EXECUTION COPY
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
BY AND AMONG
SENTO TECHNICAL INNOVATIONS CORPORATION,
KILAT HOLDINGS PTY. LIMITED,
AUSTRALIAN SOFTWARE INNOVATIONS (SERVICES) PTY LTD,
AND
ENG XXX AND XXXX XXX, INDIVIDUALLY
DATED AS OF JULY 9, 1997
EXECUTION COPY
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
THIS INTELLECTUAL PROPERTY PURCHASE AGREEMENT (this "AGREEMENT") is entered
into in Orem, Utah effective as of the 9th day of July, 1997, by and among Sento
Technical Innovations Corporation, a Utah corporation (the "BUYER"), Australian
Software Innovations (Services) Pty. Ltd ACN 000-000-000, a limited company
organized under the laws of Australia (the "SELLER"), Kilat Holdings Pty.
Limited ACN 000-000-000, a limited company organized under the laws of Australia
("KILAT"), and Eng Xxx and Xxxx Xxx (collectively, the "SHAREHOLDERS"),
individually.
RECITALS
A. Pursuant to an Option Agreement (the "OPTION AGREEMENT") dated as of
the 10th day of September, 1996 between Buyer, Seller, Kilat and the
Shareholders, Seller granted to Buyer and its nominee, Centerpost, an option
(the "OPTION") to purchase the Assets and the Intellectual Property Assets,
Kilat and the Shareholders agreed to facilitate Buyer's purchase of the Assets
and the Intellectual Property Assets and Seller, Kilat and the Shareholders
agreed to execute the Deed of Restraint of Trade.
B. Eng Xxx is the Managing Director of Seller, Kilat owns all of the
issued and outstanding shares of the capital stock of Seller and the
Shareholders own all of the issued and outstanding shares of the capital stock
of Kilat.
C. Buyer has elected pursuant to Section 1.6 of the Option Agreement to
exercise the Option with respect to the Assets and the Intellectual Property
Assets.
D. Buyer desires to purchase the Assets and the Intellectual Property
Assets from Seller, and Seller is obligated pursuant to the Option Agreement to
sell the Assets and the Intellectual Property Assets to Buyer, in accordance
with the terms and conditions of the Option Agreement. All capitalized terms
used herein without definition shall have the meanings set forth in ARTICLE 9.
AGREEMENT
NOW, THEREFORE, in consideration of the respective representations,
warranties and covenants contained herein and for other good and valuable
consideration, the receipt, adequacy and legal sufficiency of which are hereby
acknowledged, Buyer, Seller, Kilat and the Shareholders hereby agree as follows:
ARTICLE 1
SALE OF INTELLECTUAL PROPERTY ASSETS;
ADDITIONAL AGREEMENTS; CLOSING
1.1 ACQUISITION. Subject to the terms and conditions of this Agreement,
at the Closing, Seller shall sell, transfer and deliver to Buyer, and Buyer
shall purchase, all of Seller's right, title and interest in and to the
Intellectual Property Assets (the "ACQUISITION").
1.2 ADDITIONAL UNDERSTANDINGS. In connection with the Acquisition, the
parties hereto agree as follows:
(a) Buyer will not, pursuant to this Agreement, acquire any property
of Seller other than the Intellectual Property Assets to be acquired by Buyer
from Seller pursuant to the terms of this Agreement; nor will Buyer assume or be
bound by any contract or agreement other than the Contracts and the Deed of
Restraint of Trade (PROVIDED, HOWEVER, that Buyer shall not assume any
obligation of Seller thereunder); nor will Buyer assume any other debt, claim,
Liability, Tax, judgment or obligation whatsoever of Seller except for those
obligations under the Contracts to be performed after the Closing Date.
(b) In connection with the Acquisition, Seller, Kilat and each of the
Shareholders shall, from the date of this Agreement until the Closing Date,
afford Buyer's employees, auditors, legal counsel and other authorized
representatives reasonable access to the properties, records and personnel of
Seller in order to inspect, investigate and audit the Intellectual Property
Assets and the operations and business of Seller. Buyer agrees to conduct any
such inspection, investigation or audit in a reasonable manner, during regular
business hours, so as not to disrupt the normal functioning of Seller's
business. Seller, Kilat and the Shareholders agree to cooperate fully with
Buyer and to make the Seller's books and records, the Assets, the Intellectual
Property Assets and the employees of Seller available to Buyer as reasonably
required by Buyer in order for Buyer to complete its due diligence in a timely
fashion.
(c) Seller, Kilat and the Shareholders covenant and agree that upon
Buyer's request they will do all acts and execute or cause Seller to execute all
such documents as are necessary to cause the name of Seller to be changed as of
the Closing Date to a name that does not include the words "Australian Software
Innovations" or the acronym "ASI" or any similar name and will on or before the
Closing Date deliver to Buyer appropriate signed notices to the Australian
Securities Commission having such effect and all other materials reasonably
requested by Buyer in connection therewith, together with all filing fees
payable in respect of lodging such notices. Seller, Kilat and the Shareholders
consent to Buyer causing a company controlled by Buyer or its Affiliates to
change its name to Australian Software Innovations Pty Limited on or after the
Closing Date.
1.3 PURCHASE PRICE. The price to be paid by Buyer for the purchase of the
Intellectual Property Assets (the "PURCHASE PRICE") shall be Four Hundred Fifty
Five Thousand Dollars ($455,000).
1.4 PAYMENT OF PURCHASE PRICE. At the Closing, Buyer shall pay to Seller
Five Hundred Fifty Five Thousand Dollars ($555,000), representing the full
amount of the Purchase Price, in the form of cash, certified funds or wire
transferred funds, with the transfer of such funds to be initiated by Buyer
within twenty-four hours of the Closing.
1.5 CLOSING. Upon satisfaction or waiver of the conditions to Closing
contained in ARTICLE 4 and ARTICLE 5 hereof, the parties hereto agree to close
the Acquisition contemporaneously with the consummation of the transactions
described in the Asset Purchase Agreement and the Deed of Restraint of Trade
(the "CLOSING"). The Closing shall take place at the principal offices of
Buyer, or such other place as may be agreed to by the parties, on the date
agreed to by the parties, but in all events on or before thirty (30) days from
the date hereof. It is the intent of the parties to consummate the Closing as
soon as possible after the execution of this Agreement. The parties agree to
use their good faith and reasonable efforts to close the Acquisition as soon as
possible and to cooperate fully with each other to complete the Closing.
1.6 CLOSING DELIVERIES.
(a) At the Closing, Seller shall deliver to Buyer:
(i) An Assignment Agreement assigning to Buyer the Contracts,
free and clear of all Encumbrances except as expressly assumed by Buyer and
described on EXHIBIT B;
(ii) Complete and accurate Disclosure Schedules;
(iii) Such other documents, including certificates of
independent legal advice and appropriate statutory declarations, as may be
required by this Agreement or the Asset Purchase Agreement, or reasonably
requested by Buyer to carry out the transactions contemplated hereby or thereby;
and
(iv) Possession of the Intellectual Property Assets.
(b) At the Closing, Buyer shall deliver to Seller:
(i) The amount of Four Hundred Fifty Five Thousand Dollars
($455,000) in the form of cash, certified funds or wire transferred funds, with
the transfer of such funds to be initiated by Buyer within twenty-four hours of
the Closing;
(ii) An Assignment Agreement accepting assignment to Buyer of all
Seller's rights under the Contracts and assuming the obligations arising under
the Contracts to be performed after the Closing Date; and
(iii) Such other documents, including officers' certificates,
as may be required by this Agreement or the Asset Purchase Agreement, or as
reasonably requested by Seller to carry out the transactions contemplated hereby
or thereby.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER,
KILAT AND THE SHAREHOLDERS
Except as otherwise indicated, Seller, Kilat and each of the Shareholders
jointly and severally represent and warrant to Buyer that the following
representations and warranties are true, correct and complete as of the date of
this Agreement and will be true, correct and complete as of the Closing Date:
2.1 AUTHORITY. Seller, Kilat and each of the Shareholders have the
absolute and unrestricted right, power, authority and capacity to execute and
deliver the Transaction Agreements, as applicable, to perform his, her or its
obligations thereunder and to consummate the transactions contemplated thereby.
This Agreement has been, and each of the Transaction Agreements will be when
executed, duly and validly executed and delivered by Seller, Kilat and each of
the Shareholders, and each of the Transaction Agreements, as applicable,
constitutes, or will when executed constitute, the legal, valid and binding
agreement of Seller, Kilat and each of the Shareholders, enforceable against
Seller, Kilat and each of the Shareholders in accordance with its terms except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws affecting
creditors' rights generally.
2.2 ORGANIZATION, EXISTENCE AND GOOD STANDING OF SELLER AND KILAT. Seller
is a limited company duly organized, validly existing and in good standing under
the laws of Australia and has full power and authority to carry on its business
as now being conducted, to own and operate its properties and assets, and to
perform all its obligations under the Transaction Agreements and the Contracts.
Kilat is a limited company duly organized, validly existing and in good standing
under the laws of Australia and has full power and authority to carry on its
business as now being conducted, to own and operate its properties and assets,
and to perform all its obligations under the Transaction Agreements.
2.3 CONSENTS AND APPROVALS; NO VIOLATION. Except as set forth in the
Disclosure Schedules, neither the execution and delivery of the Transaction
Agreements, the consummation of the transactions contemplated thereby, nor the
compliance by Seller and Kilat with any of the provisions thereof will, as of
the Closing Date, (i) conflict with or violate any provision of the Memorandum
and Articles of Association or other charter or governing documents of Seller or
Kilat, respectively, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, contract, agreement, commitment, bond,
mortgage, indenture, license, lease, pledge agreement or other instrument or
obligation to which Seller or Kilat is a party or by which Seller or Kilat or
any of their respective properties or assets may be bound, including, without
limitation, any other agreement with respect to the sale by Seller of any of its
properties or assets, (iii) to the best knowledge of Seller, Kilat and the
Shareholders, violate or conflict with any provision of any Legal Requirement
binding upon Seller or Kilat, or (iv) to the best knowledge of Seller, Kilat and
the Shareholders, result in, or require, the creation or imposition of, any
Encumbrance upon or with respect to any properties of Seller or Kilat,
including, without limitation, the Assets or the Intellectual Property Assets,
or impair the ability of Seller, Kilat or the Shareholders to carry out their
respective obligations under or the Transaction Agreements.
2.4 BOOKS AND RECORDS. The books of account and other business records of
Seller regarding the Intellectual Property Assets and the business and
operations of Seller have all been made available to Buyer and such books and
records are complete and correct with regard to the matters which are the
subject of the Transaction Agreements.
2.5 ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the extent fully
disclosed in writing to Buyer in the Disclosure Schedules, as of the Closing
Date, Seller will have no Liabilities, including, without limitation, any
Liabilities resulting from failure to comply with any Legal Requirement
applicable to Seller, its business or operations, the Intellectual Property
Assets due or to become due and whether incurred in respect of or measured by
the income or sales of Seller for any period or arising out of any transactions
entered into, or any state of facts existing, on or before the Closing Date
which could, as of or after the Closing Date, materially adversely affect
Seller's business or operations or the Intellectual Property Assets, give rise
to an Encumbrance against the Intellectual Property Assets or materially
adversely affect Seller's ability to carry out the transactions contemplated by
the Transaction Agreements.
2.6 ABSENCE OF CHANGES. Between the date of this Agreement and the
Closing Date, there will not have been (i) any material adverse change, or any
event, condition or contingency that is likely to result in a material adverse
change in the condition of Seller's business or operations or the Intellectual
Property Assets; (ii) any damage, destruction or loss, whether covered by
insurance or not, materially and adversely affecting Seller's business or
operations, the Assets or the Intellectual Property Assets; (iii) any
termination or receipt of notice of termination of one or more of the Contracts;
(iv) any dispute or any other occurrence, event or condition of any character,
which reasonably could be anticipated to give rise to a legal or administrative
action or to a material adverse change affecting the Assets or the Intellectual
Property Assets or Seller's ability to carry out its obligations hereunder; or
(v) any agreement to do any of the foregoing.
2.7 CONTRACTS. Except as set forth on the Disclosure Schedules or as
otherwise described in this Agreement:
(a) Complete and accurate copies, including all amendments, of the
Contracts have been delivered to Buyer.
(b) All of the Contracts are in full force and effect and are valid
and enforceable in accordance with their terms, there are no material defaults
thereunder or breaches thereof, and no condition exists or event has occurred
which, with notice or lapse of time or both, would constitute a default
thereunder.
(c) Seller has the right to assign its rights and obligations under
the Contracts to Buyer, and such assignment will not result in a default, breach
or right of termination thereunder.
(d) Set forth in the Disclosure Schedules is a complete and accurate
description of all obligations or commitments of Seller with respect to any
asset of any nature whatsoever that is used in whole or in part for the personal
use or benefit of any shareholder, officer, director or employee of Seller or
any Affiliate thereof.
2.8 PERSONAL PROPERTY.
(a) Except as set forth in the Disclosure Schedules, there is no
asset, property, right or interest of any nature whatsoever necessary to or
currently utilized in the operation of Seller's business which is not included
in the Assets or the Intellectual Property Assets and Buyer has been given,
pursuant to the Option, an opportunity to acquire all of such assets,
properties, rights and interests.
(b) Seller has made available to the Buyer true, correct and complete
copies of all material contracts, agreements, mortgages, leases and commitments
relating to or affecting any interest in the Intellectual Property Assets.
(c) Other than the Contracts, there are no agreements, whether verbal
or written, affecting any of the Intellectual Property Assets which have not
been disclosed in writing to Buyer. Other than the Contracts or as authorized
by Buyer in writing prior to the Closing, all such agreements affecting the
Intellectual Property Assets will be terminated prior to or at the Closing.
2.9 TITLE TO ASSETS AND RELATED MATTERS. Seller owns all of the
Intellectual Property Assets free and clear of all Encumbrances and the claims
or rights of any other party. Seller has the power, authority and right to sell
the Intellectual Property Assets to Buyer free and clear of any Encumbrances.
2.10 INTELLECTUAL PROPERTY. Except as set forth in the Disclosure
Schedules:
(a) The Intellectual Property Assets constitute all of the
Intellectual Property necessary to or currently utilized in Seller's business
and all such Intellectual Property is owned by Seller free and clear of all
Encumbrances, and is not subject to any license, royalty or other agreement, and
Seller has not granted any license or agreed to pay any royalty in respect of
any Intellectual Property necessary to or currently utilized in Seller's
business, except for that license granted pursuant to an Exclusive License and
Technical Assistance Agreement between Seller and Spire Technologies, Inc. dated
as of July 1, 1996;
(b) None of the Intellectual Property necessary to or currently
utilized in Seller's business has been or is the subject of any pending or
threatened Proceeding or claim of infringement;
(c) No license or royalty agreement to which Seller is a party or by
which any of the Intellectual Property necessary to or currently utilized in
Seller's business is or could be materially affected is in breach or default by
any party thereto or the subject of any notice of termination given or
threatened;
(d) To the best knowledge of Seller and each of the Shareholders, the
products manufactured or sold by Seller and any process, method, part, design,
material or other Intellectual Property they employ, and the marketing and use
by Seller of any such product, service or other Intellectual Property, do not
infringe any Intellectual Property or confidential or proprietary rights of
another, and Seller has not received any notice contesting its right to use any
Intellectual Property; and
(e) Seller owns or possesses adequate rights in perpetuity in and to
all Intellectual Property necessary to conduct its business as presently
conducted.
2.11 COMPLIANCE WITH LAWS. Seller is in compliance with all Legal
Requirements applicable to the ownership of the Assets and the Intellectual
Property Assets and the operation of its business where the failure so to comply
would have a material adverse effect on Seller's ability to carry out its
obligations under the Transaction Agreements, or the ability of Buyer to carry
on the business operations related to the Intellectual Property Assets after the
Closing, and Seller does not have any basis to expect, nor has it received, any
Order, notice, or other communication from any Governmental Authority of any
alleged, actual, or potential violation and/or failure to comply with any such
Legal Requirement, except as disclosed on the Disclosure Schedules.
2.12 LITIGATION. Except as set forth in the Disclosure Schedules, (i)
neither Seller, Kilat nor either of the Shareholders is subject to any Order in
which relief is sought involving, affecting, or relating to the ownership,
operation, or use of the Intellectual Property Assets, the operation of Seller's
business or the matters covered by the Transaction Agreements which would
prevent, delay, or make illegal the transactions contemplated by the Transaction
Agreements, (ii) there are no Proceedings pending or threatened against,
involving, affecting, or relating to Seller, Kilat or either of the
Shareholders, the operation of Seller's business or to Seller's ownership,
operation or use of the Intellectual Property Assets before any arbitrator or
Governmental Authority, and (iii) to the best knowledge of Seller, Kilat and
each of the Shareholders, there exist no facts to serve as a basis for the
institution of any Proceeding against Seller, Kilat, either of the Shareholders
or any of the Intellectual Property Assets which would prohibit or adversely
affect the Assets or the Intellectual Property ability of Seller, Kilat or the
Shareholders to carry out their respective obligations under the Transaction
Agreements.
2.13 NO BROKER'S OR FINDER'S FEES. No agent, broker, investment banker or
similar Person has acted directly or indirectly on behalf of Seller in
connection with the Transaction Agreements or the transactions contemplated
thereby, and no Person, including Seller, Kilat or either of the Shareholders,
is or will be entitled to any broker's or finder's fee or any other commission
or similar fee or expense, directly or indirectly, in connection with the
Transaction Agreements or the transactions contemplated thereby.
2.14 BANKRUPTCY. Seller has not made any assignment for the benefit of
creditors, filed any petition in bankruptcy, been adjudicated insolvent or
bankrupt, petitioned or applied to any tribunal for any receiver, conservator or
trustee of it or any of its property or assets, or commenced any proceeding
under any reorganization arrangement, readjustment of debt, conservation,
dissolution or liquidation law or statute or any jurisdiction; and no such
action or proceeding has been commenced or threatened against Seller by any
creditor, claimant, Governmental Authority or any other person.
2.15 LABOR MATTERS. Except as set forth in the Disclosure Schedules,
(a) Seller has made all payments to its employees required by any
Legal Requirement or any Employee Benefit Plans;
(b) To the best knowledge of Seller, Kilat and each of the
Shareholders, there has not been, and there is not presently pending or
threatened, any Proceeding against Seller under any Legal Requirement governing
the conditions of Seller's employment of its employees, or any basis or ground
for any such claim;
(c) Seller has not been a party to any collective bargaining
agreement or other labor contract affecting the employees of Seller;
(d) To the best knowledge of Seller, Kilat and each of the
Shareholders, there has not been, and there is not presently pending or existing
or threatened, any strike, slowdown, picketing, work stoppage, labor arbitration
or proceeding in respect of the grievance of any employee, an application or
complaint filed by an employee or union with any Governmental Authority, or
organizational activity or labor dispute against or affecting the business of
Seller; and
(e) Seller has complied with all its obligations under all relevant
superannuation legislation and has made all contributions required to be made in
respect of its employees for their period of employment up to and including the
Closing Date. Seller has established reserves and accruals (each of which is
accurately set forth in the Disclosure Schedules) in amounts sufficient to
satisfy all superannuation obligations in respect of its employees for their
period of employment up to and including the Closing Date.
2.16 DISCLOSURE. No representation or warranty of Seller, Kilat or the
Shareholders contained in this Agreement, the Exhibits hereto, or any other
Transaction Agreement contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. There is no fact known to Seller, Kilat or either of the
Shareholders which has specific application to Seller (other than general
economic or industry conditions) and which materially and adversely affects or,
so far as Seller, Kilat or either of the Shareholders can reasonably foresee,
materially threatens, the Intellectual Property Assets or the ability of Seller,
Kilat or the Shareholders to carry out their respective obligations under the
Transaction Agreements, which has not been set forth in this Agreement or in the
Disclosure Schedules.
2.17 TAX MATTERS. With respect to Taxes, including, without limitation,
Taxes imposed by the Income Tax Assessment Act of 1936 of the Commonwealth of
Australia (the "TAX ACT") and any other Australian national, state or
territorial law or regulation:
(a) Seller has lodged, or will lodge, at or before the correct time all
Tax Returns required by law to be lodged on or before the Closing Date and all
such Tax Returns have been, or will be, as the case may be, fully and accurately
completed;
(b) Seller has made, to the Commissioner of Taxation or the appropriate
Governmental Authority a full and true disclosure of all material facts
necessary for the proper assessment of Seller and each deduction, rebate or
credit claimed in those Tax Returns has been properly claimed and is duly
allowable;
(c) All other necessary information, documents and notices in respect of
Tax have been properly and duly submitted by Seller to all relevant Governmental
Authorities in respect of Tax for all periods up to the Closing Date and will
continue to be properly and duly submitted up to the Closing Date and there is
no unresolved dispute with any of those authorities nor is any such dispute
foreshadowed or contemplated;
(d) All Taxes which have been assessed or imposed or are lawfully
assessable upon or are payable by Seller and which are due and payable or which
may become due and payable subsequent to but are referable to the period ending
on the Closing Date have been paid by Seller or adequate provisions has been
made for them in Seller's accounts and such provisions have been fully disclosed
to Buyer; and
(e) All obligations imposed on Seller under all laws relating to Tax have
been complied with and, without limiting the generality of the foregoing, all
amounts of income tax and medicare levy required by law to be deducted by Seller
from salary or wages of Seller's employees (including, without limitation,
Seller's directors and officers) and from prescribed payments and all amounts of
withholding tax have been duly deducted and where payable to the relevant taxing
authority have been duly paid.
2.18 INSURANCE. Seller is adequately insured against public liability in
such amounts as accord with sound business principles and such policies will not
expire prior to the Closing Date. Seller is adequately insured against workers'
compensation liability and has complied with all respects with the legislation
relating to workers' compensation in all jurisdictions where relevant. All
premiums in respect of the insurance coverage referred to in this Agreement will
have been paid prior to the Closing Date, Seller has complied with all the
conditions of the associated policies and has not made any false or misleading
statement or done or omitted to do anything which would entitle the insurers to
avoid the policies or refuse to meet any claim thereunder in full other than as
disclosed by Seller to Buyer in writing prior to the Closing Date. There is no
fact or matter of which Seller, Kilat or the Shareholders is aware which could
lead to Seller's insurance policies being vitiated or repudiated and neither
Seller, Kilat nor the Shareholders will permit any such policies to lapse prior
to the Closing Date, nor will Seller, Kilat or the Shareholders do or fail to do
anything which will render any of Seller's insurance policies void or voidable
prior to the Closing Date.
2.19 TRADE PRACTICES. There is no agreement, arrangement or activity
whether by commission or omission in which Seller has been or will be concerned
which infringes or which has been or which is required to be authorized under
the Trade Practices Act of 1974 of the Commonwealth of Australia or any other
anti-trust legislation in relation to the Intellectual Property Assets,
including, without limitation, any Australian national, state or territorial law
or regulation.
2.20 ENVIRONMENTAL LIABILITIES. There are no Environmental Liabilities (as
defined below) affecting any of Seller's business premises. There are no
factors affecting any of Seller's business premises which are likely within the
next twelve months to give rise to any Environmental Liability. For the
purposes of this clause, the term "ENVIRONMENTAL LAW" means any planning,
environmental, health, toxic, hazardous substances, dangerous goods,
waste/disposal or pollution laws, regulations, orders, notices, ordinances or
requirements, and the term "ENVIRONMENTAL LIABILITY" means any obligation,
expense, penalty or fine under an Environmental Law which could be imposed on
any occupier in possession of Seller's business premises.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller, Kilat and the Shareholders as
follows:
3.1 ORGANIZATION, EXISTENCE AND GOOD STANDING. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Utah and has full power and authority to purchase the Assets and the
Intellectual Property Assets and to carry on its intended business therewith.
3.2 AUTHORITY. Buyer has full power and authority to execute and deliver
the Transaction Agreements, to perform its obligations thereunder, and to
consummate the transactions contemplated thereby. This Agreement has been, and
each of the Transaction Agreements will be, when executed, duly and validly
executed and delivered by Buyer and each of the Transaction Agreements, as
applicable, constitutes, or will, when executed, constitute, the legal, valid,
and binding agreement of Buyer, enforceable against Buyer in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws
affecting creditor's rights generally.
3.3 CONSENTS AND APPROVALS; NO VIOLATION. No filing or registration with,
no notice to and no Governmental Authorization, consent or approval of any
Governmental Authority, creditor or other person in a contractual relationship
with Buyer is necessary in connection with Buyer's execution and delivery of the
Transaction Agreements, the performance of its obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby. Neither the execution and delivery of the Transaction Agreements, the
consummation of the transactions contemplated thereby, nor the compliance by
Buyer with any of the provisions thereof will, as of the Closing Date, (i)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of the Buyer's Articles of Incorporation or Bylaws, or of any note, contract,
agreement, commitment, bond, mortgage, indenture, license, lease, pledge
agreement or other instrument or obligation to which Buyer is a party or by
which Buyer or any of its properties or assets may be bound, or (ii) violate or
conflict with any provision of any Legal Requirement binding upon Buyer.
3.4 BANKRUPTCY. Buyer has not made any assignment for the benefit of
creditors, filed any petition in bankruptcy, been adjudicated insolvent or
bankrupt, petitioned or applied to any tribunal for any receiver, conservator or
trustee of it or any of its property or assets, or commenced any proceeding
under any reorganization arrangement, readjustment of debt, conservation,
dissolution or liquidation law or statute or any jurisdiction; and no such
action or proceeding has been commenced or threatened against Buyer by any
creditor, claimant, governmental authority or any other person.
3.5 NO BROKER'S OR FINDER'S FEES. No agent, broker, investment banker or
similar Person has acted directly or indirectly on behalf of Buyer in connection
with the Transaction Agreements or the transactions contemplated hereby, and no
Person, including Buyer, is or will be entitled to any broker's or finder's fee
or any other commission or similar fee or expense, directly or indirectly, in
connection with the Transaction Agreements or the transactions contemplated
thereby.
ARTICLE 4
CONDITIONS PRECEDENT
TO THE OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated by the
Transaction Agreements at the Closing are subject to fulfillment of the
following conditions, any one or more of which may be waived in whole or in part
by Buyer in the manner provided for herein.
4.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties of Seller, Kilat and the Shareholders contained in the
Transaction Agreements, including the Exhibits thereto, are true, correct and
complete in all material respects as of the Closing Date.
4.2 PERFORMANCE; COMPLIANCE WITH AGREEMENT. Seller, Kilat and each of the
Shareholders shall have performed and complied with all obligations, agreements,
covenants and conditions required by the Transaction Agreements to be performed
or complied with by them on or before the Closing Date, including without
limitation making all the deliveries required by SECTION 1.6.
4.3 AUTHORIZATION; THIRD-PARTY CONSENTS. All filings and registrations
with and notices to, and each Governmental Authorization, consent or approval
of, any Governmental Authority, creditor or other Person which is necessary in
connection with the execution and delivery of the Transaction Agreements by
Seller, Kilat and the Shareholders, the performance of their respective
obligations hereunder and thereunder, or the consummation of the transactions
contemplated hereby and thereby shall have been made or obtained. All corporate
actions necessary to authorize the execution, delivery and performance of the
Transaction Agreements by Seller and Kilat, and the consummation by Seller and
Kilat of the transactions contemplated by the Transaction Agreements shall have
been duly and validly taken, and Seller and Kilat shall have full right and
power to sell the Intellectual Property Assets and to perform their respective
obligations upon the terms provided in the Transaction Agreements. On or prior
to the Closing Date, Seller, Kilat and the Shareholders shall have furnished to
the Buyer evidence of the foregoing filings, notices, consents, stipulations and
assignments.
4.4 NO MATERIAL ADVERSE CHANGE. During the period from the date of this
Agreement through the Closing Date, there shall not have been any material
adverse change in the Intellectual Property Assets, and none of the events
described in SECTION 2.6 shall have occurred.
4.5 COMPLETION OF BUYER'S INVESTIGATION. Buyer shall have completed, to
its sole satisfaction and at its expense, an investigation into the condition of
the Intellectual Property Assets and the business and operations of Seller. If
Buyer is not satisfied with any matter revealed during its investigation, or
with any matter set forth on the Disclosure Schedules, Buyer shall have the
right to terminate this Agreement if notice of termination is given to the
Seller, Kilat and the Shareholders prior to the Closing.
4.6 GOOD TITLE TO BUYER. Seller shall have conveyed the Intellectual
Property Assets to Buyer, free and clear of all Encumbrances.
4.7 ACTIONS SATISFACTORY. The form and substance of all actions,
proceedings, instruments and documents required to consummate the transactions
contemplated by the Transaction Agreements shall have been satisfactory in all
reasonable respects to Buyer and its counsel.
ARTICLE 5
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER, KILAT AND THE SHAREHOLDERS
The obligations of Seller, Kilat and the Shareholders to consummate the
transactions contemplated by the Transaction Agreements at the Closing are
subject to the fulfillment of the following conditions, any one or more of which
may be waived in whole or in part by Seller, Kilat or the Shareholders in the
manner provided for herein.
5.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties of Buyer contained in the Transaction Agreements shall be true,
correct and complete in all material respects as of the Closing Date.
5.2 BUYER'S PERFORMANCE; COMPLIANCE WITH AGREEMENT. Buyer shall have
performed and complied with all obligations, agreements, covenants and
conditions required by the Transaction Agreements to be performed or complied
with by Buyer on or before the Closing Date, including without limitation making
all the deliveries required by SECTION 1.6.
5.3 AUTHORIZATION; THIRD PARTY CONSENTS. All filings and registrations
with and notices to, and each Governmental Authorization, consent or approval
of, any Governmental Authority, creditor or other Person which is necessary in
connection with Buyer's execution and delivery of the Transaction Agreements,
the performance of its obligations thereunder, or the consummation of the
transactions contemplated thereby shall have been made or obtained. All
corporate action necessary to authorize the execution, delivery and performance
of the Transaction Agreements by Buyer and the consummation by Buyer of the
transactions contemplated by the Transaction Agreements shall have been duly and
validly taken, and Buyer shall have full right and power to purchase the
Intellectual Property Assets and to perform its obligations upon the terms
provided in the Transaction Agreements. Buyer shall have furnished to Seller,
Kilat and the Shareholders evidence of the foregoing consents and actions, if
requested.
5.4 NO MATERIAL ADVERSE CHANGE. Between the date of this Agreement and
the Closing Date, there will not have been any material adverse change, or any
event, condition or contingency that results in a material adverse change
affecting the ability of Buyer to carry out its obligations under the
Transaction Agreements.
5.5 ACTIONS SATISFACTORY. The form and substance of all actions,
proceedings, instruments and documents required to consummate the transactions
contemplated by the Transaction Agreements shall have been satisfactory in all
reasonable respects to Seller, Kilat and the Shareholders and their counsel.
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 EXPENSES. Except as otherwise expressly provided herein, each party
to this Agreement shall bear its respective expenses incurred in connection with
the preparation, execution and performance of the Transaction Agreements and the
transactions contemplated hereby, including without limitation all fees and
expenses of agents, business brokers, legal counsel, accountants, tax and
financial advisors and other facilitators and advisors.
6.2 CONFIDENTIALITY.
(a) NON-DISCLOSURE AND USE. Each of Buyer, Seller, Kilat and the
Shareholders acknowledges that, in connection with the transactions contemplated
by the Option Agreement and the Transaction Agreements, each has become or may
become privy to the technical, marketing and other proprietary information of
another party, including, without limitation, information, material, documents
and data related to such other party, to the business activities of such other
party and/or to its customers, trade secrets and other proprietary information
(collectively, the "PROPRIETARY INFORMATION"). Each agrees (i) to take at all
times all reasonably necessary steps to safeguard the confidentiality of any
Proprietary Information; (ii) not to disclose, reveal, make accessible or make
available to any third Person any Proprietary Information; and (iii) not to use
any Proprietary Information for such party's own benefit or for any other
Person's benefit; PROVIDED, HOWEVER, that Buyer, Seller, Kilat or the
Shareholders may disclose (A) Proprietary Information which at the time of the
disclosure is part of the public knowledge and readily accessible to such third
party, (B) Proprietary Information which is required by law to be disclosed, and
(C) Proprietary Information required to be disclosed to BMC by the terms of the
BMC Agreement.
(b) RETURN. Buyer, Seller, Kilat and the Shareholders agree that if
the Acquisition is not consummated, each of them will return to the other
parties hereto any and all material containing or reflecting Proprietary
Information.
(c) REMEDIES. Each of Buyer, Seller, Kilat and the Shareholders
acknowledges and agrees that any breach of the terms of this SECTION 6.2 would
result in irreparable injury and damage to the injured party for which such
party would have no adequate remedy at law; each of Buyer, Seller, Kilat and the
Shareholders therefore also acknowledges and agrees that in the event of such
breach or any threat of breach, the injured or threatened party shall be
entitled, in addition to any other remedies to which such party may be entitled
at law or in equity, to an immediate injunction and restraining order to prevent
such breach and/or threatened breach by the breaching or threatening party
and/or any and all persons and/or entities acting for and/or with such breaching
or threatening party, without having to provide a bond or other security or to
prove actual damages.
6.3 OPERATION OF BUSINESS. Except pursuant to or in connection with the
BMC Agreement, neither Seller, Kilat nor either of the Shareholders will engage
in any practice, take any action or enter into any transaction outside the
Ordinary Course of Business with respect to the Intellectual Property Assets or
the operation of Seller's business from the date of this Agreement until the
Closing Date without the prior written consent of Buyer. Without in any manner
limiting the foregoing, Seller, Kilat and the Shareholders covenant and agree
that during such period,
(i) The aggregate monthly remuneration (including, without
limitation, all salary, distributions, dividends, bonuses, deferred
compensation, automobile lease expense, superannuation payments and other
payments) paid to or for the benefit of Kilat and the Shareholders and all
Affiliates of Kilat and the Shareholders shall not exceed Sixteen Thousand
Six Hundred Sixty Seven Australian Dollars (AUS$16,667), and
(ii) Except as set forth in the Disclosure Schedules, Seller will
not, and Kilat and the Shareholders will not permit Seller to, make any
payment or incur any obligation with respect to any asset of any nature
whatsoever that is used in whole or in part for the personal use or benefit
of any shareholder, officer, director or employee of Seller or any
Affiliate thereof.
Seller, Kilat and the Shareholders will use their best commercially reasonable
efforts to preserve the Intellectual Property Assets and the goodwill and value
of Seller's business, to comply with all laws applicable to the Intellectual
Property Assets and Seller's business and to maintain good working relationships
with lessors, licensors, suppliers, customers and employees. In addition,
Seller will not sell or contract to sell any interest in Seller or lease,
license, transfer, pledge, mortgage, hypothecate or otherwise dispose of any of
the Intellectual Property Assets and Kilat and the Shareholders will not permit
Seller to take any such action, except as expressly required by the BMC
Agreement. Seller will not, and Kilat and the Shareholders will not permit
Seller to, do any act or thing or suffer or permit any omission which would make
any policy of insurance of Seller written with respect to the Intellectual
Property Assets void or voidable or do anything that would mean that any
existing insurance policy of Seller is not materially in full force and effect
at all times prior to the Closing Date.
6.4 PUBLICITY. The parties hereto agree, subject to the provisions of
SECTION 6.2, to advise and confer with each other, to the maximum extent
possible, regarding and prior to the issuance of any reports, statements,
releases, public announcements or similar publicity with respect to this
Agreement or the transactions contemplated hereby; PROVIDED, HOWEVER, that any
of the parties may make such announcements, give such notices and provide such
information to Governmental Authorities, employees, creditors, affiliates and
the public as its counsel may advise is legally required.
6.5 EXCLUSIVITY. From and after the date of this Agreement until the
Closing:
(a) Except for dealings with BMC pursuant to the express terms of the
BMC Agreement, neither Seller nor any of its officers, directors, stockholders
or agents (including, without limitation, Kilat and the Shareholders) shall
directly or indirectly:
(i) Enter into any transaction with any party other than Buyer
relative to any disposition of the Intellectual Property Assets or Seller's
business or operations or any part thereof; or
(ii) Solicit or encourage submission of inquiries, proposals or
offers from any other party relative to potential disposition of the
Intellectual Property Assets or Seller's business or operations or any part
thereof; or
(iii) Provide further information to any party other than
Buyer relating to any possible disposition of the Intellectual Property Assets
or Seller's business or operations or any part thereof.
(b) Seller, Kilat and the Shareholders agree that if Seller, Kilat or
either of the Shareholders receives an offer or proposal (other than the BMC
Agreement) relating to the possible disposition of the Intellectual Property
Assets or Seller's business or operations or any part thereof, Seller, Kilat and
the Shareholders will immediately notify Buyer of such offer or proposal, the
identity of the party making the offer or proposal and the specific terms of the
offer or proposal.
6.6 COOPERATION. Kilat and each of the Shareholders agrees to cause
Seller to take, or to refrain from taking, all actions necessary to fulfill
Seller's covenants and obligations under the Transaction Agreements.
ARTICLE 7
INDEMNIFICATION AND LIMITATION
7.1 INDEMNIFICATION BY SELLER AND THE SHAREHOLDERS. Subject to the
limitations set forth in SECTION 7.4, Seller, Kilat and each of the
Shareholders, jointly and severally, unconditionally, absolutely and irrevocably
agree to and shall defend, indemnify and hold harmless Buyer, and each of
Buyer's officers, directors, employees, counsel, successors, assigns, and legal
representatives (Buyer and such persons are collectively referred to as the
"BUYER'S INDEMNIFIED PERSONS") from and against, and shall reimburse Buyer's
Indemnified Persons for, each and every Loss paid, imposed on or incurred by
Buyer's Indemnified Persons, directly or indirectly, relating to, resulting from
or arising out of any inaccuracy in any representation or warranty of Seller,
Kilat or the Shareholders under the Option Agreement, the Transaction Agreements
or the Exhibits thereto or any agreement, certificate or document delivered by
Seller, Kilat or the Shareholders pursuant hereto in any respect, or any breach
or nonfulfillment of any covenant, agreement or other obligation of Seller,
Kilat or the Shareholders under the Option Agreement, the Transaction Agreements
or the Exhibits thereto or any agreement, certificate or document to be
delivered by Seller, Kilat or the Shareholders pursuant hereto. With respect to
matters not involving Proceedings brought or asserted by third parties against
Buyer's Indemnified Persons, within thirty (30) days after notification from
Buyer's Indemnified Persons supported by reasonable documentation setting forth
the nature of the circumstances entitling Buyer's Indemnified Persons to
indemnity hereunder, Seller, Kilat and the Shareholders shall, at no cost or
expense to Buyer's Indemnified Persons, diligently commence resolution of such
matters in a manner reasonably acceptable to Buyer's Indemnified Persons and
shall diligently and timely prosecute such resolution to completion; PROVIDED,
HOWEVER, with respect to those valid claims that may be satisfied by payment of
a liquidated sum of money and which are not disputed reasonably and in good
faith by Seller, Kilat and the Shareholders, Seller, Kilat and the Shareholders
shall promptly pay the amount so claimed. If litigation or any other Proceeding
is commenced or threatened, the provisions of SECTION 7.3 shall control over the
immediately preceding sentence. Buyer shall be entitled to offset against any
amounts owed by Buyer to Seller, Kilat or the Shareholders under any Transaction
Agreement any amounts owed by Seller, Kilat or the Shareholders, respectively,
to Buyer hereunder.
7.2 INDEMNIFICATION BY BUYER. Buyer unconditionally, absolutely and
irrevocably agrees to and shall defend, indemnify and hold harmless Seller,
Kilat, the Shareholders and the successors, assigns, heirs and legal and
personal representatives of Seller, Kilat and the Shareholders (Seller, Kilat,
the Shareholders and such persons are collectively referred to as the "SELLER'S
INDEMNIFIED PERSONS") from and against, and shall reimburse Seller's Indemnified
Persons for, each and every Loss paid, imposed on or incurred by Seller's
Indemnified Persons, directly or indirectly, relating to, resulting from or
arising out of any inaccuracy in any representation or warranty of Buyer under
the Option Agreement, the Transaction Agreements or the Exhibits thereto or any
agreement, certificate or other document delivered or to be delivered by Buyer
pursuant hereto in any respect, or any breach or nonfulfillment of any covenant,
agreement or other obligation of Buyer under the Option Agreement, the
Transaction Agreements, the Exhibits thereto or any agreement, certificate or
document to be delivered by Buyer pursuant hereto. With respect to matters not
involving Proceedings brought or asserted by third parties against Seller's
Indemnified Persons, within thirty (30) days after notification from Seller's
Indemnified Persons supported by reasonable documentation setting forth the
nature of the circumstances entitling Seller's Indemnified Persons to indemnity
hereunder, the Buyer, at no cost or expense to Seller's Indemnified Persons,
shall diligently commence resolution of such matters in a manner reasonably
acceptable to Seller's Indemnified Persons and shall diligently and timely
prosecute such resolution to completion; PROVIDED, HOWEVER, with respect to
those valid claims that may be satisfied by payment of a liquidated sum of money
and which are not disputed reasonably and in good faith by Buyer, Buyer shall
promptly pay the amount so claimed. If litigation or any other Proceeding is
commenced or threatened, the provisions of SECTION 7.3 shall control over the
immediately preceding sentence.
7.3 NOTICE AND DEFENSE OF THIRD-PARTY CLAIMS. If any Proceeding shall be
brought or asserted against a party entitled to indemnification pursuant to
SECTIONS 7.1 or 7.2, or any successor thereto (the "INDEMNIFIED PERSON") in
respect of which indemnity may be sought under this Article from an indemnifying
person or any successor thereto (the "INDEMNIFYING PERSON"), the Indemnified
Person shall give prompt written notice of such Proceeding to the Indemnifying
Person who shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Person and the payment of all
expenses; provided, that any delay or failure to so notify the Indemnifying
Person shall relieve the Indemnifying Person of its obligations hereunder only
to the extent, if at all, that it is prejudiced by reason of such delay or
failure. In no event shall any Indemnified Person be required to make any
expenditure or bring any cause of action to enforce the Indemnifying Person's
obligations and liability under and pursuant to the indemnification obligations
set forth in this Article. In addition, actual or threatened action by a
Governmental Authority or other Person is not a condition or prerequisite to the
Indemnifying Person's obligations under this Article. The Indemnified Person
shall have the right to employ separate counsel in any of the foregoing
Proceedings and to participate in the defense thereof, but the reasonable fees
and expenses of such counsel shall be at the expense of the Indemnified Person
unless the Indemnified Person shall in good faith determine that there exist
actual or potential conflicts of interest which make representation by the same
counsel inappropriate. The Indemnified Person's right to participate in the
defense or response to any Proceeding should not be deemed to limit or otherwise
modify its rights and obligations under this Article. In the event that the
Indemnifying Person, within fifteen (15) days after notice of any such
Proceeding, fails to assume the defense thereof, the Indemnified Person shall
have the right to undertake the defense, compromise or settlement of such
Proceeding for the account of the Indemnifying Person, subject to the right of
the Indemnifying Person to assume the defense of such Proceeding with counsel
reasonably satisfactory to the Indemnified Person at any time prior to the
settlement, compromise or final determination thereof. If the Indemnifying
Person assumes the defense of any Proceeding, the Indemnified Person shall,
reasonably and in good faith, assist and cooperate in the defense thereof.
Anything in this Article to the contrary notwithstanding, the Indemnifying
Person shall not, without the Indemnified Person's prior written consent, settle
or compromise any Proceeding or consent to the entry of any judgment with
respect to any Proceeding for anything other than money damages paid by the
Indemnifying Person. The Indemnifying Person may, without the Indemnified
Person's prior written consent, settle or compromise any such Proceeding or
consent to entry of any judgment with respect to any such Proceeding that
requires solely the payment of money damages by the Indemnifying Person and that
includes as an unconditional term thereof the release by the claimant or the
plaintiff of the Indemnified Person from all liability in respect of such
Proceeding.
7.4 LIMITATION OF LIABILITY. Notwithstanding the foregoing provisions of
this ARTICLE 7, Buyer agrees that the maximum monetary amount for which the
Shareholders shall be liable to Buyer's Indemnified Persons in connection with
the provisions of the Transaction Agreements shall be limited to the aggregate
amount of One Million Eight Hundred Thousand Dollars ($1,800,000); PROVIDED,
HOWEVER, that the foregoing limitation on the liability of the Shareholders
shall not apply to, and each of the Shareholders shall be jointly and severally
liable to Buyer's Indemnified Persons, and any of them, for the aggregate amount
of actual damages resulting from:
(a) any representation made by Seller, Kilat or either of the
Shareholders which any of Seller, Kilat or either of the Shareholders knows or
has reason to know is false or misleading at the Closing Date, or
(b) any fraudulent conduct of Seller, Kilat or either of the
Shareholders.
Furthermore, each of Seller, Kilat and the Shareholders acknowledges and agrees
that the foregoing limitation of liability shall not in any manner limit the
liability of Seller and Kilat for any reason whatsoever.
7.5 GUARANTEE.
(a) Kilat and each of the Shareholders gives the indemnity set forth
in SECTION 7.1 and the guarantee set forth in this SECTION 7.5 in consideration
of Buyer's agreement to enter into the Transaction Agreements. Kilat and each
of the Shareholders acknowledges the receipt of valuable consideration from
Buyer for the agreement of Kilat and the Shareholders to incur obligations and
give rights under such indemnity and guarantee.
(b) Kilat and each of the Shareholders unconditionally and
irrevocably guarantees to Buyer the due and punctual performance and observance
by Seller of its obligations under the Transaction Agreements including, without
limitation, any obligation to pay money.
(c) Kilat and each of the Shareholders waive any right it, he or she
have of first requiring Buyer to commence proceedings or enforce any other right
against Seller or any other person before claiming under such indemnity and
guarantee.
(d) This guarantee and the foregoing indemnity are continuing
security obligations and are not discharged by any one payment. Such guarantee
and indemnity do not merge on completion.
(e) The liabilities of Kilat and each of the Shareholders under such
guarantee and indemnity are as a guarantor, indemnifier and principal debtor and
the rights of Buyer under such guarantee and indemnity are not affect by
anything which might otherwise affect them at law or in equity including, but
not limited, one or more of the following:
(i) Buyer granting time or other indulgence to, compounding or
compromising with or releasing Seller, or any other guarantor;
(ii) acquiescence, delay, acts, omissions or mistakes on the part
of Buyer;
(iii) any novation of a right of Buyer;
(iv) any variation of the Transaction Agreements, or any
agreement entered into in performance of thereof; or
(v) the invalidity or unenforceability of an obligation or
liability of a person other than the relevant guarantor (being Kilat or one
of the Shareholders).
(f) Kilat and each of the Shareholders may not, without the consent
of Buyer:
(i) raise a set-off or counterclaim available to it or Seller
against Buyer in reduction of it's liability under such guarantee and
indemnity;
(ii) claim to be entitled by way of contribution, indemnity,
subrogation, marshaling or otherwise to the benefit of any security or
guarantee held by Buyer in connection with the Transaction Agreements; or
(iii) prove in competition with Buyer, if a liquidator,
provisional liquidator, receiver, official manager or trustee in bankruptcy
is appointed in respect of Seller or Seller is otherwise unable to pay its
debts when they fall due,
until all money payable to Buyer in connection with the Transaction
Agreements is paid.
(g) If a claim that a payment or transfer to Buyer in connection with
the Transaction Agreements is void or voidable (including, but not limited to, a
claim under laws relating to liquidation, insolvency or protection of creditors)
is upheld, conceded or compromised, then Buyer is entitled immediately as
against Kilat and each Shareholder to the rights to which it would have been
entitled under such guarantee and indemnity if the payment or transfer had not
occurred.
(h) Kilat and each of the Shareholders agree to pay or reimburse
Buyer on demand for its costs, charges and expenses in making, enforcing and
doing anything in connection with such guarantee and indemnity including,
without limitation, legal costs and expenses on a full indemnity basis. Any
amounts paid to Buyer by Kilat or one of the Shareholders must be applied first
against payment of costs, charges and expenses under this SECTION 7.5(H), then
against other obligations under such guarantee and indemnity.
(i) Kilat and each of the Shareholders acknowledges having been given
a copy of this Agreement and having had full opportunity to consider its
provisions before entering into such guarantee and indemnity.
ARTICLE 8
MISCELLANEOUS
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Notwithstanding any investigation made at any time by or on behalf of the
parties hereto, all of the representations and warranties of the parties shall
survive the Closing of the transactions contemplated by the Transaction
Agreements (even if the other party knew or had reason to know of any
misrepresentation or breach of any warranty at the time of the Closing) and all
of the covenants of the parties shall survive the Closing, including but not
limited to the obligations of the parties set forth in SECTION 6.2 and the
indemnification obligations of the parties hereto. In addition, the covenants
and obligations set forth in SECTION 6.2 shall survive the termination of this
Agreement.
8.2 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified,
terminated, rescinded or supplemented only by written agreement of the parties
hereto.
8.3 WAIVER; CONSENTS. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Any failure of a party to comply
with any obligation, covenant, agreement or condition herein may be waived by
each party affected thereby only by a written instrument signed by the party
granting such waiver. No waiver, or failure to insist upon strict compliance,
by any party of any condition or any breach of any obligation, term, covenant,
representation, warranty or agreement contained in this Agreement, in any one or
more instances, shall be construed to be a waiver of, or estoppel with respect
to, any other condition or any other breach of the same or any other obligation,
term, covenant, representation, warranty or agreement. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver.
8.4 FURTHER ASSURANCES; COOPERATION. The parties hereto agree (i) to
furnish upon request to each other such further information, (ii) to execute and
deliver to each other such other documents, and (iii) to do such other acts and
things, all as another party hereto may at any time reasonably request,
including before, at and after the Closing, for the purpose of carrying out the
intent of the Transaction Agreements, the Transaction Agreements and the
documents referred to therein.
8.5 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when (i) delivered
personally, (ii) sent by telecopier (with receipt confirmed), or (iii) received
by the addressee, if sent by Express Mail, Federal Express or other express
delivery service (receipt requested) or (iv) three business days after being
sent by registered or certified mail, return receipt requested, in each case to
the other party at the following addresses and telecopier numbers (or to such
other address or telecopier number for a party as shall be specified by like
notice; provided that notices of a change of address or telecopier number shall
be effective only upon receipt thereof):
if to Seller, to:
Australian Software Innovations (Services) Pty Ltd
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx XXX 0000
Attn: Eng Xxx, Managing Director
Telecopier: 00-0-000-0000
if to Kilat or the Shareholders, to:
Eng Xxx
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx XXX 0000
Telecopier: 00-0-000-0000
if to Buyer, to:
Sento Technical Innovations Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxx, Xxxx 00000
Attn: Xxxxxx X. Bench, President
Telecopier: (000) 000-0000
with copies to:
Xxxxx X. Xxxxx
Xxxxxxx, Parr, Waddoups, Xxxxx & Gee
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopier: (000) 000-0000
8.6 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and permitted assigns. Buyer may,
in its discretion, assign its rights, interests and obligations hereunder to any
Person without the prior consent of any other party hereto. Neither Seller,
Kilat nor either of the Shareholders may assign any of their respective rights,
interests or obligations hereunder without the prior written consent of Buyer.
This Agreement is not intended to and shall not confer upon any person other
than the parties any rights or remedies hereunder or with respect hereto.
8.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New South Wales, Australia applicable to contracts
made and to be performed wholly therein.
8.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
8.9 INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement. Unless otherwise provided, all references in this Agreement to
articles and sections refer to the corresponding articles and sections of this
Agreement. All words used herein shall be construed to be of such gender or
number as the circumstances require. Unless otherwise specifically noted, the
words "herein," "hereof," "hereby," "hereinabove," "hereinbelow," "hereunder,"
and words of similar import, refer to this Agreement as a whole and not to any
particular article, section, clause or other subdivision hereof. Whenever the
term "including" or a similar term is used in this Agreement, it shall be read
as if it were written "including by way of example only and without in any way
limiting the generality of the clause or concept to which reference is made."
This Agreement shall be construed as though all parties had drafted it.
8.10 ENTIRE AGREEMENT. This Agreement and the Transaction Agreements,
including the Exhibits and the documents, instruments and schedules referred to
herein and therein, embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or undertakings
other than those expressly set forth or referred to herein and in the
Transaction Agreements. The Transaction Agreements supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
8.11 ATTORNEYS' FEES. In the event a Proceeding is brought by any party
under this Agreement to enforce or construe any of its terms, the party that
prevails by enforcing this Agreement shall be entitled to recover, in addition
to all other amounts and relief, its reasonable costs and attorneys' fees
incurred in connection with such Proceeding.
8.12 SEVERABILITY. If any part of this Agreement is or becomes legally
ineffective, invalid or unenforceable in any jurisdiction, the effectiveness,
validity or enforceability of this Agreement in any other jurisdiction, or the
remainder of it in that jurisdiction, will not be affected.
8.13 JOINT AND SEVERAL. In this Agreement:
(a) any agreement, covenant, obligation, representation or warranty on
the part of two or more persons binds them jointly and severally; and
(b) any agreement, covenant, obligation, representation or warranty
in favor of two or more persons is for the benefit of them jointly and
severally.
ARTICLE 9
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings specified or referred to below when used in this Agreement. Any
reference or citation to a law, statute or regulation shall be deemed to include
any amendments to that law, statute or regulation and judicial and
administrative interpretations of it.
9.1 "ACQUISITION" shall have the meaning set forth in SECTION 1.1.
9.2 "AFFILIATE" means, with respect to any specified Person, each other
Person which, directly or indirectly, controls, is controlled by or is under
common control with such specified Person (whether a general or limited
partner), each officer, director or general partner of such specified Person,
and each other Person who is the beneficial owner of five percent (5%) or more
of any class of the voting securities of such specified Person or five percent
(5%) or more in market value of the outstanding securities of such Person. For
purposes of this definition, "control" means the possession of the power to
direct or cause the direction of all or any part of the management and policies
of a specified Person, whether through the ownership of voting securities, by
contract or otherwise.
9.3 "AGREEMENT" means this Asset Purchase Agreement, including the
Exhibits hereto, which are hereby incorporated herein.
9.4 "ASSETS" means the assets of Seller identified more particularly on
EXHIBIT A.
9.5 "ASSET PURCHASE AGREEMENT" means that certain Asset Purchase Agreement
to be executed by and among Buyer, Seller, Kilat and the Shareholders
contemporaneously with the execution of this Agreement, acceptable to Buyer in
its discretion.
9.6 "BMC" means, collectively, BMC Software, Inc., a Delaware corporation,
BMC Software (Cayman) LDC, a Cayman unlimited liability company or any assignee
thereof under the BMC Agreement.
9.7 "BMC AGREEMENT" means that Asset Purchase and Services Agreement dated
as of June 30, 1997, among BMC Software, Inc., a Delaware corporation, BMC
Software (Cayman) LDC, a Cayman unlimited liability company or its assignee,
Buyer, certain shareholders of Buyer, ASI and Eng X. Xxx.
9.8 "BUYER" means Sento Technical Innovations Corporation, a Utah
corporation, or any successor, transferee or assignee thereof.
9.9 "BUYER'S INDEMNIFIED PERSONS" shall have the meaning set forth in
SECTION 7.1.
9.10 "CENTERPOST" means Centerpost Innovations Pty. Ltd. ACN 000-000-000, a
limited company organized under the laws of New South Wales, Australia.
9.11 "CLOSING" shall have the meaning set forth in SECTION 1.5(A).
9.12 "CLOSING DATE" means the date and time as of which the Closing
actually takes place.
9.13 "CONTRACTS" means those contracts and agreements identified more
particularly on EXHIBIT B, the rights of which Buyer has elected to acquire from
Seller hereunder.
9.14 "DEED OF RESTRAINT OF TRADE" shall mean that certain Deed of Restraint
of Trade to be executed by and among Buyer and the Shareholders
contemporaneously with the execution of this Agreement, acceptable to Buyer in
its discretion.
9.15 "DISCLOSURE SCHEDULES" means the disclosure schedules prepared and
delivered by Seller, Kilat and the Shareholders to Buyer prior to the Closing.
The Disclosure Schedules shall contain all information necessary to make the
representations and warranties set forth in ARTICLE 2 true and correct.
9.16 "DOLLARS" or "$" means United States dollars.
9.17 "EMPLOYEE BENEFIT PLAN" means any stock option, stock right, profit
sharing, thrift-savings, simplified employee pension plan, deferred compensation
plan, severance pay, golden parachute, cafeteria plan, flexible compensation
plan, life insurance, medical, dental, disability, welfare, superannuation or
vacation plans or any other similar plan or arrangement of any kind or
character.
9.18 "ENCUMBRANCE" means any lien, pledge, hypothecation, charge, mortgage,
deed of trust, security interest, encumbrance, equity, trust, equitable
interest, claim, easement, right-of-way, servitude, right of possession, lease
tenancy, license, encroachment, burden, intrusion, covenant, infringement,
interference, proxy, option, right of first refusal, community property
interest; or legend, defect, impediment, exception, condition, restriction,
reservation, limitation, impairment, imperfection of title; or restriction on or
condition to the voting of any security, restriction on the transfer of any
security or other asset, restriction on the receipt of any income derived from
any security or other asset, and restriction on the possession, use, exercise or
transfer of any other attribute of ownership, whether based on or arising from
common law, constitutional provision, statute or contract.
9.19 "ENTITY" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability company, joint
venture, joint stock association, estate, trust, cooperative, foundation, union,
syndicate, league, consortium, coalition, committee, society, firm, company or
other enterprise, association, organization or entity of any nature, other than
a Governmental Authority.
9.20 "GOVERNMENTAL AUTHORITY" means any Australian national, state or
territorial or local governmental authority or semi-governmental authority, and
foreign governmental authority, the United States of America, any State of the
United States, any local authority and any political subdivision of any of the
foregoing, any multi-national organization or body, any agency, department,
commission, board, bureau, court or other authority thereof, or any
quasi-governmental or private body exercising, or purporting to exercise, any
executive, legislative, judicial, administrative, police, regulatory or taxing
authority or power of any nature.
9.21 "GOVERNMENTAL AUTHORIZATION" means any permit (including without
limitation any Environmental Permit), license, franchise, approval, certificate,
consent, ratification, permission, confirmation, endorsement, waiver,
certification, registration, transfer, qualification or other authorization
issued, granted, given or otherwise made available by or under the authority of
any Governmental Authority or pursuant to any Legal Requirement.
9.22 "INTELLECTUAL PROPERTY" means any and all trademarks, tradenames,
service marks, patents, copyrights (including any registrations, applications,
licenses or rights relating to any of the foregoing), technology, trade secrets,
inventions, know-how, names, logos, artwork, designs, discoveries, computer
programs, software products and related source code and documentation,
processes, and all other intangible assets, properties and rights.
9.23 "INTELLECTUAL PROPERTY ASSETS" means all Intellectual Property of
Seller, including, without limitation, all Intellectual Property necessary to or
currently utilized in Seller s business and all of the intangible assets of
Seller identified more particularly on EXHIBIT C.
9.24 "KILAT" means Kilat Holding Pty. Limited ACN 000-000-000, a limited
company organized under the laws of Australia.
9.25 "KNOWLEDGE" or "KNOWN" - An individual shall be deemed to have
"knowledge" of or to have "known" a particular fact or other matter if such
individual is actually aware of such fact or other matter. An Entity shall be
deemed to have "knowledge" of or to have "known" a particular fact or other
matter if any individual who is serving or who has at any time served as an
officer, director, member, manager, trustee, or shareholder of such Entity (or
in any similar capacity) has, or at any time had, knowledge of such fact or
other matter.
9.26 "LEGAL REQUIREMENT" means any law (including without limitation any
Environmental Laws), statute, ordinance, decree, requirement, Order, treaty,
proclamation, convention, rule or regulation (or interpretation of any of the
foregoing) of, and the terms of any Governmental Authorization issued by, any
Governmental Authority.
9.27 "LIABILITY" means any debt, obligation, duty or liability of any
nature (including any unknown, undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with generally accepted accounting
principles.
9.28 "LOSS" means any loss, damage, injury, harm, detriment, decline in
value, lost opportunity, Liability, exposure, claim, demand, cost of any
Proceeding, settlement, judgment, award, punitive damage award, fine, penalty,
Tax, fee, charge, cost or expense (including, without limitation, costs of
attempting to avoid or in opposing the imposition thereof, interest, penalties,
costs of preparation and investigation, and the fees, disbursements and expenses
of attorneys, accountants and other professional advisors).
9.29 "OPTION" shall have the meaning set forth in RECITAL A.
9.30 "OPTION AGREEMENT" shall have the meaning set forth in RECITAL A.
9.31 "ORDER" means any order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, sentence, subpoena, consent
decree, writ or award issued, made, entered or rendered by any court,
administrative agency or other Governmental Authority or by any arbitrator.
9.32 "ORDINARY COURSE OF BUSINESS" means an action taken by a Person if:
(i) such action is recurring in nature, is consistent with the past
practices of such Person and is taken in the ordinary course of the normal day-
to-day operations of such Person;
(ii) the aggregate monetary amount associated with such action (or any
series of related actions) is less than Twenty-Five Thousand Dollars ($25,000),
unless prior to taking such action, the Person obtains from Buyer written
consent to the taking of such action; and
(iii) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in the
ordinary course of the normal day-to-day operations of other persons that are in
the same line of business as such Person.
9.33 "PERSON" means any individual, Entity or Governmental Authority.
9.34 "PROCEEDING" means any action, suit, litigation, arbitration, lawsuit,
claim, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination, investigation, challenge,
controversy or dispute commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Authority or any arbitrator.
9.35 "PROPRIETARY INFORMATION" shall have the meaning set forth in SECTION
6.2.
9.36 "PURCHASE PRICE" shall have the meaning set forth in SECTION 1.3.
9.37 "SELLER" means Australian Software Innovations (Services) Pty Ltd ACN
000-000-000, a limited company organized under the laws of Australia.
9.38 "SELLER'S INDEMNIFIED PERSONS" shall have the meaning set forth in
SECTION 7.2.
9.39 "SHAREHOLDERS" refers collectively to Eng Xxx and Xxxx Xxx, in their
individual capacities.
9.40 "TAX" means any federal, national, state, territorial, local or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, environmental, customs duties, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
fringe benefits or other tax or assessment of any nature whatsoever, including,
without limitation, any customs duty, municipal rates, stamp duties and all
other charges and levies which may be imposed by a Governmental Authority
(including any interest, penalties and additions thereto that may arise in
connection therewith), whether disputed or not.
9.41 "TAX RETURNS" means any return (including any information return),
report, statement, declaration, schedule, notice, notification, form,
certificate or other document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental Authority in
connection with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any Legal Requirement relating to any Tax.
9.42 "TRANSACTION AGREEMENTS" means this Agreement and such other documents
as are entered into in connection with this Agreement in order to complete the
transactions contemplated hereby, including, without limitation, the Option
Agreement, the Asset Purchase Agreement and the Deed of Restraint of Trade.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf as of the date first above written.
"BUYER":
SENTO TECHNICAL INNOVATIONS CORPORATION, a Utah corporation
By:
__________________________________________________
Its:
__________________________________________________
"SELLER":
THE COMMON SEAL of AUSTRALIAN SOFTWARE
INNOVATIONS (SERVICES) PTY. LTD
ACN 000-000-000, a limited company organized
under the laws of Australia was hereunto
affixed in accordance with its articles of
association in the presence of:
____________________ _________________________
Signature of Director Signature of
Director/Secretary
____________________ _________________________
Print Name Print Name
____________________ _________________________
Office Held Office Held
"KILAT":
THE COMMON SEAL of KILAT HOLDINGS PTY.
LIMITED ACN 000-000-000, a limited
company organized under the laws of Australia
was hereunto affixed in accordance with
its articles of association in the presence of:
____________________ _________________________
Signature of Director Signature of
Director/Secretary
____________________ _________________________
Print Name Print Name
____________________ _________________________
Office Held Office Held
"SHAREHOLDERS":
______________________________________________________
Eng Xxx, individually
______________________________________________________
Xxxx Xxx, individually
EXHIBIT A
TO
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
ASSETS
[To be completed - Non-intellectual property assets only]
EXHIBIT B
TO
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
CONTRACTS
[To be completed]
EXHIBIT C
TO
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
INTELLECTUAL PROPERTY ASSETS
[ATTACHED]
EXECUTION COPY
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of July ___, 1997,
by and among Sento Technical Innovations Corporation, a Utah corporation
("BUYER") and Australian Software Innovations (Services) Pty. Ltd ACN 050-053-
355, a limited company organized under the laws of Australia (the "SELLER").
RECITALS
Pursuant to that certain Intellectual Property Purchase Agreement dated as
of July ___, 1997 (the "IP Purchase Agreement"), among Buyer, Seller, Kilat
Holdings Pty. Limited ACN 000-000-000, and Eng Xxx and Xxxx Xxx, Buyer has
agreed to acquire from Seller, and Seller has agreed to sell to Buyer, among
other things, the rights and interests of Seller in and to certain agreements of
Seller, and Buyer has agreed to assume the obligations of Seller thereunder in
accordance with the terms of the IP Purchase Agreement.
NOW, THEREFORE, in consideration of the covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Buyer and Seller agree as follows:
(a) Seller hereby assigns to Buyer, and Buyer hereby accepts from Seller,
all of Seller's rights, title and interest in, to and under each and every
Contract, as such term is defined in the IP Purchase Agreement, free and clear
of all Encumbrances except as expressly assumed by Buyer pursuant to the IP
Purchase Agreement. Buyer hereby assumes and hereafter shall pay, discharge and
perform when due, all obligations of Seller arising under each Contract which
arise on or after the date hereof as provided in the IP Purchase Agreement.
(b) This Agreement is made pursuant to the terms of the IP Purchase
Agreement and does not alter or amend any of the obligations, covenants,
representations or warranties contained in the IP Purchase Agreement. In the
event of any inconsistency between this Agreement and the IP Purchase Agreement,
the IP Purchase Agreement shall control.
(c) This Agreement may be signed in one of more counterparts, and all
counterparts so executed shall constitute one instrument, binding on the parties
hereto, notwithstanding that the parties are not signatory to the same
counterpart. Executed counterparts of this Agreement transmitted by telecopier
shall be valid and binding.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of Buyer and Seller have duly executed and
delivered this Assignment Agreement as of the date first written above.
"BUYER":
SENTO TECHNICAL INNOVATIONS CORPORATION, a Utah corporation
By:
_____________________________________________
Name:
Title:
"SELLER":
THE COMMON SEAL of AUSTRALIAN SOFTWARE INNOVATIONS (SERVICES)
PTY. LTD. ACN 000-000-000, a limited company organized under the
laws of Australia was hereunto affixed in accordance with its
articles of association in the presence of:
_________________________ _________________________
Signature of Director Signature of
Director/Secretary
_________________________ _________________________
Print Name Print Name
_________________________ _________________________
Office Held Office Held
