Exhibit 10.1
OPTION TO PURCHASE AGREEMENT
This OPTION TO PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of August 2, 1999 by and among InterPro Expense Systems, Inc., a
Delaware corporation ("Optionee"), ASA InterPro SmartTime LLC, a Delaware
limited liability company (herein "Grantor" or "SmartTime LLC"), and ASA
International, Ltd., a Delaware corporation and the sole member of Grantor
("ASA").
W I T N E S S E T H:
WHEREAS, each of Grantor and Optionee believe it is in the best
interests of each company that Optionee acquire the option to acquire the assets
of, and assume the liabilities of, Grantor (the "Acquisition"), such acquisition
to be made, if completed, in accordance with the Asset Purchase Agreement
annexed hereto as EXHIBIT A (the "Purchase Agreement"); and
WHEREAS, Grantor is engaged in the business previously conducted by
the SmartTime division of ASA of designing, developing, selling, marketing and
implementing software commonly referred to as "SmartTime Software" (the
"Business", which term excludes the business related to the Legacy Products and
the Lavie Products, as each is defined in the Purchase Agreement) for time and
attendance information management ("SmartTime"); and
WHEREAS, each of Grantor and Optionee believe that is in its
respective best interests that during the period of the Option (as defined
below) granted hereunder that the Optionee operate the Business; and
WHEREAS, in order for the Optionee to operate the Business it is
necessary for the Grantor to license certain of its assets to the Optionee; and
WHEREAS, in order to induce ASA, as the sole member of the Grantor, to
authorize the Grantor to enter into this Agreement and the transactions
contemplated hereby, the Optionee is willing to lend certain sums to ASA.
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, it is agreed:
1. OPTION.
1.1 GRANT OF OPTION. Based upon and subject to the terms,
agreements, warranties, representations and conditions of this Agreement and the
Purchase Agreement, and in consideration of (a) the sum of One Million Six
Hundred Sixty Thousand Dollars ($1,660,000) (the "Initial Option Fee") paid by
Optionee to Grantor upon the execution hereof and, if the Option (defined below)
has not been exercised on or prior to Xxxxxx 0, 0000, (x) the sum of Five
Hundred Forty Thousand Dollars ($540,000) (the "Second Option Fee") to be paid
by Optionee to Grantor on August 1, 2000 (subject to adjustment as set forth
herein and to the terms of the Purchase Agreement), Grantor irrevocably grants
to Optionee an option to purchase the Assets (the "Option") upon and subject to
the further terms and conditions set forth in this Agreement and the Purchase
Agreement. The Initial Option Fee and the Second Option Fee are sometimes
collectively referred to as the "Option Fee".
1.2 OPTION TERM. The Option shall expire at five o'clock p.m.,
Boston time, on August 31, 2000 (the "Expiration Date").
1.3 EXERCISE OF OPTION. The Option may be exercised by Optionee
at any time beginning August 1, 2000 and prior to the Expiration Date by giving
written notice to Grantor designating a date, time and place for the purchase of
the Assets (the "Closing Date"), which date shall be not earlier than the close
of business on August 1, 2000, nor later that the close of business on August
31, 2000. The Option may be exercised by Optionee prior to August 1, 2000 with
the prior written consent of Grantor.
1.4 PURCHASE PRICE. In the event that Optionee exercises the
Option, subject to the further conditions of this Agreement, Optionee agrees to
purchase the Assets from Grantor for the purchase price of $7,020,000 less the
Option Fee and the Adjustment (the "Purchase Price"), all in accordance with the
Purchase Agreement; PROVIDED that Optionee shall have the right offset the
Purchase Price by any amount then due and payable from ASA to Optionee under the
ASA Note (as defined in Section 7 below).
1.5 NO RETURN OF OPTION FEE. The Option Fee shall be
non-refundable and shall be retained by Grantor whether or not the Option is
exercised by Optionee.
2. REPRESENTATIONS AND WARRANTIES OF GRANTOR AND ASA. Grantor and ASA
hereby repeat and incorporate in this Agreement by reference as if fully set
forth herein each of the representations and warranties of Grantor and ASA set
forth in Article II of the Purchase Agreement. All references therein to the
Purchase Agreement shall be deemed for purposes of this Section 2 to apply to
this Agreement, the Intellectual Property License Agreement and the Customer
Intangibles License Agreement (as each is hereinafter defined.).
3. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby repeats
and incorporates in this Agreement by reference as if fully set forth herein
each of the representations and warranties of Optionee set forth in Article III
of the Purchase Agreement. All references therein to the Purchase Agreement
shall be deemed for purposes of this Section 3 to apply to this Agreement, the
Intellectual Property License Agreement and the Customer Intangible License
Agreement.
4. OPERATION OF THE BUSINESS PRIOR TO THE EARLIER OF THE EXPIRATION
DATE AND THE CLOSING DATE. During the term of this Agreement Optionee shall
operate the Business. In connection therewith, the parties agree to take the
following actions:
4.1 MANAGEMENT AGREEMENT. Simultaneously with the execution of
this Agreement, ASA and Optionee shall enter into the Operating Agreement in the
form annexed hereto as EXHIBIT B (the "Operating Agreement") regarding the
management of Grantor's business and affairs.
4.2 EMPLOYEES. Simultaneously with the execution of this
Agreement, ASA shall transfer all of its employees (excluding the Contracted
Employees, as defined herein) to the employment of Optionee and Optionee shall
continue the employment of all of such individuals as Optionee's employees at
compensation and benefit levels reasonably comparable to such individuals'
compensation and benefits as employees of ASA.
4.3 CONTRACTED EMPLOYEES. The individuals listed on SCHEDULE A
annexed hereto shall remain employees of ASA, which shall provide the services
of such individuals to Optionee on terms mutually agreeable to ASA and Optionee.
4.4 LEASE. Simultaneously with the execution of this Agreement,
ASA and Optionee shall enter into a lease for premises located at 00 Xxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx, in the form annexed hereto as EXHIBIT C (the
"Lease").
4.5 OPERATING EXPENSES. Following the execution of this
Agreement, Optionee shall be responsible for and pay all of the expenses and
costs of operating the Business. In connection therewith, Optionee hereby
assumes and shall pay for or perform all of the Implementation Obligations and
Maintenance Obligations (as each is defined in the Purchase Agreement, and,
collectively, the "Assumed Obligations".
4.6 USE OF FIXED ASSETS. During the term of this Agreement,
Grantor shall make available to Optionee, without charge, the use of all
computers, furniture and other fixed assets of Grantor to use in the operation
of the Business.
4.7 OPTIONEE LOAN. Grantor hereby agrees to loan to Optionee, in
accordance with the provisions of a promissory note in the form annexed hereto
as EXHIBIT D (the "InterPro Note"), the Net Cash of the Grantor. For purposes of
this Agreement, "Net Cash" shall mean the cash remaining available to Grantor
resulting from the collection of the accounts receivable of Grantor existing on
the date of this Agreement, after payment therefrom of the Grantor's Balance
Sheet Liabilities (as defined in the Purchase Agreement).
5. CUSTOMER INTANGIBLES LICENSE AGREEMENT. Simultaneously with the
execution of this Agreement, Grantor and Optionee shall enter into the Customer
Intangibles License Agreement in the form annexed hereto as EXHIBIT E (the
"Customer Intangibles License Agreement").
6. INTELLECTUAL PROPERTY LICENSE AGREEMENT. Simultaneously with the
execution of this Agreement, Grantor and Optionee shall enter into the
Intellectual Property License Agreement in the form annexed hereto as EXHIBIT F
(the "Intellectual Property License Agreement").
7. ASA LOAN. Simultaneously with the execution of this Agreement,
Optionee shall loan to ASA the sum of Three Million Two Hundred Thousand Dollars
($3,200,000) to be evidenced by a promissory note in the form annexed hereto as
EXHIBIT G (the "ASA Note").
8. CONFIDENTIALITY. Each of the parties hereto hereby agrees to keep
such information or knowledge obtained pursuant to the negotiation and execution
of this Agreement or the effectuation of the transactions contemplated hereby,
confidential; provided, however, that the foregoing shall not apply to
information or knowledge which (a) a party can demonstrate was already lawfully
in its possession prior to the disclosure thereof by the other party, (b) is
generally known to the public and did not become so known through any violation
of law or this Agreement, (c) became known to the public through no fault of
such party, (d) is later lawfully acquired by such party from other sources, (e)
is required to be disclosed by order of court or government agency with subpoena
powers or (f) which is disclosed in the course of any litigation between any of
the parties hereto.
9. SURVIVAL OF REPRESENTATIONS. The representations and warranties of
each of the parties set forth herein shall survive the execution of this
Agreement and continue until the earlier of (a) the Expiration Date or (b) the
Closing Date.
10. EXPENSES Subject to the terms in the Purchase Agreement, whether
or not the transactions contemplated by this Agreement are consummated, all fees
and expenses incurred in connection therewith including, without limitation, all
legal, accounting, financial advisory, consulting and all other fees and
expenses of third parties incurred by a party in connection with the negotiation
and effectuation of the terms and conditions of this Agreement and the
transactions contemplated hereby, shall be the obligation of the respective
party incurring such fees and expenses.
11. PUBLIC DISCLOSURE Unless otherwise required by law or this
Agreement, no disclosure (whether or not in response to an inquiry) of the
subject matter of this Agreement or the transactions contemplated hereby shall
be made by a party unless approved by the other parties.
12. REASONABLE COMMERCIAL EFFORTS Subject to the terms and conditions
provided in this Agreement, each of the parties hereto shall use its reasonable
commercial efforts to take promptly, or cause to be taken promptly, all actions,
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations: to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement.
13. ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES Each party hereto, at
the request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be reasonably
necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.
14. NON-COMPETITION AND NON-SOLICITATION During the term of this
Agreement, each of Grantor and ASA agree to be bound by the provisions of
Sections 5.13 and 5.14 of the Purchase Agreement as if such provisions were
fully set forth herein.
15. ATTORNEYS' FEES Subject to the provisions of Section 7.2 of the
Purchase Agreement, if any party to this Agreement brings an action against
another party to this Agreement to enforce its rights under this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable
costs and expenses, including attorneys' fees and costs incurred in connection
with such action, including the appeal of such action.
16. NOTICES All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via telecopy (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Optionee, to:
InterPro Expense Systems, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxx
Attention: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxx, Esq.
Xxxx Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to Grantor or ASA, to:
SmartTime LLC
or
ASA International, Ltd.
00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX
Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esquire
Telecopy No.: (000) 000-0000
17. INTERPRETATION When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. COUNTERPARTS This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
19. ENTIRE AGREEMENT This Agreement and the Schedules and Exhibits
hereto: (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof; (b) are not intended to confer upon any other person any rights or
remedies hereunder, unless expressly provided otherwise; and (c) shall not be
assigned by operation of law or otherwise except as otherwise specifically
provided.
20. SEVERABILITY In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
21. OTHER REMEDIES Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
22. GOVERNING LAW This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
23. RULES OF CONSTRUCTION The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
24. DISPUTE RESOLUTION. Any dispute between the parties arising out of
or related to this Agreement shall be settled by arbitration in accordance with
the provisions of the Purchase Agreement as if such provisions were fully set
forth herein.
IN WITNESS WHEREOF, InterPro Expense Systems, Inc., SmartTime LLC and
ASA International, Ltd. have caused this Agreement to be signed by their duly
authorized respective officers, all as of the date first written above.
INTERPRO EXPENSE SYSTEMS, INC.
By: /S/ XX XXXXXXXXX
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SMARTTIME LLC
By: /S/ XXXXXX X. XXXXXXXX
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ASA INTERNATIONAL, LTD.
By: /S/ XXXXXX X. XXXXXXXX
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