Company is liable with
respect to all taxable periods or portions of periods ending on or before the
Closing, all amounts required to be paid by the Company to taxing authorities
and others have been paid, or, if due but remain payable without penalty or
interest, have been adequately reserved for and reflected in the Financial
Statements. The Company does not owe any Taxes on compensation paid to any of
its employees other than Taxes that are yet due and payable. The Company is not
a party to or bound by any tax indemnity, tax sharing or tax allocation
agreement. In addition, (a) no material claim for unpaid Taxes has become a
lien against the property of the Company or any of its subsidiaries or is being
asserted against the Company or any of its subsidiaries, (b) no audit of any Tax
Return of the Company or any of its subsidiaries is being conducted by a Tax
authority (i) as of the date of this Agreement and (ii) which, as of the Closing
Date, has had or could reasonably be expected to have a Material Adverse Effect
and (c) no extension of the
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statute of limitations on the assessment of any Taxes has been granted by the
Company or any of its subsidiaries and is currently in effect (i) as of the date
of this Agreement and (ii) which, as of the Closing Date, has had or could
reasonably be expected to have a Material Adverse Effect. As used herein,
"Taxes" shall mean all taxes of any kind, including, without limitation, those
on or measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, social
security, excise, severance, stamp, occupation, premium, value added, property
or windfall profits taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any governmental authority,
domestic or foreign. As used herein, "Tax Return" shall mean any return, report
or statement required to be filed with any governmental authority with respect
to Taxes.
Section 2.11. Brokers. Except as set forth on Section 2.11 of the Company
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Disclosure Schedule, no broker, finder or investment banker is entitled to be
paid by the Company any brokerage, finder's or other fee or commission in
connection with the Exchange and the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
Section 2.12. [Intentionally Omitted]
Section 2.13. Employee Benefit Plans.
----------------------
(a) The Company has delivered or made available to PSI prior to the execution
of this Agreement true and complete copies (or, in the case of bonus or other
incentive plans, summaries thereof) of all material pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus or other material incentive plans, all other
material written employee programs, arrangements or agreements, whether arrived
at through collective bargaining or otherwise, all material medical, vision,
dental or other health plans, all life insurance plans and all other material
employee benefit plans or fringe benefit plans, including, without limitation,
all "employee benefit plans" as that term is defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
the Company or any entity required to be aggregated with the Company pursuant to
Section 414 of the Code (each such entity being referred to in this Section 2.13
as a "Commonly Controlled Entity") for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
and under which employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries are eligible to participate (collectively,
the "Company Benefit Plans"). Any of the Company Benefit Plans which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to in this Section 2.13 as an "ERISA Plan."
Except as disclosed on Section 2.13 (a) of the Company Disclosure Letter, no
Company Benefit Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA (a "Multiemployer Plan"). Neither the Company nor any
Commonly Controlled Entity has completely or partially withdrawn from any
Multiemployer Plan. Neither the Company nor any Commonly Controlled Entity has
suffered a 70% decline in "contribution base units" (within the meaning of
Section 4205(b)(1)(A) of ERISA) in any plan year beginning after 1988. No
termination liability to the Pension Benefit Guaranty Corporation or withdrawal
liability to any Multiemployer Plan that is material in the aggregate has been
or is reasonably expected to be incurred with respect to any Multiemployer Plan
by the Company or any Commonly Controlled Entity.
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(b) All Company Benefit Plans are in compliance with the
applicable terms of ERISA and the Code and any other applicable laws, rules and
regulations the breach or violation of which could result in a material
liability to the Company or any Commonly Controlled Entity.
(c) No ERISA Plan (as defined herein) which is a defined benefit
pension plan has any "unfunded current liability," as that term is defined in
Section 302(d)(8)(A) of ERISA, and the present fair market value of the assets
of any such plan equals or exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance with all
applicable legal requirements.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or any
employee of the Company or any of its affiliates from the Company or any of its
affiliates under any Company Benefit Plan or otherwise or (ii) materially
increase any benefits otherwise payable under any Company Benefit Plan.
(e) Except as set forth on Section 2.13(e) of the Company
Disclosure Letter, there are no employment, consulting, severance pay,
continuation pay, termination pay or indemnification agreements or other similar
agreements of any nature whatsoever (collectively, "Employment Agreements")
between the Company on the one hand, and any current or former stockholder,
officer, director, employee, consultant, or agent of the Company, on the other
hand, that are currently in effect. Except as set forth on Section 2.13 of the
Company Disclosure Letter, there are no Employment Agreements or any other
similar agreements to which the Company is a party under which the transactions
contemplated by this Agreement (i) will require any payment by the Company or
PSI, or any consent or waiver from any stockholder, officer, director, employee,
consultant or agent of the Company or PSI, or (ii) will result in any change in
the nature of any rights of any stockholder, officer, director, employee,
consultant or agent of the Company under any such Employment Agreement or other
similar agreement.
(f) Each of the retirement, pension, disability or other benefit
plans of the Company has been funded, administered and maintained in accordance
with its governing documents and all applicable laws and regulations. With
respect to any such plans that are funded wholly or in part through an insurance
policy, all premiums due thereunder have been paid in a timely fashion and there
will be no retroactive vote adjustment.
(g) The Company and its subsidiaries have fulfilled their
obligations under individual and collective labor agreements concluded with its
employees or covering its employees (except for instances of non-compliance that
do not either individually or in the aggregate have a Material Adverse Effect).
The Company and its subsidiaries have not concluded company-level collective
labor agreements that are currently in effect.
Section 2.14. Affiliate Arrangements. Except with respect to contracts,
----------------------
agreements and understandings (i) among the Company and one or more of its
subsidiaries (ii) among two or more subsidiaries of the Company or (iii) as set
forth in Schedule 2.14 of the Company Disclosure Letter, there exist no other
contracts, agreements or understandings (whether oral or written) between or
among the Company and its subsidiaries, on the one hand, and any Affiliates of
the Company (as such term is defined in Rule 144 under the Act) other than such
contracts,
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<PAGE>
agreements and understandings relating to the ordinary course of business
operations of the Company.
Section 2.15. Absence of Questionable Payments. No director, officer, agent,
--------------------------------
employee, or other person acting on behalf of the Company has, to the best
knowledge of Alta (after due inquiry) used any of the Company's funds for
improper or unlawful contributions, payment, gifts, or entertainment, or made
any improper or unlawful expenditures relating to political activity to
governmental officials or others. Neither the Company nor any director,
officer, agent, employee, or other person acting on behalf of the Company has,
to the best knowledge of Alta (after due inquiry) accepted or received any
improper or unlawful contributions, payments, gifts, or entertainment or
expenditures. The Company has adequate financial controls to prevent the making
or receiving of such improper or unlawful contributions, payments, gifts,
entertainment, or expenditures. The Company has not made sales of products,
either directly or indirectly, into embargoed countries in contravention of
applicable law.
Section 2.16. Agreements, Leases and Licenses. Section 2.16 of the Company
-------------------------------
Disclosure Letter contains a list of all:
(i) leases, licenses, contracts and agreements (other than those already
performed) calling for payments to or from the Company in an amount exceeding
$500,000 in any 12 month period (excluding contingent payments and amounts
indeterminate at the time of execution),
(ii) contracts that grant to any third party any exclusive rights of any kind
with respect to any of the Company's products or services,
(iii) contracts in an amount exceeding $ 150,000 (exclusive of unearned
commissions, bonuses or other performance based compensation) with officers,
employees, agents, consultants, advisors, salesmen, sales representatives,
distributors or dealers of the Company that are not cancelable by it on notice
of not longer than thirty (30) days, and
(iv) contracts that restrict the Company from competing with any person or
from carrying on its business anywhere in the world; including all amendments
thereto or modifications thereof (collectively the "Company Contracts"). Each
of the Company Contracts is valid, binding, effective, and enforceable against
the Company and each other party thereto in accordance with its terms, without
any defenses, setoffs, counterclaims or disputes of any nature and is in full
force and effect. The Company is not in default under any of the Company
Contracts and, to the best knowledge of Alta (after due inquiry), no other party
to any of the Company Contracts is in default thereunder, and to the knowledge
of Alta (after due inquiry) no event has occurred which with the passage of time
or the giving of notice or both would constitute a default under any of the
Company Contracts, except for defaults that in the aggregate have no material
adverse effect upon the business or operations of the Company. No purchase
commitment for materials, supplies, component parts or items of inventory of the
business to which the Company is a party is in excess of the ordinary, normal,
usual and current requirements of the business of the Company or at a price in
excess of the current reasonable market price. No Company Contract obligates
the Company (i) to provide products or services to third parties which the
Company knows or has reason to believe are at prices which would result in a net
loss on the sale or provision of such products or services, or which are
pursuant to terms or conditions it cannot reasonably expect to satisfy or
fulfill in their entirety, or (ii) to purchase or acquire from third parties
services, information, products, inventory or equipment in excess of the normal,
ordinary, usual and current requirements of the Company's business
- 9 -
<PAGE>
or at a price in excess of the current reasonable market price. The Company has
not received notice that any party to any of the Company Contracts intends to
cancel or terminate any Company Contract.
Section 2.17. Environmental and Health and Safety Matters. Neither the
-------------------------------------------
Company nor any of its subsidiaries have failed to comply with any applicable
environmental laws, regulations and ordinances relating to pollution, safety,
health or protection of the environment, including, without limitation, those
relating to containment, emissions, discharges, releases or threatened releases
of hazardous substances into the environment (the "Environmental Laws"), except
where such failure would not have a Material Adverse Effect as currently
conducted. Neither the Company nor any of its subsidiaries has received notice
(from a court, governmental agency or other governmental body) that it has any
potential liability with respect to any violation or alleged violation of any
Environmental Law.
Section 2.18. Intellectual Property. None of the patents, trademarks,
---------------------
service marks, trade names, trade secrets, copyrights and any other material
intellectual property rights that are used in the business of the Company (the
"Intellectual Property"), has been held or stipulated to be invalid in any
litigation or proceeding to which the Company is a party and of which Alta has
knowledge. Except as disclosed in Section 2.18 of the Company Disclosure
Letter, the validity of the Intellectual Property, and of the Company's rights
to the Intellectual Property, has not been questioned in any litigation or
proceeding currently pending or which (to Alta's knowledge) has been threatened,
and there exists no basis for a claim against the Company for infringement of
any third party's intellectual property. The Company has not received notice to
the effect that any product which it makes or sells, or the distribution or use
by it or another of any such product, or any service it performs in the course
of its business, may infringe any trademark, service mark, trade name,
copyright, patent, trade secret, or similar legally protectable right of
another. Alta is not aware of any infringement of the Intellectual Property by
third parties, or of any communication from any governmental agency stating that
the Company is not entitled to register, or receive patents for, any of its
Intellectual Property. None of the Company's employees or consultants is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote and secure the Intellectual Property of the Company
or that would conflict with its business as conducted except to the extent that
any such interference or conflict would not have a Material Adverse Effect.
Neither the execution nor delivery of this Agreement or any document to be
delivered in connection with the transaction contemplated hereby, nor the
carrying on of its business by its employees or consultants, nor the conduct of
its business as currently conducted, will conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any of such employees or
consultants of the Company is obligated except to the extent that any such
breach or default would not have a Material Adverse Effect. Each of the
Company's employees and consultants who participate or have participated in the
creation of Intellectual Property have executed enforceable agreements with the
Company assigning or licensing his or her rights in any Intellectual Property to
the Company. Alta does not believe it is or will be necessary to utilize any
inventions of any of the Company's employees or consultants (or persons it
currently intends to hire as service providers) made prior to their employment
by the Company (except for inventions that the Company currently owns or has a
right to utilize). No unlicensed invention or intellectual property right that
is owned by any employee or consultant of the Company or any other party is
necessary for the conduct of the Company business as presently conducted. The
Company is not making unauthorized use of any proprietary information of third
parties nor any confidential information in which any of its present or past
employees or
- 10 -
<PAGE>
other service providers has claimed a proprietary interest; and the Company is
not aware of any facts that would give rise to such a claim.
Section 2.19. Customer and Supplier Relationships; Warranty Claims. Other
----------------------------------------------------
than as set forth in Section 2.19 of the Company Disclosure Letter, the Company
has not received any notice that any customer (other than in the ordinary course
of business) intends to discontinue or alter the prices or terms of, or
substantially diminish, its relationship with the Company; which would
alteration or diminution have a Material Adverse Effect. Other than as set
forth in Section 2.19 of the Company Disclosure Letter, there are no outstanding
warranty claims against the Company with respect to products sold or services
rendered by the Company or any of its subsidiaries individually in excess of
$75,000 or material in the aggregate.
Section 2.20. Accounts Receivable and Notes Receivable. The accounts
----------------------------------------
receivable and notes receivable of the Company, other than those listed in
Section 2.20 of the Company Disclosure Letter, reflected on the books and
records of the Company as of December 31, 1995 represent bona fide claims which
the Company has against debtors for sales or services arising on or before such
date and are not subject to counterclaims, setoffs or deductions of any kind
other than those reflected in the balance sheet of the Company at December 31,
1995. The aggregate amount of customer advance payments (i.e., payments in
excess of actual work performed or materials supplied as of the date of such
payment) received by the Company with respect to such accounts receivable does
not exceed 6.5 million Swiss Francs. Substantially all of the accounts
receivable and notes receivable have been created since October 31, 1995,
pursuant to shipments of goods or services conforming to the terms of purchase
orders executed by and received from unrelated third parties in the normal
course of business. Such receivables have been recorded in accordance with the
Company's historical revenue recognition policy. Except as set forth in Section
2.20 of the Company Disclosure Letter, no third party account debtor is
delinquent in its payment by more than ninety days, no account debtor has
refused to pay its obligations for any reason, to the best knowledge of Alta,
there is no insolvent account debtor for which the Company has not taken
adequate reserves and no account receivable is pledged to any third party by the
Company (except to the extent pledged to secure bank loans to the Company and/or
its subsidiaries).
Section 2.21. Disclosure; Accuracy of Documents and Information. No
-------------------------------------------------
representation, warranty or statement made by Alta in this Agreement, or any
document furnished by the Company pursuant to the terms of this Agreement or in
connection with the transactions contemplated herein when taken together with
this Agreement in its entirety and all such documents, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
Section 2.22. Organization and Qualification; Subsidiaries. Alta is a
--------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted. When used in this Agreement in
connection with Alta, the term "Material Adverse Effect" means any change, event
or effect that is materially adverse to the business, financial condition or
results of operations of Alta, the Company and its subsidiaries taken as a
whole.
Section 2.23. Certificate of Incorporation and Bylaws. Alta has previously
---------------------------------------
furnished to PSI a complete and correct copy of its certificate of incorporation
and bylaws (or equivalent organizational documents) as amended to date. Such
certificate of incorporation and bylaws are
- 11 -
<PAGE>
in full force and effect. Alta is not in violation of any of the provisions of
its certificate of incorporation or bylaws or equivalent organizational
documents.
Section 2.24. [Intentionally Omitted]
Section 2.25. Ownership of Shares. Alta owns 95,329 Vicorp Shares of record
-------------------
and beneficially, free and clear of any liens, claims, encumbrances or
restrictions. Alta has good and marketable title to the Vicorp Shares and has
the absolute right, power and capacity to sell, assign and deliver the Vicorp
Shares to PSI, free and clear of all liens, claims, encumbrances and
restrictions. The Vicorp Shares to be delivered to PSI will not, as of the
Closing, be subject to any proxy or other restriction that would in anyway limit
the ability of the holder thereof to vote such Vicorp Shares or otherwise
exercise any rights or privileges of a holder of shares of Vicorp Stock under
the laws of the Netherlands Antilles.
Section 2.26. Regulation S. Alta (i) is not a U.S. person (as defined by
------------
Rule 902 of Regulation S), (ii) was not organized under the laws of any United
States jurisdiction and (iii) was not formed for the purpose of investing in
securities not registered under the Act. Alta executed this Agreement outside
the United States and no offer to purchase the Vicorp Shares was made to Alta in
the United States. Alta has been advised that the issuance of PSI Shares in the
Exchange will not be registered with the Securities and Exchange Commission
under the Act and such shares are being issued in reliance on Regulation S and
that PSI is relying on the truth and accuracy of the representations,
warranties, agreements and acknowledgements of Alta set forth in this Agreement
in order to determine the applicability of such provisions.
Section 2.27. Disclosure. Alta has received copies of the PSI SEC Reports
----------
(as hereinafter defined) and has relied upon independent investigation in
determining to enter into this Agreement and not relied upon any information or
representations made by third parties. The disclosure documents received by
Alta included statements to the effect that the PSI Shares will not be
registered under the Act and may not be offered or sold in the United States or
to U.S. Persons during the Restricted Period unless the PSI Shares are
registered or unless such resale is exempt from or not subject to the
registration requirements of the Act. Alta acknowledges that it has not
reviewed, and not requested to review, information regarding the operations of
PSI for the three month period ended February 29, 1995 which is to be set forth
in a Quarterly Report on Form 10-Q to be filed by PSI with the Securities and
Exchange Commission following the Closing Date.
ARTICLE III
[Intentionally Omitted]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PSI
As of the date hereof and as of the Closing , PSI represents and warrants to
Alta as follows:
Section 4.1. Organization and Qualification; Subsidiaries. Each of PSI and
--------------------------------------------
its subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws
- 12 -
<PAGE>
of the jurisdiction of its incorporation and has the requisite corporate power
and authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted. Each of PSI and its subsidiaries
is in possession of all Approvals necessary to own, lease and operate the
properties it purports to own, operate or lease and to carry on its business as
it is now being conducted, except where the failure to have such Approvals would
not, individually or in the aggregate, have a Material Adverse Effect (as
defined below). Each of PSI and its subsidiaries is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect. When used in this Agreement in connection with PSI or
any of its subsidiaries, the term "Material Adverse Effect" means any change,
event or effect that is materially adverse to the business, financial condition
or results of operations of PSI and its subsidiaries taken as a whole. Other
than wholly owned subsidiaries and except as disclosed in the PSI SEC Reports or
Section 4.3 of the PSI Disclosure Letter, PSI does not directly or indirectly
own any equity or similar interest in, or any interest convertible or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business, association or
entity.
Section 4.2. Certificate of Incorporation and Bylaws. PSI has previously
---------------------------------------
furnished to the Company a complete and correct copy of the certificate of
incorporation and bylaws as amended to date of PSI and each of its subsidiaries.
Such certificates of incorporation and bylaws are in full force and effect.
Neither PSI nor any of its subsidiaries is in violation of any of the provisions
of its certificate of incorporation or bylaws or equivalent organizational
documents.
Section 4.3. Capitalization. As of February 29, 1996, the authorized capital
--------------
stock of PSI consisted of (a) 30,000,000 shares of Common Stock and 2,415,945
shares of Class B Common Stock, par value $0.01 per share (the "Class B Stock"),
and (b) 50,000 shares of Preferred Stock, par value $.01 per share, of PSI (the
"PSI Preferred Stock"), 10,000 of which have been designated as Series A
Preferred Stock and are issued and outstanding. As of each date, (i) 11,372,612
shares of Common Stock were issued and outstanding and 2,415,945 shares of Class
B Stock were issued and outstanding, all of which Common Stock and Class B Stock
are validly issued, fully paid and nonassessable and not subject to any
preemptive rights, (ii) 132,937 shares of PSI Common Stock were held in treasury
by PSI or by subsidiaries of PSI and (iii) options to purchase 1,294,438 shares
of Common Stock were outstanding under PSI's 1992 Stock Option and Restricted
Stock Plan, PSI's Stock Option Plan for Outside Directors, and under equity
compensation arrangements. Except as set forth in Section 4.3 of the PSI
Disclosure Letter (as defined below), no change in such capitalization has
occurred between February 29, 1996 and the date hereof except issuances of PSI
Common Stock upon exercise of outstanding options. All of the outstanding
shares of PSI's capital stock have been duly authorized and validly issued and
are fully paid and nonassessable and not subject to preemptive rights. Except
as set forth in this Section 4.3 or as disclosed in the disclosure letter
delivered by PSI to the Company (the "PSI Disclosure Letter"), as of the date of
this Agreement, there are no options, warrants or other rights, agreements,
arrangements or commitments, in each case to which PSI or any of its
subsidiaries is a party, of any character relating to the issued or unissued
capital stock of PSI or any of its subsidiaries or obligating PSI or any of its
subsidiaries to issue or sell any shares of capital stock of, or other equity
interests in, PSI or any of its subsidiaries. All shares of Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, shall, and the
shares of Common Stock to be issued pursuant to the Exchange will be, duly
authorized, validly issued, fully
- 13 -
<PAGE>
paid and nonassessable and not subject to preemptive rights. Except as set
forth in Section 4.3 of the PSI Disclosure Letter, there are no obligations,
contingent or otherwise, of PSI or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of Common Stock or the capital stock of any
subsidiary or to provide funds to or make any material investment (in the form
of a loan, capital contribution or otherwise) in any such subsidiary or any
other entity other than guarantees of obligations of subsidiaries entered into
in the ordinary course of business. All of the outstanding shares of capital
stock of each of PSI's subsidiaries are duly authorized, validly issued, fully
paid and nonassessable and all such shares are owned by PSI or another
subsidiary free and clear of all security interests, liens, claims, pledges,
agreements, limitations in PSI's voting rights, charges or other encumbrances of
any nature whatsoever.
Section 4.4. Authority Relative to this Agreement. PSI has all necessary
------------------------------------
corporate power and authority to execute and deliver this Agreement, and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by PSI and
the consummation by PSI of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of PSI and
no other corporate proceedings on the part of PSI are necessary to authorize
this Agreement, or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by PSI and, assuming
the due authorization, execution and delivery by Alta, constitutes the legal
and binding obligations of PSI, enforceable against PSI in accordance with its
terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to creditors' rights generally and (ii)
the availability of injunctive relief and other equitable remedies.
Section 4.5. No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement by PSI do not,
and the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby by PSI will not, (i) conflict with or violate
the certificate of incorporation or bylaws of PSI or any of its subsidiaries;
(ii) subject to compliance with the requirements set forth in Section 4.5(b)
below, conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to PSI or any of its subsidiaries or by which their respective
properties are bound or affected; or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or alter the rights or obligations of any third party or PSI or
its subsidiaries under, or give to others any rights of termination, amendment,
acceleration, increased payments pursuant to or cancellation of, or result in
the creation of a lien or other encumbrance on any of the properties or assets
of PSI or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which PSI or any of its subsidiaries is a party or
by which PSI or any of its subsidiaries or any of their respective properties
are bound or affected, except in the cases of clauses (ii) and (iii) above, for
any such conflicts, violations, breaches, defaults or other alterations or
occurrences that would not prevent or delay consummation of the Exchange in any
material respect, or otherwise prevent PSI from performing its obligations under
this Agreement in any material respect, and would not have, individually or in
the aggregate, a Material Adverse Effect.
(b) The execution and delivery of this Agreement by PSI do not,
and the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby by PSI will not, require any consent, approval,
authorization or permit of, or registration or filing with or notification to,
any Governmental Entity except (i) the filing of documents to satisfy the
applicable requirements, if any, of the Exchange Act , (ii) filings under the
rules and
- 14 -
<PAGE>
regulations of the NASD, (iii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications
(A) would not prevent or delay consummation of the Exchange in any material
respect or otherwise prevent or delay in any material respect PSI from
performing its obligations under this Agreement or (B) would not, individually
or in the aggregate, have a Material Adverse Effect.
(c) PSI has no reason to believe that the consents, approvals,
permits, registrations, filings and notifications referred to in Section 4.5(b)
above will not be obtained or made in a timely manner.
Section 4.6. Compliance; Permits.
-------------------
(a) Neither PSI nor any of its subsidiaries is in conflict with,
or in default or violation (or in a situation which, after the giving of notice
or passage of time or both, would constitute a default or violation) of, (i) any
law, rule, regulation, order, judgment or decree applicable to PSI or any of its
subsidiaries or by which any of their respective properties is bound, or (ii)
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which PSI or any of its
subsidiaries is a party or by which PSI or any of its subsidiaries or any of
their respective properties is bound, except for any such conflicts, defaults or
violations which do not and would not have, individually or in the aggregate, a
Material Adverse Effect.
(b) PSI and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities which
are material to the operation of the business of PSI and its subsidiaries taken
as a whole (collectively, the "PSI Permits"). PSI and its subsidiaries are in
compliance with the terms of the PSI Permits, except where the failure to so
comply would not, individually or in the aggregate, have a Material Adverse
Effect.
Section 4.7. SEC Filings; Financial Statements.
---------------------------------
(a) PSI has made available to Alta a correct and complete copy
of each report, schedule, registration statement and definitive proxy statement
filed by PSI with the SEC on or after August 31, 1994 and prior to the date of
this Agreement (the "PSI SEC Reports"), which are all the forms, reports and
documents required to be filed by PSI with the SEC since that date. As of their
respective dates, the PSI SEC Reports (i) complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable thereto, and (ii)
did not at the time they were filed (or, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. None of PSI's
subsidiaries is required to file any reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the PSI SEC Reports complied
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, had
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the SEC) and each
fairly presented the consolidated financial position of PSI and its consolidated
subsidiaries in all material respects as at the respective dates thereof and the
consolidated results of its operations
- 15 -
<PAGE>
and cash flows for the periods indicated (subject, in the case of the unaudited
interim financial statements, to non-normal audit adjustments, which were not
and are not expected, individually or in the aggregate, to be material in
amount).
(c) Except as disclosed in Section 4.7 of the PSI Disclosure
Letter, neither PSI nor any of its subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations or financial condition of PSI
and its subsidiaries taken as a whole, except liabilities (i) provided for in
PSI's balance sheet as of August 31, 1995 filed in the PSI SEC Reports or (ii)
incurred since August 31, 1995 in the ordinary course of business, none of which
are material to the business, results of operations or financial condition of
PSI and its subsidiaries, taken as a whole.
Section 4.8. Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
the PSI SEC Reports or in Section 4.8 of the PSI Disclosure Letter or as
contemplated by this Agreement, since August 31, 1995, (a) PSI and its
subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and have not taken any of the actions set
forth in Section 5.3(b), and (b) there has not been (i) any transaction,
commitment, dispute or other event or condition (financial or otherwise) of any
character (whether or not in the ordinary course of business), individually or
in the aggregate, having or which could reasonably be expected to have a
Material Adverse Effect or (ii) any material change by PSI in its accounting
methods, principles or practices except as required by concurrent changes in
GAAP.
Section 4.9. Absence of Litigation. Except as disclosed in Section 4.9 of
---------------------
the PSI Disclosure Schedule, there are no claims, actions, suits, investigations
or proceedings pending or, to the best knowledge of PSI, threatened against PSI
or any of its subsidiaries before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign, that,
individually or in the aggregate, would have a Material Adverse Effect on PSI,
nor is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against PSI or any of its subsidiaries having
or which would have a Material Adverse Effect.
Section 4.10. Information Provided to Stockholders. None of the information
-------------------------------------
supplied or to be supplied by PSI in disclosure materials to be provided to
stockholders of the Company in connection with the consideration of such
stockholders of the Exchange will, at the time such materials were or shall be
sent to stockholders, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made, in light
of the circumstances under which they are made, not misleading.
Section 4.11. Taxes. PSI and each of its subsidiaries, and any consolidated,
-----
combined, unitary or aggregate group for Tax purposes of which PSI or any of its
subsidiaries is or has been a member has timely filed all Tax Returns required
to be filed by it or requests for extensions to file such returns have been
timely filed, granted and have not expired, except to the extent that such
failures to file or to have extensions granted that remain in effect
individually and in the aggregate would not have a Material Adverse Effect, and
all such returns were complete and accurate in all material respects. In
addition, (a) no material claim for unpaid Taxes has become a lien against the
property of PSI or any of its subsidiaries or is being asserted against PSI or
any of its subsidiaries, (b) no audit of any Tax Return of PSI or any of its
subsidiaries is being conducted by a Tax authority (i) as of the date of this
Agreement and
- 16 -
<PAGE>
(ii) which, as of the Closing Date, has had or could reasonably be expected to
have, a Material Adverse Effect, (c) no extension of the statute of limitations
on the assessment of any Taxes has been granted by PSI or any of its
subsidiaries and is currently in effect (i) as of the date of this Agreement and
(ii) which, as of the Closing Date, has had or could reasonably be expected to
have a Material Adverse Effect
Section 4.12. Brokers. No broker, finder or investment banker is entitled to
-------
any brokerage, finder's or other fee or commission in connection with the
Exchange and the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of PSI.
Section 4.13. [Intentionally Omitted].
Section 4.14. Employee Benefit Plans.
-----------------------
(a) PSI has delivered or made available to the Company prior to
the execution of this Agreement true and complete copies (or, in the case of
bonus or other incentive plans, summaries thereof) of all material pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus or other material incentive plans, all
other material written employee programs, arrangements or agreements, whether
arrived at through collective bargaining or otherwise, all material medical,
vision, dental or other health plans, all life insurance plans and all other
material employee benefit plans or fringe benefit plans, including, without
limitation, all "employee benefit plans" as that term is defined in Section 3(3)
of ERISA, currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by PSI or any entity required to be aggregated with PSI pursuant
to Section 414 of the Code (each such entity being referred to in this Section
4.14 as a "Commonly Controlled Entity") for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
and under which employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries are eligible to participate (collectively,
the "PSI Benefit Plans"). Any of the PSI Benefit Plans which is an "employee
pension benefit plan," as that term is defined in Section 3(2) of ERISA, is
referred to in this Section 4.14 as an "ERISA Plan."
No PSI Benefit Plan is or has been a multiemployer plan. Neither PSI
nor any Commonly Controlled Entity has suffered a 70% decline in "contribution
base units" (within the meaning of Section 4205(b)(i)(A) of ERISA) in any plan
year beginning after 1988.
(b) All PSI Benefit Plans are in compliance with the applicable terms
of ERISA and the Code and any other applicable laws, rules and regulations the
breach or violation of which could result in a material liability to PSI or any
of its subsidiaries.
(c) No ERISA Plan (as defined herein) which is a defined benefit
pension plan has any "unfunded current liability," as that term is defined in
Section 302(d)(8)(A) of ERISA, and the present fair market value of the assets
of any such plan equals or exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance with all
applicable legal requirements.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise)
- 17 -
<PAGE>
becoming due to any director or any employee of PSI or any of its affiliates
from PSI or any of its affiliates under any PSI Benefit Plan or otherwise, (ii)
materially increase any benefits otherwise payable under any PSI Benefit Plan,
or (iii) result in any acceleration of the time of payment or vesting of any
such benefits to any material extent.
Section 4.15. Environmental and Health and Safety Matters. Neither PSI nor
-------------------------------------------
any of its subsidiaries have failed to comply with any applicable environmental
laws, regulations and ordinances relating to pollution, safety, health or
protection of the environment, including, without limitation, those relating to
containment, emissions, discharges, releases or threatened releases of hazardous
substances into the environment (the "Environmental Laws"), except where such
failure would not have a Material Adverse Effect on the business or operations
of PSI as currently conducted or as anticipated to be conducted. Neither PSI nor
any of its subsidiaries has received notice (from a court or governmental
agency) that it has any potential liability with respect to any violation or
alleged violation of any Environmental Law.
Section 4.16. Intellectual Property. None of the material patents,
---------------------
trademarks, service marks, trade names, trade secrets, copyrights and any other
material intellectual property rights that are used in the business of PSI (the
"PSI Intellectual Property"), has been held or stipulated to be invalid in any
litigation or proceeding to which PSI is a party. Except as disclosed in
Section 4.16 of the PSI Disclosure Letter, the validity of the PSI Intellectual
Property, and of PSI's rights to the PSI Intellectual Property, has not been
questioned in any litigation or proceeding currently pending or which (to PSI's
knowledge) has been threatened, and to PSI's knowledge there exists no basis for
a claim against PSI for infringement of any third party's intellectual property.
PSI has not received notice to the effect that any product which it makes or
sells, or the distribution or use by it or another of any such product, or any
service it performs in the course of its business, may infringe any trademark,
service mark, trade name, copyright, patent, trade secret, or similar legally
protectable right of another. PSI is not aware of any infringement of the
Intellectual Property by third parties. PSI has not received any communication
from any governmental agency stating that PSI is not entitled to register, or
receive patents for, any of its Intellectual Property. None of PSI's employees
or consultants is obligated under any contract or other agreement (including
licenses, covenants or commitments of any nature), or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
the use of his or her best efforts to promote and secure the Intellectual
Property of PSI or that would conflict with its business as conducted except to
the extent that any such interference or conflict would not have a Material
Adverse Effect. Neither the execution nor the delivery of this Agreement or any
document to be delivered in connection with the transaction contemplated hereby,
nor the carrying on of its business by its employees or consultants, nor the
conduct of its business as currently conducted, will conflict with or result in
a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees or
consultants of PSI is obligated except to the extent that any such breach or
default would not have a Material Adverse Effect. Each of PSI's current or
former employees and consultants who participate or have participated in the
creation of Intellectual Property have executed enforceable agreements with PSI
assigning or licensing his or her rights in any Intellectual Property to PSI.
PSI does not believe it is or will be necessary to utilize any inventions of any
of its employees or consultants (or persons it currently intends to hire as
service providers made prior to their employee by it (except for inventions that
PSI currently owns or has a right to utilize). No unlicensed invention that is
owned by any employee or consultant of PSI is necessary for the conduct of the
business of PSI, as presently conducted. PSI is not making unauthorized use of
any proprietary information of third parties nor any confidential information in
which any of its present or past employees or
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other service providers has claimed a proprietary interest; and PSI is not aware
of any facts that would give rise to such a claim.
Section 4.17. Disclosure; Accuracy of Documents and Information. No
-------------------------------------------------
representation, warranty or statement made by PSI in this Agreement, or any
document furnished by PSI pursuant to the terms of this Agreement or in
connection with the transaction contemplated herein when taken together with
this Agreement in its entirety and all such documents, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
ARTICLE V
CONDUCT AND TRANSACTIONS PRIOR TO
CLOSING; ADDITIONAL AGREEMENTS
Section 5.1. Information and Access. From the date of this Agreement and
----------------------
continuing until the Closing Date, Alta agrees to use its best efforts to cause
the Company and each of its subsidiaries to afford, and will afford, and with
respect to clause (b) below, to cause its independent auditors to afford, and
PSI agrees as to itself and its subsidiaries that it shall afford and, with
respect to clause (b) below, shall cause its independent auditors to afford, (a)
to the officers, independent auditors, counsel and other representatives of the
other reasonable access to its and its subsidiaries' properties, books, records
(including Tax Returns filed and those in preparation) and personnel in order
that the other may have a full opportunity to make such investigation as it
reasonably desires to make of each, and (b) to the independent auditors of the
other, reasonable access to the audit work papers and other records of its
independent auditors. No investigation pursuant to this Section 5.1 shall
affect or otherwise obviate or diminish any representations and warranties of
any party or conditions to the obligations of any party. Except as required by
law or stock exchange or NASD regulation, any information furnished pursuant to
this Section 5.1 shall be treated confidentially by such party, its officers,
independent accountants and other representatives and advisors (except for such
information as has otherwise been made public (other than by reason of a
violation of this Section 5.1)).
Section 5.2. Conduct of Business of the Company. Except as contemplated by
----------------------------------
this Agreement (including the Company Disclosure Letter), during the period from
the date of this Agreement and continuing until the Closing Date or until the
termination of this Agreement pursuant to Section 9.1, Alta shall use its best
efforts to cause the Company and its subsidiaries to (i) conduct their
respective businesses in the ordinary and usual course consistent with past
practice and (ii) use reasonable efforts to maintain and preserve intact its and
their business organization to keep available the services of its and their
officers and employees and to maintain satisfactory relations with material
franchisors, licensors, franchisees, licensees, suppliers, contractors,
distributors, customers and others having business relationships with it.
Without limiting the generality of the foregoing and except as provided in this
Agreement (including the Company Disclosure Letter), prior to the Closing Date,
Alta shall use its best efforts to ensure that neither the Company nor any of
its subsidiaries shall without the prior written consent of PSI:
(a) declare, set aside or pay any dividends on or make any other
distribution in respect of any of its capital stock, except dividends or
distributions declared and paid by a subsidiary of the Company only to the
Company or another subsidiary of the Company;
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<PAGE>
(b) split, combine or reclassify any of its capital stock or
issue or authorize or propose the issuance or authorization of any other
securities in respect of, in lieu of, or in substitution for shares of its
capital stock or repurchase, redeem or otherwise acquire any shares of its
capital stock;
(c) issue, deliver, pledge, encumber or sell, or authorize or
propose the issuance, delivery, pledge, encumbrance or sale of, or purchase or
propose the purchase of, any shares of its capital stock or securities
convertible into, or rights, warrants or options to acquire, any such shares of
capital stock or other convertible securities (other than the issuance of such
capital stock upon the exercise of options in accordance with the Company Option
Plans outstanding on the date of this Agreement in accordance with their present
terms), authorize or propose any change in its equity capitalization, or, except
as contemplated by this Agreement (including the Company Disclosure Letter),
amend any of the financial or other economic terms of any agreement relating
thereto;
(d) amend its certificate of incorporation or bylaws in any
manner;
(e) except in the ordinary course of business, consistent with
past practice (i) create, incur or assume any long-term debt or any short-term
debt for borrowed money other than under existing lines of credit; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except its
subsidiaries in the ordinary course of business and consistent with past
practices; or (iii) make any loans, advances or capital contributions to, or
investments in, any other person, except loans, advances or capital
contributions made to the Company or to a subsidiary of the Company by the
Company or another subsidiary of the Company;
(f) (i) except in the ordinary course of business, consistent
with past practice, increase in any manner the compensation of any of its
directors, officers or other employees; (ii) pay or agree to pay any pension,
retirement allowance or other employee benefit not required, or enter into or
agree to enter into any agreement or arrangement with such director, officer or
employee, whether past or present, relating to any such pension, retirement
allowance or other employee benefit, except as required under currently existing
agreements, plans or arrangements; (iii) grant any severance or termination pay
to, or enter into any employment or severance agreement with any of its
directors, officers or other employees, other than the grant of severance or
termination payments made in accordance with the Company's severance policies or
programs as in effect on the date hereof and other than employment agreements
entered into in the ordinary course of business; or (iv) except as may be
required to comply with applicable law or pursuant to renewals of employee
benefit plans and arrangements in the ordinary course of business and consistent
with past practice, become obligated (other than pursuant to any new or renewed
collective bargaining agreement) under any new pension plan, welfare plan,
multiemployer plan, employee benefit plan, benefit arrangement, or similar plan
or arrangement, which was not in existence on the date hereof, including any
bonus, incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or other benefit
plan, agreement or arrangement, or employment or consulting agreement with or
for the benefit of any person, or amend any of such plans or any of such
agreements in existence on the date hereof;
(g) enter into any other agreements, commitments or contracts,
except (in each case, in the ordinary course of business and consistent with
past practice) agreements, commitments or contracts for the purchase, sale or
lease of goods or services, each of which acquisition or sale does not,
individually, exceed $250,000;
- 20 -
<PAGE>
(h) except in accordance with Section 5.4, recommend, propose or
announce an intention to authorize, recommend or propose, or enter into any
agreement in principle or an agreement with respect to, any plan of liquidation
or dissolution, any acquisition of a material amount of assets or securities,
any sale, transfer, lease, license, or other disposition of a material amount of
assets or securities or any change in its capitalization, or any entry into a
material contract or any amendment or modification of any material contract or
any release or relinquishment of any material contract rights;
(i) take any action that would or could reasonably be expected
to result in any of its representations and warranties set forth in this
Agreement being untrue or in any of the conditions to the Exchange set forth in
Article VI not being satisfied; or
(j) authorize or enter into any contract, agreement, commitment
or arrangement to do any of the foregoing;
(k) fail to provide PSI with all non-privileged information
relating to any arbitration or litigation, wherever commenced, that relates in
any manner to this Agreement or the transactions contemplated hereby.
Section 5.3. Conduct of Business of PSI. Except as contemplated by this
--------------------------
Agreement (including the PSI Disclosure Letter), during the period from the date
of this Agreement and continuing until the Closing Date or until the termination
of this Agreement pursuant to Section 9.1, (a) PSI and its subsidiaries shall
conduct their respective businesses in the ordinary and usual course consistent
with past practice, and (b) neither PSI nor any of its subsidiaries shall
without the prior written consent of the Company:
(i) declare, set aside or pay any dividends on or make any
other distribution in respect of any of its capital stock;
(ii) split, combine or reclassify any of its capital stock or
issue or authorize or propose the issuance or authorization of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or repurchase, redeem or otherwise acquire any shares of its
capital stock;
(iii) issue, deliver, pledge, encumber or sell, or authorize or
propose the issuance, delivery, pledge, encumbrance or sale of, or purchase or
propose the purchase of, any shares of its capital stock or securities
convertible into, or rights, warrants or options to acquire, any such shares
of capital stock or other convertible securities (other than (A) the issuance
of such capital stock upon the exercise or conversion of options outstanding
on the date of this Agreement in accordance with their present terms and
identified in Section 5.3 hereof, (B) the granting of options or stock to
employees in the ordinary course of business and the issuance of PSI Common
Stock upon exercise thereof or (C) pursuant to the terms of the Retirement
Savings Plan and 1992 Stock Option and Restricted Stock Plan) or authorize or
propose any change in its equity capitalization, or, except as contemplated by
this Agreement (including the PSI Disclosure Letter), amend any of the
financial or other economic terms of such securities or the financial or other
economic terms of any agreement relating to such securities;
(iv) amend its certificate of incorporation or bylaws in any
manner;
- 21 -
<PAGE>
(v) except for a pending acquisition of BFD Productions, Inc.,
acquire or agree to acquire by merging or consolidating with, or by purchasing
or otherwise acquiring any material portion of the capital stock or the assets
of, any business or any corporation, partnership, association or other
business organization or division thereof material to PSI and its subsidiaries
considered as a whole;
(vi) take any action that would or could reasonably be expected
to result in any of its representations and warranties set forth in this
Agreement being untrue or in any of the conditions to the Exchange set forth
in Article VI not being satisfied; or
(vii) authorize or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
Section 5.4. Negotiation With Others.
-----------------------
(a) Unless and until this Agreement shall have been terminated
in accordance with its terms, the Company and Alta shall not, directly or
indirectly, through any officer, director, employee, representative or agent of
the Company or any of its subsidiaries, solicit or encourage (including by way
of furnishing nonpublic information) or take other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to an Acquisition Proposal (as defined below), or engage in any
discussions or negotiations relating thereto or in furtherance thereof or accept
any Acquisition Proposal; provided, however, that nothing contained in this
-------- -------
Section 5.4 shall prohibit the Company, or its Board of Directors, from making
any disclosure to its stockholders that, in the judgment of its Board of
Directors in accordance with, and based upon, the advice of outside counsel, is
required under applicable law. For purposes of this Agreement, "Acquisition
Proposal" means any offer to acquire all or any substantial part of the business
and properties or capital stock of the Company and its subsidiaries, whether by
merger, consolidation, sale of assets, tender offer or similar transaction or
series of transactions involving the Company or any subsidiaries of the Company.
(b) Notwithstanding Section 5.4(a), the Board of Directors of
the Company, in the exercise of its fiduciary duties and only to the extent
required by applicable law as determined in good faith by the Board of Directors
of the Company, in accordance with, and based upon, the advice of outside
counsel, may (i) furnish information (including, without limitation,
confidential information) concerning the Company to a third party who makes an
unsolicited request for such information for the purpose of making an
Acquisition Proposal, and (ii) engage in discussion or negotiations with a third
party who submits in writing a statement of interest in making an Acquisition
Proposal that the Board of Directors believes is reasonably capable of being
consummated, provided, in the case of clause (i) or (ii) hereof, that PSI shall
--------
have been notified in writing of such Acquisition Proposal or request for
information, including the principal financial terms and conditions thereof, and
shall be kept informed as to the status of any discussions or negotiations
referred to in clause (ii) above.
Upon compliance with the foregoing, the Company shall be
entitled to (i) withdraw or modify its recommendation referred to in Section
2.12 following receipt of a Superior Proposal (as defined below), and approve
and recommend to the stockholders of the Company a Superior Proposal, and (ii)
enter into an agreement with such third party concerning a Superior Proposal. A
"Superior Proposal" is an Acquisition Proposal that the Board of Directors
believes (A) based on advice of its financial advisor, is reasonably be likely
to be
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<PAGE>
superior to the transactions contemplated by this Agreement from a financial
point of view and (B) is reasonably capable of being consummated.
(c) If the Company or any of its subsidiaries receives any
unsolicited offer or proposal to enter negotiations relating to an Acquisition
Proposal, the Company shall promptly notify PSI thereof, including information
as to the identity of the offeror or the party making any such offer or proposal
and the principal financial terms and conditions of such offer or proposal, as
the case may be.
(d) Subject to the provisions of Section 5.4(b), the Company
shall immediately cease and cause to be terminated any existing discussions or
negotiations with any parties (other than PSI) conducted prior to the date of
this Agreement with respect to any of the foregoing.
Section 5.5. Stockholders' Meetings. The Company shall hold a meeting of its
----------------------
stockholders as promptly as practicable for the purpose of voting upon the
approval and adoption of this Agreement and the transactions contemplated
herein.
Section 5.6. Agreements to Take Reasonable Action.
------------------------------------
(a) Each Party shall take, and shall cause its subsidiaries to
take, or, in the case of Alta, to use its best efforts to cause the Company and
each of its subsidiaries to take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it or any of its
subsidiaries or, in the case of Alta, on the Company or any of its subsidiaries
with respect to the Exchange and shall take all reasonable actions necessary or
advisable to cooperate promptly with and furnish information to the other
parties in connection with any such requirements imposed upon it or any of its
subsidiaries in connection with the Exchange. Each party shall take, and shall
cause its subsidiaries to take or in the case of Alta to use its best efforts to
cause the Company and each of its subsidiaries to take, all reasonable actions
necessary or advisable (i) to obtain (and will take all reasonable actions
necessary to promptly cooperate with the other parties in obtaining) any
clearance, consent, authorization, order or approval of, or any exemption by,
any Governmental Entity, or other third party, required to be obtained or made
by it or any of its subsidiaries (or by the other parties or any of their
respective subsidiaries) or, in the case of Alta, on the Company or any of its
subsidiaries in connection with the Exchange or the taking of any action
contemplated by this Agreement; (ii) to lift, rescind or mitigate the effect of
any injunction or restraining order or other order adversely affecting its
ability to consummate the transactions contemplated hereby; (iii) to fulfill all
conditions applicable to the parties pursuant to this Agreement; and (iv) to
prevent, with respect to a threatened or pending temporary, preliminary or
permanent injunction or other order, decree or ruling or statute, rule,
regulation or executive order, the entry, enactment or promulgation thereof, as
the case may be; provided, however, that with respect to clauses (i) through
-------- -------
(iv) above, the parties will take only such curative measures (such as licensing
and divestiture) as each of the Parties determines to be reasonable.
(b) Subject to the terms and conditions of this Agreement, each
of the parties shall use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement,
subject to the appropriate approval of the stockholders of the Company.
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<PAGE>
Section 5.7. Consents. PSI and Alta shall each use all reasonable efforts to
--------
obtain the consent and approval of, or effect the notification of or filing
with, each person or authority whose consent or approval is required in order to
permit the consummation of the Exchange and the transactions contemplated by
this Agreement.
Section 5.8. NASDAQ Quotation. PSI shall use its reasonable efforts to cause
----------------
the shares of Common Stock issuable to the stockholders of the Company in the
Exchange to be eligible for quotation on the NASDAQ Small Cap Market and/or the
Boston Stock Exchange on the 41st day following the Closing.
Section 5.9. Public Announcements. PSI and Alta shall consult with each
--------------------
other before issuing any press release or otherwise making any public statements
with respect to the Exchange and shall not issue any such press release or make
any such public statement prior to such consultation except as may be required
by law.
Section 5.10. Notification of Certain Matters. Alta shall give prompt notice
-------------------------------
to PSI, and PSI shall give prompt notice to Alta, of the occurrence, or failure
to occur, of any event, which occurrence or failure to occur would be likely to
cause (a) any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date of the
Agreement to the Closing Date, or (b) any material failure of Alta or PSI, as
the case may be, or of any officer, director, employee or agent thereof, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement. Notwithstanding the foregoing, the
delivery of any notice pursuant to this Section shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1. Conditions to Each Party's Obligation to Close. The respective
----------------------------------------------
obligation of each party to effect the transactions set forth herein is subject
to the satisfaction prior to the Closing Date of the following conditions:
(a) Shareholder Approval. The terms of this Agreement and the transactions
--------------------
contemplated herein shall have been approved by the requisite number of holders
of Vicorp Stock in accordance with applicable law and the Company's certificate
of incorporation.
(b) Governmental Entity Approvals. All material authorizations, consents,
-----------------------------
orders or approvals of, or declarations or filings with, or expiration of
waiting periods imposed by, any Governmental Entity necessary for the Exchange
and the consummation of the transactions contemplated by this Agreement shall
have been filed, expired or been obtained, as the case may be, other than those
with respect to which, individually or in the aggregate, the failure to be
filed, to expire or to be obtained would not have a Material Adverse Effect on
the Company or PSI.
(c) No Injunctions or Restraints; Illegality. No temporary restraining
----------------------------------------
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Exchange shall be in effect; and there shall
not be any action taken, or any statute, rule, regulation or
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<PAGE>
order (whether temporary, preliminary or permanent) enacted, entered or enforced
which makes the consummation of the Exchange illegal or prevents or prohibits
the Exchange.
Section 6.2. Conditions of Obligations of PSI. The obligations of PSI to
--------------------------------
effect the Exchange are further subject to the satisfaction of the following
additional conditions, unless waived in writing by PSI:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Alta set forth in this Agreement shall be true and correct or, in
the case of representations and warranties not containing any materiality
qualifier, including, without limitation, "Material Adverse Effect," shall be
true and correct in all material respects (i) as of the date hereof and (ii) as
of the Closing Date, as though made on and as of the Closing Date (provided
--------
that, in the cases of clauses (i) and (ii), any such representation and warranty
made as of a specific date shall be true and correct as of such specific date),
and PSI shall have received a certificate signed by a Director of Alta to such
effect.
(b) Performance of Obligations of Alta. Alta shall have
----------------------------------
performed in all material respects all obligations and covenants, taken as a
whole, required to be performed by it under this Agreement prior to or as of the
Closing Date.
(c) Consents. PSI shall have received duly executed copies of
--------
all material third-party consents and approvals contemplated by this Agreement
or the Company Disclosure Letter to be obtained by Alta, in form and substance
reasonably satisfactory to PSI, except for those consents with regard to which
the failure of PSI to so receive them would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
(d) Stockholder Agreement. Alta Investissements S.A., Primwest
---------------------
Holding N.V.,Vulcan Ventures Incorporated, RMS Limited Partnership and PSI shall
have executed a Stockholders' Agreement in the form attached as Exhibit C.
(e) Legal Opinion. PSI shall have received a legal opinion from
-------------
Jones, Day, Reavis & Pogue, U.S. counsel to Alta and Promes, Trenite Van Doorne,
Netherlands Antilles counsel to the Company in form and substance reasonably
satisfactory to PSI's counsel.
(f) Supervisory Board. As of the Closing, Alta shall have
-----------------
caused the Supervisory Board of the Company to have resigned and given
irrevocable instructions to Equity Trust as Managing Director to accept
instructions regarding the Company from nominees of PSI the effect of which is
to provide PSI with control of the operations of the Company.
(g) Minimum Number of Vicorp Shares. Alta shall own and have
-------------------------------
agreed to deliver to PSI in the Exchange Shares of Vicorp Stock representing at
least ninety percent of then issued and outstanding capital stock of Vicorp.
(h) Termination of Subscription Right. Alta and Vicorp shall
---------------------------------
have terminated that certain stock subscription right pursuant to which Alta is
obligated to subscribe for 8,094 shares of Vicorp Stock at 223 Swiss Francs per
share.
Section 6.3. Conditions of Obligations of Alta. The obligation of Alta to
----------------------------------
effect the Exchange is subject to the satisfaction of the following conditions,
unless waived in writing by Alta;
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<PAGE>
(a) Representations and Warranties. The representations and
------------------------------
warranties of PSI set forth in this Agreement shall be true and correct or, in
the case of representations and warranties not containing any materiality
qualifier, including, without limitation, "Material Adverse Effect," shall be
true and correct in all material respects (i) as of the date hereof and (ii) as
of the Closing Date, as though made on and as of the Closing Date (provided
--------
that, in the cases of clauses (i) and (ii), any such representation and warranty
made as of a specific date shall be true and correct as of such specific date),
and the Company shall have received a certificate signed by the Chief Financial
Officer of PSI to such effect.
(b) Performance of Obligations of PSI. PSI shall have performed
---------------------------------
in all material respects all obligations and covenants, taken as a whole,
required to be performed by it under this Agreement prior to or as of the
Closing Date, and Alta shall have received a certificate signed by the Chief
Financial Officer of PSI to such effect.
(c) Consents. Alta shall have received duly executed copies of
--------
all material third-party consents and approvals contemplated by this Agreement
and the PSI Disclosure Letter to be obtained by PSI, in form and substance
reasonably satisfactory to Alta, except those consents the failure to so
receive, would not, individually or in the aggregate, have a Material Adverse
Effect on PSI.
(d) Stockholder Agreement. Alta, Primwest Holding N.V., Vulcan
---------------------
Ventures Incorporated, RMS Limited Partnership and PSI shall have entered into a
Stockholders' Agreement in the form attached as Exhibit C.
(e) Legal Opinion. Alta shall have received a legal opinion
-------------
from Baker & McKenzie, counsel to PSI in form and substance reasonably
satisfactory to Alta's counsel.
ARTICLE VII
POST CLOSING COVENANTS
Section 7.1. Stock Options. Within ninety days of the Closing, PSI shall
-------------
issue options to purchase Common Stock to the individuals, for the number of
shares and at the exercise price set forth in Exhibit D attached hereto.
Section 7.2 Covenants of Alta. Alta covenants and agrees (i) not to enter
-----------------
into any short sales with respect to the capital stock of PSI at any time after
the Closing Date and prior to the expiration of the Restricted Period; (ii) to
notify PSI of any events which would cause the representations and warranties
set forth in Section 2.26 to be or become untrue or breached at any time after
the execution of this Agreement and prior to the expiration of the Restricted
Period; and (iii) not to take any action that would cause PSI to be subject to
any claim for commission or other fee or remuneration by any broker, finder, or
other person and PSI is hereby indemnified against any such claim caused by the
actions of Alta or any of their employees or agents.
Section 7.3 Cooperation. Each of the parties covenants and agrees that,
-----------
following the Closing, it shall cooperate fully with the other and PSI shall
cause the Company to cooperate with Alta with respect to any arbitration and
litigation, wherever and whenever commenced, that relates in any way to this
Agreement, the transactions contemplated hereby, or any of the capital
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<PAGE>
stock of the Company. Cooperation for purposes of the preceding sentence shall
include, but not be limited to, affording the other party (and its legal
counsel) reasonable access to its officers, auditors, counsel and other
representatives and its and its subsidiaries' properties, books and records.
Section 7.4 Alta Debt. PSI covenants and agrees that, within 90 days after
----------
the Closing, it shall use its best efforts to be substituted for Alta as the
guarantor of certain obligations of the Company to the former shareholders of
Vicorp Interactive Services, Inc.
Section 7.5 Minority Shareholders. Alta covenants and agrees to use its best
---------------------
efforts to cause shareholders of the Company other than Alta to agree to
exchange Vicorp Stock owned by them for Common Stock on substantially the same
terms as set forth herein.
Section 7.6 Debt Repayment. PSI covenants and agrees that with respect to
--------------
the debt obligation of Vicorp to Alta in the foreign currency equivalent of
about CHF 1,412,500 in principal plus accrued interest, PSI shall cause Vicorp
(a) to convert such principal and interest to a U.S. dollar equivalent as of the
Closing Date (b) on January 16, 1997, to repay such amount plus interest accrued
at the rate of 6 percent simple interest.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Survival of Representations, Warranties and Covenants.
-----------------------------------------------------
Notwithstanding any investigation conducted before or after the Closing, and
notwithstanding any knowledge or notice of any facts or circumstances which any
party hereto may have as a result of such investigation or otherwise, each party
hereto will be entitled to rely upon the other parties' representations and
warranties set forth in this Agreement (as qualified by the Company Disclosure
Letter in the case of representations set forth in Article II and the PSI
Disclosure Letter in the case or representations set forth in Article IV hereto)
and upon the other party's covenants set forth in this Agreement. The
obligations of Alta and PSI, with respect to each of their respective
representations and warranties, will survive the Closing and continue in full
force and effect until the first anniversary of the Closing Date (the
"Termination Date"), at which time such representations and warranties shall
expire (except for the representations and warranties in Sections 2.25 and 4.3
which shall not expire); provided, however, that thereafter such liability shall
-------- -------
continue to exist for any indemnity claim made hereunder prior to the
Termination Date, and until such time as such indemnity claim has been finally
decided, settled or adjudicated and provided further that the obligations of
Alta set forth in Section 8.2 (b) hereof shall not terminate on the Termination
Date and shall continue indefinitely.
Section 8.2. Indemnification from Alta.
-------------------------
(a) From and after the Closing, Alta shall indemnify and hold
harmless PSI and its officers, directors, employees, Affiliates, successors and
permitted assigns (collectively, the "PSI Indemnitees") from all Losses (as
hereinafter defined) resulting from a breach by Alta of any of its
representations, warranties, covenants or obligations under this Agreement.
Except for Losses with respect to which PSI is entitled to indemnification under
8.2(b) below and as to which the following limitations shall not apply, unless
and until the Losses incurred by any of the PSI Indemnitees with respect to a
breach by Alta of any of its representations, warranties, covenants or
obligations exceed two hundred fifty thousand U.S. Dollars ($250,000) in the
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<PAGE>
aggregate the PSI Indemnitees shall not be entitled to recovery under this
Article VIII. At such time as the Losses incurred by the PSI Indemnitees
resulting from a breach or breaches by Alta of any of its representations,
warranties, covenants or obligations under this Agreement exceed two hundred
fifty thousand U.S. Dollars ($250,000) in the aggregate, the PSI Indemnitees
shall be entitled to recovery for all Losses in excess of two hundred fifty
thousand U.S. Dollars ($250,000). The aggregate maximum liability of Alta under
this Paragraph (a) shall be eight million U.S. Dollars $8,000,000; provided,
--------
however, there shall be no limitation on Losses resulting from a breach or
- -------
breaches by Alta of any of the representations and warranties, covenants or
obligations under this Agreement which are the result of fraud or willful
misrepresentation on the part of Alta.
(b) From and after the Closing, Alta shall indemnify the PSI
Indemnitees (including, without limitation, the Company) from all Losses
(without regard to the limitations set forth in paragraph 8.2(a) above and
without regard to when such Losses are incurred) resulting from or incurred in
connection with any pending, threatened or future litigation, dispute, claim or
controversy in any way relating to or arising out of the employment of Daniel
Schultz ("Schultz") by the Company, and/or any subsidiary of the Company and/or
Alta including, without limitation, the proceeding pending before the Labor
Tribunal in Paris, France, litigation pending in the Netherlands Antilles and
expected arbitration in Luxembourg and including any Losses associated with the
exercise and/or purported termination of options granted to Schultz; (ii) any
tax, social security, severance, termination or other payments or Losses in
connection with his employment / consulting activities for any periods prior to
the Closing Date and arising out of or in any way related to any employment
and/or consulting agreements which are in effect as of the date hereof between
the Company or any of its subsidiaries and Robert Davidson.
Section 8.3. [Intentionally Omitted]
Section 8.4. Indemnification from PSI. From and after the Closing, PSI shall
------------------------
indemnify and hold harmless Alta and its officers, directors, employees,
Affiliates, successors and permitted assigns (collectively, the "Alta
Indemnitees") from all Losses (as hereinafter defined) resulting from a breach
by PSI of any of its representations, warranties, covenants or obligations under
this Agreement. Unless and until the Losses incurred by the Alta Indemnitees
exceed two hundred and fifty thousand U.S. Dollars ($ 250,000), the Alta
Indemnitees shall not be entitled to recovery under this Section 8.4. At such
time as the Losses incurred by the Alta Indemnitees resulting from a breach or
breaches by PSI of any of its representations, warranties, covenants or
obligations under this Agreement exceed two hundred and fifty thousand U.S.
Dollars ($250,000) in the aggregate, the Alta Indemnitees shall be entitled to
recovery for all Losses in excess of two hundred and fifty thousand U.S. Dollars
($250,000) in the aggregate. Subject to the following sentence, the aggregate
maximum liability of PSI under this Section 8.4 shall be eight million U.S.
Dollars $8,000,000. There shall be no limitation on Losses resulting from a
breach or breaches by PSI of any of the representations and warranties,
covenants or obligations under this Agreement which are the result of fraud or
willful misrepresentation on the part of PSI.
Section 8.5. Notice. The Indemnified Party (as hereinafter defined) shall
------
give prompt written notice to the Indemnifying Party of any claim or event known
to it which gives rise to a claim by the Indemnified Party against the
Indemnifying Party based on this Agreement, stating the nature and basis of said
claims or events and the amounts thereof, to the extent known. Such notice
shall be given in accordance with Article X hereof. Such notice shall be a
condition precedent to any liability of the Indemnifying Party hereunder.
Notwithstanding the
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<PAGE>
foregoing, the failure to give written notice by the Indemnified Party with
reasonable promptness shall not defeat a claim made pursuant hereto except to
the extent that the Indemnifying Party can establish that it has been injured by
such delay. Alta is hereby deemed to have notice of all claims against the
Company outstanding as of the date hereof and to have assumed the defense
thereof with respect to pending claims by Schultz.
Section 8.6. Defense of Claims. In the event of any claim, action, suit or
-----------------
proceeding made or brought by third parties against the Indemnified Party, the
Indemnified Party shall give written notice of such claim, action, suit or
proceeding as described in Section 8.5 above, with a copy of the claim, process
and all legal pleadings with respect thereto. After notification, the
Indemnifying Party shall participate in such claim, action, suit or proceeding,
and jointly with any other Indemnifying Party similarly notified, assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified Party
at the time of such assumption. The Indemnified Party shall have the right to
employ its own counsel and such counsel may participate in such action, but the
fees and expenses of such counsel shall be at the expense of the Indemnified
Party, when and as incurred, unless (i) the employment of counsel by such
Indemnified Party has been authorized in writing by the Indemnifying Party or
(ii) the Indemnifying Party shall not in fact have employed counsel to assume
the defense of such action reasonably satisfactory to the Indemnified Party at
the time of the Indemnifying Party's assumption of the defense. If clause (ii)
of the preceding sentence shall be applicable, then counsel for the Indemnified
Party shall have the right to direct the defense of such claim, action, suit or
proceeding on behalf of the Indemnified Party; provided, however, that if the
Indemnified Party proposes to settle the claim and the Indemnifying Party then
provides evidence reasonably satisfactory to the Indemnified Party of its
ability to pay and satisfy all liabilities and expenses related to the claim in
question, the Indemnified Party shall not be entitled to settle such claim
without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld or delayed. The Indemnified Party and the Indemnifying
Party, as the case may be, shall be kept fully informed of such claim, action,
suit or proceeding at all stages thereof whether or not such party is
represented by its own counsel. The Indemnified Party shall cooperate at the
request of the Indemnifying Party in the defense of any such third party claim,
including but not limited to making all potential witnesses and documents under
its control available to counsel for the Indemnifying Party.
Section 8.7. Miscellaneous.
-------------
(a) As used herein, the term "Losses" means any and all claims,
demands, costs, losses, damages, and liabilities incurred by an Indemnified
Party, net of any insurance proceeds received by the Indemnitees. The terms
"Losses" include reasonable attorneys' fees and costs incurred in the
investigation, settlement and defense of a claim, demand, cost, loss or
liability. The term "Losses" shall exclude all indirect or consequential
damages.
(b) As used herein, the term "Indemnifying Party" shall mean
the person or persons against whom a party (the "Indemnified Party") makes a
claim for indemnification hereunder.
ARTICLE IX
TERMINATION
- 29 -
<PAGE>
Section 9.1. Termination. This Agreement may be terminated at any time prior
-----------
to the Closing:
(a) by either PSI or Alta if the Closing shall not have been
consummated by May 16, 1996, provided, however, that the right to terminate this
-------- -------
Agreement under this Section 9.1(a) shall not be available to any party whose
action or failure to act has been the cause of, or resulted, in the failure of
the Exchange to occur on or before such date and such action or failure to act
constitutes a breach of this Agreement;
(b) by either PSI or Alta, if (i) a court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action, in any case having the effect of restraining,
enjoining or otherwise prohibiting the Exchange or (ii) a governmental,
regulatory or administrative agency or commission shall seek to enjoin the
Exchange or to reform or unwind the effect of the Closing and the terminating
party reasonably believes that the time period required to resolve such
governmental action and the related uncertainty is reasonably likely to have a
Material Adverse Effect on either PSI or Alta;
(c) by Alta, upon a breach of any representation, warranty,
covenant or agreement on the part of PSI set forth in this Agreement, or if any
representation or warranty of PSI shall have become untrue, in either case such
that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not be
satisfied as of the time of such breach or as of the time such representation or
warranty shall have become untrue, provided that if such inaccuracy in PSI's
--------
representations and warranties or breach by PSI is curable by PSI through the
exercise of its reasonable efforts and for such reasonable period as PSI
continues to exercise such reasonable efforts, Alta may not terminate this
Agreement under this Section 9.1(c); or
(d) by PSI, upon a breach of any representation, warranty,
covenant or agreement on the part of Alta set forth in this Agreement, or if any
representation or warranty of Alta or the Alta shall have become untrue, in
either case such that the conditions set forth in Section 6.2(a) or Section
6.2(b) would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, provided that if such
--------
inaccuracy in the representations and warranties of Alta is curable by Alta
through the exercise of its reasonable efforts and for so long as Alta continues
to exercise such reasonable efforts, PSI may not terminate this Agreement under
this Section 9.1(d)).
Section 9.2. Effect of Termination. In the event of the termination of this
---------------------
Agreement as provided in Section 9.1, this Agreement shall be of no further
force or effect, except that (a) this Section 9.2, Article VIII
(indemnification) and Article X (general provisions), shall survive the
termination of this Agreement, and (b) nothing herein shall relieve any party
from liability for any breach of this Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1. Amendment. This Agreement may be amended by an instrument in
---------
writing signed on behalf of each of the parties, provided such amendment would
not require the approval of stockholders of PSI or the Company.
- 30 -
<PAGE>
Section 10.2. Extension; Waiver. At any time prior to the Closing Date, the
-----------------
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement and (c) waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
Section 10.3. Entire Agreement. This Agreement (including the Exhibits and
----------------
Annex hereto, the PSI Disclosure Letter and the Company Disclosure Letter
hereto) and the other documents referenced herein constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior arrangements and understandings, both written and oral, with
respect thereto.
Section 10.4. Severability. It is the desire and intent of the parties that
------------
the provisions of this Agreement be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 10.5. Notices. All notices and other communications pursuant to this
-------
Agreement shall be in writing and shall be deemed to be sufficient if contained
in a written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to PSI, to:
Precision Systems, Inc.
11800 30th Street North
St. Petersburg, FL 33716
Attention: Russell I. Pillar
Telecopier: (1) (813) 572-7637;
with a copy to:
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
Attention: Thomas J. Egan, Jr., Esq.
Telecopier: (1) (202) 452-7074.
(b) if to Alta, to:
- 31 -
<PAGE>
Alta Investissements S.A.
8 boulevard Emmanuel Servais
L-2535 Luxembourg
Telecopier: (011) (352) 470-226
with a copy to:
Jones, Day, Reavis & Pogue
20, rue de Candolle
1205 Geneva, Switzerland
Attention: Roy F. Ryan, Esq.
Telecopier: (011) 41-22-320-1232
All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of a telecopy, when the party receiving such telecopy shall have confirmed
receipt of the communication, (c) in the case of delivery by internationally
recognized overnight courier, on the Business Day following dispatch and (d) in
the case of mailing, on the third Business Day following such mailing.
Section 10.6. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 10.7. Benefits; Assignment. This Agreement is not intended to confer
--------------------
upon any person other than the parties any rights or remedies hereunder and
shall not be assigned by operation of law or otherwise.
Section 10.8. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed therein, without giving effect to laws that
might otherwise govern under applicable principles of conflicts of law.
Section 10.9. Choice of Forum; Venue. Any claim, suit, action, or proceeding
----------------------
among any or all of the parties hereto relating to this Agreement, to any
document, instrument, or agreement delivered pursuant hereto, referred to
herein, or contemplated by or referenced in this Agreement, shall be commenced
and maintained in the United States District Court for the Southern District of
New York, or, if such court lacks jurisdiction over the subject matter, in a
state court of competent subject-matter jurisdiction sitting in the State of New
York. The parties hereby submit themselves unconditionally and irrevocably to
the personal jurisdiction of such courts. The parties further agree that,
unless otherwise required by law, venue shall be exclusively in the State of New
York. The parties irrevocably waive any objection to such personal jurisdiction
or venue including, but not limited to, the objection that any suit, action, or
proceeding brought in the State of New York has been brought in an inconvenient
forum. The parties irrevocably agree that process issuing from such courts may
be served on them, either personally or by certified mail, return receipt
requested, at the addresses given in Section 10.5 hereof; and further
irrevocably waive any objection to service of process made in such manner and at
such addresses, including without limitation any objection that service of
process made in such manner and at such addresses is not authorized by the local
or procedural laws of
- 32 -
<PAGE>
the State of New York. In any suit or proceeding brought or instituted by any
of the parties to enforce any of the provisions of this Agreement or on account
of any damages claimed to be sustained by such instituting party by reason of
another party's violation of any of the terms or provisions of this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
court costs.
Section 10.10. Interpretation.
--------------
In this Agreement, unless the context otherwise requires;
(a) words importing the singular include the plural and vice
versa;
(b) words importing a gender include every gender;
(c) references to any document (including this Agreement) are
references to that document as amended, consolidated, supplemented, novated or
replaced from time to time;
(d) references to Sections are references to sections of this
Agreement;
(e) headings are for convenience only and shall be ignored in
construing this Agreement;
(f) references to any party include references to its
successors and permitted assigns;
(g) references to law include references to any constitutional
provision, treaty, decree, convention, statute, act, regulation, rule,
ordinance, subordinate legislation and any judgment or determination of any
competent authority; and
(h) references to any particular law are references to that
law as amended, consolidated, supplemented or replaced from time to time.
- 33 -
<PAGE>
Section 10.11. Fees and Expenses.
-----------------
(a) All fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses, whether or not the Exchange is consummated provided,
however, that PSI shall bear all costs and fees otherwise payable by the Company
for services performed by Jones, Day, Reavis and Pogue and Broadview Associates
relating thereto in the aggregate amount of $1,044,087. PSI shall bear the cost
of any documentary or transfer tax applicable to the issuance of the PSI Shares
and Alta shall bear the costs of any documentary or transfer tax applicable to
the transfer of the Vicorp Shares.
[Signatures On Following Page]
- 34 -
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized, as of the date first
written above.
PRECISION SYSTEMS, INC.
By: /s/ Russell I. Pillar
--------------------------------
Name: Russell I. Pillar
------------------------------
Title: President and CEO
-----------------------------
ALTA INVESTISSEMENTS S.A.
By: /s/ Ian Dalziel
--------------------------------
Name: Ian Dalziel
-------------------------------
Title: President
-----------------------------
By: /s/ Didier Primat
--------------------------------
Name: Didier Primat
-------------------------------
Title: Director
-----------------------------
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<PAGE>
IN WITNESS WHEREOF, the parties have entered into this Agreement the day and
year first above set forth.
ALTA INVESTISSEMENTS S.A.
a Luxembourg corporation
/s/ Didier Primat
-------------------------------------
By: Didier Primat
Its: Director
- 36 -
<PAGE>
EXHIBIT A
[Intentionally Omitted]
<PAGE>
EXHIBIT B
SHARE ASSIGNMENT AND TRANSFER DEED
NETHERLANDS ANTILLES FORM
<PAGE>
EXHIBIT C
FORM OF STOCKHOLDERS' AGREEMENT
<PAGE>
EXHIBIT D
PSI OPTIONS
<PAGE>
Exhibit 3
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT ("Agreement") is made as of this 16th day of
April, 1996, by and among Alta Investissements S.A. ("Alta"), Primwest Holding
N.V. ("Primwest"), Vulcan Ventures Incorporated ("Vulcan"), RMS Limited
Partnership ("RMS"), and Precision Systems, Inc. ("PSI").
WITNESSETH
WHEREAS PSI and Alta have entered into an exchange agreement dated April
13, 1996 (the "Exchange Agreement") pursuant to which Alta agreed to exchange
the shares of capital stock of Vicorp N.V., a Netherlands Antilles Company
("Vicorp"), owned by Alta for shares of Common Stock of PSI (the "Exchange"),
upon the satisfaction of certain conditions including the execution and delivery
of a shareholders' agreement by and among the parties hereto; and
WHEREAS Primwest, through its control of Alta, owns a controlling
interest in Vicorp, and RMS and Vulcan are the two largest shareholders of PSI,
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, promises and agreements hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
-----------
Capitalized words and phrases used in this Agreement have the following
meanings:
(a) "Affiliate" of a Person shall mean a company, corporation,
partnership, or other Person that, directly or indirectly, controls, is
controlled by, or is under common control with such Person. For purposes of
this definition, "control" shall exist if a Person has direct or indirect
ownership of more than 50% of the voting securities or other ownership interests
of another Person. Neither Primwest nor Alta shall be deemed to be an Affiliate
of either Vulcan or RMS.
(b) "Agreement" means this Shareholders' Agreement, as amended from
time to time. Words such as "herein," "hereinafter," "hereof," "hereto", and
"hereunder" refer to this Agreement as a whole, unless the context otherwise
requires.
<PAGE>
(c) "Common Stock" means the common stock, $.01 par value per share,
of PSI.
(d) "Closing Date" shall have the meaning ascribed to such term in
the Exchange Agreement.
(e) "Investors" means RMS and Vulcan.
(f) "Exchange Stock" means shares of Common Stock issued to members
of the Primwest Group pursuant to the Exchange.
(g) "PSI Securities" refers to the voting equity securities of PSI
including, without limitation, Common Stock, Class B Common Stock, any class or
series of Preferred Stock, any other class of capital stock as well as any
options, warrants or convertible securities that may be exercised for or
converted into capital stock of PSI.
(h) "Parties" means the Shareholders and PSI. "Party" means one of
the Parties.
(i) "Person" means natural person, individual, company, corporation,
association, partnership, firm, joint venture, trust, government agency or other
entity.
(j) "Primwest Group" means Primwest and Alta and all other
Affiliates of Primwest which are record holders of PSI Securities, and that have
become a party to this Agreement.
(k) "SEC" means the Securities and Exchange Commission.
(l) "Shareholder" means either a member of the Primwest Group or one
or both of the Investors as the context warrants, and "Shareholders" means all
of the Shareholders.
ARTICLE II
MANAGEMENT OF PSI
2.1 Board of Directors.
------------------
For so long as the Primwest Group is the holder of record of at least ten
percent of the aggregate number of issued and outstanding shares of Common
Stock, PSI shall use its best efforts, subject to the exercise by the members of
the Board of Directors of PSI of their fiduciary duties and applicable law, to
nominate for election at each annual meeting of stockholders of PSI following
the Closing Date one person designated in writing by Primwest (which written
designation shall be provided to PSI at least ninety days prior to PSI's
scheduled annual meeting of stockholders for any given year) as the Primwest
Group's nominee to the Board of Directors of PSI. Vulcan and RMS agree, subject
to the exercise of their fiduciary duties as controlling shareholders of PSI and
pursuant to applicable law, to nominate (if not
<PAGE>
nominated by the PSI Board for any reason) the Primwest nominee and to vote the
PSI Securities owned by them in favor of the Primwest nominee. The right of the
Primwest Group to nominate a member of the Board of Directors, and the
obligation of PSI to cause such person to be nominated and the obligation of
Vulcan and RMS to vote their PSI
Securities in favor of such person shall terminate in the event that the
Primwest Group owns less than ten percent of the aggregate number of issued and
outstanding shares of Common Stock.
ARTICLE III
TRANSFERS OF INTERESTS
3.1 Restrictions On Transfers.
-------------------------
Except as expressly permitted by this Agreement, the Primwest Group shall
not sell, assign, pledge, transfer, hypothecate or otherwise dispose of (a
"Transfer") all or any portion of its PSI Securities or any rights therein. Any
Transfer or attempted Transfer by the Primwest Group in violation of the
preceding sentence shall be null and void and of no force or effect whatever.
The Primwest Group hereby acknowledges the reasonableness of the restrictions on
Transfer imposed by this Agreement. Accordingly, the restrictions on Transfer
contained herein shall be specifically enforceable. The Primwest Group hereby
further agrees to hold PSI and the Investors (and the Investors' successors and
assigns) wholly and completely harmless from any cost, liability, or damage
(including, without limitation, costs of enforcing this indemnity) incurred by
any of such indemnified Persons as a result of a Transfer or an attempted
Transfer by the Primwest Group in violation of this Agreement. The restrictions
on Transfer set forth in this Article III shall automatically lapse without
further action by any party in the event that the Primwest Group is the
beneficial owner of less than ten percent of the aggregate number of issued and
outstanding shares of Common Stock.
3.2 Permitted Transfers.
-------------------
(a) General. Subject to the conditions and restrictions set forth in
this Section 3.2, Section 3.5 and the limitations set forth in Article IV, the
Primwest Group shall have the right to Transfer PSI Securities owned by it by
means of Permitted Transfers.
(b) Definition of Permitted Transfer. A "Permitted Transfer" is
(i) Any Transfer of PSI Securities at any time (i) between
members of the Primwest Group or (ii) by the Primwest Group to an Affiliate of
Primwest, provided such Affiliate becomes a party to this Agreement with respect
to the shares of Common Stock so transferred by execution of an accession letter
as set forth in Section 3.4;
(ii) After forty (40) days following the Closing Date, any
transfer by Alta to its shareholders other than Primwest and any Affiliates of
Primwest;
(iii) Any transfer by the Primwest Group pursuant to Section
3.3;
- 3 -
<PAGE>
(iv) After the Standstill Period (as defined below), any
Transfer of Exchange Stock in a single transaction or a series of transactions
pursuant to which less than ten percent in the aggregate of the total number of
shares of Exchange Stock are transferred;
(v) During the Standstill Period, any Transfer by the
Primwest Group in accordance with Section 4.2 provided that the transferor shall
have complied in all respects with the requirements of paragraphs (b) through
(f) of Section 3.3;
(vi) Any transfer of PSI Securities other than Common Stock
and, after the Standstill Period, any Transfer of Common Stock owned by the
Primwest Group other than Exchange Stock;
(vii) After the Standstill Period, any Transfer by means of a
public offering pursuant to the Primwest Group's demand registration rights set
forth in Section 5.1; or
(viii) Any Transfer by means of a public offering pursuant to
the Primwest Group's piggyback registration rights set forth in Section 5.2.
3.3 Right Of First Refusal.
----------------------
(a) If at any time following the Standstill Period the Primwest
Group wishes to Transfer ten percent or more of the aggregate number of shares
of Exchange Stock owned by the Primwest Group in a single transaction or a
series of transactions (other than pursuant to Section 3.2(b)(i), Section
3.2(b)(vii) and Section 3.2(b)(viii)), the Primwest Group must comply with the
provisions of this Section 3.3.
(b) The Primwest Group shall provide PSI with a written notice (the
"Intention to Sell Notice") of its intention to Transfer Exchange Stock, a
description of the proposed transaction, the number of shares of Exchange Stock
to be Transferred and if, other than an Exchange Sale (as defined below), the
price per share at which it plans to sell such Exchange Stock.
(c) If the Primwest Group proposes to Transfer Stock in a series of
brokerage sales on the NASDAQ Small Cap Market, the Boston Stock Exchange and/or
such other exchanges on which Common Stock is listed or quoted (an "Exchange
Sale"), then the Primwest Group shall offer to sell such Exchange Stock to PSI
at the Average Market Price (as defined below). PSI shall have forty-eight hours
after delivery of the Intention to Sell Notice to notify Primwest of PSI's
intent to purchase the Exchange Stock from the Primwest Group at such Average
Market Price. For purposes of this Section 3.3, Average Market Price shall mean
the average of the closing price for Common Stock as quoted on NASDAQ for the 10
trading days preceding the date of the Intention to Sell Notice.
(d) If the Primwest Group proposes to Transfer Exchange Stock in a
private sale or sales to third parties at a negotiated purchase price (a "Third
Party Offer"), the Primwest Group shall offer to sell such Exchange Stock to PSI
at such purchase price and on identical
- 4 -
<PAGE>
terms. The Intention to Sell Notice shall identify the third party or parties
to whom the Primwest Group has offered to sell such Exchange Stock. PSI shall
have forty-eight hours after delivery of the Intention to Sell Notice to notify
Primwest of PSI's intent to purchase the Exchange Stock from the Primwest Group
at such price and on such terms.
(e) If PSI elects to purchase the Exchange Stock of the Primwest
Group, the closing date for such transaction shall occur on a date and at a time
selected by PSI within thirty (30) days of PSI's receipt of the Primwest Group's
written notice. In the event that the purchase price set forth in a Third Party
Offer includes consideration other than cash, PSI shall elect either to pay both
the cash and non-cash portion of the consideration set forth in the Third Party
Offer or to negotiate in good faith with the Primwest Group to determine the
value of such non-cash consideration. The value of the non-cash consideration as
determined by the Primwest Group and PSI shall be paid together with the amount
of cash consideration reflected in the Third Party Offer in connection with the
transfer of the Primwest Group's Exchange Stock to PSI. If the Primwest Group
and PSI are unable to agree upon the value of the non-cash portion of the
consideration set forth in the Third Party Offer, the total purchase price per
share for the Exchange Stock to be sold by the Primwest Group shall equal the
Average Market Price.
(f) If PSI fails to give notice to the Primwest Group of its intent
to exercise its right of first refusal within the forty-eight (48) hour period
specified above, the Primwest Group shall have thirty (30) days thereafter to
sell that number of shares of Exchange Stock offered to PSI on the terms and
conditions set forth in the Intention to Sell Notice and, in the case of a Third
Party Offer, to the third party or parties identified in such notice. In the
event that Primwest has not sold such Exchange Stock within such thirty (30) day
period on the terms and conditions set forth in the Intention to Sell Notice
(and to the third party or parties, identified in such notice in the case of a
Third Party Offer), Primwest shall not sell its Exchange Stock without again
complying with this Article III (including this Section 3.3).
3.4 Accession Letter.
----------------
Any Transfer by the Primwest Group to an Affiliate of Primwest in
accordance with Section 3.2(b)(i) may only be made if such Affiliate has
executed an Accession Letter in form of Exhibit A hereto and become a Party to
this Agreement.
3.5 Holdback of Shares
------------------
Notwithstanding any provision of this Agreement to the contrary, at all
times during the six month period immediately following the Closing Date, Alta
shall own at least 679,334 of the Exchange Shares and during the six month
period commencing six months after the Closing Date and ending on the first
anniversary of the Closing Date, Alta shall own at least 339,667 of the Exchange
Shares.
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<PAGE>
ARTICLE IV
STANDSTILL
4.1 Standstill Period. For a period of twelve months following the
-----------------
Closing Date (the "Standstill Period"), the Primwest Group shall not (i)
Transfer any of the Common Stock beneficially owned by the Primwest Group; (ii)
acquire directly or indirectly any additional PSI Securities; (iii) become the
member of a "group" within the meaning of Section 13(d)(1) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") other than the Primwest
Group; or (iv) undertake, induce or attempt to induce or give encouragement to
any person (a) to initiate a proxy contest or propose a slate of directors not
endorsed by the Board of Directors of PSI or (b) to commence a tender offer or
exchange offer with respect to PSI Securities, provided, however, this Section
-------- -------
4.2 shall not prohibit a Permitted Transfer as set forth in Section 3.2(b)(i),
3.2(b)(ii) or 3.2(b)(viii).
4.2 Exception. Notwithstanding the foregoing, in the event that Vulcan
---------
sells more than ten percent of the PSI Securities owned by it in one or a series
of transactions during the Standstill Period, Primwest shall be entitled to sell
or transfer a like percentage of the Common Stock owned by it.
ARTICLE V
REGISTRATION RIGHTS
5.1 Demand Registration.
-------------------
(a) At any time and from time to time following the Standstill
Period, upon the written request of Primwest or another person designated in
writing by Primwest that PSI effect the registration under the Securities Act of
shares of Common Stock owned by the Primwest Group and specifying the intended
method of distribution thereof, PSI shall use its reasonable best efforts to
cause a registration statement to be prepared, filed and declared effective
pursuant to the Securities Act with respect to the requested number of shares of
Common Stock (the "Requested Shares") to the extent required to permit the
disposition of the Common Stock so to be registered; provided, however, that (i)
-------- -------
PSI shall not be required to effect any such registration at any time when an
exemption from registration is otherwise available to the Primwest Group
affording the Primwest Group the right to dispose of all of the shares of Common
Stock held by the Primwest Group; (ii) PSI shall be required to effect no more
than one registration hereunder during any twelve month period and no more than
two registrations in the aggregate (not including any registration effected
pursuant to Section 5.2 hereof); (iii) PSI shall not be required to prepare,
file and effect a registration statement pursuant to this Section 5.1 during the
period starting with the date thirty (30) days prior to the estimated date of
filing of, and ending ninety (90) days (or such later date as an underwriter of
PSI Securities may reasonably require) immediately following the effective date
of, any registration statement pertaining to a public offering of securities of
PSI (other than a registration of securities in a Rule 145 transaction or a
registration relating to an employee benefit plan) and (iv) the Primwest Group
shall have complied with the requirements of Articles III and IV hereof.
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<PAGE>
Any registration requested pursuant to this Section 5.1 shall be effected by the
filing of a registration statement on Form S-1, S-2 or S-3 (or any other form
that includes substantially the same information as would be required to be
included in a registration statement on such forms as presently constituted,
other than a registration statement relating to offers to employees pursuant to
plans or of securities to be issued in business combinations).
(b) The obligation of PSI to register shares of Common Stock held by
the Primwest Group pursuant to this Section 5.1 shall be conditioned upon the
Primwest Group's participation in the underwriting arrangements required by this
Section 5.1 and the inclusion in the underwriting of the Requested Shares. PSI
and the Primwest Group shall enter into an underwriting agreement in customary
form with the managing underwriter selected by PSI, following consultation with
the Primwest Group, which managing underwriter shall be a nationally recognized
investment banking firm. Notwithstanding any other provision of this Section
5.1, if the managing underwriter determines that marketing or other factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the number of shares to be included in the registration
statement to the extent such underwriter deems necessary.
(c) PSI and the holders of any shares of Common Stock to whom PSI
has granted registration rights may include their respective securities for
their own accounts in any registration effected pursuant to this Section 5.1 or
Section 5.2 below, if the managing underwriter agrees such shares will not
impair the marketability of the offering of the Requested Shares and the number
of shares of Common Stock held by the Primwest Group which would otherwise have
been included in such registration and underwriting will not thereby be limited.
5.2 Piggy Back Registration.
-----------------------
(a) If PSI at any time proposes to register any of its securities under
the Securities Act, whether or not for sale for its own account or for the
account of an affiliate or other person, in a manner that would permit
registration of Common Stock for sale to the public under the Securities Act
(other than a registration (i) on Form S-8 or S-4 or any successor or similar
forms or (ii) relating to securities of PSI issuable upon exercise of employee
stock options or in connection with any employee benefit or similar plan of
PSI), subject to the compliance by the Primwest Group with the provisions of
Articles III and IV hereof, PSI will give thirty (30) days' prior written notice
to Primwest or another person designated in writing by Primwest of its intention
to do so and, upon the written request of Primwest made within twenty (20) days
after the receipt of any such notice (which request shall specify the number of
shares of Common Stock intended to be disposed of by the Primwest Group), PSI
shall use its reasonable best efforts to effect the registration under the
Securities Act of the number of shares of Common Stock that PSI has been so
requested to register by the Primwest Group Chik Young to the extent requisite
to permit the disposition (in accordance with the intended methods as specified
by the Primwest Group) of the Common Stock so to be registered; provided,
--------
however, that PSI shall not be required to effect any such registration at any
- -------
time when an exemption from registration is otherwise available to the Primwest
Group affording the Primwest Group the right to dispose of the number of shares
of Common Stock requested to be registered; provided, further, that the Primwest
-------- -------
Group shall not be entitled to register any shares of Common Stock
- 7 -
<PAGE>
pursuant to this Section 5.2 in excess of one-third of the total number of
shares of Common Stock to be sold in such public offering as determined in good
faith by PSI with the advice of the investment banking firm selected by PSI as
the underwriter for such offering. The right of the Primwest Group to
registration pursuant to this Section 5.2 shall be conditioned upon the
inclusion in the underwriting of the shares of Common Stock the Primwest Group
seeks to have registered and upon the Primwest Group's participation in the
underwriting agreement entered into by PSI and the managing underwriter selected
by PSI. If the managing underwriter for PSI advises PSI in writing that the
marketing or other factors require a limitation on the number of shares to be
underwritten the managing underwriter may limit the number of shares of Common
Stock so offered by the Primwest Group in a non-discriminatory manner, but to no
less than one-third of the total number of shares sold in such offering. No
registration effected under this Section 5.2 shall relieve PSI of its obligation
to effect registrations upon the request of the Primwest Group under Section
5.1(a) hereof.
(b) If at any time after giving written notice to the Primwest Group
pursuant to Section 5.2(a) above, (i) PSI in good faith shall determine not to
register such securities, PSI may, at its election, give written notice of such
determination to the Primwest Group and, thereupon, shall be relieved of its
obligation to register such shares pursuant to this Section 5.2 in connection
with such registration, without prejudice, however, to any rights of the
Primwest Group to request that such registration be effected as a registration
under Section 5.1, or (ii) PSI shall determine in good faith to delay the
registration of such securities, PSI shall be permitted to delay the
registration of such shares for the same period as the delay in registering the
securities to be registered by PSI for its own account or for others.
5.3 Registration Procedures.
-----------------------
(a) If, whenever and to the extent that PSI is required to use its
reasonable best efforts to effect the registration of any of the Common Stock
under the Securities Act as provided in Section 5.1 and 5.2 above, PSI shall as
promptly as is reasonably possible:
(i) Prepare and file with the SEC a registration statement
with respect to such securities and use its reasonable best efforts to
cause such registration statement to become effective;
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have
been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in such registration
statement, but in no event for a period of more than ninety (90) days
after such registration statement becomes effective;
(iii) Furnish to Primwest such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits, except that PSI shall not
be obligated to furnish Primwest with more than two copies of such
exhibits), such number of copies of the prospectus comprised in such
registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the
Securities Act, and such other related documents, as Primwest may
reasonably request in order to facilitate the disposition of the shares
of Common Stock to be registered.
- 8 -
<PAGE>
(iv) Use its best efforts to register or qualify the number of
shares of Common Stock that PSI has been requested by Primwest to
register by such registration statement under such other securities or
blue sky laws of such jurisdictions as Primwest shall reasonably request,
and do any and all other acts and things which may be necessary or
advisable to enable Primwest to consummate the disposition in such
jurisdictions of the shares of Common Stock that PSI has been requested
by Primwest to register, except that PSI shall not for any such purpose
be required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified, to subject itself to
taxation in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(v) Use its best efforts to furnish to Primwest (i) an opinion
of counsel for PSI addressed to Primwest, dated the effective date of the
registration statement and (ii) a "comfort" letter addressed to Primwest
signed by the independent public accountants who have certified PSI's
financial statements included in the registration statement, covering
substantially the same matters with respect to the registration statement
(and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of
issuers' counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities; provided,
--------
however, that PSI shall not be obligated to furnish such an accountants'
-------
letter except in connection with an underwritten offering;
(vi) Notify Primwest, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and at the
request of Primwest prepare and furnish to Primwest a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(vii) Use its best efforts to list the shares of Common Stock so
registered on any securities exchange on which the common stock of PSI is
then listed, if such securities are not already so listed and if such
listing is then permitted under the rules of such exchange.
(b) In connection with the registration of the shares of Common Stock
pursuant to this Article V, the Primwest Group hereby agrees as follows:
(i) the Primwest Group shall cooperate with PSI in connection
with the preparation of the registration statement, and for so long as
PSI is obligated to file and keep effective the registration statement,
shall provide to PSI, in writing, for use in the registration statement,
all such information regarding the Primwest Group and its plan of
distribution of the shares of Common Stock as may be necessary to enable
PSI to prepare the registration statement and prospectus covering the
such shares, to maintain the currency and effectiveness thereof and
otherwise to comply with all applicable requirements of law in connection
therewith;
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<PAGE>
(ii) during such time as the Primwest Group may be engaged in a
distribution of Common Stock, the Primwest Group shall comply with Rules
10b-6 and 10b-7 promulgated under the Exchange Act, to the extent
applicable, and pursuant thereto it shall, among other things: (w) not
engage in any stabilization activity in connection with the securities in
contravention of such Rules; (x) distribute the shares solely in the
manner described in the registration statement; (y) cause to be furnished
to each broker through whom the shares may be offered, if any, or to the
offeree if an offer is not made through a broker, such copies of the
prospectus and any amendment or supplement thereto and documents
incorporated by reference therein as may be required by law; and (z) not
bid for or purchase any securities of PSI or attempt to induce any person
to purchase any securities of PSI other than as permitted under the
Exchange Act;
(iii) upon receipt of a notice from PSI, promptly discontinue
any distribution of shares until notified by PSI that the distribution of
shares may re-commence;
(iv) upon written notice from PSI that PSI intends to proceed
with a distribution of any of its securities and that in connection
therewith it requires the suspension by the Primwest Group of the
distribution of shares, to cease distributing such shares until such time
as the distribution by PSI has been completed; and
5.4 Registration Expenses. The Registration Expenses (as such term is
---------------------
hereinafter defined) incurred in connection with any registration requested by
Primwest pursuant to this Article V shall be paid in full by PSI except that the
Primwest Group shall pay its own legal expenses and all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of any shares of Common Stock beneficially owned by the Primwest Group and sold
pursuant to a registration statement effected pursuant to Article V.
"Registration Expenses" means any and all expenses incident to PSI's performance
of its obligations under this Article V, including (i) registration and filing
fees with the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc., (ii) fees and expenses of compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Primwest Group's shares), (iii) printing expenses, (iv) registrar and transfer
agents fees, (v) the fees and expenses incurred in connection with the listing
or quotation of shares on any securities exchange or national market system on
which shares of Common Stock are then listed or quoted, and (vi) fees and
expenses of counsel for PSI and the independent certified public accountants for
PSI. The term "Registration Expenses" does not include (w) underwriting
discounts and commissions or any broker or dealer fees or commissions or other
fees and commissions relating to the sale thereof, (x) any transfer taxes
attributable to the sale of shares of Common Stock by the Primwest Group, (y)
the fees and disbursements of counsel for the Primwest Group or any other out-
of-pocket expenses of the Primwest Group relating to such registration, and (z)
the fees and disbursements of counsel for any underwriter, broker or dealer
(except for the reasonable fees and disbursements of one such counsel in
connection with blue sky qualifications of the Primwest Group's shares as
provided above). The Primwest Group shall pay its pro rata share of the
expenses of such registration other than the Registration Expenses in the event
that other holders of Common Stock are included in a registration statement
effected pursuant to this Article V. The pro rata share of the Primwest Group
shall be based on the number of shares of Common Stock registered on behalf of
the Primwest Group and such other holders.
5.5 Postponement of Requested Registration. PSI shall upon notice in
--------------------------------------
writing to Primwest be entitled to postpone the filing of a registration
statement otherwise required to be prepared and filed by it pursuant to Section
5.1 or 5.2, for a reasonable period of time not to
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<PAGE>
exceed (x) with respect to clause (i) of this sentence, the period until the
date which is five (5) days after the filing with the SEC of PSI's next
regularly required quarterly or annual report and (y) with respect to clauses
(ii) and (iii) of this sentence, 60 days, if, at the time it receives a
registration request from Primwest, (i) such registration would require the
public disclosure of material non-public information concerning any transaction
or negotiations involving PSI or any affiliate (as defined in Rule 12b-2 under
the Exchange Act) that, in the opinion of counsel to PSI, is not yet required to
be publicly disclosed and the Board of Directors of PSI, in good faith,
determines that such disclosure would materially interfere with such transaction
or negotiations, (ii) such registration would materially adversely interfere, in
the good faith judgment of the Board, with bona fide financing plans of PSI, or
(iii) PSI proposes to file a registration statement under the Securities Act for
the offering and sale of securities for its own account in an underwritten
offering and the managing underwriter therefor shall advise PSI in writing that
in its opinion the filing or effectuation of a registration requested pursuant
to Section 5.1 herein would materially adversely affect the success of the
offering of the securities proposed to be registered for the account of PSI. If
PSI shall postpone the filing of any registration statement requested pursuant
to Section 5.1 herein, the Primwest Group shall have the right to withdraw the
request for such registration by giving written notice to PSI within 15 days
after the date of PSI's notice of postponement.
5.6 Holdback Agreement. If requested by underwriters, Primwest agrees
------------------
not to effect any public sale or distribution, including any sale under Rule 144
(or any successor provision then in effect) under the Securities Act, of any
shares of Common Stock or any other security convertible into or exchangeable or
exercisable for any shares of Common Stock (in each case, other than as part of
such underwritten public offering) during the seven (7) days prior to, and
during the 60-day period beginning on, the effective date of a registration
statement filed by PSI pursuant to Section 5.1 or 5.2 hereof.
5.7 Indemnification. Each of the Primwest Group and PSI agree to
---------------
indemnify each other in connection with any registration effected pursuant to
this Article V as follows:
(a) PSI will indemnify the Primwest Group, each of its officers,
directors and partners, employees, subcontractors, consultants, agents, legal
counsel, and accountants, each underwriter, if any, of PSI's securities covered
by such a registration statement, and each person who controls the Primwest
Group or such underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages, and liabilities (or actions,
proceedings, or settlements in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by PSI
of the Securities Act or any rule or regulation thereunder applicable to PSI and
relating to action or inaction required of PSI in connection with any such
registration, qualification, or compliance, and will reimburse the Primwest
Group, each of its officers, directors, partners, employees, subcontractors,
consultants, agents, legal counsel, and accountants, each such underwriter, and
each person who controls the Primwest Group or such underwriter, for any legal
and other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that PSI will not be liable in any such case to the extent that any
such claim, loss, damage, liability, or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to PSI by
the Primwest Group or such underwriter and stated to be specifically for use
therein or any failure by the Primwest Group to deliver a final prospectus or
supplement or amendment correcting earlier documents. It is agreed that the
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<PAGE>
indemnity agreement contained in this Section 5.7 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of PSI (which consent has not been
unreasonably withheld).
(b) the Primwest Group will, if any shares of Common Stock owned by
the Primwest Group are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify PSI, each of its
officers, directors, partners, legal counsel, and accountants, each underwriter,
if any, of PSI's securities covered by such registration statement, and each
person who controls PSI or such underwriter within the meaning of Section 15 of
the Securities Act, against all expenses, claims, losses, damages, and
liabilities (or actions, proceedings, or settlements in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular, or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse PSI, each of its officers,
directors, partners, legal counsel, and accountants, each such underwriter, and
each such control person, for any legal and other expenses reasonably incurred
in connection with investigating and defending or settling any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to PSI by the Primwest Group; provided, however, that the
-------- -------
obligations of the Primwest Group hereunder shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Primwest Group (which consent
has not been unreasonably withheld).
(c) If the indemnification provided for in this Section 5.7 is held
by a court of competent jurisdiction to be unavailable to the party seeking such
indemnification (the "Indemnified Party") with respect to any loss, liability,
claim, damage, or expense referred to therein, then the party which is required
to provide indemnification pursuant to this Section 5.7 (the "Indemnifying
Party") in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.
(d) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
5.8 Indemnification Procedures. Each party entitled to indemnification
--------------------------
under Section 5.7 of this Agreement (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and (if the claim is made by a third party) shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall
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<PAGE>
conduct the defense of such claim or any litigation resulting therefrom, shall
be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its indemnification obligations to the extent such failure is not prejudicial.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
5.9 Termination of Registration Rights. The registration rights granted
----------------------------------
to the Primwest Group in this Article V shall terminate upon the Transfer by the
Primwest Group of all of the shares of Exchange Stock issued to it in connection
with the Exchange pursuant to Rule 144 or otherwise or in the event that PSI
shall have delivered to the Primwest Group an opinion of counsel to the effect
that all of such shares held by the Primwest Group are able to be sold under
Rule 144 or pursuant to Regulation S or another applicable exemption under the
Securities Act. PSI shall not be obligated to effect any registration of shares
of Common Stock beneficially owned by the Primwest Group in the event that the
Primwest Group shall have breached the provisions of Article III or Article IV.
ARTICLE VI
REPRESENTATIONS
6.1 Representations Of The Investors.
--------------------------------
Each of the Investors hereby represents to the Primwest Group, Alta, and
PSI, that the following are true and accurate as of the date first written
above:
(a) Each Investor is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized with the
requisite power to enter into and perform its obligations under this Agreement
in accordance with its terms.
(b) Each of the Investors has the full right, power, and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
All required actions to approve and adopt this Agreement have been taken. This
Agreement is a duly authorized, valid and binding agreement of each of the
Investors enforceable against it in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(c) The execution and delivery of this Agreement by each Investor
and the consummation of the transactions required hereunder do not and will not
violate or conflict with any statute, regulation, judgment, order, writ, decree,
or injunction, currently applicable to such Investor or any of his or her
property or assets.
(d) No consent or approval of any third party is required to be
obtained by the Investor in connection with the execution and delivery of this
Agreement or the performance of the transactions contemplated hereunder. No
contract or agreement to which the Investor is a party restricts the ability of
the Investors to fulfill their obligations and responsibilities under this Agre
ement or any related agreement or to carry out the activities contemplated
herein.
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<PAGE>
6.2 Representations Of the Primwest Group.
-------------------------------------
Each member of the Primwest Group hereby represents to the Investors and
to PSI that the following are true and accurate as of the date first written
above.
(a) Primwest and each of the other members of the Primwest Group is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it was organized with the requisite power to
enter into and perform its obligations under this Agreement in accordance with
its terms.
(b) Primwest and each of the other members of the Primwest Group has
the full right, power and authority to execute and deliver this Agreement (or
Accession Letter) and to perform its obligations hereunder. All required
actions to approve and adopt this Agreement have been taken. This Agreement is
a duly authorized, valid and binding agreement of Primwest and each of the other
members of the Primwest Group enforceable against them in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(c) The execution and delivery of this Agreement (or Accession
Letter) by Primwest and each of the other members of the Primwest Group and the
consummation of the transactions required hereunder do not and will not violate
or conflict with any statute, regulation, judgment, order, writ, decree or
injunction currently applicable to the Primwest Group, any of its Affiliates or
any of their respective property or assets or any existing mortgage, indenture,
contract, licensing agreement, financing statement or other agreement binding on
the Primwest Group.
(d) No consent or approval of any third party is required to be
obtained by Primwest or any other member of the Primwest Group in connection
with the execution and delivery of this Agreement or the performance of the
transactions contemplated hereunder. No contract or agreement to which Primwest
or any other member of the Primwest Group is a party restricts the ability of
Primwest or such member of the Primwest Group to fulfill its obligations and
responsibilities under this Agreement or any related agreement or to carry out
the activities contemplated herein.
6.3 Representations Of PSI.
----------------------
PSI hereby represents to the Primwest Group and to the Investors that the
following are true and accurate as of the date first written above.
(a) PSI is a corporation duly organized, validly existing and in
good standing in the State of Delaware with the requisite power to enter into
and perform its obligations under this Agreement in accordance with its terms.
(b) PSI has the full right, power and authority to execute and
deliver this Agreement and to perform obligations hereunder. All required
actions to approve and adopt this Agreement have been taken. This Agreement is a
duly authorized, valid and binding agreement of PSI enforceable against it in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(c) The execution and delivery of this Agreement by PSI and the
consummation of the transactions required hereunder do not and will not violate
or conflict with any statute, regulation, judgment, order, writ, decree or
injunction currently applicable to PSI,
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<PAGE>
any of its Affiliates or any of their respective property or assets or any
existing mortgage, indenture, contract, licensing agreement, financing statement
or other agreement binding or PSI.
(d) No consent or approval of any third party is required to be
obtained by PSI in connection with the execution and delivery of this Agreement
or the performance of the transactions contemplated hereunder. No contract or
agreement to which PSI is a party restricts the ability of PSI to fulfill its
obligations and responsibilities under this Agreement or any related agreement
or to carry out the activities contemplated herein.
ARTICLE VII
MISCELLANEOUS
7.1 Notices.
-------
Any notice, payment, demand, or communication required or permitted to be
given by any provision of this Agreement shall be in writing and shall be deemed
delivered (a) when personally delivered by hand or by overnight courier service,
(b) when transmitted by telecopy, or (c) on the fifth day after being deposited
in the mail, certified or registered mail, postage prepaid, addressed as
follows:
If to the Primwest Group:
------------------------
Primwest Holding N.V.
7, cours de Rive
1204 Geneva, Switzerland
Attn: Ian Dalziel
With copies to:
Roy F. Ryan, Esquire
Jones, Day, Reavis & Pogue
20 rue de Condolle
1205 Geneva, Switzerland
If to PSI:
---------
Precision Systems, Inc.
11800 30th Street North
St. Petersburg, FL 33716
Attention: Russell I. Pillar
With copies to:
Thomas J. Egan, Jr., Esq.
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
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<PAGE>
If to Vulcan:
------------
Vulcan Ventures Incorporated
Suite 550
110 - 110th Avenue, N.E.
Bellevue, Washington 98004
Attention: Chief Financial Officer
If to RMS:
---------
RMS Limited Partnership
50 West Liberty Street
Suite 650
Reno, Nevada 89501
If to Alta:
----------
Alta Investissements S.A.
8 boulevard Emmanuel Servais
L-2535 Luxembourg
Attention: Ian Dalziel
Any party may from time to time change the address to which notices are
to be delivered or mailed by giving notice of such change to the other parties
as provided herein.
7.2 Legend. The following legend shall be placed on each certificate
------
representing PSI Securities issued by PSI to the Primwest Group or any permitted
transferee who becomes a party to this Agreement:
Any sale, transfer, or other disposition of the shares represented by this
certificate is restricted by the terms of a Shareholder's Agreement dated
April 16, 1996 between PSI and certain shareholders. A copy of such
Agreement is on file at the principal office of PSI and may be inspected
during regular business hours. By acceptance of this certificate, the
holder hereof agrees to be bound by the terms of such Agreement.
A copy of this Agreement shall be filed with the Secretary of PSI. Any person
may examine this Agreement for a proper purpose during the regular business
hours of PSI.
7.3 Binding Effect.
--------------
Except as otherwise provided in this Agreement, every covenant, term, and
provision of this Agreement shall be binding upon and inure to the benefit of
the Parties and their respective legal representatives, and permitted
successors, permitted transferees, and permitted assigns.
7.4 Headings.
--------
Section and other headings contained in this Agreement are for reference
purposes only and are not intended to describe, interpret, define, or limit the
scope, extent, or intent of this Agreement or any provision hereof.
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<PAGE>
7.5 Severability.
------------
Nothing in this Agreement is intended to require or shall be construed as
requiring any Party hereto to do or fail to do any act in violation of
applicable law. Any Party's inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 7.5. If any term or provision of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then such
provision shall be severed from this Agreement and such invalidation shall not
affect the validity or legality of the remainder of this Agreement, and the
balance of this Agreement not so invalidated shall be enforceable in accordance
with its terms. In the event that any provision of Section 5.7 is deemed
illegal or invalid, the Indemnitors shall nevertheless indemnify Indemnitees to
the fullest extent permitted by applicable law and by any provision of such
Section that has not been so invalidated.
7.6 Further Action.
--------------
Each Party agrees to perform all further acts and execute, acknowledge,
and deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the provisions of this Agreement.
7.7 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed therein, without giving effect to laws that might otherwise
govern under applicable principles of conflicts of law.
7.8 Choice of Forum; Venue. Any claim, suit, action, or proceeding
----------------------
among any or all of the parties hereto relating to this Agreement, to any
document, instrument, or agreement delivered pursuant hereto, referred to
herein, or contemplated by or referenced in this Agreement, shall be commenced
and maintained in the United States District Court for the Southern District of
New York, or, if such court lacks jurisdiction over the subject matter, in a
state court of competent subject-matter jurisdiction sitting in the State of New
York. The parties hereby themselves unconditionally and irrevocably to the
personal jurisdiction of such courts. The parties further agree that, unless
otherwise required by law, venue shall be exclusively in New York County, New
York. The parties irrevocably waive any objection to such personal jurisdiction
or venue including, but not limited to, the objection that any suit, action, or
proceeding brought in the State of New York has been brought in an inconvenient
forum. The parties irrevocably agree that process issuing from such courts may
be served on them, either personally or by certified mail, return receipt
requested, at the addresses given in Section 7.1 hereof; and further irrevocably
waive any objection to service of process made in such manner and at such
addresses, including without limitation any objection that service of process
made in such manner and at such addresses is not authorized by the local or
procedural laws of the State of New York. In any suit or proceeding brought or
instituted by any of the parties to enforce any of the provisions of this
Agreement or on account of any damages claimed to be sustained by such
instituting party by reason of another party's violation of any of the terms or
provisions of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and court costs.
7.9 Counterpart Execution.
---------------------
This Agreement may be executed in several counterparts, each of which
shall be an original, and such counterparts shall together constitute but one
and the same instrument.
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<PAGE>
7.10 Amendments and Waivers.
----------------------
This Agreement may be amended or modified only by a written agreement
signed by all of the Parties. Any right of PSI hereunder which is not a right of
the Investors may be waived by PSI in writing without the consent of the
Investors.
7.11 Interpretation.
--------------
In this Agreement, unless the context otherwise requires;
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include every gender;
(c) references to any document (including this Agreement) are
references to that document as amended, consolidated, supplemented, novated or
replaced from time to time;
(d) references to Sections are references to sections of this
Agreement;
(e) headings are for convenience only and shall be ignored in
construing this Agreement;
(f) references to any Party include references to its successors and
permitted assigns;
(g) references to law include references to any constitutional
provision, treaty, decree, convention, statute, act, regulation, rule,
ordinance, subordinate legislation and any judgment or determination of any
competent authority; and
(h) references to any particular law are references to that law as
amended, consolidated, supplemented or replaced from time to time.
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<PAGE>
IN WITNESS WHEREOF, the Parties have entered into this Agreement the day
and year first above set forth.
PRECISION SYSTEMS, INC.,
a Delaware corporation
______________________________
By:___________________________
Its:__________________________
ALTA INVESTISSEMENTS S.A.,
a __________ corporation
______________________________
By:___________________________
Its:__________________________
PRIMWEST HOLDING N.V.,
a __________ corporation
______________________________
By:___________________________
Its:__________________________
VULCAN VENTURES INCORPORATED
a Washington corporation
By:___________________________
Name:
Title:
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<PAGE>
RMS Limited Partnership
a Nevada Limited Partnership
By: Crystal Diamond, Inc.
Its: Managing General Partner
By:_____________________________
Its:_____________________________
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