EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
between
Uwe Gissemam and
Xxxx Xxxxxxxxx doing business as
PLUG'N PLAY COMPUTERBERATUNG GBR,
with liability limited to the business assets,
Xxxxxxxxxxxxxxxxxx 00,
00000 Xxxxxx
- hereinafter "Sellers" -
and the
ONTRACK DATA INTERNATIONAL, INC.
0000 Xxxx Xxxxx, Xxxxxx 00-00,
Xxxx Xxxxxxx, XX 00000
XXX
- hereinafter "Purchaser" -
who have concluded the following Agreement:
PREAMBLE
The Sellers have developed the software "TIRAMISU" to provide the reconstruction
of a file system that is no longer accessible by reason of a system or
application error. Through this software it is possible for the user to recreate
most of the original files which were once present from currently existing file
system information that is only partially accessible. The software can be
down-loaded as a demo-version from the internet free of charge and allows the
user to test the software in order to find out the extent to which the lost data
can be recovered. The demo-version shows the user in addition what quality he
can expect from the reconstructed files. Upon payment of a license fee, the user
of the demo-version receives from the Sellers an authorization code which
converts the demo-version into a version which permits the copying of the
reconstructed files onto a safe medium. The software "TIRAMISU" is available for
hard disk drives in versions for FAT 16, FAT 32, Netware, NTSF (1-4). In
addition the Sellers have developed the software program "Dolly" which permits
the physical copying of an entire hard disk drive. It is suitable for
duplication of hard disks or as a method for fast copying of mechanically
damaged hard disks for later reconstruction through the software "TIRAMISU".
Purchaser is an American corporation which, among other areas, is active in the
preservation and retrieving of data, data search software, anti-virus programs
and other data recovery services. The Sellers intend to transfer the assets (but
not the liabilities) of the business (Plug'n Play Computerberatung GbR,
hereafter "business") with the software developed by them inclusive of the
source codes and all programs and information connected therewith to the
Purchaser. The Purchaser has acquired the products from the Seller for
consideration, has examined and tested same and has decided in favor of the
acquisition of the business assets (but not the liabilities) of the Sellers.
The parties hereby agree as to the following:
ss 1 SUBJECT OF PURCHASE
1. Sellers are proprietors of the registered German trademark, "TIRAMISU",
registration number 397 26 132 at the German Patent and Trademark Office, valid
in Germany for computer programs in Class 9.
2. The Sellers sell the source code for all versions of the program "TIRAMISU"
and "Dolly", as well as the firm name Plug'n Play and all "Stand-Alone" or
"Delphi-Versions" of the license key generator. The definition and the
application area of the software is found in Attachment 1. The definition and
the scope of the source codes are found in Attachment 2. The sale of the source
codes includes all necessary rights, products and developments.
3. The Sellers sell to the Purchaser in connection with the software programs
"TIRAMISU" and "Dolly", together with the respective source codes, all assets
which are listed in Attachment 3.
4. The Sellers sell to the Purchaser all trade receivables of the business as of
the Transfer Date.
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5. Sellers hereby transfer to Purchaser all of their intellectual property
rights and expectancies or such rights of Plug'n Play Computerberatung GbR,
including the rights to file applications and the rights from filed
applications, as well as all of the use-rights connected herewith. Sellers
hereby transfer to Purchaser all of their rights in connection with their
business to utilize copyright and industrial property rights, particularly their
rights on patent protection. The transfer of these rights is not limited to any
territory.
6. According to the information Sellers have or should have at Closing of this
Purchase Contract, the protected rights are not and are not expected to be
challenged, there are no other reasons for cancellation or invalidity of the
protected rights, and the protected rights or their use do not infringe rights
of third parties.
ss 2 TRANSFER
1. The Sellers assign herewith their trademark rights in ss 1 (1) to the
Purchaser.
2. The transfer of the rights in ss 1 includes all the documentation concerning
the trademark in ss 1, in particular the trademark registration patent, as well
as all agreements which have been concluded with third parties as to the
trademark in ss 1. The Sellers grant as of the signing of this Agreement, a
separate written consent (Attachment 4) for the registration of the Purchaser as
the legal successor in the trademark register and shall sign the formal
declaration provided by the German Patent and Trademark Office for the transfer
of rights to a trademark. The Sellers shall provide to the Purchaser all
information requested as to the prior use of the xxxx in ss 1 and will also
provide to the Purchaser at its request any existing evidence as to such use.
3. The Sellers warrant:
a) that they do not know of any rights of third persons which restrict the right
to use the xxxx in ss 1 or that can be the basis for deletion of the xxxx and
that no proceedings for deletion of the
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xxxx are currently pending;
b) that they have not licensed the xxxx in ss 1 to any third party.
The Purchaser is informed that the trademark right has a term which expires in
the year 2007.
4. As of the date of the signature of this Agreement, the Sellers shall no
longer distribute any products with the trademark in ss 1 and shall no longer
use that xxxx. They agree not to challenge the transferred trademark and not to
otherwise cause or support any such attack against the validity of the xxxx.
5. The Sellers transfer all rights in and to the software "TIRAMISU" and
"Dolly", to the Purchaser, including the source codes and the web addresses:
xxxx://xxxxxxxx.xxxxxxxxxx.xxx/xxxxxxxxx/xxxx_xxxxxxxx;
xxxx://xxx.xxxxxxxx.xx;
xxxx_xxxxxxxx@xxxxxxxxxx.xxx.
The Purchaser will assume the www.address pursuant to ss 11 of this Agreement.
The other addresses will be attempted by the parties to be assigned to the
Purchaser. ss 11 applies.
6. The Sellers and the Purchaser agree that all assets listed in Attachment 3
become the property of the Purchaser as of the Transfer Date (ss 3 hereof).
7. The Sellers are obligated to cooperate and to take all necessary steps and to
sign all documents necessary to effect and formalize the assignments and
transfers contemplated herein. The obligation of cooperation begins as of the
Transfer Date and is further detailed in Attachment 5.
8. The Sellers assign hereby all existing trade receivables of the business to
the Purchaser, which accepts this assignment. Payments (electronic or check)
from the Transfer Date belong to the
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Purchaser.
ss 3 TRANSFER DATE
The parties hereto agree that the provisions of ss 1 and ss 2 of this Agreement
become effective as of December 22, 1998, 24:00 o'clock (hereinafter "Transfer
Date"). As of the Transfer Date all the tangible assets which have been sold are
transferred into the Ownership and possession of the Purchaser as well as the
use of all intangible rights under ss 1.
ss 4 PURCHASE PRICE
1. The purchase price amounts to DM 3,500,000. (in words: Three Million Five
Hundred Thousand German Marks).
2. The parties agree that the transfer of the assets and rights provided for in
ss 1 and ss 2 of this Agreement is a non-taxable transfer pursuant to ss 1 (1a)
UStG (VAT Law) and thereby no value added tax is owed or is to be withheld.
Should it, however, later be determined that the transfer as contemplated herein
is subject to the value added tax, the Purchaser is hereby obligated to pay such
value added tax in addition to the purchase price.
3. The purchase price is to be paid in the following installments:
a. 10% of the purchase price is due as of the date of signing of the
Agreement.
b. 40% of the purchase price is due as of the Transfer Date.
c. 50% is due on the work day after completion of the transition schedule
set forth in Attachment 5, but no later than January 31, 1999.
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4. The purchase price installments are to be paid in equal amounts to:
- Uwe Gissemann, account no. 1302 9733 Volksbank Berlin, BLZ 100 900 00
- Xxxx Xxxxxxxxx, account no. 5360 8006, Direktanlagebank, BLZ 701 204 00
The Purchaser shall provide through its German subsidiary a bank guarantee from
Commerzbank AG Stuttgart as to the installment payment under ss 4 (3) (c). The
bank guarantee shall be similar to that in Attachment 7.
5. If the payment of the first installment of the purchase price
according to para. 3 a) b) has not been made by December 31, 1998, the Sellers
have the right to withdraw from this Agreement or to damages from the Purchaser
for non-performance up to an amount of DM 100,000 or as to a higher proven
amount. As to the installment payment under ss 4 (3) (c) the Purchaser can
offset claims that have arisen by the due date thereof which may arise under ss
613a BGB for the former employee, out of the property transfer (ss 419 BGB) and
any deficiency in reaching the minimum planned revenues of DM 900,000 in the
calendar year 1998. The Sellers are obligated, should they make a claim under
the bank guarantee and they know or have reason to know that the Purchaser has a
right to offset, to refund to the Purchaser that corresponding amount within
three banking days.
6. If the Purchaser is delinquent in paying any part of the purchase price, the
overdue balance of the purchase price bears interest from the due date until
payment at an interest rate which corresponds to the quoted FIBOR rate, for
three month obligations as of the due date, plus 3 percentage points.
ss 5 OUTSTANDING ORDERS
1. The Purchaser agrees to assume and to fulfill the outstanding orders of the
Sellers for "TIRAMISU" and "Dolly" existing as of the Transfer Date and to
perform same upon the same
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agreed terms and conditions to the extent that the Sellers have not performed
the services or made the deliveries as of the Transfer Date.
2. As of the Transfer Date, the Purchaser shall conduct the business in its own
name and for its own account. To the extent that the Purchaser takes over
contracts, it shall perform thereunder for its own account and shall free the
Sellers from all prospective obligations under such contracts unless these
obligations arise from the actions or failure to act of the Sellers which lead
to claims for damages.
ss 6 TRANSITIONAL PERIOD, ASSISTANCE
1. The transfer of the software program "TIRAMISU" and "Dolly" shall be handled
according to the agreed transitional phase in Berlin as agreed by the parties in
Attachment 5. The language for instruction as to the business operations shall
be in German.
2. The Sellers agree that commencing as of the date of signing the Agreement,
they shall continue to conduct the business operations as before and in the
existing premises but in the name and for the account of the Purchaser for an
interim period of no longer than to January 15, 1999. The Sellers furthermore
assure their full cooperation in the transfer of all knowhow and information
required for continuing such business operations.
3. The Purchaser is obligated to cooperate as provided in Attachment 5 to assure
the proper and successful transfer of information within the scope and time
period agreed. Should the Purchaser continue to use the existing premises beyond
the transfer period, it shall be required to pay for such use after January 15,
1999. In no event can the existing premises be used after June 30, 1999. By this
date the Purchaser must have found substitute premises.
4. Should Sellers, individually or collectively violate their obligation to
cooperate as agreed in
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Attachment 5, the Purchaser has the right to warn the breaching Seller(s) and to
demand that the work resume on the following workday. Should the breaching
Seller(s) not respond to this demand, the Purchaser, if not itself in breach, is
entitled to liquidated damages from the Sellers in an amount of DM 5,000 per day
for each day in which the Seller(s) has failed to fulfill its obligations for
the transition. With the conclusion of the transition phase under Attachment 5,
each party is excused from further cooperation and performance.
5. The Purchaser has as a customer itself acquired a license for the use of the
software "TIRAMISU" and "Dolly". The Purchaser knows thereby the scope of the
services provided to Internet users upon their acceptance of the offer of the
Sellers. The Purchaser had sufficient opportunity to test the software
"TIRAMISU", which it intends to acquire, and to research and to review same.
Furthermore, the Purchaser knows the circumstances which led the Sellers to
develop and produce the software which is to be acquired. The Purchaser knows in
particular the circumstances that led the Sellers not to prepare any
documentation or manuals during the course of its development of the software.
6. At the beginning and during each phase of the transition period, the
contractual parties shall prepare a protocol which documents the cooperative
efforts made by each party as well as the equipment utilized for that portion of
the transition.
ss 7 LIABILITY, WARRANTIES
1. The Sellers accept joint and several liability to the Purchaser that the
following are true as of the Transfer Date:
a. The Sellers have the right to freely dispose of the assets described in ss 1
and ss 2 of this Agreement without requiring the consent of third parties and
without infringing on the rights of any third parties. The Sellers possess the
legal and economic ownership to all assets and rights to be sold
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pursuant to ss 1 and ss 2 of this Agreement which are free from encumbrances of
any kind as well as being free from rights in favor of third parties.
b. The Sellers warrant the existence of the rights in ss 1 of this Agreement
within the meaning of ss 000 XXX (Xxxxxx Civil Code). The Purchaser confirms
that the Sellers have informed it that they have made no special investigation
as to possible rights of third parties that may conflict with those rights
described in ss 1 of this Agreement.
2. The parties hereto agree that defects in the development of software, even
under application of the greatest care, cannot be fully excluded. As to the
trademark in s 1 of this Agreement, the Sellers are only liable in cases in
which the rights of third parties existed as of the date of the conclusion of
this Agreement and that the Sellers knew or had reason to know of such rights of
third parties. The Sellers provide no warranties beyond those expressly stated
in this Agreement and any liability is limited to the amount of the purchase
price (ss 4 (1)).
3. The Purchaser has in cooperation with the Sellers in the course of a
shortened due diligence reviewed the conditions affecting the acquisition of the
business of the Sellers and declares that it has made use of its rights of
examination and consultation during the negotiations leading to this Agreement.
4. The Sellers are not liable for a claim by Purchaser which arise because of
the transfer of the source codes without documentation asserted. Purchaser
declares that the production of the documentation shall be performed during the
course of the transition phase (ss 6).
ss 8 ACQUISITION OF ASSETS
The Sellers warrant that the acquisition of the assets sold to the Purchaser is
not a transfer of assets within the meaning of ss 419 BGB. The Sellers shall
hold Purchaser harmless from any claims made.
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ss 9 CONFIDENTIALITY
1. All confidential information concerning the rights under ss 1 of this
Agreement belong as of the Transfer Date to the Purchaser.
2. The contractual parties obligate themselves to treat all information that has
become available to them in conjunction with this Agreement which were
designated as confidential or which otherwise in consideration of all
circumstances are recognizable as comprising business or operational secrets of
the Sellers are to be held secret and, to the extent not required in order to
fulfill the purpose of this Agreement, are not to be copied, given to others or
utilized.
3. The Purchaser shall assure that its employees and consultants which are
active on its behalf shall not themselves use, transfer or otherwise make
unauthorized copies of such information.
4. Publication of the conclusion of this Agreement will be made by the parties
only upon mutual consent.
ss 10 NON-COMPETITION
1. The Sellers obligate themselves individually for the period of 2.5 years
after the Closing Date to avoid any competition with the Purchaser or any of its
subsidiaries in the areas of
data recovery services
data recovery-software
data diagnostic software for storage media
media data conversion services (not software)
remote virus cleaning
computer evidence (forensic) services
computer evidence (forensic) software
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hard disk drive installation software
As a breach of this obligation would be, in particular, any of the following
activities as to the above described business areas:
- Own activities (whether exercised directly or indirectly);
- Business activities for companies which are active in the foregoing
areas ("competitors");
and
- Other direct or indirect support of competitors through advice and
counsel.
The non-competition clause extends geographically throughout the territory of
the European Union, the United States and Canada and applies as well to the
supply of any of the above mentioned services through the Internet or other
electronic media.
2. As consideration for this non-competition clause is the purchase price paid
to the Sellers pursuant to ss 4 (1).
3. For every individual incident of breach of the non-competition provisions by
an individual Seller, that individual Seller shall pay to the Purchaser
liquidated damages in the amount of DM 70,000. If the non-competition violation
continues despite a written warning by the Purchaser, further liquidated damages
shall be payable in an amount of DM 50,000 for each beginning month of that
continuation. The Purchaser reserves its right to claim additional compensation
for damages as well as its right for injunctive relief against activities in
breach of this non-competition provision.
ss 11 ASSIGNMENT/ASSUMPTION OF CONTRACTS
1. The Purchaser assumes the rights and obligations under all contracts (but
only as to such contracts) listed in Attachment 7 hereto which as of the
Transfer Date are included in the business of the Sellers and releases the
Sellers from any further obligation thereunder, other than for payment
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for past services rendered thereunder.
2. To the extent that the assumption of the contracts above require the consent
of third parties, the parties hereto shall cooperate in obtaining such consent.
If the consent is not possible or does not appear appropriate or is not granted,
the contractual parties shall conduct themselves and proceed as though the
transfer of the contract as of the Transfer Date had been effective.
ss 12 CUSTOMER LISTS
The Sellers shall provide to the Purchaser an invoice and customer databank in
dBase-format which contains the data as to all customers of the Sellers (since
July 1996). Upon written request of the Purchaser, the Sellers shall prepare an
extract therefrom of all relevant data as to the customers of the Sellers who
have either accepted data recovery services or have purchased the software
program "TIRAMISU". The files contain data on some 3,200 customers and contains
the material customer data. In addition, the Sellers shall provide to the
Purchaser at its request a collection of customer letters and thank you letters
in the form of e-mails as to the software "TIRAMISU" which the Purchaser may use
for purposes of advertising, press releases or documentation purposes.
ss 13 EMPLOYEE
The Sellers have no employees. For this reason there is no assumption of any
employees by the Purchaser as otherwise required under ss 613a BGB. Should any
claim be asserted thereunder by any person, Sellers shall hold Purchaser
harmless from possible claims.
ss 14 NON-ASSUMPTION OF LIABILITIES
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The Purchaser as of the Transfer Date assumes none of the liabilities of the
Sellers. The liabilities which arose prior to the Closing Date shall be paid by
the Sellers. The Sellers obligate themselves to hold the Purchaser harmless from
all claims which are based upon liabilities which arose prior to the Transfer
Date.
ss 15 MISCELLANEOUS
1. Amendments and modifications of this Agreement, including this provision is
required to be in writing. This applies as well as to any waiver of the
requirement for the written form.
2. Should a provision of this Agreement be ineffective or void in whole or in
part, the validity and enforceability of all other provisions of this Agreement
shall not be affected thereby. The ineffective or void provision is to be
replaced with a valid provision which most nearly approximates the economic
intention of the parties.
3. In the event of disputes as to provisions agreed by the parties under ss 10
of the contract and under Attachment 5 are subject to binding arbitration.
Arbitration shall be under the rules of the German Institution for Arbitration
("DIS"). Referrals to the Courts are hereby excluded. The location shall be
Berlin, substantive law shall be that of Germany, and unless the parties
otherwise agree, there shall be three judges. The language of the proceedings
shall be in English and in German, but the arbitral award need only be in
German. The Arbitration Court may only be called upon if after 14 days no
settlement of the dispute between the parties can be reached.
4. This Agreement is subject to the law of Germany. In the event of a legal
dispute between the parties in conjunction with this Agreement, the parties
agree to the exclusive venue of Berlin.
Berlin, the ____ day of December 1998 Berlin, the ____ day of December 1998
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Uwe Gissemann Xxxx Xxxxxxxxx Xxxx Xxxxxx, Chairman and CEO
also on behalf of Plug'n Play Ontrack Data International, Inc.
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