EXHIBIT 10.19
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SER SYSTEMS, INC,
SER SOLUTIONS, INC.,
AND
XXXX XXXXX & ASSOCIATES, INC., AND
XXX SYNERGY, INC.
December 17, 2004
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ...................................... 1
Section 1.1 Accounting Principles............................. 1
Section 1.2 Accounts.......................................... 1
Section 1.3 Accounts Payable.................................. 1
Section 1.4 Affiliate......................................... 1
Section 1.5 Agreement......................................... 1
Section 1.6 Assets............................................ 2
Section 1.7 Assignment and Assumption Agreement............... 2
Section 1.8 Assignment of Lease Agreement..................... 2
Section 1.9 Assumed Liabilities............................... 2
Section 1.10 Xxxx of Sale...................................... 2
Section 1.11 Brainware Engine License.......................... 2
Section 1.12 Business Day...................................... 3
Section 1.13 Buyer............................................. 3
Section 1.14 Buyer's Consents.................................. 3
Section 1.15 Closing........................................... 3
Section 1.16 Closing Date...................................... 3
Section 1.17 Code.............................................. 3
Section 1.18 Commercially Reasonable Efforts................... 3
Section 1.19 Continuing Employee............................... 3
Section 1.20 Contracts......................................... 3
Section 1.21 Copyrights........................................ 3
Section 1.22 Deferred Maintenance.............................. 3
Section 1.23 Effective Time of the Closing..................... 3
Section 1.24 Equipment......................................... 3
Section 1.25 ERISA............................................. 3
Section 1.26 Excluded Assets................................... 3
Section 1.27 Final Working Capital Calculation................. 4
Section 1.28 Final Working Capital............................. 4
Section 1.29 Final Purchase Price.............................. 4
Section 1.30 Financial Statement............................... 4
Section 1.31 General Intangibles............................... 4
Section 1.32 Governmental Authority............................ 4
Section 1.33 IDM Business...................................... 4
Section 1.34 IDM Contract...................................... 4
Section 1.35 IDM Employee...................................... 4
Section 1.36 Initial Working Capital........................... 4
Section 1.37 Initial Working Capital Calculation............... 5
Section 1.38 Initial Purchase Price............................ 5
Section 1.39 Intangibles....................................... 5
Section 1.40 Inventory......................................... 5
Section 1.41 Knowledge......................................... 5
Section 1.42 Law............................................... 5
Section 1.43 Losses............................................ 5
Section 1.44 Material Adverse Effect........................... 5
Section 1.45 Opinion of Seller's Counsel....................... 5
Section 1.46 Permits........................................... 5
Section 1.47 Permitted Liens................................... 5
Section 1.48 Person............................................ 6
Section 1.49 Representatives................................... 6
Section 1.50 Rochester Hills Facility.......................... 6
Section 1.51 Rochester Hills Lease............................. 6
Section 1.52 Seller............................................ 6
Section 1.53 Seller's Consents................................. 6
Section 1.54 Tax or Taxes...................................... 6
Section 1.55 Tax Return........................................ 6
Section 1.56 Transition Services Agreement..................... 7
Section 1.57 Working Capital Calculation....................... 6
ARTICLE II PURCHASE AND SALE ................................... 6
Section 2.1 Purchase and Sale; Assignment and Assumption...... 6
Section 2.2 Payment of the Initial Purchase Price; Deliveries
at Closing...................................... 7
Section 2.3 Working Capital Calculation; Settlement of Final
Purchase Price.................................. 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER ............ 9
Section 3.1 Organization Seller............................... 9
Section 3.2 Authorization; Enforceability..................... 9
Section 3.3 No Violation or Conflict by Seller................ 9
Section 3.4 Financial Statements.............................. 9
Section 3.5 Title to and Sufficiency of Assets................ 9
Section 3.6 No Litigation..................................... 10
Section 3.7 Inventory......................................... 10
Section 3.8 Contracts......................................... 10
Section 3.9 Accounts.......................................... 10
Section 3.10 Condition of Equipment............................ 11
Section 3.11 Compliance with Law............................... 11
Section 3.12 Taxes............................................. 11
Section 3.13 Employment Agreements and Benefits................ 11
Section 3.14 Intangibles....................................... 11
Section 3.15 Fees and Expenses of Brokers and Others........... 12
Section 3.16 No Material Adverse Change........................ 12
Section 3.17 Environmental Conditions.......................... 12
Section 3.18 Lease............................................. 13
Section 3.19 Disclosure........................................ 13
Section 3.20 No Knowledge of Breach............................ 13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF Buyer.............. 13
Section 4.1 Organization of Buyer............................. 13
Section 4.2 Authorization; Enforceability..................... 13
Section 4.3 No Violation or Conflict by Buyer................. 13
Section 4.4 No Litigation..................................... 14
Section 4.5 Fees and Expenses of Brokers and Others........... 14
Section 4.6 Availability of Consideration..................... 14
Section 4.7 No Knowledge of Breach............................ 14
ARTICLE V CERTAIN MATTERS PENDING THE CLOSING ................. 14
Section 5.1 Carry on in Regular Course........................ 14
Section 5.2 Compensation...................................... 14
Section 5.3 Compliance with Law............................... 14
Section 5.4 Cooperation; Conditions to Closing................ 15
Section 5.5 Publicity......................................... 15
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER .... 15
Section 6.1 Compliance with Agreement......................... 15
Section 6.2 Proceedings and Instruments Satisfactory.......... 15
Section 6.3 No Litigation..................................... 15
Section 6.4 Representations and Warranties.................... 15
Section 6.5 Seller's Consents................................. 16
Section 6.6 Deliveries at Closing............................. 16
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER.... 16
Section 7.1 Compliance with Agreement......................... 16
Section 7.2 Proceedings and Instruments Satisfactory.......... 16
Section 7.3 No Litigation..................................... 16
Section 7.4 Representations and Warranties.................... 16
Section 7.5 Buyer's Consents.................................. 17
Section 7.6 Deliveries at Closing............................. 17
ARTICLE VIII INDEMNITIES AND ADDITIONAL COVENANTS ............... 17
Section 8.1 Seller's Indemnity................................ 17
Section 8.2 Buyer's Indemnity................................. 18
Section 8.3 Bulk Sales Compliance............................. 19
Section 8.4 Additional Instruments; Regulatory Matters........ 19
Section 8.5 Employment Matters................................ 20
Section 8.6 Allocation of Purchase Price...................... 20
Section 8.7 Access to Books and Records....................... 20
Section 8.8 Non-Competition................................... 20
Section 8.9 Collection of Accounts............................ 21
Section 8.10 Confidentiality................................... 21
Section 8.11 Non-Solicitation; Non-Disparagement............... 23
ARTICLE IX TERMINATION ......................................... 24
Section 9.1 Termination....................................... 24
Section 9.2 Rights on Termination; Waiver..................... 24
ARTICLE X MISCELLANEOUS ....................................... 24
Section 10.1 Transfer Taxes and Fees........................... 24
Section 10.2 Entire Agreement; Amendment....................... 24
Section 10.3 Expenses.......................................... 25
Section 10.4 Governing Law..................................... 25
Section 10.5 Assignment........................................ 25
Section 10.6 Notices........................................... 25
Section 10.7 Counterparts; Headings............................ 26
Section 10.8 Interpretation.................................... 26
Section 10.9 Severability...................................... 26
Section 10.10 No Reliance....................................... 26
Section 10.11 Specific Performance.............................. 26
SCHEDULES
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Schedule 1.1 Accounting Principles
Schedule 1.2 Accounts
Schedule 1.3 Accounts Payable
Schedule 1.9 Assumed Liabilities
Schedule 1.24 Equipment
Schedule 1.35 IDM Employees
Schedule 1.37 Initial Working Capital Calculation
Schedule 1.40 Inventory
Schedule 1.46 Permits
Schedule 1.47 Permitted Liens
Schedule 3.3 Seller's Consents
Schedule 3.4 Accounting Principles
Schedule 3.5 Exception to Title
Schedule 3.6 Exceptions to Litigation
Schedule 3.8 Exceptions to Contracts
Schedule 3.9 Exceptions to Accounts
Schedule 3.11 Compliance with Law
Schedule 3.13 Employment and Benefits Agreements
Schedule 3.14 Intangibles
Schedule 3.16 Material Adverse Change
Schedule 5.1 Exception to Regular Course
Schedule 8.6 Allocation of Purchase Price
EXHIBITS
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Exhibit 1.7 Form of Assignment and Assumption Agreement
Exhibit 1.8 Form of Assignment of Lease Agreement
Exhibit 1.10 Form of Xxxx of Sale
Exhibit 1.11 Form of Brainware Engine License
Exhibit 1.45 Form of Opinion of Seller's Counsel
Exhibit 1.56 Form of Transition Services Agreement
ASSET PURCHASE AGREEMENT
------------------------
ASSET PURCHASE AGREEMENT, made as of December 17, 2004, by and between
SER SOLUTIONS, INC. and SER SYSTEMS, INC., both Virginia corporations,
(collectively, the "Seller"), and XXX SYNERGY, INC. and XXXX XXXXX &
ASSOCIATES, INC., both Delaware corporations (collectively "Buyer").
RECITALS
--------
WHEREAS, Seller owns the Assets, is a party to the Contracts and the
Rochester Hills Lease and is subject to the Assumed Liabilities, which
Assets, Contracts and Assumed Liabilities are employed by Seller in its
IDM Business (as defined herein); and
WHEREAS, Seller desires to sell the Assets and assign the Rochester
Hills Lease and Assumed Liabilities to Buyer, and Buyer desires to purchase
the Assets and accept assignment of the Rochester Hills Lease and Assumed
Liabilities from Seller, all on the terms and subject to the conditions set
forth herein.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the Recitals and of the mutual
covenants, conditions and agreements set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, it is agreed that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings specified:
Section 1.1 Accounting Principles. "Accounting Principles" shall
mean those principles set forth on Schedule 1.1 attached hereto used or to
be used in connection with preparing the Initial Working Capital Calculation
and the Final Working Capital Calculation.
Section 1.2 Accounts. "Accounts" shall mean all accounts
receivable, notes receivable, prepaid expenses and associated rights
(including, without limitation, all security deposits, letters of credit and
security documents) arising from the sale of goods and services by Seller in
the IDM Business and existing as of the Effective Time of the Closing as set
forth in Schedule 1.2 attached hereto.
Section 1.3 Accounts Payable. "Accounts Payable" shall mean all
accounts payable of Seller arising from the conduct by Seller of the IDM
Business as set forth in Schedule 1.3 attached hereto or incurred after the
date of Schedule 1.3 in the ordinary course of business.
Section 1.4 Affiliate. "Affiliate" shall mean, with respect to any
Person, any other Person that directly or indirectly controls, is controlled
by or is under common control with such Person.
Section 1.5 Agreement. "Agreement" shall mean this Asset Purchase
Agreement, together with the Exhibits and Schedules attached hereto, as the
same may be amended from time to time in accordance with the terms hereof.
Section 1.6 Assets. "Assets" shall mean the Accounts, the
Contracts, the Equipment, the Intangibles and the Inventory, as set forth
in this Agreement and Schedules 1.2, 1.24, 3.14, and 1.39, respectively,
together with all goodwill associated with the IDM Business (to the extent
such goodwill is not included in such Intangibles); provided, however, that
the term "Assets" shall exclude the Excluded Assets.
Section 1.7 Assignment and Assumption Agreement. "Assignment and
Assumption Agreement" shall mean the assignment and assumption agreement, in
the form of Exhibit 1.7 attached hereto, to be executed by Buyer and Seller
for the assignment of the Contracts and the Assumed Liabilities from Seller
to Buyer.
Section 1.8 Assignment of Lease Agreement. "Assignment of Lease
Agreement" shall mean the assignment and assumption of the Rochester Hills
Lease in the form of Exhibit 1.8 attached hereto to be executed by Seller,
Buyer and Landlord.
Section 1.9 Assumed Liabilities. "Assumed Liabilities" shall mean
Seller's liabilities (i) to the IDM Customers for Deferred Maintenance and
other deferred revenue; (ii) under the Rochester Hills Lease; (iii) all
Accounts Payable; (iv) to the IDM Customers incurred by Seller in the
ordinary course of business for orders outstanding as of the Effective Time
of the Closing and reflected on Seller's books (other than any liability
arising out of or relating to a breach by Seller in connection with such
order that occurred prior to the Effective Time of the Closing); (v) arising
after the Effective Time of the Closing under the Contracts; (vi) any sales
or use taxes that will arise as a result of the sale of the Assets pursuant
to this Agreement (other than Seller's state and Federal Income Tax
obligations) and (vii) any liability of Seller described in Schedule 1.9
attached hereto.
Section 1.10 Xxxx of Sale. "Xxxx of Sale" shall mean the xxxx of
sale with respect to the Assets, to be executed by Seller in favor of Buyer
in the form of Exhibit 1.10 attached hereto.
Section 1.11 Brainware Engine License. "Brainware Engine License"
shall mean that certain license agreement, in the form attached hereto
as Exhibit 1.11, pursuant to which Seller shall grant to Buyer a
non-exclusive, perpetual, royalty free, worldwide (except where
prohibited by law), license, to: (x) integrate the executable version
of the SERbrainware engine ("Brainware Engine") solely in the PowerSearch
Module of SERsynergy (collectively "Integrated Product"); (y) use,
demonstrate, market, distribute, sell, and sublicense the Integrated Product
to end user customers either directly or via third parties such as resellers
and distributors; and (z) provide maintenance and support services,
implementation, training, and other services associated with the Integrated
Product; [other terms of such license agreement shall include:
(i) Seller's agreement that to the extent it may release updates
to the Brainware Engine in the ordinary course of business (which Seller
shall have no obligation to do under this Agreement), Seller will make such
updates available to Buyer free of charge, provided that such updates do not
include substantially new feature functionality;
(ii) A disclaimer of any rights of Buyer/Licensee to the Brainware
Engine with respect to any products other than the Integrated Product;
(iii) A prohibition on reverse engineering; and
(iv) An acknowledges by Buyer that all rights in the Brainware
Engine belong to Seller.]
Section 1.12 Business Day. "Business Day" shall mean any day except
a Saturday, Sunday or other day on which commercial banks in New York, New
York, are generally authorized to close.
Section 1.13 Buyer. "Buyer" shall mean XXX Synergy, Inc., and its
corporate parent Xxxx Xxxxx & Associates, Inc., both Delaware corporations.
Section 1.14 Buyer's Consents. "Buyer's Consents" shall mean all
consents, approvals, certificates and authorizations required to be obtained
by Buyer in connection with the transactions contemplated herein.
Section 1.15 Closing. "Closing" shall mean the conference held
at 9:00 a.m., local time, on the Closing Date, at the offices of Hunton &
Xxxxxxxx LLP, counsel to Seller, 0000 Xxxxxxxx Xxxxx, Xxxxx 0000, XxXxxx,
Xxxxxxxx.
Section 1.16 Closing Date. "Closing Date" shall mean December 17,
2004, or such other date as the parties hereto may mutually agree in
writing, on which date the Closing shall occur.
Section 1.17 Code. "Code" shall mean the Internal Revenue Code of
1986, as amended.
Section 1.18 Commercially Reasonable Efforts. "Commercially
Reasonable Efforts" shall mean the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to achieve that result
as expeditiously as reasonably possible, provided, however, that this will
not be deemed to require a Person to undertake extraordinary or unreasonable
measures, including the payment of amounts in excess of normal and usual
filing fees and processing fees, if any, or other payments with respect to
any Contract that are significant in the context of such Contract.
Section 1.19 Continuing Employee. "Continuing Employee" shall mean
any IDM Employee who is offered and accepts employment with Buyer from and
after the Effective Time of the Closing.
Section 1.20 Contracts. "Contracts" shall mean all contracts,
agreements, leases of personal property, licenses, relationships and
commitments that relate primarily to the IDM Business and to which Seller is
a party or by which Seller is bound as of the Closing Date, which is in full
force and effect as of the Closing Date.
Section 1.21 Copyrights. "Copyrights" shall have the meaning
in Section 3.14.
Section 1.22 Deferred Maintenance. "Deferred Maintenance" shall mean
Seller's obligation to provide maintenance services to IDM Customers
pursuant to the Contracts.
Section 1.23 Effective Time of the Closing. "Effective Time of the
Closing" shall mean 10:00 a.m., local time, on the Closing Date.
Section 1.24 Equipment. "Equipment" shall mean all tangible assets
(other than Inventory) used exclusively in the IDM Business as of the
Effective Time of the Closing, including, but not limited to, all computers,
printers, servers, furniture, fixtures, leasehold improvements, equipment
and spare parts, as set forth on Schedule 1.24 hereto.
Section 1.25 ERISA. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
Section 1.26 Excluded Assets. "Excluded Assets" shall mean all of
the assets of the Seller other than the Assets, including but not limited
to (a) assets relating to Sellers contact center business, (b) assets
relating to Seller's Brainware business, including but not limited to the
SERbrainware technology, including SERdistiller, SERiMail, SERoutlookAccess
and SERglobalBrain (personal edition, enterprise edition, API toolkit,
etc.), (c) any General Intangible including the word "SER" and (d) assets
relating to corporate overhead, employees, equipment and materials used in
providing administrative support to the Seller's businesses, including the
IDM Business, including the corporate PBX (other than PBX in the Rochester
Hills Facility) and software such as Softrax (financial) and Vantive (CRM)
("Corporate Assets.").
Section 1.27 Final Working Capital Calculation. "Final Working
Capital Calculation" shall mean the Working Capital Calculation to be
prepared and delivered in accordance with Section 2.3 hereof.
Section 1.28 Final Working Capital. "Final Working Capital" shall
mean the result of the Final Working Capital Calculation.
Section 1.29 Final Purchase Price. "Final Purchase Price" shall mean
the Initial Purchase Price as adjusted pursuant to Section 2.3 hereof.
Section 1.30 Financial Statement. "Financial Statement" shall have
the meaning given to such term in Section 3.4 herein.
Section 1.31 General Intangibles. "General Intangibles" shall mean
the intangible assets owned or licensed by Seller and used primarily in
the conduct of the IDM Business as of the Effective Time of the Closing,
including: (a) all registered and unregistered trademarks, service marks,
trade dress, logos, trade names and brand names, and any combination of such
names, used in the IDM Business including all goodwill associated therewith
and all applications, registrations and renewals in connection therewith;
(b) all trade secrets and confidential business information used in the IDM
Business (including ideas, research and development, know-how, compositions,
designs, drawings, specifications, customer and supplier lists, pricing and
cost information and business and market plans and proposals); (c) the
proprietary software used in, licensed or sold in the IDM Business other
than Excluded Assets; and (d) the rights, benefits and obligations set forth
in the Brainware Engine License.
Section 1.32 Governmental Authority. "Governmental Authority"
shall mean any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, or any court.
Section 1.33 IDM Business. "IDM Business" shall mean the Seller's
business of developing, selling and servicing integrated document management
software, including SERsynergy and all SERsynergy modules (i.e., Reports
(COLD/ERM), Document Management, Check, Document Distribution, Internet
Integration, Workflow, and PowerSearch), and all prior versions of
SERsynergy sold under the names of MacroFiche, MacroSearch, and MacroLog,
and formerly conducted under the names "MacroSoft" and "SER MacroSoft."
Section 1.34 IDM Contract. "IDM Contract" shall have the meaning
given to such term in Section 3.8 herein.
Section 1.35 IDM Employee. "IDM Employee" shall mean any of Seller's
employees engaged in the IDM Business and listed on the attached
Schedule 1.35.
Section 1.36 Initial Working Capital. "Initial Working Capital"
shall mean the result of the Initial Working Capital Calculation.
Section 1.37 Initial Working Capital Calculation. "Initial Working
Capital Calculation" shall mean the Working Capital Calculation as of the
date hereof, a copy of which is attached hereto as Schedule 1.37.
Section 1.38 Initial Purchase Price. "Initial Purchase Price" shall
mean $35,000,000.
Section 1.39 Intangibles. "Intangibles" shall mean the Copyrights
and the General Intangibles.
Section 1.40 Inventory. "Inventory" shall mean all the inventories
of goods owned by Seller and held for resale, and all supplies held for use,
in the IDM Business as of the Effective Time of the Closing as set forth on
Schedule 1.40 attached hereto.
Section 1.41 Knowledge. An individual will be deemed to have
"Knowledge" of a particular fact or other matter if that individual is
actually aware of that fact or matter. A Person (other than an individual)
will be deemed to have "Knowledge" of a particular fact or other matter if
any individual who is currently serving as a director, executive officer,
partner, executor or trustee of that Person (or any individual in any
similar capacity) has Knowledge of that fact or other matter.
Section 1.42 Law. "Law" shall mean any federal, state, local or
other law or governmental requirement of any kind, and the rules,
regulations and orders promulgated thereunder.
Section 1.43 Losses. "Losses" shall have the meaning given to such
term in Section 8.1(a) herein.
Section 1.44 Material Adverse Effect. "Material Adverse Effect"
shall mean a material adverse effect on the business or assets of the IDM
Business, taken as a whole; provided, however, that Material Adverse Effect
(and the word "material" and phrases of like import) shall exclude any
adverse changes or conditions as and to the extent such changes or
conditions relate to or result from: (a) public or industry knowledge of the
transactions contemplated by this Agreement (including but not limited to
any action or inaction by Seller's employees, customers or vendors); (b)
general economic conditions or other conditions (regulatory or other)
including those affecting the industries in which the IDM Business operates;
(c) those matters disclosed on Schedule 3.16 attached hereto; and (d)
changes resulting from Seller's compliance with the terms of this Agreement.
Section 1.45 Opinion of Seller's Counsel. "Opinion of Seller's
Counsel" shall mean the opinion of Hunton & Xxxxxxxx LLP, counsel to Seller,
in the form of Exhibit 1.45 attached hereto.
Section 1.46 Permits. "Permits" shall mean all governmental
approvals, authorizations, registrations, permits and licenses necessary or
required for the conduct of the IDM Business in the ordinary course as of
the Effective Time of the Closing, as set forth on Schedule 1.46.
Section 1.47 Permitted Liens. "Permitted Liens" shall
mean: (a) those liens, claims, mortgages or encumbrances that are
specifically listed on Schedule 1.47 attached hereto; (b) all liens
for Taxes, assessments, water and sewer rents and other governmental
charges not yet due and payable or being contested in good faith by
appropriate proceedings; (c) Laws that affect the use of the Assets
including, without limitation, zoning, building and other similar
restrictions, and (d) other liens of a minor nature that do not,
individually or in the aggregate, in any material respect interfere
with or impair the continued use of the Assets in the ordinary course
of business consistent with past practice.
Section 1.48 Person. "Person" shall mean any individual,
sole proprietorship, trust, estate, executor, legal representative,
unincorporated association, association, institution, corporation, company,
partnership, limited liability company, limited liability partnership, joint
venture, government (whether national, federal, state, provincial, county,
city, municipal or otherwise, including, without limitation, any authority,
instrumentality, division, agency, body or department thereof), and any
regulatory or self-regulatory authority, agency or other entity.
Section 1.49 Representatives. "Representatives" shall mean a
Person's affiliates, directors, officers, employees and advisors, including
without limitation, attorneys, accountants, bankers and consultants.
Section 1.50 Rochester Hills Facility. "Rochester Hills Facility"
shall mean that certain office premises at 000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxx Xxxxx, Xxxxxxxx, currently occupied by Seller pursuant to the
Rochester Hills Lease.
Section 1.51 Rochester Hills Lease. "Rochester Hills Lease" shall
mean that certain office lease for 000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx Xxxxx, Xxxxxxxx, dated June 1, 2004.
Section 1.52 Seller. "Seller" shall mean SER Solutions, Inc., and
its corporate parent SER Systems, Inc., both Virginia corporations.
Section 1.53 Seller's Consents. "Seller's Consents" shall mean all
consents, approvals, certificates and authorizations required to be obtained
by Seller in connection with the transactions contemplated herein that are
specifically identified on Schedule 3.3 attached hereto.
Section 1.54 Tax or Taxes. "Tax" or "Taxes" shall mean any federal,
state, county, local or foreign taxes, charges, levies, imposts, duties,
other assessments or similar charges of any kind whatsoever, including
interest, penalties and additions imposed thereon or with respect thereto,
arising from or relating to the IDM Business.
Section 1.55 Tax Return. "Tax Return" shall mean any report, return,
document, schedule or other information supplied or required to be supplied
to a taxing authority with respect to Taxes, including any return of an
affiliated, combined or unitary group.
Section 1.56 Transition Services Agreement. "Transition Services
Agreement" shall mean that certain Transition Services Agreement in the form
attached hereto as Exhibit 1.56.
Section 1.57 Working Capital Calculation. "Working Capital
Calculation" shall mean the amount calculated by subtracting the Accounts
Payable, deferred revenue, accrued expenses and liabilities included in
the Assumed Liabilities from the sum of the Accounts (net of appropriate
reserves), and Inventory (net of appropriate reserves) of Seller included
in the Assets.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale; Assignment and Assumption.
(a) Seller hereby agrees that at the Closing, and upon all of the
terms and subject to all of the conditions of this Agreement, it shall sell,
convey, transfer and deliver to Buyer the Assets, free and clear of all
liens, claims, mortgages or encumbrances except for Permitted Liens, and
Buyer hereby agrees that at the Closing, and upon all of the terms and
subject to all of the conditions of this Agreement, it shall purchase the
Assets, free and clear of all liens, claims, mortgages or encumbrances
except for Permitted Liens.
(b) Seller hereby agrees that at the Closing, and upon all of the
terms and subject to all of the conditions of this Agreement, it shall
assign to Buyer the Assumed Liabilities and the Rochester Hills Lease, and
Buyer hereby agrees that at the Closing, and upon all of the terms and
subject to all of the conditions of this Agreement, it shall assume from
Seller the Assumed Liabilities and the Rochester Hills Lease.
Section 2.2 Payment of the Initial Purchase Price; Deliveries at
Closing.
(a) In consideration of Seller's sale, transfer, assignment,
conveyance and delivery of the Assets and the assignment of the Assumed
Liabilities and the Rochester Hills Lease, Buyer shall, at Closing, pay to
Seller by wire transfer of immediately available funds an amount equal to
the Initial Purchase Price. In addition, at Closing, Buyer shall deliver or
cause to be delivered to Seller the following items, each (where applicable)
properly executed and dated as of the Closing Date by Buyer and, if not
attached as an exhibit to this Agreement, in form and substance satisfactory
to Seller:
(i) the Assignment and Assumption Agreement;
(ii) the Assignment of Lease Agreement;
(iii) the Brainware Engine License,
(iv) the Buyer's Consents; and
(v) a certificate of the Secretary of Buyer as to such factual
matters as may be reasonably requested by Seller.
(b) At Closing, Seller shall deliver or cause to be delivered to Buyer
the following items, each properly executed and dated as of the Closing Date
by all parties thereto (other than Buyer) and, if not attached as an exhibit
to this Agreement, in form and substance reasonably satisfactory to Buyer:
(i) the Xxxx of Sale;
(ii) the Assignment and Assumption Agreement;
(iii) the Assignment of Lease Agreement;
(iv) Brainware Engine License,
(v) Transition Services Agreement;
(vi) the Seller's Consents;
(vii) the Opinion of Seller's Counsel; and
(viii) a certificate of the Secretary of Seller as to such
factual matters as may be reasonably requested by Buyer.
Section 2.3 Working Capital Calculation; Settlement of Final
Purchase Price.
(a) On the date hereof, Seller shall provide to Buyer the Initial
Working Capital Calculation. Within 30 days after the Closing Date,
Seller shall prepare and deliver to Buyer a draft Final Working Capital
Calculation, which shall be prepared (i) in accordance with the Accounting
Principles, and (ii) in a manner consistent with the Initial Working Capital
Calculation.
(b) If Buyer has no objections to the draft Final Working Capital
Calculation, such draft shall constitute the Final Working Capital
Calculation. If Buyer has any objections to the draft Final Working Capital
Calculation, it will deliver a detailed statement describing its objections
to Seller within 10 days after receiving the draft Final Working Capital
Calculation. Buyer and Seller will use their reasonable best efforts to
resolve any such objections. If a final resolution is not obtained within
10 days after Seller has received the statement of objections, Buyer and
Seller will select a nationally recognized independent accounting firm
mutually acceptable to them to resolve any remaining objections. If Buyer
and Seller are unable to agree on the choice of an accounting firm, they
will select a nationally recognized independent U.S. accounting firm by lot
(after excluding KPMG LLP and Deloitte & Touche LLP ).
(c) Buyer and Seller will each submit to the selected accounting firm
a written statement setting forth such party's proposed aggregate resolution
of the unresolved objections and any supporting data and analysis. The
selected accounting firm will evaluate the Buyer's and Seller's proposed
aggregate resolutions of the objections and shall issue its resolution
within 30 days. Seller will revise the draft Final Working Capital
Calculation as appropriate to reflect the resolution of Buyer's objections
(as agreed upon by Buyer and Seller or as determined by such selected
accounting firm) and deliver it to Buyer within 10 days after the resolution
of such objections. Such revised statement shall constitute the Final
Working Capital Calculation.
(d) To the extent that the Final Working Capital Calculation shows
that the Final Working Capital is more than $25,000 less than the Initial
Working Capital, such difference shall be paid to Buyer in immediately
available funds by Seller within five Business Days of Seller's delivery
of such Final Working Capital Calculation. To the extent that the Final
Working Capital Calculation shows that the Final Working Capital is more
than $25,000 greater than the Initial Working Capital, Buyer shall pay such
excess to Seller in immediately available funds within two Business Days of
Seller's delivery of such Final Working Capital Calculation. All payments
made pursuant to this Section 2.3 (d) shall be accompanied by accrued
interest thereon from the Closing Date at the prevailing prime rate as
announced by the Wall Street Journal (Eastern Edition), from time to time.
(e) If any unresolved objections are submitted to an accounting firm
for resolution as provided above, the party whose proposed resolution is not
selected by the accounting firm shall pay the fees and expenses of such
accounting firm.
(f) Seller will make the work papers used in preparing the draft
Final Working Capital Calculation and the Final Working Capital Calculation
available to Buyer at reasonable times and upon reasonable notice at any
time following delivery by Seller of the draft Final Working Capital
Calculation and during the resolution of any objections with respect
thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section 3.1 Organization Seller. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia. Seller has full corporate power to carry on the
IDM Business as it is now being conducted and to own, operate and hold under
lease the assets and properties that comprise the IDM Business in the places
where such properties and assets now are owned, operated or held.
Section 3.2 Authorization; Enforceability.
The execution, delivery and performance by Seller of this Agreement and
of all of the documents and instruments contemplated hereby to which Seller
is a party are within the corporate power of Seller and have been duly
authorized by all corporate action of Seller. This Agreement is, and the
other documents and instruments required hereby to which Seller is a party
will be, when executed and delivered by the parties thereto, the valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, except as the enforceability thereof may be limited
or otherwise affected by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights or by general equity principles,
and except as rights to indemnification and contribution may be limited by
applicable law or public policy.
Section 3.3 No Violation or Conflict by Seller. The execution,
delivery and performance of this Agreement at the Closing, and the other
documents and instruments required hereby to which Seller is a party, by
Seller will not conflict with or violate any Law, judgment, order or decree
binding on Seller or the articles of incorporation or bylaws of Seller.
No notice to, filing or registration with, or authorization, consent or
approval of, any Governmental Authority is necessary or is required to be
made or obtained by Seller in connection with the execution and delivery of
this Agreement, and the other documents and instruments required hereby to
which Seller is a party, by Seller or the consummation by Seller of the
transactions contemplated hereby. Except as set forth in Schedule 3.3
attached hereto, the execution, delivery and performance of this Agreement,
and the other documents and instruments required hereby to which Seller
is a party, will not constitute a violation or breach of any contract
or agreement to which Seller is a party or by which Seller is bound,
or require the consent or approval of any party to any such contract
or agreement or give any party to any such contract or agreement a right
of termination, cancellation, acceleration or modification thereunder.
Section 3.4 Financial Statements. Seller has delivered to Buyer an
unaudited statement of income and balance sheet with respect to the IDM
Business for the eleven month period ended November 30, 2004 (the "Financial
Statement"), which Financial Statement was prepared in accordance with
Generally Accepted Accounting Principles, with the specific exceptions
set forth on Schedule 3.4, and was prepared in accordance with the
notes provided in Schedule 3.4. Such Financial Statement accurately
presents in all material respects the financial condition of the IDM
Business and has been prepared from and is in accordance in all material
respects with the accounting records of Seller.
Section 3.5 Title to and Sufficiency of Assets. Seller owns
good and valid title to all of the Assets, free and clear of any and all
mortgages, liens, encumbrances, charges, claims, restrictions, pledges,
security interests or impositions except for the liens described on
Schedule 3.5 attached hereto, and the Permitted Liens, and, upon Buyer's
payment of the Initial Purchase Price at Closing, good and valid title
to the Assets, free and clear of all mortgages, liens, encumbrances,
charges, claims, restrictions, pledges, security interests or impositions,
except for the Permitted Liens, will pass to Buyer. The Assets,
Contracts and Rochester Hills Lease include all tangible and intangible
assets, contracts and rights (other than Corporate Assets) necessary
for the operation by Buyer after the Effective Time of the Closing
of the IDM Business conducted by Seller prior to the Effective Time
of the Closing in accordance with Seller's current practice. The Assets,
Contracts and Rochester Hills Lease do not include any equity or debt
securities of or interest in, or any right or obligation to acquire any
equity or debt securities of or interest in, any corporation, partnership,
limited liability company, business trust, joint venture or other business
association.
Section 3.6 No Litigation. Except as set forth in Schedule
3.6 attached hereto, there is no litigation, arbitration proceeding,
governmental investigation, citation or action of any kind pending
or, to the Knowledge of Seller, proposed or threatened (a) relating
to the IDM Business or the Assets, Contracts or Rochester Hills Lease,
or (b) that seeks restraint, prohibition, damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
Section 3.7 Inventory. The Inventory is useable or saleable in the
ordinary course of the IDM Business as currently conducted, subject to the
reserves and accruals established with respect thereto on the books of
Seller maintained in connection with the IDM Business division, and such
reserves and accruals have been determined in a manner consistent with
generally accepted accounting principles and the past practices of Seller,
subject to the Accounting Principles.
Section 3.8 Contracts. Seller has made available to Buyer true
and complete copies of all Contracts (a) involving the sale of software or
maintenance for products sold and supported by Seller in the IDM Business
(the "IDM Contracts"); (b) third-party distribution agreements; and
(c) partner agreements. Except as set forth in Schedule 3.8 hereto,
each IDM Contract is in full force and effect and, to the Knowledge
of Seller, is enforceable in accordance with its terms (except as the
enforcement thereof may be limited or otherwise affected by bankruptcy,
insolvency, reorganization, moratorium or other laws generally affecting
the rights of creditors and subject to general equity principles
(whether considered at law or in equity)). Seller has performed each
material term, covenant and condition of each of the IDM Contracts that
is required to be performed by it at or before the date hereof. Except
as set forth in Schedule 3.8 hereto or as would not have an Material
Adverse Effect, no event has occurred that would, with the passage
of time or compliance with any applicable notice requirements, constitute
a breach or default by Seller or, to the Knowledge of Seller, any other
Person under any of the IDM Contracts, and, to the Knowledge of Seller,
no party to any of the IDM Contracts intends to cancel, terminate or
exercise any option under any of the IDM Contracts.
Section 3.9 Accounts. The Accounts: (a) all have arisen from bona
fide transactions in the ordinary course of business and (b) are expected to
be collectible in accordance with normal trade practice, subject to reserves
established for uncollectible accounts by Seller. Except as set forth in
Schedule 3.9 attached hereto, there are no pending or, to the Knowledge
of Seller, threatened disputes or claims between Seller and any Account
obligor outside of the ordinary course of business and relating to any
Account or the security documents or collateral related thereto.
Section 3.10 Condition of Equipment. The Equipment, taken as a
whole, is in good operating condition and repair for equipment of like type
and age, subject to ordinary wear and tear, and is substantially fit for the
purposes for which it currently is being utilized.
Section 3.11 Compliance with Law. The conduct of the IDM Business
and the use of its Assets and performance by Seller under the Contracts does
not violate or conflict with any Law. All Permits required by Seller to
conduct the IDM Business have been obtained, are in full force and effect
and are being complied with in all material respects. Except as set
forth in Schedule 11 attached hereto, consummation of the transactions
contemplated by this Agreement will not, with respect to any material
Permit, require the consent or approval of, or any filing with, any
Governmental Authority.
Section 3.12 Taxes. Seller has filed all required Tax Returns
relating to the IDM Business, the Assets, the Contracts and the Rochester
Hills Lease. There are no unpaid and unaccrued (on the balance sheet as of
September 30, 2004) Taxes due and payable, the nonpayment of which could
materially and adversely affect the IDM Business any of the Assets or the
use thereof by Buyer, the Rochester Hills Lease, or the Contracts. No
Tax authority has asserted any claim for the assessment of any such Tax
liability. Seller is not a foreign person for purposes of Section 1445 of
the Code. None of the Assets is subject to a "safe harbor lease" under
former Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
before the Tax Reform Act of 1984.
Section 3.13 Employment Agreements and Benefits. Schedule 3.13
attached hereto is a true and complete list of all agreements relating
to the employment, compensation and other benefits of Persons who are
currently IDM Employees including, without limitation, collective bargaining
agreements and pension, retirement, bonus, profit sharing, health,
disability, life insurance, hospitalization, education or other similar
plans or arrangements (whether or not subject to ERISA), true copies of
which have been delivered by Seller to Buyer. None of the agreements
listed on Schedule 3.13 will be breached by Seller's execution, delivery
and performance of this Agreement. Except as set forth in Schedule 3.13,
(a) no such agreements require Buyer to assume any employment, compensation,
fringe benefit, pension, profit sharing or deferred compensation agreement
or plan in respect of any IDM Employee; and (b) Seller does not and has not
contributed to or maintained a "multiemployer plan" (as defined in ERISA
Section 3(37)).
Section 3.14 Intangibles.
(a) (i) Schedule 3.14 contains a complete and accurate list of
all registered and unregistered copyrights in both published works and
unpublished works owned by Seller and used in the IDM Business
(collectively, "Copyrights");
(ii) to the Knowledge of Seller, all of the registered Copyrights
are currently in compliance with formal applicable Laws, are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety (90) days after the date of Closing;
(iii) to the Knowledge of Seller, no Copyright is infringed or
has been challenged or threatened in any way; none of the subject matter of
any of the Copyrights infringes or is alleged to infringe any copyright of
any third party; and
(iv) to the Knowledge of Seller, all works encompassed by the
Copyrights have been marked with the proper copyright notice.
(b) Seller owns the entire right, title and interest in and to the
owned General Intangibles, and is a party to valid and subsisting licenses
that are included among the Contracts with respect to the licensed
Intangibles, subject only to the Permitted Liens.
(c) To the Knowledge of Seller:
(i) there are no claims, demands or proceedings instituted,
pending or threatened by any third party pertaining to or challenging
Seller's rights to use any of the Intangibles;
(ii) there is no trademark, trade name, patent or copyright owned
by a third party (other than the Seller) that Seller is using in the conduct
of the IDM Business without a license to do so;
(iii) no third party is infringing upon any Intangibles owned
by, or exclusively licensed to, Seller in the conduct of the IDM Business;
and
(iv) except as set forth in Schedule 3.14, the computer software
components of the General Intangibles do not contain any "open source"
code (as defined by the Open Source Initiative) or "free" code (as defined
by the Free Software Foundation)(collectively, "Open Source Code") or
operate in such a way that it is compiled with or linked to Open Source
Code.
Section 3.15 Fees and Expenses of Brokers and Others. Seller is not
committed to any liability for any brokers' or finders' fees or any similar
fees in connection with the transactions contemplated by this Agreement, and
has not retained any broker or agent to act on its behalf in connection with
the transactions contemplated by this Agreement, except that Seller has
engaged Xxxxxxx and Company to represent Seller in connection with such
transactions, and Seller shall pay all fees and expenses in connection with
such engagement.
Section 3.16 No Material Adverse Change. Except as set forth
in Schedule 3.16 attached hereto, since the date of September 30, 2004,
Seller has carried on the IDM Business in the ordinary course and
substantially in the same manner as heretofore carried on and there
has not been (a) any change or development with respect to the IDM
Business constituting a Material Adverse Effect; (b) any loss, damage,
condemnation or destruction to the Assets or properties of the IDM Business,
whether or not insured against, constituting a Material Adverse Effect;
(c) any mortgage, pledge, lien or encumbrance made on any of the Assets,
except for Permitted Liens; or (d) any sale, transfer or other disposition
of assets or properties of the type included in the Assets other than in the
ordinary course of business.
Section 3.17 Environmental Conditions. Seller is not in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will
be required in order to comply with any such existing statute, law or
regulation. No Hazardous Materials (as defined below) are used or have been
used, stored, or disposed of by Seller or, to the Knowledge of Seller, by
any other person or entity on any property owned, leased or used by the IDM
Business. For the purposes of the preceding sentence, "Hazardous Materials"
shall mean (a) materials which are listed or otherwise defined as
"hazardous" or "toxic" under any applicable local, state, federal and/or
foreign laws and regulations that govern the existence and/or remedy of
contamination on property, the protection of the environment from
contamination, the control of hazardous wastes, or other activities
involving hazardous substances, including building materials or
(b) any petroleum products or nuclear materials.
Section 3.18 Lease. The Rochester Hills Lease is valid, binding and
enforceable against Seller in accordance with its terms. Seller has not
sent or received any notice of default thereunder and to the Knowledge of
Seller no event or condition exists which constitutes, or after notice or
lapse of time or both would constitute, a material default thereunder.
The leasehold interests under the Leases are subject to no lien or other
encumbrance created by Seller other than Permitted Liens.
Section 3.19 Disclosure. No representation or warranty made by
Seller in this Agreement or in any Schedule to this Agreement contains any
untrue statement of a material fact or omits to or otherwise fails to state
a material fact required to be stated therein or necessary to make the
statements contained therein not misleading. Seller has made available to
Buyer all material documents and records concerning Seller's ownership of
the Assets, and the Seller has no Knowledge of any material fact relating
to the IDM Business which may have a Material Adverse Effect on the same
and which has not been disclosed to the Buyer.
Section 3.20 No Knowledge of Breach. Seller has no Knowledge that
Buyer has breached any of the representations and warranties made by Buyer
in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
Section 4.1 Organization of Buyer. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power to enter into this Agreement
and to perform its obligations hereunder.
Section 4.2 Authorization; Enforceability.
The execution, delivery and performance by Buyer of this Agreement and
of all of the documents and instruments contemplated hereby to which Buyer
is a party are within the corporate power of Buyer and have been duly
authorized by Buyer's Board of Directors and shareholders (if required) and
all other necessary corporate action of Buyer. This Agreement is, and the
other documents and instruments required hereby to which Buyer is a party
will be, when executed and delivered by the parties thereto, the valid and
binding obligations of Buyer, enforceable against Buyer in accordance with
their respective terms, except as the enforceability thereof may be limited
or otherwise affected by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights or by general equity principles,
and except as rights to indemnification and contribution may be limited by
applicable law or public policy.
Section 4.3 No Violation or Conflict by Buyer. The execution,
delivery and performance of this Agreement, and the other documents and
instruments required hereby to which Buyer is a party, by Buyer do not
and will not conflict with or violate any Law, judgment, order or decree
binding on Buyer or the charter or bylaws of Buyer. No notice to, filing
or registration with, or authorization, consent or approval of, any
Governmental Authority is necessary or is required to be made or obtained by
Buyer in connection with the execution and delivery of this Agreement, and
the other documents and instruments required hereby to which Buyer is a
party, by Buyer or the consummation by Buyer of the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement, and the other documents and instruments required hereby to which
Buyer is a party, do not and will not constitute a violation or breach of
any contract or agreement to which Buyer is a party or by which Buyer is
bound, or require the consent or approval of any party to any such contract
or agreement or give any party to any such contract or agreement a right of
termination, cancellation, acceleration or modification thereunder.
Section 4.4 No Litigation. There is no litigation, arbitration
proceeding, governmental investigation, citation or action of any kind
pending, or, to the Knowledge of Buyer, proposed or threatened, that seeks
restraint, prohibition, damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
Section 4.5 Fees and Expenses of Brokers and Others. Buyer is not
committed to any liability for any brokers' or finders' fees or any similar
fees in connection with the transactions contemplated by this Agreement, and
has not retained any broker or agent to act on its behalf in connection with
the transactions contemplated by this Agreement.
Section 4.6 Availability of Consideration. Buyer currently
maintains immediately available funds required to pay the Initial Purchase
Price to Seller at Closing.
Section 4.7 No Knowledge of Breach. Buyer has no Knowledge that
Seller has breached any of the representations and warranties made by Seller
in this Agreement.
ARTICLE V
CERTAIN MATTERS PENDING THE CLOSING
Seller and Buyer covenant and agree that from and after the date of
this Agreement and until the Closing Date as follows:
Section 5.1 Carry on in Regular Course. Except as specifically
contemplated by this Agreement, or as set forth on Schedule 5.1 source
not found. attached hereto, Seller shall carry on the IDM Business in
the ordinary course and substantially in the same manner as heretofore
carried on and to use its Commercially Reasonable Efforts to preserve the
assets, properties, business and relationships with suppliers and customers
of the IDM Business. Seller shall: (a) advise Buyer promptly in writing
of any change in the financial position, results of operations, assets or
liabilities of the IDM Business constituting a Material Adverse Effect of
which it becomes aware; (b) deliver to Buyer on the Closing Date a list of
all material acquisitions or dispositions of Assets between the date of the
Initial Working Capital Calculation, and the Closing Date; and (c) give
Buyer prior written notice of any material acquisitions or dispositions of
Assets after the date of the Initial Working Capital Calculation of which it
becomes aware. Seller shall not dividend, distribute or transfer any Assets
to any Affiliate of Seller, except for dividends, distributions or transfers
of current assets, current liabilities, Excluded Assets or liabilities other
than the Assumed Liabilities.
Section 5.2 Compensation. Without the prior written consent of
Buyer or as otherwise expressly contemplated in this Agreement, Seller shall
not, except in the ordinary course of business grant any increases in the
rate of pay of any IDM Employees.
Section 5.3 Compliance with Law. Seller shall materially comply
with all applicable Laws, and with all orders of any court or of any
federal, state, municipal or other Governmental Authority binding upon
Seller and relating to the IDM Business (except for any such orders that
are being contested by Seller in good faith by appropriate proceedings).
Section 5.4 Cooperation; Conditions to Closing. Buyer and Seller
shall use their Commercially Reasonable Efforts and shall cooperate in all
reasonable respects in connection with the giving of any notices to any
Governmental Authority or securing the permission, approval, determination,
consent or waiver of any Governmental Authority required by Law in
connection with the transactions contemplated herein. Buyer and Seller
shall also use their Commercially Reasonable Efforts to cause the conditions
precedent to one another's obligations to be performed at Closing, as set
forth in Article VI and Article VII, to be satisfied. Neither Buyer
nor Seller shall knowingly take any action that would constitute a
misrepresentation or breach of any warranty contained in Articles III
and IV hereof. Each party hereto shall promptly notify the other of any
event or condition that would constitute a misrepresentation or breach of
warranty hereunder. Seller shall provide Buyer with reasonable access
during business hours to the Assets and the personnel of the IDM Business
in a manner that is not disruptive to Seller's business operations.
Section 5.5 Publicity. All general notices, releases, statements
and communications to employees, suppliers, distributors and customers of
the IDM Business and to the general public and the press relating to the
transactions contemplated by this Agreement shall be made only at such times
and in such manner as may be mutually agreed upon by Buyer and Seller.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer to be performed at the Closing shall
be subject to the satisfaction prior to or at the Closing, or waiver by
Buyer, of the following express conditions precedent:
Section 6.1 Compliance with Agreement. Seller shall have performed
and complied with all of its obligations under this Agreement, which are to
be performed or complied with by it prior to or at the Closing.
Section 6.2 Proceedings and Instruments Satisfactory. All
proceedings, corporate or other, to be taken by Seller in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to Buyer,
and Seller shall have made available to Buyer for examination the originals
or true and correct copies of all documents that Buyer may reasonably
request in connection with the transactions contemplated by this Agreement.
Section 6.3 No Litigation. No investigation, suit, action or other
proceeding shall be pending before any court or Governmental Authority that
seeks restraint, prohibition, damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby.
Section 6.4 Representations and Warranties.
(a) All of Seller's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), which are not qualified as to materiality or
Material Adverse Effect, shall have been accurate in all material respects
as of the date of this Agreement (except to the extent such representations
and warranties are specifically made as of a particular date, in which case
such representations and warranties shall be true and correct in all
material respects as of such date), and shall be accurate in all material
respects as of the time of the Closing as if then made (except to the extent
such representations and warranties are specifically made as of a particular
date, in which case such representations and warranties shall be true and
correct in all material respects as of such date), taking into account any
and all supplement to the Schedules.
(b) Each of the representations and warranties in this Agreement that
contains an express materiality qualification, shall have been accurate in
all respects as of the date of this Agreement (except to the extent such
representations and warranties are specifically made as of a particular
date, in which case such representations and warranties shall be true and
correct in all respects as of such date), and shall be accurate in all
respects as of the time of the Closing as if then made (except to the extent
such representations and warranties are specifically made as of a particular
date, in which case such representations and warranties shall be true and
correct in all respects as of such date), taking into account any and all
supplement to the Schedules.
Section 6.5 Seller's Consents. All of the Seller's Consents shall
have been obtained.
Section 6.6 Deliveries at Closing. Seller shall have delivered to
Buyer the documents specified in Section 2.2 (b) hereof.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
Each and every obligation of Seller to be performed at the Closing
shall be subject to the satisfaction prior to or at the Closing, or waiver
by Seller, of the following express conditions precedent:
Section 7.1 Compliance with Agreement. Buyer shall have performed
and complied with all of its obligations under this Agreement, which are to
be performed or complied with by it prior to or at the Closing.
Section 7.2 Proceedings and Instruments Satisfactory. All
proceedings, corporate or other, to be taken by Buyer in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to Seller,
and Buyer shall have made available to Seller for examination the originals
or true and correct copies of all documents that Seller may reasonably
request in connection with the transactions contemplated by this Agreement.
Section 7.3 No Litigation. No investigation, suit, action or other
proceeding shall be pending before any court or Governmental Authority that
seeks restraint, prohibition, damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby.
Section 7.4 Representations and Warranties.
(a) All of Buyer's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), which are not qualified as to materiality or
Material Adverse Effect, shall have been accurate in all material respects
as of the date of this Agreement (except to the extent such representations
and warranties are specifically made as of a particular date, in which case
such representations and warranties shall be true and correct in all
material respects as of such date), and shall be accurate in all material
respects as of the time of the Closing as if then made (except to the extent
such representations and warranties are specifically made as of a particular
date, in which case such representations and warranties shall be true and
correct in all material respects as of such date), taking into account any
and all supplement to the Schedules.
(b) Each of the representations and warranties in Section 4.2,
and each of the representations and warranties in this Agreement that
contains an express materiality qualification, shall have been accurate
in all respects as of the date of this Agreement (except to the extent
such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties
shall be true and correct in all respects as of such date), and shall be
accurate in all respects as of the time of the Closing as if then made
(except to the extent such representations and warranties are specifically
made as of a particular date, in which case such representations and
warranties shall be true and correct in all respects as of such date),
taking into account any and all supplement to the Schedules.
Section 7.5 Buyer's Consents. All of the Buyer's Consents shall
have been obtained.
Section 7.6 Deliveries at Closing. Buyer shall have delivered to
Seller the documents and instruments specified in Section 2.2 (a) hereof.
ARTICLE VIII
INDEMNITIES AND ADDITIONAL COVENANTS
Section 8.1 Seller's Indemnity.
(a) Seller hereby agrees to indemnify and hold Buyer harmless from and
against, and agrees to defend promptly Buyer from and to reimburse Buyer
for, any and all losses, damages, costs, expenses, liabilities, claims
and obligations of any kind, including, without limitation, reasonable
attorneys' fees and other legal costs and expenses (hereinafter referred
to collectively as "Losses"), that Buyer may at any time suffer or incur,
or become subject to, as a result of (i) any breach of any of the
representations and warranties made by Seller in or pursuant to this
Agreement, and (ii) any failure by Seller to perform any of their covenants
and obligations set forth in this Agreement; provided, however, that Seller
shall not be required to indemnify Buyer pursuant to Section 8.1(a) hereof
in respect of the representations and warranties made by Seller unless such
right to indemnification is asserted by Buyer (whether or not such Losses
have actually been incurred) by written notice to Seller within the
following time periods:
(y) with respect to the representations and warranties set forth
in Sections 3.12 and 3.17 hereof, insofar as they relate to
compliance with Tax Laws or environmental conditions, within
the applicable statute of limitations with respect to the
underlying Law that forms the basis of such claim (including
all extensions thereof agreed to with Tax authorities); and
(z) with respect to all other representations and warranties set
forth in Article III hereof, within eighteen months after the
Closing Date.
Notwithstanding the foregoing, Seller shall not be required to indemnify
Buyer pursuant to Section 8.1(a) in respect of the representations and
warranties made by Seller unless and until the amount of all Losses for
which indemnification is sought hereunder first exceeds $250,000, in which
event all Losses in excess of $250,000 shall be subject to indemnification.
The aggregate obligation of Seller pursuant to Section 8.1(a) shall in no
event exceed an amount equal to 25% of the Initial Purchase Price.
(b) The amounts for which Seller shall be liable under Section 8.1(a)
hereof shall be net of (i) any insurance proceeds received by Buyer in
connection with the facts and circumstances giving rise to the right of
indemnification, and (ii) any federal or state income tax benefit realized
or the then present value of any such benefit reasonably expected to be
realized by Buyer as a result of facts and circumstances giving rise to
such indemnification.
(c) In the event a claim against Buyer arises that is covered by the
indemnity provisions of Section 8.1(a) of this Agreement, notice shall be
promptly given by Buyer to Seller. Seller shall have the right to contest
and defend by all appropriate legal proceedings relating to such claim and
to control all settlements (unless Buyer agrees to assume the cost of
settlement and to forgo such indemnity) and to select lead counsel to defend
any and all such claims at the sole cost and expense of Seller; provided,
however, that no compromise or settlement of such claims may be effected
by Seller without the Buyer's consent unless (i) there is no finding or
admission of any violation of Law, and (ii) the sole remedy provided is
monetary damages that are paid in full by Seller. Buyer may select counsel
to participate in any defense, in which event Buyer's counsel shall be at
the sole cost and expense of Buyer. In connection with any such claim,
action or proceeding, the parties shall cooperate with each other and
provide each other with access to relevant books and records in their
possession.
(d) Except as set forth in Section 8.8, this Section 8.1 shall
be the sole remedy of Buyer against Seller after Closing for any claim
arising in connection with the transactions contemplated herein. Seller's
representations and warranties made herein shall survive the Closing, but
only to the extent and for such time as is necessary to enable Buyer to
enforce its rights to indemnification under this Section.
Section 8.2 Buyer's Indemnity.
(a) Buyer hereby agrees to indemnify and hold Seller harmless from and
against, and agrees to defend promptly Seller from and to reimburse Seller
for, any and all Losses that Seller may at any time suffer or incur, or
become subject to, as a result of (i) any breach or inaccuracy of any of
the representations and warranties made by Buyer in or pursuant to this
Agreement, (ii) any failure by Buyer to perform any of its covenants and
obligations set forth in this Agreement (including, without limitation,
satisfaction of the Rochester Hills Lease and the Assumed Liabilities);
provided, however, that Buyer shall not be required to indemnify Seller
pursuant to Section 8.2(a) hereof in respect of the representations and
warranties made by Buyer unless such right is asserted (whether or not
such Losses have actually been incurred) by written notice to Buyer within
eighteen months after the Closing Date; and (iii) any liability arising out
of Buyer's ownership or operation of the Assets at or after the Effective
Time of the Closing. Notwithstanding the foregoing, Buyer shall not be
required to indemnify Seller pursuant to Section 8.2(a) in respect of the
representations and warranties made by Buyer unless and until the amount
of all Losses for which such indemnification is sought hereunder first
exceeds $250,000, in which event all Losses in excess of $250,000 shall
be subject to indemnification. Buyer's aggregate obligation pursuant to
Section 8.2(a) shall in no event exceed an amount equal to 25% of the
Initial Purchase Price.
(b) The amounts for which Buyer shall be liable under Section 8.2(a)
hereof shall be net of (i) any insurance proceeds received by Seller in
connection with the facts giving rise to the right of indemnification,
and (ii) any federal or state income tax benefit realized or the then
present value of any such benefit reasonably expected to be realized by
Seller as a result of facts and circumstances giving rise to such
indemnification.
(c) In the event a claim against Seller arises that is covered by the
indemnity provisions of Section 8.2(a) of this Agreement, notice shall be
promptly given by Seller to Buyer. Buyer shall have the right to contest
and defend by all appropriate legal proceedings such claim and to control
all settlements (unless Seller agrees to assume the cost of settlement and
to forgo such indemnity) and to select lead counsel to defend any and all
such claims at the sole cost and expense of Buyer; provided, however,
that no compromise or settlement of such claims may be effected by Buyer
without Seller's consent unless (i) there is no finding or admission of any
violation of Law, and (ii) the sole remedy provided is monetary damages that
are paid in full by Buyer. Seller may select counsel to participate in any
defense, in which event such counsel shall be at the sole cost and expense
of Seller. In connection with any such claim, action or proceeding, the
parties shall cooperate with each other and provide each other with access
to relevant books and records in their possession.
(d) Except as provided in Section 8.5 hereof, this Section 8.2 shall
be the sole remedy of Seller against Buyer after Closing for any claim
arising in connection with the transactions contemplated herein. Buyer's
representations and warranties made herein shall survive the Closing, but
only to the extent and for such time as is necessary to enable Seller to
enforce their rights to indemnification under this Section.
Section 8.3 Bulk Sales Compliance. Except as otherwise provided
herein, Buyer hereby waives compliance by Seller with the provisions of the
bulk sales laws of any state (including any such laws relating to Taxes),
insofar as any such laws may apply to the transactions contemplated herein.
Seller hereby covenants and agrees to pay and discharge when due all claims
of creditors that could be asserted against Buyer by reason of such
noncompliance. Seller hereby agrees to indemnify and hold Buyer harmless
from and against and shall on demand reimburse Buyer for any and all Losses
suffered by Buyer by reason of Seller's failure to pay and discharge any
such claims.
Section 8.4 Additional Instruments; Regulatory Matters. Subject to
the terms and conditions herein provided, each of the parties hereto agrees
to use Commercially Reasonable Efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper and
advisable to consummate and make effective the transactions contemplated by
this Agreement, including assisting each other in completing all necessary
governmental and regulatory filings related to the transactions contemplated
herein. In case at any time after the Effective Time of the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, Buyer and Seller shall take all such action.
At any time and from time to time after the Closing, at either party's
request and without further consideration, each party hereto shall execute
and deliver such other instruments of sale, transfer, conveyance, assignment
and confirmation and take such other action as any other party may
reasonably deem necessary or desirable in order to more effectively
transfer, convey and assign to Buyer, and to confirm Buyer's title to and
interest in, and obligations with respect to, the Assets, the Contracts, the
Rochester Hills Lease and the Assumed Liabilities, and the consummation of
the transactions contemplated herein.
Section 8.5 Employment Matters. It is the Buyer's intention to make
written offers of employment to substantially all of the IDM Employees. It
is the Seller's intention to assist Buyer in hiring the IDM Employees.
Accordingly, Seller shall use commercially reasonable best efforts to
encourage IDM Employees who are given written offers of employment by Buyer
on terms that are not less than substantially similar to the employees'
current employment terms ("Buyer's Offer of Employment") to accept such
offers from Buyer. In addition, Seller agrees that for a period of one year
after the date hereof, Seller will not solicit or hire any IDM Employee that
received Buyer's Offer of Employment without Buyer's consent, which shall
not be unreasonably withheld. Buyer agrees that each Buyer's Offer of
Employment accepted by an IDM Employee shall include a release of Seller
with respect to severance payments and other claims arising out of the
termination of employment by Seller associated with the transaction
contemplated hereby.
Section 8.6 Allocation of Purchase Price. The Initial Purchase
Price and the Assumed Liabilities (to the extent they constitute part of
the amount realized by Seller for federal income Tax purposes) shall be
allocated among the Assets and the Contracts in accordance with Schedule
8.6 hereto, which the parties shall adjust to reflect any differences
between the Final Purchase Price and the Initial Purchase Price. This
allocation is intended to comply with the allocation method required
by Section 1060 of the Code. The parties shall cooperate to comply
with all requirements of Section 1060 and the regulations thereunder,
and once the allocation has been adjusted to reflect the Final Purchase
Price, the allocation shall be adjusted only if and to the extent necessary
to comply with such requirements. Buyer and Seller agree that they will not
take nor will they permit any affiliated person to take, for income Tax
purposes, any position inconsistent with such allocation; provided, however,
that (a) Buyer's total cost for the Assets may differ from the total amount
allocated hereunder to reflect Buyer's transaction costs other than the
Final Purchase Price and Assumed Liabilities, and (b) the amount realized by
Seller may differ from the total amount allocated hereunder to reflect
Seller's transaction costs that reduce the amount realized for income Tax
purposes.
Section 8.7 Access to Books and Records. From and after the
Closing, Buyer will authorize and permit Seller and its Representatives to
have access during normal business hours, upon reasonable notice and for
reasonable purposes and in such manner as will not unreasonably interfere
with the conduct of Buyer's business, to all books, records, files,
documents and correspondence included among the Assets that relate to the
conduct of the IDM Business prior to the Effective Time of the Closing.
From and after the Closing, Seller will authorize and permit Buyer and its
Representatives to have access during normal business hours, upon reasonable
notice and for reasonable purposes and in such manner as will not
unreasonably interfere with the conduct of Seller's business, to all books,
records, files, documents and correspondence not included among the Assets
that relate to the conduct of the IDM Business prior to the Effective Time
of the Closing. Buyer and Seller agree to maintain all books and records,
files, documents and other correspondence related to the IDM Business prior
to the Effective Time of the Closing in accordance with their respective
normal document retention practices after the Closing Date. Buyer shall
notify Seller if at any time during the six years following the Closing Date
it intends to destroy any or all of such books, papers or records, and
Seller shall have the right to review and remove at Seller's expense any
such books, papers and records.
Section 8.8 Non-Competition.
(a) For a period of two (2) years after the Closing Date, Seller shall
not, anywhere in the United States, engage in, or own, manage, operate or
control any Person engaged in or planning to become engaged in, the business
of selling document management products that compete directly with the IDM
Business to the customers of the IDM Business as of the Closing Date or to
any other Person or Persons in any industry (a "Competing Business"),
provided, however, that Seller may (i) purchase or otherwise acquire up to
(but not more than) one percent (1%) of any class of the securities of any
Person (but may not otherwise participate in the activities of such Person)
if such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Exchange
Act, and (ii) sell products and applications based on the SERbrainware
technology, including SERdistiller, SERiMail, SERoutlook Access and
SERglobalBrain (personal edition, enterprise edition, API toolkit), and
other knowledge management technology products or integrations of products
and applications with other third-party products to persons who may or may
not compete with Buyer and who may or may not be present or former customers
of the IDM Business, and (iii) at the sole discretion of the Seller, sell,
assign or transfer any of the Excluded Assets to any Person at anytime.
(b) If a final judgment of a court or tribunal of competent
jurisdiction determines that any term or provision contained in Section
8.8(a) is invalid or unenforceable, then the parties agree that the court
or tribunal will have the power to reduce the scope, duration or geographic
area of the term or provision, to delete specific words or phrases or to
replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision. This
Section 8.8 will be enforceable as so modified after the expiration of
the time within which the judgment may be appealed.
(c) Seller agrees that the restrictions set forth in this Section
8.8 are reasonable in scope, territory and time period and are necessary
to protect the value of the Assets to be purchased by Seller.
Section 8.9 Collection of Accounts. From and after the Closing,
Seller shall reasonably cooperate with Buyer in connection with Buyer's
efforts to collect the obligations due under the Accounts as reasonably
requested by Buyer. Buyer shall reimburse Seller for Seller's reasonable
out-of-pocket expenses incurred in providing the requested cooperation under
this Section 8.9.
Section 8.10 Confidentiality.
(a) As used in this Agreement, the term "Confidential Information"
includes any and all of the following information of Seller or Buyer that
has been or may hereafter be disclosed in any form, whether in writing,
orally, electronically or otherwise, or otherwise made available by
observation, inspection or otherwise by either party or its Representatives
(collectively, a "Disclosing Party") to the other party or its
Representatives (collectively, a "Receiving Party"):
(1) all information that is a trade secret under applicable trade
secret or other law;
(2) all information concerning product specifications, data,
know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current and planned research and
development, current and planned manufacturing or
distribution methods and processes, customer lists, current
and anticipated customer requirements, price lists, market
studies, business plans, computer hardware, software and
computer software and database technologies, systems,
structures and architectures;
(3) all information concerning the business and affairs of the
Disclosing Party (which includes historical and current
financial statements, financial projections and budgets, tax
returns and accountants' materials, historical, current and
projected sales, capital spending budgets and plans, business
plans, strategic plans, marketing and advertising plans,
publications, client and customer lists and files, contracts,
the names and backgrounds of key personnel and personnel
training techniques and materials, however documented), and
all information obtained from review of the Disclosing
Party's documents or property or discussions with the
Disclosing Party regardless of the form of the communication;
and
(4) all notes, analyses, compilations, studies, summaries and
other material prepared by the Receiving Party to the extent
containing or based, in whole or in part, upon any
information included in the foregoing.
Any trade secrets of a Disclosing Party shall also be entitled to all of the
protections and benefits under applicable trade secret law and any other
applicable law. If any information that a Disclosing Party deems to be a
trade secret is found by a court of competent jurisdiction not to be a trade
secret for purposes of this Agreement, such information shall still be
considered Confidential Information of that Disclosing Party for purposes of
this Agreement to the extent included within the definition. In the case of
trade secrets, each of Buyer and Seller hereby waives any requirement that
the other party submit proof of the economic value of any trade secret or
post a bond or other security.
(b) Each Receiving Party acknowledges the confidential and proprietary
nature of the Confidential Information of the Disclosing Party and agrees
that such Confidential Information (i) shall be kept confidential by the
Receiving Party; (ii) shall not be used for any reason or purpose other than
to evaluate and consummate the transactions contemplated by this Agreement;
and (iii) without limiting the foregoing, shall not be disclosed by the
Receiving Party to any Person, except in each case as otherwise expressly
permitted by the terms of this Agreement or with the prior written consent
of an authorized representative of Seller with respect to Confidential
Information of Seller (each, a "Seller Contact") or an authorized
representative of Buyer with respect to Confidential Information of Buyer
(each, a "Buyer Contact"). Each of Buyer and Seller shall disclose the
Confidential Information of the other party only to its Representatives
who require such material for the purpose of evaluating the transactions
contemplated by this Agreement and are informed by Buyer or Seller, as the
case may be, of the obligations of this Agreement with respect to such
information. Each of Buyer and Seller shall (i) enforce the terms of this
Agreement as to its respective Representatives; (ii) take such action to the
extent necessary to cause its Representatives to comply with the terms and
conditions of this Agreement; and (iii) be responsible and liable for any
breach of the provisions of this Agreement by it or its Representatives.
(c) From and after the Closing, the provisions of this Section 8.10
shall not apply to or restrict in any manner Buyer's use of any Confidential
Information of the Seller included in the Assets or relating to the IDM
Business or the Assumed Liabilities.
(d) This Section 8.10 shall not apply to that part of the Confidential
Information of a Disclosing Party that a Receiving Party demonstrates
(a) was, is or becomes generally available to the public other than as
a result of a breach of this Agreement or any other confidentiality or
non-disclosure agreement among the parties; (b) was or is developed by
the Receiving Party independently of and without reference to any
Confidential Information of the Disclosing Party; or (c) was, is or
becomes available to the Receiving Party on a non-confidential basis
from a third party not bound by a confidentiality agreement or any legal,
fiduciary or other obligation restricting disclosure.
(e) If a Receiving Party becomes compelled in any legal proceeding or
is requested by a Governmental Authority having regulatory jurisdiction over
this Agreement to make any disclosure that is prohibited or otherwise
constrained by this Agreement, that Receiving Party shall provide the
Disclosing Party with prompt notice of such compulsion or request so that
it may seek an appropriate protective order or other appropriate remedy or
waive compliance with the provisions of this Agreement. In the absence of
a protective order or other remedy, the Receiving Party may disclose that
portion (and only that portion) of the Confidential Information of the
Disclosing Party that, based upon advice of the Receiving Party's counsel,
the Receiving Party is legally compelled to disclose or that has been
requested by such Governmental Authority, provided, however, that the
Receiving Party shall use reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded by any Person to whom any
Confidential Information is so disclosed.
(f) If this Agreement is terminated or upon a request made by the
Disclosing Party, each Receiving Party shall, at the Disclosing Party's sole
discretion (a) destroy all Confidential Information of the Disclosing Party
prepared or generated by the Receiving Party without retaining a copy of
any such material; (b) promptly deliver to the Disclosing Party all other
Confidential Information of the Disclosing Party, together with all copies
thereof, in the possession, custody or control of the Receiving Party or,
alternatively, with the written consent of a Seller Contact or a Buyer
Contact (whichever represents the Disclosing Party) destroy all such
Confidential Information; and (c) certify all such destruction in writing to
the Disclosing Party, provided, however, that the Receiving Party may retain
a list that contains general descriptions of the information it has returned
or destroyed to facilitate the resolution of any controversies after the
Disclosing Party's Confidential Information is returned.
Section 8.11 Non-Solicitation; Non-Disparagement.
(a) For a period of two years after the Closing Date, Buyer shall
not, directly or indirectly hire, retain or attempt to hire or retain any
employee or independent contractor of Seller or in any way interfere with
the relationship between Buyer and any of its employees or independent
contractors, in each case other than the IDM Employees. For a period of two
years after the Closing Date, Seller shall not, directly or indirectly hire,
retain or attempt to hire or retain any Continuing Employee, or in any way
interfere with the relationship between Buyer and any Continuing Employee.
Nothing in this Section 8.11 shall prevent either party from engaging in
general public solicitations for employees in the ordinary course of
business.
(b) After the Closing Date, neither party will disparage the other
party or any of its respective shareholders, directors, officers, employees
or agents.
ARTICLE IX
TERMINATION
Section 9.1 Termination. Time is of the essence of this Agreement.
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned as follows:
(a) at any time prior to the Closing Date by mutual written agreement
of Seller and Buyer;
(b) by Buyer on the Closing Date if any of the conditions set forth
in Article VI of this Agreement shall not have been fulfilled by the Closing
Date;
(c) by Seller on the Closing Date if any of the conditions set forth
in Article VII of this Agreement shall not have been fulfilled by the
Closing Date; or
(d) by Seller or Buyer at any time after [December 31, 2004] if, by
the date of such termination and despite substantial adherence to the terms
of this Agreement by such party, the Closing has not occurred.
Section 9.2 Rights on Termination; Waiver.
(a) If this Agreement is terminated pursuant to Section 9.1, all
further obligations of the parties under or pursuant to this Agreement shall
terminate without further liability of either party to the other (except any
liability of any party then in breach of its obligations hereunder, as to
which the party not in breach shall retain all of its rights and remedies
under applicable Law), except for the provisions contained in Sections 8.10
and 8.11 hereof, which shall survive such termination in accordance with
their respective terms.
(b) If any of the conditions set forth in Article VI of this Agreement
have not been satisfied, Buyer may nevertheless elect to waive such
conditions and proceed with the consummation of the transactions
contemplated hereby. If any of the conditions set forth in Article VII
of this Agreement have not been satisfied, Seller may nevertheless elect
to waive such conditions and proceed with the consummation of the
transactions contemplated hereby.
ARTICLE X
MISCELLANEOUS
Section 10.1 Transfer Taxes and Fees. Seller shall pay all Taxes
charged to Sellers, grantors, transferors or assignors under applicable Law.
Buyer shall pay all other transfer, sales or recording Taxes and other
filing fees arising under applicable Law in connection with the transactions
contemplated hereunder.
Section 10.2 Entire Agreement; Amendment. This Agreement and the
documents referred to herein and to be delivered pursuant hereto constitute
the entire agreement between the parties pertaining to the subject matter
hereof, and supersede all prior and contemporaneous agreements,
understandings, negotiations and discussions of the parties, whether oral or
written, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof, except
as specifically set forth herein or therein. No amendment, supplement,
modification, waiver or termination of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provision of this Agreement, whether or not similar,
nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
Section 10.3 Expenses. Except as otherwise specifically provided
herein, whether or not the transactions contemplated by this Agreement are
consummated, each of the parties hereto shall pay the fees and expenses of
their respective counsel, accountants and other experts and the other
expenses incident to the negotiation and preparation of this Agreement
and consummation of the transactions contemplated hereby.
Section 10.4 Governing Law. (a) This Agreement shall be construed
and interpreted according to the laws of the State of Delaware, without
regard to the conflicts of law rules thereof. Buyer and Seller hereby agree
that service of process delivered pursuant to Section 10.6 hereof shall
suffice as adequate service of process.
(b) Notwithstanding any provision set forth in this Agreement to the
contrary, there is no agreement among the parties to submit disputes under
this Agreement to arbitration.
Section 10.5 Assignment. This Agreement and each party's respective
rights hereunder may not be assigned at any time except as expressly set
forth herein and without the prior written consent of the other party.
Section 10.6 Notices. All communications, notices and disclosures
required or permitted by this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or by messenger or one
Business Day after having been sent by overnight delivery service, or three
Business Days after the date when mailed by registered or certified U.S.
mail, postage prepaid, return receipt requested, or when received via
telecopy, telex or other electronic transmission, in all cases addressed to
the person for whom it is intended at his address set forth below or to such
other address as a party shall have designated by notice in writing to the
other party in the manner provided by this Section:
If to Seller: SER Solutions, Inc.
Loudoun Tech Center
00000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to: Hunton & Xxxxxxxx LLP
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Phone: 000-000-0000
Fax: 000-000-0000
If to Buyer: Xxxx Xxxxx & Associates, Inc.
000 Xxxxxxx 00
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Chief Financial Officer
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to: Xxxxxx Xxxxxxxx, General Counsel
Xxxx Xxxxx & Associates, Inc.
00000 X. 00xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Section 10.7 Counterparts; Headings. This Agreement may be executed
in several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same Agreement. The
Table of Contents and Article and Section headings in this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.
Section 10.8 Interpretation. Unless the context requires otherwise,
all words used in this Agreement in the singular number shall extend to and
include the plural, all words in the plural number shall extend to and
include the singular and all words in any gender shall extend to and include
all genders. All references to contracts, agreements, leases or other
understandings or arrangements shall refer to oral as well as written
matters.
Section 10.9 Severability. If any provision, clause or part of this
Agreement, or the application thereof under certain circumstances, is held
invalid, the remainder of this Agreement, or the application of such
provision, clause or part under other circumstances, shall not be affected
thereby.
Section 10.10 No Reliance. No third party is entitled to rely on
any of the representations, warranties and agreements contained in this
Agreement. Buyer and Seller assume no liability to any third party because
of any reliance on the representations, warranties and agreements of Buyer
or Seller contained in this Agreement.
Section 10.11 Specific Performance. Seller and Buyer hereby agree
that irreparable damage would occur in the event any of the provisions of
this Agreement were not performed in accordance with the terms hereof and
that money damages would be an inadequate remedy to compensate for the
breach of this Agreement. Accordingly, each party agrees that the other
shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at law or equity.
[Signature Page Follows]
IN WITNESS WHEREOF, each party hereto has caused this Asset Purchase
Agreement to be executed in its name by a duly authorized officer as of the
day and year first above written.
SELLER: SER SYSTEMS, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
SER SOLUTIONS, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
BUYER: XXX SYNERGY, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
BUYER: XXXX XXXXX & ASSOCIATES, INC.
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
