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EXHIBIT 10.10
ASSET PURCHASE AGREEMENT
BY AND AMONG
REAL-TIME INTERNATIONAL, INC.
VISTASOURCE, INC.
APPLIX, INC.
VERITEAM., INC.
VISTASOURCE FRANCE
VISTASOURCE GMBH
AND
VISTASOURCE UK, LTD.
DATED AS OF MARCH __, 2001
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered
into as of March __, 2001 by and among Real-Time International, Inc., a Delaware
corporation ("Purchaser"), Applix, Inc., a Massachusetts corporation ("Parent")
and the following wholly owned subsidiaries of Parent: VistaSource, Inc., a
Delaware corporation, Veriteam, Inc., a Washington corporation, VistaSource
France, VistaSource GmbH and VistaSource UK, Ltd. (such subsidiaries are
collectively referred to herein as the "Company").
RECITALS:
WHEREAS, Parent and the Company are engaged in the businesses
of developing and distributing office productivity software and real-time
gateways on a worldwide basis (the "Business");
WHEREAS, Purchaser has agreed to purchase from Parent and the
Company, and Parent and the Company have agreed to sell to Purchaser, the
Business and certain assets used in the Business on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements,
obligations and covenants contained herein, and intending to be legally bound
hereby, the Parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. For all purposes in this Agreement, all
terms not otherwise defined herein have the respective meanings set forth in
this Section 1.1.
"Acquired Assets" has the meaning specified in Section 2.1
hereof.
"Affiliate" means, with respect to any Person, any other
Person that controls, is controlled by or is under common control with such
Person.
"Agreement" means this Asset Purchase Agreement, including all
amendments, Exhibits and Schedules hereto.
"Ancillary Agreements" shall mean the Company Ancillary
Agreements and the Purchaser Ancillary Agreements.
"Assumed Liabilities" has the meaning specified in Section
2.3.
"Business" has the meaning specified in the recitals hereto.
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"Business Day" means any day other than a day on which banks
in the states of California or Massachusetts are authorized or obligated to be
closed.
"Closing" has the meaning specified in Section 3.1 hereof.
"Closing Date" has the meaning specified in Section 3.1
hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning specified in the first paragraph
hereof.
"Company Ancillary Agreements" has the meaning specified in
Section 4.2(a) hereof.
"Company Plan" has the meaning specified in Section 4.6(b)
hereof.
"Continued Employee" has the meaning specified in Section
4.6(a) hereof.
"Control" (including the terms "controlled," "controlled by"
and "under common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of stock or as
trustee or executor, by contract, credit arrangement or otherwise.
"Contracts" means all contracts, agreements, leases and other
instruments of any kind, whether written or oral.
"Court" means any court or arbitration tribunal of the United
States, any domestic state or any foreign country and any political subdivision
thereof.
"DGCL" means the Delaware General Corporation Law, as amended.
"Disclosure Schedules" means the schedules of even date
herewith delivered by each of the parties concurrently with the execution of
this Agreement, which, among other things, identifies exceptions to such party's
representations and warranties contained in Article IV and V hereof, with
specific section references, in each case, as the same may supplemented or
amended pursuant to Section 10.11 hereof.
"ERISA" means the Employee Retirement Income Security Act of
1974 as amended, and the regulations thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the Regulations promulgated thereunder.
"Excluded Assets" has the meaning specified in Section 2.2.
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"Excluded Liabilities" has the meaning specified in Section
2.4.
"GAAP" means U.S. generally accepted accounting principles
consistently applied.
"Governmental Authority" means any governmental agency or
authority (other than a Court) of the United States, any domestic state, or any
foreign country, and any political subdivision or agency thereof, and includes
any authority having governmental or quasi-governmental powers.
"Intellectual Property" means: trademarks, service marks,
trade names, URLs and Internet domain names, designs, slogans and general
intangibles of like nature, together with all goodwill related to the foregoing
(collectively, "Trademarks"); patents (including any registrations,
continuations, continuations in part, renewals and applications for any of the
foregoing); copyrights (including any registrations and applications therefor);
Software; technology, trade secrets and other confidential information,
know-how, proprietary processes, formulae, algorithms, models, user interfaces,
customer lists, inventions, source codes, object codes, methodologies and, with
respect to all of the foregoing, related confidential documentation
(collectively, "Trade Secrets").
"Knowledge" means: (i) with respect to an individual, an
individual is deemed to have "Knowledge" of a particular fact or other matter if
such individual is actually aware of such fact or other matter; and (ii) with
respect to a Person (other than an individual), such Person is deemed to have
"Knowledge" of a particular fact or other matter if any individual who on the
date hereof is serving as an Officer of such Person has Knowledge of such fact
or other matter.
"Law" means all laws, statutes, ordinances and Regulations of
any Governmental Authority, including all decisions of Courts having the effect
of law.
"Lien" means any mortgage, pledge, security interest,
attachment, encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing).
"Litigation" means any suit, action, arbitration, cause of
action, claim, complaint, criminal prosecution, investigation, governmental or
other administrative proceeding, whether at law or at equity, before or by any
Court or Governmental Authority or before any arbitrator.
"Material Adverse Effect" means any change, event or effect
that individually or in the aggregate (taking into account all other such
changes, events or effects) has a material adverse effect on the consolidated
business, results of operations, financial condition or prospects of the
Business, taken as a whole, except to the extent that any such change, event or
effect is attributable to or results from changes in general
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economic conditions or changes affecting the industry generally in which such
Person operates.
"Officer" of a Person means any director, the president, chief
executive officer, chief financial officer or any vice president of such Person
or any other officer or manager serving in a similar capacity.
"Order" means any judgment, order or decree of any Court.
"Permit" means any and all permits, licenses, authorizations,
Orders, certificates, registrations or other approvals granted by any
Governmental Authority.
"Permitted Lien" means (i) statutory liens for Taxes, which
are not yet due and payable or are being contested in good faith by appropriate
proceedings, (ii) statutory or common law liens to secure landlords, lessors or
renters under leases or rental agreements confined to the premises rented, (iii)
deposits or pledges made in connection with, or to secure payment of, workers'
compensation, unemployment insurance, old age pension or other social security
programs mandated under applicable Laws, and (iv) restrictions on transfer of
securities imposed by applicable federal, state and foreign securities Laws.
"Person" means an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business or
professional entity, but will not include a Governmental Authority.
"Property" means assets, properties and rights, tangible and
intangible, wherever located.
"Purchaser" means Real-Time International, a Delaware
corporation.
"Purchaser Ancillary Agreements" has the meaning specified in
Section 5.2 hereof.
"Purchaser Indemnified Parties" has the meaning specified in
Section 9.1 hereof.
"Purchaser Losses" has the meaning specified in Section 10.1.
"Purchase Price" has the meaning specified in Section 9.1
hereof.
"Regulation" means any rule or regulation of any Governmental
Authority having the effect of Law.
"Representatives" has the meaning specified in Section 6.1(a)
hereof.
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"SEC" means the Securities and Exchange Commission.
"Software" means in respect of the Business any and all (i)
computer programs, including any and all software implementations of algorithms,
models and methodologies, whether in source code or object code, (ii) databases
and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing, (iv)
the technology supporting any Internet site(s) operated by or on behalf of the
Business and (iv) all documentation, including user manuals and training
materials, relating to any of the foregoing.
"Tangible Net Book Value" means (i) all assets of the Business
as of the Closing Date (except with respect to all accounts receivable 90 days
or more past due, such accounts receivable shall be valued at 40% thereof),
including (x) all inventory maintained with respect to the Business (less
Business specific inventory reserves) and (y) fixed assets of the Business, but
excluding (a) all intangible assets of the Business (such as goodwill) and (b)
all cash of the Business, less (ii) all liabilities of the Business as of the
Closing Date, all as determined in accordance with GAAP and as set forth on the
Closing Date Balance Sheet.
"Tax Returns" means any declaration, return, report, schedule,
certificate, statement or other similar document (including relating or
supporting information) required to be filed with a Governmental Authority by
Parent or the Company with respect to the Business, or where none is required to
be filed with a Governmental Authority, the statement or other document issued
by a Governmental Authority in connection with any Tax to Parent or the Company
with respect to the Business, including any information return, amended return
or declaration of estimated Tax.
"Taxes" means any and all federal, state, local, foreign,
provincial, territorial or other taxes, imposts, tariffs, fees, levies or other
similar assessments or liabilities and other charges of any kind imposed upon
Parent or the Company with respect to the Business, including income taxes, ad
valorem taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or
with respect to gross receipts, premiums, real property, personal property,
windfall profits, sales, use, transfers, licensing, employment, social security,
workers' compensation, unemployment, payroll and franchises imposed by or under
any Law; and such terms include any interest, fines, penalties, assessments or
additions to tax resulting from, attributable to or incurred in connection with
any such tax or any contest or dispute thereof.
"Termination Date" has the meaning specified in Section 8.1(e)
hereof.
"Trademark" has the meaning specified in the definition of
"Intellectual Property" in this Section 1.
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"Transfer Taxes" means all sales, use, transfer, recording, ad
valorem, bulk sales and other similar taxes and fees, arising out of or in
connection with the transactions contemplated by this Agreement.
ARTICLE II
PURCHASE OF ASSETS
Section 2.1 Sale and Delivery of the Assets. Subject to and upon the
terms and conditions of this Agreement including Section 2.2, at the Closing,
Parent and the Company will sell, transfer, convey, assign and deliver to
Purchaser, and Purchaser will purchase and acquire from Parent and the Company,
all right, title interest in and to the Software, properties, assets, rights,
contracts, business, business records, financial statements, customer lists and
goodwill related primarily to the Business, including without limitation, those
assets described on Schedule 2.1 hereto (such properties and assets being
referred to collectively herein as the "Acquired Assets"), in each case free and
clear of all Liens, except Permitted Liens and Assumed Liabilities.
Section 2.2 Excluded Assets. Anything in Section 2.1 or anything else
in this Agreement to the contrary notwithstanding, there will be excluded from
the Acquired Assets sold, assigned, transferred and conveyed to Purchaser
hereunder those properties, assets, claims, rights and interests of Parent or
the Company described on Schedule 2.2 (such assets being referred to
collectively as the "Excluded Assets").
Section 2.3 Assumed Liabilities. Subject to Section 2.4 hereto, at the
Closing, Purchaser will assume and perform or satisfy those claims, liabilities
and obligations of the Company described on Schedule 2.3 hereto (such
liabilities being referred to collectively as the "Assumed Liabilities"). Such
Schedule 2.3 shall be amended immediately prior to Closing and shall be deemed
acceptable to Purchaser so long as any additional liabilities contained thereon
have been incurred in the ordinary course of business consistent with past
practices.
Section 2.4 Excluded Liabilities. Except as specifically set forth on
Schedule 2.3 hereto, Purchaser will not assume, or in any way be liable or
responsible for, and Parent and the Company agree to retain and perform or
satisfy all other claims, liabilities and obligations of the Company (such
liabilities being referred to collectively as the "Excluded Liabilities").
Section 2.5 Purchase Price.
(a) Consideration. In consideration for the Acquired Assets,
Purchaser shall deliver to Parent and the Company on the Closing Date the
following:
(i) One Million Three Hundred Thousand Dollars
($1,300,000) in immediately available funds (the "Cash Portion of the Purchase
Price"); and
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(ii) 190,000 shares of Purchaser's common stock
issued in the name of Parent, which shares shall, as of the Closing Date,
constitute 19.0% of the issued and outstanding common voting stock of Purchaser,
and have an approximate value of $469,510 (the "Purchaser Shares").
The Cash Portion of the Purchase Price and the
Purchaser Shares are sometimes referred to collectively herein as the "Purchase
Price."
(b) Additional Consideration. On the Closing Date, Parent and
the Company shall deliver to Purchaser a list of the Business' outstanding
accounts receivables which are, as of the Closing Date, ninety or more days past
due (the "Delinquent Receivables"). The parties agree to use their best efforts
to maximize collections of the Delinquent Receivables following the Closing
Date. Any amounts paid by account debtors owing such Delinquent Receivables (the
"Delinquent Payments") shall first be applied to the oldest Delinquent
Receivable owed by such account debtor and fifty percent of such Delinquent
Payments shall be promptly paid by Purchaser to Parent; provided, however, any
adjustments to the Cash Portion of the Purchase Price whether up or down
pursuant to Section 2.5(c)(iv) hereof shall be paid from the Delinquent Payments
which shall not be split 50/50 until the Tangible Net Book Value adjustment
determined pursuant to Section 2.5(c)(iv) is completely recovered and then the
next Delinquent Payments shall be split 50/50. As an example, if the Tangible
Net Book Value is greater than Zero Dollars, such amount above Zero Dollars
shall be paid to Parent from the first Delinquent Payments and once such amount
has been paid the remaining Delinquent Payments shall be split 50/50 between the
Parent and Purchaser.
(c) Purchase Price Adjustment. On the Closing Date, Parent
shall deliver to Purchaser a balance sheet of the Business as of the close of
Business on the Closing Date (the "Closing Date Balance Sheet"). The Closing
Date Balance Sheet shall be prepared in accordance with GAAP, applied in a
manner consistent with the prior application of those principles.
(i) The Closing Date Balance Sheet shall include the
Acquired Assets as the only assets of the Business. The Acquired Assets shall be
recorded on the Closing Date Balance Sheet in accordance with GAAP, applied in a
manner consistent with the prior application of those principles, including
consistent application of estimated lives of property involved and depreciation
schedules and prepared without giving effect to the transactions contemplated by
this Agreement.
(ii) The Closing Date Balance Sheet shall include as
its only liabilities the Assumed Liabilities, recorded on the Closing Date
Balance Sheet in accordance with GAAP and applied in a manner consistent with
the prior application of those principles and prepared without giving effect to
the transactions contemplated by this Agreement.
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(iii) The Closing Date Balance Sheet shall include a
proposed calculation of the Tangible Net Book Value of the Business.
(iv) The Parties acknowledge the Purchase Price being
paid by Purchaser hereunder has been calculated based on the assumption that the
Tangible Net Book Value of the Business reflected on the Closing Date Balance
Sheet will be Zero Dollars ($0). If the Tangible Net Book Value reflected on the
Closing Date Balance Sheet is less than Zero Dollars, then the Cash Portion of
the Purchase Price shall be decreased by an amount equal to the amount by which
such Tangible Net Book Value is less than Zero Dollars. In the event the
Tangible Net Book Value reflected on the Closing Date Balance Sheet is greater
than Zero Dollars, the Cash Portion of the Purchase Price shall be increased by
an amount equal to the amount by which such Tangible Net Book Value exceeds Zero
Dollars. Any such adjustments referred to in this clause (iv) shall be paid only
through the collection of Delinquent Receivables as set forth in Section 2.5(b)
hereof.
(d) Allocation of Purchase Price. Within 30 days after the
Closing Date, the parties in good faith shall agree as to how the Purchase Price
shall be allocated among the Acquired Assets. Each party agrees that it will use
such allocations for all Federal and State income tax reporting purposes and
that it will not, in its Tax Returns or elsewhere, take a position inconsistent
with the allocations provided for in this Section 2.5(d).
(e) Adjustments to Assumed Liabilities and Acquired Assets. If
within 60 days after the Closing Date, the parties determine in good faith that
there is an asset of the Business or a liability of the Business (which
liability was incurred in the ordinary course of business consistent with past
practice) which was inadvertently omitted from the Closing Date Balance Sheet,
the parties shall adjust the Closing Date Balance Sheet by the amount of such
liability or asset, which amount shall be agreed to in good faith by such
parties. Any such adjustments to the Closing Date Balance Sheet which result in
a change to the Tangible Net Book Value shall be paid solely from the next
Delinquent Payments which shall not be split 50/50 as provided for in Section
2.5(b) until such adjustment amount is completely recovered and then the parties
shall apply the remaining Delinquent Payments 50/50.
Section 2.6 Assignment of Contracts. If any Contract to be assigned to
Purchaser hereunder requires the consent of a third party which has not been
obtained as of the Closing Date, this Agreement shall not be deemed to effect an
assignment of such Contract. Parent agrees that it will continue to use
commercially reasonable efforts to obtain the required consent to the assignment
of such Contracts. Unless and until such consent is obtained, Purchaser will
perform and fulfill, on a subcontractor basis, the obligations of Parent or the
Company to be performed under such Contracts on and after the Closing Date, and
Parent or the Company will remit to Purchaser all payments received under such
Contracts.
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ARTICLE III
CLOSING
Section 3.1 Closing. The closing of the transaction contemplated by
this Agreement (the "Closing") will occur at the offices of Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx at 10:00
a.m., local time, on March 31, 2001, or, if all of the conditions to Closing set
forth in Article VII have not been satisfied as of such date, two business days
following the satisfaction of all such conditions, or on such other date and
such other time or at such other location and time as the parties may agree (the
"Closing Date").
Section 3.2 Deliveries. At the Closing, the parties will deliver the
documents, certificates and opinions contemplated by Article VII hereof. In
order to effectuate the sale, assignment, transfer and conveyance of the
Acquired Assets, Parent and the Company will also execute and deliver to
Purchaser at the Closing such other documents as Purchaser may reasonably deem
necessary or appropriate to vest in or confirm to Purchaser title to, or the
interest of Parent or the Company in, all of the Acquired Assets to the extent
provided herein, in a form reasonably acceptable to Purchaser and Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE COMPANY
Parent and the Company hereby represent and warrant to
Purchaser, subject to the exceptions set forth in the schedules attached hereto,
that:
Section 4.1 Organization and Qualification. Each of Parent and the
Company (i) is duly organized, validly existing and in good standing under the
laws of the respective jurisdictions in which they are incorporated or formed
and (ii) has all requisite power and authority to own, lease and operate the
Property used in the Business and to carry on the Business substantially in the
manner that the Business is currently conducted.
Section 4.2 Authorization of Agreement.
(a) Each of Parent and the Company has all requisite corporate
power and authority to execute and deliver this Agreement and each other
agreement and instrument required hereby to be executed and delivered by it at
the Closing (collectively, the "Company Ancillary Agreements"), to perform its
obligations hereunder and thereunder and to consummate the transaction
contemplated hereby and thereby. The execution and delivery by Parent and the
Company of this Agreement and each Company Ancillary Agreement, and the
performance of their respective obligations hereunder and thereunder have been
duly and validly authorized by all requisite corporate action on the part of
Parent and the Company. This Agreement and the Company Ancillary Agreements have
been or will be duly executed and delivered by Parent and the Company and,
assuming due authorization, execution and delivery hereof by Purchaser and each
other party
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thereto other than the Company and Parent, this Agreement and the Company
Ancillary Agreements constitute or will constitute legal, valid and binding
obligations of Parent and the Company, enforceable against Parent and the
Company in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(b) Schedule 4.2(b) hereto contains a complete and accurate
list of all Contracts relating primarily to the Business (including all
distributor agreements, value-added reseller agreements and contracts) and
indicates thereon those Contracts that require the consent of any third party to
transfer or assign any of the rights of Parent or the Company. Except as set
forth on Schedule 4.2(b), no filing or registration with, no waiting period
imposed by, and no Permit, Order, authorization, consent or approval of, any
person, Court or Governmental Authority is required under any Contract relating
primarily to the Business to which Parent or the Company is a party or to which
any of the Acquired Assets are subject, or any Law, Regulation or Order
applicable to Parent or the Company to permit Parent or the Company to execute,
deliver or perform this Agreement or any Company Ancillary Agreement.
(c) Neither the execution and delivery by Parent and the
Company of this Agreement or any Company Ancillary Agreement, nor the
performance by Parent and the Company of their respective obligations hereunder
or thereunder (i) will violate or breach the terms of or cause a default under
any Law, Regulation or Order applicable to the Business or such Person, the
certificate or incorporation or bylaws or analogous organizational documents of
such Person, or any Contract to which the Parent or Company is a party or by
which it or any of its Properties is bound, or (ii) with the passage of time or
the giving of notice have any of the effects set forth in clause (i) of this
Section.
Section 4.3 Title to Properties/Necessary Assets.
(a) Subject only to Permitted Liens and Assumed Liabilities,
Parent and/or the Company has good title to, or a valid leasehold (if
applicable) in, or valid right to use, all of the Properties that are used in
the operations of the Business, other than any Excluded Assets.
(b) Except for the Excluded Assets, the Acquired Assets
constitute all of the assets used in or necessary for the operations of the
Business.
Section 4.4 Litigation. Except as set disclosed on Schedule 4.4, there
is no Litigation pending or, to Parent's or the Company's Knowledge, threatened
against the Company or Parent relating to the Business which is reasonably
likely to impact the Business after the Closing Date, except such items which
occur in the ordinary course of business that involve a claim (other than a
claim for injunctive relief or challenging or
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seeking to prevent the consummation of the transactions contemplated by this
Agreement) for damages of less than $25,000 individually or in the aggregate.
Except as disclosed on Schedule 4.4 hereto, there is no event or series of
events that have occurred, directly or indirectly, as a result of any action or
inaction by or on behalf of Parent or the Company which would give rise to any
Litigation.
Section 4.5 Compliance with Laws. Neither Parent nor the Company is
subject to any written agreement, written directive, memorandum of understanding
or Order with or by any Court or Governmental Authority restricting in any
material respect the operation of the Business. Parent and the Company are in
compliance in all material respects with all applicable Laws and Regulations and
are not in default with respect to any Order applicable to the Business.
Section 4.6 Employment Matters.
(a) Schedule 4.6(a) hereto sets forth the name, job title and
current salary of all employees of Parent or the Company whose employment
responsibilities relate primarily to the Business (the "Continued Employees").
Except as set forth in Schedule 4.6(a), all of the Continued Employees are
United States citizens or are otherwise fully and properly authorized to work in
the United States on a permanent basis. On or prior to the Closing Date, Parent
and the Company will have taken all lawful steps necessary to terminate the
Continued Employees, which terminations shall be effective as of the Closing
Date. Parent or Company has paid or will have made adequate provisions to pay
all wages and other compensation due through the Closing Date for all Continued
Employees, except for such items which constitute Assumed Liabilities.
(b) Schedule 4.6(b) hereto sets forth all Parent or Company
"employee benefit plans" (as defined in Section 3(3) of ERISA, profit-sharing,
deferred compensation, bonus, stock option, stock purchase, vacation pay,
holiday pay, pension plan, retirement plan, medical or other compensation or
benefit arrangement maintained or required to be contributed to by Parent or the
Company for the benefit of the Continued Employees and/or their beneficiaries
(collectively, the "Company Plans"). Parent or the Company has delivered or made
available to Purchaser true and complete copies of all documents pertaining to
those items set forth on Schedule 4.6(b). Neither Parent nor Company maintains
or contributes to any benefit plan with respect to the Continued Employees other
than the Company Plans.
(c) No collective bargaining agreement in currently in
existence or being negotiated with respect to Parent or the Company and, as of
the date of this Agreement, no labor organization has been certified or
recognized as the representative of any employee of Parent or the Company.
(d) Parent and the Company are wholly responsible for
complying with all health care continuation coverage requirements under the law
commonly known
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as COBRA with respect to Continued Employees as to qualifying events that occur
prior to or on the Closing Date, and Purchaser shall be wholly responsible for
complying with COBRA with respect to Continued Employees who have qualifying
events that occur after the Closing Date.
Section 4.7 Taxes. Except as set forth on Schedule 4.7 hereof, and
except as would not, individually or in the aggregate, have a Material Adverse
Effect, with respect to the Business:
(a) All Tax Returns relating to any Taxes required to be filed
in connection with the operation of the Business have been filed and are true,
complete and correct in all material respects, are in compliance in all material
respects with all legal requirements applicable thereto and have been properly
and timely filed. All Taxes required to be paid or withheld and deposited in
connection with the operations of the Business (other than Taxes not yet due and
payable) have been duly and timely paid or deposited by or on behalf of the
Company;
(b) The amounts so paid have been adequate to pay all Taxes of
any kind whatsoever in respect of the Business, including interest and
penalties, due and payable by or on behalf of Parent or the Company for all
periods covered by those Tax Returns;
(c) No deficiencies for any Taxes have been asserted or, to
the Knowledge of Parent or Company, threatened, and no audit of any such returns
is currently underway or, to the Knowledge of Parent or Company, threatened;
(d) Neither Parent nor the Company is not a party to any tax
sharing or similar agreement; and
(e) There are no outstanding agreements by or on behalf of
Parent or the Company for the extension of time for the assessment or payment of
any Taxes in respect of the Business.
Section 4.8 Intellectual Property.
(a) Schedule 4.8(a) hereto sets forth a complete and accurate
list of all of the following Intellectual Property owned by the Parent or
Company that is used primarily in the Business; (a) United States and foreign
registered patents and patent applications, indicating for each, as applicable,
the applicable jurisdiction, registration number (or application number), and
the date issued (or date filed); (b) United States and Foreign Trademark
registrations (including material Internet domain registrations) and
applications and material unregistered Trademarks, indicating for each, as
applicable, the applicable jurisdiction, registration number (or application
number), and date issued (or date filed); and (c) United States and foreign
copyright registrations and applications,
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indicating for each, the applicable jurisdiction, registration number (or
application number), and date issued (or date filed).
(b) Schedule 4.8(b) sets forth a complete and accurate list of
all license agreements granting to Parent or the Company any right to use any
Intellectual Property owned by a third party that is used in the Business other
than Intellectual Property that is commercially available on reasonable terms.
(c) Except as disclosed in Schedule 4.8(c) hereto:
(i) Parent and/or the Company have a valid right to
use, free and clear of Liens, Orders and arbitration awards, other than
Permitted Liens and Assumed Liabilities, all Intellectual Property that is used
in the Business;
(ii) Parent and/or the Company have taken reasonable
steps in accordance with standard industry practices to protect all Intellectual
Property owned by Parent or the Company or used in the Business, and have a
valid right to use all Intellectual Property that is owned by a third party and
used in the Business;
(iii) the use by Parent and/or the Company of
Intellectual Property that is used in the Business as currently conducted does
not infringe upon any rights owned or controlled by any third party;
(iv) there is no Litigation pending or, to Parent's
or the Company's Knowledge, threatened or any written claim from any Person
alleging that the use of the Intellectual Property by Parent or the Company in
the conduct of the Business infringes upon, violates or constitutes the
unauthorized use of the intellectual property rights of any third party;
(v) to Parent's or the Company's Knowledge, no third
party is misappropriating, infringing, diluting or violating any Intellectual
Property that is used in the Business and no such claims have been brought
against any third party by Parent or the Company;
(vi) the execution, delivery and performance by
Parent and the Company of this Agreement, and the consummation of the
transactions contemplated hereby, will not result in the loss or impairment of,
or give rise to any right of any third party to terminate, any of the rights of
Parent or the Company to any of the Intellectual Property that is used in the
Business, or require the consent of any Governmental Authority or third party in
respect of any such Intellectual Property;
(vii) the Software owned by Parent and/or the Company
that is used in the Business was either: (x) developed by employees of Parent or
the Company within the scope of their employment; (y) developed by independent
contractors who
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have assigned their rights to Parent or the Company pursuant to written
agreements; or (z) otherwise acquired by Parent or the Company from a third
party; and
(viii) all Trademarks included in the Acquired Assets
that are registered in the United States have been in continuous use by Parent
or the Company in the conduct of the Business. To Parent's or the Company's
Knowledge, there has been no prior use of such Trademarks by any third party
which would confer upon said third party superior rights in such Trademarks; and
such Trademarks registered in the United States have been continuously used in
the Business in the form appearing in, and in connection with the goods and
services listed in, their respective registration certificates (if any).
Section 4.9 Investment Representations.
(a) Parent is acquiring the Purchaser Shares for investment
purposes only, for its own account and not as a nominee or agent for any other
person or entity, and not with a view to or for resale in connection with any
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
(b) Parent has no contract, understanding, agreement or other
arrangement or commitment, formal or informal, with any person to sell, transfer
or pledge the Purchaser Shares, or any portion thereof, and has no present plans
to enter into any such contract, understanding, agreement arrangement or
commitment. If Parent sells, transfers, or pledges the Purchaser Shares in the
future, any such transaction shall be conducted in strict compliance with all
applicable federal and state securities laws.
(c) Parent is capable of evaluating the merits and risks of
its investment in Purchaser and has the capacity to protect its own interest in
connection with the transactions contemplated hereby.
(d) Parent is aware that the Purchaser Shares have not been
registered under the Securities Act or any state securities laws. Parent
acknowledges and agrees that the Purchaser Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available.
(e) Parent agrees that any instrument that may be issued to
evidence ownership of the Purchaser Shares will be imprinted with a conspicuous
legend stating that the Purchaser Shares have not been registered under the
Securities Act or any state securities laws, and referring to the restrictions
on the transferability and sale of the Purchased Securities.
Section 4.10 Parent has been advised or is aware of and understands the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resales of securities purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the availability of
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certain current public information about Purchaser, the resale occurring
following the required holding period under Rule 144 and the number of
securities being sold during any three month period not exceeding specified
limitations. Parent acknowledges and agrees that all sales, transfers and/or
pledges of the Purchaser Shares which occur following the Closing Date shall be
conducted only in strict compliance with all applicable federal and state
securities laws.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Parent and the
Company, subject to the exceptions set forth in the schedules attached hereto,
that:
Section 5.1 Organization. Purchaser is a duly organized corporation,
validly existing and in good standing under the Laws of the State of Delaware.
Section 5.2 Authorization of Agreement. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and each
other agreement or instrument required hereby to be executed and delivered by it
at the Closing (the "Purchaser Ancillary Agreements"), to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Purchaser of this
Agreement and each Purchaser Ancillary Agreement and the performance of its
obligations hereunder and thereunder have been duly and validly authorized by
all necessary corporate action on the part of Purchaser. This Agreement and the
Purchaser Ancillary Agreements have been duly executed and delivered by
Purchaser and, assuming due authorization, execution and delivery hereof by
Parent and the Company and each other party thereto other than Parent, the
Company and Purchaser, constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar
Laws now or hereafter in effect relating to creditors' rights generally or to
general principles of equity.
Section 5.3 Approvals. No notice to, consent or approval of, or filing
or registration with any Court or Governmental Authority is required under any
Law, Regulation or Order applicable to Purchaser to permit Purchaser to execute,
deliver or perform this Agreement or any Purchaser Ancillary Agreement.
Section 5.4 No Violation. Neither the execution and delivery by
Purchaser of this Agreement or any Purchaser Ancillary Agreement nor the
performance by Purchaser of its obligations hereunder or thereunder will (a)
violate or breach the terms of or cause a default under any Law, Regulation or
Order applicable to Purchaser, the certificate of incorporation or by-laws of
Purchaser, or any Contract to which Purchaser is a party or by which it or any
of its properties is bound or (b) with the passage of time, the giving of notice
or the taking of any action by a third party, have any of the effects set forth
in clause (a) of this Section.
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Section 5.5 Capitalization. The authorized capital stock of Purchaser
is as set forth in its certificate of incorporation and the outstanding capital
stock, options and other rights to acquire capital stock and shares reserved for
issuance and the ownership of the capital stock and options of Purchaser are as
set forth in Schedule 5.5 (all of which capital stock and issued options are
duly authorized, validly issued, fully paid and nonassessable and have been
issued in full compliance with all applicable securities laws).
Section 5.6 Issuance of Shares. The Purchaser Shares, when issued in
accordance with this Agreement, will be duly authorized, validly issued, fully
paid and non-assessable.
ARTICLE VI
COVENANTS AND ADDITIONAL AGREEMENTS
Section 6.1 Access and Information.
(a) Prior to the Closing, Parent and the Company will (i)
afford to Purchaser and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Representatives") full access at reasonable times upon reasonable prior notice
to the officers, employees, Properties, Contracts and books and records of the
Business, (ii) furnish promptly to Purchaser and its Representatives such
information concerning the officers, employees, Properties, Contracts, and books
and records of the Business (including financial, operating and other data and
information) as may be reasonably requested, from time to time, by or on behalf
of Purchaser.
(b) Following the Closing, each party will afford the other
party, its officers, directors, employees, accountants, consultants, legal
counsel and other representatives, during normal business hours, reasonable
access to its officers, employees, properties, contracts, books and records and
other data relating to the Business in its possession with respect to periods
prior to the Closing and the right to make copies and extracts therefrom, to the
extent that such access may be reasonably required by the requesting party in
connection with (i) the preparation of Tax Returns and financial statements,
(ii) the determination or enforcement of rights and obligations under this
Agreement and the Ancillary Agreements, (iii) compliance with the requirements
of any Governmental Authority, (iv) the determination or enforcement of the
rights and obligations of any Indemnified Party, or (v) in connection with any
actual or threatened Litigation. For a 6-year period after the Closing Date, no
Party will destroy or otherwise dispose of any such books, records and other
data unless such party first offers in writing to surrender such books, records
and other data to the other party and such other Party does not agree in writing
to take possession thereof during the 10-day period immediately after such offer
is made.
Section 6.2 Appropriate Action; Consents; Filings.
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(a) Parent and the Company and Purchaser will each use
reasonable efforts (i) to take, or to cause to be taken, all appropriate action,
and to do, or to cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements, (ii)
to obtain from any Governmental Authorities any Permits or Orders required to be
obtained by Purchaser or the Company in connection with the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, (iii) to make all necessary filings and
thereafter make all required submissions with respect to this Agreement under
applicable Law; provided that Purchaser and Parent and the Company will
cooperate with each other in connection with the making of all such filings,
including providing copies of all such documents to the nonfiling party and its
advisors prior to filings and, if requested, will accept all reasonable
additions, deletions or changes suggested in connection therewith, and (iv) to
furnish all information required for any application or other filing to be made
pursuant to any applicable Law or any applicable Regulations of any Governmental
Authority in connection with the transactions contemplated by this Agreement and
the Ancillary Agreements.
(b) If any claim, action, suit, investigation or other
proceeding by any Governmental Authority or other Person (other than one
involving a dispute between Purchaser, on the one hand, and Parent or the
Company, on the other hand) is commenced which questions the validity or
legality of this Agreement or any Ancillary Agreement or any of the transactions
contemplated hereby or thereby or seeks damages in connection therewith, then
the parties will cooperate and use all reasonable efforts to defend against such
claim, action, suit, investigation or proceeding and, if an injunction or other
order is issued in any such action, suit or other proceeding, to use all
reasonable efforts to have such injunction or other order lifted, and to use
reasonable efforts to cooperate regarding any other impediment to the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements.
(c) Each of Parent, the Company and Purchaser will give prompt
notice to the others of (i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement and the Ancillary
Agreements, (ii) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated hereby, (iii) any
Litigation relating to or involving or otherwise affecting Parent, the Company
or Purchaser that relates to the consummation of the transactions contemplated
hereby or by the Ancillary Agreements, and (iv) any event, condition or
development that has or is reasonably likely to have a Material Adverse Effect.
(d) Each of Parent, the Company and Purchaser will give any
notices to third parties, and use reasonable efforts to obtain any consents from
third parties required to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
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Section 6.3 Employees.
(a) On the Closing Date, Parent and the Company will take (or
will have taken prior to the Closing Date) all lawful steps necessary to
terminate all of the Continued Employees. On the Closing Date, Purchaser will
offer employment, on an at-will basis, to all of the Continued Employees.
Purchaser shall offer compensation and benefit packages to each Continued
Employee substantially equivalent (in the aggregate) to the compensation and
benefit packages of such Continued Employee as of the date of this Agreement,
and the Continued Employees shall be given credit for seniority or service
purposes under Purchaser's employee benefit plans for the period of their
employment by Parent or the Company.
(b) Nothing contained in this Agreement shall obligate
Purchaser to retain for any period of time any Continued Employee.
Section 6.4 Transfer Taxes; Expenses.
(a) Any sales taxes, real property transfer taxes or recording
fees or any other similar taxes or fees payable as a result of the sale of the
Acquired Assets or any other action contemplated by this Agreement or by any
Ancillary Agreement will be borne by the party on whom such taxes are imposed by
applicable law.
(b) Parent, the Company and Purchaser will cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereby and by the Ancillary
Agreements that are required or permitted to be filed on or before the Closing.
(c) Except as provided in Section 6.4(a) and this Section
6.4(c), each party will pay its own fees, costs and expenses incurred in
connection with this Agreement and the transaction contemplated hereby and by
the Ancillary Agreements, including the fees, costs and expenses of its
financial advisors, accountants and counsel.
Section 6.5 No Competition.
(a) For a period of three years following the Closing Date
(the "Non-Compete Term"), neither Parent nor the Company will directly or
indirectly, and will not permit any Covered Entity to, engage in the Business,
or acquire more than a 10% equity ownership interest in the Business, other than
as permitted by the License Agreement. A business or enterprise shall be deemed
to be "engaged in the Business" if more than 30% of the revenues of such
business or enterprise are generated by the Business. If a business or
enterprise is not engaged in the Business on the date Parent or the Company
becomes involved, but within twelve (12) months of the date of Parent or
Company's
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acquisition commences to engage in the Business, Parent and/or the Company shall
have six months from the date of such commencement to dispose of its interest in
such business or enterprise or cause such business or enterprise to cease to
engage in the Business. If Parent or the Company acquires more than a 10% equity
interest in a business or enterprise that is generating less than 30% of its
revenues from office productivity software, Parent or the Company shall have a
period of six months from the date of acquisition to cause such business or
enterprise to cease or dispose of such portion of its business. "Affiliate(s)"
means any corporation, company, partnership, joint venture, firm and/or other
entity which Controls, is Controlled by or is under common Control with Parent
or the Company. "Control" means (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or participating
shares entitled to vote for the election of directors; and (b) in the case of
non-corporate entities (such as limited liability companies, partnerships or
limited partnerships), either (x) direct or indirect ownership of at least fifty
percent (50%) of the equity interest or (y) the power to direct the management
and policies of the non-corporate entity. A "Covered Entity" shall mean every
Affiliate of Parent or the Company but shall not include any entity which
acquires Parent which immediately prior to such acquisition was engaged in the
Business. This covenant shall apply to each entity which is presently a Covered
Entity or which becomes a Covered Entity subsequent to the date of this
Agreement.
(b) This covenant shall apply to the entirety of the world
including, with respect to California, each of the counties in the State of
California listed on Schedule 6.5 hereto. The parties have agreed that it is
reasonable to have the provisions of this Section 6.5 apply to the entirety of
the world for various reasons, including, without limitation, that Parent or the
Company currently sells and distributes the products of the Business worldwide
and after the closing of the transactions contemplated by this Agreement,
Purchaser shall continue to sell and distribute the products of the Business in
the same manner.
Section 6.6 No Solicitation. During the one-year period following the
Closing Date, (i) neither Parent nor the Company will directly or indirectly,
hire, solicit, take away, or attempt to hire, solicit or take away (either on
behalf of Parent or the Company, or any other person or entity) any person who
is then an employee of Purchaser, and (ii) Purchaser will not directly or
indirectly, hire, solicit, take away, or attempt to hire, solicit or take away
(either on behalf of Purchaser, or any other person or entity) any person who is
then an employee of Parent.
Section 6.7 Confidentiality. From and after the date hereof, Parent and
Company shall treat in confidence all non-public documents, materials and other
information regarding the Business. However, nothing contained herein shall
prohibit Parent and Company from (i) using such documents, materials and other
information in connection with any action or proceeding brought or any claim
asserted by any party hereto in respect of any breach of any representation,
warranty or covenant made in or
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pursuant to this Agreement, or (ii) supplying or filing such documents,
materials or other information to or with any Governmental Entity or other
Person which Parent and Company deems reasonably necessary in connection with
the obtaining of any consent, waiver, amendment, modification, approval,
authorization, permit or license which may be necessary to effectuate this
Agreement and to consummate the transactions contemplated hereby.
Section 6.8 Reasonable Efforts and Further Assurances. Subject to the
terms and conditions hereof, the parties will use reasonable efforts to
effectuate the transactions contemplated hereby and by the Ancillary Agreements,
and to fulfill and cause to be fulfilled the conditions to Closing under this
Agreement. Subject to the terms and conditions hereof, each party hereto, at the
reasonable request of the other party, will execute and deliver such other
instruments and do and perform such other acts and things as may be reasonably
necessary to consummate the transactions contemplated hereby and by the
Ancillary Agreements.
Section 6.9 Post-Closing Cooperation. Following the Closing, each party
will deliver promptly to the other party all mail, checks and other documents
received by such party which relate to any of the business conducted by such
other party or its Affiliates after the Closing and Parent shall use
commercially reasonable efforts to obtain any consents set forth on Schedule
4.2(b) which are not obtained prior to the Closing Date.
Section 6.10 Notices. From and after the date of this Agreement until
the Closing Date, each party hereto will promptly notify the other parties of
(i) the occurrence or nonoccurrence of any event, condition or development the
occurrence or nonoccurrence of which would be likely to materially adversely
affect the ability of such party to consummate the transactions contemplated
hereby and by the Ancillary Agreements and (ii) the failure of such party to
comply with any covenant or agreement to be complied with by it pursuant to this
Agreement which would be likely to result in any condition to the obligations of
such party to effect the transactions contemplated by this Agreement and by the
Ancillary Agreements not to be satisfied.
Section 6.11 Cessation of Use of Name. From and after the Closing Date,
Purchaser shall have the right to use the name "VistaSource" or any derivative
thereof. In such regard, on the Closing Date Company shall change its name from
VistaSource to an unrelated name and Company and Parent shall cease using the
name "VistaSource" or any variation thereof in any manner.
Section 6.12 Conduct of Business. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing Date, Parent and Company shall conduct the Business in
the ordinary course of business consistent with past practices, including,
without limitation, the timely payment of liabilities.
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ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the transactions
contemplated hereby and by the Ancillary Agreements are subject to the
satisfaction at or prior to the Closing Date of the following conditions, any or
all of which may be waived by the party entitled to the benefit thereof, in
whole or in part, to the extent permitted by applicable Law:
(a) No Order. No Court or Governmental Authority having
jurisdiction over Parent, the Company or Purchaser will have enacted, issued,
promulgated, enforced or entered any Law, Regulation or Order (whether
temporary, preliminary or permanent) which is then in effect and which has the
effect of making the transactions contemplated hereby or by any Ancillary
Agreement illegal or otherwise prohibiting consummation of the transactions
contemplated hereby or by any Ancillary Agreement substantially on the terms
contemplated by this Agreement.
(b) Post-Closing Agreements. Parent and Purchaser shall have
executed and delivered (i) a Transition Services Agreement substantially in the
form attached hereto as Exhibit A with the Schedule thereto to be completed by
the parties thereto in good faith prior to the Closing Date and (ii) the License
Agreement substantially in the form attached hereto as Exhibit B.
(c) Consents and Approvals. The consents and approvals
described on Schedule 7.1(c) shall have been received.
(d) Shareholders Agreement. Parent and Purchaser's other
shareholders shall have entered into a Shareholders Agreement, in form and
substance reasonably satisfactory to each such party, which shall provide for,
among other things, that Purchaser shall not redeem or repurchase any of its
outstanding common stock or issue any of its securities which in either case
would cause Parent to own more or less than 19% of the issued and outstanding
common stock of Purchaser.
Section 7.2 Additional Conditions to Obligations of Purchaser. The
obligations of Purchaser to effect the transactions contemplated hereby and by
the Ancillary Agreements are subject to the satisfaction at or prior to the
Closing Date of the following additional conditions, any or all of which may be
waived by Purchaser, in whole or in part, to the extent permitted by applicable
Law:
(a) Closing Date Balance Sheet. Purchaser shall have reviewed
the Closing Date Balance Sheet and shall be satisfied, in its reasonable
discretion, that such balance sheet accurately reflects the financial condition
of the Business as of such date.
(b) Representations and Warranties. Each of the
representations and warranties of Parent and the Company contained in this
Agreement will be true and
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correct as of the date hereof and at and as of the Closing Date as if made at
and as of such date, except (i) that, to the extent such representations and
warranties address matters only as of a particular date, such representations
and warranties will, to such extent, be true and correct at and as of such
particular date as if made at and as of such particular date and (ii) such
failures to be true and correct that do not in the aggregate constitute a
Material Adverse Effect (it being understood that, for purposes of determining
the accuracy of such representations and warranties in connection with this
clause (ii), all "Material Adverse Effect" qualifications and other
qualifications based on the word "material" or similar phrases contained in such
representations and warranties shall be disregarded).
(c) Agreements and Covenants. The Company and Parent will have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or prior to
the Closing, and Purchaser will have received certificates of executive officers
of each of Parent the Company, dated as of the Closing Date, to such effect.
(d) Delivery of Acquired Assets. Parent and the Company shall
have delivered to Purchaser the following:
(i) possession of all of the Acquired Assets by
turning over control of all Acquired Assets to Purchaser;
(ii) an Assignment and Assumption and Xxxx of Sale,
executed by Parent and the Company, in form and substance reasonably
satisfactory to Purchaser and Parent;
(iii) a Patent, Copyright and Trademark Assignment,
executed by Parent and the Company, in form and substance reasonably
satisfactory to Purchaser and Parent;
(iv) a complete, current and accurate list of all
distributor agreements, valued-added reseller agreements and software
development agreements of the Business;
(v) (a) a reasonable number of copies of those
documents and other materials in physical form relating to the software,
including without limitation source code, object code versions, libraries,
databases, updates, revisions, enhancements, modifications, bug fixes, program
listings, documentation, specifications, software diagnosis reports, laboratory
notebooks, flow charts, notes, manuals and analyses relating to any Software
included within the Acquired Assets, as such documents and material exist on the
Closing Date, and (b) Seller may retain and use copies of the Software as are
licensed back to Parent pursuant to the License Agreement attached hereto as
Exhibit B.
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(e) other documents reasonably required to be delivered by
Parent and the Company to effect the transactions contemplated hereby and by the
Ancillary Agreements, in form and substance reasonably satisfactory to Purchaser
and Parent.
(f) No Material Adverse Change. Purchaser shall be satisfied
in its reasonable discretion that there has been no material adverse change in
the business, operations, condition (financial or otherwise) or prospects of
Business since December 31, 2000.
Section 7.3 Additional Conditions to Obligations of Parent and the
Company. The obligations of Parent and the Company to effect the transactions
contemplated hereby and by the Ancillary Agreements are subject to the
satisfaction at or prior to the Closing Date of the following additional
conditions, any or all of which may be waived by Parent, in whole or in part, to
the extent permitted by applicable Law:
(a) Delivery of Purchase Price. Purchaser shall have delivered
the Purchase Price set forth in Section 2.5(a) hereof.
(b) Agreements and Covenants. Purchaser will have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the
Closing, and Parent and the Company will have received a certificate of an
executive officer of Purchaser, dated as of the Closing Date, to such effect.
(c) Representations and Warranties. Each of the
representations and warranties of Purchaser contained in this Agreement will be
true and correct in all material respects as of the date hereof and at and as of
the Closing Date as if made at and as of such date, except that, to the extent
such representations and warranties address matters only as of a particular
date, such representations and warranties will, to such extent, be true and
correct as of the date hereof and at and as of such particular date as if made
at and as of such particular date.
ARTICLE VIII
TERMINATION, AMENDMENT AND EXPENSES
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual consent of the parties hereto;
(b) by Purchaser, upon a material breach by Parent or the
Company of any covenant or agreement set forth in this Agreement, or if any
representation or warranty of Parent or the Company hereunder is or becomes
untrue or inaccurate in any material respect, in any case such that the
conditions set forth in Section 7.2(c) or Section
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7.2(d) would not be satisfied, unless in any such case such breach or inaccuracy
is cured within seven days after written notice thereof from Purchaser;
(c) by Parent or the Company, upon material breach by
Purchaser of any covenant or agreement set forth in this Agreement, or if any
representation or warranty of Purchaser is or becomes untrue or inaccurate in
any material respect, in any case such that the conditions set forth in Section
7.3(b) or Section 7.3(c) would not be satisfied, unless in any such case such
breach or inaccuracy is cured within seven days after written notice thereof
from Parent;
(d) any party, if there is any Order of a Court or
Governmental Authority having jurisdiction over a party hereto which is final
and nonappealable permanently enjoining, restraining or prohibiting the
consummation of the transaction contemplated hereby or by the Ancillary
Agreements; and
(e) by any party, if the transaction contemplated hereby and
by the Ancillary Agreements are not consummated before March 31, 2001 (the
"Termination Date"); provided, however, the right to terminate this Agreement
under this Section 8.1(e) is not available to any party whose action or failure
to fulfill any obligation under this Agreement has been a cause of, or resulted
in, the failure of the Closing to occur on or before the Termination Date.
Section 8.2 Effect of Termination. Except as provided in this Section
8.2 and the Ancillary Agreements, if termination of this Agreement occurs
pursuant to Section 8.1, this Agreement will forthwith become void, and there
will be no liability on the part of Purchaser, Parent or the Company or any of
their respective officers, directors, employees, shareholders, representatives
or agents to the other and all rights and obligations of any party will cease,
except that nothing herein will relieve any party from liability for any breach,
prior to termination of this Agreement in accordance with its terms, of any
covenant or agreement contained in this Agreement.
Section 8.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
Section 8.4 Waiver. At any time prior to the Closing, any party may (a)
extend the time for the performance of any of the obligations or other acts of
the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance by the other party with any of the
agreements or conditions contained herein. Any such extension or waiver will be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
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ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification Obligations of Parent and the Company.
Parent and the Company will indemnify, defend and hold harmless Purchaser and
its Affiliates, each of their respective officers, directors, employees, agents,
shareholders, representatives and agents and each of the successors and assigns
of any of the foregoing (collectively, the "Purchaser Indemnified Parties")
from, against and in respect of any and all claims, liabilities, obligations,
losses, costs, expenses, penalties, fines and judgments (at equity or at law)
and damages whenever arising or incurred (including amounts paid in settlement,
costs of investigation and reasonable attorneys' fees and expenses) arising out
of or relating to:
(a) any breach or inaccuracy of any representation or warranty
made by Parent or the Company in this Agreement or any Ancillary Agreement;
(b) any breach of any covenant, agreement or undertaking made
by Parent or the Company in this Agreement or any Ancillary Agreement; and
(c) any Excluded Liability.
The claims, liabilities, obligations, losses, costs, expenses, penalties, fines
and damages of the Purchaser Indemnified Parties described in this Section 9.1
as to which the Purchaser Indemnified Parties are entitled to indemnification
under this Section 9.1 are hereinafter collectively referred to as "Purchaser
Losses."
(d) Liability Limits. Notwithstanding anything to the contrary
set forth herein, (i) Parent and the Company shall not be liable for any
Purchaser Losses in excess of Cash Portion of the Purchase Price paid to Parent
and the Company pursuant to Section 2.5(a)(i) hereof, as adjusted pursuant to
Section 2.5(c), (ii) Parent and the Company shall not be liable for any
Purchaser Losses unless and until the aggregate amount of the Purchaser Losses
exceeds $50,000 (at which point Parent and the Company shall become liable for
Purchaser Losses in excess of such $50,000), and (iii) the amount of any
Purchaser Losses shall be reduced by any insurance proceeds which a Purchaser
Indemnified Party has received with respect such Loss, it being agreed that each
Purchaser Indemnified Party shall use commercially reasonable efforts to assert
any insurance claims to which it is entitled; provided, however, that the
limitations in clause (ii) shall not apply to any breach or inaccuracy of any
representation or warranting in Sections 4.2, 4.3, 4.7 and 4.9 or any breach or
covenant contained in Sections 2.5, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9 and 6.11 and
Article IX or any fraud or intentional misrepresentation of the parties. Subject
to Section 10.12, the rights of the Purchaser Indemnified Parties under this
Article IX shall be the exclusive remedy of such parties with respect to
Purchaser Losses or any other matter relating to this Agreement or the Ancillary
Agreements.
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Section 9.2 Indemnification Procedure.
(a) Upon becoming aware of any action, claim or proceeding, or
a threatened action, claim or proceeding, by a third party (a "Third Party
Claim") with respect to which a Purchaser Indemnified Party (hereinafter
referred to as an "Indemnified Party") may be entitled to make an
indemnification claim pursuant to Section 9.1 against the Parent or Company for
any Purchaser Losses, Indemnified Party must notify Company and Parent (the
"Indemnifying Party"), as promptly as practicable, but in any event within 10
days of the Indemnified Party's becoming aware of such Third Party Claim;
provided, however, that the failure of the Indemnified Party to so notify the
Indemnifying Party will not relieve the Indemnifying Party from liability for
such Third Party Claim arising under Section 9.1 unless the failure to so notify
the Indemnifying Party materially prejudices the ability of the Indemnifying
Party to assert defenses or counterclaims available to the Indemnified Party or
the Indemnifying Party with respect to such Third Party Claim.
(b) The Indemnifying Party will have the right, upon written
notice delivered to the Indemnified Party within 20 days thereafter, to defend
such Third Party Claim by all appropriate proceedings at its sole cost and
expense. If, however, the Indemnifying Party declines or fails to assume the
defense of such Third Party Claim within such 20 day period, then the
Indemnified Party may defend the Third Party Claim by all appropriate
proceedings, at the cost and expense of the Indemnifying Party, and may
vigorously and diligently prosecute such Third Party Claim to a final
conclusion. The party defending such Third Party Claim will have full control of
such defense, including the employment of counsel; provided, however, that if
requested by the party defending such Third Party Claim, the other party will
cooperate with the party defending such Third Party Claim.
(c) In any Third Party Claim with respect to which
indemnification is sought under Section 9.1, the party that is not defending
such Third Party Claim may participate in such Third Party Claim and retain its
own counsel at such party's own expense; provided, however, if there is a
conflict of interest between the Indemnified Party and the Indemnifying Party
with respect to such Third Party Claim such party may retain its own counsel at
the expense of the other party. The party defending the Third Party Claim will
at all times use reasonable efforts to keep the other party reasonably apprised
of the status of the defense of such Third Party Claim and to cooperate in the
defense of such Third Party Claim.
(d) The Indemnifying Party may not settle or compromise any
Third Party Claim or consent to the entry of any judgment with respect to such
Third Party Claim for which indemnification is being sought hereunder for
anything other than money damages without the prior written consent of the
Indemnified Party, which consent will not be unreasonably withheld. The
Indemnified Party may not settle or compromise any Third Party Claim or consent
to the entry of any judgment with respect
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to such Third Party Claim for which indemnification is being sought hereunder
without the prior written consent of the Indemnifying Party, which consent will
not be unreasonably withheld.
(e) If an Indemnified Party claims a right to be indemnified
pursuant to this Agreement for Purchaser Losses that do not arise from a Third
Party Claim, then such Indemnified Party will promptly send written notice of
such claim to the Indemnifying Party. Such notice will specify the basis for
such claim in reasonable detail and be accompanied by such other information as
may be necessary for the Indemnifying Party to assess the merits and amount of
such claim. As promptly as possible after the Indemnified Party has given such
notice, the Indemnified Party and the Indemnifying Party will establish the
merits and amount of such claim (by mutual agreement, litigation, arbitration or
otherwise) and, within five (5) Business Days of the final determination of the
merits and amount of such claim, the Indemnifying Party will pay to the
Indemnified Party in immediately available funds an amount equal to such claim
as determined hereunder.
(f) Any indemnification payments made pursuant to this Article
IX shall be treated by the parties, to the extent permitted by applicable law,
as an adjustment to the Purchase Price for tax purposes.
Section 9.3 Claims Period. For purposes of this Agreement, a "Claims
Period" is the period after the earlier of the Closing Date or the date of any
termination of this Agreement pursuant to Article VIII during which a claim for
indemnification may be asserted under this Agreement by an Indemnified Party.
The Claims Periods under this Agreement will terminate as follows:
(a) with respect to any breach or inaccuracy of any
representation or warranty in Sections 4.2, 4.3, 4.7 and 4.9 or any breach of
any agreement or covenant contained in Sections 2.5, 6.4, 6.5, 6.6, 6.7, 6.8,
6.9 and 6.11 and Article IX the Claims Period will continue indefinitely, except
as limited by law (including by applicable statutes of limitation); and
(b) with respect to all other Purchaser Losses (other than
Purchaser Losses described in clause (a) above) arising under this Agreement,
the Claims Period will terminate on the date that is one year after the Closing
Date.
Notwithstanding the foregoing, if prior to the close of
business on the last day of the applicable Claims Period, an Indemnifying Party
has been properly notified as provided hereunder of a claim for indemnity
hereunder and such claim has not been finally resolved or disposed of at such
date, such claim will continue to survive and will remain a basis for indemnity
hereunder until such claim is finally resolved or disposed of in accordance with
the terms hereof.
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ARTICLE X
GENERAL PROVISIONS
Section 10.1 Interpretation.
(a) Whenever the words "include", "includes" or "including"
are used in this Agreement they are deemed to be followed by the words "without
limitation."
(b) The words "hereof", "hereby", "herein" and "herewith" and
words of similar import, unless otherwise stated, are construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit, annex and schedule references are to the
articles, sections, paragraphs, exhibits, annexes and schedules of this
Agreement unless otherwise specified.
(c) The defined terms in this Agreement apply equally to both
the singular and plural forms of the terms defined, and words denoting any
gender include all genders. Where a word or phrase is defined herein, each of
its other grammatical forms has a corresponding meaning.
(d) Unless the context otherwise requires, any reference to
any agreement, other instrument, statute or regulation is to such agreement,
other instrument, statute or regulation as modified, amended or supplemented,
from time to time (and, in the case of a statute or regulation, to any successor
provision).
(e) The parties have participated jointly in the negotiation
and drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 10.2 Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the other parties will be in
writing and will be deemed given when delivered personally, upon receipt of a
transmission confirmation (with a confirming copy sent by overnight courier) if
sent by facsimile or like transmission, and on the next Business Day when sent
by Federal Express, United Parcel Service, Express Mail or other reputable
overnight courier, as follows:
(a) If to Purchaser, to:
Real-Time International, Inc.
c/o Parallax Capital Partners, LLC
00000 Xxx Xxxx Xxxxx, Xxxxx X0
Xxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
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With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
(b) If to Parent or the Company, to:
Applix, Inc.
VistaSource Incorporated
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile No.: 000-000-0000
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or to such other persons or addresses as may be designated in writing by the
party to receive such notice. Nothing in this section is deemed to constitute
consent to the manner and address for service of process in connection with any
legal proceeding (including Litigation arising out of or in connection with this
Agreement), which service will be effected as required by applicable Law.
Section 10.3 Headings. The table of contents and the headings contained
in this Agreement are for reference purposes only and will not affect in any way
the meaning or interpretation of this Agreement.
Section 10.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, then all other conditions and provisions of this Agreement
will nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
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Section 10.5 Entire Agreement. This Agreement and the Ancillary
Agreements constitute the entire agreement of the Parties, and supersede all
prior agreements, representations and undertakings, both written and oral,
between the parties, with respect to the subject matter hereof (and thereof).
Section 10.6 Assignment. No Party may, directly or indirectly, assign
this Agreement or any of its rights or obligations hereunder, by operation of
law or otherwise, without the prior written consent of the other parties hereto,
except Purchaser may assign its rights hereunder to an affiliate which is
controlled directly or indirectly by Parallax Capital Partners, LLC. Any
attempted assignment in violation of this Section 10.6 will be void and of no
effect.
Section 10.7 Parties in Interest. This Agreement will be binding upon
and inure solely to the benefit of each of the parties and their respective
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or will confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement other
than the Purchaser Indemnified Parties to the extent provided in Article IX.
Section 10.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party in the exercise of any right hereunder
will impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty, agreement or covenant herein, nor
will any single or partial exercise of any such right preclude other or further
exercise thereof or of any other right.
Section 10.9 Governing Law. This Agreement and the Ancillary
Agreements, instruments and documents contemplated hereby will be governed by
and construed in accordance with the Laws of the State of California.
Section 10.10 Counterparts. This Agreement may be executed in multiple
counterparts, and by the different Parties hereto in separate counterparts, each
of which when executed will be deemed to be an original but all of which taken
together will constitute one and the same agreement.
Section 10.11 Supplemental Disclosure Schedule. No later than five (5)
business days prior to the Closing, Parent and the Company may deliver
amendments or supplements to the Disclosure Schedules (including additions of
new sections thereof) for review and either approval thereof or rejection
thereof by Purchaser, which approval will not be unreasonably withheld or
delayed by Purchaser. To the extent that Purchaser approves any such amendment
or supplement to the Disclosure Schedules, the indemnification provisions set
forth in Article IX will not apply to any Purchaser Loss arising out of, based
upon or resulting from any matters that have been disclosed in such amendments
or supplements to the Disclosure Schedules.
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Section 10.12 Specific Performance. The parties acknowledge that money
damages would not be a sufficient remedy for any breach by any Party of its
obligation to proceed with the Closing under this Agreement or comply with the
covenants contained herein and that irreparable harm would result if this
Agreement were not specifically enforced. Therefore, the rights and obligations
of the parties under this Agreement may be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and appropriate
injunctive relief may be applied for and granted in connection therewith. A
party's right to specific performance is in addition to all other legal or
equitable remedies available to such Party.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Asset Purchase Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
REAL-TIME INTERNATIONAL, INC.,
a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
APPLIX, INC.,
a Massachusetts corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
VISTASOURCE, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
VERITEAM, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
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00
XXXXXXXXXXX XXXXXX
By: _________________________________
Name: _______________________________
Title: ______________________________
VISTASOURCE GMPH
By: _________________________________
Name: _______________________________
Title: ______________________________
VISTASOURCE UK, LTD.
By: _________________________________
Name: _______________________________
Title: ______________________________
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
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SCHEDULE 5.5
810,000 shares of Common Stock of Purchaser shall be issued to Parallax Capital
Partners, LLC on the Closing Date
190,000 shares of Common Stock of Purchaser shall be issued to Parent on the
Closing Date
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