EXHIBIT 2.2
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT
dated as of the 28th day of May, 2004 is by and between:
MAXIMUS, Inc., a Virginia
corporation with an address at 11419 Sunset Hills Road, Reston,
Virginia 20190 (" MAXIMUS "); and
Manatron, Inc. ("
Seller "), a Michigan corporation with an address at 510 E.
Milham Avenue, Portage, Michigan 49002.
Preliminary
Statement
Seller desires to sell to
MAXIMUS, and MAXIMUS desires to purchase from Seller, substantially
all of the operations and certain assets of Seller that are used
exclusively in Seller's Judicial Product Line (the "
Business ") upon the terms and conditions of this
Agreement.
NOW, THEREFORE, in
consideration of the mutual promises hereinafter set forth and
other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
SALE AND PURCHASE OF
THE ASSETS
1.1
Sale of Assets . Subject to the provisions of
this Agreement, at the Closing (as defined in Section 1.8 hereof)
Seller agrees to sell, and MAXIMUS agrees to purchase, all of
Seller's right, title and interest in and to the following assets
(collectively, the " Purchased Assets "):
(a) all rights under the
contracts, leases, or agreements listed on Schedule 1.1(a)
attached hereto, as such schedule shall be updated on the Closing
Date to reflect all contracts, leases and agreements of the
Business to be transferred as of the Closing Date (the "
Assigned Contracts ");
(b) the software and all
intellectual property rights to such software that are used in the
Business as set forth on Schedule 1.1(b) attached hereto
(the " Software ");
(c) certain fixed and
prepaid assets held by Seller for use in the Business as set forth
on Schedule 1.1(c) hereto;
(d) all permits, licenses,
registrations, certificates, orders, approvals, franchises,
variances and similar rights issued by or obtained from any
governmental, regulatory or administrative authority or agency,
court or arbitrational tribunal (a " Governmental Entity ")
related to the Business (each, a " Permit "), to the extent
transferable to MAXIMUS; and
(e) all of the proprietary
rights of Seller relating to or used in connection with the
Business and all goodwill developed through the use of such
property and rights, including (without limitation), all
trademarks, trade names, software, and know-how and set forth on
Schedule 1.1(e) attached hereto.
Specifically excluded from
the Purchased Assets are (a) assets of Seller not related to the
Business and (b) accounts receivable outstanding as of the Closing
Date (as defined in Section 1.8 below) that are specifically
related to the Business.
1.2
Assumption of Liabilities . Upon the sale and
purchase of the Purchased Assets, MAXIMUS shall assume and agree to
pay or discharge when due only those liabilities and obligations of
Seller described on Schedule 1.2 that are to be performed
after the Closing Date (the " Assumed Liabilities "). Except
as otherwise specifically provided in this Section 1.2: (a) MAXIMUS
shall not assume or be liable for any obligation or liability of
Seller of any kind or nature, known, unknown, contingent or
otherwise (each, an " Excluded Liability "), including
without limitation: (i) any liability of Seller incurred in
connection with this Agreement and the transactions provided for
herein, including brokerage, accounting and counsel fees, transfer
and other taxes, and expenses pertaining to the performance by
Seller of its respective obligations hereunder; (ii) any
litigation, proceeding, claim by any person or entity or other
obligation of Seller relating to the Business or operations of
Seller or otherwise relating to the Purchased Assets prior to the
Closing Date, whether or not such litigation, proceeding, claim or
obligation is pending, threatened, or asserted before, on, or after
the Closing Date; (iii) any liability or obligation (x) for any Tax
(as defined in Section 2.5) of Seller with respect to any taxable
period (or portion thereof), whether before or after the Closing
Date, (y) for any Tax resulting from or attributable to the
consummation of the transactions contemplated by this Agreement, or
(z) for the Taxes of any person other than Seller under Treasury
Regulation Section 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract,
or otherwise (each, a " Tax Liability "); (iv) any claim
made by an employee or former employee of Seller (including any
employees of Seller who are subsequently hired by MAXIMUS) arising
out of or otherwise in respect of his or her employment with or
termination by, Seller; and (v) any obligations of Seller under any
Law or Regulation (as defined in Section 2.7 below); and (b) Seller
shall be solely responsible for any and all liabilities and
obligations of Seller not included within the Assumed Liabilities.
The assumption of the Assumed Liabilities by MAXIMUS hereunder
shall be treated as independent of its existing business and shall
not enlarge any rights of third parties under contracts or
arrangements with MAXIMUS or Seller. Nothing herein shall prevent
MAXIMUS from contesting in good faith any of the Assumed
Liabilities.
1.3
Purchase Price and Payment .
(a) The purchase price to
be paid by MAXIMUS for the Purchased Assets shall be $2,269,383.07
(as such amount may be adjusted pursuant to Section 7.1, the "
Purchase Price "). The Purchase Price shall be payable in
the manner described in Section 1.3(b).
(b) MAXIMUS shall deliver
to Seller at the Closing the amount of $1,773,887.47, as summarized
on Schedule 1.3(b) attached hereto, by wire transfer of
funds, to an account designated in writing by Seller.
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1.4
Transfer of Purchased Assets . At the Closing,
Seller shall deliver or cause to be delivered to MAXIMUS a Bill of
Sale and Assignment in the form of Exhibit A hereto and such
other instruments of transfer as may be necessary to effectively
vest in MAXIMUS all of Seller's right, title to and interest in all
the Purchased Assets free and clear of all liens, restrictions and
encumbrances.
1.5
Assignment and Assumption of Assumed
Liabilities . MAXIMUS and Seller shall execute and deliver an
Assignment and Assumption Agreement in the form of Exhibit B
hereto pursuant to which Seller shall transfer and MAXIMUS shall
assume all of Seller's rights and obligations under the Assumed
Liabilities.
1.6
Delivery of Records and Contracts . At the
Closing, Seller shall deliver or cause to be delivered to MAXIMUS
all written leases, contracts, commitments and rights evidencing
the Purchased Assets and Assumed Liabilities. Seller shall take all
requisite steps to put MAXIMUS (or its designee) in actual
possession and operating control of the Purchased Assets. Seller
shall deliver customer lists and similar intellectual property
which are part of the Purchased Assets and, if available, in
electronic form.
1.7
MAXIMUS Designee . MAXIMUS shall have the
right, in its sole discretion, to designate one or more direct or
indirect subsidiaries to purchase the Purchased Assets subject to
this Agreement and fulfill the other obligations and exercise the
other rights of MAXIMUS hereunder; provided, however, no such
designation shall relieve MAXIMUS of its obligations under this
Agreement.
1.8
Closing . The Closing shall be deemed to take
place on May 31, 2004 at 5:00 p.m. local time at the offices of
MAXIMUS in Reston, Virginia, or at such other place, time or date
as may be mutually agreed upon by the parties (the " Closing
Date ").
1.9 Allocation of Purchase
Price . Within sixty (60) days after the Closing Date, MAXIMUS
shall prepare or cause to be prepared, and shall provide to Seller,
a statement (the " Asset Acquisition Statement ") allocating
among the Purchased Assets (including, without limitation, all
Assumed Liabilities) the Purchase Price for the Purchased Assets.
Seller agrees to make available all information reasonably
requested by MAXIMUS to enable MAXIMUS to prepare such Asset
Acquisition Statement. The Asset Acquisition Statement shall be
prepared in accordance with the provisions of Section 1060 of the
Internal Revenue Code of 1986, as amended (the " Code ").
Within ten (10) days after the receipt of such Asset Acquisition
Statement, Seller will propose to MAXIMUS any reasonable changes to
such Asset Acquisition Statement (and in the event no such changes
are proposed in writing to MAXIMUS within such time period, Seller
will be deemed to have agreed to, and accepted, the Asset
Acquisition Statement). MAXIMUS and Seller will attempt in good
faith to resolve any differences with respect to the Asset
Acquisition Statement, in accordance with requirements of Section
1060 of the Code, within fifteen (15) days after MAXIMUS' receipt
of written notice of objection from Seller. If Seller withholds its
consent to the allocation reflected in the Asset Acquisition
Statement, and MAXIMUS and Seller are unable to resolve such
differences within such time period, then any remaining disputed
matters will be finally and conclusively determined in accordance
with requirements of Section 1060 of the Code by an independent
accounting firm selected by mutual agreement of Seller and MAXIMUS,
which accounting firm shall not have
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been previously employed by
MAXIMUS or Seller (or any affiliates of such parties) within the
three-year period preceding the date such disputed matters are
submitted for resolution (the " Arbitrator "). Promptly, but
not later than fifteen (15) days after such matters are submitted
to it for resolution hereunder, the Arbitrator will determine those
matters in dispute and will render a written report as to the
disputed matters and the resulting allocation of the purchase price
(together with any Assumed Liabilities), which report shall be
conclusive and binding upon the parties. The fees and expenses of
the Arbitrator in respect of such report shall be paid one-half by
MAXIMUS and one-half by Seller. MAXIMUS and Seller shall each file
or cause to be filed IRS Form 8594 for its taxable year that
includes the Closing Date in a manner consistent with the
allocation set forth on the Asset Acquisition Statement as so
finalized, and (except as set forth below relating to a revised
Asset Acquisition Statement) shall not take any position on any tax
return inconsistent with the allocation provided in the Asset
Acquisition Statement. In the event that any adjustment is required
to be made to the Asset Acquisition Statement as a result of the
payment of any additional purchase price for the Purchased Assets
or otherwise, MAXIMUS shall prepare or cause to be prepared, and
shall provide to Seller, a revised Asset Acquisition Statement
reflecting such adjustment. Such revised Asset Acquisition
Statement shall be subject to review and resolution of timely
raised disputes in the same manner as the initial Asset Acquisition
Statement. Each of MAXIMUS and Seller shall file or cause to be
filed a revised IRS Form 8594 reflecting such adjustment as so
finalized for its taxable year that includes the event or events
giving rise to such adjustment, and (except as required by future
revised Asset Acquisition Statements) shall not take any position
on any tax return inconsistent with the allocation provided in the
revised Asset Acquisition Statement.
1.10
Transfer Taxes . All Michigan transfer,
documentary, sales, use, stamp, registration, and other such Taxes
and fees (including any penalties and interest) incurred in
connection with the consummation of the transactions contemplated
by this Agreement (the " Transfer Taxes ") shall be paid by
Seller when due; provided, however, if Transfer Taxes are incurred
in a jurisdiction outside of the State of Michigan, then such taxes
shall be paid equally by MAXIMUS and Seller when due. Seller will,
at its own expense, file all necessary tax returns and other
documentation with respect to all such transfer, documentary,
sales, use, stamp, registration, and other Taxes and fees, and, if
required by applicable law, MAXIMUS will join in the execution of
any such tax returns and other documentation.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller represents and
warrants to MAXIMUS that as of the date hereof (unless otherwise
specified):
2.1
Organization and Qualification . Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Michigan. Seller has all required
power and authority to own the Purchased Assets and to carry on the
Business as presently conducted and as presently contemplated to be
conducted.
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2.2
Authority to Execute and Perform the Agreement
. Seller has the requisite corporate legal right and power and all
legal authority and approvals required to enter into, execute and
deliver this Agreement and to perform fully its obligations
hereunder. This Agreement is a valid and binding obligation of
Seller, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws applicable to creditors' rights and remedies generally
and to the exercise of judicial discretion in accordance with
general principles of equity. No consent, approval or authorization
of, or designation, declaration or filing with, any governmental
authority or any other person, shareholder, or entity is required
of Seller in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
2.3
Compliance with Laws . Seller is not in
violation of any order, judgment, injunction, award or decree
binding upon it with respect to the Business which violation,
individually or in the aggregate, would have a material adverse
effect on the Purchased Assets or the Business or upon the
transactions contemplated hereby (a " Material Adverse
Effect "). Seller has complied in all material respects with
all federal, state and local or foreign laws, ordinances, rules,
regulations and orders applicable to the conduct of the Business or
the ownership of the assets and properties of the Business. To the
knowledge of Seller, there are no outstanding citations, fines or
penalties that have been imposed or asserted against Seller for any
such violation or alleged violation.
2.4
Charter and By-laws . Seller has heretofore
delivered to MAXIMUS true and complete copies of Seller's Restated
Articles of Incorporation (certified by the Secretary of the State
of Michigan) and By-laws as in effect on the date hereof. The
minute books of Seller contain true and complete records of all
meetings and consents in lieu of meetings of the Board of Directors
(and any committees thereof) and of the shareholders of Seller in
connection with this Agreement and the transactions contemplated
herein.
2.5
Tax Matters .
(a) To the best knowledge
of Seller, all Taxes (as defined below) with respect to the
Business or the Purchased Assets owed by Seller, whether or not
shown on any Tax Return (as defined below), have been paid and all
Tax Returns required to be filed by Seller on or before the date
hereof with respect to the Business or the Purchased Assets have
been filed within the time and in the manner prescribed by law. All
such Tax Returns are, in all material respects, true, correct and
complete and correctly and accurately reflect the amount of Tax
liability with respect to the Business or the Purchased Assets for
the period covered by such returns. No deficiency for any Taxes
with respect to the Business or the Purchased Assets or claim for
additional Taxes or interest thereon or penalties in connection
therewith has been proposed, asserted or threatened to be asserted
against Seller by any taxing authority.
(b) There are no liens or
other encumbrances with respect to Taxes upon any of the Purchased
Assets, other than with respect to Taxes not yet due and
payable.
(c)
There are no outstanding agreements, waivers or arrangements
extending the statutory period of limitation applicable to any
claim for, or the period for the collection or assessment of, Taxes
due from or with respect to Seller with respect to the Business or
the
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Purchased Assets for any
taxable period, and no power of attorney granted by or with respect
to Seller relating to Taxes with respect to the Business or the
Purchased Assets is currently in force.
(d) None of the Assumed
Liabilities is an obligation to make a payment that is not
deductible under Section 280G of the Code.
(e) None of the Purchased
Assets are or will be required to be treated as being (i) owned by
any other person pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect
immediately before the enactment of the Tax Reform Act of 1986, or
(ii) tax-exempt use property within the meaning of Section
168(h)(1) of the Code.
(f) As used in this
Agreement, (i) " Tax Return " means any return, declaration,
report, claim for refund, information return, or statement, and any
schedule, attachment, or amendment thereto, including without
limitation any consolidated, combined or unitary return or other
document (including any related or supporting information), filed
or required to be filed by any taxing authority in connection with
the determination, assessment, collection, imposition, payment,
refund or credit of any federal, state, local or foreign Tax or the
administration of the laws relating to any Tax, and (ii) "
Tax " or " Taxes " means any and all taxes, charges,
fees, levies, deficiencies or other assessments of whatever kind or
nature including, without limitation, all net income, gross income,
profits, gross receipts, excise, real or personal property, sales,
ad valorem, withholding, social security, retirement, excise,
employment, unemployment, minimum estimated, severance, stamp,
property, occupation, environmental, windfall profits, use,
service, net worth, payroll, franchise, license, gains, customs,
transfer, recording and other taxes, customs duty, fees assessments
or charges of any kind whatsoever, imposed by any taxing authority,
including any liability therefor as a transferee under Section 6901
of the Code or any similar provision of applicable law, as a result
of Treasury Regulation Section 1.1502-6 or any similar provision of
applicable law, or as a result of any Tax sharing or similar
agreement, together with any interest, penalties or additions to
tax relating thereof.
2.6
Assigned Contracts . There have been delivered
to MAXIMUS true and complete copies of all of the Assigned
Contracts, including all written amendments, waivers or other
modifications thereto. The Assigned Contracts include all of the
contracts of Seller exclusively related to the Business. All of
such contracts are valid and binding in accordance with their
terms, and Seller is not in default under any material term of any
such agreement, nor, to the best knowledge of Seller, is any other
party to any such contract or other agreement in default under any
material term of any such agreement, nor, to the best knowledge of
Seller, does any condition exist that, with notice or lapse of time
or both, would constitute a default thereunder. Schedule 2.6
sets forth a true, correct and complete list of all consents and
approvals of third parties that are required under the Assigned
Contracts.
2.7
No Breach . To the best knowledge of Seller,
the execution, delivery and performance of this Agreement, the Bill
of Sale and Assignment, and the Assignment and Assumption Agreement
(collectively, the "Related Agreements") by Seller, and the
consummation of the transactions contemplated hereby and thereby
will not:
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(a) violate, conflict with
or result in the breach of any of the terms or conditions of,
result in modification of the effect of, or otherwise give any
other contracting party the right to terminate, or constitute (or
with notice or lapse of time or both constitute) a default under,
any Assigned Contract or other agreement applicable to the
Purchased Assets to which Seller is a party or to which the
Purchased Assets are subject;
(b) violate any order,
judgment, injunction, award or decree of Governmental Entity
against, or binding upon, Seller relating to the Business or the
Purchased Assets;
(c) violate any federal, state, local or foreign laws,
regulations, rules, ordinances or orders (collectively, "Laws and
Regulations") applicable to Seller relating to the Business or the
Purchased Assets, which violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(d) violate any Permit,
which violation, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect on the Business or
the Purchased Assets;
(e) require the approval
or consent of any Governmental Entity or the approval or consent of
any other person;
(f) require the approval
or consent of any person in order that the Assigned Contracts
continue in full force and effect following the consummation of the
transactions contemplated hereby;
(g) violate or conflict
with Seller's Restated Articles of Incorporation or By-Laws; or
(h) result in the creation
of any material lien or other encumbrance on the Purchased
Assets.
2.8
Actions and Proceedings . There are no
outstanding orders, judgments, injunctions, awards or decrees of
any Governmental Entity against or involving Seller that could
reasonably be expected to affect the Purchased Assets or the
Business. There are no actions, suits or claims or legal,
administrative or arbitration proceedings or investigations
(whether or not the defense thereof or liabilities in respect
thereof are covered by insurance) pending or, to the knowledge of
Seller, threatened against or involving Seller that could
reasonably be expected to affect the Purchased Assets. There is no
fact, event or circumstance that may give rise to any suit, action,
claim, investigation or proceeding that individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect.
2.9
Real Estate . The Purchased Assets do not
include any real property or any options or contractual obligations
to purchase or acquire any interest in real property.
2.10
Intangible Property .
(a)
To the best knowledge of Seller, Seller has exclusive
ownership of all patents, trademarks, service marks, trade names
and copyrights; all applications to register any of
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the foregoing; all franchises,
trade secrets, inventions, customer lists, URLs, manufacturing or
other processes, designs, computer software, data compilations,
research results and other confidential information and legally
protected proprietary rights; whether any of the foregoing are
owned or licensed (collectively, " Proprietary Rights ")
that are material to the Business and that are used in the Business
as presently conducted and Seller has the right to use, free and
clear of claims or rights of others, all such Proprietary
Rights.
(b) With respect to the
Business or the Purchased Assets, (i) Seller has not received any
notices of infringement by Seller of any Proprietary Rights of
others, and (ii) to the best knowledge of Seller, none of the
present activities, or contemplated activities under planning or
development, of Seller or Seller's products or assets infringe on
any Proprietary Rights of others, including unauthorized use of any
confidential information or trade secrets of any person, including
without limitation any former employer of any past or present
employees of Seller. Seller is not aware of any infringement or
violation by others of the Proprietary Rights of Seller used in the
Business and included among the Purchased Assets, including any
violation of Seller's confidential information.
(c) None of the activities
of Seller's Employees (as defined in Section 2.14) or consultants
violates any agreements or arrangements that any such Employees or
consultants related to the Business have with former employers.
2.11
Title to Assets: Liens . Except as set forth
in this Section 2.11 or on Schedule 2.11 attached hereto,
Seller owns outright and has good title to all of the Purchased
Assets of Seller, free and clear of any claim, lien or other
encumbrance, except for (a) assets and properties disposed of, or
subject to purchase or sales orders, in the ordinary course of
business; or (b) liens or other encumbrances securing the claims of
materialmen, carriers, landlords and like persons, all of which are
not yet due and payable. Upon delivery of and payment for the
Purchased Assets as herein provided, MAXIMUS will acquire all
right, title and interest in the Purchased Assets, free and clear
of any claim, lien or other encumbrance.
2.12
Absence of Undisclosed Liabilities . Seller
does not have any liabilities of any nature, whether accrued,
absolute, contingent or otherwise (including, without limitation,
liabilities as guarantor or otherwise with respect to obligations
of others or liabilities for taxes due or then accrued or to become
due) related to the Business or the Purchased Assets other than
liabilities in the ordinary course of business.
2.13
Purchased Assets . The Purchased Assets are
sufficient to carry out the Business as conducted by Seller.
2.14 Employees .
Schedule 2.14 contains a complete and accurate list of all
employees employed by Seller in the Business (each, an "
Employee "), along with the position and annual rate of
compensation of each Employee. Except as set forth on Schedule
2.14 , as of the date hereof and to the knowledge of Seller, no
Employee or group of Employees has any plans to terminate
employment with Seller (other than for the purpose of accepting
employment by MAXIMUS following the Closing) or not to accept
employment with MAXIMUS. Except as set forth on Schedule
2.14 , Seller is not a party to or bound by any currently
effective employment contract, deferred compensation arrangement,
bonus plan, retirement agreement or other
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employee compensation plan or
agreement. To the knowledge of Seller, no labor union or similar
organization represents or claims to represent any of the Employees
and no such organization has made, or intends to make, any
organizational effort with respect to the Employees. To the
knowledge of Seller, none of the activities of the Employees or
consultants to the Business violates any agreements or arrangements
that any such employees or consultants have
