SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 28, 1997
ESQUIRE COMMUNICATIONS LTD.
(Exact name of registrant as specified in charter)
DELAWARE 1-11782 13-3703760
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
216 EAST 45TH STREET, NEW YORK, NY 10017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 687-8010
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to an Asset Purchase Agreement dated as of May 28, 1997 (the
"Agreement"), by and among Esquire Communications Ltd. ("Esquire"), Wolfe,
Rosenberg & Associates, Inc. and M&M Computrans (collectively, the "Sellers")
and the stockholders and partners of Sellers, on May 28, 1997, Esquire, through
a wholly-owned subsidiary, acquired substantially all the assets of Sellers. The
purchase price paid by Esquire consisted of $5,750,000 of cash, which is subject
to increase based on the annual revenues derived from the Sellers' business for
the two consecutive twelve months commencing June 1, 1997.
In connection with the Agreement, Seymour L. Wolfe and Fred R. Rosenberg,
the stockholders and partners of Sellers, entered into employment agreements
with Esquire.
The cash portion of the purchase price was obtained by Esquire from
borrowings made pursuant to its existing Credit Agreement with Antares Leveraged
Capital Corp.
The purchase price and all negotiations relating to the transaction were on
an arm's length basis. The assets acquired by Esquire will continue to be used
in Esquire's court reporting business.
The foregoing description of the acquisition is qualified in its entirety
by reference to the complete text of the Agreement which is filed as an exhibit
to this Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
(a), (b) It is impractical to provide the financial statements of Sellers
and the pro forma financial information at this time. Such financial statements
and pro forma financial information will be filed as soon as practicable but not
later than 60 days from the date hereof.
EXHIBITS
10.1 Asset Purchase Agreement dated as of May 28, 1997 among Esquire,
Wolfe, Rosenberg & Associates, Inc., M&M Computrans, Seymour L. Wolfe
and Fred R. Rosenberg.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
ESQUIRE COMMUNICATIONS LTD.
Dated: June 5, 1997 BY:/s/
Vasan Thatham
Vice President
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE NO.
10.1 Asset Purchase Agreement dated as
of May 28, 1997 among Esquire,
Wolfe Rosenberg & Associates, Inc.,
M&M Computrans, Seymour L. Wolfe and
Fred R. Rosenberg.
Exhibit 10.1
ASSET PURCHASE AGREEMENT
AMONG
M&M COMPUTRANS,
WOLFE, ROSENBERG & ASSOCIATES, INC.
AND
ESQUIRE COMMUNICATIONS LTD.
May 28, 1997
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made this 28th day of May, 1997, by and among M&M
Computrans, an Illinois general partnership ("M&M"), Wolfe, Rosenberg &
Associates, Inc., an Illinois corporation ("WRA") (M&M and WRA being
collectively referred to herein as the "Sellers"), Seymour L. Wolfe and Fred R.
Rosenberg (collectively the "Principals") and Esquire Communications Ltd., a
Delaware corporation ("Buyer").
WHEREAS, Sellers desire to sell, and Buyer desires to purchase,
substantially all the assets of Sellers relating to the operation of Sellers'
court reporting business (the "Business") upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and agreements herein contained, the parties hereto hereby
agree as follows:
1. SALE AND TRANSFER OF ASSETS
1.1. Based upon and subject to the terms, conditions, agreements,
representations and warranties hereinafter set forth, each Seller does hereby
agree, each as to its respective interests, to sell, assign, transfer, deliver
and convey to Buyer on the Closing Date (as hereinafter defined), and Buyer does
hereby agree to purchase, acquire, accept and take possession of on the Closing
Date, all of Sellers' right, title and interest in and to all assets,
properties, rights and business of Sellers of every kind and description
wherever located (except for Excluded Assets, as hereinafter defined) owned by
either Seller and used in or related to the Business (all of which are
hereinafter sometimes referred to as the "Assets"), including without
limitation, the following assets of Sellers:
(a) All accounts receivable of Sellers;
(b) All office supplies, office machines, office furniture, machinery,
equipment, fixtures, inventory, leasehold improvements (to the extent owned) and
computer hardware and software systems (to the extent assignable), including
those described on Schedule 1.1(b) hereto;
(c) All vendor and customer lists, work-in-process and computerized
information of the Seller with respect to the Assets;
(d) To the extent owned by Sellers and/or assignable, all general
intangibles relating to Sellers' Business including, without limitation, any
trade name, any design and logo relating to the name, contracts (specifically
including the assignment of all court reporting services contracts) and
commitments with customers, licenses, claims and deposits; and
(e) Copies of all books, records, forms, promotional materials and
documents of Sellers relating to the foregoing, including, without limitation,
accounting, payroll and tax records and, to the extent assignable, telephone and
telecopier numbers.
1.2. The Assets purchased by the Buyer specifically exclude the following
(the "Excluded Assets"):
(a) cash, cash equivalents, notes, bonds and marketable securities,
including without limitation that certain Priority Client WCMA Account No.
695-07539 maintained by WRA with Merrill Lynch;
(b) stock certificates, partnership certificates and minute books
evidencing ownership interests and governance of the Sellers;
(c) any notes or other evidences of indebtedness of either Seller to any
Principal, to the extent in excess of the maximum amount assumed upon the
Stockholder Notes as set forth in Section 2.1(b) below;
(d) the specific items of personal property identified on Schedule 1.2(d)
hereto; and
(e) WRA's existing line of credit with American National Bank and Trust
Company of Chicago.
2. ASSUMPTION OF LIABILITIES AND OBLIGATIONS
2.1 The Assets will be sold, conveyed, transferred and assigned to the
Buyer on the Closing Date free and clear of all liens, security interests,
mortgages, claims, restrictions, charges and encumbrances (collectively,
"Liens") whatsoever, other than Assumed Liabilities. The Buyer does not assume,
accept or undertake any obligations, duties, debts or liabilities of either
Seller of any kind whatsoever pursuant to this Agreement or otherwise, except
that from and after the Closing Date Buyer hereby agrees to assume and to fully
and timely pay, discharge and perform the following liabilities (the "Assumed
Liabilities") of Sellers (to the extent Sellers are not in default and solely to
the extent to be performed after the Closing Date):
(a) All accounts payable and accruals thereof incurred in the normal course
of business; provided, however, that accounts payable and accruals, exclusive of
court reporter liabilities, will not exceed $65,000 as specified on Schedule
2.1(a), as updated at the Closing;
(b) Up to $122,898.88 of principal and interest on outstanding notes due
and owing by WRA to the Principals (the "Stockholder Notes");
(c) All liabilities and obligations arising under the agreements with
customers, suppliers and the office lease set forth on Schedule 2.1(c) hereto;
(d) All liabilities and obligations arising under each agreement for court
reporting services between WRA and individual court reporters identified on
Schedule 2.1(d) hereto;
(e) All liabilities and obligations arising under the equipment leases,
automobile leases and (to the extent assignable) computer software licenses
identified on Schedule 2.1(e) hereto;
(f) The agreements set forth on Schedule 5.15;
(g) All accrued vacation or sick pay of employees of the Sellers, to the
extent earned but not exercised by such employees prior to Closing, the amount
of which at April 30, 1997 is set forth on Schedule 2.1(g) hereto;
(h) All liabilities and obligations relating to all work-in-process of WRA,
including court reporter obligations.
2.2. Except as provided in paragraph 2.1 or as otherwise expressly provided
in this Agreement, Buyer is not assuming and shall not be liable for any
liabilities of Sellers, including, without limitation, any liabilities: (i)
under contracts and leases which shall not have been assigned to Buyer or
assumed by Buyer pursuant to this Agreement (including, but not limited to, any
union agreements); (ii) for indebtedness for borrowed money; (iii) by reason of
or arising solely as the result of any default or breach by Sellers (other than
a default or breach arising solely from the failure to obtain a consent to the
assignment of any leased property identified on Schedule 2.1(e) hereto) of any
contract occurring prior to Closing, for any penalty assessed against Sellers
under any contract or relating to or arising out of any event occurring prior to
Closing which with the passage of time or after giving of notice, or both, would
constitute or give rise to such a breach, default or penalty, whether or not
such contract is being assigned to and assumed by Buyer pursuant to this
Agreement; (iv) the existence of which would conflict with or constitute a
breach of any representation, warranty, covenant or agreement of Sellers or the
Principals contained herein (other than a default or breach arising solely from
the failure to obtain a consent to the assignment of any leased property
identified on Schedule 2.1(e) hereto); (v) to any shareholder or affiliate of
Sellers or to any present or former employee, officer or director of or
consultant to Sellers (or independent contractor retained by Sellers),
including, without limitation, any bonuses, any termination or severance pay
related to Sellers' employees, and any post retirement medical benefits or other
compensation or benefits (except as stated above or pursuant to the employment
agreements of the Principals with Buyer); (vi) any and all taxes incurred as a
result of the sale contemplated by this Agreement; (vii) for any taxes accrued
or incurred prior to the Closing Date or relating to any period (or portion of a
period) prior thereto; (viii) relating to or arising out of any environmental
matter, including, without limitation, any violation of any environmental law or
any other law relating to health and safety of the public or the employees of
Sellers prior to the Closing Date; or (ix) relating to, or arising out of,
services rendered by Sellers, or the conduct or operation of the business of
Sellers, prior to the Closing Date (other than work-in-process).
3. CLOSING
The closing of this Agreement (the "Closing") shall take place at the
office of Chuhak & Tecson, P.C., Chicago, Illinois at 10:00 A.M. local time, on
May 28, 1997 or at such other date or time as Buyer and Sellers may agree upon
(the date of Closing being hereinafter referred to as the "Closing Date").
4. PURCHASE PRICE
4.1. The total purchase price (the "Purchase Price") to be paid by Buyer
for the Assets is $5,750,000, plus the assumption of Assumed Liabilities and any
amounts payable pursuant to Section 4.1(b) hereof, payable as follows:
(a) On the Closing Date, Buyer shall pay $5,750,000 of the Purchase Price
by the delivery by Buyer to Sellers of a certified or bank cashier's check in
such amount or by means of a federal funds wire transfer in such amount to an
account number and depository designated by Sellers.
(b) The Purchase Price shall be subject to increase based on annual
revenues of the Business as hereinafter set forth, which revenues shall be
determined by Buyer's regular accountants in accordance with Buyer's generally
accepted accounting principles applied consistently and on an accrual basis and
shall be net of credits and allowances. If the total revenues from the Business
for the first consecutive twelve month period commencing on the first day of the
calendar month immediately after the Closing Date are more than $5,250,000, then
the Sellers shall be entitled to one dollar for each dollar of revenues above
$5,250,000; provided, however, that in no event shall the amount to be paid to
Sellers for the first twelve month period be more than $250,000. If the total
revenues from the Business for the consecutive twelve month period commencing on
the first day of the calendar month commencing one year after the Closing Date
are more than $5,500,000, then the Sellers shall be entitled to one dollar for
each dollar of revenues above $5,500,000; provided, however, that in no event
shall the amount to be paid to Sellers for this second twelve month period
exceed $500,000. Any of the foregoing payments shall be made in cash, payable by
certified or bank cashier's check or by means of a federal funds wire transfer,
within 10 days after each determination of revenues for the applicable 12 month
period, which determination shall be made within 90 days after the end of each
such 12 month period. In the event that the Buyer acquires one or more
businesses in the Territory (as hereinafter defined) (whether by acquisition of
assets or stock or by merger or otherwise), in determining revenues under this
Agreement there shall be excluded the actual revenues of the acquired
businesses, during the applicable twelve month period of time. Buyer shall keep
an accurate account of the revenues of the Business and any acquired business
for each twelve month time period. Buyer shall render a statement in writing to
Sellers at the time the above payments are made showing the revenues of the
Business and the revenues of other acquired businesses during such twelve month
time periods. Buyer shall keep full and accurate books and records in sufficient
detail so that the increase of the purchase price payable hereunder can be
properly calculated. Buyer shall keep such records for three years after
payment. Buyer shall permit independent certified accountants designated by
Sellers to examine said books and records at Sellers' expense not more
frequently than once each calendar year for the sole purpose of verifying the
accuracy of the written statements submitted by Buyer and the amounts paid or
payable. If Sellers dispute Buyer's determination, the parties shall work
together to resolve any such disputes. If such dispute cannot be resolved within
30 days, Buyer or Sellers may submit the dispute to an independent accounting
firm jointly selected by Buyer and Sellers, whose determination shall be final
and binding on both Buyer and the Sellers. The fees and expenses of such
independent accounting firm shall be shared equally by Buyer and the Sellers. In
the event that it is ultimately determined that any amount payable by Buyer due
to Sellers under this subsection is more than five percent greater than the
amounts paid by Buyer, the cost of independent certified accountants designated
by Sellers and the costs of the jointly selected accountants shall be borne by
Buyer. Buyer shall immediately pay to Sellers the amount of any unpaid purchase
price together with interest at the rate of eight percent per annum beginning on
the date when such amounts were due.
(c) On the Closing date, Buyer shall pay the Stockholder Notes by delivery
to the holders thereof of a certified or bank check in the amount thereof or by
means of a wire transfer in such amount to an account number and depository
designated by the holders of the Stockholder Notes.
4.2. Sellers shall credit to Buyer on the Closing Date the aggregate amount
of all prepayments made to or advances received by Sellers under all contracts
being assumed by Buyer pursuant to this Agreement including, but not limited to,
all deposits made with respect to such agreements. All adjustments customary in
acquisitions, including utilities, rent and other items, shall be apportioned
between Buyer and Sellers as of the Closing Date.
4.3. The Purchase Price shall be allocated as agreed to by Buyer and
Sellers at Closing. Each party hereto agrees to reflect the Assets upon its
books for tax reporting purposes in accordance with such determination and to
file all tax returns in accordance with and based upon such determination.
5. REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE PRINCIPALS
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, Sellers and the Principals jointly and
severally represent and warrant as follows:
5.1. WRA is a corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois. M&M is a partnership duly
organized and validly existing under the laws of the State of Illinois. Each
Seller has the power and the authority and all licenses and permits required by
governmental authorities to own and operate its properties and carry on its
business as now being conducted. Neither Seller has any subsidiaries nor owns
beneficially or of record any equity interest in any corporation, partnership or
other business organization or entity except for Excluded Assets.
5.2. Each Seller has the power and authority and the Principals have the
legal capacity to execute and perform this Agreement and all other agreements to
be entered into in connection with the transactions contemplated hereby. All the
issued and outstanding shares of capital stock of WRA are owned beneficially and
of record by the Principals and the Principals are the sole partners of M&M.
5.3. The execution, delivery and performance of this Agreement and all
other agreements to be entered into in connection with the transactions
contemplated hereby have been duly authorized by the Board of Directors and
shareholders of WRA and by all necessary corporate or partnership action, and do
not violate or conflict with any provisions of the Certificate of Incorporation
or Bylaws of WRA or partnership agreement of M&M or any law, order or regulation
to which either Seller or the Principals is a party or by which either Seller or
any Principal is bound. Except as set forth on Schedule 2.1(e) hereto, no
consent, approval or authorization of, or filing with or notification to, any
lender, security holder, governmental agency or other person or entity is
required by either Seller or the Principals in connection with the execution,
delivery and performance by the Sellers and the Principals of this Agreement and
the consummation of the transactions contemplated hereby.
5.4. Except with respect to third-party consents identified on Schedule
2.1(e) hereto, this Agreement, and all other instruments delivered by Sellers
and the Principals in connection herewith, have been duly executed and delivered
by the Sellers or the Principals and are legal, valid and binding obligations of
Sellers and the Principals, enforceable in accordance with their respective
terms.
5.5. Except for liens to be released at Closing, to the extent of each of
their respective interests, each Seller is the owner of and has good, valid and
marketable title to the Assets (other than those Assets which are being leased
by Sellers from third parties as described on Schedule 2.1(e)) free and clear of
all Liens, except for Assumed Liabilities. The Assets to be sold and conveyed to
Buyer hereunder constitute all of the assets used in, related to or required by
Sellers in the normal operation and conduct of their Business, other than the
Excluded Assets and those Assets which are leased as set forth on Schedule
2.1(e). The fixed assets included in the Assets are in good repair and operating
condition.
5.6. Except as set forth on Schedule 5.6, there is no action, suit,
litigation or proceeding pending, or to the knowledge of Sellers or the
Principals, threatened against or relating to the Assets or Business.
5.7. There does not exist any order, writ, injunction or decree that has
been issued by, or requested of, any court or governmental agency which is
against, or binding on, Sellers or any Principal which do or may affect, limit
or control the Assets or Buyer's use thereof.
5.8. To the best knowledge of the Sellers and the Principals, the
utilization of the Assets being sold and conveyed to Buyer hereunder do not
infringe upon or violate in any way the rights evidenced by any outstanding
patents, trademarks or trade names, whether registered or unregistered, held or
owned by any third parties.
5.9. Except for account collection matters as set forth on Schedule 5.6,
Sellers' relationships with their customers are generally good, and Sellers and
the Principals are not aware of any facts or circumstances which might alter,
negate, impair or in any way adversely affect the continuity of any such
customer relationships other than the transactions contemplated by this
Agreement.
5.10. The accounts receivable of Sellers are actual and bona fide
receivables representing obligations for the total amount thereof which arose in
the ordinary course of business, but are sold without recourse or any
representation or warranty as to ultimate collectibility. At the Closing,
accounts receivable of Sellers shall not be less than $725,000.
5.11. There are no Liens for any taxes upon the Assets, including, but not
limited to, federal, state, county or local franchise, income, excise, property,
business, sales, commercial rent, employment or other taxes upon the Assets.
Each Seller has timely filed all federal, state, county and local franchise,
income, excise, property, business, sales, commercial rent and employment and
other tax returns which are required to be filed through the Closing Date, and
has paid, or will pay, all taxes which are due and payable when due.
5.12. Schedule 5.12 contains a complete and accurate list of all personnel
utilized in Sellers' business, including full and part-time persons, in-house
and outside personnel, and employees and independent contractors. Except for the
Assumed Liabilities, Buyer will not be liable for any obligations to the
foregoing persons accruing or arising prior to the Closing, including, but not
limited to, obligations (whether accrued prior to or after Closing) for
severance pay or other fringe benefits for such persons.
5.13. Schedule 5.13 contains a complete and accurate list of all
independent contractors utilized in Sellers' business. Except for the Assumed
Liabilities, Buyer will not be liable for any obligations to the foregoing
persons accruing or arising prior to the Closing.
5.14. The Sellers have furnished to Buyer a balance sheet of WRA (the
"Financial Statements") as at December 31, 1996 (the "Balance Sheet Date"), as
compiled by independent public accountants. The Financial Statements have been
prepared in conformity with and applied consistently with the past practices of
WRA as at, or for the period ended on, such date. WRA's annual revenues and
earnings, before compensation and fringe benefits to the Principals (including
family members), interest, tax, depreciation and amortization, based upon WRA's
accounting practices for its fiscal year ended December 31, 1996, are not less
than $4,995,000 and $1,200,000, respectively. Since the Balance Sheet Date, (a)
Sellers have conducted their business in a consistent manner in the regular and
ordinary course, (b) there has not been any material adverse change in the
business, operations or financial condition of Sellers, and (c) there has not
been any material damage, destruction or loss affecting the Business, except as
disclosed on Schedule 5.14.
5.15. Each of the agreements to which either Seller is a party or to which
it is subject or by which it is bound is listed on Schedule 5.15 attached hereto
(true and materially complete copies or forms of which have been furnished to
Buyer) and is a valid and subsisting contract of all of the parties thereto in
full force and effect without modification. To the best knowledge of Sellers and
the Principals, (a) Sellers have performed all obligations required to be
performed by them and are not in default under any agreement, instrument or
other document to which they are a party or to which they are subject or by
which they are bound, and (b) no event presently exists which, with or without
the lapse of time or the giving of notice, or both, would constitute a default
by them thereunder, except arising from the execution of this Agreement or the
failure to obtain consents to the assignment of leased property to Buyer. Except
as set forth on Schedule 5.6 and except for a landlord dispute involving
elevator service, to the best knowledge of Sellers and the Principals, no other
party is in material default under any such agreement, instrument or other
document.
5.16. There are no labor strikes, disputes, slow downs, work stoppages or
other labor troubles or grievances pending or, to Sellers' or the Principals'
knowledge, threatened against or involving Sellers. Sellers are not a party to
any union agreements. No unfair labor practice complaint before the National
Labor Relations Board, no discharge or grievance before the Equal Employment
Opportunity Commission, and, except as described on Schedule 5.16, no complaint,
charge or grievance of any nature before any similar or comparable state, local
or foreign agency, in any case relating to Sellers or the conduct of their
business is pending or, to Sellers' or the Principals' knowledge, threatened.
5.17. To the best knowledge of Sellers and the Principals, Sellers have
complied and are in material compliance with all laws, orders and regulations of
any governmental authority applicable to Sellers, their Business, assets or
property or its operations, including, without limitation, laws relating to
antitrust, occupational safety and health, environmental protection and
conservation, water or air pollution, toxic and hazardous waste and substances
control, consumer product safety, product liability, hiring, wages, hours,
employee benefit plans and programs, collective bargaining and withholding and
social security taxes.
5.18. No representation or warranty by Sellers or the Principals contained
in this Agreement, and no statement contained in any Schedule, Exhibit,
certificate or other instrument furnished to Buyer under or in connection with
this Agreement, contains any untrue statement of any material fact.
6. REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Sellers to enter into this Agreement and to consummate
the transactions contemplated herein, Buyer represents and warrants as follows:
6.1. Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Buyer has the power and
the authority and all licenses and permits required by governmental authorities
to own and operate its properties and carry on its business as now being
conducted. Prior to the Closing, Buyer or the acquirer of the Assets will be
qualified to do business and be in good standing in the State of Illinois.
6.2. The Buyer has the corporate power and authority to execute and perform
this Agreement and all other agreements to be entered into in connection with
the transactions contemplated hereby.
6.3. The execution, delivery and performance of this Agreement and all
other agreements to be entered into in connection therewith have been duly
authorized by the Board of Directors of the Buyer and by all necessary corporate
action, and do not violate or conflict with any provisions of the Certificate of
Incorporation or Bylaws of the Buyer or any agreement, instrument, law or
regulation to which the Buyer is a party or by which Buyer is bound.
6.4. No approval or authorization of this Agreement or any other agreement
to be entered into in connection with the transactions contemplated by this
Agreement is required by law or otherwise in order to make this Agreement or any
other agreements entered into in connection herewith binding upon the Buyer,
except as set forth on Schedule 6.4. Upon the execution and delivery of this
Agreement and any other agreement in connection therewith, such agreements will
constitute legal, valid and binding obligations of Buyer, enforceable in
accordance with their respective terms.
6.5. Buyer represents and acknowledges that (a) Sellers have made the books
and records of the Business available for review by Buyer; (b) Sellers have
permitted Buyer to inspect and investigate Sellers' properties and operations
and interview Sellers' Principals and outside accountants; and (c) Buyer has in
fact conducted a due diligence review of Sellers' operations and financial
affairs. Buyer further represents that it has not relied upon Sellers' Financial
Statements.
6.6. Buyer represents and warrants that as of the Closing Date, Buyer will
(i) offer employment upon the same compensation terms (including salary, bonus,
personal time and vacation policies) to all Sellers' employees identified on
Schedule 5.12 hereto and (ii) continue (or replace upon similar or better terms
and conditions) the group health insurance coverage policy presently in force
without a gap period for such employees; it being understood that nothing
contained in this Section 6.6 shall be construed to make any other person an
intended beneficiary of this Agreement or to limit in any manner Buyer's right
to freely manage its business affairs on a going forward basis (including hiring
or firing and revising compensation and benefit policies, except as relating to
Principals or their family members).
7. COVENANTS PRIOR TO CLOSING
During the period from the date hereof through the Closing, the Sellers and
the Principals covenant and agree with Buyer that:
7.1. The Sellers will give to Buyer's officers, employees, representatives,
agents, counsel and accountants, full access during normal business hours to all
of their premises, properties, operations and books and records, and will cause
the Sellers' officers, employees, representatives, agents, counsel and
accountants to furnish to Buyer's officers, employees, representatives, agents,
counsel and accountants such financial and operating data and other information
with respect to the business and properties of the Sellers to the extent
available as such officers, employees, representatives, agents, counsel and
accountants shall request.
7.2. The Sellers and the Principals will use commercially reasonable
efforts to preserve intact Sellers' business organization, keep available the
services of Sellers' present officers and employees and preserve Sellers'
present relationships with persons with whom it has significant business
relations. The Sellers will, in their sole discretion and in the presence of at
least one of the Principals, permit Buyer or its authorized representatives to
meet with clients and others having business relations with the Sellers. Nothing
contained in this Agreement shall prevent Sellers from taking actions to collect
accounts receivable in the ordinary course of business.
7.3. (a) During the period from the date hereof through the Closing, except
with the prior written consent of Buyer, the Sellers shall conduct their
business in the ordinary course.
(b) During the period from the date hereof through the Closing, the Sellers
will not, except in the ordinary course of business:
(i) issue or commit to issue any capital stock, partnership interest
or other ownership interest of the Sellers,
(ii) grant or commit to grant any options, warrants or other rights to
subscribe for or purchase or otherwise acquire any shares of its capital
stock or other ownership interest or issue or commit to issue any
securities convertible into or exchangeable for shares of capital stock or
other ownership interest,
(iii) effect a split or reclassification of any capital stock of the
Sellers or a recapitalization of the Sellers,
(iv) amend the Certificate of Incorporation, By-Laws, partnership
agreement or other governing instruments of the Sellers,
(v) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets or stock of, or in any
other manner, any business of any corporation, partnership, association or
other business organization or division thereof, or acquire or agree to
acquire the beneficial ownership of any class of the outstanding capital
stock or other equity interest of any such entity, or otherwise acquire or
agree to acquire any assets which are material to the Sellers,
(vi) sell, lease or otherwise dispose of, or grant any options with
respect to, any of their assets which are material, individually or in the
aggregate, to the Sellers,
(vii) adopt or enter into any collective bargaining agreement or
employee benefit plans,
(viii) pay any bonuses to, or incur any bonuses payable to, any of
their officers or directors, grant to any officer or director any increase
in salaries, fees or other forms of compensation or in severance or
termination pay, otherwise than as required by an agreement existing on the
date hereof or enter into or amend any employment agreement with any
officer or director,
(ix) take any action (excluding, without limitation, an action that
might otherwise be permitted under this paragraph 7.3) that would or might
result in any of the representations and warranties of the Sellers or the
Principals in this Agreement becoming untrue or that would have been
required to be set forth in any such representation or warranty or in the
Schedules if such action had occurred prior to the date hereof; provided,
however, that Sellers may continue to institute and continue proceedings to
collect accounts receivable in the ordinary course of business,
(x) accelerate the collection of accounts receivable or defer the
payment of liabilities, or
(xi) take any other action, or enter into any other transaction, not
in the ordinary course of business and consistent with prior practices.
7.4 The Sellers, Principals and Buyer shall use commercially reasonable
efforts to obtain all consents and approvals of third parties which may be
necessary or required for the consummation of this Agreement and the
transactions contemplated hereby. Notwithstanding anything to the contrary
contained in this Agreement, the parties agree that the failure to obtain
third-party consents to the assignment of any of the leased property identified
on Schedule 2.1(e) hereto shall not (i) constitute grounds to refuse to proceed
to Closing or give rise to any claim by Buyer for financial damages or
indemnification, (ii) constitute a breach of any of Seller's representations or
warranties, or (iii) excuse Buyer's undertaking to assume such assets and the
liabilities and obligations associated therewith as Assumed Liabilities. Buyer
further agrees to cooperate with Sellers in a commercially reasonable manner to
become recognized as an additional obligor on the scheduled automobile leases
referenced above, with this undertaking to survive Closing of this transaction.
7.5. The Sellers shall promptly (and in any event prior to the Closing)
advise Buyer orally and in writing of any change or event having, or which would
have (insofar as can be reasonably foreseen), a material adverse effect on the
business, properties, financial condition or results of operations of the
Sellers or would constitute, or with the passage of time would constitute, a
breach of any representation or warranty of the Sellers or Principals contained
in this Agreement. Sellers and the Principals agree that, with respect to their
representations and warranties made in this Agreement, each of them will have a
continuing obligation to supplement or amend the Schedules hereto with respect
to any matter hereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described in
the Schedules hereto. In the event that Buyer elects to proceed to Closing
pursuant to this Agreement after Buyer obtains actual knowledge of any breach of
warranty or representation of Sellers (or otherwise excusing Buyer from closing
pursuant to this Agreement), then Buyer shall thereby automatically and
irrevocably waive any such breaches or closing conditions.
7.6. Pending the Closing Date, the Sellers shall not take any action which
is inconsistent with this Agreement.
7.7. Sellers and the Principals will not, and will cause their directors,
officers, employees, agents and affiliates not to, directly or indirectly,
solicit or initiate the submission of proposals from, or solicit, encourage,
entertain or enter into any arrangement, agreement or understanding with, or
engage in any discussions with, or furnish any information to, any person, other
than Buyer or a representative thereof, with respect to the acquisition of all
or any part of the Assets or Business (whether by merger, purchase of stock or
assets or otherwise).
8. CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
The obligations of the Sellers hereunder are, at the option of the Sellers,
subject to the following conditions:
8.1. The representations and warranties of Buyer contained herein shall be
true and correct on the date when made and at and as of the Closing Date as if
then made, and Buyer shall have performed and complied with all agreements,
covenants and conditions required hereunder to be performed or complied with by
it prior to or at the Closing.
8.2. At the Closing, the Sellers shall have received an opinion, dated the
Closing Date, of Stroock & Stroock & Lavan LLP, counsel for Buyer, in form and
substance reasonably satisfactory to the Sellers.
8.3. At the Closing, the Sellers shall have received certified copies of
the resolutions of the Board of Directors of Buyer authorizing and approving
this Agreement.
8.4. There shall not be any order, injunction or decree of any court having
jurisdiction to restrain, enjoin, invalidate or otherwise prevent this Agreement
and the consummation of the transactions contemplated hereby, and there shall
not be any litigation or proceeding by any commission, agency or department of
the federal or any foreign, state or local government to restrain, enjoin,
invalidate or otherwise prevent this Agreement and the consummation of the
transactions contemplated hereby.
8.5. All governmental approvals required for the consummation of this
Agreement and the other transactions contemplated hereby shall have been
obtained, the withholding of which could have a material adverse effect on
Sellers, shall have been obtained.
8.6. All legal matters in connection with this Agreement and the
transactions contemplated by this Agreement, and all documents and instruments
incident thereto, shall be reasonably satisfactory in form and substance to
counsel to the Sellers, and the Sellers and such counsel shall have received all
such documents and instruments, or copies thereof (certified if requested), as
they may have reasonably requested.
8.7. The Sellers shall have received a certificate of an officer of Buyer,
dated the Closing Date, in form and substance satisfactory to the Sellers,
certifying as to the fulfillment on behalf of Buyer of the conditions specified
in paragraphs 8.1, 8.4 and 8.5 hereof.
8.8. Each of the Principals shall have entered into an employment agreement
with the Buyer in substantially the form of Exhibit A attached hereto.
9. CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are, at the option of Buyer, subject to
the following conditions:
9.1. The representations and warranties of the Sellers and the Principals
contained herein shall be true and correct on the date when made and at and as
of the Closing Date as if then made and the Sellers and the Principals shall
have performed and complied with all agreements, covenants and conditions
required hereunder to be performed or complied with by them prior to or at the
Closing.
9.2. At the Closing, Buyer shall have received an opinion dated the Closing
Date, from counsel for the Sellers, in form and substance reasonably
satisfactory to Buyer.
9.3. Buyer shall have received certified copies of the resolutions of the
Board of Directors and shareholders of WRA authorizing and approving this
Agreement.
9.4. There shall not be any order, injunction or decree of any court having
jurisdiction to restrain, enjoin, invalidate or otherwise prevent this Agreement
and the consummation of the transactions contemplated hereby, and there shall
not be any litigation or proceeding by any commission, agency or department of
the federal or any foreign, state or local government to restrain, enjoin,
invalidate or otherwise prevent this Agreement and the consummation of the
transactions contemplated hereby.
9.5. All governmental approvals required for the consummation of this
Agreement and the other transactions contemplated hereby shall have been
obtained, the withholding of which would have a material adverse effect on the
financial condition or business of the Sellers, shall have been obtained.
9.6. At the Closing, Buyer shall have received from each state or other
jurisdiction in which the Sellers are incorporated or qualified as a foreign
corporation, good standing (or equivalent) certificates dated within thirty days
prior to the Closing Date, as to the due incorporation or organization, legal
existence and qualification of the Sellers in such jurisdiction.
9.7. Since the Balance Sheet Date, there shall have been no material
adverse change in the properties, assets, business, results of operations or
financial condition of the Sellers. Between the date hereof and the Closing
Date, there shall not have been any material loss, damage or destruction to or
of any of the assets, properties or business of Sellers, whether or not covered
by insurance, nor shall the assets, properties or business of Sellers have been
adversely affected in any way as a result of any fire, accident, or other
casualty, war, civil strife, labor dispute, riot or act of God or the public
enemy.
9.8. All legal matters in connection with this Agreement and the
transactions contemplated by this Agreement, and all documents and instruments
incident thereto, shall be reasonably satisfactory in form and substance to
Stroock & Stroock & Lavan LLP, counsel to Buyer, and Buyer and such counsel
shall have received such documents and instruments, or copies thereof (certified
if requested), as they may have reasonably requested.
9.9. Buyer shall have received a certificate of the Sellers executed by its
President and partner, dated the Closing Date, in form and substance
satisfactory to Buyer, certifying as to the fulfillment on behalf of the Sellers
of the conditions specified in paragraphs 9.1, 9.5, 9.6, and 9.8 hereof.
9.10. Each of the Principals shall have entered into an employment
agreement with the Buyer in substantially the form of Exhibit A attached hereto.
10. TERMINATION OF AGREEMENT
10.1. This Agreement may be terminated at any time prior to the Closing:
(a) by mutual consent of the Sellers and the Buyer;
(b) by either Sellers or the Buyer if this Agreement shall not have
been consummated on or before May 30, 1997; provided, however, that a material
breach of this Agreement by a terminating party shall not be the reason for the
failure of the Closing to occur;
(c) by the Sellers if any of the conditions specified in Section 8
hereof has not been met in all material respects or waived by the Sellers; or
(d) by Buyer if any of the conditions specified in Section 9 hereof
has not been met in all material respects or waived by Buyer.
11. CLOSING DOCUMENTS
11.1. Sellers agree to deliver to Buyer on the Closing Date appropriate
assignments and bills of sale with respect to the Assets being sold hereunder,
together with the documents required to be delivered by Sellers pursuant to
Section 9 hereof. At the Closing, WRA shall amend its Certificate of
Incorporation to change its name so that Buyer may utilize the corporate name of
WRA after the Closing.
11.2. Buyer agrees to deliver on the Closing the Purchase Price and the
documents required to be delivered by Buyer pursuant to Section 8 hereof.
12. COSTS
Each party covenants and agrees that it shall be responsible for and bear
its respective costs and expenses in connection with, or arising out of, the
negotiation or consummation of this Agreement and the transactions contemplated
hereby. Sellers shall be responsible for any sales, use or transfer taxes (other
than taxes, if any, applicable to automobiles) applicable to the transactions
provided for herein.
13. INDEMNIFICATION
13.1. INDEMNIFICATION BY SELLERS. Sellers and the Principals jointly and
severally hereby agree to indemnify Buyer against and hold it harmless from any
and all losses, liabilities, costs, damages, claims and expenses (including,
without limitation, reasonable attorneys fees and expenses incurred by Buyer in
any action or proceeding between Buyer and Sellers and/or the Principals or
between Buyer and any third party or otherwise) ("Damages") which Buyer may
sustain at any time by reason of (i) noncompliance with any applicable bulk
sales or transfer law, (ii) any liability or contract of, or claim against,
Sellers, whether contingent or absolute, direct or indirect, known or unknown,
matured or unmatured (including but not limited to liabilities for taxes),
except for Assumed Liabilities, (iii) any liability or claim arising in any way
from any service rendered, or action taken by, or relating to the operations of,
Sellers prior to the Closing Date, except for the Assumed Liabilities, (iv) any
liability or claim under any environmental laws relating to any event, action or
failure to act which occurred prior to the Closing Date, or (v) the breach or
inaccuracy of or failure to comply with any of the warranties, representations,
conditions, covenants or agreements of Sellers or the Principals contained in
this Agreement (except as waived pursuant to this Agreement). Buyer shall have
the right to set- off and deduct any Damages incurred by it under this Agreement
from any payments required to be made by Buyer under any obligation of Buyer to
Sellers. The Sellers and the Principals shall not have any liability to
indemnify the Buyer except to the extent that the aggregate amount of Damages
exceeds $50,000 (exclusive of attorneys fees) and in no event shall Sellers or
the Principals have any liabilities for any Damages which exceed the amount of
the Purchase Price.
13.2. INDEMNIFICATION BY BUYER. Buyer agrees to indemnify and hold Sellers
harmless from and against any and all Damages which Sellers may sustain at any
time by reason of (i) any Assumed Liability by Buyer (including, without
limitation, obligations arising from the failure to obtain consents to the
assignment of leased property identified on Schedule 2.1(e) attached hereto) or
(ii) the breach or inaccuracy of or failure to comply with any warranties,
representations, conditions, covenants or agreements of Buyer contained in this
Agreement or in any agreement, certificate or document delivered pursuant to or
in connection with this Agreement or arising out of the Closing of the
transactions contemplated hereby.
13.3. PROCEDURES FOR INDEMNIFICATION. In the event that any claim is
asserted against any party hereto, or any party hereto is made a party defendant
in any action or proceeding, and such claim, action or proceeding involves a
matter which is the subject of this indemnification, then such party (an
"Indemnified Party") shall give written notice to the other party hereto (the
"Indemnifying Party") of such claim, action or proceeding, and such Indemnifying
Party shall have the right to join in the defense of said claim, action or
proceeding at such Indemnifying Party's own cost and expense and, if the
Indemnifying Party agrees in writing to be bound by and to promptly pay the full
amount of any final judgment from which no further appeal may be taken and if
the Indemnified Party is reasonably assured of the Indemnifying Party's ability
to satisfy such agreement, then at the option of the Indemnifying Party, such
Indemnifying Party may take over the defense of such claim, action or
proceeding, except that, in such case, the Indemnified Party shall have the
right to join in the defense of said claim, action or proceeding at its own cost
and expense.
14. NON-COMPETITION
14.1. Each of the Sellers and the Principals agrees that for a period of
five years after the Closing Date, they will not, directly or indirectly, within
a radius of 100 miles of metropolitan Chicago, Illinois, or 100 miles
surrounding Sellers' existing place of business or in any county or city in
which Sellers conducted their business, including without limitation all
counties and cities in which there have been clients, agents, employees or
independent contractors of Sellers (the "Territory"), except in the course of
the Principals' duties as employees of Buyer or as provided in this Agreement,
(i) engage in any business the same as or similar to, or engage in competition
with, the business heretofore or presently engaged in by Sellers, (ii) render
services to or have any interest, as a shareholder, owner, agent, consultant,
lender or guarantor or any other interest, in any other person engaged in the
rendering of services, which are currently being rendered by Sellers, or similar
services, or (iii) engage in competition with, or sell, services as are referred
to in clause (ii) of this paragraph; provided, however, that the foregoing shall
not be deemed to prevent the Sellers or the Principals from (x) investing in
securities if such class of securities in which the investment is so made is
listed on a national securities exchange, is issued by a company registered
under Section 12(g) of the Securities Exchange Act of 1934 or is traded on the
Nasdaq Stock Market or over-the-counter, so long as such investment holdings do
not, in the aggregate, constitute more than 5% of the voting stock of any
company's securities, (y) performing service or engaging in business as a
consultant, owner or employee for any supplier of court reporting equipment and
technology or (z) investing in the businesses of a family member of a Principal
provided that such family businesses are not in competition with the business of
Buyer or the court reporting business of Sellers.
14.2. Other than (a) another Principal or (b) a family member of a
Principal or another Principal, neither Seller nor any Principal, for a period
of three years from and after the Closing Date, shall, directly or indirectly,
(i) hire, offer to hire, entice away, retain, employ or solicit or attempt to
solicit (either for itself or as agent for another) for employment or induce,
persuade or encourage any person to leave Buyer's employ who, prior to the
Closing Date was, or during such three year period will be, employed or retained
by Buyer as a consultant, independent contractor, reporter, agent, employee or
otherwise (except for a Principal or family member of a Principal or another
Principal) or (ii) divert or attempt to divert from Buyer any business
whatsoever by influencing or attempting to influence any client or supplier of
Buyer within the Territory.
14.3. Sellers and the Principals acknowledge and agree that any breach of
this Section 14 is likely to result in irreparable injury to Buyer, that
monetary damages will be an inadequate remedy of such breach and that,
accordingly, in addition to any other remedy that Buyer may have, Buyer shall be
entitled to enforce the specific performance of this Section 14 and to seek both
permanent and temporary relief in the event of any breach hereof.
14.4. The parties acknowledge that the time, scope, geographic area and
other provisions of this Section 14 have been specifically negotiated by
sophisticated commercial parties and agree that all such provisions are
reasonable under the circumstances of the transactions contemplated by this
Agreement. If any portion of this Section 14 shall be determined to be invalid
and unenforceable as written, each such portion shall be enforced to the extent
reasonable under the circumstances and such determination shall not affect the
validity or enforceability of the balance hereof, and such balance shall remain
in full force and effect. It is understood that Sellers and the Principal are
entering into this non-competition agreement in order to induce Buyer to enter
into this Agreement.
15. BROKERS
Each party represents and warrants to the other (and agrees to indemnify
and hold harmless the other against breach of any such representation and
warranty) that it has not engaged any broker, finder or similar person or entity
in connection with the transactions provided for herein.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained herein, and all other
representations and warranties of the Sellers, the Principals and Buyer
contained in the instruments executed in connection with the consummation of the
transactions provided for herein, shall survive the execution of this Agreement,
the consummation of the sale contemplated hereby and any investigation made by
any party hereto and (except for the payment of purchase price monies to Sellers
and the assumption of the Assumed Liabilities by Buyer) shall terminate two
years after the Closing Date; provided, however, that the parties shall be
liable for all claims for indemnification made in writing prior to the
expiration of such two year period of time in accordance with the procedures set
forth in Section 13.
17. NOTICES
All notices, requests, demands, documents and other communications given or
due hereunder shall hereafter be made in writing and shall be deemed to have
been duly given when hand delivered, when received if sent by telecopier or by
same day or overnight recognized commercial courier service or three days after
being mailed by certified or registered mail, postage prepaid:
if to either Seller or Principals to:
Wolfe, Rosenberg & Associates, Inc.
188 West Randolph, Suite 2001
Chicago, Illinois 60601
with a copy to:
Stephen M. Margolin
Chuhak & Tecson, P.C.
225 W. Washington, Suite 1300
Chicago, Illinois 60606
and if to the Buyer to:
Malcolm Elvey
Esquire Communications Ltd.
216 East 45th Street
New York, New York 10017
with a copy to:
Martin H. Neidell
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
18. COMPLETE AGREEMENT
This Agreement and the accompanying schedules and exhibits contain the
complete agreement between the parties hereto with respect to the sale
contemplated hereby and supersede all prior covenants and understandings between
the parties hereto with respect to such sale. This Agreement shall not be
amended or modified except by a writing signed by each party to be charged and
this Agreement may not be discharged except by performance in accordance with
its terms or by a writing signed by each party to be charged.
19. SEVERABILITY
In case any one or more of the provisions hereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
20. WAIVER, REMEDIES
Except as set forth in this Agreement, no waiver of any breach of any
provision of this Agreement shall be held to be a waiver of any other or
subsequent breach, and the failure of a party to enforce at any time any
provision hereof shall not be deemed a waiver of any right of any such party to
subsequently enforce such provision or any other provision hereunder. All
remedies afforded in this Agreement shall be taken and construed as cumulative,
that is, in addition to every other remedy provided herein or by law.
21. COUNTERPARTS
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. COOPERATION; COVENANTS AFTER CLOSING
Sellers and the Principals will cooperate with Buyer, and Sellers and the
Principals will use their commercially reasonable efforts to have the officers
and directors of Sellers cooperate with Buyer, at Buyer's request and expense,
on and after the Closing Date, in endeavoring to effect the collection of
accounts receivable owing to Sellers at the Closing Date and in furnishing
information, evidence, testimony and other assistance in connection with any
actions, proceedings, arrangements or disputes involving the Sellers and/or
Buyer and based upon contracts, arrangements, commitments or acts of Sellers
which were in effect or occurred on or prior to the Closing Date.
23. AUTHORIZATION; MAIL
Sellers agree that Buyer shall have the right and authority to collect for
the account of Buyer all receivables and other items which shall be transferred
to Buyer as provided herein, and to endorse with the name of Sellers any checks
received on account of any such receivables or other items. Sellers agree that
they will promptly transfer and deliver to Buyer any cash or other property that
Sellers may receive in respect of any such receivables or other items. Sellers
authorize and empower Buyer from and after the Closing Date (i) to receive and
open mail addressed to Sellers and (ii) to deal with the contents thereof in any
manner Buyer sees fit, provided such mail and the contents thereof relate to the
Assets or otherwise to the business of Sellers as conducted by Buyer or to any
of the Assumed Liabilities. Sellers agree to deliver to Buyer promptly upon
receipt any mail, checks or other documents received by them pertaining to the
Assets or any of the Assumed Liabilities. Buyer agrees to deliver to Sellers any
mail which it receives to which it is not entitled by reason of this Agreement
or otherwise and to which Sellers are entitled.
24. FURTHER ASSURANCES
Sellers agree at any time and from time to time after the Closing Date,
upon the request of Buyer, to do, execute, acknowledge and deliver, or to cause
to be done, executed, acknowledged and delivered, all such further acts,
assignments, transfers, powers of attorney and assurances as may be required for
the better assigning, transferring, conveying, and confirming to Buyer, or to
its successors and assigns, of any or all of the Assets and to carry out the
terms and conditions of this Agreement.
25. CONFIDENTIALITY
Sellers and the Principals, on the one hand, and Buyer, on the other hand,
severally agree not to, directly or indirectly, without the prior written
consent of the other, use or disclose to any person, firm or corporation, any
information, trade secrets, confidential customer information, technical data or
know-how relating to the products, processes, methods, equipment or business
practices of the other. In the event that the transactions contemplated by this
Agreement do not close for any reason, Buyer shall immediately return or destroy
all documents, records, instruments and materials provided by the Sellers to
Buyer, together with all copies and summaries and other materials derived from
the foregoing (the "Confidential Information"). Buyer further agrees that for a
period beginning on the date hereof and ending two years from the date the
parties terminate this Agreement relating to the sale of the Business, Buyer
shall not, without the prior written approval of the Principals, either directly
or indirectly, in any capacity (whether as owner, partner, shareholder, broker,
dealer, agent, employee, consultant or otherwise): (i) contact, solicit the
service of or encourage any employees, independent contractors or agents of
Sellers to terminate their employment or independent contractor or agent
relationships with Sellers; (ii) contact, solicit or encourage any suppliers,
representatives or distributors of Sellers to curtail their business dealings
with Sellers or alter their relationship with Sellers; or (iii) use any
Confidential Information provided by Sellers for competitive purposes or
encourage any clients or customers of Sellers to terminate such client or
customer relationships with Sellers; provided, however, that the foregoing shall
not prevent Buyer from acquiring, owning and operating a court reporting company
in the Territory. The parties acknowledge that they have attempted to limit
Buyer's right hereunder only to the extent necessary to protect the Sellers from
unfair competition. The parties hereby agree that, if the scope or
enforceability of the restrictive covenant is in any way disputed at any time, a
court or other trier of fact may modify and enforce the covenant to the extent
that it believes to be reasonable under the circumstances existing at that time.
If Buyer is requested in any civil or criminal legal proceeding or any
regulatory proceeding or similar process, to disclose any part of the
Confidential Information, Buyer will, if not legally prohibited from doing so,
give the Sellers timely notice of such request so that the Sellers may seek an
appropriate protective order and/or waive Buyer's compliance with this
Agreement.
Buyer recognizes that the disclosure, divulgence or other unauthorized use
of the Confidential Information or other breach of this Section would cause the
Sellers irreparable harm and injury, and that damage remedies for breach of any
provision of this Section would be inadequate. Accordingly, without prejudice to
the rights and remedies otherwise available, the Sellers shall be entitled to
equitable relief by way of injunction if the Buyer or any of its representatives
breach any of the provisions of this Agreement.
26. BENEFIT OF PARTIES; ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
Agreement may not be assigned by Sellers or the Principals except with the prior
written consent of Buyer. Buyer may freely assign this Agreement to a wholly-
owned subsidiary of Buyer; provided, however, that Buyer shall remain obligated
to Sellers and Principals pursuant to this Agreement. Nothing herein contained
shall confer or is intended to confer on any third party or entity which is not
a party to this Agreement any rights under this Agreement.
27. GOVERNING LAW
This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the State of Illinois applicable to contracts made and to be
entirely performed in such State. The parties hereto agree and intend that the
proper and exclusive venue and forum for the litigation of any disputes arising
out of this Agreement shall be in state or federal courts located in Cook
County, Illinois.
28. ATTORNEYS FEES
In any action or proceeding between the parties to this Agreement, the
prevailing party in such action or proceeding shall be entitled to be reimbursed
for its reasonable attorneys fees and expenses incurred in connection therewith.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Agreement to be executed by their authorized representatives as of
the day and year first above written.
Wolfe, Rosenberg & Associates, Inc.
By: /s/ ___________________________
M&M Computrans
By:/s/ ___________________________
/s/ _____________________________
Seymour L. Wolfe
/s/ _____________________________
Fred R. Rosenberg
Esquire Communications Ltd.
By:/s/ _________________________
