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EXHIBIT 10.33
SHARE PURCHASE AGREEMENT
BETWEEN
AREMISSOFT (EE.ME.A) LTD
A Cyprus Company
AND
DENON INTERNATIONAL Ltd
A United Arab Emirates Company
AND
Company Shareholders
December 28, 2000
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made and entered into as of
December 28, 2000, by and between AremisSoft (EE.ME.A) Ltd, a Cyprus Company and
Denon International Ltd , a corporation organized under the laws of United Arab
Emirates (the "Company") and the shareholders of the Company listed on the
signature page hereof (collectively, the "Company Shareholders).
W I T N E S S E T H:
A. The Company is the legal successor to all the right, title and
interest in Denon International Ltd (hereinafter referred to as the
"Acquired Business")
B. The Company Shareholders are the owners of all the outstanding shares
of the Capital Stock of the Company (the "Shares"); and
C. AremisSoft (EE.ME.A) Ltd., desires to acquire the Acquired Businesses
by purchasing all of the issued and outstanding Shares of the Company
from the Company Shareholders, on the terms and subject to the
conditions set forth herein;
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, AremisSoft (EE.ME.A)
Ltd., the Company and the Company Shareholders agree as follows:
1. Purchase and Sale of the Shares.
1.1 Agreements to Sell and Purchase; Closing. Subject to the terms and
conditions of this Agreement, the Company Shareholders agree to sell to one
hundred percent (100%) of the issued and outstanding Shares of Capital Stock of
the Company, and AremisSoft (EE.ME.A) Ltd. agrees to purchase such Shares from
the Company Shareholders for the aggregate purchase price set forth in Paragraph
1.2. The exact number of Shares held by each of the Company Shareholders is set
forth below:
Xxxxxxx Swovoda 2,999 Shares
X.X. Xxxxxxxxx 1 Share
------------
3,000 Shares
============
1.2 Purchase Price.
(a) Subject to the terms and conditions set forth in this
Agreement, AremisSoft (EE.ME.A) Ltd.shall pay to the Company Shareholders an
aggregate purchase price for all of the issued and outstanding Shares equal to
Seven Million Three Hundred Forty Thousand United States Dollars ($7,340,000) as
the purchase price (the "Purchase Price") for the Shares in the following
amounts to the Company Shareholders:
Xxxxxxx Swovoda $7,337,553
X.X.Xxxxxxxxx $ 2,447
----------
TOTAL $7,340,000
==========
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(b) Hundred percent (100%) of the Purchase Price shall be paid at
the Closing pursuant to the Clause 1.2.(a) to the Company Shareholders.
1.3. The Closing; Closing Date.
1.3.1. Time shall be of the essence for the obligations of
AremisSoft (EE.ME.A) Ltd and the Company Shareholders under this Agreement. The
purchase and sale of the Shares shall take place at a closing (the "Closing") to
be held at the offices of AremisSoft (EE.ME.A) Ltd., 000, Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx on December 28, 2000, or on such other date and time as may be
agreed upon in writing by the Company and the Company Shareholders (the "Closing
Date").
1.3.2. At the Closing, each of the Company Shareholder shall
deliver to AremisSoft (EE.ME.A) Ltd (i) a certificate or certificates
representing the number of shares of Capital Stock set forth beside such Company
Shareholder's name in Section 1.1 above, (ii) stock powers executed in favor of
AremisSoft (EE.ME.A) Ltd (or in favor of such Affiliate of AremisSoft (EE.ME.A)
Ltd. as AremisSoft (EE.ME.A) Ltd. may in writing at the Closing direct)
sufficient to validly transfer title to the Shares, and ownership thereof, to
AremisSoft (EE.ME.A) Ltd., (iii) a Certificate from the chief executive of the
Company stating that all of the representations and warranties of the Company
provided for in this Agreement are true and correct as of the Closing Date and
that all conditions to the Company's performance under this Agreement have been
satisfied or waived as of the Closing Date; (iv) a duly executed Confidentiality
Agreement as provided for in Section 9 of this Agreement and (v) a Certificate
from each of the Company Shareholders stating that all of the representations
and warranties of the Company Shareholders provided for in this Agreement are
true and Correct as of the Closing Date and that all conditions to the Company
Shareholder's performance under this Agreement have been satisfied or waived as
of the Closing Date.
1.3.3. At the Closing, AremisSoft (EE.ME.A) Ltd. shall deliver to
the Company Shareholders 7,340,000 US Dollars effective Closing Date (ii) a
Certificate from the chief executive of AremisSoft (EE.ME.A) Ltd. stating that
all of the representations and warranties of AremisSoft (EE.ME.A) Ltd. provided
for in this Agreement are true and correct as of the Closing Date and that all
conditions to AremisSoft (EE.ME.A) Ltd. performance under this Agreement have
been satisfied or waived as of the Closing Date.
1.3.4. At the Closing, for each of the employees set forth on
Schedule 1.1.4, the Company shall deliver fully executed employment agreements
on terms and conditions acceptable to AremisSoft (EE.ME.A) Ltd. and in
substantially similar form to the form of employment agreement attached to the
Closing Memorandum as an exhibit. The salary and benefits of the employees set
forth in Schedule 1.1.4 shall be no greater than the salary and benefits
received by the employees during the year 2000, unless otherwise agreed to by
AremisSoft (EE.ME.A) Ltd.
2. Representations and Warranties of the Company Shareholders. Each of the
Company Shareholders represents and warrants to AremisSoft (EE.ME.A) Ltd. that,
as applied solely itself, all of the following representations and warranties in
this Section 2 are true and correct as of the date of this Agreement, and will
be true and correct, as amended or supplemented pursuant to this Agreement, on
and immediately prior to the Closing Date:
2.1. Ownership and Status of the Company Shares. The Company
Shareholder is the record and beneficial owner (or, if the Company Shareholder
is a trust or estate or a deceased natural person, the legal owner) of the
number of Company sets opposite the Company Shareholder's name in Section 1.1
above, free and clear of all liens, encumbrances, and charges except as set
forth in the Disclosure Memorandum all of which shall be released on or before
the Closing Date.
2.2 Power and Authority of the Company Shareholder. The Company
Shareholder has the full power, legal capacity and authority to execute and
deliver this Agreement and any other document to which the Company Shareholder
is a party and to perform the Company Shareholder's obligation
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under this Agreement and in all other documents to which the Company Shareholder
is a party. This Agreement constitutes the legal, valid and binding obligation
of the Company Shareholder, enforceable against the Company Shareholder in
accordance with its terms, except as that enforceability may be (i) limited by
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and (ii) subject
to general principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law). If the Company Shareholder is
an Entity, the Company Shareholder has obtained, in accordance with all
applicable Laws and its Charter Documents, all approvals and the taking of all
actions necessary for the authorization, execution, delivery and performance by
the Company Shareholder of this Agreement and any other document to which the
Company Shareholder is a party. If the Company Shareholder is acting otherwise
than in an individual capacity (whether as an executor or a guardian or in any
other fiduciary or representative capacity), all actions on the part of the
Company Shareholder and all other Persons (including any court) necessary for
the authorization, execution, delivery and performance by the Company
Shareholder of this Agreement and the any other documents to which the Company
Shareholder is a party have been duly taken.
2.3 No Conflicts or Litigation. The Company Shareholder's execution,
delivery and performance in accordance with the respective terms of this
Agreement and any other document to which the Company Shareholder is a party do
not and will not (i) violate or conflict with any Laws, (ii) breach or
constitute a default under (A) any agreement or instrument to which the Company
Shareholder is a party or by which the Company Shareholder or any Company Shares
the Company Shareholder owns is bound, or (B) any Company Contract (except as
the Disclosure Memorandum sets forth), (iii) result in the creation or
imposition of, or afford any Person the right to obtain any Lien upon any
Company Shares the Company Shareholder owns (or upon any revenues, income or
profits of the Company Shareholder therefrom), or (iv) if the Company
Shareholder is an Entity, violate the Company Shareholder's Charter Documents.
No Litigation is pending or threatened to which the Company Shareholder is or
may become a party which (i) questions or involves the validity or
enforceability of any of the Company Shareholders' obligations under this
Agreement or other documents under this Agreement, or (ii) seeks (or reasonably
may be expected to seek) (A) to prevent or delay the consummation by the Company
Shareholder of the transactions this Agreement contemplates, or (B) damages in
connection with any such consummation.
2.4 No Brokers. Except as the Disclosure Memorandum sets forth, the
Company Shareholder has not, directly or indirectly, in connection with this
Agreement or the transactions contemplated hereby (i) employed any broker,
finder or agent, or (ii) agreed to pay or incurred any obligation to pay any
broker's or finder's fee, any sales commission or any similar fee or
compensation.
2.5 Preemptive and Other Rights; Waiver. The Company Shareholder
either (i) does not own or otherwise have any statutory or contractual
preemptive or other right of any kind (including any right of first offer or
refusal) to acquire any Company Shares, or (ii) hereby irrevocably waives each
right of that type the Company Shareholder does own or otherwise has.
2.6 Control of Related Businesses. Except as the Disclosure Memorandum
sets forth, the Company Shareholder is not, alone or with one or more other
Persons, the controlling Affiliate of any Entity, business or trade (other than
the Company or any Entity the Company includes, if the Company Shareholder is an
Affiliate of any thereof) that (i) is engaged in any line of business which is
the same as or similar to any line of business in which the Company or any
Entity the Company includes is engaged, or (ii) is, or has within the three (3)
year period ending on the date of this Agreement, engaged in any transaction
with an Entity the Company includes, except for transactions in the ordinary
course of business of that Entity.
3.0 Representations and Warranties of the Company Shareholders. The Company
and each Company Shareholder jointly and severally represent and warrant to, and
agree with, AremisSoft (EE.ME.A) Ltd.that all of the following representations
and warranties in this Section 3 of this Agreement are as of the date of this
Agreement, and will be, on and immediately prior to the Closing Date, true and
correct.
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3.1 Organization, Authority and Qualification.
3.1.1 The Company is duly organized and validly existing under
the laws UAE. The Company and each of the Company Subsidiaries has full
corporate power and authority and is entitled to own or lease its properties and
to carry on its business as and in all places where such business is conducted
and such properties are owned or leased. The Company and the Company
Subsidiaries are qualified as a foreign corporation in all jurisdictions it is
required to register as such. The Company Shareholders have attached true,
correct and complete copies of the Charter Documents and bylaws of the Company
and each of the Company Subsidiaries, as amended to date, to the Disclosure
Memorandum. The Company Shareholders have attached to the Disclosure Memorandum
true, correct and complete copies of: (i) the minutes and other similar records
of meetings of the shareholders of the Company and its board of directors, which
contain all records of meetings and actions taken in lieu thereof by the
Company's shareholders and show all corporate actions taken by the Company's
shareholders, the Company's Directors, or any committees thereof, and (ii) the
share transfer records, which fully reflect all issuances, transfers and
redemptions of the Company's shares since the date of its incorporation. The
Company Shareholders have attached to the Disclosure Memorandum true, correct
and complete copies of: (i) the minutes and other similar records of meetings of
the shareholders of the Acquired Businesses and their respective board of
directors, which contain all records of meetings and actions taken in lieu
thereof by the Acquired Businesses' shareholders and show all corporate actions
taken by the Acquired Businesses' shareholders, the Acquired Businesses'
Directors, or any committees thereof, and (ii) the share transfer records, which
fully reflect all issuances, transfers and redemptions of the Acquired
Businesses shares since the date of their respective incorporation.
3.1.2 The Company has the full corporate power and authority to
execute, deliver and perform this Agreement and any other documents hereunder to
which it is a party. . This Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as that enforceability may be (i) limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (ii) subject to general
principles of equity (regardless of whether that enforceability is considered in
a proceeding in equity or at law).
3.2 Capitalization of the Company; Ownership of Shares; Subsidiaries.
3.2.1 The authorized equity capital of the Company consists of
3,000 equity shares of AED 1000 per share as of the Closing Date.
3.2.2 All of the issued and outstanding shares of the Company are
owned of record and beneficially by the Company Shareholders as set forth in
Section 1.1 of this Agreement.
3.2.3 All of the issued and outstanding Shares of the Company are
duly authorized, validly issued, fully paid and non-assessable and were
authorized, offered, issued and sold in accordance with all applicable
securities and other Laws and all rights of the shareholders. No Person has any
preemptive rights with respect to shares of the Company. There are no
outstanding securities convertible into the equity capital of he Company or
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements or arrangements providing for the issuance (contingent or
otherwise) of, or any Actions relating to, the capital stock of the Company.
There are no voting trusts, proxies or other agreements or understandings with
respect to the voting of the Capital Stock of the Company. The Company is not
subject to any obligation to repurchase or otherwise acquire or retire any of
its capital stock, and the Company has no Liability for dividends declared or
accrued, but unpaid, with respect to its capital stock. Neither the Company nor
any Acquired Business have purchased or redeemed any of its capital stock, and
except as set forth in the Disclosure Memorandum, has not paid any dividend or
made any other payment to any of the Company Shareholders or other Related
Parties within the past two (2) years.
3.2.4 The Company does not own or have an interest, direct or
indirect, or any commitment to purchase or otherwise acquire, any capital stock
or other equity interest, direct or indirect, in any
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other Person, except as set forth in the Disclosure Memorandum. All such
interests so set forth are owned of record and beneficially by the Company as
set forth in the Disclosure Memorandum and are duly authorized, validly issued,
fully paid and non-assessable, and were authorized, offered, issued and sold in
accordance with all applicable securities and other Laws.
3.2.5 Each Company Shareholder is the legal and beneficial owner
of the Company Shares as set forth in Section 1.1 of this Agreement, free and
clear of any and all Liens. There are no outstanding contracts, demands,
commitments or other agreements or arrangements under which the Company
Shareholders (or any of them) or the Company are or may become obligated to
sell, transfer or assign any of the Company Shares to any Person.
3.2.6 The Disclosure Memorandum either (i) sets forth the form of
organization, legal name, each assumed name and Organization State of each
Company Subsidiary, or (ii) correctly states no Entity is a Company Subsidiary.
Except as set forth in the Disclosure Memorandum, each Company Subsidiary is a
Wholly Owned Subsidiary. In the case of any Company Subsidiary that is not a
Wholly Owned Subsidiary, the Disclosure Memorandum sets forth, by each class and
each series within each class, the number of outstanding shares (or other
percentage of ownership interest) of Capital Stock of the Company Subsidiary,
(i) the Company's aggregate direct and indirect ownership of those shares (or
interests), and (ii) the name and address of record and percentage ownership of
those shares (or interests) of each holder of record thereof other than the
Company or a Company Subsidiary. No Lien exists upon any outstanding share (or
other percentage ownership interests) of Capital Stock of any Company Subsidiary
which the Company, directly or indirectly, owns other than the Liens, if any,
the Disclosure Memorandum describes, all of which will be released at or before
the Closing Date.
3.3 Capacity; Inconsistent Obligations. Except as set forth in the
Disclosure Memorandum, the execution, delivery and performance of this Agreement
and each of the documents hereunder to which any Company Shareholder or the
Company is a party will not (i) result in a violation of the Company's Charter
Documents or bylaws, or any Law, or (ii) result in a breach of, conflict with or
default under any term or provision of any indenture, note, mortgage, bond,
security agreement, loan agreement, guaranty, pledge, or other instrument,
contract, agreement or commitment or any Order, to which the Company or any
Company Shareholder is a party or by which any of them or any of their
respective assets and properties, including, without limitation, the Company
Shares, is subject or bound; nor will such actions result in (A) the creation of
any Lien on any of the Company Shares or any of the Company's assets or
properties, (B) the acceleration or creation of any Liability of the Company,
(C) the forfeiture of any right or privilege of the Company, or (D) the
forfeiture of any right or privilege of any Company Shareholder which may affect
such Company Shareholder's ability to perform under this Agreement.
3.4 Consents. Except as set forth in the Disclosure Memorandum, the
execution, delivery and performance by each Company Shareholder and the Company
of this Agreement and each of the documents hereunder to which he, she or it is
a party, and the consummation of the transactions contemplated herein and
therein does not (a) require the consent, approval or action of, or any filing
with or notice to, any Government or other Person, or (b) impose any other term,
condition or restriction on AremisSoft (EE.ME.A) Ltd. or the Company (or any
successor thereto) pursuant to any business combination or takeover Law.
3.5 No Violation; Compliance with Laws. Except as set forth in the
Disclosure Memorandum, the Company and the Company Subsidiaries are not in
default under or in violation of (a) its Charter Documents or bylaws, or (b) any
Order. Except as set forth in the Disclosure Memorandum, the operations of the
Company and its predecessors have been conducted in all material respects in
compliance with all applicable Laws. (For purposes of this paragraph, any
violation of applicable Law that could result in imposition of a fine or other
monetary penalty upon the Company shall be deemed to be a Material
non-compliance). Neither the Company nor any Company Shareholder has received
any notification of any asserted past or present failure by the Company to
comply with any applicable Law.
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3.6 Possession of Licenses. Except as set forth in the Disclosure
Memorandum, the Company and the Company Subsidiaries possess all franchises,
certificates, licenses, permits and other authorizations from Governments and
all other Persons, free from burdensome restrictions, that are necessary for the
ownership, maintenance and operation of its properties and assets and the
conduct of its business, and the Company and the Company Subsidiaries are not in
violation thereof.
3.7 Financial Statements; Financial Condition. The Company and the
Company Shareholders have to the Disclosure Memorandum copies of the Company's
financial statements which include the historical financial statements of the
Acquired Businesses and related documents as identified in the Disclosure
Memorandum (collectively, the "Financial Statements"). The Financial Statements
include the Company's most recent Balance Sheet (the "Reference Date Balance
Sheet"). The date of the Reference Date Balance Sheet is referred to herein as
the "Reference Date". The Financial Statements include the balance sheet of each
of the Acquired Businesses for the prior two fiscal years and a profit and loss
statement for each of the Acquired Businesses for the last three full fiscal
years. Except as set forth in the Disclosure Memorandum, the Financial
Statements are true and correct, in all Material respects, have been prepared in
accordance with GAAP consistently applied, present fairly the financial
condition of the Company as at the respective dates thereof and the results of
the Company's operations and cash flows for the periods then ended, and are
consistent with the books and records of the Company and the Acquired
Businesses. The books and records of the Company and the Acquired Businesses are
true, correct and complete in all Material respects and, except as set forth in
the Disclosure Memorandum, are maintained in accordance with GAAP.
3.8 Liabilities. Set forth in the Disclosure Memorandum is a complete,
true and correct listing of all Liabilities of the Company as of the Closing
Date. The Company has no Liability, except as may be set forth in the Disclosure
Memorandum.
3.9 Title to Properties. Except as set forth in the Disclosure
Memorandum, the Company has good and marketable title to all properties and
assets reflected in the Reference Date Balance Sheet, except inventories and
other immaterial assets which have been disposed of in the ordinary course of
business since the Reference Date, and all other properties and assets necessary
to conduct its business as currently being conducted and as conducted during the
periods covered by the Financial Statements (other than any leased property),
free and clear of Liens, except as may be set forth in the notes to the
Reference Date Balance Sheet.
3.10 Receivables; Debtors. Except as set forth in the Disclosure
Memorandum, all notes and accounts receivable shown on the Reference Date
Balance Sheet and all such receivables now held by the Company are valid and
collectible obligations and were not and are not subject to any offset or
counterclaim, except for amounts reserved against such receivables which are
reflected on the Reference Date Balance Sheet or otherwise set forth in the
Disclosure Memorandum and, with respect to notes and accounts receivable arising
after the Reference Date and now outstanding, except for a percentage thereof
equal to the percentage which said reserved amounts on the Reference Date
Balance Sheet or in the Disclosure Memorandum constituted of the aggregate of
notes and accounts receivable on such Reference Date Balance Sheet.
3.11 Personal Property.
3.11.1 Except as set forth in the Disclosure Memorandum, all
machinery, equipment, vehicles, and other items of tangible personal property
which are owned or leased by the Company are in good condition and repair,
subject to normal wear and tear, suited for the use intended and are and have
been operated in conformity with all applicable Laws. To the knowledge of the
Company and the Company Shareholders, except as set forth in the Disclosure
Memorandum, there are no defects or conditions which would cause such tangible
personal property to be or become inoperable or unsafe.
3.11.2 To the knowledge of the Company and the Company
Shareholders, except as set forth in the Disclosure Memorandum, all lessors of
machinery, equipment or other tangible personal property leased by the Company
have performed and satisfied their respective duties and obligations
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under such leases. The Company has not brought or threatened any Action against
any such lessor for failure to perform and satisfy its duties and obligations
thereunder.
3.12 Real Property.
3.12.1 The Company has good and marketable title to all of the
real property reflected on the Reference Date Balance Sheet as owned by the
Company (collectively, the "Owned Real Property"), free and clear from all
defects and Liens, except as may be set forth in the notes to the Reference Date
Balance Sheet or in the Disclosure Memorandum. The Disclosure Memorandum lists
all Real Property, whether owned or leased by the Company, listing with respect
to each parcel the street address and the owner or lessor.
3.12.2 Except as set forth in the Disclosure Memorandum, each
parcel or tract of real property which is used by the Company in its business
and that is not Owned Real Property (the "Leased Real Property," and
collectively with the Owned Real Property, the "Real Property") is subject to a
written lease or sublease to which the Company is a party as lessee or sublessee
(individually a "Real Property Lease"). All such Real Property Leases are valid
and in full force and effect in accordance with their terms. The Company
Shareholders have attached to the Disclosure Memorandum true, correct and
complete copies of all Real Property Leases. There is not, with respect to any
Real Property Lease (i) any default by the Company, or any event of default or
event which with notice or lapse of time, or both, would constitute a default by
the Company, or (ii) to the knowledge of the Company and the Company
Shareholders, any existing default by any other party to any Real Property
Lease, or event of default or event which with notice or lapse of time, or both,
would constitute a default by any other party to any Real Property Lease.
3.12.3 All of the Real Property is free from development, use or
occupancy restrictions, (except those imposed by applicable Law), and from
special taxes or assessments, (except those generally applicable to other
properties in the tax districts in which the Real Property is located or as
otherwise described in the Disclosure Memorandum). No options have been granted
to others to purchase, lease or otherwise acquire any interest in the Real
Property. The Company has the exclusive right of possession of each tract or
parcel comprising its Real Property.
3.12.4 Except as set forth in the Disclosure Memorandum, the
present use, occupancy and operation of the Real Property, and all aspects of
the Improvements to the Real Property are in compliance with all Laws and
private restrictive covenants, and to the Company's and the Company
Shareholders' knowledge there has not been any proposed change thereto that
would affect any of the Real Property or its use, occupancy or operation. There
exists no conflict or dispute with any Government or other Person relating to
any Real Property or the activities thereon. No portion of the Real Property is
subject to any classification, designation or preliminary determination of any
Government or pursuant to any Law which would restrict its use, development,
occupancy or operation in connection with the Company's business. Except as set
forth in the Disclosure Memorandum, all Improvements are in good condition and
repair, and are suited for the operation of the Company's business.
3.12.5 Neither the Company nor any other Person has caused any
work or improvements to be performed upon or made to any of the Real Property
for which there remains outstanding any payment obligation that would or might
serve as the basis for any Lien in favor of the Person who performed the work.
3.12.6 Except as set forth in the Disclosure Memorandum, all
requisite certificates of occupancy and other permits and approvals required
with respect to the Real Property or the Improvements and the use, occupancy and
operation thereof have been obtained and paid for and are currently in effect
and free of restrictions.
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3.13 Intellectual Property.
3.13.1 All Intellectual Property belonging to the Acquired
Businesses have been transferred to the Company. The Company and the Company
Shareholders have attached to the Disclosure Memorandum true and correct copies
of all transfer documents and deeds reflecting the transfer of the Intellectual
Property of the Acquired Businesses to the Company. No Company Intellectual
Property or product or service of the Company is subject to any proceeding or
outstanding decree, Order, judgment, agreement, or stipulation restricting in
any manner the use, transfer, or licensing thereof by the Company, or which may
affect the validity, use or enforceability of such Company Intellectual
Property, which in any such case would be reasonably likely to have a Material
Adverse Effect on the Company.
3.13.2 Each Material item of Company Registered Intellectual
Property is valid and subsisting. All necessary registration, maintenance and
renewal fees currently due in connection with such Registered Intellectual
Property have been made and all necessary documents, recordation and
certificates in connection with such Registered Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Registered Intellectual Property, except where the failure to
do so would not be reasonably likely to have a Material Adverse Effect on the
Company.
3.13.3 The Disclosure Memorandum lists all of the Company's
Intellectual Property. The Company or the Company Subsidiaries own and have good
and exclusive title to, or have licenses (sufficient for the conduct of its
business as currently conducted and as proposed to be conducted) to, each
Material item of Company Intellectual Property used in connection with the
conduct of its business as currently conducted and as proposed to be conducted
free and clear of any Lien or encumbrance (excluding licenses and related
restrictions); and the Company or the Company Subsidiaries are the exclusive
owners of all trademarks and trade names used in connection with and Material to
the operation or conduct of the business of the Company and the Company
Subsidiaries, including the sale of any products or the provision of any
services by the Company and the Company Subsidiaries.
3.13.4 The Company or the Company Subsidiaries own exclusively,
and have good and marketable title to, all copyrighted works that are the
Company's products or which the Company otherwise expressly purports to own.
3.13.5 To the extent that any Material Intellectual Property has
been developed or created by a third party for the Company or the Company
Subsidiaries, as the case may be, the Company has a written agreement with such
third party with respect thereto and the Company or the Company Subsidiary
thereby either (i) have obtained ownership of and are the exclusive owners of,
or (ii) have obtained a license (sufficient for the conduct of its business as
currently conducted and as proposed to be conducted) to all such third party's
Intellectual Property in such work, material or invention by operation of law or
by valid assignment, to the fullest extent it is legally possible to do so.
3.13.6 The Disclosure Memorandum lists all Company Contracts,
licenses and agreements to which the Company is a party (i) with respect to
Company Intellectual Property licensed or transferred to any third party (other
than end-user licenses in the ordinary course), or (ii) pursuant to which a
third party has licensed or transferred any Material Intellectual Property to
the Company.
3.13.7 All Material contracts, licenses and agreements relating
to Company Intellectual Property are in full force and effect. The consummation
of the transactions contemplated by this Agreement will neither violate nor
result in the breach, modification, cancellation, termination, or suspension of
such contracts, licenses and agreements in accordance with its terms, the effect
of which would have a Material Adverse Effect on the Company. The Company is in
Material compliance with, and has not materially breached any term of any of
such contracts, licenses and agreements and, to the knowledge of the Company and
the Company Shareholders, all other parties to such contracts, licenses and
agreements are in compliance in all Material respects with, and have not
materially breached any term of, such contracts, licenses and agreements.
Following the Closing Date, AremisSoft (EE.ME.A) Ltd. will be permitted to
exercise all of the Company's rights under such
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contracts, licenses and agreements to the same extent the Company would have
been able to had the transactions contemplated by this Agreement not occurred
and without the payment of any additional amounts or consideration other than
ongoing fees, royalties or payments which the Company would otherwise be
required to pay.
3.13.8 The operation of the business of the Company as such
business currently is conducted and has been historically conducted by the
Acquired Businesses, including the Company's design, development, marketing and
sale of the products or services of the Company and including with respect to
products currently under development has not, does not and will not infringe or
misappropriate in any Material manner the Intellectual Property of any third
party or, to the knowledge of the Company and the Company Shareholders,
constitute unfair competition or trade practices under the laws of any
jurisdiction.
3.13.9 The Company has not received written notice from any third
party, and to the knowledge of the Company and the Company Shareholders, no
other pending overt threat from any third party, that the operation of the
business of the Company or any act, product or service of the Company, infringes
or misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction.
3.13.10 To the knowledge of the Company and the Company
Shareholders, no person has or is infringing or misappropriating any Company
Intellectual Property.
3.13.11 The Company and the Company Subsidiaries have taken
reasonable steps to protect the its rights in its confidential information and
trade secrets that they wish to protect or any trade secrets or confidential
information of third parties provided them.
3.14 Contracts.
3.14.1 Except as set forth in the Disclosure Memorandum, all
Company Contracts have been entered into in the ordinary course of the Company's
business on commercially reasonable terms, are valid and enforceable in all
Material respects in accordance with their terms, are in full force and effect,
and will continue to be valid and enforceable and in full force and effect on
identical terms following the Closing Date. Except as set forth in the
Disclosure Memorandum, no Company Contract is likely to result in a loss to the
Company upon completion of performance, and all Company Contracts can be
fulfilled or performed by the Company in accordance with their respective terms
without undue or unusual expenditures of money or effort. All Company Contracts
are listed in the Disclosure Memorandum, and true, correct and complete copies
of all Company Contracts in excess of $250,000 USD have been attached to the
Disclosure Memorandum.
3.14.2 There are no existing Material defaults, events of default
or events which, with the giving of notice or lapse of time, or both, would
constitute a Material default by the Company under any Company Contract. No
event has occurred which may hereafter give rise to any right of termination,
acceleration, Damages or any other remedy under any Company Contract.
3.14.3 To the knowledge of the Company and the Company
Shareholders, neither this Agreement, the Closing or the relationship between
the Company and AremisSoft (EE.ME.A) Ltd. has caused or is likely to cause the
termination or non-renewal of any Company Contract.
3.15 Insurance. The Company has obtained and maintains insurance
policies which provide adequate coverage to insure its assets, properties and
business against such risks and in such amounts as are prudent and customary in
the industry in which the Company operates, and all such policies are in full
force and effect. All premiums due on such policies have been paid, and the
Company has not received any notice of cancellation with respect thereto. The
Company has no Liability for premiums or for retrospective premium adjustments
for any period. The Disclosure Memorandum lists the types, amounts of coverage
and deductibles of all such insurance policies, and true, correct and complete
copies thereof have been attached thereto.
11
3.16 Litigation; Contingencies. Except as set forth in the Disclosure
Memorandum, no Action is pending or, to the knowledge of the Company
Shareholders and the Company, threatened against, by or affecting the Company or
the Company Shares. There are no unsatisfied judgments or Orders against the
Company or any Company Shareholder to which any of them or their assets and
properties are subject.
3.17 Taxes. Except as set forth in the Disclosure Memorandum, the
Company and any entity at any time eligible or required to file a consolidated
or combined Tax Return with the Company, including the Acquired Businesses
(individually, an "Affiliated Entity" and collectively, the "Affiliated
Entities"), has duly and timely filed all federal, state, municipal, local and
foreign, if any, Tax Returns and reports (including returns for estimated tax),
and all reports and returns of all other Governments having jurisdiction
(collectively, "Returns") with respect to all Taxes (including, without
limitation, consolidated or combined Tax Returns of some or all of the Company
and the Affiliated Entities); all such Tax Returns and reports show the correct
and proper amount due; and the Taxes shown on all Tax Returns and reports and
all Tax assessments received by the Company or any Affiliated Entity have been
paid to the extent that such Taxes or estimates are due. The Company has
attached to the Disclosure Memorandum true, correct and complete copies of all
Returns filed with respect to the five (5) tax years preceding the date hereof.
Except as set forth in the Disclosure Memorandum, all Taxes imposed on the
Company and its Affiliated Entities by any Government (including all deposits in
connection therewith required by applicable Law, and all interest and penalties
thereon) which have become due and payable by the Company for all periods
through the date hereof have been paid in full, and adequate reserves for all
other Taxes, whether or not due and payable, and whether or not disputed, have
been set up on the books of the Company, and such reserves will be adequate to
pay all Taxes of the Company for all periods through the Closing. There is not
now any proposed assessment against the Company or any Affiliated Entity of
additional Taxes of any kind. The Company is not a party to any Tax sharing or
Tax allocation agreement, understanding, arrangement or commitment. There is no
dispute or Action concerning any Tax Liability of the Company raised by a
Government in writing.
3.18 Employment and Labor Matters. Except as set forth in the
Disclosure Memorandum, to the Company's and the Company Shareholders' knowledge,
no employee, agent, consultant or independent contractor who performs services
on a regular basis for the Company plans to discontinue such relationship with
the Company after the Closing.
3.18.1 The Company is not a party to any agreement of any kind
which deals with wages, conditions of employment, benefits or other matters
affecting the employer/employee relationship with any union, labor organization
or employee group. There are no controversies pending, or to the Company's and
the Company Shareholders' knowledge threatened, between the Company and any
union, labor organization or employee group representing, or seeking to
represent, any of its employees, and there has been no attempt by any union,
labor organization or employee group to organize any of the Company's employees
at any time in the past five (5) years. The Company has substantially complied
with all applicable Laws relating to wages, hours, health and safety, payment of
Social Security withholding and other taxes, maintenance of workers'
compensation insurance, labor and employment relations and employment
discrimination.
3.18.2 The Disclosure Memorandum lists all contracts, agreements
or arrangements (written or oral) concerning the employment of any individual by
the Company, including each such individual's title, compensation and duties.
3.19 Employee Benefit Matters
3.19.1 The Disclosure Memorandum lists all "employee benefit
plans" (the "Employee Plans") to which the Company contributes or is required to
contribute and all other practices, commitments, arrangements and agreements
pursuant to which the Company provides, directly or indirectly, any benefits for
employees. True, correct and complete copies of all Employee Plans, together
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with related trusts, insurance contracts, summary plan descriptions, and annual
reports for the past three (3) years, have been attached to the Disclosure
Memorandum.
3.19.2 Each Employee Plan has been operated and administered in
all Material respects in accordance with all applicable Laws. There are no
pending claims or, to the Company's and the Company Shareholders' knowledge
threatened claims, by or against any of the Employee Plans by any employee or
beneficiary covered under such Employee Plan, or by any Government or otherwise
involving such Employee Plan or any of its fiduciaries (other than for routine
claims for benefits).
3.19.3 The Company is not bound to provide, and the Company does
not provide, benefits, including, without limitation, death, health or medical
benefits (whether or not insured), with respect to current or former employees
of the Company other than as required by applicable Law. Neither this Agreement
nor any transaction contemplated hereby will entitle any current or former
employee, officer or director of the Company to severance pay, unemployment
compensation, "change of control" compensation or any similar payment.
3.20 Environmental Matters. Except as set forth in the Disclosure
Memorandum, the Company holds all Environmental Permits necessary for conducting
its business and operations and has conducted, and is presently conducting, its
business and operations in full compliance with all applicable Environmental
Laws and Environmental Permits, including, without limitation, all record
keeping and filing requirements. There is no existing or, to the knowledge of
the Company or Company Shareholders, pending Environmental Law with a future
compliance date that will require Material operational changes, business
practice modifications or capital expenditures at any Real Property (or any
other property presently or formerly owned, operated or controlled by the
Company or as to which the Company may bear responsibility or Liability), or any
of the Improvements thereon. There are no presently pending, or to the Company's
and the Company Shareholders' knowledge, threatened Actions or Orders against or
involving the Company (including any Person for whose acts or omissions the
Company is responsible) relating to any alleged, past or ongoing violation.
3.21 Absence of Certain Business Practices. Neither the Company nor
any officer, employee or agent of the Company, nor any other person acting on
behalf of the Company, has, directly or indirectly, within the past five (5)
years, given or agreed to give any gift or similar benefit to any Person who is
or may be in a position to help or hinder the Company's business (or assist the
Company in connection with any actual or proposed transaction) which (a) might
subject the Company to any Material Damage in any Action or which might have an
effect on the Company or its assets and properties, (b) if not given in the
past, might have had an effect on the Company's business or its assets and
properties, or (c) if not continued in the future, might have an effect on the
Company or which might subject the Company to suit or penalty in any Action.
3.22 Agreements and Transactions with Related Parties. Except as set
forth in the Disclosure Memorandum, the Company is not, directly or indirectly,
a party to any contract, agreement or lease with, or any other commitment to,
(a) any Person owning, or formerly owning, beneficially or of record, directly
or indirectly, any of the Company Shares of or other equity interest in the
Company, (b) any Affiliate of such Person, (c) any director or officer of the
Company, (d) any Person in which any of the foregoing Persons has, directly or
indirectly, at least a three percent (3.0%) beneficial interest in the Capital
Stock or other type of equity interest of such Person, or (e) any partnership in
which any of the foregoing Persons is a general partner or has at least a three
percent (3.0%) beneficial interest (any or all of the foregoing being referred
to herein as "Related Parties"). Without limiting the generality of the
foregoing, (i) no Related Party, directly or indirectly, owns or controls any
assets or properties which are or have been used in the Company's business, and
(ii) no Related Party, directly or indirectly, engages in or has any significant
interest in or connection with any business (A) which is or which within the
last three (3) years has been a competitor, customer or supplier of the Company
or has done business with the Company, or (B) which as of the date hereof sells
or distributes products or services which are similar or related to the
Company's products or services.
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3.23 Absence of Changes. Except as expressly provided for in this
Agreement, or as set forth in the Disclosure Memorandum, since the Reference
Date:
3.23.1 There has been no change in the business, assets,
properties, Liabilities, affairs, results of operations, condition (financial or
otherwise), cash flows or prospects of the Company or in its respective
relationships with suppliers, customers, employees, lessors or others, other
than changes in the ordinary course of business, none of which have had or will
have a Material Adverse Effect on the Company, in the aggregate.
3.23.2 There has been no Material damage, destruction or loss to
the assets, properties, or business of the Company, whether or not covered by
insurance.
3.23.3 The business of the Company has been operated in the
ordinary course and consistent with its prior practices.
3.23.4 The books, accounts and records of the Company have been
maintained in the usual, regular and ordinary manner on a basis consistent with
prior years and with the basis in which the Financial Statements were prepared.
3.23.5 There has been no declaration, setting aside or payment of
any dividend or other distribution on or in respect of the Capital Stock of the
Company, nor has there been any direct or indirect redemption, retirement,
purchase or other acquisition of any of the Capital Stock or other securities of
the Company.
3.23.6 The Company has not discontinued or determined to
discontinue selling any products or services previously sold by the Company, the
sales of which have been Material to the Company.
3.23.7 There has been no Lien (other than Liens for current Taxes
which are not yet due and payable) created on or in the assets of the Company.
3.23.8 There has been no sale, transfer, lease or other
disposition of any asset of the Company to any Related Party or, except in the
ordinary course of the Company's business, to any other Person, and no debt to,
or Material claim or right of, the Company has been canceled, compromised,
waived or released.
3.23.9 There has been no amendment, termination or waiver of, or
any notice of any amendment, termination or waiver of, any right of the Company
under any Company Contract or under any franchise, certificate, license, permit
or authorization from any Government, and there has been no amendment to the
Charter Documents or bylaws of the Company.
3.23.10 The Company has not delayed or postponed the payment of
any accounts payable or other Liabilities outside the ordinary course of
business.
3.23.11 The Company has not paid or committed to pay any bonus,
profit-share or other extraordinary compensation payment or other arrangement
(except in the ordinary course of business and consistent with past practices),
nor has the Company entered into any agreement, contract or commitment with any
Company Shareholder or any Related Party or amended the terms of any existing
agreement, contract or commitment with any Company Shareholder or any Related
Party.
3.23.12 There has been no change in the authorized, issued or
outstanding Capital Stock or other securities of the Company.
3.24 Bank Accounts and Safe Deposit Boxes. The Disclosure Memorandum
lists each bank in which the Company maintains an account or safe deposit box,
the account numbers, and the names of all persons authorized to draw thereon or
have access thereto.
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4. Representations and Warranties of AremisSoft (EE.ME.A) Ltd. As an
inducement to the Company and the Company Shareholders to enter into and perform
this Agreement, AremisSoft (EE.ME.A) Ltd. on behalf of itself, hereby represents
and warrants as follows:
4.1. Organization. AremisSoft (EE.ME.A) Ltd. is a corporation duly
organized and validly existing under the Laws of Cyprus.
4.2. Authorization. No Inconsistent Agreements. AremisSoft (EE.ME.A)
Ltd. has full corporate power and authority to execute and deliver this
Agreement and to its obligations thereunder. This Agreement constitutes the
legal, valid and binding obligation of AremisSoft (EE.ME.A) Ltd. , enforceable
against AremisSoft (EE.ME.A) Ltd. in accordance with its terms, except as that
enforceability may be (i) limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law).
4.3. Consents. The execution, delivery and performance by AremisSoft
(EE.ME.A) Ltd. of this Agreement and the consummation of the transactions
contemplated herein does not require the consent, approval or action of, or any
filing with or notice to, any Government or other Person.
5. Covenants Extending to the Closing Date.
5.1. Access and Cooperation; Due Diligence.
5.1.1. From the date hereof and until the Closing Date, the
Company will (i) afford to the Representatives of AremisSoft (EE.ME.A) Ltd.
reasonable access to all the key employees, sites, properties, books and records
of the Company and the Company Subsidiaries, (ii) AremisSoft (EE.ME.A) Ltd. with
such additional financial and operating data and other information relating to
the business and properties of each of the Company and the Company Subsidiaries
as AremisSoft (EE.ME.A) Ltd. may from time to time reasonably request, and (iii)
cooperate with AremisSoft (EE.ME.A) Ltd. and its Representatives in the
preparation of any documents or other material that may be required in order to
consummate the transactions contemplated by the Agreement.
5.1.2. Each of the Company and the Company Shareholders will use
their best efforts to secure, as soon as practicable after the date hereof, all
approvals or consents of third persons as may be necessary to enable them to
consummate the transactions contemplated hereby. AremisSoft (EE.ME.A) Ltd. will
use its best efforts to secure, as soon as practicable after the date hereof,
all approvals or consents of third persons as may be necessary to enable
AremisSoft (EE.ME.A) Ltd. to consummate the transactions contemplated hereby.
5.1.3. If this Agreement is terminated pursuant to Section 8 of
this Agreement, AremisSoft (EE.ME.A) Ltd. will promptly return all written
Confidential Information of Company it possess to the Company.
5.2 Conduct of Business Pending the Closing Date . Except as and only
to the extent set forth in Disclosure Memorandum, from the date hereof and until
the Closing Date, the Company will, and will cause each Company Subsidiary to:
5.2.1 carry on its business in substantially the same manner as
it has heretofore and not introduce any new methods of management, operation or
accounting that in the aggregate are Material to the Company or the Company
Shares;
5.2.2 maintain its properties and facilities, including those
held under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
15
5.2.3 promptly perform all its obligations under agreements
relating to or affecting its business, assets, properties and other rights;
5.2.4 keep in full force and effect without interruption all of
its present insurance policies or other comparable insurance coverage;
5.2.5 use reasonable commercial efforts to (i) maintain and
preserve its business organization intact; (ii) retain its present employees;
and (iii) maintain its relationships with suppliers, customers and others having
business relations with it; and
5.2.6 comply with all applicable Laws.
5.3 Prohibited Activities. Except as and only to the extent set forth
in the Disclosure Memorandum, from the date hereof and until the Closing Date ,
without the prior written consent of AremisSoft (EE.ME.A) Ltd., the Company will
not, and will not permit any Company Subsidiary to,:
5.3.1 make any change in its Charter Documents;
5.3.2 issue any of its Company Shares or issue or otherwise
create any of its Derivative Securities;
5.3.3 make any Restricted Payment;
5.3.4 make any investments in the Company Shares, Derivative
Securities or Indebtedness of any Person;
5.3.5 enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures in a single transaction or
a series of related transactions involving an aggregate amount of more than
twenty-five Thousand Dollars ($25,000) otherwise than in the ordinary course of
its business and consistent with its past practice;
5.3.6 increase or commit or promise to increase the Cash
Compensation payable or to become payable to any officer, director, shareholder,
employee or agent, consultant or independent contractor of the Company and the
Company Subsidiaries or make any discretionary bonus or management fee payment
to any such Person, except bonuses or salary increases to employees (other than
the Company Shareholders or their Immediate Family Members) at the times and in
the amounts consistent with its past practice;
5.3.7 create, assume or permit to be created or imposed any Liens
upon any of its assets or properties, whether now owned or hereafter acquired,
except for purchase money Liens incurred in connection with the acquisition of
equipment with an aggregate cost not in excess of Twenty-Five Thousand Dollars
($25,000) and necessary or desirable for the conduct of the business of the
Company and the Company Subsidiaries;
5.3.8 (i) adopt, establish or terminate any Employee Plan; or
(ii) take any discretionary action, or omit to take any contractually required
action, if that action or omission could either (A) deplete the assets of any
Employee Plan, or (B) increase the liabilities or obligations under any such
Employee Plan;
5.3.9 sell, assign, lease or otherwise transfer or dispose of any
of its owned or leased property or equipment otherwise than in the ordinary
course of its business and consistent with its past practice;
5.3.10 negotiate for the acquisition of any business or the
start-up of any new business;
5.3.11 merge, consolidate or effect a share exchange with, or
agree to merge, consolidate or effect a share exchange with, any other Entity;
16
5.3.12 waive any of its rights or claims that in the aggregate
are Material to the Company, provided that it may negotiate and adjust invoices
in the course of good faith disputes with customers in manner consistent with
past practice;
5.3.13 commit breaches that in the aggregate are Material to the
Company, or amend or terminate any Company Contract or any of its Governmental
Approval; or
5.3.14 enter into any other transaction (i) outside the ordinary
course of business and consistent with its past practice, or (ii) prohibited
hereby.
5.4 No Shop. Each of the Company and the Company Shareholders agree
that, from the date hereof and until the first to occur of the Closing Date or
the termination of this Agreement in accordance with Section 8 below, neither
the Company nor any Company Shareholder, nor any of their respective officers,
directors or shareholders will, and the Company and each Company Shareholder
will direct and use their reasonable best efforts to cause each of their
respective Representatives not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including any proposal or offer to the Company Shareholders) with respect
to a merger, acquisition, consolidation or similar transaction involving the
Company Shares, or any purchase of all or any significant portion of the assets
or any equity securities of, the Company (any such proposal or offer being an
"Acquisition Proposal") or engage in any activities, discussions or negotiations
concerning, or provide any Confidential Information respecting, the Company, or
a Company Subsidiary, or have any discussions with, any Person relating to an
Acquisition Proposal or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. The Company and each Company Shareholder
will: (i) immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and each will take the steps necessary to inform the
Persons referred to in the first sentence of this Section of the obligations
undertaken in this Section, and (ii) notify AremisSoft (EE.ME.A) Ltd.
immediately if any such inquiries or proposals are received by, any such
information is requested from or any such discussions or negotiations are sought
to be initiated or continued with the Company or any Company Shareholder.
5.5 Notification of Certain Matters. The Company Shareholders and the
Company will give prompt notice to AremisSoft (EE.ME.A) Ltd. of (i) the
existence or occurrence of each condition or state of facts which will or
reasonably could be expected to cause any representation or warranty of the
Company or any Company Shareholder contained herein to be untrue or incorrect in
any Material respect on or prior to the Closing Date, and (ii) any Material
failure of any Company Shareholder or the Company to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by that Person
hereunder. AremisSoft (EE.ME.A) Ltd.will give prompt notice to the Company of
(i) the existence or occurrence of each condition or state of facts which will
or reasonably could be expected to cause any representation or warranty of
AremisSoft (EE.ME.A) Ltd. contained herein to be untrue or inaccurate on or
prior to the Closing Date, and (ii) any Material failure of AremisSoft (EE.ME.A)
Xxx.xx comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder. The delivery of any notice pursuant
to this Section will not be deemed to (i) modify the representations or
warranties herein of the party delivering that notice, or any other party, which
modification may be made only pursuant to Section 11.7 of this Agreement, or
(ii) limit or otherwise affect the remedies available hereunder to the party
receiving that notice.
5.6 Supplemental Information. Each of the Company and the Company
Shareholders agree that, with respect to the representations and warranties of
that party contained in this Agreement, that party will have the continuing
obligation until the Closing to provide AremisSoft (EE.ME.A) Ltd.promptly with
such additional supplemental information (collectively, the "Supplemental
Information"), in the form of (i) amendments to then existing Disclosure
Memorandum, or (ii) additional Schedules, as would be necessary, in light of the
circumstances, conditions, events and state of facts then known to the Company
or any Company Shareholder, to make each of those representations and warranties
true and correct as of the Effective Date. For the purpose only of determining
whether the conditions to
17
the obligations of AremisSoft (EE.ME.A) Ltd. which are specified in Section 6.3
have been satisfied, the Disclosure Memorandum as of the Closing Date will be
deemed to be the Disclosure Memorandum as of the date hereof as amended or
supplemented by the Supplemental Information provided to AremisSoft (EE.ME.A)
Ltd. prior to the Closing pursuant to this Section; provided, however, that if
the Supplemental Information so provided discloses the existence of
circumstances, conditions, events or state of facts which, in any combination
thereof, (i) have had a Material Adverse Effect in the sole judgment of
AremisSoft (EE.ME.A) Ltd. (which will be conclusive for purposes of this
Section), or (ii) are having or will have a Material Adverse Effect, AremisSoft
(EE.ME.A) Ltd. will be entitled to terminate this Agreement pursuant to Section
8.14); and provided, further, that if AremisSoft (EE.ME.A) Xxx.xx entitled to
terminate this Agreement pursuant to Section 8.14. but elects not to do so, it
will be entitled to treat as Indemnified Losses (which treatment will not
prejudice the right of any Company Shareholder to contest the Indemnified
Losses), as applicable, all which are attributable to the circumstances,
conditions, events and state of facts first disclosed herein after the date
hereof in the Supplemental Information.
6. Conditions to the Closing and the Consummation of the Transactions
Contemplated Hereby.
6.1. Conditions to the Obligations of Each Party. The obligation of
each party hereto to take the actions contemplated to be taken by that party at
the Closing is subject to the satisfaction on or before the Closing Date or
written waiver pursuant to the provisions of this Agreement of each of the
following conditions:
6.1.1. No Litigation shall be pending on the Closing Date to
restrain, prohibit or otherwise interfere with, or to obtain Material Damages or
other relief from AremisSoft (EE.ME.A) Ltd. in connection with the consummation
of the transactions contemplated by this Agreement; and
6.1.2. All Governmental Approvals required to be obtained by any
of the Company Shareholders, the Company, and AremisSoft (EE.ME.A) Ltd. as a
result of this Agreement shall have been obtained.
6.2 Conditions to the Obligations of the Company and the Company
Shareholders. The obligations of the Company and each Company Shareholder with
respect to actions to be taken by them on or before the Closing Date are subject
to the satisfaction on or before the Closing Date, or the written waiver by the
Company on behalf of itself and each Company Shareholder pursuant to the
provisions of this Agreement of (i) all the conditions of Section 6.1 set forth,
and (ii) all the following conditions:
6.2.1 All the representations and warranties of AremisSoft
(EE.ME.A) Xxx.xx this Agreement shall be true and correct as of the Closing Date
as though made at that time.
6.2.2 AremisSoft (EE.ME.A) Ltd.shall have delivered to the
Company Shareholders executed copies of the officer's certificate respecting the
representations and warranties of AremisSoft (EE.ME.A) Ltd. in this Agreement
and compliance with the covenants of AremisSoft (EE.ME.A) Ltd. in Section 5 of
this Agreement and in a form substantially similar to the form thereof attached
as an exhibit to the Closing Memorandum.
6.2.3 AremisSoft (EE.ME.A) Ltd. shall have delivered the Purchase
Price it is obligated to deliver pursuant to Section 1.2 of this Agreement.
6.3 Conditions to the Obligations of AremisSoft (EE.ME.A) Ltd. The
obligations of AremisSoft (EE.ME.A) Ltd. with respect to actions to be taken by
it on or before the Closing Date are subject to the satisfaction on or before
the Closing Date, or the written waiver by AremisSoft (EE.ME.A) Ltd. pursuant to
the terms of this Agreement, of (i) all the conditions of Section 6.1 above set
forth, and (ii) all the following conditions: 6.3.1 All the representations and
warranties of the Company Shareholders and the Company in this Agreement shall
be true and correct as of the Closing Date as though made at that time.
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6.3.2 The Company Shareholders and the Company shall have
delivered to AremisSoft (EE.ME.A) Ltd.:
(i) a certificate, signed by an authorized officer of the
Company Shareholders, or individually signed if the Company Shareholder is not
an Entity, respecting the representations and warranties of the Company
Shareholders and the Company in this Agreement and compliance with the covenants
of the Company Shareholders and the Company in Section 5 of this Agreement and
in a form substantially similar to the form thereof attached as an exhibit to
the Closing Memorandum;
(ii) a certificate, signed by an authorized officer of the
Company respecting the representations and warranties of the Company
Shareholders and the Company in this Agreement and compliance with the covenants
of the Company Shareholders and the Company in Section 5 of this Agreement and
in a form substantially similar to the form thereof attached as an exhibit to
the Closing Memorandum;
(iii) with respect to the Company and any Company
Subsidiaries, a certificate, dated as of a current date, duly issued by the
appropriate Government in its Organization State and, in each other jurisdiction
the Disclosure Memorandum lists for it, showing it to be in good standing and
authorized to do business in its Organization State and those other
jurisdictions set forth in the Disclosure Memorandum; and
(iv) the Company Shares, duly endorsed with signature
guarantees acceptable to AremisSoft (EE.ME.A) Ltd., together with a any other
document reasonably necessary to complete the transfer of the Company Shares to
AremisSoft (EE.ME.A) Ltd.
7. Indemnities.
7.1. Indemnification by the Company Shareholders.
7.1.1. In accordance with and subject to the provisions of this
Section 7, the Company Shareholders shall indemnify and hold harmless the
Company, AremisSoft (EE.ME.A) Ltd., their respective Affiliates, and the
officers, directors, agents and employees of the Company, AremisSoft (EE.ME.A)
Ltd. and their Affiliates (collectively, the "Indemnitees") from and against and
in respect of any and all loss, damage, diminution in value, Liability, cost and
expense, including reasonable attorneys' fees and amounts paid in settlement
(collectively, the Indemnified Losses"), suffered or incurred by any one or more
of the Indemnitees by reason of, or arising out of:
(i) any misrepresentation or breach of representation or
warranty contained in this Agreement, any other document delivered by the
Company Shareholders to the Indemnitees under this Agreement, the Disclosure
Memorandum or any certificate, instrument, schedule, agreement or other writing
delivered by or on behalf of any Company Shareholder or the Company pursuant to
this Agreement or in connection with the transactions contemplated herein, or
the breach of any covenant or agreement of any Company Shareholder or the
Company contained in this Agreement or any certificate, instrument, schedule,
agreement or other writing delivered to the Indemnitees by or on behalf of any
Company Shareholder or the Company pursuant to this Agreement or in connection
with the transactions contemplated herein;
(ii) any and all Liabilities of the Company arising or
incurred prior to the Closing Date except for any Liability arising from those
matters described in the Disclosure Memorandum;
(iii) any and all Actions, Orders, assessments, fees and
expenses incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnification.
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7.1.2 The Company Shareholders shall reimburse Indemnitees on
demand for any Indemnified Losses suffered by the Indemnitees, based on the
judgment of any court of competent jurisdiction or pursuant to a bona fide
compromise or settlement of claims, demands, or actions in respect of any
Indemnified Losses. The Company Shareholders shall have the opportunity to
defend at their expense any claim, action or demand for which the Indemnitees
claim indemnity against the Company Shareholders; provided that (i) the defense
is conducted by reputable counsel approved by the Indemnitees, which approval
shall not be unreasonably withheld or delayed, (ii) the defense is expressly
assumed in writing within ten (10) days after written notice of the claim,
action or demand is given to the Company Shareholders, and (iii) counsel for the
Indemnitees may participate at all times and in all proceedings (formal and
informal) relating to the defense, compromise and settlement of the claim,
action or demand at the expense of the Indemnitees.
7.2 Limitations and Payment on Claims. No claim shall be brought by
any Indemnitee under this Section 7 for breach of any representation or
warranty, and none of them shall be entitled to receive any payment with respect
thereto, unless and until the aggregate amount of such claim(s) equals or
exceeds Twenty Five Thousand Dollars ($25,000), and after such time as the
amount of such claim(s) equals or exceeds Twenty Five Thousand Dollars
($25,000), the Indemnitees may assert all such prior and all future claims
against the Company Shareholders hereunder, and any such delay in asserting a
claim or claims against the Company Shareholders pursuant to this Section shall
in no way prejudice the Indemnitees under any statute or period of limitations
or similar Law or under any principle of equity.
7.3 No Liability or Contribution by the Company. The Company shall not
have any Liability to any Company Shareholder as a result of any
misrepresentation or breach of representation or warranty by the Company
contained in this Agreement, any other document delivered pursuant to this
Agreement, the Disclosure Memorandum or any certificate, instrument, agreement
or other writing delivered by or on behalf of any Company Shareholder or the
Company pursuant to this Agreement or in connection with the transactions
contemplated herein, or the breach of any covenant or agreement of any Company
Shareholder or the Company contained in this Agreement, any other document
delivered pursuant to this Agreement, or the Disclosure Memorandum or any
certificate, instrument, agreement or other writing by or on behalf of any
Company Shareholder or the Company pursuant to the provisions of this Agreement
or in connection with the transactions contemplated herein, and no Company
Shareholder shall have any right of indemnification or contribution against the
Company on account of any event or condition occurring or existing prior to or
on the date hereof or prior to the Closing Date.
7.4 Survival. The representations and warranties of each Company
Shareholder and the Company contained in this Agreement, any other document
delivered pursuant to this Agreement, the Disclosure Memorandum or in any
certificate, instrument, agreement or other writing delivered by or on behalf of
any Company Shareholder or the Company pursuant to this Agreement or in
connection with the transactions contemplated herein shall survive any
investigation heretofore or hereafter made by or on behalf of AremisSoft
(EE.ME.A) Ltd.and the consummation of the transactions contemplated herein and
all such representations and warranties shall be of no further force and effect
after the expiration of five (5) years from the date of the Closing Date
("Survival Period"). Anything to the contrary notwithstanding, a claim for
indemnification which is made but not resolved prior to the expiration of the
Survival Period may be pursued and resolved after such expiration.
8. Termination of the Agreement.
8.1. Termination. This Agreement may be terminated at any time prior
to the Closing solely:
8.1.1. by the mutual consent of AremisSoft (EE.ME.A) Ltd. and the
Company Shareholders;
8.1.2. by the Company Shareholders or the Company, on one hand,
or by AremisSoft (EE.ME.A) Ltd.on the other hand, if the transactions
contemplated by this Agreement to take place at the
20
Closing shall not have been consummated by January 31, 2000, unless the parties
shall have agreed in writing to a different date;
8.1.3. by the Company Shareholders or the Company, on the one
hand, or by AremisSoft (EE.ME.A) Ltd., on the other hand, if a Material breach
or default is made by the other party (or in the case of the Company Shareholder
and the Company, any of them ) in the observance or in the due and timely
performance of any of the covenants, agreements or conditions contained herein;
or
8.1.4. by AremisSoft (EE.ME.A) Ltd. if the Company has suffered a
Material Adverse Effect not disclosed in the Disclosure Memorandum as of the
date of this Agreement.
8.2. Liabilities in Event of Termination. If this Agreement is
terminated pursuant to Section 8.1, there shall be no Liability or obligation on
the part of any party hereto except to the extent that such Liability is based
on the breach by that party of any of its representations, warranties or
covenants set forth in this Agreement.
9. Confidentiality Agreements; Prohibited Activities.
9.1. In order to induce AremisSoft (EE.ME.A) Ltd. to enter into this
Agreement and make payments as provided herein, each Company Shareholder agrees
that, for the period of five (5) years immediately following the date of the
Closing, he will not, without the prior written consent of AremisSoft (EE.ME.A)
Ltd., for his own account or jointly with another, directly or indirectly, for
or on behalf of any Person, as principal, agent or otherwise:
9.1.1. own, control, manage or otherwise participate in the
ownership, control or management of a business engaged in the business of
selling any product or providing any services in competition with the Company,
AremisSoft (EE.ME.A) Ltd. or any of its subsidiaries within any Territory in
which the Company was engaged in business on the date of the Closing (for
purposes of this Section 9, Territory will be the online cyber community of
businesses which the Company is a part of that are web enabled through the
Internet);
9.1.2. solicit, call upon or attempt to solicit the patronage of
any person having an office or place of business within the Territory and to
whom the Company has sold or has provided services on, or during the two (2)
year period prior to, the date of the Closing, for the purpose of obtaining the
patronage of any such person for the purchase of such services, except as an
employee or on behalf of AremisSoft (EE.ME.A) Ltd.or the Company or their
respective Affiliates; or
9.1.3. solicit or induce, or in any manner attempt to solicit or
induce, any person employed or engaged by AremisSoft (EE.ME.A) Ltd.or the
Company in any capacity (including, without limitation, as an employee,
distributor, independent contractor or agent), to leave such employment or
engagement, whether or not such employment or engagement is pursuant to a
contract or is at will.
9.2 Notwithstanding anything contained herein to the contrary, it
shall not be a breach of the covenants contained in this Section 9 for any
Company Shareholder to own not more than two percent (2%) of the equity
interests of any person described in Section 9.1.1 above whose equity interests
are publicly traded.
9.3 The parties hereto each agree that this Section 9 imposes a
reasonable restraint on the Company Shareholders in light of the activities and
business of AremisSoft (EE.ME.A) Ltd.on the date hereof, the current business
plan of AremisSoft (EE.ME.A) Ltd.and the consideration each Company Shareholder
received as a result of this acquisition.
9.4 The covenants in this Section 9 are severable and separate, and
the unenforceability of any specific covenant in this Section 9 is not intended
by any party hereto to, and will not, affect the provisions of any other
covenant in this Section 9. If any court of competent jurisdiction determines
that the scope, time or territorial restrictions Section 9.1 sets forth are
unreasonable as applied to any
21
Company Shareholder, the parties hereto including that Company Shareholder,
acknowledge their mutual intentional and agreement that those restrictions be
enforced to the fullest extent the court deems reasonable, and thereby will be
reformed to that extent as applied to that Company Shareholder and any other
Company Shareholder similarly situated.
9.5 Each of the Company Shareholders, for themselves and their
successors and assigns, agree to execute a Confidentiality Agreement in
substantially similar form to the form attached as an exhibit to the Closing
Memorandum.
10. Arbitration of Disputes.
10.1. All disputes, controversies or claims between the parties
hereto, arising under, out of, or in any way relating to this Agreement
including without limitation, the execution, delivery, validity, enforceability,
performance, breach, discharge, interpretation or construction of this
Agreement, that are not settled within thirty (30) days (or such longer period
as may be mutually agreed upon) from the date that either party notifies the
other in writing that such dispute or disagreement exists shall be finally
settled by arbitration in a proceeding conducted under the then existing
UNCITRAL Arbitration Rules by three (3) arbitrators appointed and acting in
accordance with said rules and the procedure set forth herein, whose award shall
final and binding upon the parties.
10.2. Each party may select one (1) arbitrator, and the two (2)
selected arbitrators shall choose a third arbitrator to serve as chairman of the
arbitration
10.3. The arbitrators to be appointed herein shall have no interest in
this Agreement or either of the parties, and need not be a resident of the
country of the parties or among those individuals on the list of any commercial
arbitration association.
10.4. The cost of any arbitration conducted pursuant to this Agreement
shall be borne equally by the parties, provided, however, that each party shall
pay its own attorney's fees. Notwithstanding the foregoing, as part of the
arbitration award, the arbitrators may include in the award the reasonable
attorneys' fees and cost of the arbitration to the prevailing party.
10.5. The arbitrators shall endeavor to issue a decision in writing
suitable for enforcement under international law within six months from the date
the party seeking arbitration files its written claim under the UNCITRAL
Arbitration Rules. The decision of a majority of the arbitrators shall be final
and binding upon the parties and neither party shall seek recourse to a court of
law or to other authorities to appeal or request revision of the award. Judgment
upon the award returned by the arbitrators may be entered and enforced in any
court having jurisdiction over the parties or the parties' assets.
10.6. The arbitration proceeding shall take place in Cyprus, at the
premises of the Cyprus Chamber of Commerce and Industry and shall be conducted
in the English language.
11. Miscellaneous Provisions.
11.1. Notices. All notices required or permitted hereunder must be
made in writing, in the English language, and will be deemed to be delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom notice
is sent, or (ii) if delivered by mail (whether actually received or not), at the
close of business on the seventh London Business Day next following the day when
placed in the mail, postage prepaid, certified or registered, addressed to the
appropriate party or parties, at the address of such party or parties set forth
below (or at such other address as such party may designate by written notice to
all other parties in accordance herewith):
If to AremisSoft (EE.ME.A) Ltd.:
X X Xxxxxxx
22
Director
AremisSoft (EE.ME.A) Ltd
000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
with a copy to (which will not constitute notice for purposes of this
Agreement):
Xxxxx X. Xxxxxx, Esq.
Xxxxxx Eng Linn & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
If to the Company Shareholders:
Mr. Michael Swovoda
Xxxxxxxxxxx 00
Xxxxxx, Xxxxxxx
11.2 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective permitted
successors and assigns. Neither the Company nor any Company Shareholder may
assign, delegate or otherwise transfer any of their rights or obligations under
this Agreement without the written consent of AremisSoft (EE.ME.A) Ltd.
11.3 Partial Invalidity and Severability. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable Laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a Forum of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part thereof, shall constitute their
agreement with respect to the subject matter hereof and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally permissible, any illegal, invalid or unenforceable provision of this
Agreement shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable provision.
11.4 Waiver. Any term or condition of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such party. No failure on the part of
any party hereto to exercise, and no delay in exercising any right, power or
remedy created hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy by either party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. No waiver by either party hereto of any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.
11.5 Headings. The headings of particular provisions of this Agreement
are inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
11.6 Number and Gender. Where the context requires, the use of the
singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.
23
11.7 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and this Agreement contains the sole and entire agreement between the parties
with respect to the matters covered hereby. This Agreement shall not be altered
or amended except by an instrument in writing signed by or on behalf of the
party entitled to the benefit of the provision against whom enforcement is
sought.
11.8 Governing Law. The Agreement and the rights and obligations of
the parties hereto shall be governed by and construed and enforced in accordance
with the substantive laws of Cyprus, without regard to its conflicts of laws
provisions thereof.
11.9 Counterparts; Signatures. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. This Agreement may be
signed by the parties in various locations and signatures sent to a party via
facsimile machine shall have equal dignity with the original signature for all
purposes.
11.10 Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified with respect thereto below:
"Action" shall mean any action, suit, Litigation, complaint,
counterclaim, claim, petition, mediation contest, or administrative proceeding,
whether at Law, in equity, in arbitration or otherwise, and whether conducted by
or before any Government or other Person.
"Affiliate" means, as to any specified Person, any other Person
that, directly or indirectly through one or more intermediaries or otherwise,
Controls, is controlled by or is under common Control with the specified Person.
"Affiliated Entity" or "Affiliated Entities" shall have the
meaning set forth in Section 3.17.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in the United States are required or
authorized to be closed.
"Capital Stock" means, with respect to: (i) any corporation, any
share, or any depositary receipt or other certificate representing any share, of
an equity ownership interest in that corporation, and (ii) any other Entity, any
share, membership or other percentage interest, unit of participation or other
equivalent (however designated) of an equity interest in that entity.
"Cash Compensation" means, as applied to any employee,
non-employee director or officer of, or any natural person who performs
consulting or other independent contractor services for, the Company or any
Company Subsidiary, the wages, salaries, bonuses (discretionary and formula),
fees, and other cash compensation paid or payable by the Company and each
Company Subsidiary to that employee or other natural person.
"Charter Documents" means, with respect to any Entity, in each
case as amended, modified and supplemented at that time, (i) the articles or
certificate of formation, incorporation or organization (or the equivalent
organizational documents) of that Entity, (ii) by bylaws or limited liability
company agreement or regulations (or the equivalent governing documents) of that
Entity, and (iii) each document setting forth the designation, amount and
relative rights, limitations and preferences of any class or series of that
Entity's Capital Stock or of any rights in respect of that Entity's Capital
Stock.
"Company Contracts" means all existing written and oral Material
Agreements and commitments of the Company, including, without limitation, all
employment and consulting contracts, union contracts, distributorship
agreements, agreements with suppliers and customers (except purchase or sale
orders entered into in the ordinary course of business involving the purchase or
sale of goods or services for not more than Ten Thousand Dollars ($10,000) and
for a term of not more than twelve (12) months), leases, licenses, employee
benefit plans, deferred compensation agreements, indentures, notes,
24
bonds, mortgages, security agreements, loan agreements, guarantees, franchise
agreements, agreements in respect of the issuance, sale, repurchase or transfer
of the Company's Capital Stock, bonds or other securities, powers of attorney,
and any contract which involves a payment by the Company of more than Ten
Thousand Dollars ($10,000) or has a term or requires performance by the Company
over a period of more than ninety (90) days.
"Company Intellectual Property" shall mean any Intellectual
Property that is owned by, or exclusively licensed to the Company or one of its
subsidiaries and shall include all Intellectual Property of the Acquired
Businesses as defined in the recitals to this Agreement.
"Company Registered Intellectual Property" means all of the
Registered Intellectual Property owned by, or filed in the name of the Company
or one of its subsidiaries.
"Company Subsidiary" means at any time any Entity that is a
Subsidiary of the Company at that time.
"Confidential Information" means, with respect to any Person, all
trade secrets and other confidential, non-public and/or proprietary information
of that Person, including information derived from reports, investigations,
research, work in progress, codes, marketing and sales programs, capital
expenditure projects, cost summaries, pricing formulae, contract analyses,
financial information, projections, confidential filings with any Government and
all other confidential, non-public concepts, methods of doing business, ideas,
materials or information prepared or performed for, by or on behalf of that
Person.
"Control" means a Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of another
Person, whether through the ownership of voting Capital Stock, by contract or
otherwise.
"Damages" to any Person means any cost, damage (including any
consequential, exemplary, punitive or treble damage) or expense (including
reasonable fees and actual disbursements by attorneys, consultants, experts or
other Representatives and Litigation costs) to, any fine of or penalty on or any
Liability (including loss of earnings or profits) of any other nature of that
Person.
"Derivative Securities" of a specified Entity means any Capital
Stock, debt security or other indebtedness of the specified Entity or any other
Person which is convertible into or exchangeable for, or any option, warrant or
other right to acquire, (i) any unissued Capital Stock of the specified Entity,
or (ii) any Capital Stock of the specified Entity which has been issued and is
being held by the Entity, directly or indirectly, as treasury Capital Stock.
"Disclosure Memorandum" means certain information regarding the
Company and the Company Shareholders which have been delivered by the Company
Shareholders and the Company pursuant to this Agreement. The Disclosure
Memorandum shall be deemed to be part of and qualify those Sections in this
Agreement which refer to in the Sections of the Disclosure Memorandum.
"Employee Plan" shall have the meaning set forth in Section 3.19.
"Entity" means any sole proprietorship, corporation, partnership
of any kind having a separate legal status, limited liability company, business
trust, unincorporated organization or association, mutual company, joint stock
company or joint venture.
"Environmental Laws" shall mean all Laws, general or particular
conditions, requirements, decrees, and covenants relating to health, safety and
the environment, including, without limitation, Laws and covenants relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or Hazardous Materials or wastes
of every kind and nature into the environment (including without limitation
ambient air, surface water, ground water, soil and subsoil), or otherwise
relating to the manufacture, generation, processing, distribution, application,
use,
25
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, or to
occupational or worker safety and health, and any and all Laws, directives,
guidelines, policies, plans, Orders, stipulations, provisions and conditions of
Environmental Permits, licenses, stipulations, certificates of authorization,
and other operating authorizations, notices or demand letters issued, entered,
promulgated or approved thereunder.
"Environmental Permits" shall mean all permits, licenses,
certificates, approvals, authorizations, regulatory plans or compliance
schedules required by applicable Environmental Laws, or issued by a Government
pursuant to applicable Environmental Laws, or entered into by agreement of the
party to be bound, relating to activities that affect human health or the
environment, including, without limitation, permits, licenses, certificates,
approvals, authorizations, regulatory plans and compliance schedules for air
emissions, water discharges, pesticide and herbicide or other agricultural
chemical storage, use or application, and Hazardous Material or Solid Waste
generation, use, storage, treatment and disposal.
"Financial Statements" shall have the meaning set forth in
Section 3.07.
"Forum" shall mean any federal, national, state, local, municipal
or foreign court, governmental agency, administrative body or agency, tribunal,
private alternative dispute resolution system, or arbitration panel.
"GAAP" shall mean generally accepted accounting principles,
consistently applied in UAE.
"Government" means (i) any national, state, county, municipal or
other government, domestic or foreign, or any agency, board, bureau, commission,
court, department or other instrumentality of any such government, or (ii) any
Person having the authority under applicable Law to assess and collect Taxes for
its own account.
"Governmental Approval" means at any time authorization, consent,
approval, permit, franchise, certificate, license, implementing order or
exemption of, or registration or filing with, any Government, including any
certification or licensing of a natural person to engage in a profession or
trade or a specific regulated activity, at that time.
"Hazardous Material" shall mean any substance or material,
including without limitation raw materials, commercial products and wastes or
waste products that, because of its quantity, concentration, or physical,
chemical or infectious characteristics may cause or significantly contribute to
an increase in mortality or an increase in serious, irreversible or
incapacitating illness, or pose a substantial hazard to human health or the
environment, including without limitation petroleum and all substances and
materials designated as hazardous or toxic under any applicable Environmental
Law.
"Immediate Family Member" of a Company Shareholder means at any
time: (i) if that Company Shareholder is a natural person, any child or
grandchild (by blood or legal adoption) or spouse of that Company Shareholder at
that time, or any child of that spouse, and (ii) if that Company Shareholder is
an Entity whose ultimate beneficial owner is a natural person, or a natural
person and his spouse, any child or grandchild (by blood or adoption) or spouse
at that time (if not then an ultimate beneficial owner of that Entity), or any
child of that spouse, of the ultimate beneficial owner or owners.
"Improvements" shall mean all buildings, structures and other
improvements of any and every nature located on the Real Property and all
fixtures attached or affixed, actually or constructively, to the Real Property
or to any such buildings, structures or other improvements.
"Indemnified Losses" shall have the meaning set forth in Section
7.1.1.
"Indemnitees" shall have the meaning set forth in Section 6.1.1.
26
"Intellectual Property" shall mean any or all of the following
and all rights in, arising out of or associated therewith: (i) all United
States, international and foreign patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof, (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, software, source code, object code, technical data and
customer lists, and all documentation relating to any of the foregoing, (iii)
all copyrights, copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world, (iv) all industrial
designs and any registrations and applications therefor throughout the world,
(v) all trade names, logos, common law trademarks and service marks, trademark
and service xxxx registrations and applications therefor throughout the world,
(vi) all databases and data collections and all rights therein throughout the
world, (vii) all moral and economic rights of authors and inventors, however
denominated, throughout the world, and (viii) any similar or equivalent rights
to any of the foregoing anywhere in the world.
"Known," "to the knowledge of," "aware" or words of similar
import employed in this Agreement with reference to any individual or Entity
shall be conclusively presumed to mean that the individual or Entity has made
reasonable efforts under the circumstances to become knowledgeable; in the case
of the Company, "knowledge" shall be deemed to be the individual and collective
knowledge (as defined above) of its directors and senior officers and managers.
"Law" shall mean all federal, national, state, provincial, local,
municipal or foreign constitutions, statutes, rules, regulations, norms,
ordinances, acts, codes, legislation, treaties, conventions, common law
principles, judicial decisions and similar laws and legal requirements, whether
of the United States of America, Cyprus, India, UAE, or any other jurisdiction
as in effect from time to time.
"Leased Real Property" shall have the meaning set forth in
Section 3.12.
"Liability" shall mean any liability or obligation whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated and whether due or to become due.
"Lien" shall mean any mortgage, pledge, hypothecation, security
interest, encumbrance, claim, restriction on use, lien or charge of any kind, or
any rights of others, however evidenced or created (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the lien notice records or other similar
legislation of any jurisdiction).
"Litigation" means any action, case, proceeding, claim,
grievance, suit or investigation or other proceeding conducted by or pending
before any Government or any arbitration proceeding.
"Material" means, as applied to any Entity or the Company, of a
like or character affecting or effecting the business, operations, property,
property or assets, liabilities, financial condition or result of operations of
that Entity and its Subsidiaries considered as a whole, as the case may be,
which a reasonable person would like to know as part of the total mix of
information considered by such person in making a decision to acquire the
Company Shares.
"Material Adverse Effect" means, with respect to the consequences
of any fact or circumstance (including the occurrence or non-occurrence of any
event) to the Company, that such fact or circumstance has caused, is causing or
will cause, directly, indirectly or consequentially, singly or in the aggregate
with other facts and circumstances, any Damages in excess of Twenty-Five
Thousand Dollars ($25,000).
"Material Agreement" of any Entity means any contract or
agreement (i) to which that Entity or any of its Subsidiaries is a party, or by
which that Entity or any of its Subsidiaries is bound or to which any property
or assets of that Entity or any of its Subsidiaries is subject, and (ii) which
is Material to that Entity.
27
"Orders" shall mean all applicable orders, writs, judgments,
injunctions, decrees, rulings, consent agreements, and awards of or by any Forum
or entered by consent of the party to be bound.
"Organization State" means, as applied to (i) any corporation,
its state or other jurisdiction of incorporation, (ii) any limited liability
company or limited partnership, the state or other jurisdiction under whose laws
it is formed, organized and existing in that legal form, and (iii) any other
Entity, the state or other jurisdiction whose laws govern that Entity's internal
affairs.
"Owned Real Property" shall have the meaning set forth in Section
3.12.
"Person" shall include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a Government.
"Real Property" shall have the meaning set forth in Section 3.12.
"Real Property Lease" shall have the meaning set forth in Section
3.12.
"Reference Date" shall have the meaning set forth in Section
3.07.
"Reference Date Balance Sheets" shall have the meaning set forth
in Section 3.07.
"Registered Intellectual Property" means all United States,
Indian, international and foreign (i) patents and patent applications (including
provisional applications), (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks, (iii) registered copyrights and applications for
copyright registration, and (iv) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any state, government or other public legal
authority.
"Related Parties" shall have the meaning set forth in Section
3.22.
"Representatives" means, with respect to any Person, the
directors, officers, employees, affiliates, accountants (including independent
certified public accounts), advisors, attorneys, consultants or other agents of
that Person, or any other representatives of that Person of any of those
directors, officers, employees, Affiliates, accountants, (including independent
certified accountants), advisors, attorneys, consultants, or other agents.
"Restricted Payment" means, with respect to any Entity at any
time, any of the following that Entity effects: (i) any declaration or payment
of any dividend or other distribution, direct or indirect, on account of any
Capital Stock of that Entity or any Affiliate of that Entity, or (ii) any direct
or indirect redemption, retirement, purchase or other acquisition for value of,
or any direct or indirect purchase, payment or sinking fund or similar deposit
for the redemption, retirement, purchase or other acquisition for value of, or
to obtain the surrender of, any then outstanding Capital Stock of that Entity or
any Affiliate of that Entity or any then outstanding warrants, options, or other
rights to
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acquire or subscribe for or purchase unissued or treasury Capital Stock of that
Entity or any Affiliate of that Entity.
"Returns" shall have the meaning set forth in Section 3.17.
"Solid Waste" shall mean any garbage, refuse, sludge from a waste
treatment plant, water supply treatment plant, or air pollution control facility
and other discarded material, including solid, liquid, semi-solid, or contained
gaseous material resulting from industrial, commercial, mining and agricultural
operations, and from community activities.
"Subsidiary" of any specified Person at any time, means any
Entity a majority of the Capital Stock of which is at that time owned or
controlled, directly or indirectly, by the specified Person.
"Supplemental Information" shall have the meaning set forth in
Section 5.6.
"Survival Period" shall have the meaning set forth in Section
7.4.
"Taxes" shall mean any present or future taxes, levies, imposts
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation income, gross receipts, excise, property,
sales, use, customs, value added, consumption, transfer, license, payroll,
employee income, withholding, Social Security, and franchise taxes, now or
hereafter imposed or levied by the United States of America, India, or any other
Government or by any department, agency or other political subdivision or taxing
authority thereof or therein, all deposits required in connection therewith, and
all interests, penalties, additions to tax, and other similar Liabilities with
respect thereto.
"Wholly Owned Subsidiary" means any corporation or other Entity,
all of whose outstanding Capital Stock on a fully diluted basis is owned by
another Person, directly or indirectly.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement as of the date first above written.
"AREMISSOFT (EE.ME.A) LTD."
Xx. X X Xxxxxxx
By
THE "COMPANY"
DENON INTERNATIONAL LTD
Mr. Michael Swovoda
