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ASSET PURCHASE AGREEMENT
among
RETURN ON INVESTMENT CORPORATION,
GO SOFTWARE, INC.
and
VERIFONE, INC.
Dated as of December 6, 2004
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Certain Definitions.......................................1
Section 1.2 Other Terms..............................................10
Section 1.3 Other Definitional Provisions............................10
ARTICLE II
PURCHASE AND SALE OF THE BUSINESS
Section 2.1 Purchase and Sale of Assets..............................10
Section 2.2 Excluded Assets..........................................11
Section 2.3 Assumption of Liabilities................................12
Section 2.4 Excluded Liabilities.....................................12
Section 2.5 Purchase Price...........................................12
Section 2.6 Purchase Price Adjustment................................13
Section 2.7 Closing..................................................14
Section 2.8 Deliveries by Buyer......................................14
Section 2.9 Deliveries by ROI and the Seller.........................14
Section 2.10 Affiliate Acquisitions...................................15
Section 2.11 Workout Clause...........................................16
Section 2.12 Contingent Payment.......................................16
Section 2.13 Designated Executives....................................17
Section 2.14 Incentive Program........................................18
Section 2.15 XxXX Reports.............................................18
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ROI and SELLER
Section 3.1 Organization and Qualification...........................18
Section 3.2 Corporate Authorization..................................19
Section 3.3 Consents and Approvals...................................19
Section 3.4 Non-Contravention........................................19
Section 3.5 Binding Effect...........................................20
Section 3.6 ROI Reports and Financial Statements.....................20
Section 3.7 Litigation and Claims....................................21
Section 3.8 Taxes....................................................21
Section 3.9 Employee Benefits........................................22
Section 3.10 Compliance with Laws.....................................22
Section 3.11 Environmental Matters....................................22
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Section 3.12 Intellectual Property....................................23
Section 3.13 Labor....................................................25
Section 3.14 Contracts................................................26
Section 3.15 Territorial Restrictions.................................27
Section 3.16 Absence of Changes.......................................27
Section 3.17 Assets...................................................27
Section 3.18 Product Certifications...................................27
Section 3.19 Title to Property........................................28
Section 3.20 Real Property............................................28
Section 3.21 Operation of the Business................................28
Section 3.22 Absence of Liabilities...................................28
Section 3.23 Warranties/Product Liability.............................29
Section 3.24 Insurance................................................29
Section 3.25 Finders' Fees............................................29
Section 3.26 GO Gateway Product.......................................29
Section 3.27 No Other Representations or Warranties...................29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1 Organization and Qualification...........................29
Section 4.2 Corporate Authorization..................................30
Section 4.3 Consents and Approvals...................................30
Section 4.4 Non-Contravention........................................30
Section 4.5 Binding Effect...........................................30
Section 4.6 Finders' Fees............................................30
Section 4.7 No Other Representations or Warranties...................30
ARTICLE V
COVENANTS
Section 5.1 Access and Information...................................31
Section 5.2 Conduct of Business......................................31
Section 5.3 Reasonable Best Efforts..................................33
Section 5.4 Tax Matters..............................................34
Section 5.5 Employees and Employee Benefits..........................37
Section 5.6 Non-Solicitation/Non-Competition.........................38
Section 5.7 Further Assurances.......................................38
Section 5.8 Acquisition Proposals....................................38
Section 5.9 Confidentiality..........................................40
Section 5.10 Guaranty of Receivables..................................40
Section 5.11 Intellectual Property Non-Assertion......................40
Section 5.12 Additional Financial Statements..........................40
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ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 Conditions to the Obligations of Buyer, Seller and ROI...41
Section 6.2 Conditions to the Obligations of Buyer...................41
Section 6.3 Conditions to the Obligations of Seller and ROI..........42
ARTICLE VII
SURVIVAL; INDEMNIFICATION; CERTAIN REMEDIES
Section 7.1 Survival.................................................43
Section 7.2 Indemnification by Seller and ROI........................43
Section 7.3 Indemnification by Buyer.................................44
Section 7.4 Third Party Claim Indemnification Procedures.............45
Section 7.5 Direct Claims............................................47
Section 7.6 Consequential Damages....................................47
Section 7.7 Payments.................................................47
Section 7.8 Characterization of Indemnification Payments.............47
Section 7.9 Effect of Waiver of Condition............................48
Section 7.10 Exclusive Remedy.........................................48
ARTICLE VIII
TERMINATION
Section 8.1 Termination..............................................48
Section 8.2 Effect of Termination....................................48
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices..................................................49
Section 9.2 Amendment; Waiver........................................50
Section 9.3 No Assignment or Benefit to Third Parties................50
Section 9.4 Entire Agreement.........................................50
Section 9.5 Fulfillment of Obligations...............................51
Section 9.6 Public Disclosure........................................51
Section 9.7 Expenses.................................................51
Section 9.8 Bulk Sales...............................................51
Section 9.9 Governing Law; Submission to Jurisdiction; Selection
of Forum; Waiver of Trial by Jury .......................51
Section 9.10 Counterparts.............................................51
Section 9.11 Headings.................................................52
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Section 9.12 Severability.............................................52
Section 9.13 Specific Performance.....................................52
EXHIBITS AND SCHEDULES
EXHIBITS
--------
SCHEDULES
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Schedule 1.1(a) - Assigned Leases
Schedule 1.1(b) - Specified Matter
Schedule 1.1(c) - Subsidiaries
Schedule 2.1(d) - Transferred Patents and Trademarks
Schedule 2.1(i) - Certain Transferred Assets
Schedule 2.2(f) - Excluded Contracts
Schedule 2.2(h) - Excluded Assets
Schedule 3.3(a) - Governmental Consents and Approvals
Schedule 3.3(b) - Other Material Consents and Approvals
Schedule 3.4 Non-Contravention
Schedule 3.6(b) - ROI Historical Financial Statements
Schedule 3.6(c) - Seller Historical Financial Statements
Schedule 3.6(d) - Reconciliations of Historical Financial Statements
Schedule 3.7 - Litigation and Claims
Schedule 3.8 - Taxes
Schedule 3.9(a) - Benefit Plans
Schedule 3.9(c) - Employees
Schedule 3.10 - Compliance with Laws
Schedule 3.11 - Environmental Matters
Schedule 3.12(a)(i) - Registered Intellectual Property
Schedule 3.12(a)(ii) - Intellectual Property Not Included
Schedule 3.12(d)(i) - Material Intellectual Property Contracts
Schedule 3.12(d)(ii) - Intellectual Property Contract Defaults
Schedule 3.13(a) - Union Contracts
Schedule 3.13(b) - Labor NonCompliance
Schedule 3.14(a) - Material Contracts
Schedule 3.14(b) - Contract Defaults and Consents
Schedule 3.16 - Absence of Changes
Schedule 3.17 - Assets
Schedule 3.18 - Product Certifications
Schedule 3.19 - Title to Property
Schedule 3.21 - Operation of Business
Schedule 3.22 - Absence of Liabilities
Schedule 3.23 - Product Liability
Schedule 3.24(a) - Material Insurance Policies
Schedule 4.3(a) - Governmental Consents and Approvals
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Schedule 4.3(b) - Other Material Consents and Approvals
Schedule 6.1(b) - Seller Required Approvals
Schedule 7.2(a)(viii) - Payments Due to Certain Individuals
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ASSET PURCHASE AGREEMENT, dated as of December 6, 2004, among Return on
Investment Corporation, a Delaware corporation ("ROI"), GO Software, Inc., a
Georgia corporation (the "Seller") and VeriFone, Inc., a Delaware corporation
("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of developing and marketing
software and services whose products (including but not limited to PC Charge
Pro, XxXX and the GO Gateway) enable various merchants to accept all tender
types of transactions (the "Business"); and
WHEREAS, Seller (and certain of its Affiliates) desire to sell to Buyer,
and Buyer desires to purchase and assume from Seller and such Affiliates,
substantially all of the assets and certain, specified liabilities of the
Business, as more particularly set forth herein; and
WHEREAS, simultaneously with the execution hereof, certain stockholders of
ROI are entering into the Voting Agreement, as defined herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Certain Definitions. As used in this Agreement, the following
terms have the meanings set forth below:
"2006 Statement" has the meaning set forth in Section 2.12(b).
"Accounts Payable" means all trade accounts payable of Seller as of
the Closing arising out of the purchase or consumption of goods and services by
the Business.
"Accounts Receivable" means all trade accounts receivable of Seller
as of the Closing arising out of the sale or other disposition of goods or
services of the Business.
"Acquisition Proposal" has the meaning set forth in Section 5.8.
"Affiliate" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by, or under common control with, such
other Person as of the date on which, or at any time during the period for
which, the determination of
affiliation is being made. For purposes of this definition, the term "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" means this Asset Purchase Agreement, as the same may be
amended or supplemented from time to time in accordance with the terms hereof.
"Applicable Employees" has the meaning set forth in Section 5.5(a).
"Assigned Leases" means those leases and subleases governing real
property used or leased by the Business, which real property is owned by Persons
other than Seller or any of its Affiliates, listed on Schedule 1.1(a).
"Assumed Liabilities" means all the following Liabilities of Seller:
(i) all Accounts Payable that would be required by GAAP to be set forth on
audited financial statements of the Business as of the Closing, (ii) all
commissions owed in respect of sales associated with Accounts Receivable
collected by Buyer following the Closing, and (iii) all Liabilities of the
Business under the Contracts, other than those to the extent arising out of or
relating to (A) any breach that occurred prior to the Closing, and (B) any
material Contract or Liability that is required by this Agreement to be, but
that has not been, disclosed to Buyer in Schedule 3.14(a).
"Base Value" means $832,293, which represents (i) the total trade
accounts receivable shown on Seller's June 30, 2004 balance sheet, minus (ii)
the total trade accounts payable shown thereon.
"Benefit Plans" has the meaning set forth in Section 3.9(a).
"Books and Records" means all books, ledgers, files, reports, plans,
records, customer lists, manuals and other materials (in any form or medium) of,
or maintained for, the Business, but excluding any such items to the extent that
they are included in or primarily related to any Excluded Assets or Excluded
Liabilities.
"Business" has the meaning set forth in the Recitals.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banks in The City of New York, the City of Atlanta, Georgia or the
City and County of San Francisco, California are authorized or obligated by Law
or executive order to close.
"Buyer" has the meaning set forth in the Preamble.
"Buyer Indemnified Parties" has the meaning set forth in Section
7.2(a).
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"Buyer Required Approvals" means all consents, approvals, waivers,
authorizations, notices and filings from or with a Government Entity that are
required to be and are listed on Schedule 4.3.
"Chosen Courts" has the meaning set forth in Section 9.9.
"Claim Notice" has the meaning set forth in Section 7.4(a).
"Closing" means the consummation of the asset sale that is the
subject of this Agreement.
"Closing Date" has the meaning set forth in Section 2.7.
"Closing Value" means (x) the total Accounts Receivable shown on the
Closing Statement (it being understood that, for purposes of calculating the
Closing Value, any Accounts Receivable from VeriFone shall be deemed to be
$100,000 in the aggregate), minus (y) the total Accounts Payable shown on the
Closing Statement.
"Closing Statement" means the calculation of Accounts Receivable and
Accounts Payable, prepared, or caused to be prepared, by Buyer in accordance
with Section 2.6 hereof and, in the event of an ROI Objection, as adjusted by
either the agreement of Buyer and ROI, or by the CPA Firm, acting pursuant to
Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Business" has the meaning set forth in Section 5.6(b).
"Confidentiality Agreement" means that certain confidentiality
agreement entered into among Seller, ROI and VeriFone, Inc., in July 2004.
"Consent Certificates" means certificates evidencing consents of
third parties that are required in order to effectuate a legal transfer or
sublease of the Assigned Leases.
"Consideration" has the meaning set forth in Section 5.4(h).
"Consummation Event" means the consummation, prior to June 30, 2006,
of the Specified Matter.
"Contingent Payment" means the payment of the Contingent Payment
Amount pursuant to Section 2.12(d)(x).
"Contingent Payment Amount" means an amount in cash equal to the
greater of (i) zero, and (ii) the difference of (A) $1,650,000, minus (B) the
lesser of (x) $1,500,000, and (y) the sum of (I) the amount of finally
determined indemnification claims with respect to which Buyer has exercised its
right of set-off pursuant to Section
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7.2(b), plus (II) the product of the Total Maintenance Revenue, as determined
pursuant to Section 2.15, multiplied by two.
"Contracts" means all agreements, contracts, leases and subleases,
purchase orders, arrangements, commitments and licenses (other than this
Agreement and agreements governing Seller Leased Property) that are Related to
the Business as of the Closing, or to which any of the Transferred Assets are
subject, whether written or oral, except to the extent included in Excluded
Assets.
"Copyrights" has the meaning set forth in the "Intellectual
Property" definition.
"CPA Firm" means such firm of independent certified public
accountants as to which ROI and Buyer shall mutually agree.
"Designated Executives" has the meaning set forth in Section 2.13.
"Direct Claim" has the meaning set forth in Section 7.5.
"Employees" means all current employees of the Business as of the
Closing, whether or not actively at work on such date.
"Encumbrance" means any lien, pledge, charge, claim, encumbrance,
security interest, option, mortgage, easement, or other similar restriction of
any kind.
"Environmental Law" means any Law (including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980)
and any Governmental Authorization relating to (x) the protection of the
environment or human health and safety (including air, surface water,
groundwater, drinking water supply, and surface or subsurface land or
structures), (y) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, management, release
or disposal of, any Hazardous Substance or waste material or (z) noise, odor or
electromagnetic emissions.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" means all of the Liabilities of ROI, Seller
and their respective Affiliates other than Assumed Liabilities. For the
avoidance of doubt, "Excluded Liabilities" includes (i) any bonus or other
discretionary employee compensation accrued by Seller or ROI since June 30, 2004
or in respect of any period ending after June 30, 2004 and (ii) any liability of
ROI or Seller to Designated Executives in connection with or as a result of the
transactions contemplated by this Agreement,
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whether pursuant to employment agreements between ROI and such individuals or
otherwise, including under the agreement described in Schedule 2.2(f).
"Fixtures and Equipment" means all furniture, furnishings, vehicles,
equipment, computers, tools and other tangible personal property (other than
Inventory) Related to the Business, wherever located, including any of the
foregoing purchased subject to any conditional sales or title retention
agreement in favor of any other Person.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authorizations" means all licenses, permits,
certificates and other authorizations and approvals Related to the Business and
issued by or obtained from a Government Entity or Self-Regulatory Organization.
"Government Entity" means any federal, state or local court,
administrative body or other governmental or quasi-government entity with
competent jurisdiction.
"Hazardous Substance" means any substance that is listed, defined,
designated or classified as hazardous, toxic or otherwise harmful under
applicable Laws or is otherwise regulated by a Government Entity, including
petroleum products and byproducts, asbestos-containing material, polychlorinated
biphenyls, lead-containing products and mold.
"Indebtedness" means (i) all liabilities for borrowed money, whether
current or funded, secured or unsecured, all obligations evidenced by bonds,
debentures, notes or similar instruments, and all liabilities in respect of
mandatorily redeemable or purchasable capital stock or securities convertible
into capital stock; (ii) all liabilities for the deferred purchase price of
property; (iii) all liabilities in respect of any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which liabilities are required to be classified and accounted for under GAAP as
capital leases, (iv) all liabilities for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction securing
obligations of a type described in clauses (i), (ii) or (iii) above to the
extent of the obligation secured, and all liabilities as obligor, guarantor, or
otherwise, to the extent of the obligation secured.
"Indemnified Parties" has the meaning set forth in Section 7.2(a).
"Indemnifying Party" has the meaning set forth in Section 7.4(a).
"Intellectual Property" means (i) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a's, domain names, logos,
symbols, trade dress, assumed names, fictitious names, trade names, and other
indicia of origin, all applications and registrations for the foregoing, and all
goodwill associated therewith and symbolized thereby, including all renewals of
same (collectively, "Trademarks"); (ii) inventions and discoveries, whether
patentable or not, and all patents, registrations, invention disclosures
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and applications therefor, including divisions, continuations,
continuations-in-part and renewal applications, and including renewals,
extensions and reissues (collectively, "Patents"); (iii) trade secrets, and
know-how, including processes, schematics, business methods, formulae, drawings,
prototypes, models, designs, customer lists and supplier lists (collectively,
"Trade Secrets"); (iv) published and unpublished works of authorship, whether
copyrightable or not (including without limitation databases and other
compilations of information), including mask rights and computer software,
copyrights therein and thereto, registrations and applications therefor, and all
renewals, extensions, restorations and reversions thereof (collectively,
"Copyrights"); and (v) any other intellectual property or proprietary rights.
"Inventory" means all inventory Related to the Business, wherever
located, including all finished goods, whether held at any location or facility
of Seller or in transit to Seller, in each case as of the Closing Date.
"IP Contracts" means all Contracts relating to Intellectual
Property, including Contracts granting Seller and its Affiliates rights to use
the Intellectual Property of other Persons, non-assertion agreements, settlement
agreements, agreements granting rights to use Scheduled Intellectual Property,
Trademark coexistence agreements, and Trademark consent agreements.
"IT Assets" means computers, computer software, firmware,
middleware, servers, workstations, routers, hubs, switches, data communications
lines, all other information technology equipments and all associated
documentation, in each case Related to the Business.
"Knowledge" or any similar phrase means the actual knowledge of Xxxx
Xxxxxxx, Xxxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxx Xxxxxxx Xxxxxxxx,
Xxxxxx Xxxxxx and Xxxxx Xxxxxxxxx (in the case of Seller) or of any management
employee of Buyer, as the case may be.
"Law" means any law, statute, ordinance, rule, regulation, code,
order, judgment, injunction or decree enacted, issued, promulgated, enforced or
entered by a Government Entity or Self-Regulatory Organization.
"Leased Real Property" means all real property that is the subject
of the Assigned Leases.
"Liabilities" means any and all debts, liabilities, commitments and
obligations of any kind, whether fixed, contingent or absolute, matured or
unmatured, liquidated or unliquidated, accrued or not accrued, asserted or not
asserted, known or unknown, determined, determinable or otherwise, whenever or
however arising (including, whether arising out of any contract or tort based on
negligence or strict liability) and whether or not the same would be required by
GAAP to be reflected in financial statements or disclosed in the notes thereto.
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"Losses" has the meaning set forth in Section 7.2(a).
"Material Adverse Effect" means an effect, circumstance or event
that is materially adverse to the business, assets, financial condition or
results of operations of the Business, taken as a whole, including the
revocation, invalidity, impairment or other ineffectiveness of any material
Product Certification or any group of Product Certifications that, when taken
together, are material.
"Material Contracts" has the meaning set forth in Section 3.14(a).
"Maintenance Revenue" has the meaning set forth in Section 2.15(a).
"Non-Assignable Contract" has the meaning set forth in Section 2.11.
"Non-Governmental Authorizations" means all licenses, permits,
certificates and other authorizations and approvals other than Governmental
Authorizations that are (i) held by ROI or Seller and (ii) Related to the
Business.
"Notice Period" has the meaning set forth in Section 7.4(a).
"Ordinary Course" or "Ordinary Course of Business" means the conduct
of the Business in accordance with Seller's normal day-to-day customs, practices
and procedures.
"Patents" has the meaning set forth in the "Intellectual Property"
definition.
"Past Due Amount" has the meaning set forth in Section 5.10.
"Permitted Encumbrances" means (i) Encumbrances specifically
reflected or specifically reserved against or otherwise disclosed in Seller's
September 30, 2004 balance sheet, (ii) mechanics', materialmen's,
warehousemen's, carriers', workers', or repairmen's liens or other similar
common law or statutory Encumbrances arising or incurred in the Ordinary Course
and that are not material in amount or effect on the Business, (iii) liens for
Taxes, assessments, and other governmental charges not yet due and payable, in
an aggregate amount that would not be material, and (iv) with respect to real
property, zoning, building, subdivision or other similar requirements or
restrictions.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, a Government Entity, a trust or other
entity or organization.
"Product" has the meaning set forth in Section 3.23.
"Product Certification" means all product certifications given or
granted by processors or manufacturers with respect to Products.
"Proxy Statement" has the meaning set forth in Section 5.3(b).
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"Purchase Price" has the meaning set forth in Section 2.5.
"Quarterly Statement" has the meaning set forth in Section 2.12(b).
"Registered" means issued by, registered with, renewed by or the
subject of a pending application before any Government Entity or domain name
registrar.
"Related to the Business" means required for, related primarily to,
or used primarily in connection with, the Business as conducted by Seller and
its Affiliates prior to the Closing.
"Requisite Vote" has the meaning set forth in Section 3.2(a).
"Revenue Event" means the date as of which Buyer delivers (or
becomes obligated to deliver) to ROI a Revenue Calculation showing that the
Revenue Number exceeds $28,649,000.
"Revenue Number" has the meaning set forth in Section 2.12(b).
"XxXX Agreement" has the meaning set forth in Section 2.15(a).
"XxXX Report" has the meaning set forth in Section 2.15(a).
"ROI" has the meaning set forth in the Preamble.
"ROI Historical Financial Statements" has the meaning set forth in
Section 3.6(b).
"ROI Interim Financial Statements" has the meaning set forth in
Section 3.6(b).
"ROI Objection" has the meaning set forth in Section 2.6(b).
"ROI Reports" has the meaning set forth in Section 3.6(a).
"ROI Year-End Financial Statements" has the meaning set forth in
Section 3.6(b).
"SEC" means the United States Securities and Exchange Commission.
"Scheduled Intellectual Property" has the meaning set forth in
Section 3.12(a).
"Seller" has the meaning set forth in the Preamble.
"Seller Historical Financial Statements" has the meaning set forth
in Section 3.6(c).
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"Seller Indemnified Parties" has the meaning set forth in Section
7.3(a).
"Seller Interim Financial Statements" has the meaning set forth in
Section 3.6(c).
"Seller Required Approvals" means all consents, approvals, waivers,
authorizations, notices and filings that are required to be listed and are
listed on Schedules 3.3(a) and 3.3(b).
"Seller Year-End Financial Statements" has the meaning set forth in
Section 3.6(c).
"Specified Matter" means that certain matter described in Schedule
1.1(b).
"Stockholders Meeting" has the meaning set forth in Section 5.3(c)
"Subsidiary" means those Persons set forth in Schedule 1.1(c) and
any other corporation or other entity (including joint ventures) of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
are directly or indirectly owned by Seller or ROI.
"Superior Proposal" has the meaning set forth in Section 5.8.
"Tax Returns" means all reports and returns required to be filed
with respect to Taxes.
"Taxes" means all federal, state or local and all foreign taxes,
including income, gross receipts, windfall profits, value added, severance,
property, production, sales, use, duty, license, excise, franchise, employment,
withholding or similar taxes, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties.
"Third Party Claim" has the meaning set forth in Section 7.4(a).
"Total Maintenance Revenue" has the meaning set forth in Section
2.15(a).
"Trademarks" has the meaning set forth in the "Intellectual
Property" definition.
"Trade Secrets" has the meaning set forth in the "Intellectual
Property" definition.
"Transaction" means the purchase and sale of the Transferred Assets
and the assumption of the Assumed Liabilities pursuant to this Agreement.
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"Transfer Taxes" has the meaning set forth in Section 5.4(e).
"Transferred Assets" has the meaning set forth in Section 2.1.
"Transferred Employee" has the meaning set forth in Section 5.5(a).
"Transferred Employees' Records" means all personnel files related
to the Transferred Employees.
"Transferred Intellectual Property" means all the Intellectual
Property Related to the Business, including, for the avoidance of doubt, the
Patents and Trademarks set forth on Schedule 2.1(d).
"Voting Agreement" means a voting agreement in the form attached to
this Agreement as Exhibit 1.1(b).
Section 1.2 Other Terms. Other terms may be defined elsewhere in the text
of this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
Section 1.3 Other Definitional Provisions. Unless the express context
otherwise requires:
(a) the words "hereof", "herein", and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement;
(b) the terms defined in the singular have a comparable meaning when used
in the plural, and vice versa;
(c) the terms "Dollars" and "$" mean United States Dollars;
(d) references herein to a specific Section, Subsection or Schedule shall
refer, respectively, to Sections, Subsections or Schedules of this Agreement;
(e) wherever the word "include," "includes," or "including" is used in
this Agreement, it shall be deemed to be followed by the words "without
limitation;" and
(f) references herein to any gender includes each other gender.
ARTICLE II
PURCHASE AND SALE OF THE BUSINESS
Section 2.1 Purchase and Sale of Assets. On the terms and subject to the
conditions set forth herein, at the Closing, ROI and Seller shall, or shall
cause one or more of their Affiliates to, sell, convey, transfer, assign and
deliver to Buyer, and Buyer
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shall purchase from ROI, Seller and/or their Affiliates all of ROI's and
Seller's and each of their Affiliates' right, title and interest in and to the
assets of ROI, Seller and their Affiliates Related to the Business, whether
tangible or intangible, real, personal or mixed, except for the Excluded Assets
(collectively, the "Transferred Assets"), free and clear of all Encumbrances,
other than Permitted Encumbrances, including all of such right, title and
interest in and to the following:
(a) all of the Accounts Receivable;
(b) all of the Inventory;
(c) all of the Contracts;
(d) all of the Transferred Intellectual Property;
(e) all of the Books and Records;
(f) all of the Product Certifications;
(g) all of the Fixtures and Equipment;
(h) all of the Leased Real Property (except the Kennesaw, Georgia
facility);
(i) all of the personal property listed in Schedule 2.1(i) with
respect to the Kennesaw, Georgia facility;
(j) all causes of action, lawsuits, judgments, claims and demands of
any nature available to or being pursued by ROI, Seller or any of their
Affiliates to the extent related to the Transferred Assets, the Assumed
Liabilities or the ownership, use, function or value of any Transferred
Asset, whether arising by way of counterclaim or otherwise, except to the
extent included in the Excluded Assets;
(k) all credits, prepaid expenses, deferred charges, advance
payments, security deposits, prepaid items and duties to the extent
Related to the Business or any Transferred Asset;
(l) all Governmental Authorizations and Non-Governmental
Authorizations and all applications therefor; and
(m) all guaranties, warranties, indemnities and similar rights in
favor of ROI, Seller or any of their Affiliates to the extent related to
any Transferred Asset.
Section 2.2 Excluded Assets. Notwithstanding anything herein to the
contrary, from and after the Closing, ROI, Seller and their Affiliates shall
retain all of their existing
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right, title and interest in and to, and there shall be excluded from the sale,
conveyance, assignment or transfer to Buyer hereunder, and the Transferred
Assets shall not include, the following (collectively, the "Excluded Assets"):
(a) all Tax assets (including duty and tax refunds and prepayments);
(b) all Tax Returns and all books and records (including working
papers) related thereto;
(c) all rights, assets and accruals in connection with, or relating
to, the Benefit Plans;
(d) all credits, prepaid expenses, deferred charges, advance
payments, security deposits, prepaid items and duties to the extent
related to any asset that is not a Transferred Asset;
(e) all cash and cash equivalents;
(f) all Contracts listed on Schedule 2.2(f), including those between
Seller and any of its Affiliates;
(g) all assets, properties and rights primarily related to, or used
primarily in connection with, the construction information business of
Tectonic Network, Inc.; and
(h) all assets, properties and rights listed on Schedule 2.2(h);
(i) all personnel records, other than the Transferred Employees'
Records.
Section 2.3 Assumption of Liabilities. On the terms and subject to the
conditions set forth herein, at the Closing, Buyer shall assume and discharge or
perform when due all the Assumed Liabilities. Buyer will not assume or have any
responsibility of any nature with respect to any Liability relating to the
Business, the Transferred Assets or the Transferred Employees that exists, or
arises out of the operation or ownership of the Transferred Assets or the
Business or the employment of the Transferred Employees, prior to the Closing
and that is not an Assumed Liability.
Section 2.4 Excluded Liabilities. ROI, Seller and their Affiliates shall
retain and be responsible for all Excluded Liabilities.
Section 2.5 Purchase Price. The aggregate amount to be paid for the
Transferred Assets shall be Thirteen Million Dollars ($13,000,000), as adjusted
pursuant to Section 2.6 (the "Purchase Price").
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Section 2.6 Purchase Price Adjustment. (a) As soon as practicable but in
no event more than 30 days following the Closing, Buyer shall prepare, or cause
to be prepared, and deliver to ROI the Closing Statement, which shall set forth
the Accounts Receivable and the trade accounts payable of the Business as of the
Closing and which shall be prepared in accordance with GAAP. Upon completion of
the Closing Statement, Buyer shall derive the Closing Value from the Closing
Statement, and deliver such calculation and the Closing Statement to ROI.
(b) ROI shall complete its review of the Closing Statement within 30 days
after delivery thereof by Buyer. In the event that ROI determines that the
Closing Statement has not been prepared on the basis set forth in Section
2.6(a), ROI shall, on or before the last day of such 30-day period, so inform
Buyer in writing (the "ROI Objection"), setting forth a specific description of
the basis of ROI's determination and the adjustments to the Closing Statement
and the corresponding adjustments to the Closing Value that ROI believes should
be made. If no ROI Objection is received by Buyer on or before the last day of
such 30-day period, then the Closing Value set forth on the Closing Statement
delivered by Buyer shall be final. Buyer shall have 10 days from receipt of the
ROI Objection to review and respond to any ROI Objection.
(c) If ROI and Buyer are unable to resolve all of their disagreements with
respect to the proposed adjustments set forth in the ROI Objection within 15
days following the completion of Buyer's review of the ROI Objection, they shall
refer any remaining disagreements to the CPA Firm which, acting as experts and
not as arbitrators, shall determine, on the basis set forth in and in accordance
with Section 2.6(a), and only with respect to the remaining differences so
submitted, whether and to what extent, if any, the Closing Statement and the
Closing Value require adjustment. Buyer and ROI shall instruct the CPA Firm to
deliver its written determination to Buyer and ROI no later than 30 days after
the remaining differences underlying the ROI Objection are referred to the CPA
Firm. The CPA Firm's determination shall be conclusive and binding upon Buyer
and ROI and their Affiliates. The fees and disbursements of the CPA Firm shall
be borne equally by Buyer and ROI. Buyer and ROI shall make readily available to
the CPA Firm all relevant books and records and any work papers (including those
of the parties' respective accountants, to the extent permitted by such
accountants) relating to the Closing Statement and the ROI Objection and all
other items reasonably requested by the CPA Firm in connection therewith.
(d) ROI shall provide to Buyer full access to the books and records of the
Business and to any other information, including work papers of its accountants
(to the extent permitted by such accountants), and to any employees during
regular business hours and on reasonable advance notice, to the extent necessary
for Buyer to prepare the Closing Statement, to respond to the ROI Objection and
to prepare materials for presentation to the CPA Firm in connection with Section
2.6(c). ROI shall have full access to all information used by Buyer in preparing
the Closing Statement, including the work papers of its accountants (to the
extent permitted by such accountants).
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(e) If the Base Value is greater than the Closing Value, then the Purchase
Price shall be decreased by the amount of the difference, and ROI shall promptly
(and in any event within five Business Days) after the final determination
thereof pay to Buyer the amount of such difference, by wire transfer of
immediately available funds to an account designated by Buyer.
Section 2.7 Closing. The Closing shall take place at the offices of
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M.,
New York City time, on the fifth Business Day following the date on which the
conditions set forth in Section 6.1 (other than those conditions that by their
nature are to be satisfied at the Closing but subject to the fulfillment or
waiver of those conditions) have been satisfied or waived, or at such other time
and place as the parties hereto may mutually agree. The date on which the
Closing occurs is called the "Closing Date". Notwithstanding anything in this
Agreement to the contrary, the parties agree that the place of title transfer
for the Transferred Assets shall be in the State of Georgia.
Section 2.8 Deliveries by Buyer. At the Closing, Buyer shall deliver to
Seller the following:
(a) $13,000,000 in immediately available funds by wire transfer to
an account or accounts which have been designated by Seller at least two
Business Days prior to the Closing Date;
(b) such instruments of assumption and other instruments or
documents, in form and substance reasonably acceptable to Seller, as may
be necessary to effect Buyer's assumption of the Assumed Liabilities and
the effective assignment of any Contracts or other Transferred Assets;
(c) an opinion of counsel to Buyer reasonably satisfactory to ROI
with respect to the due authorization, execution and delivery of this
Agreement;
(d) the certificate to be delivered pursuant to Section 6.3(c); and
(e) such other customary instruments of transfer, assumptions,
filings or documents, in form and substance reasonably satisfactory to
Seller, as may be required to give effect to this Agreement.
Section 2.9 Deliveries by ROI and the Seller. At the Closing, ROI and
Seller shall deliver, or cause to be delivered, to Buyer the following:
(a) bills of sale or other appropriate documents of transfer, in
form and substance reasonably acceptable to Buyer, transferring the
tangible personal property included in the Transferred Assets to Buyer;
(b) assignments, in form and substance reasonably acceptable to
Buyer and, if applicable, as required by any Government Entity with which
ROI's,
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Seller's or any of their Affiliates' rights to any Transferred
Intellectual Property have been filed, assigning to Buyer the Transferred
Intellectual Property;
(c) assignments of the Assigned Leases, in form and substance
reasonably acceptable to Buyer;
(d) assignment and assumption agreements, in form and substance
reasonably acceptable to Buyer and Seller, assigning to Buyer all rights
of Seller and their Affiliates in and to all of the Contracts, exclusive
of any Excluded Liabilities;
(e) a duly executed certification for ROI and Seller that each is
not a foreign Person within the meaning set forth in Treasury Regulation
Section 1.1445-2(b)(2)(iii)(A); it being understood that notwithstanding
anything to the contrary contained herein, if ROI and Seller fail to
provide Buyer with such certification, Buyer shall be entitled to withhold
the requisite amount from the Purchase Price in accordance with Section
1445 of the Code and the applicable Treasury Regulations;
(f) the Books and Records;
(g) an opinion of counsel to ROI and Seller reasonably satisfactory
to Buyer with respect to the due authorization, execution and delivery of
this Agreement;
(h) evidence of the obtaining of, or the filing with respect to, the
Seller Required Approvals set forth on Schedule 6.1(b);
(i) the Consent Certificates relating to the Assigned Leases;
(j) the certificate to be delivered pursuant to Section 6.2(c); and
(k) such other customary instruments of transfer, assumptions,
filings or documents, in form and substance reasonably satisfactory to
Buyer, as may be required to give effect to this Agreement.
Section 2.10 Affiliate Acquisitions. Notwithstanding anything to the
contrary contained in this Agreement, Buyer may elect to have any or all of the
Transferred Assets conveyed or transferred to, or any of the Assumed Liabilities
assumed by, one or more of its Affiliates so long as no such election results in
any greater cost or obligation than ROI, Seller and their Affiliates would
otherwise have had; provided, however, that no such election shall relieve Buyer
of any of its obligations to ROI and Seller and their Affiliates hereunder with
respect to the Assumed Liabilities or otherwise. The Purchase Price shall be
allocated among those Transferred Assets to be conveyed to Buyer and those
Transferred Assets to be conveyed to the respective Affiliates of Buyer, but in
no event shall the amount of the Purchase Price or any other items to be paid
for the
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Transferred Assets, the nature of the Assumed Liabilities to be assumed, the
obligation to pay Taxes or Transfer Taxes or the allocation of risk and
responsibility between Seller, on the one hand, and Buyer, on the other hand, be
modified to the detriment of Seller and their Affiliates as a result of the
delivery of separate bills of sale, assignments and other closing documents.
Section 2.11 Workout Clause. Seller shall, during the remaining term of
each Contract that requires third party consent for assignment that has not been
obtained as of the Closing (a "Non-Assignable Contract"), use commercially
reasonable efforts to (a) make the benefit of such Non-Assignable Contract
available to the Buyer so long as the Buyer fully cooperates with Seller and
promptly reimburses Seller for any payments made by Seller in connection
therewith and (b) enforce, at the request of the Buyer and at the sole expense
and for the account of the Buyer, any right of Seller arising from such
Non-Assignable Contract against the other party or parties thereto (including
the right to elect or terminate any such Non-Assignable Contract in accordance
with the terms thereof); provided, however, that the Buyer shall have the sole
responsibility with respect to the completion of the work following the Closing
under such Non-Assignable Contract; shall bear all costs and expenses with
respect thereto arising or accruing after the Closing Date; shall be solely
entitled to the benefits thereunder; and shall be solely responsible for any
claims resulting from any alleged defect in construction, design, materials or
workmanship in connection with any job performed by the Buyer under such
Non-Assignable Contract after the Closing Date.
Section 2.12 Contingent Payment. (a) Within three Business Days following
the execution and delivery by Buyer of any definitive contract or agreement
providing for the Specified Matter, Buyer shall provide ROI with written notice
of such execution and delivery and Buyer's good faith estimate of the
consummation date for the Specified Matter. Not later than the first Business
Day following the consummation of the Specified Matter, Buyer will provide ROI
with written notice of such consummation.
(b) Within 30 days after the end of each calendar quarter following the
Closing Date, through and including March 31, 2006, Buyer shall provide ROI with
a certificate (each, a "Quarterly Statement"), signed by Buyer's chief financial
officer, specifying the revenue net of discounts and returns of the Business for
such calendar quarter and stating that such net revenue has been calculated in
accordance with GAAP. Within 30 days following June 30, 2006, Buyer shall
provide ROI with a certificate (the "2006 Statement"), signed by Buyer's chief
financial officer, specifying the revenue net of discounts and returns of the
Business for the 24 months ending June 30, 2006 (the "Revenue Number") and
stating that the Revenue Number has been calculated in accordance with GAAP. It
is agreed that deferred revenue is not included in revenue.
(c) Buyer shall provide to ROI full access to supporting schedules,
revenue reconciliations and any other information, and to its employees during
regular business hours and on reasonable advance notice, to the extent
reasonably necessary for ROI to evaluate each Quarterly Statement and the 2006
Statement. In the event that ROI
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determines that any Quarterly Statement or the 2006 Statement has not been
prepared in accordance with GAAP, ROI shall, on or prior to the 30th day
following its receipt of such Quarterly Statement or the 2006 Statement, as the
case may be, so inform Buyer in writing, setting forth a specific description of
ROI's objection(s) and the corresponding adjustments to the Quarterly Statement
or the 2006 Statement that ROI believes should be made. If no such notice is
received prior to such 30th day, the Quarterly Statement or 2006 Statement shall
be final. The resolution of any objection shall be handled in accordance with
Section 2.6(c).
(d) On September 8, 2006 (or such date, if later, on which any objection
shall be resolved), but only if there has previously occurred a Consummation
Event or Revenue Event, Buyer shall pay (x) to ROI, by wire transfer of
immediately available funds to an account designated by ROI at least two
Business Days prior to the payment date, an amount equal to the Contingent
Payment Amount, if any, and (y) to the Designated Executives, in such
proportions as may be determined in accordance with Section 2.13, by wire
transfer of immediately available funds to such accounts as they may designate
at least two Business Days prior to the payment date (or in the absence of any
such designation, by delivery to the Designated Executives of one or more
cashier's or official checks), an aggregate of $350,000, reduced by any required
Tax withholding. If a Consummation Event or Revenue Event never occurs, Buyer
shall not be obligated to make any payments pursuant to this Section 2.12(d). If
the Contingent Payment Amount is zero, Buyer shall not be obligated to make any
payment pursuant to clause (x) of this Section 2.12(d).
(e) During the period following the Closing through June 30, 2006, Buyer
will (i) in connection with the management of the Business, employ management
practices substantially consistent with the management practices Buyer employs
with respect to its other businesses, and (ii) operate the Business in a
commercially reasonable manner consistent with the objective of maximizing the
long term return of the Business.
Section 2.13 Designated Executives. The aggregate $350,000 payment
contemplated by Section 2.12(d)(y) shall be allocated as follows:
(a) ROI shall allocate an aggregate of $100,000 among employees of the
Business prior to the Closing ("Designated Executives") designated by it in its
sole discretion. ROI shall notify Buyer of the amount allocated to each such
Designated Executive at least two Business Days prior to the payment date.
(b) Buyer shall allocate an aggregate of $250,000 among Designated
Executives which remain employed by the Business following the Closing,
designated by it in its sole discretion.
(c) Promptly following the Closing, ROI shall pay an aggregate of $150,000
to Designated Employees designated by it in its sole discretion.
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(d) No Designated Employee shall be a third party beneficiary of the
covenants set forth in this Article II.
(e) All amounts paid pursuant to Section 2.12(d)(y) and this Section 2.13
shall be paid subject to withholding of applicable state, federal and local
income and employment Taxes.
(f) ROI and Buyer shall work in good faith to avoid any loss of deduction
under Section 280G of the Code and the imposition of any excise tax under
Section 4999 of the Code as a result of the allocations among the Designated
Executives contemplated by this Section 2.13.
Section 2.14 Incentive Program. Within a reasonable period of time
following the Closing, Buyer shall establish an incentive program for its
employees involved in the Business, providing for incentives in such amounts and
in such forms as Buyer shall determine.
Section 2.15 XxXX Reports. (a) Prior to the 30th day following the first
anniversary of the end of the calendar quarter in which the Closing occurs,
Buyer shall provide ROI with a report (the "XxXX Report") listing each end user
software license agreement for the XxXX product (each, a "XxXX Agreement")
which, from the Closing until such anniversary, either was terminated by the
customer or expired without the customer having renewed such XxXX Agreement on
the same economic terms provided for therein or substantially similar terms,
together with a calculation of the annual maintenance fees attributable to each
such XxXX Agreement, as set forth in the schedules to such XxXX Agreement (the
"Maintenance Revenue"), as well as a calculation of the sum of all such
maintenance fees (such sum, the "Total Maintenance Revenue").
(b) Buyer shall provide to ROI full access to the books and records of the
Business and to its employees during regular business hours and on reasonable
advance notice, to the extent reasonably necessary for ROI to evaluate the XxXX
Report. Any disputes concerning the XxXX Report or the Total Maintenance Revenue
shall be handled in the manner described in Section 2.6.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ROI and SELLER
Each of ROI and Seller represents and warrants to Buyer as of the date
hereof and as of the Closing as follows:
Section 3.1 Organization and Qualification. Each of ROI and Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, in the case of ROI, and the laws of the State of
Georgia, in the case of Seller, and has all requisite corporate power and
authority to own, lease and operate its assets, and to carry on the Business as
currently conducted. Seller is duly qualified to do
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business and is in good standing as a foreign corporation in each jurisdiction
where the ownership or operation of the Transferred Assets or the conduct of the
Business requires such qualification, except where the failure to be so
qualified would not materially affect the Business.
Section 3.2 Corporate Authorization. (a) Each of ROI and Seller has full
corporate power and authority to execute and deliver this Agreement and to
perform their obligations hereunder. The execution, delivery and performance by
ROI and Seller of this Agreement has been duly and validly authorized and no
additional corporate or stockholder authorization or consent is required in
connection with the execution, delivery and performance by ROI and Seller of
this Agreement, subject only to the approval of the Transaction by holders of a
majority of the outstanding shares of capital stock of ROI (the "Requisite
Vote").
(b) ROI's Board of Directors (i) has approved and declared advisable this
Agreement and the Transaction, and (ii) has received the opinion of its
financial advisors, SVB Alliant, to the effect that the Purchase Price to be
received by Seller in the Transaction is fair to the stockholders of ROI from a
financial point of view, a copy of which opinion has been delivered to Buyer. It
is agreed and understood that such opinion is for the benefit of ROI's Board of
Directors and may not be relied on by Buyer.
Section 3.3 Consents and Approvals. Except as set forth on Schedule
3.3(a), no consent, approval, waiver, authorization, notice or filing is
required to be obtained by ROI or any of its Subsidiaries from, or to be given
by ROI or any of its Subsidiaries to, or made by ROI or any of its Subsidiaries
with, any Government Entity, in connection with the execution, delivery and
performance by ROI or any of its Subsidiaries of this Agreement. Except as set
forth on Schedule 3.3(b), no consent, approval, waiver, authorization, notice or
filing, including relating to any Product Certification, is required to be
obtained by ROI or any of its Subsidiaries from, or to be given by ROI or any of
its Subsidiaries to, or made by ROI or any of its Subsidiaries with, any Person
which is not a Government Entity in connection with the execution, delivery and
performance by ROI or any of its Subsidiaries of this Agreement.
Section 3.4 Non-Contravention. Subject to obtaining the approval of the
stockholders of ROI by the Requisite Vote, the execution, delivery and
performance by ROI and its Subsidiaries of this Agreement, and the consummation
of the transactions contemplated hereby and thereby, do not and will not (i)
violate any provision of the Articles of Incorporation, Certificate of
Incorporation, Bylaws or other organizational documents of ROI or any of its
Subsidiaries, (ii) assuming the receipt of all consents, approvals, waivers and
authorizations and the making of the notices and filings set forth on Schedule
3.3(b), conflict with, or result in the breach of, or constitute a default
under, or result in the termination, cancellation, modification or acceleration
(whether after the filing of notice or the lapse of time or both) of any right
or obligation of ROI or any of its Subsidiaries under, or result in a loss of
any benefit to which ROI or any of its Subsidiaries is entitled under, any
Contract, or result in the creation of any Encumbrance
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upon any of the Transferred Assets, (iii) assuming the receipt of all consents,
approvals, waivers and authorizations and the making of notices and filings set
forth on Schedule 3.3(a) or required to made or obtained by Buyer, violate or
result in a breach of or constitute a default under any Law to which ROI or any
of its Subsidiaries is subject, or under any Governmental Authorization, other
than, in the case of clause (iii), conflicts, breaches, terminations, defaults,
cancellations, accelerations, losses, violations or Encumbrances that would not
have a Material Adverse Effect or materially impair or delay ROI's and its
Subsidiaries' ability to perform its obligations hereunder or (iv) violate,
result in a breach of, or otherwise be inconsistent with the terms of, or the
facts forming the basis for, any material Product Certification, other than as
set forth on Schedule 3.4.
Section 3.5 Binding Effect. This Agreement when executed and delivered by
Buyer and the other parties thereto, constitutes a valid and legally binding
obligation of Seller and ROI, as applicable, enforceable against Seller and ROI
in accordance with their respective terms.
Section 3.6 ROI Reports and Financial Statements.
(a) ROI has made available to Buyer each registration statement, report,
proxy statement or information statement prepared by it since December 31, 2003,
including (i) ROI's Annual Report on Form 10-KSB for the year ended June 30,
2004, and (ii) ROI's Quarterly Report on Form 10-QSB for the period ended
September 30, 2004 in the form (including exhibits, annexes and any amendments
thereto) filed with the Securities and Exchange Commission (the "SEC")
(collectively, including any such reports filed subsequent to the date hereof
and as amended, the "ROI Reports"). As of their respective dates (or, if
amended, as of the date of such amendment) the ROI Reports did not, and any ROI
Reports filed with the SEC subsequent to the date hereof will not, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading.
(b) Set forth on Schedule 3.6(b) is a copy of the audited balance sheets
and audited statements of income and statements of cash flows for ROI for the
fiscal years ended June 30, 2003 and 2004 (the "ROI Year-End Financial
Statements") and a copy of the unaudited balance sheet and statement of income
and statement of cash flows for ROI for the three months ended September 30,
2004 (the "ROI Interim Financial Statements" and, together with the ROI Year-End
Financial Statements, the "ROI Historical Financial Statements"). The ROI
Historical Financial Statements have been prepared in accordance with GAAP
consistently applied, and fairly present, in all material respects, the
financial condition and results of operations and cash flows of ROI as of the
dates thereof or the periods then ended, subject in the case of the unaudited
financial statements to normal year-end adjustments and the absence of footnotes
and similar presentation items therein.
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(c) Set forth on Schedule 3.6(c) is a copy of the unaudited balance sheets
and unaudited statements of income for Seller for the fiscal years ended June
30, 2003 and 2004 (the "Seller Year-End Financial Statements") and a copy of the
unaudited balance sheet and statement of income for Seller for the three months
ended September 30, 2004 (the "Seller Interim Financial Statements" and,
together with the Seller Year-End Financial Statements, the "Seller Historical
Financial Statements". The Seller Historical Financial Statements have been
prepared in accordance with GAAP consistently applied, and fairly present, in
all material respects, the financial condition and results of operations and
cash flows of the Business as of the dates thereof or the periods then ended,
subject to normal year-end adjustments and the absence of footnotes and similar
presentation items therein. There are no material off balance sheet
transactions, arrangements, obligations, or relationships attributable to the
Business that may have a Material Adverse Effect.
(d) Set forth in Schedule 3.6(d) are reconciliations between the latest
balance sheet and income statement set forth in Schedule 3.6(b) and the latest
balance sheet and income statement set forth in Schedule 3.6(c). Such
reconciliations fairly present, in all material respects, all expenses incurred
by ROI on behalf of the Seller and all expenses incurred by the Seller on behalf
of ROI.
Section 3.7 Litigation and Claims. Except as set forth on Schedule 3.7:
(a) There is no civil, criminal or administrative action, suit, demand,
claim, hearing, proceeding or investigation pending, or to the Knowledge of
Seller threatened, against or relating to ROI, Seller or any of their Affiliates
in connection with the Transferred Assets, the Business or the transactions
contemplated hereby.
(b) None of the Transferred Assets is subject to any order, writ,
judgment, award, injunction or decree of any court or governmental or regulatory
authority of competent jurisdiction or any arbitrator or arbitrators.
Section 3.8 Taxes. Except as set forth on Schedule 3.8, (a) all Tax
Returns with respect to the Business that are required to be filed on or before
the Closing have been or will have been duly filed and all amounts shown to be
due and owing thereon have been or will have been duly and timely paid, (b)
Seller has withheld from its employees and timely paid to the appropriate
authorities or set aside in an account for such purpose proper and accurate
amounts for all periods through the date of this Agreement in compliance with
all Tax withholding provisions (including income, social security and employment
Tax withholding for all types of compensation), (c) there is no lien for Taxes
upon any of the Transferred Assets nor, to the Knowledge of Seller, is any
taxing authority in the process of imposing any lien for Taxes on any of the
Transferred Assets, other than liens for Taxes that are not yet due and payable
or for Taxes the validity or amount of which is being contested by either Seller
or one of its Affiliates in good faith by appropriate action, and (d) all
deficiencies asserted or assessments made, if any, as a result of any
examination of the Tax Returns referred to in clause (a) above have
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been paid in full, unless the validity or amount thereof is being contested by
either Seller or one of its Affiliates in good faith by appropriate action.
Section 3.9 Employee Benefits.
(a) All benefit and compensation plans, contracts, policies or
arrangements covering Employees, any "employee benefit plans" within the meaning
of Section 3(3) of ERISA, any deferred compensation, stock option, stock
purchase, stock appreciation rights, stock based, incentive, bonus, workers'
compensation, short-term or long-term disability, vacation and severance plans
and all employment, severance and change in control agreements, including any
trust instruments and insurance contracts forming a part thereof, and all
amendments thereto (the "Benefit Plans"), are listed on Schedule 3.9(a) and each
Benefit Plan which has received a favorable opinion letter from the Internal
Revenue Service National Office, including any master or prototype plan, has
been separately identified. Seller has provided or made available to Buyer true
and complete copies of all Benefit Plans and all related service agreements,
summaries, summary plan descriptions, actuarial reports, the most recent filed
Forms 5500 and the most recent determination letters.
(b) No Benefit Plan is (i) subject to Title IV of ERISA or Section 412 of
the Code, (ii) a multiemployer plan within the meaning of Section 3(37) of
ERISA, or (iii) maintained outside of the United States. Within the last three
years, Seller has not incurred any liability under Title IV of ERISA. All
Benefit Plans covering Employees which are subject to ERISA have been
administered in accordance with their terms and are in substantial compliance
with all applicable Laws, including ERISA and the Code.
(c) Schedule 3.9(c) sets forth a true, correct and complete list of all
Employees employed by the Business on the date hereof, identifying as to each a
job title, years of service, amount or rate of salary or wages, most recent
annual cash bonus, any other annual cash compensation and location of
employment.
Section 3.10 Compliance with Laws. Except as disclosed on Schedule 3.10,
(a) the Business has been for the previous three years and currently is being
conducted in material compliance with all applicable Laws, (b) Seller has not
received any written notice alleging any violation under any applicable Law, and
ROI has not received any such notice in connection with the Business, (c) the
Business has all material Governmental Authorizations necessary for the conduct
of the Business as currently conducted; it being understood that nothing in this
representation is intended to address any compliance issue that is specifically
addressed by Section 3.11.
Section 3.11 Environmental Matters. Except for matters that are set forth
on Schedule 3.11:
(a) the Business has been for the previous five years and is in material
compliance with all applicable Environmental Laws and there are no material
Liabilities under any Environmental Law with respect to the Business;
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(b) the Leased Real Property has been for as long as it has been leased by
ROI, and is, in material compliance with all applicable Environmental Laws and
there are not material Liabilities under any Environmental Law with respect to
the Leased Real Property;
(c) to Seller's Knowledge, neither ROI, Seller nor any predecessor in
interest has received from any Person any written notice, demand, claim, letter
or request for information, relating to any violation or alleged violation of,
or any Liability under, any Environmental Law in connection with or affecting
the Business or related to the Transferred Assets or, to Seller's Knowledge,
related to the Leased Real Property;
(d) there are no writs, injunctions, decrees, orders or judgments
outstanding, or any actions, suits, proceedings or investigations pending,
threatened, relating to compliance with or Liability under any Environmental Law
Related to the Business or related to the Leased Real Property or the
Transferred Assets;
(e) to Seller's Knowledge, there has been no release, threatened release,
contamination or disposal of Hazardous Substances at any third party property,
or waste generated by Seller or any of its Affiliate or any legally responsible
predecessor corporation thereof, that has given or could reasonably be expected
to give rise to any Liability under any Environmental Law for which the Business
would incur or share Liability;
(f) no property currently or formerly owned or operated in connection with
the Business (including soils, groundwater, surface water, buildings and other
structures) has been contaminated by ROI, Seller or any Affiliate thereof with
any Hazardous Substance that could reasonably be expected to require
investigation or remediation under any Environmental Law;
(g) Seller has delivered or made available to Buyer and its advisors all
environmental reports, audits, assessments, sampling data, liability analyses,
memoranda, and studies in the possession of or conducted by Seller or any of its
Affiliates with respect to compliance under, or Liabilities related to, any
Environmental Law with respect to the Business and the Leased Real Property.
Section 3.12 Intellectual Property.
(a) Schedule 3.12(a)(i) sets forth a true and complete list of all
Registered Intellectual Property that is owned by Seller or any of its
Affiliates and Related to the Business (the "Scheduled Intellectual Property").
Except as set forth on Schedule 3.12(a)(ii), the Transferred Intellectual
Property constitutes all Intellectual Property used in or related to the
Business and, immediately after the Closing, necessary for the Buyer to conduct
and operate the Business as now being conducted by Seller. Seller owns all the
Scheduled Intellectual Property, free and clear of all Encumbrances. The
Scheduled Intellectual Property is valid, subsisting and enforceable, and is not
subject to any outstanding order, judgment, decree or agreement adversely
affecting Seller's or its
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Affiliates' use thereof or rights thereto. Seller has the right to use, pursuant
to license, sublicense, agreement or permission, the Transferred Intellectual
Property as such Intellectual Property is currently used in the Business.
(b) Immediately after the Closing, Buyer will own or have the right to use
all of the material Transferred Intellectual Property, on terms and conditions
substantially similar to those in effect immediately prior to the Closing.
(c) Neither the conduct of the Business nor any of the products sold or
services provided by Seller in connection therewith, infringes upon or otherwise
violates the Intellectual Property of any other Person. To the Knowledge of
Seller, none of the Transferred Intellectual Property is being infringed upon or
violated by any other Person.
(d) Schedule 3.12(d)(i) sets forth all IP Contracts, excluding
commercially available software licensed pursuant to shrink-wrap or click-wrap
agreements and standard, non-exclusive licenses by Seller to its customers.
Except as set forth on Schedule 3.13(d)(ii), (w) each IP Contract is, and will
continue to be immediately following the Closing, in full force and effect in
accordance with its terms, (x) no default or breach exists under, and there has
been no event, condition or occurrence that, with the giving of notice or lapse
of time, or both, would give rise or constitute a breach or default by Seller
under or any of its Affiliates under, any IP Contract that would be material to
the Business, (y) the consummation of the transactions contemplated hereby will
not conflict with, or result in the breach of, effect or give rise to any
license under, or constitute a default under, or result in the termination,
cancellation or acceleration (whether after the filing of notice or the lapse of
time or both) of any right of either Seller or any of its Affiliates under, or a
loss of any benefit to which either Seller or any of its Affiliates is entitled
under, or the imposition of any obligation under, or Encumbrance on, any of the
IP Contracts, and (z) no IP Contract contains any term that would become
applicable or inapplicable or whose scope would materially change as a result of
the consummation of the transactions contemplated hereby. To Seller's Knowledge,
the Transferred Intellectual Property that is the subject of a license or
sublicense to either Seller or any of its Affiliates is valid, subsisting and
enforceable and is not subject to any outstanding order, judgment, decree or
agreement adversely affecting either Seller's or any of its Affiliates' use
thereof or rights thereto.
(e) There is no litigation, opposition, cancellation, proceeding,
objection or claim pending, asserted or, to the Knowledge of Seller, threatened
concerning the ownership, validity, registerability, enforceability,
infringement, use or licensed right to use any material Transferred Intellectual
Property.
(f) The Scheduled Intellectual Property has been duly registered with,
filed in or issued by, as the case may be, the United States Patent and
Trademark Office or such other filing offices, domestic or foreign, as are
identified on Schedule 3.12(a)(i) and such registrations, filings, issuances and
other actions remain in full force and effect, and are current and unexpired.
Except as would not have a Material Adverse Effect, Seller has
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properly executed and recorded all documents necessary to perfect its title to
all Intellectual Property set forth on Schedule 3.12(a), and has filed all
documents and paid all taxes, fees, and other financial obligations required to
maintain in force and effect all such items until the Closing.
(g) Seller, ROI and their Affiliates have taken all reasonable measures to
protect the secrecy, confidentiality and value of all Trade Secrets Related to
the Business, and to Seller's Knowledge, such Trade Secrets have not been used,
disclosed to or discovered by any Person except pursuant to valid and
appropriate non-disclosure and/or license agreements, which have not been
breached. To Seller's Knowledge, no Employee has any patents issued or
applications pending for any device, process, design or invention of any kind
now used or needed by either Seller or its Affiliates in the furtherance of the
Business that have not been assigned to either Seller and/or its Affiliates. No
current or former officer or employee of ROI has any right, title or interest in
or to any of the Transferred Intellectual Property.
(h) To Seller's knowledge, Seller's employees' performance of their
employment activities does not violate any third party's intellectual property
rights or such employees' contractual obligations to any third person. To
Seller's Knowledge, no Employee's performance of his or her employment
activities violates the Intellectual Property or other rights of any Person.
(i) To Seller's Knowledge, the IT Assets operate and perform in all
material respects in accordance with their documentation and functional
specifications and otherwise as required in connection with the Business. To
Seller's Knowledge, the IT Assets do not contain any "time bombs," "Trojan
horses," "back doors," "trap doors," "worms," viruses, bugs, faults or other
devices or effects that (A) enable or assist any Person to access without
authorization the IT Assets, or (B) otherwise significantly adversely affect the
functionality of the IT Assets, except as disclosed in its documentation. To
Seller's Knowledge, no Person has gained unauthorized access to the IT Assets.
Seller has implemented reasonable backup and disaster recover technology
consistent with industry practices. To Seller's Knowledge, none of the IT Assets
or any proprietary software owned by Seller contains any shareware, open source
code, or other software whose use requires disclosure or licensing of the
Transferred Intellectual Property.
Section 3.13 Labor. (a) Except as set forth on Schedule 3.13(a), neither
Seller nor any of its Affiliates is a party to or bound by any material labor
agreement, union contract or collective bargaining agreement respecting the
Employees.
(b) Except as set forth on Schedule 3.13(b), Seller and ROI are in
compliance in all material respects with all labor Laws Related to the Business
and the Employees, and are not engaged in any unfair labor practices, as defined
in the National Labor Relations Act or other similar Law applicable to
Employees.
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(c) There is no pending, or to the Knowledge of Seller, threatened,
strike, walkout or other work stoppage or any union organizing effort by any of
the Employees.
(d) There is no unfair labor practice charge or complaint against the
Business pending, or to Seller's Knowledge threatened, before the National Labor
Relations Board or other Government Entity.
Section 3.14 Contracts. (a) Schedule 3.14(a) lists all written contracts
and other agreements Related to the Business to which ROI or any of its
Subsidiaries is a party or by which any of their properties or assets are bound,
having the following description(s) (collectively, the "Material Contracts"):
(i) any agreement (or group of related agreements) Related to the
Business for the lease of personal property to or from any Person
providing for lease payments in excess of $10,000 per annum;
(ii) any agreement (or group of related agreements) Related to the
Business for the purchase or sale of supplies, products, or other personal
property, or for the furnishing or receipt of services, the performance of
which will extend over a period of more than one year or involve
consideration in excess of $10,000;
(iii) any agreement Related to the Business concerning a partnership
or joint venture or other contract or agreement involving a sharing of
profits, losses, costs or liabilities by ROI, Seller or any of their
Affiliates with any other Person;
(iv) any agreement (or group of related agreements) under which ROI
or any of its Subsidiaries has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any capitalized lease obligation,
in excess of $10,000 or under which it has imposed an Encumbrance on any
of Transferred Assets, tangible or intangible;
(v) any material agreement Related to the Business concerning
confidentiality;
(vi) any material agreement of ROI or Seller with any of Seller's
Affiliates which is Related to the Business;
(vii) any agreement Related to the Business which contains any
provision or covenant limiting (A) the ability of Seller to engage in any
line of business, to compete with any Person, to do business with any
Person in any location or to employ any Person, (B) the ability of any
Person to compete with or obtain products or services from Seller or (C)
the ability of Seller to do business other than with a specified Person or
Persons;
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(viii) any collective bargaining agreement and any other agreements
relating to organized labor;
(ix) any agreement of Seller for the employment of any individual on
a full-time, part-time, consulting, or other basis providing annual
compensation in excess of $20,000 or providing severance benefits in
excess of $3,000.
(b) To the Knowledge of Seller, all Material Contracts are in full force
and effect and are enforceable against each party thereto in accordance with the
express terms thereof. There does not exist under any Material Contract any
material violation or breach or event of default, or alleged material violation,
or breach or event of default, or event or condition that, after notice or lapse
of time or both, would constitute a material violation, or breach or event of
default thereunder on the part of Seller or, to Seller's Knowledge, any other
party thereto, except as set forth in Schedule 3.14(b). There are no material
disputes pending or, to Seller's Knowledge, threatened under any Contract
included in the Transferred Assets.
(c) There are no outstanding powers of attorney in favor of any Person
relating to the Business that would affect any Transferred Asset.
Section 3.15 Territorial Restrictions. ROI and its Subsidiaries are not
restricted by any agreement or understanding with any Person from carrying on
the Business anywhere in the world or from expanding the Business in any way or
entering into any new businesses, except for such restrictions that,
individually or in the aggregate, would not be material to the Business or that
would not apply to the Business or Buyer following the Closing.
Section 3.16 Absence of Changes. Since September 30, 2004, ROI and its
Subsidiaries have conducted the Business only in the Ordinary Course, and the
Business has not experienced any event or condition, and to Seller's Knowledge
no event or condition is threatened, that, individually or in the aggregate, has
had or is reasonably likely to have, a Material Adverse Effect. Since June 30,
2004, none of the actions or events prohibited or circumscribed by Subsections
(a) through (n) of Section 5.2 have been taken or have occurred, except as set
forth on Schedule 3.16.
Section 3.17 Assets. Except as set forth on Schedule 3.17 and with such
exceptions as would not affect the use, operation or value of the Transferred
Assets, the Transferred Assets constitute all the assets, properties and rights
of ROI and its Subsidiaries necessary to conduct the Business as currently
conducted and, immediately after the Closing, necessary for Buyer to continue to
operate and conduct the Business as currently conducted.
Section 3.18 Product Certifications. (a) The Product Certifications set
forth on Schedule 3.18 are all the Product Certifications relating to the
Business, and constitute all the Product Certifications necessary to conduct the
Business as currently conducted and,
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immediately after the Closing, necessary for Buyer to continue to operate and
conduct the Business as currently conducted.
(b) Seller has not made any material modifications or updates to the
Products which would require Product Certifications different from those set
forth on Schedule 3.18.
Section 3.19 Title to Property. Except as set forth on Schedule 3.19, and
with such exceptions as would not affect the use, operation or value of the
Transferred Assets, Seller has, and at the Closing Seller will transfer to Buyer
or its Affiliates, (i) good and marketable fee simple title to, or a valid and
binding leasehold interest in, the real property they own or lease that are
included in the Transferred Assets and (ii) good title to the personal tangible
property they own or lease that are included in the Transferred Assets, in each
case free and clear of all Encumbrances, except Permitted Encumbrances.
Section 3.20 Real Property. (a) Seller has delivered to Buyer complete and
accurate copies of each of the Assigned Leases and any documents or instruments
affecting the rights or obligations of any of the parties thereto.
(b) Each facility (including, all buildings, structures, and improvements)
included in the Transferred Assets is suitable for its current use, operation
and occupancy.
(c) To the Knowledge of Seller, the ownership, occupancy, use and
operation of the Leased Real Property has complied and complies, in all material
respects, with all Laws and Governmental Authorizations, and does not violate in
any material respect any instrument of record or agreement affecting such
property.
(d) To Seller's Knowledge, there are no pending, or threatened,
appropriation, condemnation, eminent domain or like proceedings relating to the
Leased Real Property.
(e) None of the Leased Real Property has suffered any material damage by
fire or other casualty which has not heretofore been repaired and restored in
all material respects, except for damage that would not, individually or in the
aggregate, materially impair the conduct of the Business.
Section 3.21 Operation of the Business. Except as set forth on Schedule
3.21, no part of the Business is currently operated through any entity other
than Seller.
Section 3.22 Absence of Liabilities. Except as specifically reflected,
reserved against or otherwise disclosed in the Historical Financial Statements
and except as set forth on Schedule 3.22, the Business does not have any
Liabilities of a type required to be reflected on a balance sheet prepared in
accordance with GAAP, other than Liabilities that were incurred since the date
of the Historical Financial Statements in the Ordinary Course of Business.
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Section 3.23 Warranties/Product Liability. Except as set forth on Schedule
3.23 and except as specifically reflected, reserved against or otherwise
disclosed in the ROI Historical Financial Statements or the Seller Historical
Statements or incurred since the date thereof and as would not be material to
the Business (a) there is no notice, demand, claim, action, suit, inquiry,
hearing, proceeding, notice of violation or investigation from, by or before any
Government Entity relating to any product, including the packaging and
advertising related thereto, designed, formulated, manufactured, processed, sold
or placed in the stream of commerce by the Business or any services provided by
the Business (a "Product"), or claim or lawsuit involving a Product which is
pending or, to Seller's Knowledge, threatened, by any Person, and (b) there has
not been, nor is there under consideration by the Business, any Product recall
or post-sale warning of a material nature conducted by or on behalf of the
Business concerning any Product. All Products materially comply with applicable
Governmental Authorizations and Laws, and there have not been and there are no
material defects or deficiencies in such Products.
Section 3.24 Insurance. Schedule 3.24(a) lists all material insurance
policies covering the properties, assets, employees and operations of the
Business (including policies providing property, casualty, liability, and
workers' compensation coverage). All of such policies or renewals thereof are in
full force and effect.
Section 3.25 Finders' Fees. Except for SVB Alliant, whose fees will be
paid by ROI, there is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of Seller or any of
its Affiliates who might be entitled to any fee or commission from either Seller
or any of its Affiliates in connection with the transactions contemplated
hereby.
Section 3.26 GO Gateway Product. As of the date of this Agreement, all
reasonably foreseeable capital expenditures necessary for the development,
testing and successful launch of the GO Gateway product have been made.
Section 3.27 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither Seller nor
any other Person makes any other express or implied representation or warranty
on behalf of Seller or ROI.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and ROI as of the date hereof and
as of the Closing as follows:
Section 4.1 Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
Buyer has all requisite corporate power and authority to own and operate its
respective properties and assets and to carry on its respective business as
currently conducted.
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Section 4.2 Corporate Authorization. Buyer has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and thereunder. The execution, delivery and performance by Buyer of
this Agreement has been duly and validly authorized and no additional corporate
or shareholder authorization or consent is required in connection with the
execution, delivery and performance by Buyer of this Agreement.
Section 4.3 Consents and Approvals. No consent, approval, waiver,
authorization, notice or filing is required to be obtained by Buyer from, or to
be given by Buyer to, or made by Buyer with, any Government Entity or other
Person in connection with the execution, delivery and performance by Buyer of
this Agreement other than those the failure of which to obtain, give or make
would not, individually or in the aggregate materially impair or delay the
ability of Buyer to effect the Closing or to perform its obligations under this
Agreement. No consent, approval, waiver, authorization, notice or filing is
required to be obtained by Buyer from, or to be given by Buyer to, or made by
the Buyer with, any Person which is not a Government Entity in connection with
the execution, delivery and performance by Buyer of this Agreement.
Section 4.4 Non-Contravention. The execution, delivery and performance by
Buyer of this Agreement, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) violate any provision of the
Certificate of Incorporation, Bylaws or other organizational documents of Buyer,
(ii) assuming the receipt of all consents, approvals, waivers and authorizations
and the making of notices and filings required to be made or obtained by Seller
or ROI, to the Knowledge of Buyer, violate or result in a breach of or
constitute a default under any Law to which Buyer is subject, or (iii) conflict
with, or result in the breach of, or constitute a default under, or result in
the termination, cancellation, modification or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of
Buyer under, or result in a loss of any benefit to which Buyer is entitled
under, any Contract, other than, in the case of clause (iii), conflicts,
breaches, terminations, defaults, cancellations, accelerations, losses,
violations or Encumbrances that would not, individually or in the aggregate,
materially impair or delay Buyer's ability to perform its obligations hereunder.
Section 4.5 Binding Effect. This Agreement, when executed and delivered by
each of Seller and ROI will constitute a valid and legally binding obligation of
Buyer enforceable against it in accordance with its respective terms.
Section 4.6 Finders' Fees. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of Buyer or any Affiliate of Buyer who might be entitled to any fee or
commission from Seller or ROI in connection with the transactions contemplated
hereby.
Section 4.7 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither Buyer nor
any other Person makes any other express or implied representation or warranty
on behalf of Buyer.
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ARTICLE V
COVENANTS
Section 5.1 Access and Information.
(a) From the date hereof until the Closing, subject to reasonable rules
and regulations of Seller and any applicable Laws, Seller shall (and ROI shall
cause Seller to) (i) afford Buyer and its representatives (including
representatives of entities providing or arranging financing for Buyer) access,
during regular business hours and upon reasonable advance notice, to the
Employees, and the assets, books and records of the Business, (ii) furnish, or
cause to be furnished, to Buyer any financial and operating data and other
information that is available with respect to the Business as Buyer from time to
time reasonably requests, (iii) instruct its counsel and financial advisors to
cooperate in a reasonable manner with Buyer in its investigation of the
Business, including instructing its accountants to give Buyer reasonable access
to their work papers, (iv) provide Buyer and its lenders reasonable access to
the books and records of the Business to the extent reasonably necessary for
such lenders to complete a customary due diligence investigation with respect to
Buyer, (v) cooperate with Buyer and its lenders in such lenders' preparation of
security interest documentation and other documents reasonably necessary in
order to perfect such lenders' interests in Buyer's assets and properties
(including the Transferred Assets) following the Closing, and (vi) provide Buyer
and its independent accountants with reasonable access to the books and records
of the Business and the Employees, for purposes of completing its accounting and
Tax allocations with respect to the Transferred Assets. No investigation
pursuant to this Section 5.1(a) shall alter any representation or warranty given
hereunder by Seller. All requests for information made pursuant to this Section
5.1(a) shall be directed to an executive officer of Seller or such Person or
Persons as may be designated by Seller. All information received pursuant to
this Section 5.1(a) shall be governed by the terms of the Confidentiality
Agreement.
(b) Following the Closing, upon the request of the other party, to the
extent permitted by Law and confidentiality obligations existing as of the
Closing Date, Seller shall grant to Buyer, and its representatives, and Buyer
shall grant to Seller, and its representatives, during regular business hours
and subject to reasonable rules and regulations of the granting party, the
right, at the expense of the non-granting party, to inspect and copy the books,
records and other documents in the granting party's possession pertaining to the
operation of the Business prior to the Closing (including books of account,
records, files, invoices, correspondence and memoranda, customer and supplier
lists, data, specifications, insurance policies, operating history information
and inventory records). In no event shall either party have access to the
consolidated federal, state or local Tax Returns of the other party.
Section 5.2 Conduct of Business. During the period from the date hereof to
the Closing, except as otherwise
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contemplated by this Agreement or as Buyer otherwise agrees in writing in
advance, Seller shall conduct, and ROI shall cause Seller to conduct, the
Business in the Ordinary Course and use its commercially reasonable efforts to
preserve intact the Business and its relationship with its customers, suppliers,
creditors and employees in accordance with past practices. During the period
from the date hereof to the Closing, except as set forth on Schedule 5.2(n) or
as otherwise contemplated by this Agreement or as Buyer shall otherwise consent
(which consent shall not be unreasonably withheld), Seller shall not, and ROI
shall cause Seller not to, with respect to the Business:
(a) incur, create or assume any Encumbrance on any of its assets other
than a Permitted Encumbrance;
(b) sell, lease, license, transfer or dispose of any assets other than in
the Ordinary Course of Business;
(c) terminate or extend or modify any Material Contract;
(d) enter into any contract, arrangement or commitment other than in the
Ordinary Course of Business;
(e) dispose of or permit to lapse any rights in, to or for the use of any
Intellectual Property Related to the Business or the subject of any Seller
Licensed Intellectual Property, or disclose to any Person not an Employee any
Intellectual Property Related to the Business or the subject of any Seller
Licensed Intellectual Property not heretofore a matter of public knowledge,
except pursuant to judicial or administrative process;
(f) (i) increase the compensation of any of the directors, officers,
Employees or independent contractors of the Business, except in the Ordinary
Course of Business or pursuant to the terms of agreements or plans currently in
effect and listed on Schedule 3.9(a), (ii) pay or agree to pay or increase or
agree to increase any pension, retirement allowance, severance or other employee
benefit not already required or provided for under any existing plan, agreement
or arrangement to any director, officer, employee or independent contractor,
(iii) except as required by applicable Law, amend in any respect any such plan,
agreement or arrangement, other than amendments that result in de minimis
additional expense or (iv) hire any employee or individual independent
contractor with annual compensation in excess of $20,000, other than to fill
vacancies arising in the Ordinary Course of Business at compensation levels not
in excess of those prevailing in the market, or enter into any new employment or
severance agreements that would result in post-termination payments that in the
aggregate would exceed $5,000 becoming due or payable upon termination of
employment or of the individual independent contractor;
(g) assume or enter into any labor or collective bargaining agreement
relating to the Business;
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(h) (i) incur any additional Indebtedness, except under the current terms
of any Contracts for Indebtedness disclosed on Schedule 3.14(a), or issue any
debt securities or assume, guarantee or endorse any material obligations of any
other Person, or (ii) make any material loans, advances or capital contributions
to, or investments in, any other Person (other than customary loans or advances
to employees in amounts not material to the maker of such loan or advance);
(i) settle any material claims, actions, arbitrations, disputes or other
proceedings;
(j) accelerate the delivery or sale of products or the incurrence of
capital expenditures, or (except in the Ordinary Course) offer discounts on sale
of products;
(k) acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or other business organization or division thereof
or any equity interest therein;
(l) cancel or compromise any material debt or claim or waive any rights of
material value to the Business without the Business receiving a realizable
benefit of similar or greater value, or voluntarily suffer any extraordinary
loss;
(m) do any other act which would reasonably be expected to cause any
representation or warranty of either Seller in this Agreement to be or become
untrue in any material respect or intentionally omit to take any action
necessary to prevent any such representation or warranty from being untrue in
any material respect at such time; or
(n) authorize or enter into any agreement or commitment with respect to
any of the foregoing.
Section 5.3 Reasonable Best Efforts. (a) Seller and Buyer shall cooperate
and use their respective reasonable best efforts to fulfill as promptly as
practicable the conditions precedent to the other party's obligations hereunder,
including securing as promptly as practicable all consents, approvals, waivers
and authorizations required in connection with the transactions contemplated
hereby. Without limiting the generality of the foregoing, Buyer and Seller will
make all filings and submissions required by any applicable Laws and promptly
file any additional information requested as soon as practicable after receipt
of such request therefor. Subject to applicable law and the instructions of any
Government Entity, Seller and Buyer each shall keep the other apprised of the
status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by Seller and Buyer, as the case may be, or any of their
respective Subsidiaries, from any third party and/or any Government Entity with
respect to such transactions.
(b) ROI shall promptly prepare and file with the SEC a definitive Proxy
Statement with respect to the Transaction (the "Proxy Statement"). As promptly
as
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practicable after such filing and subject to any SEC review period, ROI shall
mail the Proxy Statement to its stockholders. ROI agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it or
its Subsidiaries for inclusion or incorporation by reference in the Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to stockholders and at the time of the Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. ROI will cause the
Proxy Statement to comply as to form in all material respects with the
applicable provisions of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
(c) ROI will take, in accordance with applicable law and its certificate
of incorporation and by-laws, all action necessary to convene a meeting of its
stockholders (the "Stockholders Meeting") as promptly as reasonably practicable
following the date of this Agreement to consider and vote upon the adoption of
this Agreement and approval of the Transaction. ROI's Board of Directors shall
recommend such adoption or approval, as the case may be, and shall take all
lawful action to solicit such approval. In the event that subsequent to the date
hereof, ROI's Board of Directors determines that this Agreement or the
Transaction is no longer advisable and either makes no recommendation or
recommends that its stockholders reject this Agreement or the Transaction, ROI
shall nevertheless submit this Agreement to its stockholders for adoption at the
Stockholders Meeting.
Section 5.4 Tax Matters.
(a) Seller Liability for Taxes. Seller shall be liable for (A) any Taxes
imposed with respect to the Business or any Transferred Assets or any income or
gain derived with respect thereto for the taxable periods, or portions thereof,
ended on or before the Closing Date, (B) Losses directly or indirectly relating
to or arising out of any liability for Taxes imposed with respect to the
Business or any Transferred Assets or any income or gain derived with respect
thereto for the taxable periods, or portions thereof, ended on or before the
Closing Date, and (C) any Transfer Taxes for which it is liable pursuant to
Section 5.4(e).
(b) Buyer Liability for Taxes. Buyer shall be liable for (A) any Taxes
imposed with respect to the Business or any Transferred Assets or any income or
gains derived with respect thereto for any taxable period, or portion thereof,
beginning after the Closing Date, (B) Losses directly or indirectly relating to
or arising out of any liability for Taxes imposed with respect to the Business
or any Transferred Assets or any income or gains derived with respect thereto
for any taxable period, or portion thereof, beginning after the Closing Date,
and (C) any Transfer Taxes for which Buyer is liable pursuant to Section 5.4(e).
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(c) Proration of Taxes. To the extent necessary to determine the liability
for Taxes for a portion of a taxable year or period that begins before and ends
after the Closing Date, the determination of the Taxes for the portion of the
year or period ending on, and the portion of the year or period beginning after,
the Closing Date shall be determined by assuming that the taxable year or period
ended as of the close of business on the Closing Date, except that those annual
property taxes and exemptions, allowances or deductions that are calculated on
an annual basis shall be prorated on a time basis.
(d) Tax Returns. Except as provided in Section 5.4(e), if either party
shall be liable hereunder for any portion of the Tax shown due on any Tax
Returns required to be filed by the other party, the party preparing such Tax
Return shall deliver a copy of the relevant portions of such Tax Return to the
party so liable for its review and approval not less than 30 days prior to the
date on which such Tax Returns are due to be filed (taking into account any
applicable extensions). If the parties disagree as to any item reflected on any
such return with respect to the taking of a particular tax return position or
the making of a particular disclosure on such return, Seller shall determine how
the disputed items, tax return positions or disclosures are reflected, if at
all, unless such returns relate solely to Taxes for which Buyer is liable
hereunder, in which case Buyer shall make the determination.
(e) Transfer Taxes. All federal, state, local or foreign or other excise,
sales, use, value added, transfer (including real property transfer or gains),
stamp, documentary, filing, recordation and other similar taxes and fees that
may be imposed or assessed as a result of the Transaction, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties ("Transfer Taxes"), shall be borne by
Seller.
(f) Contest Provisions. Each of Buyer and Seller shall promptly notify the
other in writing upon receipt of notice of any pending or threatened audits or
assessments with respect to Taxes for which such other party (or such other
party's Affiliates) may be liable pursuant to this Section 5.4. Seller shall be
entitled to participate at its expense in the defense of and, at their option,
take control of the complete defense of, any Tax audit or administrative or
court proceeding relating to Taxes for which it may be liable pursuant to this
Section 5.4, and to employ counsel of its choice at its expense. Neither party
may agree to settle any claim for Taxes for which the other may be liable
without the prior written consent of such other party, which consent shall not
be unreasonably withheld. Buyer and Seller agree that as to all Taxes (including
Transfer Taxes) and Seller's liability, on the one hand, and Buyer's liability,
on the other hand, for such Taxes (including Transfer Taxes), the contest
provisions of this Section 5.4(f) shall control and the provisions of Section
7.4 through 7.10 shall not apply to the Tax indemnity provisions of this Section
5.4.
(g) Buyer's Claiming, Receiving or Using of Refunds and Overpayments. If,
after the Closing, Buyer or its Affiliates (A) receive any refund, or (B)
utilize the benefit of any overpayment or prepayment of Taxes which, in either
of cases (A) and (B),
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(x) relate to a Tax paid by Seller or any of its Affiliates, or (y) is the
subject of indemnification by Seller hereunder, Buyer shall promptly transfer,
or cause to be transferred, to Seller the entire amount of the refund or
overpayment (including interest) received or utilized by Buyer or its
Affiliates. Buyer agrees to notify Seller promptly of both the discovery of a
right to claim any such refund or overpayment and the receipt of any such refund
or utilization of any such overpayment. Buyer agrees to timely file and claim
any such refund or to utilize any such overpayment as soon as possible and to
furnish to Seller all information, records and assistance necessary to verify
the amount of the refund or overpayment.
(h) Determination and Allocation of Consideration. The parties to this
Agreement agree to determine the amount of and allocate the total consideration
transferred by Buyer to Seller or its Affiliates pursuant to this Agreement (the
"Consideration") in accordance with the fair market value of the assets and
liabilities transferred. Buyer shall provide Seller with one or more schedules
allocating the Consideration at least 20 days prior to the Closing. If Seller
disagrees with any items reflected on the schedules so provided, Seller shall
notify Buyer of such disagreement and its reasons for so disagreeing, in which
case Seller and Buyer shall attempt to resolve the disagreement. To the extent
Seller and Buyer cannot agree on a mutually acceptable determination and/or
allocation of the Consideration (including any adjustment of such consideration
pursuant to the immediately following sentence), such determination and/or
allocation shall be made by the CPA Firm, whose decision shall be final and
binding and whose expenses shall be shared equally by Seller and Buyer. Seller
and Buyer agree to prepare and file an IRS Form 8594 in a timely fashion in
accordance with the rules under Section 1060 of the Code and in a manner
consistent with the mutually agreed upon determination and/or allocation of the
Consideration (or as determined by the CPA Firm). To the extent that the
Consideration is adjusted after the Closing Date, the parties agree to revise
and amend the schedule and IRS Form 8594 in the same manner and according to the
same procedure. The determination and allocation of the Consideration derived
pursuant to this Section 5.4(h) shall be binding on Seller and Buyer for all Tax
reporting purposes.
(i) Assistance and Cooperation. After the Closing Date the parties shall
cooperate fully in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns and payments in respect thereof. Each
party shall (i) provide timely notice to the other in writing of any pending or
proposed audits or assessments with respect to Taxes for which such other party
or any of its Affiliates may have a liability under this Agreement and (ii)
furnish the other with copies of all relevant correspondence received from any
taxing authority in connection with any audit or information request with
respect to any Taxes referred to in Section 5.4(h).
(j) Employee Withholding and Reporting Matters. With respect to those
Transferred Employees who are employed by Buyer within the same calendar year as
the Closing, Buyer shall, in accordance with and to the extent permitted
pursuant to Revenue Procedure 84-77, 1984-2 C.B. 753, assume all responsibility
for preparing and filing
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Form W-2, Wage and Tax Statement, Form W- 3, Transmittal of Income and Tax
Statements, Form 941, Employer's Quarterly Federal Tax Return, Form W-4,
Employee's Withholding Allowance Certificate and Form W-5, Earned Income Credit
Advance Payment Certificate. Seller and Buyer agree to comply with the
procedures described in Section 5 of the Revenue Procedure 84-77.
(k) Maintenance of Buyer's Books and Records. Until the applicable statute
of limitations (including periods of waiver) has run for any Tax Returns filed
or required to be filed covering the periods up to and including the Closing
Date, Buyer shall, and shall cause its Affiliates to, retain all Books and
Records with respect to the Business in existence on the Closing Date and after
the Closing Date will provide Seller access to such Books and Records for
inspection and copying by Seller, or its agents upon reasonable request and upon
reasonable notice. After the expiration of such period, no such Books and
Records shall be destroyed by Buyer without first advising Seller in writing and
giving Seller a reasonable opportunity to obtain possession thereof, any costs
of transferring such Books and Records to be paid by Seller.
Section 5.5 Employees and Employee Benefits. ((a) Buyer shall offer
employment to at least eighty percent (80%) of the Applicable Employees, under
terms as determined by Buyer in its discretion, on the Closing Date or upon the
return of any such Applicable Employee to active employment. For purposes of
this Agreement, "Applicable Employees" means (i) all Employees of the Business
on the Closing Date, including Employees on temporary leave for purposes of jury
or annual two-week national service/military duty, Employees on vacation and
Employees on a regularly scheduled day off from work; and (ii) Employees who on
the Closing Date are on maternity or paternity leave, educational leave,
military leave with veteran's reemployment rights under federal law, leave under
the Family Medical Leave Act of 1993, approved personal leave, short-term
disability leave or medical leave; provided, however, that no such Employee
shall be guaranteed reinstatement to active service if he is incapable of
working in accordance with the policies, practices and procedures of the Buyer
or if his return to employment is contrary to the terms of his leave. Each
Applicable Employee who accepts Buyer's offer of employment shall be a
"Transferred Employee" for purposes of this Agreement upon the later of the
Closing Date or the return of such Applicable Employee to active employment.
(b) Buyer shall (i) waive any applicable pre-existing condition
exclusions, waiting periods and actively-at-work requirements with respect to
participation and coverage requirements in any replacement or successor welfare
benefit plan of Buyer that a Transferred Employee is eligible to participate in
following the Closing Date, to the extent such exclusions, requirements or
waiting periods were inapplicable to, or had been satisfied by, such Transferred
Employee immediately prior to the Closing Date under the relevant Benefit Plan
in which such Transferred Employee participated, (ii) provide, or cause to be
provided to, each such Transferred Employee and their beneficiaries with credit
for any co-payments, out-of-pocket expenses and deductibles paid (to the same
extent such credit was given under the analogous Benefit Plan prior to the
Closing Date)
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in satisfying any applicable deductible, co-payment or out-of-pocket
requirements in respect of the plan year in which the Closing occurs and (iii)
recognize, or cause to be recognized, service prior to the Closing Date with the
Seller for purposes of eligibility and vesting (but not for purposes of benefit
accrual) under any benefit plan of Buyer to the same extent such service was
recognized by the Seller under any similar Benefit Plan in which such
Transferred Employee participated immediately prior to the Closing Date.
Notwithstanding the foregoing, nothing contained herein shall obligate Buyer to
provide or maintain any particular type of benefit or employee benefit plan.
Section 5.6 Non-Solicitation/Non-Competition. (a) Each of Seller and ROI
agrees that for the period commencing on the Closing Date and expiring on the
fifth anniversary of the Closing Date it will not directly or indirectly (i)
induce or encourage any Employee to reject Buyer's offer of employment or to
accept any other position or employment, (ii) solicit for employment or any
similar arrangement any Transferred Employee or (ii) hire or assist any other
Person in hiring any Transferred Employee; provided, however, that this Section
5.6(a) shall not apply to Transferred Employees who have left the employment of
Buyer or any of its Affiliates and shall not prohibit general solicitations for
employment through advertisements or other means.
(b) Each of Seller and ROI agrees that for the period commencing on the
Closing Date and expiring on the fifth anniversary of the Closing Date it shall
not engage, either directly or indirectly, alone or with others, as stockholders
or otherwise in any business in North America that develops or markets software
or services for debit card, credit card, check or related transactions
processing or in any business in North America that competes with the Business,
as conducted as of the Closing Date (together, a "Competing Business"); provided
that nothing in this Section 5.6(b) shall preclude Seller or any of its
Affiliates from owning in the aggregate up to 2% of any Person engaged in a
Competing Business.
Section 5.7 Further Assurances. From time to time after the Closing Date,
each party hereto shall, and shall cause its Affiliates, promptly to execute,
acknowledge and deliver any other assurances or documents or instruments of
transfer reasonably requested by the other party hereto and necessary for the
requesting party to satisfy its obligations hereunder or to obtain the benefits
of the transactions contemplated hereby. Without limiting the generality of the
foregoing, to the extent that Buyer or Seller discovers following Closing that
any asset that was intended to be transferred pursuant to this Agreement was not
transferred at Closing, each of Seller and ROI shall or shall cause its
Affiliates promptly to assign and transfer to Buyer all right, title and
interest in such asset. Following the Closing Date, Buyer shall provide ROI and
Seller with reasonable access to the Books and Records, including, without
limitation, copies of source code, to the extent reasonably necessary to permit
Seller to satisfy and discharge the Excluded Liabilities.
Section 5.8 Acquisition Proposals. ROI agrees that prior to the earlier of
the Closing and the earlier of the termination of this Agreement pursuant to
Article VIII,
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neither it nor any of its Subsidiaries nor any of the officers and directors of
it or its Subsidiaries shall, and that it shall direct and use its reasonable
best efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly,
initiate, solicit or encourage any inquiries or the making of any proposal or
offer with respect to a merger, reorganization, share exchange, consolidation or
similar transaction involving, or any purchase of all or any material assets or
any equity securities of, it or any of its Subsidiaries (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal"). ROI further
agrees that neither it nor any of its Subsidiaries nor any of the officers and
directors of it or its Subsidiaries shall, and that it shall direct and use its
best efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly,
engage in any discussions or negotiations concerning, or provide any
confidential information or data to, any Person relating to an Acquisition
Proposal; provided, however, that nothing contained in this Agreement shall
prevent ROI or its Board of Directors from (i) complying with its disclosure
obligations under federal or state law with regard to an Acquisition Proposal;
or (ii) at any time before, but not after, this Agreement is submitted for a
vote at the Stockholders Meeting, (A) providing information in response to a
request therefor by a Person who has made an unsolicited bona fide written
Acquisition Proposal if ROI's Board of Directors receives from the Person so
requesting such information an executed confidentiality agreement on terms
substantially similar to those contained in the Confidentiality Agreement; (B)
engaging in any negotiations or discussions with any Person who has made an
unsolicited bona fide written Acquisition Proposal; or (C) recommending such an
Acquisition Proposal to the stockholders of ROI, if and only to the extent that,
(x) in each such case referred to in clause (A), (B) or (C) above, ROI's Board
of Directors determines in good faith after consultation with outside legal
counsel that such action is necessary in order for its directors to comply with
their respective fiduciary duties under applicable law and (y) in each case
referred to in clause (B) or (C) above, ROI's Board of Directors determines in
good faith (after consultation with its outside financial advisors) that such
Acquisition Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects of the proposal
and the Person making the proposal, and if consummated, would result in a
transaction more favorable to ROI's stockholders from a financial point of view
than the transaction contemplated by this Agreement (any such more favorable
Acquisition Proposal being referred to in this Agreement as a "Superior
Proposal"). ROI agrees that it will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. ROI agrees that it will
take the necessary steps to promptly inform the individuals or entities referred
to in the first sentence hereof of the obligations undertaken in this Section
5.8 and in the Confidentiality Agreement. ROI agrees that it will notify Buyer
immediately if any such inquiries, proposals or
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offers are received by, any such information is requested from, or any such
discussions or negotiations are sought to be initiated or continued with, any of
its representatives indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any proposals or offers and
thereafter shall keep Buyer informed, on a current basis, of the status and
terms of any such proposals or offers and the status of any such discussions or
negotiations.
Section 5.9 Confidentiality. Seller shall treat as confidential and shall
safeguard any and all information, knowledge and data included in the
Transferred Assets or the Seller Leased Property, in each case by using the same
degree of care, but no less than a reasonable standard of care, to prevent the
unauthorized use, dissemination or disclosure of such information, knowledge and
data as Seller used with respect thereto prior to the execution of this
Agreement. Buyer acknowledges that the confidentiality obligations set forth
herein shall not extend to information, knowledge and data that is publicly
available or becomes publicly available through no act or omission of Seller or
ROI, or becomes available on a non-confidential basis from a source other than
Seller or ROI so long as such source is not known by such party to be bound by a
confidentiality agreement with or other obligations of secrecy to the other
party.
Section 5.10 Guaranty of Receivables. Buyer agrees to attempt to collect
in good faith all Accounts Receivable. As of a date not fewer than 60 days nor
more than 120 days following the Closing, Buyer shall determine, for each
obligor with respect to any Account Receivable, the amount of such Account
Receivable which has not been paid (the "Past Due Amount"), and shall promptly
shall send to ROI a written notice showing the aggregate Past Due Amount. An
amount equal to such Past Due Amount shall be paid in cash by ROI to Buyer
within five days of such notice. To the extent that any amounts are paid by ROI
under this section, Buyer shall compute the amount, if any, which such obligor
subsequently pays to Buyer with respect to such Account Receivable and, to the
extent any such additional amounts have been paid, Buyer shall reimburse ROI for
any payments by ROI under this Section 5.10. At Seller's request, Buyer shall
assign to ROI any Accounts Receivable for which Buyer has been paid under this
Section 5.10.
Section 5.11 Intellectual Property Non-Assertion. Each of ROI and Seller
agrees that it shall not assert against the Buyer or any of its Affiliates or
any of their employees, contractors or successor or assigns any Intellectual
Property owned or controlled by it or any of its Affiliates as of the Closing
Date in connection with the operation of the Business.
Section 5.12 Additional Financial Statements. Seller will prepare and
furnish to Buyer as soon as they become available, periodic financial reports in
the form which it customarily prepares for its internal purposes concerning the
Business.
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ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 Conditions to the Obligations of Buyer, Seller and ROI. The
obligations of the parties hereto to effect the Closing are subject to the
satisfaction (or waiver) prior to the Closing of the following conditions:
(a) No Prohibition. No Law shall be in effect prohibiting the Transaction.
(b) Consents and Approvals. All Seller Required Approvals set forth on
Schedule 6.1(b) and all Buyer Required Approvals shall have been obtained.
(c) Stockholder Approval. This Agreement and the Transaction shall have
been duly approved by holders of ROI's capital stock constituting the Requisite
Vote.
Section 6.2 Conditions to the Obligations of Buyer. The obligation of
Buyer to effect the Closing is subject to the satisfaction (or waiver) prior to
the Closing of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of ROI and Seller contained in Sections 3.1 through 3.6 shall be true
and correct in all respects as of the date hereof and as of the Closing as if
made on and as of the Closing (except for such representations and warranties
that are made as of a specific date, which shall be true and correct in all
respects as of such date). Each of the other representations and warranties of
ROI and Seller contained in this Agreement shall be true and correct in all
respects (disregarding, for this purpose, any qualifications as to materiality
or Material Adverse Effect) as of the date hereof and as of the Closing as if
made on and as of the Closing (except for such representations and warranties
that are made as of a specific date, which shall be true and correct in all
respects as of such date), except for such failures to be true and correct as
have not had and would not reasonably be expected, in the aggregate, to have a
Material Adverse Effect.
(b) Covenants. Each of the covenants and agreements of Seller to be
performed on or prior to the Closing shall have been duly performed in all
material respects.
(c) Certificate. Buyer shall have received a certificate, signed by a duly
authorized officer of Seller and dated the Closing Date, to the effect that the
conditions set forth in Sections 6.2(a) and 6.2(b) have been satisfied.
(d) No Proceedings. There shall not be pending or threatened any suit,
action or proceeding challenging or seeking to restrain, limit or prohibit any
transactions contemplated by this Agreement or seeking to obtain from Buyer in
connection with the transactions contemplated by this Agreement any material
damages or material commitments or seeking to prohibit or limit the ownership,
operation or control by Buyer or any
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of its Affiliates of any material portion of the business or assets of Buyer
(including the Business) or any of its Affiliates.
(e) Legal Opinion. Buyer shall have received an opinion of counsel
reasonably satisfactory to Buyer with respect to the due authorization,
execution and delivery of this Agreement.
(f) No Encumbrances. ROI and Seller shall have furnished to Buyer evidence
reasonably satisfactory to Buyer of the satisfaction, discharge and release of
all Encumbrances on the Transferred Assets.
(g) Management Bonuses. Seller shall have furnished to Buyer evidence
reasonably satisfactory to Buyer of the payment of management bonuses to ROI's
and Seller's executives for fiscal year 2004 or of arrangements to pay such
bonuses out of the Purchase Price as and when paid at the Closing.
(h) Absence of Certain Liabilities. ROI shall have furnished to Buyer
evidence that Seller and Paymentech, L.P. have entered into a Commitment
Reseller Agreement in substantially the form furnished to Buyer prior to the
date of this Agreement.
Section 6.3 Conditions to the Obligations of Seller and ROI. The
obligation of Seller and ROI to effect the Closing is subject to the
satisfaction (or waiver) prior to the Closing of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
respects as of the date hereof and as of the Closing as if made on and as of the
Closing (except for such representations and warranties that are made as of a
specific date, which shall be true and correct in all respects as of such date).
(b) Covenants. Each of the covenants and agreements of Buyer to be
performed on or prior to the Closing shall have been duly performed in all
material respects.
(c) Certificate. Seller and ROI shall have received a certificate, signed
by a duly authorized officer of Buyer and dated the Closing Date, to the effect
that the conditions set forth in Sections 6.3(a) and 6.3(b) have been satisfied.
(d) Legal Opinion. Seller and ROI shall have received an opinion of
counsel reasonably satisfactory to Seller and ROI with respect to the due
authorization, execution and delivery of this Agreement.
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ARTICLE VII
SURVIVAL; INDEMNIFICATION; CERTAIN REMEDIES
Section 7.1 Survival. The representations and warranties of Buyer, Seller
and ROI contained in this Agreement shall survive the Closing for the period set
forth in this Section 7.1. All representations and warranties contained in this
Agreement and all claims with respect thereto shall terminate upon the
expiration of two years after the Closing Date, except that (i) the
representations and warranties contained in Sections 3.1, 3.2, 3.5, 4.1, 4.2 and
4.5 shall survive forever and (ii) the representations and warranties contained
in Sections 3.9 and 3.11 shall survive until the expiration of the applicable
statute of limitations, giving effect to any extensions thereof; it being
understood that in the event notice of any claim for indemnification under
Section 7.2(a) or Section 7.3(a) hereof has been given (within the meaning of
Section 9.1) within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive with
respect to such claim until such time as such claim is finally resolved.
Section 7.2 Indemnification by Seller and ROI. (a) From and after the
Closing, Seller and ROI hereby jointly and severally agree that from and after
the Closing they shall indemnify, defend and hold harmless Buyer, its
Affiliates, and their respective directors, officers, shareholders, partners,
members, attorneys, accountants, agents, representatives and employees (other
than the Transferred Employees) and their heirs, successors and permitted
assigns, each in their capacity as such (the "Buyer Indemnified Parties" and
collectively with the Seller Indemnified Parties, the "Indemnified Parties")
from, against and in respect of any damages, losses, charges, Liabilities,
claims, demands, actions, suits, proceedings, payments, judgments, settlements,
assessments, deficiencies, taxes, interest, penalties, and costs and expenses
(including removal costs, remediation costs, closure costs, fines, penalties and
expenses of investigation and ongoing monitoring, reasonable attorneys' fees,
and reasonable out of pocket disbursements) (collectively, "Losses") imposed on,
sustained, incurred or suffered by, or asserted against, any of the Buyer
Indemnified Parties, whether in respect of third party claims, claims between
the parties hereto, or otherwise, directly or indirectly relating to or arising
out of (i) subject to Section 7.2(b), any breach or inaccuracy of any
representation or warranty made by Seller or ROI contained in this Agreement
(other than the representations and warranties set forth in Sections 3.3, 3.5,
3.12, 3.17 and 3.19 of this Agreement) or any document delivered pursuant to
this Agreement for the period such representation or warranty survives, it being
understood that for purposes of this Section 7.2(a) any
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qualifications relating to materiality, including the term "Material Adverse
Effect" (other than in the first sentence of Section 3.16), or relating to
Knowledge contained in such representation or warranty shall be disregarded for
purposes of determining whether such representation or warranty was breached,
(ii) any breach or inaccuracy of any representation or warranty made by Seller
or ROI contained in Section 3.3, 3.5, 3.17 or 3.19 of this Agreement for the
period such representation or warranty survives, it being understood that for
purposes of this Section 7.2(a) any qualifications relating to materiality,
including the term "Material Adverse Effect", or relating to Knowledge contained
in such representation or warranty shall be disregarded for purposes of
determining whether such representation or warranty was breached, (iii) any
breach or inaccuracy of any representation or warranty made by Seller or ROI
contained in Section 3.12 of this Agreement for the period such representation
or warranty survives, it being understood that for purposes of this Section
7.2(a) any qualifications relating to materiality, including the term "Material
Adverse Effect", or related to knowledge contained in such representation or
warranty shall be disregarded for purposes of determining whether such
representation or warranty was breached, (iv) any material breach of any
covenant or agreement of Seller, ROI or any of their Affiliates contained in
this Agreement or any document delivered pursuant to this Agreement, (v) any of
the Excluded Liabilities, including any and all Liabilities relating to the
Employees and the Benefit Plans to the extent not expressly assumed by Buyer in
this Agreement, (vi) any Taxes and Transfer Taxes for which ROI or the Seller
are responsible in accordance with Section 5.4, (vii) any tax repayment plan
with the State of California or any of its instrumentalities, and (viii) any and
all payments due to the individuals listed in Schedule 7.2(a)(viii) in
connection with or as a result of the transactions contemplated by this
Agreement, whether pursuant to employment agreements between ROI and such
individuals or otherwise.
(b) Seller and ROI shall not be liable to the Buyer Indemnified Parties
for any Losses with respect to the matters described in Section 7.2(a)(i) unless
and until the Contingent Payment is payable, in which case (i) Buyer shall be
entitled to set-off against the Contingent Payment such Losses with respect to
which there has therefore occurred a "final determination" pursuant to Section
7.7, (ii) Buyer shall not be entitled to set-off against the Contingent Payment
Losses in excess of $1,500,000 in the aggregate, and (iii) the Buyer Indemnified
Parties' sole and exclusive remedy for such matters shall be the exercise of
such right of set-off, but only as and to the extent such right may be
exercised.
(c) Seller and ROI shall not liable to the Buyer Indemnified Parties for
any Losses with respect to the matters described in Section 7.2(a)(iii) unless
and until such Losses exceed $1,000,000 in the aggregate, in which case Seller
and ROI shall be liable for all such Losses (including the first $1,000,000);
provided that Seller and ROI shall not be required to make any payments to the
Buyer Indemnified Parties pursuant to Section 7.2(a)(iii) in excess of an amount
equal to 50% of the Purchase Price, as adjusted pursuant to Section 2.6.
Section 7.3 Indemnification by Buyer. (a) From and after the Closing,
Buyer hereby agrees that from and after the Closing it shall indemnify, defend
and hold harmless Seller, ROI, their Affiliates, and their respective directors,
officers, shareholders, partners, members, attorneys, accountants, agents,
representatives and employees and their heirs, successors and permitted assigns,
each in their capacity as such (the "Seller Indemnified Parties") from, against
and in respect of any Losses imposed on, sustained, incurred or suffered by, or
asserted against, any of the Seller Indemnified Parties, whether in respect of
third party claims, claims between the parties
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hereto, or otherwise, directly or indirectly relating to, arising out of (i)
subject to Section 7.3 (b) hereof any breach or inaccuracy of any representation
or warranty made by Buyer contained in this Agreement or any document delivered
pursuant to this Agreement for the period such representation or warranty
survives, it being understood that for purposes of this Section 7.3(a) any
qualifications relating to materiality, including the term "Material Adverse
Effect", or relating to Knowledge contained in such representation or warranty
shall be disregarded for purposes of determining whether such representation or
warranty was breached, (ii) any material breach of a covenant or agreement of
Buyer contained in this Agreement or any document delivered pursuant to this
Agreement, (iii) any and all Taxes and Transfer Taxes for which Buyer is
responsible in accordance with Section 5.4, and (iv) the use by Buyer and its
Affiliates of the Transferred Assets following the Closing.
(b) Buyer shall not be liable to the Seller Indemnified Parties for any
Losses with respect to the matters contained in Section 7.3(a)(i) in excess of
$1,500,000 in the aggregate.
Section 7.4 Third Party Claim Indemnification Procedures.
(a) In the event that any written claim or demand for which an
indemnifying party (an "Indemnifying Party") may have liability to any
Indemnified Party hereunder, other than those relating to Taxes (which are the
subject of Section 5.4(g)), is asserted against or sought to be collected from
any Indemnified Party by a third party (a "Third Party Claim"), such Indemnified
Party shall promptly, but in no event more than ten days following such
Indemnified Party's receipt of a Third Party Claim, notify the Indemnifying
Party in writing of such Third Party Claim, the amount or the estimated amount
of damages sought thereunder to the extent then ascertainable (which estimate
shall not be conclusive of the final amount of such Third Party Claim), any
other remedy sought thereunder, any relevant time constraints relating thereto
and, to the extent practicable, any other material details pertaining thereto (a
"Claim Notice"); provided, however, that the failure timely to give a Claim
Notice shall affect the rights of an Indemnified Party hereunder only to the
extent that such failure has a material prejudicial effect on the defenses or
other rights available to the Indemnifying Party with respect to such Third
Party Claim. The Indemnifying Party shall have 30 days (or such lesser number of
days set forth in the Claim Notice as may be required by court proceeding in the
event of a litigated matter) after receipt of the Claim Notice (the "Notice
Period") to notify the Indemnified Party that it desires to defend the
Indemnified Party against such Third Party Claim unless the Indemnified Party
has notified the Indemnifying Party in the Claim Notice that it has determined
in good faith that there is a reasonable probability that such Third Party Claim
may adversely affect it or its Affiliates other than as a result of monetary
damages; it being understood that by assuming the defense of a Third Party Claim
the Indemnifying Party shall conclusively acknowledge that it has an indemnity
obligation with respect to such Third Party Claim.
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(b) In the event that the Indemnifying Party notifies the Indemnified
Party within the Notice Period that it desires to defend the Indemnified Party
against a Third Party Claim, the Indemnifying Party shall have the right to
defend the Indemnified Party by appropriate proceedings and shall have the sole
power to direct and control such defense, with counsel reasonably satisfactory
to the Indemnified Party at its expense. Once the Indemnifying Party has duly
assumed the defense of a Third Party Claim, the Indemnified Party shall have the
right, but not the obligation, to participate in any such defense and to employ
separate counsel of its choosing. The Indemnified Party shall participate in any
such defense at its expense unless (i) the Indemnifying Party and the
Indemnified Party are both named parties to the proceedings and the Indemnified
Party shall have reasonably concluded that representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them, or (ii) the Indemnified Party assumes the defense of a
Third Party Claim after the Indemnifying Party has failed to diligently pursue a
Third Party Claim it has assumed, as provided in the first sentence of Section
7.4(c). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party, settle, compromise or offer to settle or compromise any
Third Party Claim on a basis that would result in (i) the imposition of a
consent order, injunction or decree that would restrict the future activity or
conduct of the Indemnified Party or any of its Affiliates, (ii) a finding or
admission of a violation of Law or violation of the rights of any Person by the
Indemnified Party or any of its Affiliates, (iii) a finding or admission that
would have an adverse effect on other claims made or threatened against the
Indemnified Party or any of its Affiliates, or (iv) any monetary liability of
the Indemnified Party that will not be promptly paid or reimbursed by the
Indemnifying Party.
(c) If the Indemnifying Party (i) elects not to defend the Indemnified
Party against a Third Party Claim, whether by not giving the Indemnified Party
timely notice of its desire to so defend or otherwise, (ii) is not entitled to
defend the Third Party Claim as a result of the Indemnified Party's election to
defend the Third Party Claim as provided in Section 7.4(a), or (iii) after
assuming the defense of a Third Party Claim, fails to take reasonable steps
necessary to defend diligently such Third Party Claim within ten days after
receiving written notice from the Indemnified Party to the effect that the
Indemnifying Party has so failed, the Indemnified Party shall have the right but
not the obligation to assume its own defense; it being understood that the
Indemnified Party's right to indemnification for a Third Party Claim shall not
be adversely affected by assuming the defense of such Third Party Claim. The
Indemnified Party shall not settle a Third Party Claim without the consent of
the Indemnifying Party, which consent shall not be unreasonably withheld.
(d) The Indemnified Party and the Indemnifying Party shall cooperate in
order to ensure the proper and adequate defense of a Third Party Claim,
including by providing access to each other's relevant business records and
other documents, and employees; it being understood that the costs and expenses
of the Indemnified Party relating thereto shall be Losses.
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(e) The Indemnified Party and the Indemnifying Party shall use reasonable
best efforts to avoid production of confidential information (consistent with
applicable Law), and to cause all communications among employees, counsel and
others representing any party to a Third Party Claim to be made so as to
preserve any applicable attorney-client or work-product privileges.
Section 7.5 Direct Claims. If an Indemnified Party wishes to make a claim
for indemnification hereunder for a Loss that does not result from a Third Party
Claim (a "Direct Claim"), the Indemnified Party shall notify the Indemnifying
Party in writing of such Direct Claim, the amount or the estimated amount of
damages sought thereunder to the extent then ascertainable (which estimate shall
not be conclusive of the final amount of such Direct Claim), any other remedy
sought thereunder, any relevant time constraints relating thereto and, to the
extent practicable, any other material details pertaining thereto. The
Indemnifying Party shall have a period of 30 days within which to respond to
such Direct Claim. If the Indemnifying Party does not respond within such 30-day
period, the Indemnifying Party will be deemed to have accepted the Direct Claim.
If the Indemnifying Party rejects all or any part of the Direct Claim, the
Indemnified Person shall be free to seek enforcement of its rights to
indemnification under this Agreement with respect to such Direct Claim.
Section 7.6 Consequential Damages. The parties hereto acknowledge that
Losses includes consequential, punitive, special, incidental and indirect
damages, including lost profits.
Section 7.7 Payments. The Indemnifying Party shall pay all amounts payable
pursuant to this Article VII, by wire transfer of immediately available funds,
promptly following receipt from an Indemnified Party of a xxxx, together with
all accompanying reasonably detailed back-up documentation, for a Loss that is
the subject of indemnification hereunder, unless the Indemnifying Party in good
faith disputes the Loss, in which event it shall so notify the Indemnified
Party. In any event, the Indemnifying Party shall pay to the Indemnified Party,
by wire transfer of immediately available funds, the amount of any Loss for
which it is liable hereunder no later than three days following any final
determination of such Loss and the Indemnifying Party's liability therefor. A
"final determination" shall exist when (i) the parties to the dispute have
reached an agreement in writing, (ii) a court of competent jurisdiction shall
have entered a final and non-appealable order or judgment, or (iii) an
arbitration or like panel shall have rendered a final non-appealable
determination with respect to disputes the parties have agreed to submit
thereto.
Section 7.8 Characterization of Indemnification Payments. All payments
made by an Indemnifying Party to an Indemnified Party in respect of any claim
pursuant to Section 7.2 or 7.3 hereof shall be treated as adjustments to the
Purchase Price for Tax purposes.
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Section 7.9 Effect of Waiver of Condition. Neither Buyer's nor Seller's
right to indemnity pursuant to this Article VII shall be adversely affected by
its waiver of a condition to closing set forth in Article VI unless such party
makes clear by the terms of its waiver that it is foreclosing its right to
indemnity with respect to the matter that is the subject of the waiver.
Section 7.10 Exclusive Remedy. After the Closing, the indemnities provided
in this Article VII and the remedy described in Section 9.13 shall constitute
the sole and exclusive remedies of any Indemnified Party for damages arising out
of, resulting from or incurred in connection with any claims in this Agreement,
except in the case of fraud or willful misconduct.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by written agreement of Buyer, Seller and ROI;
(b) by either Buyer, on the one hand, or ROI, on the other hand, by giving
written notice of such termination to the other party or parties, if the Closing
shall not have occurred on or prior to June 30, 2005 so long as the terminating
party is not in material breach of its obligations under this Agreement;
(c) by Buyer if any of the conditions to Closing set forth in Section 6.2
are not capable of being fulfilled as of the Closing so long as Buyer is not in
material breach of its obligations under this Agreement;
(d) by ROI if any of the conditions to Closing set forth in Section 6.3
are not capable of being fulfilled as of the Closing so long as Seller and ROI
are not in material breach of their obligations under this Agreement; or
(e) by any party if the Closing shall not have occurred on or prior to 10
Business Days following the satisfaction of all the conditions to Closing as a
result of any action or inaction by the other party
Section 8.2 Effect of Termination. In the event of the termination of this
Agreement in accordance with Section 8.1, this Agreement shall thereafter become
void and have no effect, and no party hereto shall have any liability to the
other party hereto or their respective Affiliates, or their respective
directors, officers or employees, except for the obligations of the parties
hereto contained in this Section 8.2 and in Sections 9.1, 9.4, 9.7, 9.9, 9.10,
9.11 and 9.12 (and any related definitional provisions set forth in Article I),
and except that nothing in this Section 8.2 shall relieve any party from
liability for any breach of this Agreement that arose prior to such termination.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. All notices and communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended or delivered by registered or
certified mail, return receipt requested, or if sent by telecopier or email,
provided that the telecopy or email is promptly confirmed by telephone
confirmation thereof, to the Person at the address set forth below, or such
other address as may be designated in writing hereafter, in the same manner, by
such Person:
To Buyer:
VeriFone, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxxx Xxxxxxxxxxx,
Chief Financial Officer
With a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 650-461-5700
Attention: Xxxxxxx X. Xxxx
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To Seller or ROI:
Return on Investment Corp.
0000 Xxxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxxxxx Xxxx
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxxxxxxx X. Xxx
Section 9.2 Amendment; Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer, Seller and ROI, or in the case of
a waiver, by the party or parties against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 9.3 No Assignment or Benefit to Third Parties. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, legal representatives and permitted assigns. Subject to
the provisions of Section 2.10, no party to this Agreement may assign any of its
rights or delegate any of its obligations under this Agreement, by operation of
Law or otherwise, without the prior written consent of the other party hereto,
except as provided in Section 9.5 and except that Buyer may assign any and all
of its rights under this Agreement to one or more direct or indirect wholly
owned subsidiaries of VeriFone Holdings, Inc. (but no such assignment shall
relieve Buyer of any of its obligations hereunder). Nothing in this Agreement,
express or implied, is intended to confer upon any Person other than Buyer,
Seller, ROI, the Indemnified Parties and their respective successors, legal
representatives and permitted assigns, any rights or remedies under or by reason
of this Agreement.
Section 9.4 Entire Agreement. This Agreement (including all Schedules and
Exhibits hereto) contains the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters,
except for the Confidentiality Agreement, which shall remain in full force and
effect until the Closing.
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Section 9.5 Fulfillment of Obligations. Any obligation of any party to any
other party under this Agreement, which obligation is performed, satisfied or
fulfilled completely by an Affiliate of such party, shall be deemed to have been
performed, satisfied or fulfilled by such party.
Section 9.6 Public Disclosure. Notwithstanding anything to the contrary
contained herein, except as may be required to comply with the requirements of
any applicable Law and the rules and regulations of any stock exchange upon
which the securities of one of the parties is listed, from and after the date
hereof, no press release or similar public announcement or communication shall
be made or caused to be made relating to this Agreement unless specifically
approved in advance by both parties hereto.
Section 9.7 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the party incurring
such costs and expenses.
Section 9.8 Bulk Sales. Seller and Buyer agree to waive compliance with
Article 6 of the Uniform Commercial Code as adopted in each of the jurisdictions
in which any of the Transferred Assets are located to the extent that such
Article is applicable to the transactions contemplated hereby.
Section 9.9 Governing Law; Submission to Jurisdiction; Selection of Forum;
Waiver of Trial by Jury. THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. Each party hereto agrees that it shall bring any action or
proceeding in respect of any claim arising out of or related to this Agreement
or the transactions contained in or contemplated by this Agreement, exclusively
in the United States District Court for the Southern District of New York or any
New York State court sitting in New York County (the "Chosen Courts"), and
solely in connection with claims arising under this Agreement or the
transactions that are the subject of this Agreement (i) irrevocably submits to
the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to
laying venue in any such action or proceeding in the Chosen Courts, (iii) waives
any objection that the Chosen Courts are an inconvenient forum or do not have
jurisdiction over any party hereto and (iv) agrees that service of process upon
such party in any such action or proceeding shall be effective if notice is
given in accordance with Section 9.1 of this Agreement. Each party hereto
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
Section 9.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
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Section 9.11 Headings. The heading references herein and the table of
contents hereof are for convenience purposes only, and shall not be deemed to
limit or affect any of the provisions hereof.
Section 9.12 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.13 Specific Performance. The parties acknowledge that there may
be no adequate remedy at law for a breach of this Agreement and that money
damages may not be an appropriate remedy for breach of this Agreement.
Therefore, the parties agree that each party has the right to injunctive relief
and specific performance of this Agreement in the event of any breach hereof in
addition to any rights it may have for damages, which shall include out of
pocket expenses, loss of business opportunities and any other damages, direct
and indirect, consequential, punitive or otherwise. The remedies set forth in
this Section 9.13 are cumulative and shall in no way limit any other remedy any
party hereto has at law, in equity or pursuant hereto.
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
RETURN ON INVESTMENT CORPORATION
By: /s/ Xxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Financial Officer
GO SOFTWARE, INC.
By: /s/ Xxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Financial Officer
VERIFONE, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Chief Financial Officer
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