AGREEMENT FOR THE PURCHASE
AND SALE OF ASSETS
This Agreement is made this December 18, 2000, by and among:
(1) AREMISSOFT CORPORATION ("Aremis"), a corporation duly organised and
existing under the laws of the State of Delaware, the United States of
America, with its principal place of business at 000 Xxxxxx Xxxxxx Xxxxx
000 Xxxxxxxx XX 00000, the United States of America;
(2) Latin America One Pte Ltd (the "Purchaser"), a company incorporated in
Singapore with its registered office at 00 Xxxx Xxxxxx Xxxxxx Xxxxx,
Xxxxxxxxx 000000;
(3) VERSO TECHNOLOGIES, Inc. (formerly known as Eltrax Systems, Inc.) ("VTI"),
a corporation duly organised and validly existing under the laws of the
State of Minnesota, the United States of America, with its principal place
of business at 000 Xxxxxxxx Xxxxx 000 Xxxxxxx XX 00000, the United States
of America; and
(4) Eltrax Systems Pte Ltd ("ESPL"), a company incorporated in Singapore with
its registered office at 00 Xxxx Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxx 000000.
WHEREAS, Aremis and the Purchaser desire that the Purchaser acquires, on
the terms and subject to the conditions reflected below, the Acquired Assets (as
defined below) and the Acquired Business (as defined below), as a going concern
with effect from the Completion Date; and
WHEREAS, VTI and ESPL believe that it is desirable and in their best
interests for ESPL to sell the Acquired Assets and the Acquired Business to the
Purchaser;
NOW, THEREFORE, the parties to this Agreement 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 Section 1.1 of the Acquired Business
Disclosure Document attached hereto, including, but not limited
to all Intellectual Property Rights and Software Products used in the
Acquired Business, and all other assets of ESPL, tangible or
intangible (including contractual, warranty, and other rights), the use or
value of which is related to the assets so identified.
1.2 Acquired Business: The businesses of ESPL in which the Acquired Assets are
utilized, as described on Section 1.2 of the Acquired Business
Disclosure Document attached hereto.
1.3 Acquired Business Balance Sheet: The balance sheet as at 31st October, 2000
or, if available prior to Completion, the balance sheet as at the date
provided for in Section 8.1(8) included in the Unaudited Financial
Statements of the Acquired Business, excluding the Excluded Assets.
1.4 Acquired Business Disclosure Document: The document delivered by ESPL to
the Purchaser containing certain disclosures relative to this Agreement, a
copy of which is attached to this Agreement as Exhibit to Section 1.4.
1.5 Acquired Facilities: All warehouses, stores, plants, production facilities,
manufacturing facilities, fixtures, and improvements owned or leased by
ESPL 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 the 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 Liabilities of ESPL to be assumed by the Purchaser
pursuant to this Agreement, as specifically identified in Section 1.8 of
the Acquired Business Disclosure Document, and no other Liabilities.
1.9 Business Day: Any day that is not a Saturday, Sunday, Public Holiday or a
day on which banks in New York, the United States of America, or Singapore
are authorized to close.
1.10 Completion: The completion of the Transaction, to take place as described
in Article II.
1.11 Completion Date: The date on which Completion takes place, as agreed by the
parties, but shall not in any event be prior to satisfaction or waiver of
the conditions to Completion set forth in Article VIII hereof.
1.12 Completion Time: The time at which Completion actually occurs, which shall
take place at 5:00 p.m., Singapore time, on the Completion Date, unless
otherwise agreed by the parties.
1.13 Consideration: The net sum of US$200,000, exclusive of any Goods and
Services Tax payable, to be paid by the Purchaser to ESPL or its nominee at
Completion for the Acquired Assets and the Acquired Business.
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 ESPL: Xxxxxx Xxx Xxxx Xxxxx Xxxx Xxxx, 0 Xxxxxxx Xxxxxxxxx
#00-00 Xxxxxx Xxxxx Xxx, Xxxxxxxxx 000000.
1.16 Counsel to the Purchaser: Xxxxx & Xxxxxxxx, 00 Xxxxxxxx Xxxx #00-00 Xxxx
Xxxxx Xxxxxxxxx 000000.
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: Generally accepted accounting principles, as in effect in Singapore
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 Rights: All Software Products (including, but not
limited to, all versions, renewals, modifications and extensions of any
Software Products), patents, patent applications, trade and
service marks, trade and service xxxx 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 ESPL for manufacturing, assembly, processing, finishing, sale, or
resale to others, from time to time in the ordinary course of the business
of ESPL 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 Master Agreement: The Agreement for the Purchase and Sale of Assets dated
28th September, 2000 entered into by Aremis, VTI and Eltrax Hospitality
Group, Inc. ("EHGI") relating to the sale and purchase of the business, and
certain assets and liabilities of EHGI, upon the terms and conditions
therein.
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 Projections: The projections of economic results of the Acquired Business,
prepared by ESPL on a monthly basis through 31st December, 2000 and
delivered to the Purchaser pursuant to the terms of this Agreement. Such
Projections include, separately and consolidated, projected financial
results for each separate business operation of the Acquired Business and
for each separate facility of the Acquired Business.
1.27 Proprietary Rights: Trade secrets, copyrights, patents, trademarks, service
marks, customer lists, and all similar types of intangible property
developed, created or owned by ESPL in connection with the Acquired Assets,
or used by ESPL in
connection with the Acquired Business, whether or not the same are entitled
to legal protection.
1.28 Receivables: Accounts receivable, notes receivable, and other obligations
appearing as assets on the books of ESPL, and customarily reflected as
assets in balance sheets of entities prepared in accordance with GAAP,
indicating moneys owed to ESPL.
1.29 Senercomm: Senercomm, Inc., a Florida corporation, located at 000 Xxxxxxxx,
Xxxxx 000, Xxxxxxx, XX 00000.
1.30 Senercomm Software Products: Senercomm developed or published Software
Products marketed under the "Senercomm" trademark and Intellectual Property
Rights to Senercomm published descriptions, specifications, technical
manuals, and other Senercomm supporting materials which may exist in text
or in electronic format, as the same may be modified from time to time.
1.31 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 the Schedule to Section 1.1(iv) of the Acquired Business
Disclosure Document.
1.32 Squirrel: Squirrel Systems, Inc., a Georgia corporation, located at 000
Xxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
1.33 Squirrel Software Products: All Squirrel developed or published Software
Products marketed under the "Squirrel" trademark and Intellectual Property
Rights to Squirrel published descriptions, specifications, technical
manuals, and other Squirrel supporting materials which may exist in text or
in electronic format, as the same may be modified from time to time.
1.34 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.
1.35 S$: The lawful currency of Singapore.
1.36 Transaction: The sale and purchase of the Acquired Assets and the Acquired
Business, and the assumption of the Assumed Liabilities, for the
Consideration as contemplated by, and subject to the terms and conditions
of, this Agreement.
1.37 Unaudited Financial Statements: The balance sheet as at 31st October, 2000
or (if available prior to Completion) the balance sheet as at the date
provided for in Section 8.1(8), the balance sheet as at 31st December,
1999, the income statement for the period ended 31st October, 2000 or (if
available prior to Completion) for the period ended as of the date provided
for in Section 8.1(8), the income statement for the period ended 31st
December, 1999 and the related notes provided therewith, for the Acquired
Business, excluding therefrom the Excluded Assets, prepared in accordance
with GAAP, other than the presentation of appropriate footnote disclosure,
schedules and the division of equity and inter-company accounts.
1.38 US$: The lawful currency of the United States of America.
ARTICLE II
THE TRANSACTION
2.1 The Transaction
On the Completion Date, and at the Completion Time, subject in all
instances to each of the terms, conditions, provisions and limitations
contained in this Agreement, ESPL shall and VTI shall cause ESPL as
beneficial owner to, sell, transfer, convey, and assign to the Purchaser,
by instruments reasonably satisfactory in form and substance to the
Purchaser and Counsel to the Purchaser, and the Purchaser shall acquire
from ESPL free and clear from all and any claims, liens, charges or
encumbrances (except for the encumbrances expressly provided in the Hire
Purchase Agreement dated 10th May, 1999 in respect of various computer
goods identified as item 4 on the Schedule to Section 1.1(iii) of the
Acquired Business Disclosure Document) whatsoever (i) the Acquired Assets,
and (ii) the Acquired Business, with the exclusive right to carry on the
same in continuation of or in succession to ESPL, and (iii) assume the
Assumed Liabilities, and only those Liabilities and no other Liabilities
whatsoever, in exchange for the Consideration. VTI and ESPL jointly and
severally represent that the Acquired Assets are all the assets reasonably
necessary for the conduct of the Acquired Business in the ordinary course
(exclusive of working capital) 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 Rights used in the ordinary conduct of the Acquired Business and
all contract, warranty, and other intangible rights relating to or arising
out of the Acquired Business. Neither Aremis nor the Purchaser or 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
VTI or ESPL other than the Assumed Liabilities. With effect from
Completion, Aremis and the Purchaser hereby agree to jointly and severally
pay, perform or discharge all of the Assumed Liabilities. VTI and ESPL
hereby jointly and severally represent that, prior to and on Completion,
ESPL holds and will hold absolutely free and clear from all and any claims,
liens, charges or encumbrances (except in relation to the Hire Purchase
Agreement referred to above) whatsoever all right, title and interest to
and in the Acquired Assets and there are no agreements, understandings, or
arrangements of VTI or ESPL which, as of or after Completion, would
materially and adversely affect the Acquired Assets and the Acquired
Business, the ability of ESPL to sell, transfer, convey and assign the
Acquired Assets and the Acquired Business free and clear from all and any
claims, liens, charges or encumbrances (except in relation to the Hire
Purchase Agreement referred to above) whatsoever as provided herein or
result in the assumption of any Liabilities by the Purchaser other than 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 to such account or accounts of VTI, ESPL
or of designated third-parties (it being understood that VTI and ESPL will
be using a portion of the Consideration proceeds to pay amounts owed to
certain third-parties who have played legal, financial and other advisory
roles in connection with the Transaction) as shall have been adequately
described to Aremis and/or the Purchaser in writing not less than three
Business Days prior to Completion.
ARTICLE III
COMPLETION
3.1 Completion
Completion hereunder shall take place at the offices of Counsel to the
Purchaser, Counsel to ESPL or at such place or places as the parties to
this Agreement may agree upon, on the Completion Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Aremis and the Purchaser hereby represent and warrant to VTI and ESPL as
follows:
4.1 Organization
Aremis is a corporation duly incorporated, organised, validly existing and
in good standing under the laws of its jurisdiction of incorporation. The
Purchaser is a company duly incorporated and validly existing under the
laws of Singapore, 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 the 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 the Purchaser of its obligations hereunder (except for
compliance with any regulatory or licensing laws applicable to the business
of the Purchaser, all of which, to the extent applicable to Purchaser, will
be satisfied in all material respects prior to Completion) do not, except
as disclosed in Schedule to Section 4.3, (1) conflict with, and will not
result in a breach of, any of the provisions of the Memorandum and Articles
of Association of the Purchaser; (2) contravene any Singapore laws, or any
order, writ, judgment, injunction, decree, determination, or award
affecting or binding upon Aremis and/or any of its Subsidiaries or the
Purchaser, 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 breach of or default under any indenture or loan or credit
agreement or any other agreement or instrument to which Aremis and/or any
of its Subsidiaries or the Purchaser 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 Aremis and/or any of its
Subsidiaries or the Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF VTI AND ESPL
VTI and ESPL, jointly and severally represent and warrant to Aremis and the
Purchaser as follows:
5.1 Organization and Qualification
VTI is a corporation duly incorporated, organised, validly existing, and in
good standing under the laws of its jurisdiction of incorporation. ESPL is
a company duly incorporated and validly existing under the laws of
Singapore. ESPL has the requisite corporate power and authority to carry on
the Acquired Business, as it is now being conducted. Each of VTI and ESPL
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 Entity's business.
5.2 Authority Relative to This Agreement
This Agreement has been duly and validly executed and delivered by VTI and
ESPL, and constitutes a valid and binding Agreement of VTI and ESPL,
enforceable in accordance with its terms. Each of VTI and ESPL 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 and no other corporate proceedings on the part of either VTI
and/or ESPL are necessary to approve and adopt this Agreement or to approve
the consummation of the Transaction contemplated hereby.
5.3 Absence of Breach; No Consents
The execution, delivery, and performance of this Agreement by VTI and ESPL,
and the performance by VTI and ESPL of their respective obligations
hereunder, do not, (1) except as identified in the Schedule to Section
5.3.1 of the Acquired Business Disclosure Document, conflict with or result
in a breach of any of the provisions of the Articles of Incorporation or
Bylaws, or Memorandum and Articles of Association, as the case may be, of
VTI or ESPL, respectively; (2) except as identified in the Schedule to
Section 5.3.2 of the Acquired Business Disclosure Document, contravene any
law, ordinance, rule or regulation in the respective jurisdictions in which
they have been incorporated, 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, VTI or ESPL or all or
any part 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) except as identified in the Schedule
to Section 5.3.3 of the Acquired Business Disclosure Document, conflict
with or result in a material breach of or default under any material
indenture or loan or credit agreement or any other agreement or instrument
to which VTI or ESPL is a party or by which any of the material properties
of the Acquired Business may be affected or bound; (4) except as identified
in the Schedule to Section 5.3.4 of the Acquired Business Disclosure
Document, 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) except as identified in the
Schedule to Section 5.3.5 of the Acquired Business Disclosure Document
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 VTI, ESPL or any of their
respective Subsidiaries. ESPL does not have any obligation to pay finder's
or broker's fees or commissions in connection with the exercise of options
to renew or extend real estate leases to which ESPL is a party.
5.5 Financial Statements.
ESPL has heretofore delivered to the Purchaser 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 ESPL. The Unaudited Financial
Statements were prepared in accordance with GAAP (as qualified in Section
1.37 above). Without limiting the foregoing, as of the date of the Acquired
Business Balance Sheet, ESPL owned each of the assets included in
preparation of the Acquired Business Balance Sheet, and the valuation of
such assets in the Acquired Business Balance Sheet is consistent with GAAP
(as qualified in Section 1.37 above); and ESPL had no Liabilities required
to be included in the Acquired Business Balance Sheet in accordance with
GAAP (as qualified in Section 1.37 above) 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 (as qualified in Section 1.37 above) in amounts in
excess of the amounts included for them in the Acquired Business Balance
Sheet. From the date hereof through the Completion Date, VTI and ESPL 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 sections corresponding to the subsections below:
(1) No Undisclosed Liabilities
ESPL has no Liabilities relating to or affecting the Acquired Business
or the Acquired Assets which are not, to the extent required by GAAP
(as qualified in Section 1.37 above), 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)
ESPL is not in any default or in breach, in any material respect,
under any contract, license, mortgage, indenture, deed or permit held
or affecting the Acquired Business, (b) there are no leasehold
improvements currently due and owing at any of the Acquired Facilities
for which the Acquired Business is or will be responsible, (c) there
are no deferred rents due to lessors at or with respect to any of such
Acquired Facilities, and (d) 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
S$17,000 and each person to whom the aggregate amount of such
Liabilities is in excess of S$17,000.
(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 and 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 transfer of or right granted under any material lease,
license, agreement, patent, trademark, trade name or copyright
included among the Acquired Assets;
(e) any sale or other disposition of any of the Acquired Assets, or
any mortgage, pledge, charge or imposition of any lien or other
encumbrance on any of the Acquired Assets, or any agreement
relating to any of the foregoing, other than in the ordinary
course of business; or
(f) 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, ESPL has
conducted the Acquired Business only in the ordinary and usual course,
and without limiting the foregoing, no changes have been made in (i)
executive compensation levels, or (ii) the manner in which other
employees of ESPL are compensated, or (iii) supplemental benefits
provided to any such executives or other employees of ESPL, or (iv)
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) Taxation
ESPL has properly and promptly filed (or obtained proper extensions in
respect of) all local and foreign income and other tax returns,
reports, and declarations that are required by applicable law to be
filed by it 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 has paid, or will pay when due all Singapore
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) Compliance With Laws
(a) The Acquired Business has been conducted and operated, and the
Acquired Assets have been used in substantial compliance with
all, and ESPL has not received any notice of any breach of any,
laws or ordinances, rules, regulations and orders of all
governmental and regulatory entities for the time being in force
and applicable to ESPL, 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 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.
(b) 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 on the Acquired Business or the
Acquired Assets. All such permits, licenses, zoning rights, and
other governmental authorizations (if any) will, as a part and
consequence of the Transactions, be transferred to the Purchaser
at Completion.
(5) Litigation
(a) No material investigation, review or enquiry by or on behalf of
any governmental department, commission, board, bureau, agency or
instrumentality with respect to the Acquired Business or any of
the Acquired Assets or the use thereof is to the best knowledge
of ESPL, pending or, threatened (other than inspections and
reviews (if any), customarily made of businesses such as the
Acquired Business), nor has any governmental department,
commission, board, bureau, agency or instrumentality indicated an
intention to conduct the same.
(b) There are no actions, suits or proceedings pending or, to the
best of the knowledge of ESPL, threatened against or affecting
the Acquired Business or any of the Acquired Assets at law or in
equity, or before any governmental department, commission, board,
bureau, agency or instrumentality.
(6) Employees
(a) There are no collective bargaining, bonus, profit sharing,
compensation, or other plans, agreements, trusts, funds or
arrangements maintained by VTI or ESPL for the benefit of
directors, officers or employees of ESPL and there are no
employment, consulting, severance, or indemnification
arrangements (except as provided in the Memorandum and Articles
of Association of ESPL), agreements or understandings between VTI
or ESPL on the one hand, and any current or former directors,
officers or other employees of ESPL, on the other hand.
(b) The Acquired Business Disclosure Document identifies each person
whose annualized income from ESPL, on the date of the Acquired
Business Balance Sheet, exceeded or would exceed on an annualized
basis, or whose income from ESPL in the fiscal year begun
immediately thereafter is at a rate exceeding, US$50,000 per
annum. ESPL is not, and following Completion 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.
(7) Ownership of Assets
(a) ESPL has (or as of Completion will have), with respect to the
Acquired Assets, good, marketable and insurable title, and valid,
effective and continuing leasehold rights (including licenses) in
the case of leased or licensed property, to all real property (as
to which, in the case of owned property, such title is freehold
or in fee simple) and 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 reasonable appearance or
reasonable expectations that the same is owned or leased by it;
such ownership or leasehold rights are, or at Completion will be,
free and clear from all and any claims, charges, and encumbrances
(other than those customarily held by a lessor or licensor in a
lease or license of real property), except liens for taxes not
yet due and 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
the Acquired Assets or the Acquired Business; and such ownership
or leasehold rights will be conveyed to the Purchaser at
Completion pursuant to the Transaction.
(b) ESPL does not know of any potential action by any party,
governmental or other regulatory entity, and no proceedings with
respect thereto have been instituted of which ESPL has notice,
that would materially affect ESPL's ability to use and utilise
each of the Acquired Assets for the purpose of carrying on the
Acquired Business. ESPL has not received any default notices from
any mortgagee regarding any leased properties of the Acquired
Business or any leasehold interests, which comprise any part of
the Acquired Assets.
(c) Section 1.1 and Section 5.6.12 (and the schedules to both of the
sections) of the Acquired Business Disclosure Document contain a
reasonably detailed listing, as of the date specified therein, of
all Acquired Assets including, but not limited to:
(i) accounts receivable as provided in Section 5.6 (12) below;
(ii) miscellaneous current assets in excess of S$17,000;
(iii)prepaid expenses in excess of S$17,000 (except those not
related to the Acquired Assets or the Assumed Liabilities);
(iv) Software Products; and
(v) buildings, improvements and leasehold improvements.
(8) Proprietary Rights, Software Products and Intellectual Property Rights
Subject to the qualifications in the Acquired Business Disclosure
Document,
(a) ESPL possesses full ownership of, or adequate and enforceable
exclusive long-term licenses or other exclusive rights to use
(without payment) all of the Proprietary Rights, Software
Products and Intellectual Property Rights, and all such
ownership, license or other rights shall be conveyed to the
Purchaser at Completion pursuant to the Transaction; and
(b) ESPL has not received any notice of conflict which asserts the
rights of others with respect to any of the Proprietary Rights,
Software Products or the Intellectual Property Rights; and ESPL
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 or arrangement relating to
any of the Proprietary Rights, Software Products or Intellectual
Property Rights.
(9) Trade Names
The Acquired Business Disclosure Document identifies each
trade/business name or other similar name under which ESPL has
conducted any part of the Acquired Business or in which ESPL has
utilized any of the Acquired Assets during the five (5) years
preceding the date of this Agreement.
(10) Subsidiaries, Etc.
No Subsidiary of ESPL, directly or indirectly, owns any of the
Acquired Assets or conducts any part of the Acquired Business. ESPL is
not 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) Facilities
(a) To the best of ESPL's knowledge (as applied to all of the
following), 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
ESPL 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 for
which they are being utilised.
(b) None of such Acquired Facilities, vehicles or other equipment are
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. ESPL 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 ESPL
has not received notice of any claim or assertion that ESPL is or
may be in any such breach, violation or default.
(12) Accounts Receivable
All accounts receivable of ESPL, reflected in the Acquired Business
Balance Sheet represent transactions in the ordinary course of
business, and are collectible, net of any reserves. As of the date
specified therein, the Acquired Business Disclosure Document
specifically identifies (a) the aging of Receivables, (b) each
Receivable in excess of S$17,000, (c) each Receivable in an amount in
excess of S$17,000 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 S$17,000.
(13) Inventories
All Inventories of ESPL, that are reflected in the Acquired Business
Balance Sheet, are of quality and quantity usable and saleable in the
ordinary course of business except for obsolete items and items of
below-standard quality, all of which, in the aggregate, are immaterial
in amount. Items included in ESPL's Inventories are carried in the
books of ESPL, and are valued on the Acquired Business Balance Sheet
consistent with GAAP (as qualified in Section 1.37 above).
(14) Contracts
The Acquired Assets and the Acquired Business are not 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
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
S$17,000 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 this Agreement of less than S$17,000.
All items excluded in (b) above represent, in the aggregate, less than
S$170,000. Neither VTI nor ESPL is a party to any executory contract
to sell or transfer any part of any leasehold interest included in the
Acquired Assets or utilised by the Acquired Business. True and
accurate copies of all leases of properties included in the Acquired
Assets or utilized by the Acquired Business, including all amendments,
supplements, extensions and modifications thereof, have heretofore
been delivered to the Purchaser by ESPL.
(15) 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 ESPL at the time of Completion will, reflect all amounts owed
by ESPL in respect of trade accounts due and other Payables of the
Acquired Business or relating to the Acquired Assets, and the actual
Liability of ESPL 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.
(16) Labor Matters
To the best of the knowledge of ESPL, there are no activities or
controversies, including without limitation, any labour organizing
activities, election petitions or proceedings, proceedings preparatory
thereto, unfair labour practice complaints, labour strikes, disputes,
slowdowns, or work stoppages, pending or, threatened, affecting the
employees of ESPL.
(17) Title to and Utilization of Real Properties and Leasehold Estates
Except as disclosed in the Acquired Business Disclosure Document, ESPL
owns fee, simple or a valid leasehold interest in, all real property
included in the Acquired Assets and has the unbridled right to use the
same (other than those customarily held by a lessor or licensor in a
lease or license of real property), and is not aware of any claim,
notice or threat to the effect that its right to own and use such
property is subject in any way to any challenge, claim, assertion of
rights, proceedings toward condemnation or confiscation, in whole or
in part, or is otherwise subject to challenge. To VTI and ESPL's
knowledge, each parcel of real property the ownership of, or leasehold
interest in, which is included among the Acquired Assets is free of
any and all hazardous wastes, toxic substances, or other types of
contamination in quantities or conditions requiring remediation, and
ESPL is not subject to any Liability resulting from or related to any
such wastes, substances or contaminants in connection with any such
property.
(18) Complete list of Agreements
(a) The Schedule to Section 1.1(iii) of the Acquired Business
Disclosure Document contains the full, complete and entire list
of all existing agreements entered into or serviced by or
assigned or transferred to ESPL related to the Acquired Business,
and forming part of the Acquired Assets, including without
limitation, all agreements relating to leased property and
agreements whereby ESPL has or has been granted distributorship,
marketing or licensing rights or provides any services relating
to Software Products, including without limitation, Squirrel
Software Products and Senercom Software Products, other than
those not required to be identified pursuant to Section 5.6(14).
(b) Notwithstanding Section 5.6(18)(a) above, in addition and without
prejudice to all and any rights or remedies available to Aremis
and the Purchaser in respect of misrepresentation or breach of
any representation or warranty of VTI and ESPL set out in this
Agreement, if at any time before or after Completion, it shall
come to the attention of VTI, ESPL, Aremis or the Purchaser (each
a "Discovering Party") that there are other existing agreements
related to the Acquired Business, which should have been included
in the Schedule to Section 1.1 (iii) of the Acquired Business
Disclosure Document, then the Discovering Party shall promptly
notify the other parties of such fact, and VTI and ESPL shall
forthwith use commercially reasonable efforts to do and execute
all such documents, acts and things as the Purchaser may
reasonably request for the purpose of effectively vesting in the
Purchaser the full benefit of such agreements, at no further
consideration or other charge to the Purchaser. Where the
consent, authorisation or waiver of any third party is required
for such purpose, and such consent, authorisation or waiver is
not obtained, than the Purchaser shall be entitled to act as the
agent and attorney of ESPL in order to obtain for itself the full
benefits of such agreements in the manner and to the extent
provided for in the letter executed by Aremis and VTI dated 22nd
November, 2000, the terms of which are incorporated herein by
reference.
5.7 Full Disclosure
The documents, certificates and other writings furnished or to be furnished
by or on behalf of VTI or ESPL 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
Except as set forth on the Acquired Business Disclosure Document, since the
date of the Acquired Business Balance Sheet, VTI and ESPL have not taken
any actions that would be prohibited under the provisions of this Agreement
(without the prior written consent of the Purchaser) after the date of this
Agreement.
ARTICLE VI
COVENANTS OF AREMIS AND THE PURCHASER
6.1 Affirmative Covenants
From the date hereof through the Completion Date, Aremis shall procure the
Purchaser to, and the Purchaser will use commercially reasonable efforts to
satisfy the conditions to Completion 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 VTI
and ESPL in this Agreement are and remain true and accurate in all material
respects and that the covenants and agreements of VTI and ESPL 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
Aremis and the Purchaser shall reasonably cooperate with VTI and ESPL, and
their respective 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 ESPL.
6.3 Costs
Whether or not the Transaction is consummated, all costs and expenses
incurred by Aremis and the Purchaser in connection with the preparation of
this Agreement and in preparation for the Transaction contemplated hereby
shall be paid by Aremis and the Purchaser, as the case may be.
6.4 Publicity
Prior to Completion, any written news releases by the Purchaser pertaining
to this Agreement or the Transaction shall be submitted to ESPL for review
and approval prior to release by the Purchaser, and shall be released only
in a form approved by ESPL, provided, however, that (1) such approval shall
not be unreasonably withheld by ESPL, and (2) such review or approval shall
not be required of releases by the Purchaser if it 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
(1) The transfer of the employment of the employees of ESPL who are
governed by the Singapore Employment Act, Chapter 91 (the "Employment
Act") (the "Employees") shall be governed by Section 18A of the
Employment Act and ESPL and the Purchaser shall each comply with their
respective obligations under the said Section 18A.
(2) In the case of any employees of ESPL falling outside the provisions of
the Employment Act (the "Executive Employees"), ESPL shall terminate
the employment of the Executive Employees with effect from the close
of business on Completion Date and the Purchaser shall offer them
employment with effect from the date immediately following the
Completion Date, on the basis that:
(a) the Purchaser's offer of employment shall be on the same terms
and conditions including but not limited to salary levels, leave
entitlement and all other benefits as applied to each of such
Executive Employees under the employment contract between them
and ESPL;
(b) in computing the period of employment (including calculations of
annual bonuses, leave entitlement and other benefits) by the
Purchaser of each such Executive Employee who accepts the
Purchaser's offer of employment, the period of such Executive
Employee's employment with ESPL and the benefits including but
not limited to the leave entitlement of each such Executive
Employee respectively shall be included; and
(c) such Executive Employees shall not suffer any loss in seniority,
leave allowance or other benefits in their employment with the
Purchaser.
In the event that any Executive Employee shall decline the Purchaser's
offer of employment, all claims, demands, costs and expenses,
including redundancy, long service and other payments payable (if any)
shall be borne by ESPL. ESPL shall use its best efforts to persuade
the Executive Employees to accept the Purchaser's offer of employment.
(3) ESPL shall perform and discharge all its obligations up to the
Completion Date in respect of all the Employees and Executive
Employees for its own account up to and including Completion Date
including, without limitation, discharging all wages and salaries of
the Employees and Executive Employees and all other costs and expenses
related to their employment. Subject to the provisions of Article X,
VTI and ESPL shall fully indemnify, defend and hold harmless the
Purchaser and its officers, directors, employees and agents from and
against any and all losses incurred as a result of claims, actions or
proceedings brought by any Executive Employee against the Purchaser or
any of its officers, directors, employees or agents as a result of any
act or omission of ESPL on or prior to the Completion Date.
6.6 Cooperation
Purchaser acknowledges that post-Completion, ESPL intends to be dissolved,
its assets liquidated and its affairs wound up. Aremis and the Purchaser
shall reasonably cooperate with VTI and ESPL and their respective counsel,
accountants, agents and representatives in every way in that regard and in
executing and delivering all documents and instruments deemed reasonably
necessary or useful by VTI or ESPL in that regard. Without limiting the
generality of the foregoing, the Purchaser shall allow and cause those
employees of ESPL who are currently officers of ESPL and who become
employed by the Purchaser in connection with the Transaction to remain as
officers of ESPL, without compensation, and shall cause such employees to
execute and deliver, on behalf of ESPL, the documents and instruments
contemplated in the immediately preceding sentence and to otherwise further
the dissolution, liquidation and winding up of ESPL, as directed by VTI or
ESPL. VTI shall reimburse the Purchaser for any and all reasonable
out-of-pocket expenses which it incurs and pays in connection with its
duties and obligations under this Section 6.6 but VTI shall not be required
to reimburse the Purchaser for the time spent by its employees in
furtherance of such duties and obligations. The Purchaser shall use its
best efforts to retain, and on request, shall provide VTI and ESPL with
access to or copies of, all documents which VTI and/or ESPL may reasonably
request in connection with the dissolution, liquidation and winding up of
ESPL or in preparing and filing any and all tax returns and financial
statements for any periods ending on or prior to 31st December, 2000, or in
connection with any audit activities in respect of any periods ending on or
prior to 31st December, 2000.
ARTICLE VII
COVENANTS OF VTI AND ESPL
7.1 Affirmative Covenants
From the date hereof through the Completion Date, VTI and ESPL will take
every action reasonably required of it to satisfy the conditions to
Completion 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 honoured and that the conditions to the obligations of VTI
and ESPL set forth in this Agreement are not incapable of satisfaction.
7.2 Non-Competition Agreement
ESPL will execute a five (5) year non-competition agreement with the
Purchaser to preclude ESPL from engaging in any business competitive with
that of the Acquired Business, directly or indirectly, alone or in
collaboration with others, except with the written consent of the Purchaser
or as a shareholder of less than one percent (1%) of the common stock of a
publicly held company engaged in one or more of such businesses and with
such other terms as are mutually acceptable to ESPL and the Purchaser.
7.3 Access and Information
Subject to the terms and conditions of the existing confidentiality
agreement between VTI and Aremis (the terms and conditions of which are
incorporated herein by reference), between the date of this Agreement and
the Completion Date, ESPL 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
Completion to all of their and their respective 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 7.3 shall affect any representations
or warranties of VTI or ESPL, or the conditions to the obligations of the
Purchaser to consummate the Transaction contained in this Agreement.
Purchaser and its representatives shall use their best efforts to assert
their rights hereunder in such manner as to minimize interference with the
business of VTI and ESPL.
7.4 No Solicitation
Until the Completion Date or the termination of this Agreement in
accordance with its terms, VTI, ESPL and those acting on behalf of either
of them will not, and VTI and ESPL will each 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. VTI and ESPL 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 Acquired Business, or providing information to government authorities.
7.5 Conduct of Business Pending The Transactions
VTI and ESPL jointly and severally 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, VTI and ESPL 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, VTI and ESPL shall use their reasonable
efforts to keep intact the business organization and goodwill of the
Acquired Business, keep available the services of the employees of
ESPL 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 they 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 their Subsidiaries.
(2) They shall not 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.
(3) They shall not:
(a) adopt, enter into, or amend any bonus, profit sharing,
compensation, stock option, warrant, pension, retirement,
deferred compensation, employment, severance, termination, or
other employee benefit schemes, plans, agreements, trusts, funds
or arrangements 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.
(4) They shall not sell, lease, charge, 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 thereof 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 and 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.
(5) They shall not enter into, or terminate, any material contract,
agreement, commitment, or understanding relating to or affecting the
Acquired Assets or the Acquired Business.
(6) They shall not 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 (5) above.
(7) ESPL will, and VTI will procure ESPL to continue to properly and
promptly file when due (or obtain proper extensions with respect to)
all 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 when due 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.
(8) VTI and ESPL 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.
(9) VTI and ESPL 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
VTI and ESPL shall reasonably cooperate with the Purchaser and the
Purchaser's counsel, accountants and agents in every way in carrying out
the Transactions contemplated herein, and in executing and delivering all
documents and instruments deemed reasonably necessary or useful by the
Purchaser.
7.8 Costs
Whether or not the Transaction is consummated, all costs and expenses
incurred by VTI and ESPL in connection with the preparation of this
Agreement and in the preparation for the Transaction and in connection with
Completion of the Transaction contemplated hereby shall be paid by VTI and
ESPL, as the case may be.
7.9 Publicity
Prior to Completion, any written news releases by VTI or ESPL pertaining to
this Agreement or the Transaction shall be submitted to the Purchaser for
review and approval prior to release by VTI or ESPL, and shall only be
released in a form approved by the Purchaser, provided, however, that (1)
such approval shall not be unreasonably withheld by the Purchaser, and (2)
such prior review or approval shall not be required of releases by VTI or
ESPL if it 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
VTI or ESPL 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 of the schedules or exhibits thereto delivered
by them under this Agreement promptly after the occurrence of the same and
again at Completion by delivery of appropriate updates to the Acquired
Business Disclosure Document and to all such schedules or exhibits. No such
notification made pursuant to this clause shall be deemed to cure any
breach of any representation or warranty made in this Agreement unless the
Purchaser specifically agrees thereto 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
ESPL agrees to promptly pay when due, or otherwise to discharge, up to and
including the Completion Date, without cost or expense to the Purchaser,
each and every Liability of ESPL relating to the Acquired Business other
than the Assumed Liabilities.
ARTICLE VIII
CONDITIONS TO COMPLETION
8.1 Conditions to Obligations of the Purchaser
The obligation of the Purchaser to effect the Transaction shall be subject
to the fulfillment at or prior to Completion of the following conditions,
unless Purchaser shall waive such fulfillment:
(1) This Agreement and the Transaction contemplated hereby shall have
received those approvals, consents, authorizations, and waivers from
governmental and other regulatory agencies and other third parties
(including lenders, those holders of debt securities and lessors)
identified in the Schedule to Section 5.3.4 of the Acquired Business
Disclosure Document, including the expiration of any applicable
waiting period under any applicable laws.
(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) VTI and ESPL shall have performed in all material respects each of
their agreements and obligations contained in this Agreement and
required to be performed on or prior to Completion 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 VTI and ESPL 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, 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 Completion
Time as if made as of such time.
(6) The Purchaser shall have received from ESPL, a written statement,
executed by a director of ESPL, dated the Completion Date, as to the
satisfaction of the conditions in paragraphs (3), (4), and (5) above
and including, as exhibits, copies of all authorizing board of
directors resolutions and, where necessary, shareholder resolutions,
and true and complete current copies of ESPL's Memorandum and Articles
of Association.
(7) The Purchaser shall have received from ESPL such documents, in a
reasonably satisfactory form and substance to the Purchaser and to
Counsel to the Purchaser, sufficient to transfer title to the Acquired
Assets to the Purchaser.
(8) VTI and ESPL will use commercially reasonable efforts to make
available to the Purchaser prior to Completion an updated unaudited
balance sheet and income statement with related notes and schedules as
of the end of the month immediately prior to the Completion Date. If
those updated financial statements are produced, they shall, for
purposes of the definition of "Unaudited Financial Statements,"
replace and supersede the balance sheet as at 31st October, 2000 and
the income statement for the period ended 31st October, 2000, in their
entirety, for all purposes relevant to this Agreement.
8.2 Conditions to Obligations of VTI and ESPL
The obligation of VTI and ESPL to effect the Transaction shall be subject
to the fulfillment at or prior to Completion of the following conditions,
unless VTI and ESPL shall waive such fulfillment:
(1) This Agreement and the Transaction contemplated hereby shall have
received those approvals, consents, authorizations, and waivers from
governmental and other regulatory agencies and other third parties
(including lenders, those holders of debt securities and lessors), as
identified on the attached Schedule 8.2(1), required by law to
consummate the Transaction, including the expiration of any applicable
waiting period under any applicable laws.
(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) 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 Completion and shall have complied with
all material requirements, rules and regulations of all regulatory
authorities having jurisdiction relating to the Transaction.
(4) The representations and warranties of the Purchaser set forth in this
Agreement shall be true in all material respects as of the date of
this Agreement except in such respects as do not materially and
adversely affect the business of the Purchaser and its Subsidiaries,
taken as a whole, as of the Completion Date as if made as of such
date.
(5) ESPL shall have received from the Purchaser, an officer's certificate,
executed by a director of the Purchaser, dated the Completion Date, as
to the satisfaction of the conditions in paragraphs (3) and (4) above
and including, as exhibits, copies of all authorizing board of
directors resolutions, and where necessary, shareholder resolutions,
and true and complete copies of its Memorandum and Articles of
Association.
(6) ESPL shall have received from the Purchaser evidence reasonably
satisfactory to ESPL 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 reasonably acceptable
to ESPL.
ARTICLE IX
TERMINATION, AMENDMENT, WAIVER
9.1 Termination
This Agreement and the Transaction may be terminated at any time prior to
Completion, whether before or after any necessary shareholders approval:
(1) By mutual consent of the Purchaser and ESPL;
(2) By Aremis, the Purchaser, VTI or ESPL upon the material breach of this
Agreement by the other; or
(3) By either Aremis and the Purchaser or VTI and ESPL, 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 VTI, and ESPL, as provided in Section
8.2, were not, or cannot reasonably be, satisfied on or before
December 29, 20000, 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 Aremis, the Purchaser, VTI and ESPL by
action taken at any time. This Agreement may not be amended except by an
instrument in writing signed on behalf of Aremis, the Purchaser, VTI and
ESPL.
9.3 Waiver
At any time prior to the Completion Date, Aremis, the Purchaser, VTI, or
ESPL, 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 any of VTI or ESPL to the
Purchaser in accordance with the provisions of this Agreement prior to
Completion, 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
VTI and ESPL 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 VTI or ESPL contained in this Agreement,
any of the documents or agreements executed in connection with this
Agreement (collectively, the "Attendant Documents") or any other
document, certificate, appendix, schedule, list or other instrument to
be furnished by VTI, or ESPL to the Purchaser pursuant to this
Agreement or any of the Attendant Documents;
(2) any breach or failure of VTI or ESPL to perform any covenant or
agreement required to be performed by VTI or ESPL pursuant to this
Agreement or any of the Attendant Documents including, without
limitation, ESPL's obligations to pay the unassumed Liabilities under
Section 7.11 above; or
(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 VTI, and ESPL
Aremis and the Purchaser hereby agree to jointly and severally indemnify,
defend and hold harmless, VTI, ESPL 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 Aremis and/or the Purchaser contained in
this Agreement, any of the Attendant Documents or any other document,
certificate, appendix, schedule, list or other instruments to be
furnished by Aremis and/or the Purchaser to VTI or ESPL pursuant to
this Agreement or any of the Attendant Documents;
(2) any breach or failure of Aremis and/or the Purchaser to perform any
covenant or agreement required to be performed by Aremis and/or the
Purchaser pursuant to this Agreement or any of the Attendant Documents
including, without limitation, Aremis and/or the Purchaser's
obligations to pay the Assumed Liabilities under Section 2.1 above; or
(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, or such other non-monetary 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.
Notwithstanding the foregoing, other than actions for fraud or other
intentional torts, the remedies set forth in this Article 10 shall be the
Purchaser Parties' and the Seller Parties' sole and exclusive remedies
relative to the recovery of economic or monetary damages.
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
seven (7) 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
Aremis and the Purchaser shall, and shall cause their accountants, counsel,
employees and other representatives to, reasonably cooperate with VTI and
ESPL 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"). VTI and ESPL shall cause their 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, Aremis and the Purchaser shall cause their
accountants, counsel, employees and other representatives, to make
available to VTI and ESPL, their employees, work papers, documents and
other information and materials reasonably requested by VTI and ESPL in
connection with the Excluded Liabilities, and VTI and ESPL shall cause
their 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 (VTI and ESPL 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 Application of Indemnification Provisions
The parties agree that the above indemnification provisions and those
contained in Sections 10.6, 10.7, 10.8 and 10.9 of the Master Agreement
shall apply to this Agreement in the manner and subject to the limitations
contained in Section 10.10 of the Master Agreement, which Section is
incorporated herein by reference.
ARTICLE XI
GENERAL PROVISIONS
11.1 Collection of Accounts Receivable.
Upon and after Completion, the Purchaser shall have the right and authority
to collect all Receivables transferred to the Purchaser pursuant to this
Agreement and to endorse the name of ESPL on any cheques received on
account of any such Receivables. VTI and ESPL shall promptly transfer and
deliver to the Purchaser any cash, cheques or other property which VTI, and
ESPL may receive in respect of such accounts after the Completion Date. VTI
and ESPL will cooperate with the Purchaser, at its reasonable request, on
and after the Completion Date in endeavoring to collect all Receivables
transferred to the Purchaser by furnishing, at Purchaser's cost and
expense, such information, testimony and other assistance as the Purchaser
may reasonably require in connection with collection of such accounts.
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. Aremis and the Purchaser hereby
jointly and severally agree not to coerce or suggest, directly or
indirectly, in any way, to any customer that they identify any payment to a
particular Receivable, and in the event of any such coercion or suggestion,
Aremis shall procure the Purchaser, and the Purchaser agrees to make a
credit to ESPL, for any Receivables put to VTI or ESPL as provided below,
in an amount equal to five times the amount of that Receivable. The
Purchaser shall use commercially reasonable efforts to collect the
Receivables (but shall not be obligated hereunder to bring any action to
collect any Receivables) but if it shall fail to collect the full amount of
any such Receivable within 180 days after the Completion Date, the
Purchaser shall, subject to the provisions contained in Section 10.10 of
the Master Agreement relating to the putting back of Receivables, have the
right to put such Receivable to VTI or ESPL, whereupon VTI or ESPL (as
applicable) shall repurchase such Receivable from the Purchaser at the face
amount thereof. Any such put right must be exercised on or before 360 days
after the Completion Date unless extended in writing by VTI or ESPL.
Notwithstanding the foregoing, the Purchaser shall not have the right to
put to VTI or ESPL (as applicable) any Receivable which the Purchaser has
compromised or settled or agreed to accept payment at less than the face
amount thereof in full satisfaction thereof or otherwise given a credit in
respect thereof. Upon a put of a receivable to VTI or ESPL, the Purchaser
will cooperate with VTI or ESPL, at its reasonable request, in endeavoring
to collect all Receivables put to VTI or ESPL by furnishing, at VTI or
ESPL's cost and expense, such information, testimony and other assistance
as VTI or ESPL may reasonably require in connection with collection of such
accounts.
11.2 Arbitration
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, the United States of
America, under the auspices of, and pursuant to the rules of, the American
Arbitration Association as then in effect (which rules are incorporated
herein by reference), or such other procedures as the parties may agree to
at the time, before an arbitrator to be 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 any court having jurisdiction over the party against whom
enforcement is sought.
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
three (3) business days for local addresses or ten (10) business days for
overseas addresses 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:
LatinAmerica One Pte Ltd (or its new name as notified by the Purchaser to
the other parties)
c/o Messrs Xxxxx & Xxxxxxxx (Attention: Xx Xxxxxxx Xxx/Mr Sellakumaran)
00 Xxxxxxxx Xxxx
#00-00 Xxxx Xxxxx
Xxxxxxxxx 000000
with a required copy to :
Xxxxx X. Xxxxxx, Esq.
Xxxxxx Eng Xxxx & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
If to VTI:
Verso Technologies, Inc.
000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. X'Xxxxxx, Chairman
with a required copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx X. Xxxxx, Esq.
Jaffe, Raitt, Heuer & Xxxxx, P.C.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
If to ESPL:
Eltrax Systems Pte Ltd
00 Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxxxxx 000000
Attention : Mr Xxxxxxx Xxxx
Xx Xxxx Xxxx
11.4 Interpretation
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
11.5 Survival of Representations, Warranties, Etc.
The representations, warranties, covenants, and agreements of the parties
contained herein shall survive Completion and any investigation of the
other party made prior thereto. Representations and warranties shall so
survive for a period of three (3) years from Completion, except for those
contained in Sections 4.1, 4.2, 4.3, 5.1, 5.2, 5.3 and the indemnity
provisions in Section 10, which shall survive indefinitely, and for those
contained in Section 5.5 which shall survive until 31st March 2001.
11.6 Entire Agreement
This Agreement and the existing confidentiality agreement referenced in
Section 7.3 constitute the entire agreement and supersedes all of the prior
agreements, 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 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. This
Agreement is not intended to confer upon any person who is not a party
hereto, any rights or remedies. This Agreement shall not be assigned or
transferred whether by operation of law or otherwise by any party except
that all or any part of the rights of the Purchaser hereunder, 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 unconditionally guaranteed by, the Purchaser (which must be a guarantee
of performance, and not just collection, with no duty on the part of VTI or
ESPL to pursue the assignee first, and which guarantee must be approved by
VTI in advance, which approval will not be unreasonably withheld). It is
acknowledged and understood by VTI and ESPL that the Purchaser may assign
its rights, but not its obligations, hereunder, after execution and prior
to Completion, to one or more wholly-owned (direct or indirect)
Subsidiaries of the Purchaser.
11.7 Stamp Duties
The Purchaser shall bear all stamp duties (if any) payable in connection
with and incidental to this Agreement.
11.8 Goods and Services Tax
The parties shall use all reasonable endeavours to procure that the
Transaction is deemed to be a transfer of a business as a going concern for
the purposes of Section 34 of the Goods and Services Tax Act (Cap. 117A)
and Goods and Services Tax Act (Excluded Transactions) Order 1994.
11.9 Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance with, the
laws of Singapore.
11.10 Execution in Counterparts.
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 December 19, 2000 by their respective
officers thereunto duly authorized.
AremisSoft Corporation:
By:
Roys Poyiadjis, CEO
The Purchaser:
Latin America One Pte Ltd
By:
Xxxxx X. Xxxxxx, Director
By:
Xxxxxxx Xxxx, Director
VTI:
Verso Technologies, Inc.:
By:
Xxxxxx X. Xxxxxxx , Executive Vice-President
ESPL:
Eltrax Systems Pte Ltd
By:
[Name]
