Exhibit 2.1
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EXECUTION COPY
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ASSET PURCHASE AGREEMENT
By and Between
BUSINESS PARTNER SOLUTIONS, INC.
a subsidiary of
SAVOIR TECHNOLOGY GROUP, INC.
and
REAL APPLICATIONS, LTD.
September 8, 1998
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1 DEFINITIONS.....................................................1
ARTICLE 2 PURCHASE AND SALE; CLOSING......................................2
2.1 Purchase and Sale of Assets............................................2
2.2 Assumption of Liabilities; Assignment of Master Distributor Agreements.2
2.3 Purchase Price.........................................................2
2.4 Closing Date...........................................................3
2.5 Accounting Treatment...................................................3
2.6 Tax Treatment..........................................................3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF REAL..........................3
3.1 Organization, Good Standing and Qualification..........................3
3.2 Authority..............................................................3
3.3 Financial Statements...................................................4
3.4 Business Changes.......................................................4
3.5 Bankruptcy and Insolvency..............................................5
3.6 Taxes..................................................................5
3.7 Title to Purchased Assets..............................................5
3.8 Customers and Sales....................................................5
3.9 No Default.............................................................5
3.10 Interest in Customers.................................................6
3.11 Brokers or Finders....................................................6
3.12 Underlying Documents..................................................6
3.13 Full Disclosure.......................................................6
3.14 Intellectual Property.................................................6
3.15 Discount Schedules....................................................6
3.16 IBM Compliance........................................................7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BPS...........................7
4.1 Organization, Good Standing and Qualification..........................7
4.2 Authority..............................................................7
4.3 No Conflict............................................................8
4.4 Brokers or Finders.....................................................8
ARTICLE 5 ADDITIONAL AGREEMENTS...........................................8
5.1 Access to Information..................................................8
5.2 Legal Conditions.......................................................9
5.3 Good Faith.............................................................9
5.4 Investment in Resellers................................................9
5.5 Confidentiality........................................................9
5.6 Employees.............................................................10
5.7 Compliance Claims.....................................................10
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5.8 Leasing...............................................................10
5.9 Hardware Replacement Services.........................................10
ARTICLE 6 CONDITIONS PRECEDENT...........................................11
6.1 Conditions to Obligations of BPS and REAL.............................11
6.2 Conditions to Obligations of BPS......................................12
6.3 Conditions to Obligations of..........................................12
ARTICLE 7 INDEMNIFICATION................................................13
7.1 Indemnification by REAL...............................................13
7.2 Indemnification by BPS................................................14
7.3 Indemnification Procedure.............................................14
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER..............................15
8.1 Termination...........................................................15
8.2 Effect of Termination; Sole Remedy....................................15
ARTICLE 9 GENERAL........................................................16
9.1 Cooperation...........................................................16
9.2 Risk of Loss..........................................................16
9.3 No Third Party Beneficiaries..........................................16
9.4 Notices...............................................................16
9.5 Binding Effect........................................................17
9.6 Entire Agreement; Modification; Waiver................................17
9.7 Attorneys' Fees.......................................................18
9.8 Expenses..............................................................18
9.9 Construction..........................................................18
9.10 Brokerage............................................................18
9.11 Assignment...........................................................18
9.12 Relationship.........................................................18
9.13 No Announcements.....................................................18
9.14 Counterparts.........................................................18
9.15 Severability.........................................................18
9.16 Headings.............................................................18
9.17 Extension; Waiver....................................................19
9.18 Arbitration..........................................................19
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EXHIBITS
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Exhibit A Form of Sales Agreement
Exhibit B Disclosure Schedule
Exhibit C Financial Statements of REAL
Exhibit D Form of Solution Provider Agreement
Exhibit E Form of Non-Compete Agreement
Exhibit F Form of Facilities and Services Agreement
Exhibit G Internal Revenue Service Form 8594
Exhibit H Agreement of Assignment and Assumption
SCHEDULES
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Schedule 2.1(a) Intangibles
Schedule 2.1(c) Permits
Schedule 2.2(a) Assumed Sales Orders
Schedule 2.2(b) Assigned Master Distributor Agreements
Schedule 3.8 Customers and Sales
Schedule 3.10 Customers
Schedule 3.12 Documents
Schedule 3.16 IBM Compliance Issues
Schedule 5.4 Restriction on Investment in Resellers
Schedule 5.6 Employees
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), made and entered into
as of September 8, 1998, by and between BUSINESS PARTNER SOLUTIONS, INC., a
Texas corporation ("BPS"), a subsidiary of SAVOIR TECHNOLOGY GROUP, INC., a
Delaware corporation ("SVTG"), and REAL APPLICATIONS, LTD., a California
corporation ("REAL"),
W I T N E S S E T H:
WHEREAS, BPS desires to purchase from REAL, and REAL desires to sell to
BPS, certain distribution assets of REAL for cash on the terms and conditions
hereinafter set forth; and
WHEREAS, BPS desires to purchase from REAL, and REAL desires to sell to
BPS, certain inventories of REAL in accordance with the terms and conditions set
forth in an inventory purchase agreement (the "Sales Agreement"); and
WHEREAS, BPS, REAL, El Camino Resources International, Inc., a
California corporation ("El Camino"), Xxxxx X. Xxxxxx ("Xxxxxx"), Xxxxx X. Xxxxx
("Xxxxx") and Xxx Xxxxxxxx ("Xxxxxxxx") intend to enter into a covenant not to
compete (the "Non-Compete"); and
WHEREAS, BPS and REAL intend to enter into a solution provider
agreement (the "Solution Provider Agreement") whereby REAL will commit to
purchase IBM RS/6000 and other products exclusively from BPS for a period of
*** from the date of Closing; and
WHEREAS, BPS and REAL intend to enter into a facilities services
agreement whereby REAL shall provide facilities and administrative services to
BPS through December 31, 1998 (the "Facilities and Services Agreement"); and
WHEREAS, BPS and REAL intend to enter into an agreement of assignment
and assumption (the "Agreement of Assignment and Assumption"):
NOW, THEREFORE, in consideration of the covenants, warranties and
mutual agreements hereinafter set forth, BPS and REAL agree as follows:
ARTICLE 1
DEFINITIONS
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The terms defined in this Agreement shall have their respective defined
meanings whenever such terms are used in this Agreement, unless the context
expressly or by necessary implication otherwise requires.
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ARTICLE 2
PURCHASE AND SALE; CLOSING
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2.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions set
forth in this Agreement, REAL agrees to sell, convey, transfer, assign, and
deliver to BPS, and BPS agrees to purchase from REAL on the Closing Date
(as defined in Section 2.4 hereof), the following assets relating to the IBM
mid-range server distribution business of REAL (the "Mid-Range Distribution
Business"), including, without limitation, the following (collectively, the
"Purchased Assets"):
(a) INTANGIBLES. The right to use technical know-how and goodwill
used in the operation of the Mid-Range Distribution Business, including, without
limitation, those listed in SCHEDULE 2.1(A) (collectively, the "Intangibles");
(b) BOOKS AND RECORDS. All papers and records in REAL's care, custody,
or control relating to the Mid-Range Distribution Business, including, without
limitation, all purchasing and sales records, customer and vendor lists and all
accounting and financial records; and
(c) PERMITS. To the extent transferable, all of REAL's rights in, to or
under any governmental licenses, environmental and other permits, approvals and
authorizations which relate to the Mid-Range Distribution Business, including,
without limitation, all those listed in SCHEDULE 2.1(C).
The Purchased Assets shall be conveyed on the Closing Date to BPS by REAL free
and clear of all liabilities, obligations, liens and encumbrances.
2.2 ASSUMPTION OF LIABILITIES; ASSIGNMENT OF MASTER DISTRIBUTOR
AGREEMENTS. BPS is not assuming any debt, liability or obligation of
REAL, whether known or unknown, fixed or contingent, including, without
limitation, any liabilities or obligations arising out of the operation of
REAL's Mid-Range Distribution Business in the ordinary course which are unpaid
as of the Closing Date or connected in any way with any retirement, medical,
life, disability or other employee benefit plan of REAL. All liabilities arising
from or related to REAL's operations or REAL's ownership of the Mid-Range
Distribution Business and Purchased Assets through the Closing Date shall remain
the responsibility of REAL. BPS shall assume inventory, performance and all
other obligations associated with firm sales orders which have not shipped
relating to sales which have not occurred and listed in SCHEDULE 2.2(A) and REAL
shall assign to BPS and BPS shall assume all Master Distributor Agreements
pertaining to REAL's customers listed in SCHEDULE 2.2(B), pursuant to the
Agreement of Assignment and Assumption a form of which is attached hereto as
EXHIBIT H.
2.3 PURCHASE PRICE. As consideration for the transfer of the Purchased
Assets to BPS, BPS shall deliver at the Closing, to REAL a wire transfer in
immediately available funds, in an amount equal to Twelve Million Eight Hundred
Seventy-Five Thousand Dollars ($12,875,000) (the "Purchase Price").
2.4 CLOSING DATE. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Pillsbury Madison & Sutro LLP,
2550 Hanover Street, Palo
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Alto, California at 10:00 a.m. local time on September 8, 1998, or at such other
place and/or time as the parties may agree (the "Closing Date"). Final versions
of the schedules to this Agreement shall be annexed hereto on the Closing Date.
2.5 ACCOUNTING TREATMENT. The parties intend that the purchase and sale
of the Purchased Assets will be accounted for using purchase accounting.
2.6 TAX TREATMENT. Each party hereto agrees (a) that the Purchased Assets
shall be Class IV assets as that term is used in Internal Revenue Service
("IRS") Form 8594 and (b) to properly file Form 8594 a form of which is attached
hereto as EXHIBIT G.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF REAL
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Except as set forth in the disclosure schedule attached hereto as
EXHIBIT B, REAL hereby makes the following representations and warranties,
Sections 3.3, 3.4, 3.7, 3.8, 3.9, 3.10 and 3.14 of which relate solely to the
Mid-Range Distribution Business, for the benefit of BPS, which REAL warrants are
true and correct as of the date of this Agreement and shall be true and correct
as of the Closing Date:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. REAL is a corporation
duly organized, validly existing, and in good standing under the laws of
California. REAL has all necessary corporate powers to own its properties and to
carry on its business as now owned and operated, is duly qualified to transact
business and is in good standing in all jurisdictions in which the nature of its
business or of its properties makes such qualification necessary.
3.2 AUTHORITY. REAL has all requisite corporate power and authority to
enter into this Agreement, and each of the Sales Agreement, the Covenant Not to
Compete, the Solution Provider Agreement, the Facilities and Services Agreement
and the Agreement of Assignment and Assumption (collectively referred to herein
as the "Collateral Agreements"), subject to satisfaction of the conditions set
forth herein, to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Collateral Agreements and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of REAL. This
Agreement and the Collateral Agreements have been duly executed and delivered by
REAL, and constitute the valid and binding obligation of REAL, enforceable in
accordance with their terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the rights of
creditors and the effect or availability of rules of law governing specific
performance, injunctive relief or other equitable remedies. Provided the
conditions set forth in Article 7 are satisfied, the execution and delivery of
this Agreement and the Collateral Agreements do not or will not, and the
consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation under (a) any provision of the
Articles of Incorporation or the Bylaws of REAL or (b) any material agreement or
instrument, permit, franchise, license, judgment or order, applicable to REAL or
its properties or assets.
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No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority (a "Governmental Entity"), is required by or with
respect to REAL in connection with the execution and delivery of this Agreement
or the Collateral Agreements by REAL or the consummation by REAL of the
transactions contemplated hereby or thereby, except for such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws and the laws
of any foreign country.
3.3 FINANCIAL STATEMENTS. REAL has furnished BPS with its unaudited
statements of income and retained earnings relating to the Mid-Range
Distribution Business for the one-year period ended April 30, 1998, and the
three-month period ended July 31, 1998, and balance sheets at, April 30, 1998
and July 31, 1998. The balance sheet at July 31, 1998 is hereinafter referred to
as the "REAL Balance Sheet," and all such financial statements are hereinafter
referred to collectively as the "REAL Financial Statements." The REAL Financial
Statements have been and will be complete, true and accurate in all material
respects and attached hereto as EXHIBIT C and, except for any interim financial
statements, have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved,
and are or will be in accordance with REAL's books and records, and fairly
present the financial position of REAL and the results of its operations as of
the date and for the periods indicated thereon, subject in the case of the
unaudited portion of the REAL Financial Statements to normal year-end audit
adjustments which will not be material and the absence of footnote disclosures.
At the date of the REAL Balance Sheet (the "REAL Balance Sheet Date") and as of
the Closing Date, REAL had and will have no liabilities or obligations, secured
or unsecured (whether accrued, absolute, contingent or otherwise) not reflected
on the REAL Balance Sheet or the accompanying notes thereto except for
liabilities and obligations as may have arisen in the ordinary course of
business prior to the date of said Balance Sheet and which, under GAAP, would
not have been required to be reflected on such Balance Sheet and except for
liabilities incurred in the ordinary course of business since the date of said
Balance Sheet which are usual and normal in amount.
3.4 BUSINESS CHANGES. Since April 30, 1998, except as otherwise
contemplated by this Agreement or as disclosed in writing to BPS, REAL has
conducted its operation of the Mid-Range Distribution Business only in the
ordinary and usual course and, without limiting the generality of the foregoing:
(a) There have been no changes in the condition (financial or
otherwise), business, net worth, assets, properties, employees, operations,
obligations or liabilities of the Mid-Range Distribution Business which, in the
aggregate, have had or may be reasonably expected to have a materially adverse
effect on the condition, business, net worth, assets, prospects, properties or
operations of the Mid-Range Distribution Business.
(b) REAL has not mortgaged, pledged, or otherwise encumbered any of
the Purchased Assets.
(c) REAL has not sold, assigned, transferred or conveyed, or committed
itself to sell, assign, transfer or convey, any computer software, software
programs, inventions, drawings,
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designs, customer lists, proprietary know-how or information, or other rights
used in the Mid-Range Distribution Business.
3.5 BANKRUPTCY AND INSOLVENCY. No petition in bankruptcy (voluntary or
otherwise), assignment for the benefit of creditors, or petition seeking
reorganization or arrangement or other action under federal or state bankruptcy
laws is pending on behalf of or against REAL.
3.6 TAXES. REAL has accurately and completely filed with the appropriate
United States, state, local and foreign governmental agencies all tax returns
and reports required to be filed (subject to permitted extensions applicable to
such filings), and has paid or accrued in full all taxes shown as owing on such
tax returns, duties, charges, withholding obligations and other governmental
liabilities as well as any interest, penalties, assessments or deficiencies, if
any, due to, or claimed to be due by, any governmental authority (including
taxes on properties, income, franchises, licenses, sales and payrolls). (All
such items are collectively referred to herein as "Taxes"). The REAL and Closing
Balance Sheets fully accrue or reserve or will fully accrue or reserve all
current and deferred Taxes. REAL is not a party to any pending action or
proceeding, nor is any such action or proceeding threatened by any governmental
authority for the assessment or collection of Taxes. No liability for Taxes has
been incurred other than in the ordinary course of business. There are no liens
for Taxes except for liens for property taxes not yet delinquent. REAL is not a
party to any Tax sharing, Tax allocation, Tax indemnity or statute of
limitations extension or waiver agreement, and in the past five (5) years has
not been included on any consolidated combined or unitary return with any other
entity.
3.7 TITLE TO PURCHASED ASSETS. REAL has good and marketable title to all of
the Purchased Assets free and clear of any mortgages, liens, pledges, charges,
encumbrances, equities, claims, easements, covenants, conditions or
restrictions.
3.8 CUSTOMERS AND SALES. SCHEDULE 3.8 contains a correct and current list
of all of the customers of Mid-Range Distribution Business together with
summaries of the sales made to each customer during the most recent fiscal year.
Except as indicated in SCHEDULE 3.8, REAL has no information, and is not aware
of any facts, indicating that any of these customers intend to cease doing
business with REAL, or materially alter the amount of the business that they are
presently doing with REAL.
3.9 NO DEFAULT.
(a) Each of the standard customer agreements or contracts of the
Mid-Range Distribution Business, to the best of REAL's knowledge, is a legal,
binding and enforceable obligation by or against REAL, subject to the effect of
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
federal or state laws affecting the rights of creditors and the effect or
availability of rules of law governing specific performance, injunctive relief
or other equitable remedies (regardless of whether any such remedy is considered
in a proceeding at law or in equity). To REAL's knowledge, no party with whom
REAL has an agreement or contract is in default thereunder or has breached any
term or provision thereof which is material to the conduct of the Mid-Range
Distribution Business.
(b) REAL has performed, or is now performing, the obligations of, and
REAL is not in material default (or would by the lapse of time and/or the giving
of notice be in material default)
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in respect of, any contract, agreement or commitment binding upon it or its
assets or properties and material to the conduct of the Mid-Range Distribution
Business. No third party has raised any claim, dispute or controversy with
respect to any of the executory contracts of REAL, nor has REAL received written
notice or warning of alleged nonperformance, delay in delivery or other
noncompliance by REAL with respect to its obligations under any of those
contracts, nor are there any facts which exist indicating that any of those
contracts may be totally or partially terminated or suspended by the other
parties thereto.
3.10 INTEREST IN CUSTOMERS. Neither REAL, nor any officer, director, or
employee of REAL, nor any spouse or child of any of them has any direct or
indirect interest in any customer of REAL listed in SCHEDULE 3.10 attached
hereto.
3.11 BROKERS OR FINDERS. REAL has not dealt with any broker or finder in
connection with the transactions contemplated by this Agreement. REAL has not
incurred, and shall not incur, directly or indirectly, any liability for any
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.12 UNDERLYING DOCUMENTS. Included in SCHEDULE 3.12 is a list of documents
which have been furnished by REAL to BPS. All such documents furnished to BPS
are true and correct copies, and there are no amendments or modifications
thereto that have not been disclosed to BPS.
3.13 FULL DISCLOSURE. To the best of REAL's knowledge, any information
furnished by REAL to BPS in writing pursuant to this Agreement (including the
Exhibits and Schedules hereto), at any time prior to the Closing Date, does not
and will not contain any untrue statement of a material fact and does not and
will not omit to state any material fact necessary to make any statement, in
light of the circumstances under which such statement is made, not misleading.
3.14 INTELLECTUAL PROPERTY. REAL has no Intellectual Property (as defined
herein) relating to the Mid-Range Distribution Business. The term "Intellectual
Property" means the right to use trade names, trademarks, trademark
registrations and applications, service marks, service xxxx registrations and
applications, copyrights, copyright registrations and applications, patents,
patent rights, trade secrets and other intangibles.
3.15 DISCOUNT SCHEDULES.
(a) With respect to that certain Master Managing Industry Remarketer
Sales Agreement by and between REAL and TSG-Total Solutions Group ("TSG") dated
as of September 11, 1996, and as amended by that certain Addendum No. 03, the
discount schedule thereto shall be interpreted to mean ***. For example, but not
by way of limitation, REAL offers new AS/400 systems to TSG at a price equal to
***.
(b) With respect to that certain Master Distributor/Solution Provision
Sales Agreement by and between REAL and Symatrix Technology, Inc. as successor
in interest to AMX Systems, Inc. ("AMX") dated as of August 13, 1998, the
discount schedule thereto shall be interpreted to mean ***. For example, but not
by way of limitation, REAL offers AS/400 products to AMX at a price equal to
***.
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3.16 IBM COMPLIANCE. Except as set forth in SCHEDULE 3.16, REAL is in
compliance with REAL's IBM Business Partner Agreement with IBM dated as of
January 13, 1997, and has conducted its business at all times in compliance with
such agreement. REAL has not received any written notice or warning of alleged
noncompliance by REAL with respect to REAL's obligations under its arrangement
with IBM.
ARTICLE 4
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REPRESENTATIONS AND WARRANTIES OF BPS
BPS hereby makes the following representations and warranties for the
benefit of REAL, which BPS warrants are true and correct as of the date of this
Agreement and shall be true and correct as of the Closing Date:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. BPS is a corporation
duly organized, validly existing, and in good standing under the laws of Texas.
BPS has all necessary corporate powers to own its properties and to carry on its
business as now owned and operated, is duly qualified to transact business and
is in good standing in all jurisdictions in which the nature of its business or
of its properties make such qualification necessary.
4.2 AUTHORITY. BPS has all requisite corporate power and authority to enter
into this Agreement and the related agreements contemplated herein, and, subject
to satisfaction of the conditions set forth herein, to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the related agreements contemplated herein, and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of BPS. This Agreement and the
Collateral Agreements have been duly executed and delivered by BPS and
constitute the valid and binding obligation of BPS enforceable in accordance
with their terms, subject to the effect of applicable bankruptcy, insolvency,
reorganization or other similar federal or state laws affecting the rights of
creditors and the effect or availability of rules of law governing specific
performance, injunctive relief or other equitable remedies. Provided the
conditions set forth in Article 7 are satisfied, the execution and delivery of
this Agreement and the Collateral Agreements do not or will not, and the
consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation under (a) any provision of BPS's
Articles of Incorporation or Bylaws, or (b) any material agreement or
instrument, permit, license, judgment, order, statute, law, ordinance, rule or
regulation applicable to BPS or its properties or assets.
No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority is required by or with
respect to BPS in connection with the execution and delivery of this Agreement
and the related agreements contemplated herein by BPS or the consummation by BPS
of the transactions contemplated hereby or thereby, except for such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state commercial laws.
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4.3 NO CONFLICT. The execution and delivery of this Agreement by BPS and
the performance of BPS's obligations hereunder, (a) are not in violation or
breach of, and will not conflict with or constitute a default under, any of the
terms of the Articles of Incorporation or Bylaws of BPS or any of its
subsidiaries, or any material contract, agreement or commitment binding upon BPS
or any of its assets or properties; (b) will not result in the creation or
imposition of any lien, encumbrance, equity or restriction in favor of any third
party upon any of the assets or properties of BPS; and (c) will not conflict
with or violate any applicable law, rule, regulation, judgment, order or decree
of any government, governmental instrumentality or court having jurisdiction
over BPS or any of its assets or properties.
4.4 BROKERS OR FINDERS. Except for its arrangement with Alliant Partners,
BPS has not dealt with any broker or finder in connection with the transactions
contemplated by this Agreement. Except for its arrangement with Alliant
Partners, BPS has not incurred, and shall not incur, directly or indirectly, any
liability for any brokerage or finders' fees or agents commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE 5
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ADDITIONAL AGREEMENTS
5.1 ACCESS TO INFORMATION. REAL shall afford to BPS and SVTG and shall
cause its independent accountants to afford to BPS and SVTG, and its
accountants, counsel and other representatives, reasonable access during normal
business hours to REAL's properties, books, contracts, commitments and records
and to the independent accountants reasonable access to the audit work papers
and other records of REAL's accountants for the audit year ended April 30, 1998,
relating to the Mid-Range Distribution Business; provided, that such access does
not materially impair the ability of REAL to conduct its business in the
ordinary course. During such period, REAL shall use reasonable efforts to
furnish promptly to BPS and SVTG (a) a copy of each report, schedule and other
document filed or received by REAL pursuant to the requirements of federal and
state securities laws and (b) all other information concerning the business,
properties and personnel of REAL as BPS and SVTG may reasonably request. Pending
the Closing (and if this Agreement is terminated, at all times after the date
hereof), BPS and SVTG shall treat as confidential and will not use, submit or
disclose to, or make available for inspection by any other person, or allow any
other person to use or disclose, any information, materials, documents,
financial statements or other data relating to REAL, its business or its owners.
If this Agreement is terminated, BPS and SVTG shall promptly return to REAL any
and all copies of such material, including copies prepared by BPS and SVTG.
5.2 LEGAL CONDITIONS. Each party will take all reasonable actions necessary
to comply promptly with all legal requirements which may be imposed on such
party with respect to this Agreement and will promptly cooperate with and
furnish information to the other party in connection with any such requirements
imposed upon such other party or any subsidiary of such other party in
connection with this Agreement. Each party will take, and will cause its
subsidiaries to take, all reasonable actions to obtain (and to cooperate with
the other party and its subsidiaries in obtaining) any consent, authorization,
order or approval of, or any exemption by, any governmental authority, or other
third party, required to be obtained or made by such party
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or its subsidiaries (or by the other party or its subsidiaries) in connection
with this Agreement or the taking of any action contemplated thereby.
5.3 GOOD FAITH. Each party shall act in good faith in an attempt to cause
to be satisfied all the conditions precedent to its obligations and those of the
other parties to this Agreement over which it has control or influence. Each
party will act in good faith and take all reasonable action within its
capability necessary to render accurate as of the Closing Date its
representations and warranties contained in this Agreement, but in no event
shall any party hereto be required to spend any amounts in connection with such
actions to the extent that the party reasonably determines that such amounts or
expenses are unreasonable.
5.4 INVESTMENT IN RESELLERS. For the three-year period following the
Closing, REAL agrees that it shall not directly or indirectly acquire control of
or make a controlling investment in (by equity ownership or any other
arrangement including but not limited to partnership, joint venture or similar
interest) any reseller set forth in SCHEDULE 5.4.
5.5 CONFIDENTIALITY.
(a) REAL covenants and agrees that REAL shall maintain in confidence
and shall cause the directors, officers, employees, agents and advisors of REAL
to maintain in confidence, and not use to the detriment of BPS or SVTG any
written, oral or other information obtained in confidence from BPS or SVTG in
connection with this Agreement or the transactions contemplated hereby, unless
(i) such information is already known to such party or to others not bound by a
duty of confidentiality or such information becomes publicly available through
no fault of such party, (ii) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval required
for the consummation of the transactions contemplated by this Agreement, or
(iii) the furnishing or use of such information is required by legal
proceedings; provided that REAL shall provide BPS or SVTG with prompt written
notice of any such requirement so that BPS or SVTG may seek a protective order
or other appropriate remedy. REAL further understands and agrees that any breach
of the covenants contained in this Section 5.5(a) by REAL or its directors,
officers, employees, agents or advisors shall result in irreparable harm to BPS
or SVTG, that money damages would not be a sufficient remedy for any such breach
of the covenants contained in this Section 5.5(a) and that BPS or SVTG shall be
entitled to equitable relief, including injunction and specific performance, as
a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach by REAL of the covenants contained in this
Section 5.5(a) but shall be in addition to all other remedies available at law
or equity to BPS or SVTG.
(b) BPS or SVTG covenants and agrees that BPS or SVTG shall maintain in
confidence and shall cause the directors, officers, employees, agents and
advisors of BPS or SVTG to maintain in confidence, and not use to the detriment
of REAL any written, oral or other information obtained in confidence from REAL
in connection with this Agreement or the transactions contemplated hereby,
unless (i) such information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (ii) the use of such information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the transactions contemplated by this
Agreement, or (iii) the furnishing or use of such information is required by
legal proceedings; provided that BPS or SVTG shall provide REAL with prompt
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written notice of any such requirement so that REAL may seek a protective order
or other appropriate remedy. BPS or SVTG further understands and agrees that any
breach of the covenants contained in this Section 5.5(b) by BPS or SVTG or its
directors, officers, employees, agents or advisors shall result in irreparable
harm to REAL, that money damages would not be a sufficient remedy for any such
breach of the covenants contained in this Section 5.5(b) and that REAL shall be
entitled to equitable relief, including injunction and specific performance, as
a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach by BPS or SVTG of the covenants contained in
this Section 5.5(b) but shall be in addition to all other remedies available at
law or equity to REAL. This Section 5.5(b) shall not apply to any written, oral
or other information obtained from REAL as part of the Purchased Assets.
5.6 EMPLOYEES. ***
5.7 COMPLIANCE CLAIMS. REAL covenants and agrees REAL shall remain
responsible for any and all compliance claims made by IBM relating to sales by
REAL made prior to the Closing Date including without limitation those set forth
on SCHEDULE 3.16.
5.8 LEASING. El Camino shall have a right of first refusal to offer a
leasing program with respect to non-IBM platform sales on terms, both as to the
customer and SVTG, which are competitive to other available leasing sources. In
addition, if there is a material change in the terms with respect to SVTG's
existing leasing arrangements with *** or if SVTG shall in its sole
determination become dissatisfied with such leasing arrangement, EL Camino
shall have a right of first refusal to offer a leasing program with respect to
IBM platform sales on terms, both as to the customer and SVTG, which are
competitive to other available leasing sources. Each right of first refusal
described herein shall automatically terminate upon the earlier of (i) the
termination of the Solution Provider Agreement; or (ii) three (3) years from the
date of the Closing.
5.9 HARDWARE REPLACEMENT SERVICES. SVTG, at its option, may offer hardware
replacement services (the "Hardware Replacement Services") to its customers. In
the event a customer is interested in entering into a Hardware Replacement
Services contract, SVTG shall refer such customer to El Camino's headquarters.
In the event the customer enters into a Hardware Replacement Services contract
with El Camino, SVTG shall be entitled to a one time fee equal to *** of the
annual xxxxxxxx for the Hardware Replacement Services contract, which fee also
shall become due and payable upon each renewal of such contract.
ARTICLE 6
---------
CONDITIONS PRECEDENT
6.1 CONDITIONS TO OBLIGATIONS OF BPS AND REAL. The obligations of BPS and
REAL to consummate this Agreement shall be subject to the satisfaction on or
prior to the Closing Date of the following conditions unless waived by both BPS
and REAL:
(a) GOVERNMENT APPROVALS. All authorizations, consents, orders or
approvals of, or declarations or filings with, or expiration of waiting periods
imposed by, any governmental
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authority necessary for the consummation of the transactions contemplated by
this Agreement and the related agreements contemplated herein.
(b) THIRD-PARTY APPROVALS. Any and all consents or approvals required
from third parties relating to contracts, agreements, licenses, leases and other
instruments, material to the respective businesses of BPS and REAL shall have
been obtained.
(c) LEGAL ACTION. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation of
this Agreement shall have been issued by any federal or state court and remain
in effect, and no litigation seeking the issuance of such an order or
injunction, shall be pending which, in the good faith judgment of REAL or BPS
has a reasonable probability of resulting in such order, injunction or damages.
(d) SALES AGREEMENT. BPS and REAL shall have entered into the Sales
Agreement, a form of which is attached hereto as EXHIBIT A.
(e) SOLUTION PROVIDER AGREEMENT. BPS and REAL shall have entered into
the Solution Provider Agreement, a form of which is attached hereto as
EXHIBIT D.
(f) FACILITIES AND SERVICES AGREEMENT. BPS and REAL shall have
entered into the Facilities and Services Agreement, a form of which is attached
hereto as EXHIBIT F.
(g) AGREEMENT OF ASSIGNMENT AND ASSUMPTION. BPS and REAL shall have
entered into the Agreement of Assignment and Assumption.
(h) XXXX-XXXXX-XXXXXX. If applicable, the waiting period applicable to
the transactions contemplated by this agreement under the Xxxx-Xxxxx-Xxxxxx Act
shall have expired or been terminated.
(i) WAIVER. A consummation of the Closing shall constitute a waiver
of these conditions to Closing.
6.2 CONDITIONS TO OBLIGATIONS OF BPS. The obligations of BPS to consummate
this Agreement are subject to the satisfaction on or prior to the Closing Date
of the following conditions, unless waived by BPS:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of REAL set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as if made at and as of the
Closing Date, except as otherwise contemplated by this Agreement, and BPS shall
have received a certificate or certificates signed by an authorized officer of
REAL to such effect.
(b) DUE DILIGENCE. BPS shall have completed its due diligence
investigation of REAL to its good faith satisfaction.
(c) PERFORMANCE OF OBLIGATIONS. REAL shall have performed all
covenants, agreements, obligations required to be performed by it under this
Agreement prior to the Closing Date, and BPS shall have received a certificate
signed by an authorized officer of REAL to such effect.
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(d) AMX AND TSG CONTRACTS. Each of AMX and TSG shall have entered
into two (2) year purchase contracts with REAL and any successor to the
Mid-Range Distribution Business on terms acceptable to BPS and SVTG. Such
agreement shall be assigned to BPS to be effective as of the Closing Date.
(e) NO MATERIAL ADVERSE CHANGE. There shall have been no changes in the
condition (financial or otherwise), business, prospects, employees, operations,
obligations or liabilities of REAL which, in the aggregate, have had or may be
reasonably expected to have a materially adverse effect on the financial
condition, business, or operations of REAL and the Mid-Range Distribution
Business on a consolidated basis.
(f) NON-COMPETE ARRANGEMENTS. BPS, REAL, El Camino, Xxxxxx, Xxxxx and
Xxxxxxxx shall have entered into a Non-Compete, a form of which is attached
hereto as EXHIBIT E.
(g) REQUIRED CONSENTS. BPS or SVTG shall have received written
consent from all necessary parties including IBM and IBM Credit Corporation.
(h) WAIVER. A consummation of the Closing shall constitute a waiver
of these conditions to Closing.
6.3 CONDITIONS TO OBLIGATIONS OF REAL. The obligations of REAL to
consummate the transactions contemplated hereby are subject to the satisfaction
on or prior to the Closing Date of the following additional conditions unless
waived by REAL:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of BPS set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as if made at and as of the
Closing Date, except as otherwise contemplated by this Agreement, and REAL shall
have received a certificate signed by an authorized officer of BPS to such
effect.
(b) PERFORMANCE OF OBLIGATIONS OF BPS. BPS shall have performed in all
material respects all obligations required to be performed by it under this
Agreement prior to the Closing Date, and REAL shall have received a certificate
signed by an authorized officer of BPS to such effect.
(c) REQUIRED CONSENTS. REAL shall have received written consent from
all necessary parties including IBM and IBM Credit Corporation.
(d) WAIVER. A consummation of the Closing shall constitute a waiver
of these conditions to Closing.
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ARTICLE 7
---------
INDEMNIFICATION
7.1 INDEMNIFICATION BY REAL.
(a) REAL, after the Closing and until the period ending at July 31,
1999, agrees to defend and indemnify BPS and SVTG and their respective
affiliates, directors, officers and interestholders, and their respective
successors and assigns (collectively, the "BPS Indemnitees"), against and hold
each of them harmless from any and all losses, liabilities, taxes, claims,
suits, proceedings, demands, judgments, damages, expenses and costs, including,
without limitation, reasonable counsel fees, costs and expenses incurred in the
investigation, defense or settlement of any claims covered by this indemnity (in
this Section 7.1 collectively, the "REAL Indemnifiable Damages") which any such
indemnified person may suffer or incur by reason of (i) the inaccuracy or breach
of any of the representations, warranties and covenants of REAL contained in
this Agreement or any documents, certificate or agreement delivered pursuant
hereto; (ii) any claim by any person under any provision of any federal or state
securities law relating to any transaction, event, act or omission of or by REAL
occurring before or after the Closing Date; or (iii) liabilities of REAL
relating to the Mid-Range Distribution Business or the Purchased Assets arising
before or after the Closing not expressly assumed by BPS in Section 2.2 hereof.
Nothing herein shall limit in any way BPS's remedies in the event of breach by
REAL of any of its covenants or agreements hereunder which are not also a
representation or warranty or for willful fraud or intentionally deceptive
material misrepresentation or omission by REAL in connection herewith or with
the transactions contemplated hereby.
(b) Without limiting the generality of the foregoing but considering
the limitation on indemnification provided for in Section 7.1(a), with respect
to the measurement of REAL Indemnifiable Damages, BPS and SVTG shall have the
right to be put in the same financial position as they would have been in had
each of the representations, warranties and covenants of REAL been true and
accurate or the same had not breached any such covenants or had any of the
events, claims or liabilities referred to in part (a) of this Section 7.1 not
occurred or been made or incurred.
(c) Any indemnitee under this Agreement may not seek recovery under the
indemnities set forth herein unless and until the REAL Indemnifiable Damages of
such party are greater than $25,000, at which point such indemnity shall apply
to all REAL Indemnifiable Damages.
7.2 INDEMNIFICATION BY BPS.
(a) BPS, after the Closing and until the period ending at July 31,
1999, agrees to defend and indemnify REAL and its respective affiliates,
directors, officers and interestholders, and their respective successors and
assigns (collectively, the "REAL Indemnitees"), against and hold each of them
harmless from any and all losses, liabilities, taxes, claims, suits,
proceedings, demands, judgments, damages, expenses and costs, including, without
limitation, reasonable counsel fees, costs and expenses incurred in the
investigation, defense or settlement of any claims covered by this indemnity (in
this Section 7.2 collectively, the "BPS Indemnifiable Damages") which any such
indemnified person may suffer or incur by reason of (i) the inaccuracy or breach
of any of the representations, warranties and covenants of BPS contained in
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this Agreement or any documents, certificate or agreement delivered pursuant
hereto; or (ii) any claim by any person under any provision of any federal or
state securities law relating to any transaction, event, act or omission of or
by BPS occurring before or after the Closing Date. Nothing herein shall limit in
any way REAL's remedies in the event of breach by BPS of any of its covenants or
agreements hereunder which are not also a representation or warranty or for
willful fraud or intentionally deceptive material misrepresentation or omission
by BPS in connection herewith or with the transactions contemplated hereby.
(b) Without limiting the generality of the foregoing but considering
the limitation on indemnification provided for in Section 7.2(a), with respect
to the measurement of BPS Indemnifiable Damages, REAL shall have the right to be
put in the same financial position as they would have been in had each of the
representations, warranties and covenants of BPS been true and accurate or the
same had not breached any such covenants or had any of the events, claims or
liabilities referred to in part (a) of this Section 7.2 not occurred or been
made or incurred.
(c) Any indemnitee under this Agreement may not seek recovery under the
indemnities set forth herein unless and until the BPS Indemnifiable Damages of
such party are greater than $25,000, at which point such indemnity shall apply
to all BPS Indemnifiable Damages.
7.3 INDEMNIFICATION PROCEDURE. A party seeking indemnification (the
"Indemnitee") shall use its best efforts to minimize any liabilities, damages,
deficiencies, claims, judgments, assessments, costs and expenses in respect of
which indemnity may be sought under this Agreement. The Indemnitee shall give
prompt written notice to the party from whom indemnification is sought (the
"Indemnitor") of the assertion of a claim for indemnification, but in no event
longer than (a) thirty (30) days after service of process in the event
litigation is commenced against the Indemnitee by a third party, or (b) sixty
(60) days after the assertion of such claim. No such notice of assertion of a
claim shall satisfy the requirements of this Section 7.3 unless it describes in
reasonable detail and in good faith the facts and circumstances upon which the
asserted claim for indemnification is based. If any action or proceeding shall
be brought in connection with any liability or claim to be indemnified
hereunder, the Indemnitee shall provide the Indemnitor twenty (20) calendar days
to decide whether to defend such liability or claim. During such period, the
Indemnitee shall take all necessary steps to protect the interests of itself and
the Indemnitor, including the filing of any necessary responsive pleadings, the
seeking of emergency relief or other action necessary to maintain the status
quo, subject to reimbursement from the Indemnitor of its expenses in doing so.
The Indemnitor shall (with, if necessary, reservation of rights) defend such
action or proceeding at its expense, using counsel selected by the insurance
company insuring against any such claim and undertaking to defend such claim, or
by other counsel selected by it and approved by the Indemnitee, which approval
shall not be unreasonably withheld or delayed. The Indemnitor shall keep the
Indemnitee fully apprised at all times of the status of the defense and shall
consult with the Indemnitee prior to the settlement of any indemnified matter.
Indemnitee agrees to use reasonable efforts to cooperate with Indemnitor in
connection with its defense of indemnifiable claims. In the event the Indemnitee
has a claim or claims against any third party growing out of or connected with
the indemnified matter, then upon receipt of indemnification, the Indemnitee
shall fully assign to the Indemnitor the entire claim or claims to the extent of
the indemnification actually paid by the Indemnitor and the Indemnitor shall
thereupon be subrogated with respect to such claim or claims of the Indemnitee.
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ARTICLE 8
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TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual written consent of REAL and BPS;
(b) by either BPS or REAL if there has been a breach of any material
representation, warranty, covenant or agreement contained in this Agreement on
the part of the other party to this Agreement and, if such breach is curable,
such breach has not been cured within ten (10) days after written notice of such
breach;
(c) by either BPS or REAL if the Closing shall not have occurred by
September 15, 1998;
(d) by BPS if any condition to BPS's obligation to consummate this
Agreement as provided in Sections 6.1 and 6.2 hereof has not been satisfied or
waived by BPS;
(e) by REAL if any condition to REAL's obligation to consummate this
Agreement as provided in Sections 6.1 and 6.3 hereof has not been satisfied or
waived by REAL;
(f) by either BPS or REAL if any court or governmental entity of
competent jurisdiction shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree or ruling or
other action shall have become final and nonappealable; provided, however, that
the right to terminate this Agreement pursuant to this Section 8.1(f) shall not
be available to any party who has not used its reasonable best efforts to cause
such order to be lifted.
8.2 EFFECT OF TERMINATION; SOLE REMEDY. Notwithstanding any provisions in
this Agreement to the contrary, if the Closing does not occur, neither BPS nor
REAL shall be entitled to indemnification for the falsity of any representations
or warranties or a breach of any of the covenants and agreements contained
herein to be performed at or prior to the Closing. In the event that this
Agreement shall be terminated pursuant to Section 7.1 hereof, all further
obligations of the parties hereto under this Agreement (other than pursuant to
Sections 5.5 and 8.2 and Article 9 hereof) shall terminate without further
liability or obligation of either party to the other party hereunder.
ARTICLE 9
---------
GENERAL
9.1 COOPERATION. From and after the Closing, REAL and BPS shall cooperate
fully with each other to the end that the Purchased Assets and title thereto
shall be fully and effectively transferred to and conveyed to BPS. Such
cooperation shall include execution and delivery of
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such instruments, consents, notices, acknowledgments, applications and other
documents, as may be reasonably requested by either party hereto.
9.2 RISK OF LOSS. Prior to the Closing, all risk of loss in connection with
the Purchased Assets shall be borne by REAL. In the event any of the Purchased
Assets are damaged by any casualty, REAL shall promptly notify BPS in writing of
such casualty and BPS shall have the right, in its sole and absolute discretion,
either to terminate this Agreement or to purchase the Purchased Assets in
accordance with the terms of this Agreement. Subsequent to the Closing, all risk
of loss in connection with the Purchased Assets shall be borne by BPS.
9.3 NO THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement shall
be construed to confer upon or give to any person or entity other than the
parties hereto and their successors and assigns, any rights or remedies under or
by reason of this Agreement.
9.4 NOTICES. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail registered or certified, postage prepaid, or
by Federal Express, and properly addressed as follows:
If to BPS: Business Partner Solutions, Inc.
c/o Savoir Technology Group, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxx
Chief Financial Officer
Fax: (000) 000-0000
and Carlton Xxxxxx Xxxxxxx XX
Business Partner Solutions, Inc.
0000 Xx. Xxxx 0000 Xxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to: Pillsbury Madison & Sutro LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
If to REAL: REAL Applications, Ltd.
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
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with a copy to: El Camino Resources, Ltd.
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Legal Department
Fax: (000) 000-0000
9.5 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors, assigns, heirs,
executors and personal representatives.
9.6 ENTIRE AGREEMENT; MODIFICATION; WAIVER.
(a) This Agreement and the schedules and exhibits attached to this
Agreement set forth the entire agreement of the parties hereto with respect to
the matters contained herein and no prior or contemporaneous agreement or
understanding pertaining to any such matter shall be effective for any purpose.
No supplement, modification or amendment to this Agreement shall be binding
unless executed in writing by all of the parties. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, any waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
(b) Specifically, the confidentiality letter agreement by and among
REAL, SVTG and BPS dated as of April 24, 1998 is hereby ended and superseded by
the confidentiality provisions of this Agreement set forth in Section 5.5
hereof.
9.7 ATTORNEYS' FEES. In any action between the parties hereto seeking
enforcement of any of the terms and provisions of this Agreement, the prevailing
party in such action shall be entitled, in addition to damages, injunctive or
other relief, to its reasonable costs and expenses, and reasonable attorneys'
fees to be fixed by the court.
9.8 EXPENSES. Each of the parties shall pay all costs and expenses incurred
or to be incurred by it in negotiating and preparing this Agreement and in
closing and carrying out the transactions contemplated by this Agreement.
9.9 CONSTRUCTION. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to agreements
among California residents, made and to be performed entirely within the State
of California.
9.10 BROKERAGE. REAL and BPS (except for its arrangement with Alliant
Partners) each represent that neither has negotiated nor dealt with any broker
in connection with the transaction contemplated in this Agreement. REAL and BPS
shall each indemnify and hold the other harmless from and against any and all
claims, loss, liability, cost or expense, including reasonable attorneys' fees,
arising from or relating to any claim or action by any broker with whom such
party has dealt or is alleged to have dealt.
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9.11 ASSIGNMENT. This Agreement may not be assigned by either party, by
operation of law or otherwise, without the prior written consent of the other
party.
9.12 RELATIONSHIP. The relationship of the parties to this Agreement is
determined solely by the provisions of this Agreement. This Agreement does not
create any agency, partnership, joint venture or trust.
9.13 NO ANNOUNCEMENTS. Until the Closing Date or such earlier time as the
parties may otherwise agree, the parties agree to keep the terms of the
Agreement confidential and not to disclose the same to any third party, except
as required by law.
9.14 COUNTERPARTS. This Agreement may be signed by the parties in different
counterparts and the signature pages combined shall create a document binding on
all parties.
9.15 SEVERABILITY. If any provision of the Agreement is held to be invalid
or unenforceable at law, that provision will be reformed as a valid provision to
reflect as closely as possible the original provision giving maximum effect to
the intent of the parties, or if that cannot be done, will be severed from the
Agreement without affecting the validity or enforceability of the remaining
provisions.
9.16 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
9.17 EXTENSION; WAIVER. At any time prior to the Closing, BPS or REAL may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto or
(c) waive compliance with any of the agreements or conditions for the benefit
thereof contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of all of the parties hereto.
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9.18 ARBITRATION. Any controversy or claim relating to this Agreement or
any breach thereof, shall be settled solely and finally by arbitration in
accordance with the rules of the American Arbitration Association ("AAA") then
in effect in the State of California, and judgment upon such award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof. The
arbitrator may provide that the cost of the arbitration (including reasonable
legal fees) incurred by the prevailing party will be borne by the non-prevailing
party.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
BUSINESS PARTNER SOLUTIONS, INC., a
Texas corporation
By _____________________________________
Its ____________________________________
REAL APPLICATIONS, LTD., a California
corporation
By _____________________________________
Its ____________________________________
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EXHIBIT A
FORM OF SALES AGREEMENT
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SALES AGREEMENT
This Sales Agreement (this "Agreement") is made as of September 8, 1998
(the "Effective Date") by and between Real Applications, Ltd., having its
principal place of business at 00000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxx,
Xxxxxxxxxx 00000 ("SELLER"), and Business Partner Solutions, Inc., a Texas
corporation having offices at 0000 Xx. Xxxx 0000 Xxxx, Xxx Xxxxxxx, Xxxxx 00000
("BUYER").
In consideration of the mutual undertakings herein contained, SELLER
and BUYER agree as follows:
1. SALE: SELLER agrees to sell and BUYER agrees to purchase from SELLER the
machines and features listed on Attachment A (collectively, the
"Equipment") on the terms specified in this Agreement. The machines and
features listed in Attachment A are configured as specified in Attachment
B.
2. SALES PRICE: The sales price for each machine and feature is stated as a
line item on Attachment A. Subject to adjustment for BUYER's returns and
SELLER's re-purchase transactions as authorized under this Agreement, BUYER
will pay 100% of the sales price on the date that is *** days after the
closing of the Asset Purchase Agreement between BUYER and SELLER.
3. DELIVERY, FREIGHT, COSTS, AND RISK OF LOSS: SELLER shall deliver the
Equipment, on or before September 18, 1998, and BUYER shall accept delivery
of the Equipment at BUYER's Fremont, California warehouse. BUYER shall bear
the risk of damage and destruction from every cause once the Equipment has
been delivered to BUYER. SELLER shall pay for all shipping costs to the
designation(s) specified by BUYER.
4. INSPECTION AND RETURN: Attachment A identifies three categories of
Equipment: (a) New Machines, which are new machines to be delivered by
SELLER to BUYER in IBM sealed packaging; (b) Used Machines, which are
machines that are in good working order but that have been used or are
otherwise delivered to BUYER in open IBM packaging; and (c) Features, which
may be new or used and in good working order. BUYER shall inspect each item
of Equipment upon delivery, and BUYER shall be responsible for notifying
SELLER of any defect or damage to an item of Equipment or of any claim
arising hereunder in accordance with the following schedule: (a) as to a
New Machine, within *** days after delivery of the New Machine; (b) as to a
Used Machine, within *** days after delivery of the Used Machine; and (c)
as to a Feature, within *** days after delivery of the Feature. BUYER's
failure to advise SELLER of such defect, damage or claim within the
applicable time period specified above will release SELLER from any
liability for damages therefor. If BUYER notifies SELLER of such damage or
defect within the applicable time period specified above, then BUYER may
return the damaged or defective Equipment to SELLER (with SELLER to pay for
shipping), and BUYER will have no obligation to pay for such Equipment. If
BUYER notifies SELLER that any Used Machine or Feature is missing manuals,
cables, etc. within the applicable time period specified above, SELLER
shall have *** days after receipt of such notice to
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furnish the missing item(s). If SELLER fails to furnish the missing
item(s) within such time period, then BUYER may return the Used Machine
or Feature that is missing the item(s) to SELLER and BUYER will have no
obligation to pay for such Equipment.
5. SELLER'S RE-PURCHASE RIGHT. During the period from the Effective Date up to
the date that is *** days after the Effective Date, SELLER may, at its sole
option, elect to repurchase any line item of Equipment, as described in
Attachment A, at the price specified in Attachment A, provided that BUYER
has not already sold or committed to sell such item of Equipment to a third
party.
6. TITLE: Title to the Equipment shall vest in BUYER upon delivery to BUYER,
provided that BUYER hereby assigns to SELLER a purchase money security
interest in each item of Equipment until such time as SELLER has received
payment in full for such Equipment. Upon SELLER's request, BUYER will
execute such financing statements as may be necessary to evidence SELLER's
security interest in the Equipment.
7. EXTRA FEATURES: If the Equipment on delivery contains any features not
specified in this Agreement, SELLER at its own expense may remove them.
Removal shall be performed by the manufacturer (or another party reasonably
acceptable to BUYER), upon the request of SELLER and at a time reasonably
convenient to BUYER.
8. TAXES: BUYER will be responsible for and shall pay when due all taxes,
fees, withholdings or other charges (including any interest and penalties),
if any, imposed by reason of this sale, other than taxes based on SELLER's
income. BUYER will provide SELLER with a duly executed resale tax exemption
certificate prior to shipment of the Equipment.
9. OPTION TO TERMINATE: SELLER may terminate this Agreement if: (1) BUYER
refuses or is unable to accept delivery of any item of Equipment as
required under Paragraph 3 above; (2) BUYER becomes insolvent or the
subject of proceedings under any law relating to bankruptcy or the relief
of debtors; or (3) BUYER fails to perform any other provision of this
Agreement. SELLER's right to terminate shall be exercised by written notice
to BUYER. The right of SELLER to terminate this Agreement shall not be the
exclusive remedies available to it and is in addition to any other rights
and remedies provided by law or this Agreement, including but not limited
to the right to recover damages from BUYER.
10. FORCE MAJEURE: If SELLER is unable to deliver the Equipment because of an
act of God or other cause beyond the control of SELLER, SELLER shall not be
liable for such failure during the period of and to the extent of the
disability, provided that if such disability continues beyond *** days,
then BUYER, at its option, may terminate this Agreement. If the disability
prevents or interferes with the shipment of the Equipment by the carrier
which SELLER would ordinarily have used, shipment shall not be made by a
more costly carrier unless BUYER advises SELLER that it will assume the
additional costs.
11. MAINTENANCE, WARRANTIES AND DISCLAIMERS: SELLER warrants that it will be
the owner of the Equipment when it is delivered, free and clear of any
liens and encumbrances, with
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the full right to sell the Equipment to BUYER. SELLER warrants that all New
Machines will be new and delivered in sealed manufacturer's packaging and
will qualify for all of the manufacturer's warranties; all Used Machines
will be in good condition and in good working order; all Features will be
in good condition and in good working order and all Equipment will contain
all required parts, manuals, cables, etc. and be eligible for the
manufacturer's standard maintenance agreement, providing BUYER contracts of
such maintenance from the manufacturer prior to installation of the
Equipment. BUYER, recognizing that SELLER is not the manufacturer of the
Equipment, expressly waives any claim against SELLER based upon any
infringement or alleged infringement of any patent, copyright or trademark
with respect to the Equipment. THE FOREGOING REPRESENTATIONS AND WARRANTIES
ARE EXPRESSLY IN LIEU OF ANY OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AND OF ANY OTHER OBLIGATION ON THE PART OF SELLER, THE BUYER
ACKNOWLEDGES THAT IT HAS MADE THE SELECTION OF SAID EQUIPMENT BASED ON ITS
OWN JUDGMENT AND EXPRESSLY DISCLAIMS ANY RELIANCE UPON STATEMENTS MADE BY
SELLER, BUYER AGREES THAT SELLER WILL IN NO EVENT BE LIABLE FOR SPECIAL
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER. Notwithstanding
anything to the contrary, SELLER will repair or replace or if such repair
or replacement is not possible, will refund the purchase price paid for
Equipment that is not covered by the manufacturer's warranty as a result of
abuse, neglect or other acts or omissions by SELLER or its agents.
12. NOTICES: Any notice with regard to this Agreement shall be in writing and
sent by registered or certified mail, postage prepaid, addressed as set
forth in the first paragraph of this Agreement, or to any other address of
which notice has been given. Notice shall be effective upon receipt or ***
days from the date of mailing, whichever occurs first.
13. SOFTWARE DISCLAIMER: SELLER and BUYER acknowledge that the Equipment herein
may include software ("Software") in which SELLER may have no ownership or
other proprietary rights and no such title shall be transferred to BUYER
hereunder. BUYER or the end-user of the Equipment and Software licensed
products ("Licensee") agrees to enter into a license or other agreement for
the use of the Software, and Licensee agrees that, as between BUYER,
Licensee and SELLER, SELLER shall be a third party beneficiary under such
license or other agreement. Any Software agreement shall be separate and
distinct from this agreement, and SELLER and its assigns shall not have any
rights or obligations thereunder with respect to such Software.
14. MISCELLANEOUS:
A. This Agreement is effective only when accepted in writing by an
authorized officer of SELLER at its offices as described above. This
Agreement is made in California upon acceptance, and it shall be
governed by and construed in accordance with its laws, including all
matters of construction, validity, performance, and enforcement.
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B. This Agreement may not be assigned in whole or in part by either party
without the prior written consent of the other, except to a purchaser
of all or substantially all of the assigning party's assets or a
majority of its voting stock, and any attempted assignment contrary to
the requirements of this Section shall be void.
C. NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL, INDIRECT, PUNITIVE, SPECIAL OR INCIDENTAL DAMAGES,
WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF THE OTHER
PARTY OR ITS END-USERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS
OF DATA, GOODWILL, PROFITS, INVESTMENTS, USE OF MONEY OR USE OF BPS
PRODUCTS, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF
OTHER WORK OR IMPAIRMENT OF OTHER ASSETS, OR LABOR CLAIMS), ARISING
OUT OF BREACH OF EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT,
MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE,
EXCEPT ONLY IN THE CASE OF DEATH OR PERSONAL INJURY WHERE AND TO THE
EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY.
D. This Agreement and the Asset Purchase Agreement between BUYER and
SELLER contain the entire understanding between the parties related to
the subject matter of this Agreement and supersedes any prior
understanding and agreements between them concerning its subject.
There are no other oral or written representations, agreements, or
understandings between them related to the subject matter of this
Agreement. This Agreement may be amended, and rights under it may be
waived, only in writing.
E. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and of equal force and effect.
G. F. In the event either party to this Agreement shall elect to enforce
the terms and conditions of this Agreement in any arbitration or
litigation, the prevailing party shall be entitled to recover from
the other party its reasonable attorney's fees and costs, including
those incurred on appeal, as determined by the arbitration or court.
Any controversy or claim relating to this Agreement or any breach
thereof shall be settled solely and finally by arbitration in
accordance with the rules of the American Arbitration Association
("AAA") then in effect in the State of California, and judgment upon
such award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. The arbitrator may provide that the cost
of the arbitration (including reasonable legal fees) incurred by the
prevailing party) will be borne by the non-prevailing party.
H. This Agreement will be governed by and interpreted in accordance with
the laws of the State of California, excluding its conflict of law
principles. Subject to the dispute resolution requirements set forth
in Section G above, each party consents to the exclusive jurisdiction
and venue of the courts located in and serving Santa
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Xxxxx County, California in all matters arising out of or relating to
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective duly authorized representatives.
SELLER: BUYER:
REAL APPLICATIONS, LTD.
By:____________________________
By:____________________________
Name:__________________________
Name: _________________________
Title:_________________________
Title:_________________________
Date:__________________________
Date:__________________________
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BUY NUMBER
KNOW ALL PEOPLE BY THESE PRESENTS:
That ____________________ (hereinafter called "Seller"), for valuable
consideration, the receipt whereof is hereby acknowledged, hereby grants,
transfers and conveys unto ________________________ (hereinafter called
"Buyer"), its successors and assigns, certain items of equipment set forth on
the Attachment A to have and to hold the aforesaid equipment unto Buyer, its
successors and assigns, forever, and Seller for itself and its successors and
assigns, covenants with Buyer that Seller is the lawful owner of the aforesaid
equipment and has the right to sell the same, and warrants that said items of
equipment are free from all encumbrances and liens, and that it will warrant and
defend the same against all claims and demands of all persons:
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be executed in its
name by its proper officers, this _____ day of _____________, 1998.
SELLER
By:_____________________________________
Title:__________________________________
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ATTACHMENT A
***
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ATTACHMENT B
***
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EXHIBIT B
REAL APPLICATIONS, LTD.
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULE
Following are exceptions to the representations and warranties of REAL
Applications, Ltd. ("REAL") set forth in Article 3 of the Asset Purchase
Agreement, dated August 31, 1998, by and among REAL and Business Partner
Solutions, Inc. (the "Agreement"). All of the exceptions stated herein shall
constitute exceptions to each and all of the representations and warranties in
Article 3 of the Agreement to which they may relate, whether or not so itemized.
Section numbers used herein correspond to section numbers in the Agreement.
Capitalized terms not defined herein shall have the meanings given to them in
the Agreement.
SECTION 3.4(B). Fleet Bank ("Fleet") has a blanket lien on all of the
assets of REAL, including intangibles. No consent of Fleet is required
for the transactions contemplated by this Agreement and the Collateral
Agreements. Fleet's lien is automatically released with respect to the
Purchased Assets upon payment to REAL. The purchase price will be wire
transferred to REAL's account at Fleet.
SECTION 3.8. See Section 3.4(b) hereof.
SECTION 5.1. The Mid-Range Distribution Business is a division of REAL
Applications, Ltd. No separate reporting exists specifically as to the
Mid-Range Distribution Business, except for an internal P&L and other
revenue related reporting. REAL Applications, Ltd. is a wholly owned
subsidiary of El Camino Resources, Ltd. While El Camino has had full
audited financials for many years, REAL's first audit was for the
period ended April 30, 1997, for which period only a balance sheet was
prepared. For the fiscal year ended April 30, 1998, REAL will have its
first full audit, including a cash flow statement and income statement.
The audit is in progress and is anticipated to close prior to August
30th. Work papers associated with the April 30, 1997 audit are not
extensive. Very little information for this first audit relates
specifically to the Midrange Distribution Business.
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EXHIBIT C
FINANCIAL STATEMENTS OF REAL
***
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EXHIBIT D
FORM OF SOLUTION PROVIDER AGREEMENT
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EXHIBIT E
FORM OF NON-COMPETE AGREEMENT
THIS AGREEMENT NOT TO COMPETE (the "Non-Compete"), made and entered
into as of September 8, 1998 by and among BUSINESS PARTNER SOLUTIONS, INC., a
Texas corporation ("BPS"), a subsidiary of SAVOIR TECHNOLOGY GROUP, INC., a
Delaware corporation ("SVTG"), EL CAMINO RESOURCES INTERNATIONAL, INC., a
California corporation ("El Camino"), XXXXX X. XXXXXX ("Xxxxxx"), XXXXX X. XXXXX
("Xxxxx") and XXX XXXXXXXX ("Xxxxxxxx") and REAL APPLICATIONS, LTD., a
California corporation ("REAL"),
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Asset Purchase
Agreement, dated as of September 8, 1998 (the "Agreement"), by and between BPS
and REAL, REAL intends to sell, convey, transfer, assign and deliver REAL's
assets relating to its IBM mid-range server distribution business, together with
the associated goodwill (the "Assets"), to BPS in exchange for certain
consideration; and
WHEREAS, this Non-Compete is a condition precedent to the transaction
contemplated in the Agreement and BPS would not enter into the Agreement absent
the execution by each of El Camino, Harmon, Wolff, Xxxxxxxx and REAL of this
Non-Compete:
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises contained in this Non-Compete and for other and further valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined in this
Agreement shall have the meanings set forth in the Agreement.
2. TERM. BPS, El Camino, Harmon, Wolff, Xxxxxxxx and REAL hereby
enter into this Non-Compete for a term ending ***.
3. CONSIDERATION FOR COVENANT NOT TO COMPETE. The sole consideration
for the faithful performance of the obligations specified in Section 4 hereof by
El Camino, Harmon, Wolff, Xxxxxxxx and REAL shall be the consideration received
by REAL under the Agreement.
4. AGREEMENT NOT TO COMPETE. The parties hereto agree that for the term
of this Non-Compete, El Camino, Harmon, Wolff, Xxxxxxxx and REAL, and their
affiliates will not, in any of the jurisdictions set forth in EXHIBIT A hereto,
directly or indirectly: (i) engage in the two-tier IBM mid-range server
distribution business (a "Competing Business"); (ii) acquire an interest
exceeding a five percent (5%) equity interest in any entity which is engaged in
a Competing Business; provided that should REAL or El Camino acquire an interest
in a Competing Business exceeding five percent (5%) in connection with an
acquisition, merger, consolidation or similar transaction, REAL or El Camino
shall divest such Competing Business within six (6) months of such acquisition,
merger, consolidation or similar transaction; (iii) assist any other person or
entity to be so engaged; or (iv) approach, contact or solicit any then current
employee of SVTG and/or BPS or any affiliate of SVTG and/or BPS to leave the
employ of SVTG and/or BPS or any of its affiliates without the prior written
consent of SVTG and/or BPS.
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5. NON-SOLICITATION BY BPS OR SVTG. The parties hereto agree that for
the term of this Non-Compete, BPS and SVTG will not, in any of the jurisdictions
set forth in EXHIBIT A hereto, directly or indirectly, approach, contact or
solicit any then current employee of REAL or any affiliate of REAL to leave the
employ of REAL or any of its affiliates without the prior written consent of
REAL.
6. INTERPRETATION.
(a) El Camino, Harmon, Wolff, Xxxxxxxx and REAL recognize that the
foregoing covenant in Section 4, and the territorial, time and other limitations
with respect thereto, are reasonable and properly required for the adequate
protection of the acquisition of the Assets by BPS, and agree that such
limitations are reasonable with respect to the business activities of El Camino,
Harmon, Wolff, Xxxxxxxx and REAL.
(b) The parties recognize that the laws and public policies of the
various states of the United States and the District of Columbia may differ as
to the validity and enforceability of covenants similar to those contained in
Section 4. It is the intention of the parties that the provisions of Section 4
shall be enforced to the fullest extent permissible under the laws and public
policies of the State of California and of any other jurisdiction in which
enforcement may be sought, but that the unenforceability (or the modification to
conform with such laws or public policies) of any provisions hereof shall not
render unenforceable or impair the remainder of Section 4. To the extent that
Section 4 shall be declared unenforceable in any one or more of such
jurisdictions, such declaration shall not affect Section 4 with respect to each
other jurisdiction, as Section 4 shall be construed to be severable and
independent. If any provision of Section 4 shall be determined to be invalid or
unenforceable, either in whole or in part, Section 4 shall be deemed amended to
delete or modify, as necessary, the offending provisions and to alter the
balance of Section 4 in order to render the same valid and enforceable to the
fullest extent permissible as aforesaid.
7. REMEDIES. In the event of a breach or a threatened breach of any of
the covenants contained in Xxxxxxx 0, XXXX and BPS shall, in addition to the
remedies provided by law, have the right and remedy to have such covenants
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any material breach of any of the covenants will
cause irreparable injury to SVTG and BPS and that money damages will not provide
an adequate remedy to SVTG and BPS.
8. SUCCESSORS AND ASSIGNS. This Non-Compete shall inure to the benefit
of the successors and assigns of SVTG and BPS. Neither El Camino, Harmon, Wolff,
Xxxxxxxx nor REAL may assign its obligations hereunder, and any such proposed
assignment shall be void. Subject to the foregoing, this Non-Compete shall inure
to the benefit of, and bind the successors and assigns of El Camino, Harmon,
Wolff, Xxxxxxxx and REAL.
9. WAIVER. The failure of any party to insist, in any instance, upon
performance of any of the terms or conditions of this Non-Compete shall not be
construed as a waiver of future performance of any such term or condition, and
the obligations of any party with respect thereto shall continue in full force
and effect.
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10. EFFECTIVENESS. The effectiveness of this Non-Compete is expressly
conditioned on the closing of the transaction specified in the Agreement.
11. ENTIRE AGREEMENT. This Non-Compete and the Agreement set forth
the entire agreement between the parties with respect to the subject matter
hereof and may be amended only by an agreement in writing signed by the party
against whom enforcement of any amendment is sought.
12. NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail registered or certified, postage
prepaid, or by Federal Express, and properly addressed as follows:
If to BPS: Business Partner Solutions, Inc.
c/o Savoir Technology Group, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxx
Chief Financial Officer
Fax: (000) 000-0000
and Carlton Xxxxxx Xxxxxxx XX
Business Partner Solutions, Inc.
0000 Xx. Xxxx 0000 Xxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to: Pillsbury Madison & Sutro LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
If to REAL: REAL Applications, Ltd.
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to: El Camino Resources, Ltd.
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Legal Department
Fax: (000) 000-0000
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13. GOVERNING LAW. This Non-Compete and its validity, construction
and performance shall be governed in all respects by the internal laws of the
State of California without giving effect to principles of conflict of laws.
14. ATTORNEYS. Pillsbury Madison & Sutro LLP has only represented BPS
in connection with this transaction. Each of El Camino, Harmon, Wolff, Xxxxxxxx
and REAL has had an opportunity to consult with its counsel regarding the terms
of this Non-Compete.
15. COUNTERPARTS. This Agreement may be signed by the parties in
different counterparts and the signature pages combined shall create a document
binding on all parties.
IN WITNESS WHEREOF, the parties have hereto executed this Non-Compete
as of the date first written above.
EL CAMINO RESOURCES BUSINESS PARTNER SOLUTIONS, INC.,
INTERNATIONAL, INC., a California a Texas corporation
corporation
By ________________________________ By ________________________________
Its _______________________________ Its _______________________________
REAL APPLICATIONS, LTD., a California n
___________________________________ corporatio
Xxxxx X. Xxxxxx
By ________________________________
___________________________________ Its _______________________________
Xxxxx X. Xxxxx
___________________________________
Xxx Xxxxxxxx
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EXHIBIT A
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I. CALIFORNIA COUNTIES:
-------------------
1. Alameda 23. Riverside
2. Alpine 24. Sacramento
3. Calaveras 25. San Xxxxxx
4. Xxxxxx Xxxxx 00. Xxx Xxxxxxxxxx
0. Xx Xxxxxx 00. San Diego
6. Fresno 28. San Francisco
7. Xxxxx 29. San Xxxxxxx
8. Xxxx 30. San Xxxx Obispo
9. Kings 31. San Mateo
10. Lake 32. Santa Xxxxxxx
11. Los Angeles 33. Santa Xxxxx
12. Madera 34. Santa Xxxx
13. Xxxxx 35. Sierra
14. Mariposa 36. Siskiyou
15. Mendocino 37. Xxxxxx
16. Merced 38. Sonoma
17. Monterey 39. Stanislaus
18. Napa 40. Xxxxxx
19. Nevada 41. Ventura
20. Orange 42. Yolo
21. Placer 43. Yuba
22. Plumis
II. UNITED STATES. All of the States of the United States other than
California.
III. CANADA, MEXICO, AND PUERTO RICO.
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EXHIBIT F
FACILITIES AND SERVICES AGREEMENT
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FACILITIES AND SERVICES AGREEMENT
---------------------------------
THIS FACILITIES AND SERVICES AGREEMENT (this "Agreement"), dated as of
September 8, 1998, (the "Effective Date") is made by and between BUSINESS
PARTNER SOLUTIONS, INC., a Texas corporation ("BPS"), having offices at 0000 Xx.
Xxxx 0000 Xxxx, Xxx Xxxxxxx, Xxxxx 00000, and REAL APPLICATIONS, LTD., a
California corporation ("REAL"), having offices at 00000 Xxxxxx Xxxxxx Xxxx,
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
A. BPS has purchased REAL's mid-range distribution business as of the
Effective Date pursuant to that certain Asset Purchase Agreement of even date
herewith by and between BPS and REAL.
B. BPS desires to share the facilities of REAL located at 21051 and
00000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000 (the "Facilities")
with REAL, and REAL desires to share the Facilities with BPS.
C. The parties mutually desire to establish an arrangement whereby
REAL may provide certain Services (as defined below) to BPS.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. TERM. Unless earlier terminated in accordance with Section 9
below, the term of this Agreement shall be the period that commences on the
Effective Date and that continues through *** (the "Agreement Term").
2. THE PREMISES.
(a) OCCUPANCY. REAL hereby agrees that BPS shall be permitted to occupy
and utilize the following portions of the Facilities during the Agreement Term:
The portions of the facility located at 00000 Xxxxxx Xxxxxx Xxxx that currently
are used and / or occupied by administrative personnel who will provide the
Services; and the portions of the facility located at 00000 Xxxxxx Xxxxxx Xxxx
that currently are used and / or occupied by sales personnel who will provide
the Services (the "Premises"). (b) OBLIGATIONS FOR THE Premises. REAL will
deliver the Premises to BPS on the Effective Date in good repair. REAL agrees
that during the Agreement Term, all obligations relating to the Premises,
including without limitation, obligations of maintenance, repair, upkeep, taxes,
utilities (excluding communications) and all other costs pertaining to the
Premises shall for all purposes be borne exclusively by REAL. REAL shall
maintain telephones, telephone wiring, modems, data and electrical needs,
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including without limitation wiring, construction, locks and so forth, in at
least the same manner as REAL currently provides and maintains such equipment
for the administrative and sales personnel who will be providing the Services to
BPS.
(c) JANITORIAL. REAL will deliver the Premises to BPS in clean
condition, and REAL will provide at its sole expense ordinary and reasonable
janitorial services for the Premises.
3. SERVICES.
(a) PROVISION OF SERVICES. In consideration for the payments received
by REAL under Section 2.3 of the Asset Purchase Agreement, REAL shall provide to
BPS upon BPS's request the services set forth on SCHEDULE A to this Agreement
(the "Services") during the Agreement Term.
(b) TERMINATION OF SERVICES. BPS may terminate the Services upon ***
days' written notice to REAL.
4. INSURANCE.
(a) REAL REQUIREMENTS. REAL will maintain, during the Agreement Term,
at its sole expense at least the same level of insurance coverage that REAL
maintained for the Facilities and REAL operations prior to the Effective Date,
and such insurance shall be adequate to protect REAL and BPS from any
liabilities, losses, damages and expenses arising from REAL's provision of the
Services and/or the Premises. Such insurance shall include but not be limited to
workers' compensation insurance as required by the laws of the state in which
the Services are provided, commercial general liability insurance providing
bodily injury and property damage coverage.Promptly after the Effective Date,
REAL shall (i) name BPS as an additional named insured on all such insurance
policies, (ii) name both Facilities (including the Premises) as an insured
location on all applicable insurance policies, and (iii) furnish BPS with a
certificate evidencing such coverage. The certificate and policies shall also
provide that REAL's policies will not be canceled or materially altered without
*** days prior written notice to BPS.
(b) BPS REQUIREMENTS. BPS will procure and maintain at its sole expense
full and adequate insurance coverage of all of its property and equipment that
is located within the Facilities and of BPS's operations conducted from within
the Facilities so as to protect itself and REAL from any liabilities, losses,
damages and expenses arising from BPS's activities within the Facilities. Such
insurance shall include but not be limited to workers' compensation insurance as
required by the laws of the state in which BPS is conducting its activities
under this Agreement, commercial general liability insurance providing bodily
injury and property damage coverage with a combined single limit of at least the
same level at which BPS insures other similar operations.. Promptly after the
Effective Date, BPS shall (i) name REAL as an
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additional named insured on all such insurance policies, (ii) and furnish BPS
with a certificate evidencing such coverage.
5. INDEPENDENT CONTRACTOR. It is understood and agreed that REAL is an
independent contractor hereunder and therefore has full and sole responsibility
for compliance with all applicable federal, state and local laws, ordinances and
regulations, relating to employment, labor, wages, benefits, taxes, fire and
safety, and other matters in conjunction with the Services to be performed
hereunder, including the obtaining of all necessary permits and licenses. REAL
is responsible for the conduct of its employees and agents and will in addition
promptly remove any who may be objectionable to BPS from providing Services
hereunder.
6. INDEMNIFICATION.
(a) BY REAL. REAL will indemnify, defend and hold harmless BPS and each
of its officers, directors, employees, affiliates and subsidiaries against any
and all losses, liabilities, damages, claims, demands, costs, obligations,
deficiencies and expenses (including without limitation interest, penalties,
court costs, expert witness fees and expenses, consultants' fees and expenses
and attorney's fees and expenses) (collectively, "Losses") arising from or in
connection with: (i) the Services or Premises; (ii) negligence or breach of this
Agreement by REAL, its directors, officers, employees and/or agents; or (iii)
any Hazardous Materials (as defined below) that may be present on, in, around,
below or originating from the Facility other than any Hazardous Materials
brought to the Facility by BPS. "Hazardous Material" means any material,
substance, waste or component thereof (whether a liquid, solid, or gas) that is
prohibited, controlled, or regulated by any governmental entity having
jurisdiction as a contaminant, pollutant, toxic substance, radioactive
substance, hazardous waste, hazardous substance, hazardous material or
petroleum, its derivatives, by-products or other hydrocarbons, pursuant to any
applicable United States, state, or local environmental or health and safety
law, rule or regulation.
(b) BY BPS. BPS will indemnify, defend and hold harmless REAL and each
of its officers, directors, employees, affiliates and subsidiaries against any
and all losses, liabilities, damages, claims, demands, costs, obligations,
deficiencies and expenses (including without limitation interest, penalties,
court costs, expert witness fees and expenses, consultants' fees and expenses
and attorney's fees and expenses) (collectively, "Losses") arising from or in
connection with: (i) BPS' negligence in the use of the Premises or Services or
breach of this Agreement by BPS, its directors, officers, employees and/or
agents; or (iii) any Hazardous Materials (as defined below) that are brought to
the Facility by BPS. "Hazardous Material" means any material, substance, waste
or component thereof (whether a liquid, solid, or gas) that is prohibited,
controlled, or regulated by any governmental entity having jurisdiction as a
contaminant, pollutant, toxic substance, radioactive substance, hazardous waste,
hazardous substance, hazardous material or petroleum, its derivatives,
by-products or other hydrocarbons, pursuant to any applicable United States,
state, or local environmental or health and safety law, rule or regulation.
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7. CONFIDENTIAL INFORMATION.
(a) Each party may encounter or receive information that the other
party to this agreement considers to be confidential or proprietary
("Confidential Information"). Each party will endeavor to notify the other party
of specific information which is Confidential Information by suitably labeling
written or other tangible representations of the Confidential Information as
such, or by written, oral or visual instructions as to the nature and expected
care to be accorded to the Confidential Information, however it is possible that
there may be occasions when such notice or instruction is not given.
Accordingly, each party will ensure that it and its employees who have access to
such Confidential Information will exercise care to protect and preserve in
strict confidence and not to use for any purpose or disclose to any third party
any Confidential Information of the other party. In no event shall the receiving
party use less than the same degree of care to protect the Confidential
Information of the other party as it would employ with respect to its own
information of like importance that it does not want to have published or
disseminated.
(b) EXCEPTIONS. Notwithstanding anything in this Agreement to the
contrary, the foregoing restrictions on use and disclosure of Confidential
Information shall not apply to information that: (i) has become known to the
general public, without the fault or breach of the receiving party, (ii) the
receiving party independently developed without the use of any Confidential
Information, as evidenced by written records; or (iii) the receiving party
rightfully obtains from a third party who has the right to transfer or disclose
it.
(c) The Confidential Information includes, but is not limited to: (i)
technical information concerning the design or development of products or
processes; (ii) applications being prepared or which have been submitted to
domestic federal, state, or municipal, or foreign, government agencies to pursue
protection or preservation of intellectual property rights or to obtain approval
for marketing or distribution of products or for practicing processes; (iii)
trade secret information not generally known by competitors; (iv) financial
business information; (v) lists of customers or suppliers, or the nature,
purpose, or schedule of specific transactions with customers or suppliers; (vi)
equity or debt transactions; and (vii) any information that a party knows or
reasonably should know is confidential or proprietary information of the other
party. In particular, but without limitation, REAL agrees that all documents and
tangible items provided to REAL by BPS or created by REAL for use in connection
with the provision of Services to BPS are the property of BPS and shall be
promptly returned to BPS on termination of such provision of Services together
with all copies, recordings, abstracts, notes or reproductions of any kind made
from or about the documents and tangible items or the information they contain.
REAL represents that all REAL employees and contractors that provide Services to
REAL are already or will be subject to a written agreement with REAL and / or
REAL employment policies that prohibit the unauthorized use or disclosure of BPS
Confidential Information. In particular, but without limitation, BPS agrees that
any REAL Confidential Information shall be promptly returned to REAL on
termination of this Agreement together with all copies, recordings, abstracts,
notes or reproductions of any kind made from or about the documents and tangible
items or the information they contain.
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BPS represents that all BPS employees and contractors are already or will be
subject to a written agreement with BPS and / or BPS employment policies that
prohibit the unauthorized use or disclosure of REAL Confidential Information.
8. FURTHER ASSURANCES. REAL and BPS shall execute such further
documents and instruments, requested by either party, as may be necessary or
reasonably desirable to consummate the transactions contemplated herein.
9. TERMINATION. This Agreement may be terminated: (i) by BPS on ***
days' notice with or without cause; and (ii) by either party to this Agreement
upon *** days' notice to the other party if such other party materially breaches
this Agreement and fails to cure the breach within *** days of such notice.
10. GENERAL.
(a) NOTICE. All notices required or permitted by this Agreement will be
given in writing, delivered in person, or by courier, or by certified or
registered mail, postage prepaid, or by facsimile or other recognized form of
electronic transmission, addressed to REAL or BPS, as the case may be, as set
forth above or to such change of address as is given by notice, and will be
effective upon mailing or transmission.
(b) GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of California, without
regard to any conflict of laws principles thereunder. This Agreement shall be
deemed to have been drafted by both of the parties hereto, and no rule of
construction shall be applied in favor of or against either party hereto.
(c) LIMITATION ON LIABILITY. EXCEPT FOR CLAIMS ARISING OUT OF A BREACH
OF SECTION 7 ABOVE, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL, INDIRECT, PUNITIVE, SPECIAL OR INCIDENTAL DAMAGES, WHETHER
FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF THE OTHER PARTY OR ITS
END-USERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL,
PROFITS, INVESTMENTS, USE OF MONEY OR USE OF BPS PRODUCTS, INTERRUPTION IN USE
OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS,
OR LABOR CLAIMS), ARISING OUT OF BREACH OF EXPRESS OR IMPLIED WARRANTY, BREACH
OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR
OTHERWISE, EXCEPT ONLY IN THE CASE OF DEATH OR PERSONAL INJURY WHERE AND TO THE
EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY.
(d) DISPUTE RESOLUTION. Any controversy or claim relating to this
Agreement or any breach thereof shall be settled solely and finally by
arbitration in accordance with the rules of the American Arbitration Association
("AAA") then in effect in the State of California, and
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judgment upon such award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The arbitrator may provide that the cost of
the arbitration (including reasonable legal fees) incurred by the prevailing
party) will be borne by the non-prevailing party.
(e) SEVERABILITY. If any provision of the Agreement is held to be
invalid or unenforceable at law, that provision will be reformed as a valid
provision to reflect as closely as possible the original provision giving
maximum effect to the intent of the parties, or if that cannot be done, will be
severed from the Agreement without affecting the validity or enforceability of
the remaining provisions.
(f) SURVIVAL. The provisions of Sections 4 (for a period of 3 months),
5, 7, 8 and 10 shall survive termination of this Agreement.
(g) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements and undertakings,
both written and oral, with respect to the subject matter hereof.
(h) HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same document.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized representatives as of the date first above set
forth.
REAL APPLICATIONS, LTD.
By ______________________________________
Name ____________________________________
Title ___________________________________
BUSINESS PARTNER SOLUTIONS, INC.
By ______________________________________
Name ____________________________________
Title ___________________________________
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SCHEDULE A
----------
DESCRIPTION OF SERVICES
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* * *
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EXHIBIT G
INTERNAL REVENUE SERVICE FORM 8594
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EXHIBIT H
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AGREEMENT OF ASSIGNMENT AND ASSUMPTION
--------------------------------------
THIS AGREEMENT OF ASSIGNMENT AND ASSUMPTION is entered into effective
as of September 8, 1998, by and between REAL APPLICATIONS, LTD., a California
corporation ("Assignor"), and BUSINESS PARTNER SOLUTIONS, INC., a Texas
corporation ("Assignee"). Capitalized terms not defined herein shall have the
meanings ascribed to them in that certain Asset Purchase Agreement of even date
herewith by and between Assignor and Assignee (the "Asset Purchase Agreement").
1. ASSIGNMENT. For good and valuable consideration, receipt of which
is hereby acknowledged, Assignor hereby assigns, transfers and sets over to
Assignee, effective as of the date hereof, the inventory, performance and all
other obligations associated with firm sales orders which have not shipped
relating to sales which have not occurred and listed in SCHEDULE 2.2(A) and all
Master Distributor Agreements pertaining to REAL's customers listed in SCHEDULE
2.2(B) (collectively, the "Obligations").
2. ASSUMPTION. Assignee hereby expressly assumes, and hereby
covenants and agrees to perform and fulfill, all of the obligations of the
Assignor which are to be performed in connection with such Obligations, as fully
as if Assignee had originally been obligated to make such payments.
3. INDEMNITY. Assignee agrees to indemnify, defend and hold the
Assignor harmless from and against any and all claims, losses, costs, expenses
or liabilities arising on or after the date hereof from Assignee's failure to
perform under such Obligations.
4. CONSENTS OF OTHERS OBTAINED. Assignor represents and warrants
that it has obtained the consents required to be obtained to assign the
Obligations to Assignee.
5. NO KNOWN DEFAULTS. Assignors represents and warrants that to its
knowledge there is no default or breach by Assignor or any other party, and no
event which, with notice and/or the passage of time would constitute a breach or
default by Assignor or any other party, in connection with the Obligations.
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6. MISCELLANEOUS. Any waiver by either party of a breach of any term,
provision or condition of this Agreement shall not operate or be construed as a
waiver of any subsequent breach of the same or any other term, provision or
condition of this Agreement. No waiver of any term, provision or condition of
this Agreement shall be valid unless in writing and signed by the party agreeing
to such waiver. This Agreement shall be governed by and construed in accordance
with the laws of the State of California, provided, however, that this Agreement
shall be construed as intended by the parties. This Agreement may be executed in
one or more counterparts, each of which shall be an original and all of which
shall together constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement of
Assignment and Assumption as of the date first above written.
ASSIGNOR:
REAL APPLICATIONS, LTD., a California
corporation
By ____________________________________
Its ___________________________________
ASSIGNEE:
BUSINESS PARTNER SOLUTIONS, INC.,
Texas corporation
By ____________________________________
Its ___________________________________
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SCHEDULE 2.2(a)
---------------
* * *
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SCHEDULE 2.2(b)
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* * *
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SCHEDULE 2.1(a)
INTANGIBLES
None
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SCHEDULE 2.1(c)
PERMITS
None
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ASSUMED SALES ORDERS
***
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SCHEDULE 2.2(b)
ASSIGNED MASTER DISTRIBUTOR AGREEMENTS
***
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SCHEDULE 3.8
CUSTOMERS AND SALES
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SCHEDULE 3.10
CERTAIN CUSTOMERS
***
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SCHEDULE 3.12
DOCUMENTS
(a) IBM Business Partner Agreement by and between REAL and IBM (Distributor
Profile/Solution Provider Profile) dated as of January 13, 1997 with
the following attachments: General Terms; Complementary Marketing
Terms; North American Solution Provider Attachment; Managing Industry
Remarketer - Schedule A; Remarketer General Terms.
(b) U.S. Business Partner Agreement by and between REAL and Candle
Corporation effective June 1997.
(c) Managing Industry Remarketer Non-Exclusive Distributor Agreement by and
between REAL and International Marketing Strategies, Inc. dated as of
December 31, 1996.
(d) Midrange Value Added Distributor Agreement by and between REAL and Wall
Data Incorporated dated as of May 22, 1998.
(e) Form of Reseller Agreement by and between REAL and Computer Associates
International, Inc. Second Amendment dated as of November 28, 1995.
(f) Form of Master Distributor/Solution Provider Sales Agreement
(g) Master Managing Industry Remarketer Sales Agreement by and between
REAL and *** and discount schedule. Amendment No. 03 is dated as of
May 29, 1998.
(h) Master Distributor/Solution Provider Sales Agreement by and between
REAL and *** as successor in interest to *** dated as of August 13,
1998.
(i) Industry Remarketer Affiliate Master Sales Agreement by and between
REAL and Strategic Systems Southwest, Inc. dated as of August 15, 1994
and discount schedule.
(j) Reseller Agreement by and between REAL and *** dated as of March 7,
1994 and discount schedule.
(k) Reseller Agreement by and between REAL and *** dated as of _____.
Discount schedule and form of Credit Application are included.
(l) Master Managing Industry Remarketer Sales Agreement by and between REAL
and *** ("XXX") dated as of April 18, 1996. Discount schedule revised
November 14, 1996.
(m) Master Managing Industry Remarketer Sales Agreement by and between REAL
and *** ("XXX") dated as of April 23, 1996. Discount schedule revised
May 13, 1997.
(n) Master Managing Industry Remarketer Sales Agreement by and between REAL
and *** ("XXX") dated as of July 26, 1996. Discount schedule included,
revised in November 30, 1995.
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(o) Master Managing Industry Remarketer Sales Agreement by and between REAL
and *** ("XXX") dated as of June 18, 1996. No discount schedule since
1996 per REAL.
(p) Master Managing Industry Remarketer Sales Agreement by and between REAL
and *** ("XXX") dated as of June 18, 1996. Discount schedule revised as
of May 20, 1998.
(q) Industry Remarketer Affiliate Master Sales Agreement by and between
REAL and *** dated as of April 8, 1994. Discount schedule revised as of
July 1, 1994.
(r) Master Distributor / Solution Provider Sales Agreement by and between
REAL and *** dated as of August 4, 1997.
(s) Master Industry Remarketer Affiliate Sales Agreement by and between
REAL and *** dated as of October 31, 1995.
(t) Discount schedule for *** revised as of May 21, 1998.
(u) Employment Agreements and schedule of compensation for those employees
listed in SCHEDULE 5.6.
(v) Summary of Employment Benefits.
(w) List of principal customers and suppliers by product, showing dollar
amounts.
(x) Unaudited financial statements as of April 30, 1998. Audited financial
statements for the fiscal years ended April 30, 1997 and 1996.
(y) Overheads of Fiscal Year 1999 Plan.
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SCHEDULE 3.16
IBM COMPLIANCE ISSUES
***
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SCHEDULE 5.4
RESELLERS
***
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SCHEDULE 5.6
EMPLOYEES/AGENTS
***
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5.6-1
