Exhibit 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT"), dated as of September
1, 2001, is made by and between AXS-One Inc., a Delaware corporation (the
"SELLER"), and Xxxxxxxxxxx International Ltd., a corporation registered in
Gibraltar (the "PURCHASER").
WITNESSETH
WHEREAS, the parties hereto desire to provide for the purchase and sale
of the entire share capital, consisting of 62,476 shares ("SHARES"), of AXS-One
Spolka z ograniczona odpowiedzialnoscia, a limited liability company organized
under the laws of Poland (the "Company").
WHEREAS, Xxxxxxx Xxxxxxxx ("XXXXXXXX") is one of the two shareholders,
and the Managing Director, of the Purchaser, and Xxxxxxxx' spouse, Xxxxx
Xxxxxxxx ("X. XXXXXXXX"), is the other shareholder, and a Director, of the
Purchaser.
WHEREAS, having served as the Managing Director of the Company for the
past several years, Xxxxxxxx is directly familiar with the business, operations,
assets, liabilities and prospects of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto, intending to be legally bound,
agree as follows:
Certain terms used in this Agreement are defined in Section 6 hereof.
1. SALE AND PURCHASE OF SHARES.
1.1. AGREEMENT TO SELL AND PURCHASE SHARES. At the Closing (as defined in
Section 1.3(a) hereof), the Seller hereby agrees to sell to the Purchaser, and,
subject to all of the terms and conditions hereof, the Purchaser hereby agrees
to purchase from the Seller, an aggregate of 62,476 Shares.
1.2. PURCHASE PRICE. The aggregate purchase price for the Shares to be sold
to Purchaser pursuant to Section 1.1 hereof will be Four Hundred Thirty Thousand
United States Dollars (US$430,000) (the "PURCHASE PRICE"), which is based on the
financial condition of the Company on July 31, 2001. The Purchase Price will be
payable in fifteen (15) monthly installments, in lawful currency of the United
States of America, pursuant to the terms of an installment promissory note in
the form of EXHIBIT 1.2 hereto (the "NOTE").
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1.3. THE CLOSING.
(a) The closing of the purchase and sale of the Shares (the
"CLOSING," and the date thereof, the "CLOSING DATE") shall occur at the offices
of the Seller (or at such other location as may be agreed upon by the Seller and
the Purchaser), and will take place concurrently with the execution and delivery
of this Agreement by the parties hereto (or as soon thereafter as is necessary
to comply with any applicable legal or administrative requirements). The parties
agree to use their good faith best efforts to effect the Closing promptly
following the execution and delivery of this Agreement. However, if the
Purchaser or the Seller fails to deliver its respective deliverables (as set
forth in Section 1.4 hereof) prior to September 30, 2001, then the other party
may, by written notice to all other parties, at any time thereafter, terminate
this Agreement (whereupon the rights and obligations of the parties hereunder
shall terminate).
(b) At the Closing, the Seller shall deliver the Deed of
Transfer (as defined below) for the Shares to the Purchaser against delivery by
the Purchaser of the Purchase Price in the form of the Note.
1.4. CLOSING DELIVERIES. At the Closing:
(a) The Seller will, pursuant to the Deed of Transfer, deliver
the Shares to the Purchaser, free and clear of all Liens.
(b) The Purchaser will pay for the Shares by delivering the
Note to the Seller.
(c) The Seller will deliver to the Purchaser each of the
following documents (and, with respect to each of the documents referenced in
subsections (i) - (v) below, a counterpart thereof duly executed by the Seller):
(i) this Agreement;
(ii) the "Agreement On Regular Pledge Over Shares" in the
form of Exhibit 1.4(c)(ii) hereto (the "PLEDGE AGREEMENT");
(iii) the Deed of Transfer in the form of Exhibit
1.4(c)(iii) hereto (the "DEED OF TRANSFER);
(iv) the side letters in the form of EXHIBIT 1.4(C)(IV)
hereto with regard to the purchase and sale of certain outstanding
loans made by the Seller, and by Seller's United Kingdom subsidiary
("AXS-UK"), to the Company (the "SIDE LETTERS");
(v) the Reseller Agreement in the form of EXHIBIT
1.4(C)(V) hereto (the "RESELLER AGREEMENT");
(vi) appropriate evidence as to the release by Foothill
Capital Corporation of its lien on the Shares; and
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(vii) written resignations, effective upon the Closing, of
(i) Xxxx Xxxx and Xxxxxxx Xxxxxxxx from the supervisory board of the
Company, and (ii) Xxxxxxx Xxxxxxxxx from the management board of the
Company, in the form of EXHIBIT 1.4(C)(VII) hereto.
(d) The Purchaser will deliver to the Seller the following,
duly executed:
(i) this Agreement and the Deed of Transfer (executed by
the Purchaser);
(ii) the Note (executed by the Purchaser);
(iii) the Pledge Agreement (executed by the Purchaser);
(iv) the Reseller Agreement (executed by the Company);
(v) the Side Letters (executed by the Purchaser);
(vi) the Guarantee Agreement in the form of EXHIBIT
1.4(D)(VI) hereto (the "COMPANY GUARANTEE") (executed by the Company);
(vii) the Guarantee Agreement in the form of EXHIBIT
1.4(D)(VII) hereto (the "XXXXXXXX GUARANTEE") (executed by Xxxxxxxx);
(viii) the Guarantee Agreement in the form of EXHIBIT
1.4(D)(VIII) hereto (the "X. XXXXXXXX GUARANTEE") (executed by X.
Xxxxxxxx);
(ix) the (A) fully executed written termination agreements
of Xxxxxxxx, X. Xxxxxxxx and Xxxxx Xxxxx with AXS-UK, and (B) written
releases of the Seller (and its affiliates) by each such person of any
and all claims arising in connection with his/her employment by AXS-UK
or the Company, in the form of EXHIBIT 1.4(D)(IX) hereto; and
(x) such other documents as are incidental to any of the
foregoing.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby represents
and warrants to the Purchaser as follows:
2.1. ORGANIZATION. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, United
States.
2.2. CORPORATE POWER; BINDING EFFECT. The Seller has all requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder in accordance with the terms hereof. This Agreement and
the transactions contemplated hereby have been approved and authorized by all
requisite corporate action on the part of the Seller, and this Agreement
constitutes a legal, valid, and binding obligation of the Seller, enforceable
against
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the Seller in accordance with its terms (subject to the effect of bankruptcy,
insolvency, reorganization or other similar laws and to general principles of
equity (whether considered in proceedings at law or in equity)). The execution
and performance by the Seller of its obligations under this Agreement, including
the Exhibits hereto, will not constitute a breach or violation of any provision
of the Seller's Certificate of Incorporation, By-laws or other organizational
document, any law, regulation, contract, commitment, order, judgment or decree
of any court or governmental agency applicable to the Seller, or any agreement
to which the Seller is a party.
2.3. NO BANKRUPTCY. As of the effective date of this Agreement, no
bankruptcy or similar proceedings have been filed by or against the Seller.
2.4. TITLE TO SHARES; CAPITALIZATION; RIGHTS TO ACQUIRE SHARE CAPITAL.
Immediately prior to the Closing, the authorized and outstanding share capital
of the Company consisted solely of the 62,476 Shares, all of which were owned
(both of record and beneficially) by the Seller, free and clear of any and all
Liens (other than the lien, referenced in Section 1.4(c)(vi) hereof, of Foothill
Capital Corporation, which lien shall be released as of the Closing). The
Company does not have outstanding, is not bound by, and has no obligation to
issue, grant or enter into, any Derivative Securities.
2.5. BROKERS. No finder, broker, agent, or other intermediary has acted for
or on behalf of the Seller or any of its affiliates in connection with the
negotiation or consummation of the transactions contemplated hereby, and no fee
will be payable by the Seller to any such person in connection with such
transactions.
2.6. NO OTHER REPRESENTATIONS OR WARRANTIES; "AS IS" NATURE OF SALE. Except
as expressly set forth in this Section 2, the Shares are being sold "as is" and
the Seller makes no other representations with respect to the Company, its
business, its condition (financial or otherwise), its operating results, its
title to any assets (or the condition thereof), its liabilities (contingent or
otherwise) or its prospects. The Purchaser acknowledges that it has not entered
into this Agreement (or any other agreement being entered into in connection
herewith) in reliance upon any representation or warranty except those
specifically set forth in this Section 2.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents and
warrants as follows:
3.1. ORGANIZATION. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Gibraltar. Xxxxxxxx and X.
Xxxxxxxx are the sole shareholders and Directors of the Purchaser, Xxxxxxxx is
the Managing Director of the Purchaser, and the Purchaser does not have
outstanding, is not bound by, and has no obligation to issue, grant or enter
into, any Derivative Securities.
3.2. CORPORATE POWER; BINDING EFFECT. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement, including
the Exhibits hereto, and to perform its
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obligations hereunder in accordance with the terms hereof. This Agreement,
including the Exhibits hereto, and the transactions contemplated hereby, have
been approved and authorized by all requisite corporate action on the part of
the Purchaser, and this Agreement, including the Exhibits hereto, constitutes a
legal, valid, and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms (subject to the effect of bankruptcy,
insolvency or other similar laws). The execution and the performance by the
Purchaser of its obligations under this Agreement, including the Exhibits
hereto, will not constitute a breach or violation of any provision of the
Purchaser's Memorandum of Association, Articles of Association or other
organizational document, any law, regulation, contract, commitment, order,
judgment or decree of any court or governmental agency applicable to the
Purchaser, or any agreement to which the Purchaser is a party.
3.3. SOLVENCY. The Purchaser is solvent as of the Closing Date, and the
Purchaser has no reason to believe that its performance under this Agreement,
including the Exhibits hereto, will render the Purchaser insolvent.
3.4. ACCESS TO INFORMATION. By reason of Chamber's business or financial
experience and involvement with the Company, Purchaser has the capacity and has
taken all steps necessary to protect its interests in connection with its
purchase of the Shares. Purchaser has had the opportunity to evaluate the merits
and risks of the purchase, and has been given the opportunity to meet with
officials of the Seller and the Company and to have said officials answer any
questions regarding the terms and conditions of this particular purchase, and
all such questions have been answered to Purchaser's satisfaction.
3.5. INVESTMENT INTENT. For so long as the Purchaser's obligations under the
Note remain outstanding, the Purchaser is acquiring the Shares solely for its
own account, for investment purposes, with no present intention of distributing
or reselling any of the Shares or any interest therein in violation of
applicable securities laws. The Purchaser is aware that the offer and sale of
the Shares pursuant to this Agreement will not be registered under the United
States Securities Act of 1933, as amended, or the securities laws of any state
or other jurisdiction (including, without limitation, Gibraltar or Poland), and
that (in addition to the restrictions set forth herein and in the Pledge
Agreement) neither the Shares nor any interest therein may be sold, pledged, or
otherwise transferred unless the Shares are registered under (or qualify for an
exemption from) applicable securities laws.
3.6. GOVERNMENT CONSENTS. No consents or approvals of, applications to or
notifications of any governmental or regulatory authorities of any relevant
jurisdiction (including in particular the Polish anti-trust authority, i.e.
Urzad Ochrony Konkurencji i Konsumentow) are required in connection with
conclusion of this Agreement or the purchase of the Shares hereunder, except
for: (i) the filing of a tax return with the Polish tax authorities for the
purpose of paying the civil law transactions tax, and (ii) notifying the
competent Registry Court in Poland as provided in Section 4.1(a)(ii) hereof.
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3.7. BROKERS. No finder, broker, agent, or other intermediary has acted for or
on behalf of the Purchaser or any of its affiliates (including, without
limitation, Xxxxxxxx and X. Xxxxxxxx) in connection with the negotiation or
consummation of the transactions contemplated hereby, and no fee will be payable
by the Purchaser to any such person in connection with such transactions.
4. POST-CLOSING COVENANTS.
4.1. AFFIRMATIVE COVENANTS. The Purchaser will cause the Company to comply
with each of the following covenants:
(a) As soon as possible after the Closing:
(i) duly enter the transfer of the Shares pursuant to
this Agreement as well as the pledge established on
the Shares pursuant to the Pledge Agreement to the
Company's share register; and
(ii) and in any case not later than seven (7) days
following the Closing, duly notify the competent
Registry Court in Poland of the transfer of the
Shares effected pursuant to this Agreement as well as
the pledge established on the Shares pursuant to the
Pledge Agreement, and apply for disclosing the
Purchaser as the sole shareholder of the Company; and
(iii) eliminate the Company's supervisory board.
(b) For a period of five years after the Closing (or such other longer period as
may be required by local law), the Company shall preserve all files and records
(financial and otherwise) relating to the business of the Company prior to the
Closing, allow the Seller and its representatives access to such files and
records and permit the Seller and its representatives to make copies and
extracts therefrom at any time during normal business hours. Neither the
Purchaser nor the Company will dispose of any of such files or records during
such five year period.
(c) For so long as the Purchaser's obligations under the Note remain outstanding
(except with respect to subsection (vii) below, which covenant shall survive
satisfaction of the Note), the Purchaser, as sole shareholder of the Company,
shall use its utmost best efforts, regardless of cost, exercising its corporate
rights, to:
(i) cause to be done all things necessary to maintain,
preserve, renew and keep in full force and effect the
Company's corporate existence;
(ii) preserve and keep in full force and effect all
material licenses, authorizations, permits, rights
and franchises necessary or useful for the conduct of
the Company's business;
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(iii) maintain all of its properties used or useful in the
conduct of its business in good condition, repair,
and working order and cause to be made all necessary
repairs, renewals, replacements, betterments, and
improvements thereof;
(iv) maintain with financially sound and reputable
insurance companies, funds, or underwriters insurance
of the kinds, covering the risks and in the relative
proportionate amounts usually carried by reasonable
and prudent Polish companies conducting businesses
similar to that of the Company;
(v) pay and discharge when payable all taxes, assessments
and governmental charges imposed upon the Company or
any of the properties, sales or activities of the
Company, or any part thereof, or upon the income or
profits therefrom (in each case before the same
becomes delinquent and before penalties accrue
thereon) and all claims for labor, materials or
supplies (whether incurred before or after the
Closing), which if unpaid would by law become a Lien
upon any of its property, unless and to the extent
that the same are being contested in good faith and
by appropriate proceedings and adequate reserves have
been established on its books with respect thereto;
and
(vi) comply with all obligations which the Company has
incurred or hereafter incurs pursuant to any contract
or agreement, as such obligations become due.
(vii) no later than December 31, 2001 (the "TERMINATION
DATE"), take all necessary steps to (A) change the
Company's name and logo, including, to the extent
necessary, by amending the Company's Articles of
Association and (B) assign to the Seller all of the
Company's rights to trademarks that are either
pending or registered in the name of the Company as
of the Closing Date (and not adopt, or seek
protection for, any trademarks confusingly similar to
that owned in the United States by the Seller (other
than "Access1")). The Purchaser agrees that, from and
after the Termination Date, neither it nor the
Company will use any name or logo confusingly similar
to the present name and logo of the Company;
provided, however, that the Seller hereby agrees that
the Company may adopt the name "Access1." For
purposes of this subsection, the Seller's consent to
the Company's adoption of the name "Access1" shall be
limited to (1) the Company itself, and such name may
not be assigned by the Company to any other entity,
including, without limitation, the Purchaser, and (2)
use solely within the Territory (as that term is
defined in the Reseller Agreement).
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4.2. NEGATIVE COVENANTS RELATING TO THE COMPANY. For so long as the
Purchaser's obligations under the Note remain outstanding, the Purchaser will
cause the Company not to take any of the following actions without the prior
written consent of the Seller:
(a) authorize, issue or enter into any agreement providing for the
issuance (contingent or otherwise) of any share capital, capital stock or
Derivative Securities of the Company;
(b) except (i) as expressly contemplated by this Agreement or (ii) to
the extent such amendments or resolutions do not or could not, in any respect,
adversely affect or otherwise impair any of the rights of the Seller under this
Agreement, the Note or the Pledge Agreement, make, adopt or approve any
amendment, restatement or other modification to the Company's Articles of
Association, bylaws or other organizational document;
(c) increase any compensation (including salary, bonuses and other
forms of current and deferred compensation) or benefits payable to any employee,
contractor, officer or director of the Company by more than ten percent (10%)
above the officially pronounced (by the appropriate governmental authority)
level of inflation in the aggregate beyond any such person's level of
compensation or benefits immediately prior to the Closing Date;
(d) authorize or effect (i) the sale, lease, license, abandonment or
other disposition of all or substantially all of the assets of the Company or
(ii) the merger, division ("podzial"), consolidation or change in legal form
(e.g., transformation into a joint stock company) of the Company with or into
any other entity;
(e) authorize the Company to incur, create, assume, become or be
liable, directly, indirectly or contingently, in any manner with respect to, or
permit to exist, any indebtedness or liability for borrowed money (other than
trade debt incurred in the ordinary course of the Company's business and
consistent with the Company's past practices);
(f) encumber, permit a Lien to exist on, transfer, sell, assign or
otherwise dispose of any of the Company's assets other than in the ordinary
course of its business, consistent with past practices and on arm's length terms
and conditions;
(g) change or otherwise modify in any material respect the nature of
the business of the Company as presently conducted by it;
(h) open any new, or close any existing, office or place of business
(or modify in any material respect the terms of any real property lease to which
the Company is currently a party);
(i) permit the number of persons employed, or retained as contractors,
by the Company to vary by more than + five (5) people from the number of
employees employed and contractors retained by the Company on the Closing Date;
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(j) change the constituent members (as of immediately following the
Closing) of the Company's management board, which members are identified on
SCHEDULE 4.2(J) hereto, or reinstitute the Company's supervisory board (the
Seller's consent to any requested change under this subparagraph not to be
unreasonably withheld);
(k) redeem, purchase or otherwise acquire (or enter into any agreement
providing for the redemption, purchase or other acquisition of) any share
capital, capital stock or Derivative Securities of the Company, nor repay any
indebtedness owed by the Company to any direct or indirect affiliate of the
Company; or
(l) purchase, lease or otherwise acquire additional assets (other than
in the ordinary course of the Company's business and consistent with the
Company's past practices).
4.3. NEGATIVE COVENANTS RELATING TO THE PURCHASER. For so long as the
Purchaser's obligations under the Note remain outstanding, the Purchaser shall
not take any of the following actions without the prior written consent of the
Seller:
(a) authorize, issue or enter into any agreement providing for the
issuance (contingent or otherwise) of any share capital, capital stock or
Derivative Securities of the Purchaser;
(b) except (i) as expressly contemplated by this Agreement or (ii) to
the extent such amendments or resolutions do not or could not, in any respect,
adversely affect or otherwise impair any of the rights of the Seller under this
Agreement, the Note or the Pledge Agreement, make, adopt or approve any
amendment, restatement or other modification to the Purchaser's Memorandum of
Association, Articles of Association or other organizational document;
(c) increase any compensation (including salary, bonuses and other
forms of current and deferred compensation) or benefits payable to any employee,
contractor, officer or director of the Purchaser by more than ten percent (10%)
above the officially pronounced (by the appropriate governmental authority)
level of inflation in the aggregate beyond any such person's level of
compensation or benefits immediately prior to the Closing Date;
(d) authorize or effect (i) the sale, lease, license, abandonment or
other disposition of all or substantially all of the assets of the Purchaser or
(ii) the merger, consolidation or change in legal form of the Purchaser with or
into any other entity;
(e) authorize the Purchaser to incur, create, assume, become or be
liable, directly, indirectly or contingently, in any manner with respect to, or
permit to exist, any indebtedness or liability for borrowed money;
(f) change or otherwise modify in any material respect the nature of
the business of the Purchaser as presently conducted by it;
(g) change the constituent members (as of immediately following the
Closing) of the Purchaser's board of directors, which members are identified on
SCHEDULE 4.3(G) hereto (the
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Seller's consent to any requested change under this subparagraph not to be
unreasonably withheld);
(h) redeem, purchase or otherwise acquire (or enter into any agreement
providing for the redemption, purchase or other acquisition of) any share
capital, capital stock or Derivative Securities of the Purchaser, nor repay any
indebtedness owed by the Purchaser to any direct or indirect affiliate of the
Purchaser; or
(i) purchase, lease or otherwise acquire additional assets (other than
in the ordinary course of the Purchaser's business and consistent with the
Purchaser's past practices).
4.4. RESTRICTION ON TRANSFER. For so long as the Purchaser's obligations
under the Note remain outstanding and other than as contemplated by the Pledge
Agreement, the Purchaser will not sell, assign, transfer, pledge, hypothecate or
encumber the Shares (or otherwise subject the Shares to any Lien) or enter into
any agreement to do any of the foregoing.
5. INDEMNIFICATION.
5.1. INDEMNIFICATION BY SELLER.
(a) The Seller will indemnify, defend, and hold harmless the Purchaser
from and against any and all Damages incurred by it which result from or relate
to the breach by the Seller of any of its representations or warranties
contained in Section 2 of this Agreement or any of its covenants or agreements
contained in this Agreement. Except as expressly provided in Section 5.1(b)
hereof, the foregoing represents Seller's sole indemnification obligations, and
Purchaser's sole remedy, related to this Agreement and the transactions
contemplated hereby.
(b) Notwithstanding the above, the Seller will indemnify, defend, and
hold harmless the Purchaser from and against any and all Damages incurred by it
which result from or relate to genuine, bona fide claims raised by Mazowiecka
Wytwornia Xxxxx i Drozdzy ,,Polmos" ("POLMOS") that the Seller "Direct Invoice"
software licensed to Polmos by the Company, under that certain Master Software
License Agreement dated 1996.10.31, fails to conform to the description of that
software provided to Polmos by the Seller and the Company prior to the Closing.
In addition to the conditions set forth in Section 5.3 hereof, the indemnity
obligations set forth in this subsection (b) are subject to the following
conditions and limitations: (i) to be subject to this subsection, the claims of
Polmos must relate to actions taken, or failed to be taken, by the Seller (or by
the Company with the express approval of the Seller) prior to the Closing, (ii)
the Purchaser shall, and the Purchaser shall cause Xxxxxxxx and the Company to,
hereafter use their good faith best efforts, at their sole expense, to make the
licensed software work to the satisfaction of Polmos and to otherwise prevent
Polmos from raising claims subject to this subsection, (iii) notwithstanding
Section 5.3(i), the Purchaser must give the Seller immediate written notice of
any claim of Polmos, upon the Company's first learning of the intent of Polmos
to possibly assert such claim, to which the Purchaser intends the indemnity
obligations set forth in this subsection (b) to apply, and the Purchaser, the
Company and Xxxxxxxx must fully cooperate with and assist any efforts by the
Seller to resolve such claim directly with
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Polmos, and (iv) in no event will the Seller's aggregate liability under the
indemnity obligations set forth in this subsection (b) exceed US$100,000.
5.2. INDEMNIFICATION BY PURCHASER. The Purchaser shall indemnify, defend,
and hold harmless the Seller (which for purposes of this Section 5 shall include
Seller's officers, directors, subsidiaries and its and their respective
affiliates) from and against any and all Damages incurred by it which result
from or relate to (i) the breach by the Purchaser or the Company of any of its
representations, warranties, covenants, or agreements contained in this
Agreement, (ii) the Company's failure to comply with its obligation under the
Reseller Agreement to provide "first level maintenance and support" (as such
term is described in the Reseller Agreement) to all licensees of Seller's
software located in the Territory (as defined in the Reseller Agreement), (iii)
claims made by any employee of the Company or any taxing authority based on the
conduct of the Company's business either prior to or following the Closing, and
(iv) the conduct of the business of the Company at all times following the
Closing (including, without limitation, claims arising as a result of the
misunderstanding of any third party that the Company is no longer a subsidiary
or affiliate of the Seller following the Closing).
5.3. MECHANICS OF INDEMNITY. The foregoing indemnity obligations are
conditioned on the party seeking indemnification (the "Indemnified Party"): (i)
giving the proposed indemnifier (the "Indemnifying Party") notice of the
relevant claim (unless the failure to give notice does not materially prejudice
the defense thereof), (ii) cooperating with the Indemnifying Party, at the
Indemnifying Party's expense, in the defense of such claim and (iii) giving the
Indemnifying Party the right to assume and control (and the Indemnifying Party
shall promptly assume and control) the defense and settlement of any such claim,
except that the Indemnifying Party shall not enter into any settlement that
affects the Indemnified Party's rights or interests without the Indemnified
Party's prior written approval, which approval will not be unreasonably withheld
or delayed. The Indemnified Party shall have the right to participate in the
defense at its own expense. In the event the Indemnifying Party does not
promptly assume the defense of any claim as provided above, the Indemnified
Party shall have the full right to defend against such claim and shall be
entitled to settle or agree to pay in full such claim or demand, in its sole
discretion, all at the expense of the Indemnifying Party.
5.4.SURVIVAL OF OBLIGATIONS. The obligations of the Seller and the Purchaser
under this Section 5 will survive the transfer of the Shares and the termination
of this Agreement for, with respect to Seller's obligations under Section 5.1(a)
hereof, a period of one (1) year, with respect to Seller's obligations under
Section 5.1(b) hereof, a period of two (2) years, and with respect to
Purchaser's obligations under Section 5.2 hereof, the longer of the period that
the Purchaser's obligations under the Note remain outstanding, or the period
established by the applicable statute of limitations. The foregoing time periods
represent the time periods in which a claim for indemnification under this
Section 5 must be asserted by the Indemnified Party; once a claim is properly
asserted under this Section 5 within the applicable time period, the
Indemnifying Party's indemnification obligations with respect to such claim
shall survive termination of said period.
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6. DEFINITIONS. For all purposes of this Agreement the following terms will have
the meanings set forth in this Section 6:
"DAMAGES" means all damages, losses, claims, demands, actions, causes
of action, suits, litigations, arbitrations, liabilities, costs, and expenses,
including investigatory and court costs and the reasonable fees and expenses of
counsel and experts.
"DERIVATIVE SECURITIES" means (i) all shares of stock and other
securities that are convertible into or exchangeable for the issuer's share
capital and (ii) all options, warrants, and other rights to acquire any of the
issuer's share capital or securities convertible into or exchangeable for the
issuer's share capital.
"LIENS" means any and all liens, claims, mortgages, security interests,
charges, encumbrances, and restrictions on transfer of any kind, except, with
respect to the Shares, any of the same arising under this Agreement, the Note,
the Pledge Agreement or the Articles of Association of the Company as in effect
immediately prior to the Closing.
7. MISCELLANEOUS PROVISIONS.
7.1. AMENDMENTS, CONSENTS, WAIVERS, ETC.
(a) AMENDMENT, CONSENT, WAIVER. This Agreement or any
provision hereof may only be amended, waived or terminated by the written
agreement of both the Seller and the Purchaser.
(b) WRITTEN WAIVER; FAILURE TO EXERCISE RIGHTS. No waiver of
any breach or default hereunder will be valid unless in a writing signed by the
waiving party. No failure or other delay by any person in exercising any right,
power, or privilege hereunder will be or operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege.
7.2. NOTICES. All notices, requests, instructions or other documents to be
given hereunder will be in writing or by written telecommunication, and will be
deemed to have been duly given if (i) delivered personally (effective upon
delivery), (ii) sent by a reputable, established air courier service that
provides evidence of delivery (effective upon delivery), or (iii) sent by
telecopier followed within 24 hours by confirmation by one of the foregoing
methods (effective upon receipt of the telecopy in complete, readable form),
addressed as follows (or to such other address as the recipient party may have
furnished to the sending party for the purpose pursuant to this Section 7.2):
If to the Seller:
AXS-One Inc.
000 Xxxxx 00 Xxxxx
00
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile No. 201.939.6955
If to the Purchaser:
Xxxxxxxxxxx International Ltd.
c/o Mr. Xxxxxxx Xxxxxxxx
AXS-One Sp. z o. o.
xx. Xxxxxx 00X
00-000 Xxxxxxxx, Xxxxxx
Facsimile No. 00-00-000-00-00
7.3. COUNTERPARTS. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered will be an original,
but all of which together will constitute one and the same agreement. If this
Agreement is concluded in Polish, the English language version shall govern.
7.4. CAPTIONS. The captions of sections or subsections of this Agreement are
for reference only and will not affect the interpretation or construction of
this Agreement.
7.5 ASSIGNMENT; BINDING EFFECT AND BENEFITS. Neither Purchaser nor Seller
may assign its rights or delegate its duties under this Agreement without the
other party's prior written consent. Any attempted assignment or delegation in
violation of the foregoing shall be void. This Agreement and the rights and
obligations of the parties will bind and inure to the benefit of their
respective successors and permitted assigns.
7.6. FURTHER ASSURANCES. From time to time on and after the date hereof, the
Purchaser and the Seller will, and the Purchaser will cause Xxxxxxxx, X.
Xxxxxxxx and the Company to, promptly execute and deliver all such further
instruments and assurances, and will promptly take all such further actions, as
the Purchaser or the Seller may reasonably request of the other in order more
effectively to effect or confirm the transactions contemplated by this
Agreement, the Note and the Pledge Agreement and to carry out the purposes
hereof and thereof.
13
7.7. SEVERABILITY. No invalidity or unenforceability of any section of this
Agreement or any portion thereof will affect the validity or enforceability of
any other section or the remainder of such section.
7.8. EQUITABLE RELIEF. Each of the parties acknowledges that any breach by
such party of its obligations under this Agreement would cause substantial and
irreparable damage to the other party and that money damages would be an
inadequate remedy therefor. Accordingly, each party agrees that the other party
will be entitled to an injunction, specific performance, and/or other equitable
relief to prevent the breach of such obligations.
7.9. ENTIRE AGREEMENT. This Agreement, together with the exhibits hereto,
contains the entire understanding and agreement between the parties and
supersedes any prior or contemporaneous understandings or agreements between
them with respect to the subject matter hereof.
7.10. JUDGMENT CURRENCY. In the event that a judgment, order or award is
rendered by any court or tribunal for the payment of (i) any amounts owing to
Seller under this Agreement or (ii) damages in respect of a judgment or order of
another court or tribunal and such judgment, order or award is expressed in a
currency (the "Judgment Currency") other than the currency due hereunder,
namely, U.S. Dollars (the "Agreed Currency"), the Purchaser agrees (a) that its
obligations in respect of any such amounts owing shall be discharged only to the
extent that, on the business day following Seller's receipt of any sum adjudged
in the Judgment Currency, Seller may purchase the Agreed Currency with the
Judgment Currency and (b) to indemnify and hold harmless Seller against any
deficiency in terms of the Agreed Currency in the amounts actually received by
Seller following any such purchase (after deduction of any premiums and costs of
exchange payable in connection with the purchase of, or conversion into, the
Agreed Currency). The indemnity set forth in the preceding sentence shall
(notwithstanding any judgment referred to in the preceding sentence) constitute
an obligation of the Purchaser separate and independent from its other
obligations hereunder, shall apply irrespective of any indulgence granted by
Seller, and shall survive the termination of this Agreement.
7.11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF IMMUNITY. This
Agreement shall be governed by, and construed in accordance with, the law of the
State of New Jersey, United States, exclusive of its conflict of laws
provisions. Each of the parties hereto hereby submits to the exclusive
jurisdiction of the United States District Court for the District of New Jersey,
and of any New Jersey state court sitting in Bergen County, for the purposes of
any and all legal proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby (other than those that relate to
enforcement of Seller's rights under the Pledge Agreement, in respect of which
the parties submit to the non-exclusive jurisdiction of the foregoing courts).
The parties irrevocably consent to the service of any and all process in any
legal proceeding by the delivery of copies of such process to such party in
accordance with Section 7.2. Each of the parties hereto irrevocably waives, to
the fullest extent permitted by applicable law, any objection
14
that it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. The Seller
and the Purchaser agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. To the extent that the Seller
or the Purchaser has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Seller and the Purchaser
hereby irrevocably waives such immunity in respect of its respective obligations
under this Agreement, the Pledge Agreement, the Note and any other exhibit
hereto and, without limiting the generality of the foregoing, agrees that the
waivers set forth herein shall have the fullest scope permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are intended
to be irrevocable for purposes of such Act.
7.12. WAIVER OF JURY TRIAL. EACH OF THE SELLER AND THE PURCHASER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT, AND/OR ANY DOCUMENT EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF OR BY ANY PARTY HERETO.
7.13. AXS-ONE SOFTWARE.
(a) As of the Closing, the Company's and the Purchaser's sole and
exclusive rights with respect to any software, copyrightable material or other
intellectual property developed or to be developed by the Seller (collectively,
"SOFTWARE," which term shall include any derivative works of the Software
created by or for the Company, whether prior to or following the Closing
("DERIVATIVE WORKS")) shall be as set forth in the Reseller Agreement. To the
extent the Company's retention of any Software is not necessary in order for the
Company to perform its obligations under the Reseller Agreement, the Purchaser
shall cause the Company to promptly return all copies of the same to the Seller.
Except as otherwise expressly permitted in the Reseller Agreement, the Purchaser
agrees to hold, and to cause the Company and Xxxxxxxx to hold, the Software, and
any other proprietary information of Seller, in the strictest of confidence and
not to disclose the same to any third party.
(b) Each and every Derivative Work shall be deemed a "work made for
hire" under applicable copyright law and shall belong exclusively to the Seller,
whether or not the Seller uses such Derivative Work. To the extent that such
Derivative Works do not qualify for "work made for hire" status, the Purchaser
shall cause the Company and the Company's employees to irrevocably assign all
rights of every kind in the Derivative Works, including without limitation,
copyrights, to the Seller. No rights to or in such Derivative Works are reserved
to the Company or to the Company's employees, other than the Company's right to
15
license such Derivative Works to end users in accordance with the terms of the
Reseller Agreement. The Purchaser shall cause the Company to promptly provide
the Seller with complete copies of all Derivative Works and all materials
related thereto, upon the later to occur of (i) the Closing, or (ii) the
development of the Derivative Works. The Seller shall have the right to use, in
any media or by any method, now known or hereafter known, all of such Derivative
Works, any part or parts thereof, or none of such Derivative Works, as the
Seller sees fit, and the Seller may alter such Derivative Works, add to them, or
combine such Derivative Works with any other work or works, in the Seller's sole
discretion.
(c) The Purchaser shall cause the Company and Xxxxxxxx to comply with
the provisions of this Section 7.13.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
16
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement as of the day and year first above written.
SELLER: AXS-ONE INC.
By /s/ XXXX X. XXXX
-----------------
Name: Xxxx X. Xxxx
Title: President and CEO
State of New Jersey
) SS
City of Xxxxxxxxxx
This is to certify that Xxxx X. Xxxx, personally known to me to be the
same person whose name is subscribed to the foregoing Stock Purchase Agreement,
appeared before me, Xxxxx Xxxxxxxxx, a Notary Public, this 20th day of
September, 2001 and expressly acknowledged to me that he executed said Stock
Purchase Agreement on behalf of AXS-ONE INC., that he was duly authorized to do
so, and that he intended AXS-ONE INC. to be duly bound by the same.
/s/ XXXXX XXXXXXXXX
-----------------------
Notary Public
My Commission Expires:
--------------
PURCHASER: XXXXXXXXXXX INTERNATIONAL LTD.
By: /s/ XXXXXXX XXXXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
--------------------------------)
) SS
--------------------------------)
This is to certify that Xxxxxxx Xxxxxxxx, personally known to me to be
the same person whose name is subscribed to the foregoing Stock Purchase
Agreement, appeared before me, _______________, a Notary Public, this ____ day
of September, 2001 and expressly acknowledged to me that he executed said Stock
Purchase Agreement on behalf of XXXXXXXXXXX INTERNATIONAL LTD., that he was duly
authorized to do so, and that he intended XXXXXXXXXXX INTERNATIONAL LTD. to be
duly bound by the same.
-----------------------
Notary Public
My Commission Expires:
--------------
17
EXHIBIT 1.4(c)(iii)
DEED OF TRANSFER
This Deed of Transfer (this "Deed") dates as of September __, 2001, is made by
and between AXS-One Inc., a Delaware corporation (the "Seller") and Xxxxxxxxxxx
International Ltd., a Gibraltar corporation (the "Purchaser").
WHEREAS, the parties hereto entered into a Stock Purchase Agreement on September
1, 2001 (the "Agreement") which established the conditions of purchase and sale
of the entire share capital, consisting of 62,476 shares ("Shares"), of AXS-One
Spolka z ograniczona odpowiedzialnoscia, a limited liability company organized
under the laws of Poland (the "Company")
WHEREAS, the conditions established by the Agreement have been fulfilled by the
parties;
the parties hereto agree as follows:
1. TRANSFER OF OWNERSHIP.
1.1 In exercise of the conditions of the Agreement the Seller hereby transfers
to the Purchaser the ownership title of and to all the Shares, free and
clear from any Liens, for the price of four hundred thirty thousand
American Dollars (US$430,000).
1.2 Immediately after execution of this Deed the Purchaser shall notify the
Company on transfer of the shares executed by virtue of this Deed (the
"Transfer") and shall present to the Company a copy thereof. The Purchaser
shall cause that the Company shall:
(i) as soon as possible duly enter the Transfer of the Shares to the
Company's share register; and
(ii) in any case not later than seven (7) days following the execution
of this Deed, duly notify the competent Registry Court in Poland
of the Transfer of the Shares and apply for disclosing the
Purchaser as the sole shareholder of the Company.
2. PAYMENT OF PRICE
The payment of the price for the Shares will be effected by the Purchaser on
conditions established in the Stock Purchase Agreement and the Promissory Note
issued by the Purchaser on the even date hereto.
3. APPLICABLE LAW
This Deed is subject to the laws of the Republic of Poland.
18
SELLER: AXS-ONE INC.
By
-------------------------------------------
Name: Xxxx X. Xxxx
Title: President & CEO
--------------------------)
) SS
--------------------------)
This is to certify that Xxxx X. Xxxx, personally known to me to be the
same person whose name is subscribed to the foregoing Deed of Transfer, appeared
before me, _______________, a Notary Public, this ____ day of September, 2001
and expressly acknowledged to me that he executed said Deed of Transfer on
behalf of AXS-ONE INC., that he was duly authorized to do so, and that he
intended AXS-ONE INC. to be duly bound by the same.
---------------------------
Notary Public
My Commission Expires:
--------------
PURCHASER: XXXXXXXXXXX INTERNATIONAL LTD.
By:
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
--------------------------)
) SS
--------------------------)
This is to certify that Xxxxxxx Xxxxxxxx, personally known to me to be
the same person whose name is subscribed to the foregoing Deed of Transfer,
appeared before me, _______________, a Notary Public, this ____ day of
September, 2001 and expressly acknowledged to me that he executed said Deed of
Transfer on behalf of XXXXXXXXXXX INTERNATIONAL LTD., that he was duly
authorized to do so, and that he intended XXXXXXXXXXX INTERNATIONAL LTD. to be
duly bound by the same.
---------------------------
Notary Public
My Commission Expires:
--------------
19
EXHIBIT 1.4(c)(iv)
AXS-ONE INC.
000 XXXXX 00 XXXXX
XXXXXXXXXX, XXX XXXXXX 00000
September , 2001
Xxxxxxxxxxx International Ltd.
c/o Mr. Xxxxxxx Xxxxxxxx
AXS-One Sp. z o. o.
xx. Xxxxxx 00X
00-000 Xxxxxxxx, Xxxxxx
Re: Sale and Purchase of Certain Inter-company Debt
-----------------------------------------------
Dear Xxxx:
As we have discussed, as of July 31, 2001, AXS-One Sp. z o. o. (the
"COMPANY"), a limited liability company organized under the laws of Poland (and
a wholly-owned subsidiary of AXS-One Inc., a Delaware corporation (the
"SELLER")) was indebted to the Seller in the amount of US$6,570,286.08 (the
"LOAN").
In connection with the closing of the transactions contemplated by the
Stock Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of September 1,
2001, between the Seller and Xxxxxxxxxxx International Ltd. (the "PURCHASER"),
the Seller hereby agrees to sell and assign to the Purchaser, effective at the
Closing (as defined in the Purchase Agreement), and the Purchaser hereby agrees
to purchase from the Seller, the Loan for the sum of One United States Dollar
(U.S.$1.00), payable in cash at the Closing.
The Seller makes no representations or warranties whatsoever with
respect to the Loan, including, without limitation, as to the occurrence or
non-occurrence of any default(s) thereunder or the financial condition of the
Company.
If the Purchaser is in agreement with the foregoing, please so indicate
by affixing your signature in the space provided below.
This letter agreement shall be governed by, and construed in accordance
with, the law of the State of New Jersey, United States, exclusive of its
conflict of laws provisions.
Very truly yours,
AXS-One Inc.
By _____________________
Name: Xxxx X. Xxxx
Title: President & CEO
20
Agreed and accepted:
Xxxxxxxxxxx International Ltd.
By:__________________________
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
21
AXS-ONE LIMITED
XXXXXX XXXXXX, XXXXXX XXXX
XXXXXXX XX0 0XX XXXXXX XXXXXXX
September , 2001
Xxxxxxxxxxx International Ltd.
c/o Mr. Xxxxxxx Xxxxxxxx
AXS-One Sp. z o. o.
xx. Xxxxxx 00X
00-000 Xxxxxxxx, Xxxxxx
Re: SALE AND PURCHASE OF CERTAIN INTER-COMPANY DEBT
Dear Xxxx:
As we have discussed, as of July 31, 2001, AXS-One Sp. z o. o. (the
"COMPANY"), a limited liability company organized under the laws of Poland (and
a wholly-owned subsidiary of AXS-One Inc., a Delaware corporation ("AXO-US"))
was indebted to AXS-One Limited (the "SELLER") in the amount of
GBP(pound)259,447.30 (the "LOAN").
In connection with the closing of the transactions contemplated by the
Stock Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of September 1,
2001, between AXO-US and Xxxxxxxxxxx International Ltd. (the "PURCHASER"), the
Seller hereby agrees to sell and assign to the Purchaser, effective at the
Closing (as defined in the Purchase Agreement), and the Purchaser hereby agrees
to purchase from the Seller, the Loan for the sum of One United States Dollar
(U.S.$1.00), payable in cash at the Closing.
The Seller makes no representations or warranties whatsoever with
respect to the Loan, including, without limitation, as to the occurrence or
non-occurrence of any default(s) thereunder or the financial condition of the
Company.
If the Purchaser in agreement with the foregoing, please so indicate by
affixing your signature in the space provided below.
This letter agreement shall be governed by, and construed in accordance
with, the law of the State of New Jersey, United States, exclusive of its
conflict of laws provisions.
Very truly yours,
AXS-One Limited
By _____________________
Name: Xxxx X. Xxxx
Title: Director
22
Agreed and accepted:
Xxxxxxxxxxx International Ltd.
By:__________________________
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
23
EXHIBIT 1.4(c)(vii)
I, the undersigned ____________________, hereby tender my resignation from the
[Supervisory Board/Management Board] of AXS-One Sp. z o.o. effective as of the
day of transfer of all shares in AXS-One Sp. z o.o. from its current
shareholder, i.e. AXS-One, Inc., to Xxxxxxxxxxx International Ltd..
----------------------------
24
EXHIBIT 1.4(d)(ix)
I, the undersigned ____________________, do hereby release and waive any and all
claims, whether statutory or otherwise, including, without limitation, claims
for severance, compensation and benefits, I may now have, or hereafter may have,
against AXS-One Inc., and its direct or indirect subsidiaries, shareholders,
officers and directors, arising from my employment, or retention as a
contractor, by AXS-One Inc. or any of its direct or indirect subsidiaries.
---------------------------
25
SCHEDULE 4.2(j)
MEMBERS OF COMPANY'S MANAGEMENT BOARD
IMMEDIATELY FOLLOWING CLOSING
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
SCHEDULE 4.3(g)
MEMBERS OF PURCHASER'S BOARD OF DIRECTORS
IMMEDIATELY FOLLOWING CLOSING
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
26
