EXHIBIT 10.1
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EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BY AND AMONG
MRO SOFTWARE, INC.
INTERMAT, INC.
AND
INTERNATIONAL MATERIALS SOLUTIONS, INC.
DATED: As of January 1, 2003
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EXHIBITS
Exhibit A Secured Promissory Note (Amortized)
Exhibit B Secured Promissory Note (Balloon)
Exhibit C Warrant to Purchase Common Stock
Exhibit D Security Agreement
Exhibit E Assignment and Assumption Agreement and Xxxx of Sale
Exhibit F License and Support Agreement
Exhibit G Form of Legal Opinion - Seller
Exhibit H Form of Legal Opinion - Buyer
Exhibit I Lease Assignment Agreement
Exhibit J Form of Employee Letter
INDEX OF DEFINED TERMS
A K
Agreement..............................1 Know-how.........................21
Amortized Note.........................3 Knowledge........................22
Ancillary Agreements..................20
Assignment Agreement...................5 L
Assumed Contracts......................6
Assumed Liabilities....................2 Laws.............................22
Lease Assignment..................5
B Lessor............................6
License Agreement.................5
Statement of Assets and Liabilities...10 Losses...........................22
Balloon Note...........................3
Business...............................1 M
Business Records.......................2
Buyer..................................1 Material Adverse Effect..........22
Buyer Indemnified Persons.............20 MRO Products.....................16
C O
Closing...............................20 Office Lease......................6
Closing Date...........................4
Code..................................20 P
Common Stock..........................11
Commonly Controlled Entity.............9 Parent............................1
Consents..............................20 Payables.........................22
Constituent Documents.................20 Premises..........................1
Contracts.............................20 Products..........................1
Court Order...........................20 Purchase Notes....................3
Customer..............................15 Purchase Price....................3
Purchased Assets..................1
D
R
Debt..................................20
Receivables......................22
E
S
Effective Date.........................1
Employee Benefit Plans................21 Security Agreement................3
Encumbrance...........................21 Seller............................1
ERISA.................................21 Supplemental Assets...............2
ERISA Group...........................21
Excluded Assets........................3 T
Excluded Contracts....................21
Excluded Liabilities...................3 Tax Returns......................22
Taxes............................22
G Technical Documentation...........2
Terminated Employee..............13
Government Authority..................21 Third Party Action...............22
Government Authorizations.............21 Trademarks........................2
H W
Hired Employees.......................13 Warrant...........................3
I
Indemnified Person....................21
Indemnifying Person...................21
Intellectual Property.................21
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into
effective as of the 1st day of January, 2003 (the "Effective Date"), among MRO
Software, Inc., a Massachusetts corporation ("Parent"), INTERMAT, Inc., a
Delaware corporation (the "Seller") and a wholly-owned subsidiary of the Parent,
and International Materials Solutions, Inc., a Delaware corporation ("Buyer").
RECITALS
WHEREAS, Seller is engaged in the business of providing data
normalization services and licensing certain associated software products to
customers (the "Business"); and
WHEREAS, Buyer wishes to acquire the assets of Seller described herein
and to assume the liabilities of the Business described herein;
NOW, THEREFORE, in consideration for the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
(Certain capitalized terms used herein and not otherwise defined are
defined in Article 6.)
ARTICLE 1. PURCHASE AND SALE OF ASSETS.
1.1 Purchased Assets. Subject to the terms and conditions of this Agreement,
Seller hereby sells, assigns and transfers to Buyer, and Buyer purchases,
all of Seller's assets as they shall exist on the Closing Date, excluding
the Excluded Assets identified in Section 1.4 (collectively, the "Purchased
Assets") and including, without limitation, such of Seller's assets as are
more particularly described below:
a. all of Seller's rights, title and interest in and to any and all
technology and computer software tools and products of every kind and
description that were originally developed by Seller, meaning the
software tools, products and technologies known as (or used to
develop, support and enhance) SMD or Standard Modifier Dictionary,
Struxure, Xxxxxxxx.xxx, MRO Master, Press, Impress, Express and
Autocon (the "Products");
b. all of Seller's rights, title and interest in and to all prior
versions of the Products, and all improvements, enhancements,
revisions, fixes, new versions, derivatives, compilations,
adaptations, selections and arrangements of the Products made by or on
behalf of Seller and all of the foregoing that is or was at any time
under development by Seller;
c. all of Seller's rights, title and interest in and to all hardware,
fixed assets, furniture, equipment, inventory, and other tangible
items owned by Seller and located in Seller's premises at Xxx Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx (the "Premises");
d. all of Seller's customer lists, contact information, marketing, sales,
prospect and pipeline information and materials, manuals, catalogs,
brochures, product literature, pricing materials, shipping and
packaging materials, vendor and supplier lists, financial records and
information relating to the Business and other printed materials,
support logs and all other similar information in tangible and
electronic form where available, except for those business records to
be retained by Seller pursuant to Section 1.4 (the "Business Records")
(Seller being entitled to retain a copy of any thereof), but only such
as relate exclusively to the Business;
e. all of Seller's rights, title and interest, if any, in the
Intellectual Property;
f. all of Seller's rights, title and interest in and to the following
trademarks, service marks and common law trademark and service xxxx
rights: INTERMAT, STRUXURE, XXXXXXXX.XXX, AUTOCON and SMD and STANDARD
MODIFIER DICTIONARY (the "Trademarks"), including (i) all Trademark
registrations and applications therefor, and (ii) all related trade
names and logos, and applications therefor, owned by Seller and
including the word "INTERMAT"; and all goodwill associated with any of
the foregoing;
g. all of Seller's rights, title and interest, if any, in and to the
domain name and URL xxxx://xxx.xxxxxxxx.xxx and the contents of that
website;
h. all right, title and interest of Seller and/or Parent in, to and under
the Contracts listed on Schedule 1.1(h) and identified as "Assumed
Contracts" (the "Assumed Contracts");
i. all of Seller's rights, title and interest in and to any and all
technical documentation reflecting or describing or otherwise related
exclusively to any of the Products (the "Technical Documentation"),
including without limitation, source code, object code, descriptions,
data, instructions and records specifications, manuals, training
materials, programmers' notes, architecture, logic models and data
models; and
j. all of Seller's rights in and to any Government Authorizations which
relate exclusively to the operation of the Business or the Products,
but only to the extent they are transferable to Buyer.
1.1A Other Assets. To the extent that there are any assets (the "Supplemental
Assets") of Seller or of Parent of the type referred to in Section 1.1 that
are currently used in, and necessary to the operation of, the Business that
are not Purchased Assets, and to the extent that Buyer would be required to
expend material funds to replace those assets, Parent will engage in good
faith negotiations with Buyer to make such assets available for use by
Buyer in the Business on a non-exclusive royalty-free basis, by license or
similar means, to the extent it is legally able to do so; provided,
however, that the foregoing shall not obligate Seller or Parent to transfer
title to any assets, or to incur any out-of-pocket expense with regard
thereto. "Supplemental Assets" shall not be deemed to include third-party
software used in the Business.
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1.2 Assumed Liabilities. Subject to the terms and conditions of this Agreement,
Buyer shall assume, pay, perform or discharge when due the following
liabilities and obligations (the "Assumed Liabilities"): (i) those
obligations, debts and liabilities set forth on Schedule 1.2; and (ii)
those obligations, debts and liabilities of the Business or otherwise
relating to the Purchased Assets arising after the Closing Date (unless
specifically retained by Seller pursuant to this Agreement). Certain
additional liabilities and obligations related to employee compensation and
benefits, related to certain contracts of Seller and/or Parent and related
to operating expenses of the Business on and after the Effective Date are
dealt with elsewhere in this Agreement.
1.3 Excluded Liabilities. Except for the Assumed Liabilities and those
explicitly dealt with elsewhere in this Agreement, all other obligations,
debts and liabilities of Seller and/or Parent of any kind or character,
whether known or unknown, absolute, accrued, contingent or otherwise, shall
remain and continue to be the obligations, debts and liabilities of Seller
and/or Parent (collectively, the "Excluded Liabilities"), including but not
limited to debts, obligations and liabilities relating to the Excluded
Assets.
1.4 Excluded Assets. Buyer and Seller specifically exclude from Buyer's
purchase hereunder any and all ownership or other interest in (i) all of
Seller's cash and all Receivables, (ii) all Microsoft Office, SQL products,
Lotus Notes, Oracle, Siebel and PeopleSoft licenses used by Seller or in
its possession, (iii) all MAXIMO, Collego, MainControl, MC/Empower and OCS,
(iii) all other software programs and their associated documentation and
materials and all other assets in the possession of Seller, in each case
that are not Purchased Assets, and (iv) all Excluded Contracts, and (v)
Seller's records relating solely to its legal existence and status,
stockholders and minute of meetings of its directors and stockholders
(collectively, the "Excluded Assets"). For the avoidance of doubt, to the
extent there is any overlap between items encompassed by the terms
"Purchased Assets" and "Excluded Assets", those items shall be Excluded
Assets.
1.5 Purchase Price and Closing. In consideration of the sale by Seller to Buyer
of the Purchased Assets, in addition to the assumption by Buyer of the
Assumed Liabilities, Buyer agrees that it will pay to Seller or to its
designee at the Closing the following consideration:
a. a subordinated secured promissory note in the original principal
amount of $1,000,000.00, in the form attached as Exhibit A (the
"Amortized Note");
b. a subordinated secured promissory note in the original principal
amount of $1,000,000.00 (subject to adjustment as provided in such
note), in the form attached as Exhibit B (the "Balloon Note" and,
together with the Amortized Note, the "Purchase Notes"); and
c. a warrant to purchase 180,000 shares of Common Stock, par value $0.001
per share, of Buyer, in the form attached as Exhibit C (the "Warrant"
and, together with the Purchase Notes, the "Purchase Price").
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The Purchase Notes shall be secured pursuant to a Security Agreement
substantially in the form attached as Exhibit D (the "Security Agreement").
At the request of Buyer, the Purchase Notes shall be subject to a
subordination agreement between Buyer, Seller and Senior Creditors (as
defined in the Purchase Notes) in form and substance required by such
creditors and reasonably acceptable to Seller, it being understood that
Seller need not agree to any terms less favorable to it (including without
limitation the amount of senior debt as to which the Purchase Notes are
subordinated) than those set forth in the Purchase Notes.
1.6 Time and Place of Closing. The Closing shall be consummated
contemporaneously with the execution of this Agreement at the offices of
Parent in Bedford, MA at 10:00 a.m., on January 13, 2003, via facsimile,
overnight courier or in such other manner as does not require Buyer to
attend in person. If necessary, the Closing shall occur at such other
place, date or time as may be fixed by mutual agreement of the parties. The
date of the Closing is referred to herein as the "Closing Date".
1.7 Current Asset and Liability Allocation. At the Closing:
a. Seller will retain all cash and Receivables and all proceeds
therefrom.
b. Schedule 1.7 sets forth a detailed list, including aging data, of the
Receivables and Payables immediately prior to the Effective Date.
Except as specifically set forth herein to the contrary, Seller shall
be entitled to the proceeds of all Receivables and shall be obligated
to pay all Payables. Buyer hereby agrees that if any amounts are
received by Buyer in respect of the Receivables, then all such amounts
shall be held in trust and paid over to Seller within 10 days of
receipt of such amounts by Buyer. If Buyer receives any invoices for
Payables, Buyer agrees to forward such invoices to Seller within 10
days of receipt of such invoices by Buyer. Any proceeds of accounts
receivable of Buyer arising from the conduct of the Business from and
after the Effective Date shall be the property of Buyer.
c. Any payments received by Seller or Buyer from a debtor that owes both
Receivables and an account receivable of Buyer arising from and after
the Effective Date shall be deemed to be a payment on the oldest
receivable so owed which is not subject to a bona fide claim asserted
in writing by the payor.
d. Buyer shall be responsible for all expenses related to the conduct of
the Business from and after the Effective Date, and Buyer shall be
entitled to all revenue and other assets generated by the conduct of
the Business from and after the Effective Date. Buyer shall be
obligated to reimburse Seller for all prepaid expenses of the Business
that relate to the period from and after the Effective Date, and
Seller shall be obligated to turn over to Buyer amounts representing
prepaid revenue attributable to the period from and after the
Effective Date. To the extent practicable, rent, insurance, ad valorem
taxes, payroll and any other of such identifiable expenses (including
an amount agreed as an adjustment sufficient to enable Buyer to
procure necessary Office and SQL licenses from Microsoft, and other
amounts listed) will be allocated, pro rated and settled at the
Closing in accordance with Schedule 1.7. To the extent such items are
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not able to be settled at the Closing, Buyer and Seller shall continue
to be responsible therefor and shall settle such items promptly after
receipt of additional settlement statements from each other.
1.8 Allocation of Purchase Price. Within 30 days of the Closing, Seller will
furnish to Buyer an allocation of the Purchase Price among the Purchased
Assets, which allocation shall be subject to the approval of Buyer, such
approval to not be unreasonably withheld. The parties agree to take
reporting positions consistent with such allocation for U.S. federal, state
or local tax purposes.
1.9 Closing Deliveries. At the Closing:
a. Buyer shall execute and deliver to Seller or its designee the Purchase
Notes and the Warrant.
b. Buyer and Seller shall execute and deliver to each other an Assignment
and Assumption Agreement and Xxxx of Sale, in the form attached hereto
as Exhibit E (the "Assignment Agreement").
c. Seller shall deliver to Buyer copies, and, to the extent they are in
the possession of Seller or Parent, originals of all Assumed Contracts
(Parent being entitled to retain the original of all Assumed Contracts
to which it is a party or that otherwise obligated or obligate Parent
to perform services or deliver products), the Business Records, which
copies or originals shall be available at the Closing or otherwise at
the Premises. (Seller shall be entitled to retain a copy of any of the
foregoing.) Seller shall execute and deliver or cause to be delivered
to Buyer against execution and delivery of the Purchase Notes good and
sufficient instruments of transfer to transfer to Buyer all of
Seller's right, title and interest in and to the Purchased Assets,
free and clear of all Encumbrances.
d. Buyer shall execute and deliver a Security Agreement securing Buyer's
obligations under the Purchase Notes, together with such additional
agreements, instruments and documents as are necessary to perfect in
Seller the security interests contemplated in Exhibit D and this
Agreement.
e. The parties shall execute and deliver a License and Support Agreement
in the form attached as Exhibit F (the "License Agreement").
f. Seller shall deliver to Buyer the legal opinion of its general counsel
substantially in the form attached hereto as Exhibit G, and Buyer
shall deliver to Seller the legal opinion of its counsel substantially
in the form attached hereto as Exhibit H. Seller shall reimburse Buyer
up to 50% of the incremental legal fees incurred by Buyer in obtaining
its opinion, such reimbursement not to exceed $2,500.
g. Seller and Parent shall deliver to the 12/31/02 Statement of Assets
and Liabilities (as defined in Section 2.17).
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h. Buyer will deliver to Parent a copy of the commitment letter referred
to in Section 3.6.
1.10 Access; Further Assurances. After the Closing, Buyer shall afford to Parent
and its accountants and attorneys reasonable access during Buyer's normal
business hours and upon reasonable notice to the books and records of
Seller delivered to Buyer pursuant to this Agreement and shall permit
Seller to make copies therefrom (at Seller's expense) for the purpose of
preparing such tax returns of Seller as may be required after the Closing,
for complying with its obligations under applicable securities, tax,
environmental, employment or other laws and regulations, for the defense of
claims, and for other proper purposes approved in writing by Buyer (Seller
may retain copies of such books and records as Seller reasonably
anticipates will be required for such purposes). After the Closing, Seller
shall afford to Buyer and its accountants and attorneys reasonable access
during Seller's normal business hours and upon reasonable notice to the
books and records of Seller to the extent required by Buyer to comply with
its obligations under applicable securities, tax, environmental, employment
or other laws and regulations, and for other proper purposes approved in
writing by Seller (Buyer may retain copies of such books and records as
Buyer reasonably anticipates will be required for such purposes). Buyer and
Seller from time to time after the Closing, at the request of either party
and without further consideration, shall execute and deliver such further
instruments, agreements and documents, and take such other action as may
reasonably be required to more effectively transfer the Purchased Assets
and the Assumed Liabilities to Buyer, and to consummate the other
transactions contemplated herein.
1.11 Contracts and Consents Buyer agrees to pay, perform and discharge when due
all obligations, debts and liabilities of Seller and/or Parent arising from
and after the Effective Date pursuant to the Assumed Contracts listed on
Schedule 1.1(h); provided, however, that Buyer shall not have any
obligation with respect to any such obligations, debts and liabilities that
are not specified in writing in the Assumed Contracts or otherwise
disclosed in Schedule 1.1(h) or actually known by Buyer. Buyer shall be so
obligated with respect to the Assumed Contracts whether or not a Consent of
the counter-party thereto is required and whether or not any required
Consent has been obtained; provided, however, that Parent shall indemnify
Buyer for any liabilities and expenses incurred by Buyer that are solely
related to the failure to obtain any required Consent, and provided,
further, that Buyer will indemnify Seller and Parent for any liabilities
and expenses, arising from and after the Effective Date, that are related
to Buyer's performance or non-performance of any Assumed Contracts (other
than in respect of the failure to obtain a required Consent). Buyer will
use commercially reasonable efforts to secure the discharge of Seller and
Parent from, and Seller and Parent will use commercially reasonable efforts
to secure the assignment to Buyer of, any Assumed Contracts. To the extent
that the transactions contemplated by this Agreement require the Consent
under any Assumed Contract, Buyer, Parent and Seller will use commercially
reasonable efforts to secure such Consents as they mutually agree are
necessary and appropriate, with any out-of-pocket costs to secure such
Consents being the responsibility of Seller. To the extent that the
assignment of any Assumed Contract shall require the Consent of other
parties thereto, this Agreement shall not constitute an assignment thereof
(even though Buyer shall be obligated to Seller and Parent to perform
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thereunder and shall be entitled to the benefits therefrom). Buyer agrees
to consummate the transactions contemplated by this Agreement whether or
not Seller has secured all necessary third party Consents to the Assumed
Contracts. To the extent necessary, each party agrees to cooperate with the
other in any reasonable arrangement designed to transfer to Buyer the
benefits and obligations of any Assumed Contract, including, but not
limited to, having (a) Buyer act as agent for Seller, and (b) Seller
enforce for the benefit of Buyer any and all rights of Seller against the
other party thereto (including rights arising out of the cancellation by
such other party or otherwise). Anything herein to the contrary
notwithstanding, Seller will not assign to Buyer any Contract to which
Parent is a party or which otherwise requires Parent to render services or
deliver products; as to such of those Contracts which relate in any portion
to the Business or the Products, Buyer will remain obligated to perform all
services and deliver all Products that relate to the Business or the
Products and Buyer shall be entitled to the benefits thererom. In addition,
certain additional provisions relating to support, maintenance and warranty
services of existing customers are contained in the License Agreement.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer that the statements
contained in this Article 2 are true and correct, except as set forth in the
Disclosure Schedule attached hereto.
2.1 Organization and Qualification of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with full power and authority to own, operate or lease
its properties and to conduct its business in the manner and in the places
where such properties are owned or leased or such business is conducted by
it.
2.2 Title to Assets. Seller has good and valid title to all of the Purchased
Assets, free and clear of all Encumbrances (other than for taxes on
personal property not yet due and payable). At the Closing, Seller will
sell, convey, assign and transfer and deliver to Buyer good and valid title
to all of the Purchased Assets, free and clear of any such Encumbrances.
2.3 Authorization of Transaction. Seller has the unrestricted and absolute
power, authority and capacity to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder, and to carry out the transactions contemplated
hereby and thereby. All necessary action, corporate or otherwise, has been
taken by Seller and by the Parent to approve and authorize the execution,
delivery and performance by Seller and Parent of this Agreement and each of
the Ancillary Agreements and the transactions contemplated hereby and
thereby to which it is a party. This Agreement has been, and each Ancillary
Agreement will be at the Closing, duly executed and delivered by Seller and
the Agreement and each Ancillary Agreement is, or upon the Closing will be,
the legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms.
2.4 No Conflict of Transaction With Obligations and Laws. Except as set forth
on Schedule 2.4, neither the execution, delivery and performance of this
Agreement or any Ancillary Agreement, nor the performance of the
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transactions contemplated hereby and thereby, will: (i) require any Consent
of or declaration, filing or registration with any person, including any
Governmental Authority; (ii) conflict with or constitute (with or without
the passage of time or the giving of notice) a breach of, or default under,
any debt instrument to which Seller is a party, or give any person the
right to accelerate any indebtedness or terminate, any right; (iii)
conflict with or constitute (with or without the passage of time or giving
of notice) a default under or breach of any other agreement, instrument or
obligation to which Seller is a party or by which it or its assets are
bound; (iv) result in the creation of any Encumbrance upon any Purchased
Assets; (v) violate any Court Order or Law, or give any Government
Authority or other person the right to exercise any remedy or obtain any
relief under any Court Order or Law, to which Seller is subject or by which
the Purchased Assets are bound, or (vi) violate of any of the terms or
requirements of, or give any Governmental Authority the right to terminate
or modify any Government Authorization.
2.5 Government Authorizations. Seller holds all Government Authorizations which
are required to own its properties and assets and to permit it to conduct
its businesses as presently conducted. All such Government Authorizations
are valid and in full force and effect, and Buyer shall have full benefit
of the same (to the extent transferable). No proceeding is pending or, to
the Knowledge of Seller, threatened seeking the revocation or limitations
of any Government Authorization.
2.6 Litigation. There is no action, suit, claim, proceeding, investigation or
arbitration proceeding pending, or to the knowledge of any officer of
Parent, threatened in writing against or otherwise involving the Business
or the Purchased Assets, by or before any arbitrator or Governmental
Authority, as the case may be, nor, to the knowledge of any officer of
Parent, are there any investigations relating to the Business or any of the
Purchased Assets pending or threatened by or before any arbitrator or
Governmental Authority, as the case may be, as to which written notice has
been given to Parent or Seller. There are no outstanding Court Orders to
which Seller is a party or by which any of the Purchased Assets are bound,
except for items that would not be reasonably likely to give rise to a
Material Adverse Effect. There is no action, suit or judicial or
administrative proceeding pending or, to the Knowledge of Seller or Parent,
threatened against Seller relating to the transactions contemplated by this
Agreement.
2.7 Contracts. With respect to the Assumed Contracts, except as otherwise
disclosed in Schedule 2.7; (i) all of the Assumed Contracts are in full
force and effect, Seller has paid all amounts currently due thereunder
(other than immaterial amounts withheld relating to performance disputes)
and satisfied all other material obligations accrued to date thereunder and
Seller has not received any written notice of default with respect to any
material Assumed Contract, which default remains in effect; and (ii) Seller
has not given written notice of default in respect of any material Assumed
Contract, which default remains in effect.
2.8 Intellectual Property. Schedule 2.8 is a true and complete list of all of
the Intellectual Property that is registered or that consists of a written
application therefor. Seller has taken reasonable measures to protect the
Intellectual Property. Except as set forth in Schedule 2.8, Seller owns all
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such Intellectual Property (provided, however that this sentence does not
imply a warranty as to good title in or to any patents). Neither Seller nor
Parent has received written notice within the past two years that the
Intellectual Property infringes the patents, copyrights, trade secrets or
trademarks of a third party. Neither Seller nor Parent has asserted in
writing an infringement claim against a third party with respect to the
Intellectual Property within the past two years. Except as set forth on
Schedule 2.8, and except for such of the following as have been entered
into in the ordinary course of business, there are no outstanding options,
licenses or agreements of any kind relating to the Intellectual Property,
nor is Seller bound by or a party to any options, licenses or agreements of
any kind with respect to the Intellectual Property that are necessary for
the Business.
2.9 Employee Benefit Matters; Labor; Employment. Except as set forth on
Schedule 2.9:
a. Neither Seller nor any corporation, trade, business, or entity under
common control with Seller, within the meaning of Section 414(b), (c),
(m), or (o) of the Code or Section 4001 of ERISA, ("Commonly
Controlled Entity") has contributed to or has an obligation to
contribute to, nor has Seller or any Commonly Controlled Entity at any
time within six years prior to the Closing Date contributed to or had
an obligation to contribute to, either (1) a multiemployer plan within
the meaning of Section 3(37) of ERISA or (2) any plan subject to Title
IV of ERISA;
b. All obligations of Seller, whether arising by operation of law or by
contract, required to be performed under Section 4980B of the Code (or
similar state law) have been performed;
c. Seller shall retain or assume each Employee Benefit Plan, and Buyer
shall not assume or be liable for any of the obligations under any
Employee Benefit Plan maintained by a Commonly Controlled Entity;
d. Seller has no labor union contracts.
2.10 Compliance with Laws. Seller is, and at all times prior to the Closing
Date, has been in material compliance with all Laws (including with
limitation statutes, orders, rules, ordinances and regulations pertaining
to health, safety and environmental matters) applicable to the ownership or
operation of the Business, and Seller has not received written notice of
any violation or claim of any violation of any Laws applicable to the
Business.
2.11 Leased Real Property. The Office Lease is the only leasehold interest of
Seller in real property relating to the Business as now conducted. The
Office Lease is a binding and valid obligation of Seller and is in full
force and effect. Seller is not in default under the Office Lease. Subject
to obtaining written consent of the Lessor to the Lease Assignment, Seller
has full legal power and authority to enter into the Lease Assignment with
Buyer.
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2.12 Taxes. Seller has timely filed or caused to be filed all Tax Returns
affecting the Business or the Purchased Assets which are required to be
filed by Seller, all such Tax Returns which have been filed are accurate
and complete in all material respects, and Seller has timely paid all Taxes
shown on such returns or on any Tax assessment received by Seller to the
extent such Taxes have become due (except to the extent such Taxes are
being contested in good faith by Seller, which contests are listed on the
Disclosure Schedule). Seller is not currently the beneficiary of any
extension of time within which to file any Tax Return. There are no Liens
for Taxes upon the Business or the Purchased Assets, other than statutory
liens for Taxes not yet due and payable. Seller has not received notice of
any Tax deficiency or delinquency applicable to the Business. To the
Knowledge of Seller, there are no legal, administrative, or Tax proceedings
pursuant to which Seller is or could reasonably be made liable for any
taxes, penalties, interest, or other charges, the liability for which could
extend to Buyer as transferee of the Business or the Purchased Assets. None
of the Purchased Assets directly or indirectly secures any debt the
interest on which is exempt from tax under ss.103(a) of the Code, and none
of the Purchased Assets is "tax-exempt use property" within the meaning of
ss.168(h) of the Code.
2.13 Insurance. Except as set forth on Schedule 2.13, there have been no claims
in excess of $25,000 in any single instance, made under any insurance
policies maintained by or for the benefit of Seller with respect to Hired
Employees or the Purchased Assets within the past three years.
2.14 No Commissions. Neither Seller nor any person on Seller's behalf has
incurred any finder's, broker's or agent's fees or commissions or similar
compensation in connection with the transactions contemplated hereby which
would impose any obligation or liability upon Buyer.
2.15 Financial Statements. An unaudited Statement of Assets and Liabilities of
the Business as at December 31, 2002 (the "Statement of Assets and
Liabilities") is attached as Schedule 2.15. There is no material liability
of the Business of Seller accrued as of that date that is being assumed by
Buyer pursuant to this Agreement that is not reflected on the Statement of
Assets and Liabilities. No such liabilities have been incurred by Seller
since the date of the Statement of Assets and Liabilities other than in the
ordinary course of business.
2.16 Absence of Certain Changes or Events. From and after the Effective Date,
except as contemplated by or as disclosed in this Agreement, Seller has
conducted the Business only in the ordinary course and in a manner
consistent with past practice and, since such time, there has not been any
Material Adverse Effect on the Purchased Assets or the Business.
2.17 No Other Representations. Buyer acknowledges that it has been given full
access to all information concerning Seller that it has requested, that
Buyer is familiar with the Business and the Purchased Assets, and Buyer is
satisfied with their condition. Except as specifically stated in this
Article 2, Seller makes and Buyer receives no other representations or
warranties of any kind or description, and the Purchased Assets and the
Business are being sold by Seller and are accepted by Buyer "As-Is", and in
their present condition. In addition, Parent and Seller make no
representation, and none of Seller's or Parent's representations,
warranties, covenants or agreements contained herein shall be construed to
represent or warrant that the Purchased Assets are sufficient for Buyer to
operate the Business.
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
3.1 Organization and Capitalization of Buyer; No Material Business Operations.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with full power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is conducted by it. Buyer was incorporated in the State of
Delaware on December 9, 2002. Prior to the Closing Date, Buyer has not
conducted any material business operations other than those conducted in
connection with the consummation of the transactions contemplated by this
Agreement.
3.2 Capitalization.
a. The authorized capital stock of Buyer consists of 7,000,000 shares of
common stock, par value $0.001, of Buyer ("Common Stock"), of which
3,420,000 shares are issued and outstanding, and 3,000,000 shares of
preferred stock, par value $0.001, of Buyer, of which none are issued
and outstanding. The outstanding shares of Common Stock are all duly
and validly authorized and issued, fully paid and nonassessable. Buyer
has reserved 180,000 shares of Common Stock to be issued upon exercise
of the Warrant, and 400,000 shares of Common Stock to be issued
pursuant to a Stock Incentive Plan to be implemented by Buyer after
Closing.
b. The outstanding shares of Common Stock are owned by the stockholders
and in the numbers specified in Schedule 3.2 hereto.
c. Except as contemplated by this Agreement and other than right of first
offer and special purchase rights provisions contained in the
Stockholders Agreement, dated as of January 6, 2003, a copy of which
has been furnished to Seller), there are no (i) outstanding or
authorized subscriptions, warrants, options or other rights granted by
Buyer or its equity holders to purchase or acquire, or preemptive
rights with respect to the issuance or sale of, any equity interest in
Buyer, or which obligate or may obligate Buyer to issue any additional
interest in its equity or any securities convertible into or
evidencing the right to subscribe for any portion of its equity, (ii)
other securities of Buyer directly or indirectly convertible into or
exchangeable for any portion of the equity in Buyer, (iii) agreements
relating to the voting of Buyer's equity, (iv) Encumbrances on the
transferability of Buyer's equity, or (v) other agreements between
Buyer and any other person relating to Buyer's equity.
d. Buyer does not own any securities issued by any other business
organization or governmental authority. Buyer has no subsidiaries, and
is not a partner or participant in any joint venture or partnership of
any kind.
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3.3 Authorization of Transaction. Buyer has the unrestricted and absolute
power, authority and capacity to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder, and to carry out the transactions contemplated
hereby and thereby. All necessary action, corporate or otherwise, has been
taken by Buyer to approve and authorize the execution, delivery and
performance of this Agreement and each of the Ancillary Agreements and the
transactions contemplated hereby and thereby. This Agreement has been, and
each Ancillary Agreement will be at the Closing, duly executed and
delivered by Buyer and the Agreement and each Ancillary Agreement is, or
upon the Closing will be, the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
3.4 No Conflict of Transaction with Obligations and Laws. Neither the
execution, delivery and performance of this Agreement or any Ancillary
Agreement, nor the performance of the transactions contemplated hereby and
thereby, will: (i) require any Consent; (ii) conflict with or constitute
(with or without the passage of time or the giving of notice) a breach of,
or default under, any debt instrument to which Buyer is a party, or give
any person the right to accelerate any indebtedness or terminate, any
right; (iii) conflict with or constitute (with or without the passage of
time or giving of notice) a default under or breach of any other agreement,
instrument or obligation to which Buyer is a party or by which it or its
assets are bound; (iv) result in the creation of any Encumbrance upon any
Purchased Assets; (v) violate any Court Order or Law, or give any
Government Authority or other person the right to exercise any remedy or
obtain any relief under any Court Order or Law, to which Buyer is subject
or by which the Purchased Assets are bound, or (vi) violate of any of the
terms or requirements of, or give any Governmental Authority the right to
terminate or modify any Government Authorization.
3.5 No Commissions. Neither Buyer nor any person on Buyer's behalf has incurred
any finder's, broker's or agent's fees or commissions or similar
compensation in connection with the transactions contemplated hereby which
would impose any obligation or liability upon Seller.
3.6 Commitment for Financing. Prior to the date hereof, Buyer, or one or more
stockholders of Buyer on Buyer's behalf, has secured a commitment letter
for a working capital line of credit of at least $2,000,000 from a
commercial or institutional lender. A copy of that letter has been
delivered to Parent.
ARTICLE 4. AGREEMENTS OF THE PARTIES.
4.1 Employee Matters. Set forth on Schedule 4.1 is a complete list of all
employees of Seller. It is the parties' mutual intent (i) that Buyer shall
have the opportunity and shall offer to employ substantially all of the
employees of Seller as of the Closing Date, (ii) that Seller shall have
responsibility for all obligations to such employees arising prior to the
Effective Date and all severance obligations to the Terminated Employees,
except as otherwise specifically set forth herein, and (iii) that Buyer
shall have responsibility for all obligations for such employees who become
employees of and actually perform services for Buyer from and after the
Effective Date ("Hired Employees"), as follows:
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a. Buyer has extended firm offers to at least 90% of Seller's employees.
All such offers provide for cash compensation that is substantially
equivalent to that being paid by Seller, other than as shown in a
written notice previously delivered to Seller. Each such offer was
under a letter of employment which contains a comprehensive release of
Seller and Parent, substantially in the form attached hereto as
Exhibit J.
b. Seller shall be responsible for all wages, commissions and other
compensation for such Hired Employees up to but not including the
Effective Date, and Seller shall be responsible for all wages,
commissions, compensation and benefits (and related Taxes) for all
employees of Seller who are not Hired Employees. Schedule 4.1 contains
a true and correct accounting of all accrued vacation, other days off
and severance benefits of each of Seller's employees.
c. Buyer and Seller shall cooperate to effect a rollover of the 401(k)
accounts maintained on behalf of the Hired Employees to accounts
created on behalf of such Hired Employees under a 401(k) plan to be
established by Buyer; Buyer will reimburse Seller for the non-vested
portion of such accounts which are rolled over as an adjustment on
Schedule 1.7.
d. If, as of the Closing, more than five employees of Seller do not
accept an offer of employment with Buyer (each such non-accepting
employee or employee not offered employment by Buyer, a "Terminated
Employee"), Seller shall be solely responsible to pay all of its
accrued vacation, sick pay and severance obligations owed to all such
Terminated Employees; provided that, subject to the Closing, Buyer
shall be obligated to pay Seller a dollar amount equal to the positive
difference, if any, resulting from subtracting 5 from the total number
of Terminated Employees, divided by the total number of Terminated
Employees, then multiplied by the total amount of all accrued
vacation, sick pay and severance paid by Seller to all Terminated
Employees. Seller shall provide Buyer with written documentation
reasonably acceptable to Buyer accounting for all such payments, and
Buyer shall pay Seller the dollar amount referred to in the preceding
sentence within 30 days after receipt of such accounting.
e. If any Terminated Employee to whom Seller makes a Severance Payment
becomes an employee of Buyer following the Closing Date, Buyer shall
pay to Seller (with credit for the total amount paid by Buyer pursuant
to the preceding subparagraph (c) divided by the total number of
Terminated Employees), within 30 days of hiring such Terminated
Employee, an amount equal to product of the amount of such Severance
Payment multiplied by the applicable percentage as set forth below:
(i) 100%, if such Terminated Employee is hired by Buyer during the
period from the Closing Date until the date that is six months
following the Closing Date; and
(ii) 50%, if such Terminated Employee is hired by Buyer during the
period beginning six months following the Closing Date and ending
one year after the Closing Date.
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f. Buyer shall be responsible for all wages, benefits and other
obligations for all Hired Employees accruing from and after the
Effective Date (including all Taxes and related contributions and all
group medical, dental or death benefits for expenses incurred, related
to or arising from, events occurring from and after the Effective
Date, or death or disability occurring from and after the Effective
Date).
g. As permitted by Revenue Procedure 96-60, Seller shall be responsible
to provide Hired Employees a statement on Form W-2 covering calendar
year 2002. Buyer shall be responsible for issuing W-2s for all periods
beginning from and after the Effective Date for each such employee.
h. Seller will provide all notices and any continuation of health benefit
coverage required to be provided to any of its employees (which may
include employees of Seller who are not hired by Buyer), or the
beneficiaries or dependents of such employees, under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), to the
extent such notices and continuation of health benefit coverage are
required to be provided by Seller by reason of events occurring prior
to the Closing Date, by reason of the transactions contemplated by
this Agreement, or by reason of Buyer's failure to hire any current
employee of Seller. Buyer shall have the option to offer substitute
coverage, or reimburse the employees of Seller who are hired by Buyer
for all or any portion of their monthly COBRA expense. Buyer shall
reimburse Seller for all costs incurred by Seller and described in
this subparagraph to the extent they relate to Hired Employees.
i. Parent and Seller hereby releases all of its employees (and waives any
related claims against Buyer) from any existing non-competition or
employment covenants to the extent inconsistent with the provisions of
this Section 4.1, but such release in no way affects any provisions
regarding confidentiality, intellectual property and non-solicitation,
all of which shall remain in full force and effect.
4.2 Equipment. Buyer will assume all of Seller's obligations under all leases
of equipment used in Seller's business, a complete and accurate list of
which is set forth on Schedule 4.2. To the extent that the transactions
contemplated by this Agreement require the Consent of any third party to
any such leases, Buyer, Seller and Parent will use commercially reasonable
efforts to secure such Consent, but failure to obtain any Consent shall not
relieve Buyer of its obligations under this section, but Buyer shall be
indemnified for any liabilities and expenses incurred by Buyer that are
related to the failure to obtain any such required third party Consents.
4.3 Non-Competition. Each of the parties acknowledges that Parent is licensing
certain of the Products from Buyer pursuant to the License Agreement. In
connection with such License Agreement, for a period ending on the earlier
of (i) the date on which a Change in Control of Parent occurs, or (ii) the
expiration of three (3) years from the Effective Date, or (iii) upon the
occurrence of an "Event of Default" under either of the Purchase Notes (the
term "Event of Default" has the meaning given such term in the respective
Purchase Note), Parent agrees to the following restrictions:
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a. Parent will not, using the Products, offer or provide industrial
product content normalization services ("Competing Services"), and
will not license the Products to others for the purpose of providing
Competing Services; provided, that, subject to the License Agreement,
Parent is permitted to license the Products to Customer(s) for the
purpose of enabling the Customer(s) to normalize industrial product
content for its (their) own internal business purposes, including the
creation of normalized or transactionable content for use by and
between the Customer(s) and its (their) vendors, suppliers, customers
and other business partners (such Customer(s) shall not be authorized
to generally offer Competing Services); and
b. Parent will not divest, distribute or otherwise dispose of its
licenses to the Products as part of any transaction that results in or
creates a business or entity, whether owned by Parent or otherwise,
that derives a substantial portion of its revenue from the delivery of
Competing Services. For this purpose, "Customer", means any person
that is at any time authorized by Parent to use a Product.
4.4 Non-Solicitation. Each party recognizes that the employees of the other
party are its primary and most important asset. Except as otherwise
contemplated by this Agreement, for two years following the Closing, each
party agrees not to (i) induce, entice or attempt to hire or employ,
directly or indirectly, any employee of the other party or its affiliates
on behalf of such party or any other person, (ii) induce or attempt to
induce any employee of the other party or its affiliates to leave the
employ or cease doing business with the other party or its affiliates, or
(iii) induce or attempt to induce any individual or entity to violate these
provisions; provided, that the foregoing shall not prevent either party
from employing any person for whom such party has evidence that such person
responded to a mass media solicitation or advertisement that is not
directed at employees of the other party.
4.5 Transition Assistance. Seller will provide Buyer with Siebel, Lotus Notes
and support for its other information technology infrastructure, accounting
and other processes for a reasonable period of time, pursuant to a
transition plan to be documented and agreed by the parties. If this
assistance continues beyond 30 days, Buyer will compensate Seller for its
fully loaded costs as calculated by Parent in good faith pursuant to GAAP
(or if GAAP does not provide a standard, using its internal allocation
methods as used for budgeting purposes). Under no circumstances is Seller
required to continue this assistance for more than 90 days.
4.6 Removal of Information. Except as specifically provided herein or in the
Ancillary Agreements, each party shall return to the other party, or
destroy, all information related to the other party's business operations
as they exist immediately following Closing. Without limiting the
foregoing:
a. Buyer will return all MAXIMO, Collego, MainControl, MC/Empower, OCS
and other software, documentation, marketing materials and information
related to Parent's business, and Buyer shall destroy all copies,
extracts, printouts and other tangible and electronic embodiments of
Parent's sales, customer, pipeline, support, services, accounting,
tax, personnel, marketing, product, technology, strategic and other
proprietary or confidential information.
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b. Parent and Buyer will negotiate in good faith with a view to their
executing and delivering to each other Parent's standard form of
development partner license agreement. Pursuant to such agreement, if
it is so executed and delivered, Parent will grant to Buyer, and Buyer
will accept from Parent, a fully-paid, royalty-free and non-exclusive
right and license to use Parent's MAXIMO software development kit and
related documentation, for the sole purposes of enabling Buyer to
maintain and improve the current and future integration between the
Products and the MRO Products. For this purpose, "MRO Products", means
those software products currently marketed by Parent under the
trademark "MAXIMO", and all products which may be added to or sold in
conjunction with the MAXIMO product line, and all future products
which may be marketed by Parent under any name or xxxx whatsoever.
c. Seller will (after delivering the same to Buyer) remove from its
systems all customer, pipeline, support, services and other business
information exclusively related to the Products or the Business,
except for such copies as Seller is permitted to retain pursuant to
Sections 1.4, 1.9(c), 1.10 and elsewhere in this Agreement.
d. Within not more than two days following the Closing Date, Seller will
change its name to a name that does not contain the word "Intermat" or
any similar word(s), and Buyer may change its name to Intermat, Inc.
or any other name of Seller's choosing which is not similar to any of
Parent's corporate name, domain names or common law or registered
trademarks or product names. Seller, Parent and Buyer will execute
such consents or other documentation as necessary to facilitate these
provisions.
4.7 Sales and Transfer Taxes. Seller shall be solely responsible for, and shall
pay and discharge, any and all Massachusetts sales and transfer Taxes, if
any, payable in connection with or as a result of the sale of the Purchased
Assets hereunder, and Buyer shall be solely responsible for, and shall pay
and discharge, any and all other sales and transfer Taxes, if any, payable
in connection with or as a result of the sale of the Purchased Assets
hereunder. Seller shall pay and discharge and be solely responsible for all
unpaid Taxes of any kind that Seller incurred prior to the Effective Date
and relating to the Business or the Purchased Assets.
4.8 Texas State Tax Certificate. Within a reasonable period of time (not to
exceed 30 days) following the Closing, Seller shall deliver to Buyer a
properly executed receipt or certificate from the Texas Comptroller stating
that no Taxes are then due with respect to the Business or the Purchased
Assets, or the amount, if any, of Taxes, interest or penalties that Seller
owes for any period up to the Effective Date.
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4.9 Assignment of Lease. Within a reasonable period of time following the
Closing, Seller and Buyer shall execute and deliver to each other a Lease
Assignment Agreement, in form mutually agreeable to the parties and the
landlord (the "Lease Assignment"), providing Buyer the right to the
possession and use of the Premises under the terms of that certain Office
Lease (the "Office Lease") between Seller and Crescent Real Estate Funding
III, L.P. ("Lessor") dated August 29, 1997, as amended, related to the
Premises. Seller shall deliver to Buyer a written Consent of the Lessor
consenting to the Lease Assignment, in form and substance reasonably
satisfactory to Buyer.
ARTICLE 5. INDEMNIFICATION.
5.1 Indemnification by Seller.
a. Subject to the limitations in paragraph (b) below, Seller and Parent
agree, jointly and severally, to defend, indemnify and hold harmless
Buyer's Indemnified Persons from and against all Losses directly or
indirectly incurred by or sought to be imposed upon any of them
resulting from or arising out of:
(i) any breach of any of the representations, warranties or covenants
made by Seller in or pursuant to this Agreement, and Ancillary
Agreement, or in any agreement, document or instrument
contemplated hereby;
(ii) any fraud or intentional misrepresentation by Seller; and
(iii) in respect of any Excluded Liability.
b. The right to indemnification under paragraph (a) is subject to the
following limitations:
(i) Seller shall have no liability under paragraph (a) unless one or
more of Buyer's Indemnified Persons gives written notice to
Seller asserting a claim for Losses, including reasonably
detailed facts and circumstances pertaining thereto, before the
expiration of one year from the Closing Date, except that for any
claim based upon a covenant or undertaking which by its terms is
to be performed after the Closing, then the one year period above
shall commence on the date when such covenant or agreement should
have been performed;
(ii) Indemnification for claims under paragraph (a) above shall be
payable by Seller only if the aggregate amount of all Losses
thereunder by Buyer's Indemnified Persons shall exceed $25,000,
at which point Seller shall be responsible for the entire amount
of such Losses, including the first $25,000 of such Losses; and
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(iii) Under no circumstances (other than Seller's actual fraud) shall
Seller's liability hereunder exceed $2,000,000. In no event will
Seller be required to pay cash in respect of any liabilities
hereunder beyond the actual cash amount paid by Buyer under the
Purchase Notes, it being understood that an additional source of
indemnification payments for Buyer is by way of an offset against
amounts owing by it under the Purchase Notes, as provided in
Section 7.2 (any such offset shall apply to the next required
payment under the Purchase Notes).
5.2 Indemnification by Buyer.
a. Subject to the limitations in paragraph (b) below, from and after the
Closing Date, Buyer shall indemnify and hold harmless Seller's
Indemnified Persons from any and all Losses directly or indirectly
incurred by or sought to be imposed upon them resulting from or
arising out of:
(i) any breach of any of the representations, warranties or covenants
made by Buyer in or pursuant to this Agreement, any Ancillary
Agreement, or in any agreement, document or instrument
contemplated hereby;
(ii) any fraud or intentional misrepresentation by Seller; and
(iii) in respect of any Assumed Liability.
b. The right of indemnification under paragraph (a) above is subject to
the following limitations:
(i) Buyer shall have no liability under paragraph (a) above unless
one or more of Sellers' Indemnified Persons gives written notice
to Buyer asserting a claim for Losses, including reasonably
detailed facts and circumstances pertaining thereto, before the
expiration of one year from the Closing Date, except that for any
claim based upon a covenant or undertaking which by its terms is
to be performed after the Closing, then the one year period above
shall commence on the date when such covenant or agreement should
have been performed; and
(ii) Indemnification for claims under paragraph (a) above shall be
payable by Buyer only if the aggregate amount of all Losses
thereunder by Seller's Indemnified Persons shall exceed $25,000,
at which point Buyer shall be responsible for the entire amount
of such Losses, including the first $25,000 of such Losses.
(iii) Under no circumstances (other than Buyer's actual fraud) shall
Buyer's liability for any breach of its representations or
warranties (but not its covenants or agreements) hereunder exceed
$2,000,000.
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5.3 Defense of Third Party Actions.
a. Promptly after receipt of notice of any Third Party Action, any person
who believes he, she or it may be an Indemnified Person will give
notice to the potential Indemnifying Person of such action. The
omission to give such notice to the Indemnifying Person will not
relieve the Indemnifying Person of any liability hereunder unless it
was prejudiced thereby, nor will it relieve it of any liability which
it may have other than under this Article 5.
b. Upon receipt of a notice of a Third Party Action, the Indemnifying
Person shall have the right, at its option and at its own expense, to
participate in and be present at the defense of such Third Party
Action, but not to control the defense, negotiation or settlement
thereof, which control shall remain with the Indemnified Person,
unless the Indemnifying Person makes the election provided in
paragraph (c) below.
c. By written notice within 45 days after receipt of a notice of a Third
Party Action, an Indemnifying Person may elect to assume control of
the defense, negotiation and settlement thereof, with counsel
reasonably satisfactory to the Indemnified Person; provided, however,
that the Indemnifying Person agrees (i) to promptly indemnify the
Indemnified Person for its expenses to date, and (ii) to hold the
Indemnified Person harmless from and against any and all Losses caused
by or arising out of any settlement of the Third Party Action approved
by the Indemnifying Person or any judgment in connection with that
Third Party Action. The Indemnifying Persons shall not in the defense
of the Third Party Action enter into any settlement which does not
include as a term thereof the giving by the third party claimant of an
unconditional release of the Indemnified Person, or consent to entry
of any judgment except with the consent of the Indemnified Person.
d. Upon assumption of control of the defense of a Third Party Action
under paragraph (c) above, the Indemnifying Person will not be liable
to the Indemnified Person hereunder for any legal or other expenses
subsequently incurred in connection with the defense of the Third
Party Action, other than reasonable expenses of investigation.
e. Any person who has not assumed control of the defense of any Third
Party Action shall have the duty to cooperate with the party which
assumed such defense.
5.4 Miscellaneous.
a. Buyer's Indemnified Persons shall not be entitled to indemnification
under Section 5.1(a) and Sellers' Indemnified Persons shall not be
entitled to indemnification under Section 5.2(a) with respect to a
breach of a representation or warranty, if they had clearly
demonstrable actual knowledge of the matter giving rise to
indemnification.
b. If any Loss is recoverable under more than one provision hereof, the
Indemnified Person shall be entitled to assert a claim for such Loss
until the expiration of the longest period of time within which to
assert a claim for Loss under any of the provisions which are
applicable.
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c. The gross amount for which any Indemnifying Person may be liable
pursuant to this Article 5 shall be reduced by any insurance proceeds
actually recovered by or on behalf of the Indemnified Person on
account of the indemnifiable Loss.
5.5 Payment of Indemnification. Claims for indemnification under this Article 5
shall be paid or otherwise satisfied by Indemnifying Persons within 30 days
after notice thereof is given by the Indemnified Person.
ARTICLE 6. DEFINITIONS.
As used in this Agreement, the following terms have the indicated meanings:
"Ancillary Agreements" means the Assignment Agreement, the Purchase Notes,
the Security Agreement, the License Agreement, the Warrant, the Lease Assignment
and such other agreements as are to be executed and delivered pursuant to this
Agreement.
"Buyer's Indemnified Persons" means Buyer, its subsidiary and affiliated
corporations, their respective directors, officers, employees, stockholders,
partners, members, agents, heirs and personal representatives.
"Closing" means the closing of the purchase and sale provided for in this
Agreement.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended. All references to the Code, U.S. Treasury regulations or other
governmental pronouncements shall be deemed to include references to any
applicable successor regulations or amending pronouncement.
"Consents" means all consents and approvals of Governmental Authorities,
and all consents and approvals of third parties, in each case that are necessary
in order to transfer ownership in the Purchased Assets to Buyer and otherwise to
consummate the transactions contemplated hereby.
"Constituent Documents" means a party's certificate or articles of
incorporation or organization, bylaws, or other corresponding documents, as
amended.
"Contracts" means all agreements, licenses, contracts, or other binding
commitments, arrangements or plans, written or oral (including any amendments
and other modifications thereto), to which Seller is a party or is otherwise
bound and which relate primarily to the conduct of the Business or to which
Parent is a party or is otherwise bound and which relate exclusively to the
Business.
"Court Order" means any court order, judgment, administrative or judicial
order, writ, decree, stipulation, arbitration award or injunction of an
arbitrator or Governmental Authority.
"Debt" without duplication, means (a) all indebtedness (including the
principal amount thereof or, if applicable, the accreted amount thereof and the
amount of accrued and unpaid interest thereon) of Seller, whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of money borrowed, (b) all deferred indebtedness of Seller for the payment of
20
the purchase price of property or assets purchased, (c) all obligations of
Seller to pay rent or other payment amounts under a lease of real or personal
property which is required to be classified as a capital lease in accordance
with GAAP, (d) any outstanding reimbursement obligation of Seller with respect
to letters of credit, bankers' acceptances or similar facilities issued for the
account of Seller, (e) any payment obligation of Seller under any interest rate
swap agreement, forward rate agreement, interest rate cap or collar agreement or
other financial agreement or arrangement entered into for the purpose of
limiting or managing interest rate risks, (f) all indebtedness for borrowed
money secured by any Encumbrance existing on property owned by Seller, whether
or not indebtedness secured thereby shall have been assumed, (g) all guaranties,
endorsements, assumptions and other contingent obligations of Seller in respect
of, or to purchase or to otherwise acquire, indebtedness for borrowed money of
others, and (h) all premiums, penalties and change of control payments required
to be paid or offered in respect of any of the foregoing as a result of the
consummation of the transactions contemplated by this Agreement regardless if
any of such are actually paid.
"Employee Benefit Plans" means any "employee benefit plan" within the
meaning of Section 3(3) of ERISA and any bonus, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
vacation, severance, disability, death benefit, hospitalization or insurance
plan providing benefits to any present or former employee or contractor of
Seller or any member of the ERISA Group maintained by any such entity or as to
which any such entity has any liability or obligation.
"Encumbrance" means any lien, option (including right of first refusal or
first offer), encumbrance, restriction, mortgage, pledge, security interest,
claim or charge of any kind or character.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" shall mean the collective reference to Seller and any other
trades or businesses under common control with Seller within the meaning of
Section 4001(b)(1) of ERISA.
"Excluded Contracts" means all Contracts that are not Assumed Contracts,
including (a) all employment, change of control and severance Contracts; (b) all
Employee Benefit Plans and contracts associated with Employee Benefit Plans,
including all assets or funds held in trust, or otherwise, associated with or
used in connection with the Employee Benefit Plans or contracts associated with
Employee Benefit Plans; (c) all Contracts for Debt; (d) any collective
bargaining agreement; (e) all Contracts that have terminated or expired prior to
the Effective Date in the ordinary course of business; and (f) all insurance
Contracts.
"Government Authority" means any governmental authority, whether foreign,
federal, state, local or other political subdivision or agency of any of the
foregoing.
"Government Authorizations" means any license, permit, order, concession,
grant, authorization, consent or approval.
"Indemnified Person" means any person entitled to be indemnified under
Article 5.
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"Indemnifying Person" means any person obligated to indemnify another
person under Article 5.
"Intellectual Property" means all trademarks, Know-how, copyrights,
copyright registrations and applications for registration, patents and all other
intellectual property rights (including Internet Domain Names), whether
registered or not, owned by Seller, including the rights to xxx for past
infringement thereof, but only such of the foregoing that relate exclusively to
the Business.
"Know-how" means all ideas, concepts, methodologies, techniques and
proprietary technical information relating solely to the Products.
"Knowledge" means, with respect to a specified party hereto, the actual
knowledge of such party (including, but not limited to, the actual knowledge of
such party's officers, directors, and employees involved in the preparation of
this Agreement.
"Laws" means all applicable statutes, laws, ordinances, rules and
regulations.
"Losses" means all losses, damages (excluding punitive and consequential
damages), fines, penalties, liabilities, payments and obligations, and all
expenses related thereto.
"Material Adverse Effect" means any change event or occurrence that has, or
is reasonable likely to have, individually or in the aggregate, a material
adverse impact upon the business, operations, properties, condition (financial
or otherwise), results of operations, Purchased Assets or liabilities of the
Business, taken as a whole.
"Payables" means accounts payable, notes payable, contract payables, and
other payables arising from operation of the Business prior to the Effective
Date, including expenses accrued prior to the Effective Date, regardless of
whether invoices have been received by Seller on the date hereof.
"Receivables" means accounts receivable, trade accounts, notes receivable,
contract receivables and other receivables arising from operation of the
Business prior to the Effective Date, including receivables for work completed
prior to the Effective Date, regardless of whether invoices have been prepared
and issued to the account debtor on the Closing Date.
"Seller's Indemnified Persons" means each of Seller, its subsidiary and
affiliated corporations, their respective directors, officers, employees,
stockholders, partners, members, agents, heirs and personal representatives.
"Taxes" means taxes, charges, fees, imposts, levies, interest, penalties,
additions to tax or other assessments or fees of any kind, including, but not
limited to, income, corporate, capital, excise, property, sales, use, turnover,
value added and franchise taxes, deductions, withholdings and customs duties,
imposed by any Governmental Authority and any payments with respect thereto
required under any tax-sharing agreement.
"Tax Returns" means any return, report, information return or other
document (including any related or supporting information) filed or required to
be filed with any Governmental Authority in connection with the determination,
assessment, collection or administration of any Taxes or the administration of
any laws, regulations or administrative requirements relating to any Taxes.
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"Third Party Action" means any written assertion of a claim, or the
commencement of any action, suit, or proceeding, by a third party as to which
any person reasonably believes it may be an Indemnified Person hereunder.
ARTICLE 7. MISCELLANEOUS.
7.1 Survival of Warranties. All representations, warranties, agreements,
covenants and obligations herein or in any schedule, certificate or
financial statement delivered by any party incident to the transactions
contemplated hereby are material, shall be deemed to have been relied upon
by the other party and shall survive the Closing for the applicable period
set forth in Article 5 and shall not merge in the performance of any
obligation by either party hereto.
7.2 No Offset Right. There will be no prepayment penalty under the Purchase
Notes. Buyer's payment and other obligations under the Purchase Notes and
Security Agreement are non-contingent and absolute, and Buyer has
absolutely no right to offset or credit any an/or all payments to be made
by it for any reason whatsoever, by reason of any claim by Buyer against
Seller for indemnification hereunder or otherwise, unless Seller agrees in
writing. Notwithstanding the immediately preceding sentence, Buyer shall be
entitled to a right of offset under the Purchase Notes for any claim
against Seller or Parent under this Agreement for which: (a) Seller agrees
in writing to the amount and validity of such claim or (b) there has been a
judicial or other determination regarding the amount and validity of such
claim in a final, non-appealable decision, award or settlement.
7.3 Fees and Expenses. Buyer will bear its own expenses and the Parent will
bear its and Seller's expenses in connection with the negotiation and the
consummation of the transactions contemplated by this Agreement, or its
negotiation and termination (if terminated), including without limitation
all legal, accounting and investment banking or advisory fees.
7.4 Notices. All notices, requests, demands and other communications required
or permitted to be given hereunder by any party hereto shall be in writing
and shall be deemed to have been duly given (i) when received if delivered
personally, or (ii) on the business day following the business day sent if
sent by prepaid domestically recognized overnight receipted courier if sent
domestically, or (iii) on the third business day following the day sent if
sent by prepaid internationally recognized overnight receipted courier if
sent internationally, or (iv) when receipt is telephonically acknowledged
if sent by fax transmission on a business day or, if not a business day, on
the next following business day, or to the parties at the following
addresses (or at such other addresses as shall be specified by the
parties):
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If to Buyer, to:
International Materials Solutions, Inc.
c/o Genesis Park Ventures
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Xx. Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
The Terrace 7
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: X. Xxxxx Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Seller, to:
MRO Software, Inc.
000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxx Xxxxxxxx, V.P. & General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
and in any case at such other address as the addressee shall have specified
by written notice. All periods of notice shall be measured from the date of
delivery thereof.
7.5 Confidentiality. The parties agree that they will keep confidential and not
disclose or divulge: (i) any proprietary information or data regarding the
Business except as expressly permitted in the License Agreement, (ii) any
confidential, proprietary or secret information which they may obtain from
another party hereto in connection with the transactions contemplated
herein, or pursuant to inspection rights granted hereunder, or (iii) the
financial or other terms of this Agreement, unless such information becomes
public information through no fault of such party or is required to be
disclosed by applicable law, including applicable securities laws or stock
exchange rules or regulations. The obligations of this Section shall
survive any termination of this Agreement.
7.6 Publicity and Disclosures. Except as may be otherwise required for
compliance by Parent with applicable stock market rules or securities laws,
neither Buyer nor Seller nor Parent shall issue any public announcement
concerning this Agreement without the prior written approval of the other,
which approval shall not be unreasonably withheld. Seller confirms that
when referring to the Business it has discontinued use of the term
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"Intermat" in its filings under the Securities Exchange Act, and refers to
the Business as its "catalogue content services" or similar terms. The
foregoing notwithstanding, Seller reserves the absolute right to provide
such disclosure in its publicly filed documents as may be required under
applicable laws, rules and regulations.
7.7 Assignability. This Agreement may not be assigned by either party without
the consent of the other. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and
permitted assigns.
7.8 Governing Law.
a. This Agreement shall be governed by and construed in accordance with
the laws of The State of Delaware (other than the choice of law
principles thereof), except that any representations and warranties
with respect to real and tangible property shall be governed by and
construed in accordance with the laws of the jurisdiction where such
property is situated.
b. Buyer hereby waives compliance by Seller and Parent with the
provisions of the "bulk sales", "bulk transfer" or similar laws of any
state. Seller and Parent agree to indemnify and hold Buyer harmless
against any and all claims, losses, damages, liabilities, costs and
expenses incurred by Buyer as a result of any failure to comply with
any such "bulk sales", "bulk transfer" or similar laws.
c. Any controversy or claim arising out of or relating to this Agreement
or a breach hereof shall be finally settled by arbitration in New York
City under the commercial rules then in effect of the American
Arbitration Association, and shall be determined in accordance with
the laws of the State of New York applicable to contracts wholly
performed therein.
7.9 General.
a. This Agreement (including all exhibits or schedules appended to this
Agreement and all documents delivered pursuant to or referred to in
this Agreement, all of which are hereby incorporated herein by
reference) constitutes the entire agreement between the parties, and
all promises, representations, understandings, warranties and
agreements with reference to the subject matter hereof and inducements
to the making of this Agreement relied upon by any party hereto, have
been expressed herein or in the documents incorporated herein by
reference.
b. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
hereof.
c. This Agreement may be amended only by a written agreement executed by
all parties hereto.
d. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original but all of which together shall constitute
one and the same instrument.
e. Any table of contents, title of an article or section heading herein
contained is for convenience of reference only and shall not affect
the meaning of construction of any of the provisions hereof.
[Signature page immediately follows.]
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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
MRO SOFTWARE, INC./INTERMAT, INC./INTERNATIONAL MATERIALS SOLUTIONS, INC.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as an instrument under seal in multiple counterparts by their duly
authorized representatives on January 17, 2003, to be effective as of the
Effective Date.
INTERNATIONAL MATERIALS SOLUTIONS, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
INTERMAT, INC.
By: /s/ Xxxxx Xxxx
----------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------
Title: President
-------------------------------------
MRO SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
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