Exhibit 2.3
RESTATED EARNOUT AGREEMENT
THIS RESTATED EARNOUT AGREEMENT (this "Agreement") is executed on
September __, 1998 but made effective as of the 30th day of October, 1997, by
and among IMTEK OFFICE SOLUTIONS, a Delaware corporation ("Imtek") and persons
executing this Agreement on behalf of certain of the shareholders (the
"Shareholders") of THOMPSON OFFICE PRODUCTS, INC., a Maryland corporation
("Thompson").
WHEREAS, the parties entered into an Agreement relating to certain
earnout payments to be made to the Shareholders in the event revenue milestones
are reached, which did not accurately reflect the intentions of the parties (the
"Original Agreement");
WHEREAS, the parties now desire to enter into this Restated Earnout
Agreement in order to accurately memorialize the intentions of the parties with
respect to the transactions contained herein, which shall supercede the Original
Agreement;
WHEREAS, Imtek has acquired all of the issued and outstanding shares of
common stock of Thompson in exchange for 1,000,000 issued shares of Common Stock
of Imtek (the "Exchange Offer"); and
WHEREAS, Imtek agreed, in a Memorandum of Understanding dated August
23, 1997, to pay the Shareholders additional remuneration for the attainment of
revenue milestones.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contains herein, the parties agree as follows:
ARTICLE 1
PAYMENT FOR ACHIEVING REVENUE MILESTONES
1.1 Earn Out. Subject to all of the terms of this Agreement, Imtek
agrees to pay to the Shareholders the amounts shown below ("Earn Out") when
revenues from acquired Thompson business operations exceed the cumulative
revenues shown in Section 1.2, below ("Earn Out Table").
1.2 Earn Out Table.
Cumulative Revenues Earn Out Amount
------------------- ---------------
$400,000 $46,000
$500,000 $46,000
$600,000 $46,000
$700,000 $46,000
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
The Shareholders hereby represent and warrant to Imtek that:
2.1 Organization. Thompson is a corporation duly organized, validly
existing, and in good standing under the laws of Maryland, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
2.2 Compliance with Laws. Company has complied with, and is not in
violation of, applicable federal, state or local statues, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation) affecting its properties or the operation of its
business, except for matters which would not have a material affect on Company
or its properties.
2.3 Authority. The board of Directors of Thompson has authorized the
execution of this Agreement and the transactions contemplated herein, and
Thompson has full power and authority to execute, deliver and perform this
Agreement and this Agreement is the legal, valid and binding obligation of
Thompson is enforceable in accordance with its terms and conditions, except as
may be limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally. The approval of Thompson's shareholders is not
necessary for this transaction.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF IMTEK
Imtek represents and warrants to Shareholders that:
3.1 Organization. Imtek is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware, has all necessary
corporate powers to own properties and to carry on its business as now owned and
operated by it, and is duly qualified to do business and is in good standing in
each of the states where its business requires qualification.
3.2 Compliance with Laws. Imtek has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning, environmental
or other law, ordinance, or regulation) affecting its properties or the
operation of its business.
3.3 Litigation. Imtek is not a party to any suit, claim, assessment,
action, arbitration, or legal, administrative, or other proceeding or
governmental investigation pending or, to the best knowledge of Imtek,
threatened against or affecting Imtek or its business, assets, or financial
condition. Imtek is not in default with respect to any order, writ, injunction,
or decree of any federal, state, local, or foreign court, department agency, or
instrumentality. Imtek is not engaged in any legal action to recover moneys due
to it except in the ordinary course of business.
3.4 Authority. The board of Directors of Imtek has authorized the
execution of this Agreement and the transactions contemplated herein, and Imtek
has full power and authority to execute, deliver and perform this Agreement and
this Agreement is the legal, valid and binding obligation of Imtek, is
enforceable in accordance with its terms and conditions, except as may be
limited by bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally. The approval of Imtek's shareholders is not necessary
for this transaction.
3.5 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by Imtek and the performance by Imtek or their obligations
hereunder in the time and manner contemplated will not cause, constitute or
conflict with or result in (a) any material breach or violation of any of the
provisions of or constitute a default under any license, indenture, mortgage,
charter, instrument, certificate of incorporation, bylaw, or other agreement or
instrument to which Imtek is a party, or by which it may be bound, nor will any
consents or authorizations of any party, or by which it may be bound, nor will
any consents or authorizations of any party other than those hereto be required,
(b) an event that would permit any party to any material agreement or instrument
to terminate it or to accelerate the maturity of any indebtedness or other
obligation of Imtek, or (c) an event that would result in the creation or
imposition of any material lien, charge, or encumbrance of any asset of Imtek.
ARTICLE 4
CONDITIONS PRECEDENT TO IMTEK'S PERFORMANCE
4.1 Conditions. Imtek's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article VI. Imtek may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Imtek of any other condition of or any of Imtek's
other rights or remedies, at law or in equity, if Company shall be in default of
any of their representations, warranties, or covenants under this Agreement.
4.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Shareholders in the Agreement
or in any written statement that shall be delivered to Imtek under this
agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
4.3 Performance. Company shall have perform, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
4.4 Absence of Litigation. No action, suit, or proceeding before any
court of any governmental body of authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Company or Shareholders on or before the
Closing Date.
ARTICLE 5
CONDITIONS PRECEDENT TO
THOMPSON'S SHARHOLDERS PERFORMANCE
5.1 Conditions. Thompson's obligations hereunder shall be subject to
the execution, at or before the Closing, of the Exchange Agreement.
ARTICLE 6
CLOSING
6.1 Closing. The closing of this transaction shall be held at the
offices of Imtek, or such other place as shall be mutually agreed upon, on such
date as shall be mutually agreed upon by the parties.
ARTICLE 7
NON-COMPETE
7.1 General Non-Compete. The Shareholders listed in Exhibit 1 attached
hereto, acknowledge the receipt of Imtek's Stock and other value consideration
and agree not to compete with the business of the Imtek, it successors or
assigns for a period of 4 years commencing from the date of this Agreement. The
term "not compete" with the business of the Imtek shall mean that the
Shareholders shall not directly or indirectly, or in any capacity, on behalf of
themselves or on behalf of any other firm, engage or compete in a business
substantially similar or competitive to the business of Thompson.
7.2 Non-Compete in the Viatical Settlement Business. The Shareholders
listed in Exhibit 1 of this Agreement, acknowledge the receipt of valuable
shares of the Imtek's Stock and other value consideration in exchange for
Thompson's viatical settlement business and agree not to directly or indirectly,
as an owner, officer, director, employee, consultant, or stockholder, engage in
the viatical settlement business for a period of 4 years commencing with the
date of this Agreement. The Shareholders acknowledge and agree herein that the
non-compete agreements described in this Article 8 specifically prohibits any
solicitation of funds, life insurance policies or services from any companies,
brokers, agents, consultants, physicians, attorneys, hospitals, health care
service providers and medical testing laboratories listed in the Exchange Offer.
Thompson's viatical settlement business shall mean the origination, buying,
funding, servicing, and selling of life insurance policies owned by terminally
ill individuals.
ARTICLE 8
MISCELLANEOUS
8.1 Headings. The Article and paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be deemed
to define, limit, or add to the meaning of any provision of this Agreement.
8.2 No Oral Change. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
8.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressed in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other subsequent breach.
8.4 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
8.5 Choice of Law. This Agreement and its application shall be governed
by the laws of the State of Maryland.
8.6 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.7 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
Imtek: Imtek Office Solutions, Inc.
8028 Ritchie Highway, Suite 208
Pasadena, MD 21122
Thompson Office Products, Inc.
1818 Pot Spring Road, Suite 242
Timonium, MD 21093
8.8 Binding Effect. This Agreement shall insure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
8.9 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein. .
8.10 Announcements. Imtek and Shareholders will consult and cooperate
with each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or the employees,
customers or suppliers.
8.11 Expenses. Each party will pay its own legal, accounting and any
other out-of-pocket expenses reasonably incurred in connection with this
transaction, whether or not the transaction contemplated hereby is consummated.
8.12 Survival of Representations and Warranties. The representation,
warranties, covenants and agreements of the parities set forth in this Agreement
or in any instrument, certificate, opinion, or other writing providing for in
it, shall survive the Closing irrespective of any investigation made by or on
behalf of any party.
AGREED TO AND ACCEPTED as of the date first above written.
IMTEK OFFICE SOLUTIONS, INC.
/s/ Edwin C. Hirsch
Edwin C. Hirsch - President
/s/ Robert W. Hoover
Robert W. Hoover
/s/ Andrew Walter
Andrew Walter
/s/ Brad Thompson
Brad Thompson