Agreement for the Purchase and Sale of Assets
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Agreement for the Purchase and Sale of Assets
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between
Eltrax AG., a Swiss corporation,
and Eltrax Holdings AG, a Swiss corporation,
as Sellers
Verso Technologies, Inc., a Minnesota Corporation
as Sellers' Ultimate Parent
and
AremisSoft Hospitality (Switzerland) GmbH, a Swiss corporation,
as Purchaser
AremisSoft Corporation, a Delaware Corporation
as Purchaser's Ultimate Parent
Table of Contents:
ARTICLE I: DEFINITIONS.............................................................................................3
ARTICLE II: THE TRANSACTION........................................................................................7
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................8
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF EHAG AND EAG..........................................................9
ARTICLE VI: COVENANTS OF THE PURCHASER............................................................................15
ARTICLE VII: COVENANTS OF EHAG AND EAG............................................................................17
ARTICLE VIII: CONDITIONS TO CLOSING...............................................................................20
ARTICLE IX: TERMINATION, AMENDMENT, WAIVER........................................................................22
ARTICLE X: INDEMNITY..............................................................................................23
ARTICLE XI: GENERAL PROVISIONS....................................................................................25
This Agreement for the Purchase and Sale of Assets (the "Agreement") is made
this 26th day of October, 2000, by and among AremisSoft Hospitality
(Switzerland) GmbH, a Swiss corporation ("Purchaser") Eltrax AG, a Swiss
corporation, ("EAG"), Eltrax Holdings AG, a Swiss corporation, ("EHAG") (Sellers
together referred to as "Sellers") the Sellers' Ultimate Parent and the
Purchaser's Ultimate Parent, and provides for the Purchaser to acquire
substantially all of the assets of Sellers (other than the shares of EAG and
Eltrax UK. Ltd.), subject to the liabilities assumed in this Agreement by the
Purchaser and no other liabilities.
Recitals
WHEREAS, the Purchaser desires to acquire, on the terms and subject to the
conditions reflected below, the business of Sellers insofar as the same is
conducted through the use of the Acquired Assets; and
WHEREAS, Sellers believe that it is desirable and in their best interests to
sell the Acquired Assets to the Purchaser;
NOW, THEREFORE, the parties to this Agreement for the Purchase and Sale of
Assets do hereby agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement, the capitalized terms identified below in this
Article I shall have the meanings indicated, and variants and derivatives of the
following terms shall have correlative meanings. To the extent that certain of
the definitions set forth below express agreements between or among parties to
this Agreement, or contain representations or warranties or covenants of a
party, the parties agree to the same by execution of this Agreement. The parties
to this Agreement agree that agreements, representations, warranties, and
covenants expressed in any part or provision of this Agreement shall for all
purposes of this Agreement be treated in the same manner as other such
agreements, representations, warranties, and covenants contained elsewhere in
this Agreement, and the Article or Section of this Agreement within which such
an agreement, representation, warranty, or covenant appears shall have no
separate meaning or effect on the same.
1.1 Acquired Assets: The assets to be acquired by the Purchaser pursuant to the
terms hereof, as identified on Schedule 1.2(i)-1 of the Acquired Business
Balance Sheet attached hereto, including, but not limited to all Intellectual
Property and Software Products used in the Acquired Business, and all other
assets of EAG, tangible or intangible (including contractual, warranty, and
other rights), the use or value of which is inextricably linked to the assets so
identified, and excluding (a) the shares of EAG and Eltrax UK. Ltd. , (b) any
rights related to the Squirrel business other than the interntional contracts
concerning the Squirrel business.
1.2 Acquired Business: The businesses in which the Acquired Assets are utilized,
as described on Schedule 1.2(i)-1 of the Acquired Business Disclosure Document
attached hereto.
1.3 Acquired Business Balance Sheet: The balance sheet as of September 30, 2000,
included in the Unaudited Financial Statements of the Acquired Business.
1.4 Acquired Business Disclosure Document: The document delivered by Sellers to
the Purchaser containing certain disclosures relative to this Agreement, a copy
of which is attached to this Agreement as Exhibit 1.5.
1.5 Acquired Facilities: All warehouses, stores, plants, production facilities,
manufacturing facilities, processing facilities, fixtures, and improvements
owned or leased by EAG or otherwise used in connection with the operation of the
Acquired Business or leased or subleased to others, but only to the extent that
the same consist of Acquired Assets.
1.6 Affiliate: When used with respect to a person, an "affiliate" of that person
is a person Controlling, Controlled by, or under common Control with that
person.
1.7 Agreement: This Agreement for the Purchase and Sale of Assets, including all
of its Schedules and Exhibits specifically referred to in this Agreement that
have been or are to be delivered by a party to this Agreement to another such
party in connection with the Transaction or this Agreement, and including all
duly adopted amendments, modifications, and supplements to or of this Agreement
and such Schedules and Exhibits.
1.8 Assumed Liabilities: The known and absolute Liabilities reflected on the
Acquired Business Balance Sheet to be assumed by the Purchaser pursuant to this
Agreement, , and no other Liabilities. In particular, Purchaser does not assume
(a) any Liabilities that are not reflected on the Acquired Business Balance
Sheet other than those acquired since September 30, 2000 in the regular course
of business, and (b) no liabilities arising out of the employment other than
those reflected on the Acquired Business Balance Sheet or incurred after
September 30, 2000, and (c) no liabilities that relate to the Squirrel business
other than those related to the international contracts related to the Squirrel
business and assumed pursuant to Section 1.1.
1.9 Business Day: Any day that is not a Saturday, Sunday, or a day on which
banks in New York, New York, or Zug, Switzerland, are authorized to close.
1.10 Closing: The completion of the Transaction, to take place as described in
Article II.
1.11 Closing Date: The date on which the Closing actually occurs, which shall be
October 26, 2000, unless otherwise agreed by the parties, but shall not in any
event be prior to satisfaction or waiver of the conditions to Closing set forth
in Article VIII hereof.
1.12 Closing Time: The time at which the Closing actually occurs, which shall
take place at [5:00] p.m. Swiss time, on the Closing Date, unless otherwise
agreed by the parties.
1.13 Consideration: The net sum of USD 300,000 to be paid by the Purchaser to
EAG at the Closing for the Acquired Assets, subject to modification and
adjustment as provided in this Agreement.
1.14 Control: Generally, the power to direct the affairs of an Entity by reason
of either (i) owning or controlling the right to vote a sufficient number of
shares of voting stock or other voting interest of such Entity, or (ii) having
the right to direct the general management of the affairs of such Entity by
contract or otherwise.
1.15 Counsel to Eltrax Systems, Inc. and Eltrax Hospitality Group, Inc.: Jaffe,
Raitt, Heuer & ▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and (Swiss counsel) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ attorneys, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.
1.16 Counsel to the Purchaser: ▇▇▇▇▇▇ Eng Linn & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and (as Swiss counsel) Pestalozzi ▇▇▇▇▇ &
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.
1.17 Entity: A corporation, partnership, sole proprietorship, joint venture, or
other form of organization formed for the conduct of a business, whether active
or passive.
1.18 Excluded Assets: Notwithstanding the definition of the Acquired Assets or
the Acquired Business, the assets identified in Section 1.18 of the Acquired
Business Disclosure Document shall not be deemed part of the Acquired Assets.
1.19 GAAP: Swiss generally accepted accounting principles, as in effect on the
date of any statement, report or determination that purports to be, or is
required to be, prepared or made in accordance with "GAAP" consistently applied
throughout the periods to which reference is made.
1.20 Intellectual Property: All Software Products (including, but not limited
to, all versions, renewals, modifications and extensions of any Software
Product), patents, patent applications, trade and service marks, trade and
service ▇▇▇▇ registrations, trade names, copyrights, licenses, sublicenses,
inventions, trade secrets, technology, know-how, domain names, customer lists,
prospect lists and other similar intangible property.
1.21 Inventories: The stock of raw materials, work-in-process and finished
goods, including but not limited to finished goods purchased for resale, held by
Sellers for manufacturing, assembly, processing, finishing, sale, or resale to
others (including other Subsidiaries or divisions of Sellers (other than EAG and
Eltrax UK. Ltd.), from time to time in the ordinary course of the business of
Seller in the form in which such inventories then are held or after
manufacturing, assembling, finishing, processing, incorporating with other goods
or items, refining, or the like.
1.22 Liabilities: At any point in time (the Determination Time), the obligations
of a person or Entity, whether known or unknown, contingent or absolute,
recorded on its books or not, arising or resulting in any way from facts,
events, agreements, obligations or occurrences that existed or transpired at a
prior point in time, or resulted from the passage of time to the Determination
Time.
1.23 Local Counsel: Special counsel retained by the Purchaser, EHAG or EAG, as
the case may be, to advise as to certain matters of local law in states or
localities in which the Purchaser, EHAG or EAG, as the case may be, desires such
Local Counsel.
1.24 Parent: An Entity which Controls, directly or indirectly, or through one or
more intermediaries, a Subsidiary.
1.25 Payables: Liabilities of a party arising from the borrowing of money or the
incurring of obligations for services, merchandise or goods purchased.
1.26 Proprietary Rights: Trade secrets, copyrights, patents, trademarks,
service marks, customer lists, and all similar types of intangible property
developed, created or owned by EHAG and/or EAG in connection with the Acquired
Assets, or used by EAG in connection with its business, whether or not the same
are entitled to legal protection.
1.27 Purchaser: AremisSoft Hospitality (Switzerland) GmbH.
1.28 Receivables: Accounts receivable, notes receivable, and other obligations
appearing as assets on the books of EAG, and customarily reflected as assets in
balance sheets of entities prepared in accordance with GAAP, indicating moneys
owed to EAG and its Subsidiaries.
1.29 Software Products: Any instruction or instructions, in source-code or
object code format, for controlling the operation of any computer processing
unit together with all user documentation related thereto. Software Products
include, but are not limited to, the applications identified on Schedule 1.2
(iv) to the Acquired Business Disclosure Document.
1.30 Subsidiary: With respect to any Entity, another Entity of which fifty
percent (50%) or more of the effective voting power, or the effective power to
elect a majority of the board of directors or similar governing body, or fifty
percent (50%) or more of the true equity interest; is owned by such first
Entity, directly or indirectly.
1.31 Transaction: The sale of the Acquired Assets, and the assumption of the
Assumed Liabilities, for the Consideration as contemplated by, and subject to
the terms and conditions of, this Agreement.
1.33 Unaudited Financial Statements: The balance sheet and income statement, as
of September30, 2000 and for the twelve months ended December 31, 1999, for the
Acquired Business prepared in accordance with GAAP.
ARTICLE II: THE TRANSACTION
2.1 The Transaction. On the Closing Date, and at the Closing Time, subject in
all instances to each of the terms, conditions, provisions and limitations
contained in this Agreement, EAG shall, and EHAG shall cause EAG to, sell,
transfer, convey, and assign to the Purchaser, by instruments reasonably
satisfactory in form and substance to the Purchaser and its counsel, and
the Purchaser shall acquire from EAG, the Acquired Assets, and shall assume
the Assumed Liabilities, and only those Liabilities and no others, in
exchange for the Consideration. Sellers represent that the Acquired Assets
are all the assets reasonably necessary for the conduct of the Acquired
Business in the ordinary course in the same manner as that in which such
business has been conducted in the immediate past, including, without
limitation, all Proprietary Rights, Software Products and Intellectual
Property used in the ordinary conduct of the Acquired Business and all
contract, warranty, and other intangible rights relating to or arising out
of such Acquired Business. Neither the Purchaser nor any of its Affiliates
is assuming, becoming liable for, agreeing to discharge or in any manner
becoming in any way responsible for any of the Liabilities of Sellers other
than the Assumed Liabilities. Purchaser hereby agrees to pay, perform or
discharge all of the Assumed Liabilities. Sellers hereby represent that,
prior to the Closing, neither EHAG nor any Affiliate of EHAG other than EAG
holds any right, title or interest to the Acquired Assets and there are no
other agreements, understandings, or arrangements which, as of or after the
Closing, would materially adversely effect the Acquired Assets and the
Acquired Business, the ability of EAG to sell, transfer, convey and assign
the Acquired Assets and the Acquired Business to the Purchaser or result in
the assumption of any Liabilities by the Purchaser other than the Assumed
Liabilities.
Purchaser agrees to assume the Assumed Liabilities and to pay, perform all
of the Assumed Liabilities and thereby discharging Sellers from the Assumed
Liabilities.
2.2 Manner of Payment. Payment of the Consideration by the Purchaser shall be
made in immediately available funds by wire transfer of USD to the account or
accounts of EAG notified by Sellers to Purchaser. At the Closing payment shall
be evidenced by Purchaser by submitting to the Sellers a copy of the irrevocable
wiring instructions sent to its bank and duly signed fax confirmation of such
bank that it has executed such wiring instructions.
2.3 Closing. The Closing hereunder shall simultaneously take place at the
offices of Purchaser, Counsel to the Purchaser, Counsel to Sellers, or at such
other places as the parties to this Agreement may agree upon, on the Closing
Date.
[Atricle III: intentionally omitted]
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers:
4.1 Organization. The Purchaser is a corporation duly organized and validly
existing under the laws of Switzerland and has the requisite corporate power and
authority to carry on its business as it is now being conducted.
4.2 Authority Relative to This Agreement. The Purchaser has the requisite
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
and approved by the requisite level of corporate authority of Purchaser and no
other corporate proceedings on the part of the Purchaser are necessary to
approve and adopt this Agreement or to approve the consummation of the
Transactions contemplated hereby, including, without limitation, delivery of the
Consideration. This Agreement has been duly and validly executed and delivered
by the Purchaser and constitutes a valid and binding obligation of the
Purchaser, enforceable in accordance with its terms.
4.3 Absence of Breach; No Consents. The execution, delivery and performance of
this Agreement, and the performance by Purchaser of its obligations hereunder do
not conflict with, and will not result in a breach of, any of the provisions of
the Articles of Association or Bylaws of Purchaser; (2) contravene any law, rule
or regulation of Switzerland, or of any applicable foreign jurisdiction, or any
order, writ, judgment, injunction, decree, determination, or award affecting or
binding upon the Purchaser or any of its Subsidiaries, in such a manner as to
provide a basis for enjoining or otherwise preventing consummation of the
Transaction; (3) conflict with or result in a material breach of or default
under any material indenture or loan or credit agreement or any other material
agreement or instrument to which Purchaser or any of its Subsidiaries is a
party, in such a manner as to provide a basis of enjoining or otherwise
preventing consummation of the Transaction; or (4) require the authorization,
consent, approval or license of any third party of such a nature that the
failure to obtain the same would provide a basis for enjoining or otherwise
preventing consummation of the Transaction.
4.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
or the Transaction or any related transaction based upon any agreements, written
or oral, made by or on behalf of Purchaser or any of its Subsidiaries.
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF EHAG AND EAG
Sellers, individually and collectively, represent and warrant to the Purchaser
as follows:
5.1 Organization and Qualification. Each of Sellers is a corporation duly
organized and validly existing under the laws of its respective jurisdictions of
incorporation and each has the requisite corporate power and authority to carry
on its business as it is now being conducted. Each of EHAG, EAG and any
Subsidiary of EAG is duly qualified as a foreign corporation to do business, and
is in good standing, in each jurisdiction where the character of the properties
owned or leased by it, or the nature of its activities, is such that
qualification as a foreign corporation in that jurisdiction is required by law
except where the failure to be so qualified would not reasonably be expected to
have a material adverse effect on such Entities' business.
5.2 Authority Relative to This Agreement. This Agreement has been duly and
validly executed and delivered by Sellers and constitutes a valid and binding
Agreement of Sellers enforceable in accordance with its terms. Each of Sellers
has all requisite corporate power and authority to enter into this Agreement and
to carry out the Transaction contemplated hereby, and its doing so has been duly
and sufficiently authorized, subject only to governmental regulatory approvals
as and to the extent specifically set forth elsewhere in this Agreement.
5.3 Absence of Breach; No Consents. The execution, delivery, and performance of
this Agreement by Sellers, and the performance by Sellers of their respective
obligations hereunder, do not, (1) conflict with or result in a breach of any of
the provisions of the Articles of Incorporation or Bylaws of EHAG or EAG; (2)
contravene any law, ordinance, rule, or regulation of the laws of Switzerland or
of any applicable foreign jurisdiction (except for compliance with regulatory or
licensing laws, ordinances, rules or regulations, all of which, to the extent
applicable to EHAG or EAG will be satisfied in all material respects prior to
the Closing), or contravene any order, writ, judgment, injunction, decree,
determination, or award of any court or other authority having jurisdiction
over, or cause the suspension or revocation of any authorization, consent,
approval, or license, presently in effect, which affects or binds, EHAG or EAG
or all or any part of the Acquired Business or any material properties of the
Acquired Business, except in any such case where such contravention, suspension
or revocation will not have a material adverse effect on the business, condition
(financial or otherwise), operations or prospects of the Acquired Business and
will not have a material adverse effect on the validity of this Agreement or on
the validity of the consummation of the Transaction; (3) conflict with or result
in a material breach of or default under any material indenture or loan or
credit agreement or any other material agreement or instrument to which EHAG or
EAG is a party or by which any of the material properties of the Acquired
Business may be affected or bound; (4) require the authorization, consent,
approval, or license of any third party, except for those the failure of which
to obtain would not reasonably be expected to have a material adverse effect on
the Acquired Business or the Acquired Assets; or (5) constitute grounds for the
loss or suspension of any permits, licenses, or other authorizations used in the
Acquired Business.
5.4 Brokers. No broker, finder, or investment banker is entitled to any
brokerage, finder's, or other fee or commission in connection with this
Agreement or the Transaction or any related transaction based upon any
agreements, written or oral, made by or on behalf of EHAG, EAG or any of their
Subsidiaries.
5.5 Financial Statements. EAG has heretofore delivered to the Purchaser the
following:
The Unaudited Financial Statements of the Acquired Business.
All of the historical financial statements contained in such documents were
prepared from the books and records of Sellers. The Unaudited Financial
Statements were prepared in accordance with GAAP, and fairly and accurately
reflect the financial position and condition of EAG as of the dates and for the
periods indicated subject to normal year-end adjustments and the absence of
footnotes. Without limiting the foregoing, as of the Acquired Business Balance
Sheet, EAG owned each of the assets included in preparation of the Acquired
Business Balance Sheet, and such assets are valued in accordance with GAAP; and
EAG had no Liabilities required to be included in the Acquired Business Balance
Sheet in accordance with GAAP for which the Acquired Business or any part of the
Acquired Assets is responsible or liable, other than those included in the
Acquired Business Balance Sheet, nor any Liabilities required to be included in
the Acquired Business Balance Sheet in accordance with GAAP in amounts in excess
of the amounts included for them in the Acquired Business Balance Sheet. The
Purchaser acknowledges that projections of future economic performance are
necessarily unreliable and subject to the occurrence or nonoccurrence of a
variety of events, but Sellers represent that the Projections have been prepared
in good faith. From the date hereof through the Closing Date Sellers will
continue to prepare financial statements for the Acquired Business on the same
basis that they have done so in the past, will promptly deliver the same to the
Purchaser, and agree that from and after such delivery the foregoing
representations will be applicable to each financial statement so prepared and
delivered.
5.6 Absence of Material Differences From the Acquired Business Disclosure
Document. Except as specifically disclosed in the Acquired Business Disclosure
Document in schedules corresponding to the subsections below:
(1) No Undisclosed Liabilities. Sellers have no Liabilities relating to or
affecting the Acquired Business or the Acquired Assets which are not, to the
extent required by GAAP, adequately reflected or reserved against on the face of
the Acquired Business Balance Sheet, except Liabilities incurred since the date
of the Acquired Business Balance Sheet in the ordinary course of business of the
Acquired Business and consistent with past practice. Without limiting the
foregoing, (a) there are no improvements currently due and owing at any of the
Acquired Facilities for which the Acquired Business is or will be responsible,
and (b) there are no deferred rents due to lessors at or with respect to any of
such Acquired Facilities, and (c) the Acquired Business Disclosure Document sets
forth, as a part thereof, each Liability of or affecting the Acquired Business
or the Acquired Assets in an amount in excess of USD10,000 and each person to
whom the aggregate amount of such Liabilities is in excess of USD10,000.
(2) No Material Adverse Change, Etc. Since the date of the Acquired Business
Balance Sheet, other than as contemplated or caused by this Agreement, there has
not been (a) any material adverse change in the business, condition (financial
or otherwise), operations, or prospects of the Acquired Business; (b) any
damage, destruction or loss, whether covered by insurance or not, having a
material adverse effect on the business, condition (financial or otherwise),
operations or prospects of the Acquired Business, or materially adversely
affecting the Acquired Assets; (c) any entry into or termination of any material
commitment, contract, agreement or transaction affecting the Acquired Business
or the Acquired Assets (including, without limitation, any material borrowing or
capital expenditure or sale or other disposition of any material asset or
assets) other than this Agreement and agreements executed in the ordinary course
of business; (d) any redemption, repurchase or other acquisition for value of
the capital stock of any corporation included in the Acquired Assets or any
issuance of capital stock by any corporation included in the Acquired Assets or
securities convertible into or rights to acquire any such capital stock (e) any
transfer of or right granted under any material lease, license, agreement,
patent, trademark, trade name or copyright included among the Acquired Assets;
(f) any sale or other disposition of any asset of the Acquired Business, or any
mortgage, pledge or imposition of any lien or other encumbrance on any asset of
the Acquired Business or of any corporation included in the Acquired Assets, or
any agreement relating to any of the foregoing, other than in the ordinary
course of business; or (g) any default or breach in any material respect under
any contract, license or permit held by or for or affecting the Acquired
Business. Since the date of the Acquired Business Balance Sheet, Sellers have
conducted the Acquired Business only in the ordinary and usual course, and
without limiting the foregoing, no changes have been made in (a) executive
compensation levels, or (b) the manner in which other employees of EAG are
compensated, or (c) supplemental benefits provided to any such executives or
other employees of EAG, or (d) inventory levels of the Acquired Business in
relation to sales levels, except, in any such case, in the ordinary course of
business and, in any event, without material adverse effect on the business,
condition (financial or otherwise), operations, or prospects of the Acquired
Business.
(3) Taxes. Sellers have properly filed or caused to be filed (or obtained proper
extensions in respect of) all federal, cantonal, local, and foreign income and
other tax returns, reports, and declarations that are required by applicable law
to be filed by them and that relate to or in any way affect the Acquired
Business or the Acquired Assets except for those the failure of which to file
would not have an adverse effect on the Acquired Business or the Acquired
Assets, and have paid, or will pay at or prior to the Closing, all federal,
cantonal, local, and foreign income and other taxes properly due (including any
amounts deferred as a result of an extension or otherwise) for the periods
covered by such returns, reports, and declarations.
(4) Litigation. (a) No material investigation or review by any governmental
entity with respect to the Acquired Business or any of the Acquired Assets or
the use thereof is, to the best of the knowledge of Sellers, pending or
threatened (other than inspections and reviews customarily made of businesses
such as the Acquired Business), nor has any governmental entity indicated an
intention to conduct the same, and (b) there is no action, suit or proceeding
pending or, to the best of the knowledge of Sellers, threatened against or
affecting the Acquired Business or the Acquired Assets at law or in equity, or
before any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality.
(5) Employees, Etc. There are no collective bargaining, bonus, profit sharing,
compensation, or other plans (other than the EAG Pension Plans as set out in
par. (11) of this Section), agreements, trusts, funds, or arrangements
maintained by EHAG, EAG or any Subsidiary of EHAG or EAG for the benefit of
directors, officers or employees of, or whose principal responsibilities relate
to, the Acquired Business, and there are no employment, consulting, severance,
or indemnification arrangements, agreements, or understandings between EHAG or
EAG, on the one hand, and any current or former directors, officers or other
employees (or Affiliates thereof) of, or whose principal responsibilities relate
to, the Acquired Business, on the other hand. The Acquired Business Disclosure
Document identifies each person whose annualized gross income from EAG, on the
date of the Acquired Business Balance Sheet, exceeded or would exceed on an
annualized basis, or whose income from EAG in the fiscal year begun immediately
thereafter is at a rate exceeding, CHF100,000 per annum, and describes each
contractual arrangement for the employment or compensation of each such person
including the vacation time accrued and the overtime accrued. EAG is not, and
following the Closing will not be, bound by any express or implied contract or
agreement to employ, directly or as a consultant or otherwise, any person for
any specific period of time or until any specific age except as specified in
agreements in writing identified in the Acquired Business Disclosure Document or
executed pursuant to the provisions hereof.
(6) Compliance With Laws. The Acquired Business and each of the Acquired Assets
is in substantial compliance with all, and neither EHAG nor EAG have received
notice of any violation of any, laws or regulations applicable to its
operations, including, without limitation, the laws and regulations relevant to
the use or utilization of premises, or with respect to which compliance is a
condition of engaging in any aspect of the business of the Acquired Business,
except to the extent the failure of which any of the foregoing to be true would
not have a material adverse effect on the Acquired Business or the Acquired
Assets. The Acquired Business has all permits, licenses, zoning rights, and
other governmental authorizations necessary to conduct its business as presently
conducted, except to the extent the failure of the Acquired Business to have any
of the foregoing would not have a material adverse effect.
(7) Ownership of Assets. EAG has (or as of the Closing will have) good and
marketable title to all personal property owned or leased by it and comprising a
part of the Acquired Assets or the Acquired Business, or used by it in the
conduct of the Acquired Business in such a manner as to create the appearance or
reasonable expectations that the same is owned or leased by it; such ownerships,
or at the Closing will be, free and clear of all liens, claims, encumbrances and
charges, except liens for minor imperfections of title and encumbrances, if any,
which, singularly or in the aggregate, are not substantial in amount and do not
materially-detract from the value of the property subject thereto or materially
impair the use thereof; no other person has any ownership or similar right in,
or contractual or other right to acquire any such right in, any of such assets;
and such ownership will be conveyed to the Purchaser at the Closing pursuant to
the Transaction. Sellers do not know of any potential action by any party,
governmental or other, and no proceedings with respect thereto have been
instituted of which EHAG or EAG has notice, that would materially affect EAG's
ability to use and to utilize each of such assets in the business of the
Acquired Business. Neither EHAG nor EAG has received any default notices from
any mortgagee regarding any leased properties of the Acquired Business. All
Acquired Assets including, but not limited to, (a) accounts receivable as
provided in clause (13) below, (b) miscellaneous current assets in excess of
USD10,000, (c) prepaid expenses in excess of USD10,000, (d) Software Products,
(e) real property, and (f) gross aggregate additions for each of the past four
years by location of (i) buildings and improvements and (ii) automobiles and
trucks, are owned by the Sellers.
(8) Proprietary Rights, Software Products and Intellectual Property. EAG
possesses full ownership of, or adequate and enforceable exclusive long-term
licenses or other exclusive rights to use (without payment), all Proprietary
Rights, Software Products and Intellectual Property used in the Acquired
Business or utilized in connection with the Acquired Assets, and all such
ownership, license or other rights shall be conveyed to the Purchaser at the
Closing pursuant to the Transaction; neither EHAG nor EAG has received any
notice of conflict which asserts the rights of others with respect thereto; and
EAG has, in all material respects, performed all of the obligations required to
be performed by it, and is not in default in any material respect, under any
agreement relating to any such Proprietary Rights, Software Products and
Intellectual Property.
(9) Trade Names. The Acquired Business Disclosure Document identifies each trade
name, fictitious business name, or other similar name under which EHAG or EAG
has conducted any part of the Acquired Business or in which EHAG or EAG has
utilized any of the Acquired Assets during the five (5) years preceding the date
of this Agreement.
(10) Subsidiaries, Etc. No Subsidiary of EHAG or EAG (other than EAG or Eltrax
UK. Ltd.), directly or indirectly, owns any of the Acquired Assets or conducts
any part of the Acquired Business. Neither EHAG, EAG nor any of their
Subsidiaries described in the Acquired Business Disclosure Document is a partner
of or joint venturer with any other person or Entity in relation to any of the
Acquired Assets or any portion of the Acquired Business.
(11) Social Security, Employee Benefit Plans.
a) Sellers have paid in full any and all social security contributions as and
when due up to September 30, 2000; there are no facts and circumstances existing
or having arisen which have or may lead to a reassessment by any social security
authority regarding social security contributions to be made by EHAG or EAG.
Sellers have paid all their obligations under the two existing pension plans for
the benefit of the employees of the Acquired Business ("EAG Pension Plans") and
specifically have paid all contributions required prior to September 30, 2000 as
required by the regulations of the pension plans.
(b) Except for the EAG Pension Plan neither EAG nor any of its Subsidiaries or
EHAG maintains or contributes to any pension plan or any other plan for the
benefit of employees, nor is EHAG or EAG or any of its Subsidiaries presently,
nor has it been within the last six years, a participating employer in any
pension plan affecting, in any case, employees of the Acquired Business or
employees of EHAG, EAG or a Subsidiary whose principal activities relate to the
Acquired Business.
(12) Facilities. To Sellers' knowledge, the Acquired Facilities are (as to
physical plant and structure) structurally sound and none of the Acquired
Facilities, nor any of the vehicles or other equipment used by EAG in connection
with the Acquired Business has any material defects and all of them are in all
material respects in good operating condition and repair and are adequate for
the uses to which they are being utilized; none of such Acquired Facilities,
vehicles or other equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs (normal wear and tear excepted) which
are not material in nature or cost. EAG is not in any material breach, violation
or default of any lease affecting the Acquired Business or the Acquired Assets
with respect to, or as a result of which, the other party, whether lessor,
lessee, sublessor, or sublessee thereto, has the right to terminate the same and
neither EHAG nor EAG have received notice of any claim or assertion that it is
or may be in any such breach, violation or default.
(13) Accounts Receivable. All accounts receivable of EAG, whether or not
reflected in the Acquired Business Balance Sheet represent transactions in the
ordinary course of business, and are current and collectible, net of any
reserves shown on such Balance Sheet (which reserves are adequate and were
calculated consistent with past practice). As of the date specified therein, the
Acquired Business Disclosure Document specifically identifies (a) the aging of
Receivables, (b) each Receivable in excess of USD10,000, (c) each Receivable in
an amount in excess of USD5,000 that is more than 90 days past due, and (d) each
Receivable from a person or Entity from whom the aggregate of such Receivables
exceeds USD10,000. Payments received from customers in respect of any
Receivables shall be applied to the oldest outstanding Receivable from such
customer, unless such customer, acting on its own volition, specifically
identifies such payment to a particular Receivable, in which case such payment
shall be applied to the specified Receivable.
(14) Inventories. All Inventories of EAG, reflected in the Acquired Business
Balance Sheet are of quality and quantity usable and salable in the ordinary
course of business. Items included in such Inventories are carried on the books
of EAG, and are valued on the Acquired Business Balance Sheet, at the lower of
cost or market and, in any event, at not greater than their net realizable
value, on an item by item basis, after appropriate deduction for costs of
completion, marketing costs, transportation expense and allocation of overhead.
(15) Contracts. The Acquired Assets and the Acquired Business are not parties to
or affected by any contracts, agreements or understandings, whether express or
implied, written or verbal, provided, however, that the Acquired Assets or the
Acquired Business may be parties to or affected by, and the Acquired Business
Disclosure Document need not identify, any such contracts, agreements, or
understandings that fall into one of the following categories: (a) those that
are terminable on notice of less than thirty-two (32) days and do not involve
payments or obligations of more than USD10,000 in any period of thirty-one (31)
days or less (on termination or otherwise); or (b) those that involve aggregate
payment or obligation remaining unpaid as of the date of the Agreement of less
than USD10,000.
(16) Accounts Payable. The accounts payable reflected on the Acquired Business
Balance Sheet do, and those reflected in the most recent balance sheet included
in the Unaudited Financial Statements do, and those reflected on the books of
EAG at the time of the Closing will, reflect all amounts owed by EAG in respect
of trade accounts due and other Payables of the Acquired Business or relating to
the Acquired Assets, and the actual Liability of EAG in respect of such
obligations was not, and will not be, on any of such dates, in excess of the
amounts so reflected on the balance sheets or the books of the Acquired
Business, as the case may be.
(17) Labor Matters. To the best of the knowledge of Sellers, there are no
activities or controversies, including without limitation, any labor organizing
activities, election petitions or proceedings, proceedings preparatory thereto,
unfair labor practice complaints, labor strikes, disputes, slowdowns, or work
stoppages, pending or, threatened, affecting the employees of EAG.
5.7 Full Disclosure. The documents, certificates, and other writings furnished
or to be furnished by or on behalf of EHAG and/or EAG to the Purchaser pursuant
to the provisions of this Agreement, taken together in the aggregate, do not and
will not contain any untrue statements of a material fact, or omit to state any
material fact necessary to make the statements made, in the light of the
circumstances under which they are made, not misleading.
5.8 Actions Since Balance Sheet Date. Since the date of the Acquired Business
Balance Sheet, neither EHAG nor EAG has taken any actions that would be
prohibited under the provisions of this Agreement (without the prior consent of
the Purchaser) after the date of this Agreement.
ARTICLE VI: COVENANTS OF THE PURCHASER
6.1 Affirmative Covenants. From the date hereof through the Closing Date, the
Purchaser will use commercially reasonable efforts to satisfy the conditions to
Closing set forth in this Agreement and otherwise to ensure the prompt and
expedient consummation of the Transaction substantially as contemplated by this
Agreement, and will use commercially reasonable efforts to cause the Transaction
to be consummated, provided in all instances that the representations and
warranties of Sellers in this Agreement are and remain true and accurate in all
material respects and that the covenants and agreements of Sellers in this
Agreement are honored and that the conditions to the obligations of the
Purchaser set forth in this Agreement are not incapable of satisfaction.
6.2 Cooperation VAT. The Purchaser shall reasonably cooperate with Sellers and
its counsel, accountants and agents in every way in carrying out the
Transactions contemplated herein, and in delivering all documents and
instruments deemed reasonably necessary or useful by EAG. The Purchaser and
EHAG/EAG will notify the asset transfer in order to obtain exemption from
payment of the VAT. In the event that no exemption may be obtained, the VAT on
the transfer of the Assets, if any, will be invoiced by EAG to Purchaser on the
Consideration. EHAG/EAG and the Purchaser agree that payment of such additional
amount, if any, shall become due and payable 60 days after the end of the
calendar quarter for which such VAT, if any, is due and payable. The Parties
agree to undertake their best efforts to allow that VAT, if any, due and payable
on the asset transfer may be fully recouped by the Purchaser at the time such
additional amount, if any, becomes due and payable. Among others, EHAG/EAG
undertake to provide appropriate documentation that will allow Purchaser to
recoup such additional amount, if any, when it is due and payable.
6.3 Expenses. Whether or not the Transaction is consummated, all costs and
expenses incurred by the Purchaser in connection with this Agreement and the
Transactions contemplated hereby shall be paid by the Purchaser except as
otherwise provided (directly or indirectly) herein.
6.4 Publicity. Prior to the Closing any written news releases by the Purchaser
pertaining to this Agreement or the Transaction shall be submitted to EHAG for
review and approval prior to release by the Purchaser, and shall be released
only in a form approved by EAG, provided, however, that (1) such approval shall
not be unreasonably withheld, and (2) such review and approval shall not be
required of releases by the Purchaser if prior review and approval would prevent
the timely and accurate dissemination of such press release as required to
comply, in the judgment of counsel, with any applicable law, rule or policy.
6.5 Offers of Employment. Subject to the terms and conditions of this Agreement,
promptly after the Closing and to the extent the employment agreements are not
transferred to Purchaser by operation of law, Purchaser shall offer employment
to the employees employed immediately prior to Closing by EAG, on terms and
conditions acceptable to Purchaser. Purchaser shall not be liable for any
liabilities associated with any employee of the Acquired Business terminated by
EHAG or EAG. The Purchaser shall assume responsibility for wages and expenses
which accrued prior to the Closing, but which are not scheduled for payment
until after the Closing for the employees employed immediately prior to Closing
by EAG accrued prior to the Closing to the extent consistent with the historical
payroll practices of EAG and the Acquired Business. Other than the employees
employed immediately prior to Closing by EAG, the Purchaser shall not assume
responsibility for any scheduled or unscheduled payroll payments due employees
of the Acquired Business for any form of compensation which may be accrued by
such employees prior to the Closing.
ARTICLE VII: COVENANTS OF EHAG AND EAG
7.1 Affirmative Covenants. From the date hereof through the Closing Date,
Sellers will take every action reasonably required of it to satisfy the
conditions to Closing set forth in this Agreement and otherwise to ensure the
prompt and expedient consummation of the Transaction substantially as
contemplated hereby, and will exert all reasonable efforts to cause the
Transaction to be consummated, provided in all instances that the
representations and warranties of the Purchaser in this Agreement are and remain
true and accurate and that the covenants and agreements of the purchaser in this
Agreement are honored and that the conditions to the obligations of Sellers set
forth in this Agreement are not incapable of satisfaction.
[7.2 intentionally left blank]
7.3 Covenant Not to Compete and not to Solicit. For the purpose of assuring the
Purchaser the full benefit of the businesses and goodwill of the Aquired
Business, the Seller undertakes by way of further consideration for the
obligations of the Purchaser under this Agreement as separate and independent
agreement that he will not: (a) at any time after Closing disclose to any
person, or himself use for any purpose, and shall use his best endeavors to
prevent the publication or disclosure of, any information concerning the
business, accounts or finances of the Aquired Business or any of the clients' or
customers' transaction or affairs of which he has knowledge; (b) for five (5)
years after Closing either on his own account or for any other person directly
or indirectly solicit, interfere with or endeavor to entice away from the
Purchaser any person who to his knowledge is, or has during the immediately
preceeding three years been, a client, customer or employee or, or in the habit
of dealing with, any member the Acquired Business or of the Purchaser's group;
(c) for the period of two (2) years, or jointly with, or as manager, agent for,
or employee of any person, or as a shareholder of more than one percent (1 %)
interest in (i) the business carried out by the Acquired Business at the date
hereof ("Business"); or (ii) any other competitive business to the business as
then carried on by the Acquired Business, or any member of the Purchaser's group
of companies as then constituted. However, notwithstanding to the above stated
covenant, Sellers will be able to continue to employ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as a
part-time employee for the sole purpose of liquidating EAG and possibly EHAG.
The purpose has to be narrowly construed.
7.4 Access and Information. Sellers shall afford to the Purchaser and to the
Purchaser's accountants, counsel, and other representatives reasonable access
during normal business hours throughout the period prior to the Closing to all
of its and its Subsidiaries properties, books, contracts, commitments, records
(including, but not limited to, tax returns), and personnel relating to the
Acquired Assets or the Acquired Business and, during such period, shall furnish
promptly to the Purchaser (1) all written communications to its directors or to
its shareholders generally relating to the Acquired Assets or the Acquired
Business, (2) internal monthly financial statements of the Acquired Business
when and as available, and (3) all other information relating to the Acquired
Assets or the Acquired Business as the Purchaser may reasonably request, but no
investigation pursuant to this Section 7.4 shall affect any representations or
warranties of EHAG or EAG, or the conditions to the obligations of the Purchaser
to consummate the Transaction contained in this Agreement. In the event of
termination of this Agreement, Purchaser and its advisors will treat the
confidential information obtained from Sellers in accordance with the
confidentiality agreement entered into between their parent companies.
7.5 No Solicitation. Until the Closing Date or the termination of this Agreement
in accordance with its terms, EHAG, EAG and their respective Subsidiaries, and
those acting on behalf of any of them will not, and Sellers will use its best
efforts to cause its officers, employees, agents, and representatives (including
any investment banker) to not, directly or indirectly, solicit, encourage, or
initiate any discussions with, or negotiate or otherwise deal with, or provide
any information to, any person or Entity other than the Purchaser and its
officers, employees, and agents, in relation to the Acquired Assets or the
Acquired Business. EHAG or EAG will notify the Purchaser immediately upon
receipt of an inquiry, offer or proposal relating to any of the foregoing. None
of the foregoing shall prohibit providing information to others in a manner in
keeping with the ordinary conduct of the EHAG or EAG's business, or providing
information to government authorities.
7.6 Conduct of Business Pending The Transactions. Sellers covenant and agree
with the Purchaser that, prior to the consummation of the Transaction or the
termination of this Agreement pursuant to its terms, unless the Purchaser shall
otherwise consent in writing, which consent shall not be unreasonably withheld
or delayed, and except as otherwise contemplated by this Agreement or disclosed
in the Acquired Business Disclosure Document, Sellers will comply with each of
the following:
(1) The Acquired Business, and the other businesses that relate to, use or
affect the Acquired Assets, if any, will be conducted only in the ordinary and
usual course, Sellers shall use reasonable efforts and shall cause each of its
Subsidiaries to use reasonable efforts to keep intact the business organization
and good will of the Acquired Business, keep available the services of the
employees of the Acquired Business and of the employees of EHAG, EAG or of a
Subsidiary whose principal activities relate to the Acquired Business and
maintain relationships, in a manner reasonably consistent with historical
practices, with suppliers, lenders, creditors, distributors, employees,
customers and others having business or financial relationships with the
Acquired Business, and it shall immediately notify the Purchaser of any event or
occurrence or emergency material to and not in the ordinary and usual course of
business of, the Acquired Business or affecting any material part of the
Acquired Assets, or any of its Subsidiaries.
(2) [Omitted]
(3) [Omitted]
(4) Neither they nor any of their Subsidiaries shall create, incur or assume any
long-term or short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, affecting the Acquired
Business or any of the Acquired Assets, except in the ordinary course of
business and consistent with past practice;
(5) Neither they nor any of their Subsidiaries shall (a) adopt, enter into, or
amend an bonus, profit sharing, compensation, stock option, warrant, pension,
retirement, deferred compensation, employment, severance, termination, or other
employee benefit plan, agreement trust fund or arrangement for the benefit or
welfare of any employees of the Acquired Business, or (b) agree to any material
(in relation to historical compensation) increase in the compensation payable or
to become payable to, or any increase in the contractual term of employment of,
any such employee except, with respect to employees who are not officers or
directors, in the ordinary course of business and consistent with past practice.
(6) Neither they nor any of their Subsidiaries shall sell, lease, mortgage,
encumber, or otherwise dispose of or grant any interest in any of the Acquired
Assets except for sales, encumbrances and other dispositions or grants in the
ordinary course of business of the Acquired Business and consistent with past
practice and except for liens for taxes not yet due or liens or encumbrances
that are not material in amount or effect and do not impair the use of the
property, or as specifically provided for or permitted in this Agreement.
(7) Neither they nor any of their Subsidiaries shall enter into, or terminate,
any material contact, agreement, commitment, or understanding relating to or
affecting the Acquired Assets or the Acquired Business.
(8) Neither it nor any of its Subsidiaries shall enter into any agreement,
commitment, or understanding, whether in writing or otherwise, with respect to
any of the matters referred to in subparagraphs (1) through (7) above.
(9) EAG will, and EHAG will cause EAG to, continue to properly and promptly file
when due (or obtain proper extensions with respect to) all federal, cantonal,
local, foreign, and other tax returns, reports, and declarations required to be
filed by it relating to the Acquired Assets or the Acquired Business, and will
pay, at or prior to the Closing, all taxes and governmental charges due
(including any amounts deferred as a result of an extension or otherwise) from
or payable by it relating to the Acquired Assets or the Acquired Business.
(10) Sellers will comply in all material respects with all laws and regulations
applicable to the operations of the Acquired Business and the utilization of the
Acquired Assets.
(11) Sellers will maintain in full force and effect insurance coverage relating
to the Acquired Assets or the Acquired Business of a type and amount consistent
with past practice, but not less than that presently in effect.
7.7 Cooperation. Sellers will reasonably cooperate with the Purchaser and its
counsel, accountants, and agents in every way in carrying out the transactions
contemplated by this Agreement and in delivering all documents and instruments
deemed reasonably necessary or useful by the Purchaser.
7.8 Expenses. Whether or not the transaction is consummated, all costs and
expenses incurred by Sellers in connection with this Agreement and the
Transaction shall be paid by Sellers except as otherwise provided (directly or
indirectly) herein.
7.9 Publicity. Prior to the Closing any written news releases by EHAG or EAG
pertaining to this Agreement or the Transaction shall be submitted to the
Purchaser for review and approval prior to release by EHAG or EAG, and shall be
released only in a form approved by the Purchaser, provided, however, that (1)
approval shall not be unreasonably withheld and (2) such review and approval
shall not be required of releases by EHAG or EAG if prior review and approval
would prevent the timely and accurate dissemination of such press release as
required to comply, in the judgment of counsel, with any applicable law, rule or
policy.
7.10 Updating the Exhibits and Disclosure Documents. EHAG or EAG shall notify
the Purchaser of any changes additions, or events which may cause any change in
or addition to the Acquired Business Disclosure Document or any Schedules
delivered by them under this Agreement promptly after the occurrence of the same
and again at the Closing by delivery of appropriate updates to the Acquired
Business Disclosure Document and to all such Schedules. No such notification
made pursuant to this Section shall be deemed to cure any breach of any
representation or warranty made in this Agreement unless the Purchaser
specifically agrees hereto in writing nor shall any such notification be
considered to constitute or give rise to a waiver by the Purchaser of any
condition set forth in this Agreement.
7.11 Payment of Unassumed Liabilities. Sellers agree promptly to pay when due,
or otherwise to discharge, without cost or expense to the Purchaser, each and
every Liability of EHAG or EAG relating to the Acquired Business other than the
Assumed Liabilities.
ARTICLE VIII: CONDITIONS TO CLOSING
8.1 Conditions to Obligation of Purchaser. The obligation of the Purchaser to
effect the Transaction shall be subject to the fulfillment at or prior to the
Closing of the following conditions, unless Purchaser shall waive such
fulfillment:
(1) This Agreement and the Transaction contemplated hereby shall have received
all approvals, consents, authorizations, and waivers from governmental and other
regulatory agencies and other third parties (including lenders, holders of debt
securities and lessors) required to consummate the Transaction (including the
expiration of any applicable waiting period under any regulation or statute).
(2) There shall not be in effect a preliminary or permanent injunction or other
order by any court or other authority which prohibits the consummation of the
Transaction.
(3) Sellers shall have performed in all material respects each of its agreements
and obligations contained in this Agreement and required to be performed on or
prior to the Closing and shall have complied with all material requirements,
rules, and regulations of all regulatory authorities having jurisdiction
relating to the Transaction.
(4) No material adverse change shall have taken place in the business, condition
(financial or otherwise) operations, or prospects of the Acquired Business or
the Acquired Assets since the date of the Acquired Business Balance Sheet other
than those, if any, that result from the changes permitted by, and transactions
contemplated by, this Agreement.
(5) The representations and warranties of Sellers set forth in this Agreement
shall be true in all material respects as of the date of this Agreement or,
except in such respects as, in the reasonable judgment of the Purchaser, do not
materially and adversely affect the business, condition (financial or
otherwise), operations, or prospects of the Acquired Business or the Acquired
Assets, as of the Closing Time as if made as of such time.
(6) All other conditions to the closing of all other agreements for the
purchase and sale of assets between the Purchaser or an Affiliate of Purchaser
and EHAG, EAG or an Affiliate of EHAG or EAG have been satisfied or waived.
8.2 Conditions to Obligation of Sellers. The obligation of Sellers to effect the
Transaction shall be subject to the fulfillment at or prior to the Closing of
the following conditions, unless Sellers shall waive such fulfillment:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other regulatory
agencies and other third parties (including lien holders, holders of debt
securities, lessors, and the shareholders of Sellers) required by law to
consummate the Transaction (including the expiration of any applicable waiting
period under any regulation or statute).
(2) There shall not be in effect a preliminary or permanent injunction or other
order by any federal or state authority which prohibits the consummation of the
Transaction.
(3) The Purchaser shall have performed in all material respects each of its
agreements and obligations contained in this Agreement required to be performed
on or prior to the Closing and shall have complied with all material
requirements, rules and regulations of all regulatory authorities having
jurisdiction relating to the Transaction.
(4) The representation and warranties of the Purchaser set forth in this
Agreement shall be true in all material respects as of the date of this
Agreement and, except in such respects as do not materially and adversely affect
the business of the Purchaser and is Subsidiaries, taken as a whole, as of the
Closing Time as if made as of such time.
(5) EAG shall have received from the Purchaser evidence satisfactory to EAG and
its counsel that the Consideration has been, or is in the process of being,
delivered in the form of immediately available funds via wire transfer or other
means acceptable to EAG.
(6) All other conditions to the Closing of all other agreements for the purchase
and sale of the Acquired Assets between the Purchaser or an Affiliate of
Purchaser and EHAG, EAG or an Affiliate of EHAG or EAG have been satisfied or
waived.
ARTICLE IX: TERMINATION, AMENDMENT, WAIVER
9.1 Termination. This Agreement and the Transaction may terminated at any time
prior to the Closing, whether before or after any necessary shareholders
approval:
(1) By mutual consent of the Purchaser and Sellers;
(2) By the Purchaser or Sellers upon the material breach of this Agreement by
the other; or
(3) By either the Purchaser or Sellers, upon written notice to the other, if the
conditions to such party's obligations to consummate the Transaction, in the
case of Purchaser, as provided in Section 8.1, or, in the case of Sellers, as
provided in Section 8.2, were not, or cannot reasonably be, satisfied on or
before the Closing Date. unless the failure of condition is the result of the
material breach of this Agreement by the party seeking to terminate this
Agreement.
9.2 Amendment. This Agreement may be amended by EHAG, EAG and the Purchaser by
action taken at any time. This Agreement may not be amended except by an
instrument in writing signed on behalf of EHAG, EAG and the Purchaser.
9.3 Waiver. At any time prior to the Closing Date, the Purchaser, EHAG or EAG,
by action taken by their respective Boards of Directors, may, but shall not be
obligated to, (1) extend the time for the performance of any of the obligations
or other acts of the other parties hereto, (2) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (3) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
9.4 Relief. In the event of liability on the part of EHAG or EAG to the
Purchaser in accordance with the provisions of this Agreement prior to the
Closing, the parties recognize and acknowledge that monetary measures of damages
will not reasonably be calculable and that specific performance and injunctive
relief should therefore be available to the Purchaser.
ARTICLE X: INDEMNITY
10.1 Indemnification of Purchaser. Sellers and Sellers' Ultimate Parent hereby
agree to jointly and severally indemnify, defend and hold harmless, the
Purchaser and its officers, directors, shareholders, managers, members,
employees, independent contractors, agents, successors and assigns
(collectively, the "Purchaser Parties"), for, from and against any and all
liabilities, losses, costs or expenses which any of the Purchaser Parties may
suffer or for which any of the Purchaser Parties may become liable and which are
based on, the result of, arise out of or are otherwise related to any of the
following:
(1) any inaccuracy or misrepresentation in, or breach of any representation or
warranty of EHAG or EAG contained in this Agreement, any of the documents or
agreements executed in connection with this Agreement (collectively, the
"Attendant Documents") or any certificate, schedule, list or other instrument to
be furnished by EHAG or EAG to the Purchaser pursuant to this Agreement or any
of the Attendant Documents;
(2) any breach or failure of EHAG or EAG to perform any covenant or agreement
required to be performed by EHAG or EAG pursuant to this Agreement or any of the
Attendant Documents;
(3) any and all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses, including reasonable attorneys' fees and consultants' fees
(collectively, the "Related Expenses"), incident to any of the foregoing.
10.2 Indemnification of Sellers. Purchaser and Purchaser's Ultimate Parent
hereby agree to indemnify, defend and hold harmless, EHAG, EAG and their
respective officers, directors, shareholders, managers, members, employees,
independent contractors, agents, successors and assigns (collectively, the
"Seller Parties"), for, from and against any and all liabilities, losses, costs
or expenses which any of the Seller Parties may suffer or for which any of the
Seller Parties may become liable and which are based on, the result of, arise
out of or are otherwise related to any of the following:
(1) any inaccuracy or misrepresentation in, or breach of any representation or
warranty of the Purchaser contained in this Agreement, any of the Attendant
Documents or any certificate, schedule, list or other instrument to be furnished
by the Purchaser to EHAG or EAG pursuant to this Agreement or any of the
Attendant Documents;
(2) any breach or failure of the Purchaser to perform any covenant or agreement
required to be performed by the Purchaser pursuant to this Agreement or any of
the Attendant Documents;
(3) any and all Related Expenses incident to any of the foregoing.
10.3 Remedies Not Exclusive. The Purchaser Parties and the Seller Parties shall
be entitled to exercise and resort to all rights and remedies for
misrepresentation or breach as are afforded at law or in equity, including,
without limitation, rescission, specific performance, actions for damages,
adjustment to the purchase price or such other remedies and relief as may be
afforded under this Agreement or by a court of competent jurisdiction. Neither
the existence or exercise of any specific remedies is intended to be exclusive
or impair or otherwise adversely affect in any manner whatsoever any rights,
remedies or relief otherwise available, and each and every right and remedy will
be cumulative and in addition to every other right and remedy provided in this
Agreement or by law.
10.4 Procedures. If any proceedings are instituted or any claim or demand is
asserted by any person not a party to this Agreement in respect of which any of
the Purchaser Parties or the Seller Parties may seek indemnification pursuant to
this Section 10, the indemnified party shall promptly cause written notice (the
"Notice") of the assertion of any such claim or demand to be made to the
indemnifying party; provided, however, that the failure of the indemnified party
to give prompt Notice shall not relieve the indemnifying party of its
obligations hereunder unless, and only to the extent that, such failure caused
the damages for which the indemnifying party is obligated to be greater than
they would have been had the indemnified party given the indemnifying party
prompt Notice hereunder. Except as otherwise provided herein, the indemnifying
party shall have the right, at its option and expense, to defend against,
negotiate, or settle any such claim or demand, and if the indemnifying party
exercises that option, the indemnifying party shall not be liable for the fees
and expenses incurred after the date the indemnifying party notifies the
indemnified party of such exercise by a counsel employed by the indemnified
party. An indemnifying party may not settle any such claim or demand without the
written consent (which consent shall not be unreasonably withheld, conditioned
or delayed) of the indemnified party unless such settlement requires no more
than a monetary payment for which the indemnified party is fully indemnified or
involves other matters not binding upon the indemnified party. An indemnifying
party shall not be liable for any settlement of any such claim or demand
effected without its prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed). In the event that the
indemnifying party shall fail to respond within ten (10) days after the giving
of the Notice, then the indemnified party may retain counsel and conduct the
defense thereof as it may, in its sole discretion, deem proper, at the sole cost
and expense of the indemnifying party. The parties agree to cooperate fully with
each other in connection with the defense, negotiation or settlement of any such
legal proceeding, claim or demand.
10.5 Cooperation. The Purchaser shall, and shall cause its accountants, counsel,
employees and other representatives to, reasonably cooperate with Sellers in
connection with any and all disputes which may arise in connection with any and
all Liabilities other than the Assumed Liabilities (the "Excluded Liabilities").
Sellers shall, and shall cause its accountants, counsel, employees and other
representatives to, reasonably cooperate with the Purchaser in connection with
any and all disputes which may arise in connection with any and all of the
Assumed Liabilities. Without limiting the generality of the foregoing, the
Purchaser shall cause its accountants, counsel, employees and other
representatives, to make available to EHAG or EAG, their employees, work papers,
documents and other information and materials reasonably requested by EHAG or
EAG in connection with the Excluded Liabilities and Sellers shall cause its
respective accountants, counsel, employees and other representatives, to make
available to the Purchaser, its employees, work papers, documents and other
information and materials reasonably requested by the Purchaser in connection
with the Assumed Liabilities. The party requesting cooperation (Sellers in
connection with the Excluded Liabilities or the Purchaser in connection with the
Assumed Liabilities) shall pay all out-of-pocket expenses reasonably incurred
and paid by the cooperating party to third parties in connection with such
cooperative efforts; provided, however, that the party requesting cooperation
shall not be obligated to reimburse the cooperating party for the time spent by
any of their or their Affiliates' employees' time spent in connection with such
cooperative efforts.
10.6 Limitation. The parties shall have no liability for indemnification
pursuant to this Article 10 until the aggregate amount of all losses suffered by
the party seeking indemnification with respect to such matters exceeds the sum
of USD50,000, and then only for the amount by which such aggregate losses exceed
USD50,000; provided, however, that this limitation shall not apply to breaches
by EHAG or EAG or its obligations under Section 7.11 above.
ARTICLE XI: GENERAL PROVISIONS
11.1 Arbitration and Choice of Law. In the event that there shall be a dispute
arising out of or relating to this Agreement, the Transaction, any document
referred to herein or centrally related to the subject matter hereof, or the
subject matter of any of the same, the parties agree that such dispute shall be
submitted to binding arbitration in Los Angeles County, California, under the
auspices of, and pursuant to the rules of, the American Arbitration Association
as then in effect, or such other procedures as the parties may agree to at the
time, before an arbitrator selected pursuant to the rules of the American
Arbitration Association. Any award issued as a result of such arbitration shall
be final and binding between the parties, and shall be enforceable by an court
having jurisdiction over the party against whom enforcement is sought.
11.2 Choice of Law. This Agreement shall be governed by, interpreted and
construed in accordance with the substantive laws of Switzerland, excluding the
United Nations Convention on Contracts for the International Sales of Goods of
April 11, 1980.
11.3 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given if and when delivered
personally or six (6) business days following mailing by registered or certified
mail (return receipt requested) to the parties at the following addresses or at
such other address for a party as shall be specified by like notice given.
If to the Purchaser:
To the Purchaser's Ultimate Parent:
AremisSoft Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Roys Poyiadjis, CEO
with a required copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ Eng ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to EHAG or EAG:
To theSeller's Ultimate Parent:
Verso Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, CEO
with a required copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Jaffe, Raitt, Heuer & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11.4 Survival of Representations, Warranties, Etc. The representations,
warranties, covenants, and agreements of the parties contained herein shall
survive the Closing and any investigation of the other party made prior thereto.
Representations and warranties shall so survive for a period of three (3) years
from the Closing, except for those contained in Sections 4.1, 4.2, 4.3, 5.1, 5.2
and 5.3 which shall survive for ten (10) years.
11.5 Miscellaneous. This Agreement constitutes the entire agreement and
supersedes all of the prior agreements and understandings, both written and
oral, between the parties, with respect to the subject matter hereof, except as
specifically provided otherwise or referred to herein, so that no such external
or separate agreements relating to the subject matter of this Agreement (1)
shall have any effect or be binding, unless the same is referred to specifically
in this Agreement or is executed by the parties after the date hereof; (2) is
not intended to confer upon any other person any rights or remedies hereunder;
and (3) shall not be assigned by operation of law or otherwise except for
assignments of all or any part of the rights of the Purchaser hereunder, which
may be freely assigned by the Purchaser so long as the obligations of the
Purchaser under this Agreement remain obligations of, or their performance is
guaranteed by, the Purchaser. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement and facsimile
signatures shall have equal dignity with original signatures for all purposes.
IN WITNESS WHEREOF, the undersigned have caused this Agreement for the Purchase
and Sale of Assets to be signed on October 26, 2000 by their respective officers
or proxies thereunto duly authorized.
The Purchaser:
AremisSoft Hospitality (Switzerland) GmbH
By:
EHAG:
Eltrax Holding AG
By:
EAG:
Eltrax AG
By:
Sellers' Ultimate Parent:
Verso Technologies, Inc
By:
Purchasers' Ultimate Parent:
AremisSoft Corporation
By:
