Exhibit 2.1
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[Letterhead of Candle Corporation]
December 27, 1996
Xxxxxx X. Xxxxxx
Chairman, CEO & President
Apertus Technologies, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Re: Letter Agreement Regarding Acquisition of the MQView
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Business Unit
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Dear Xx. Xxxxxx:
The purpose of this letter is to set forth in writing the arrangements
which Apertus Technologies Inc. ("Seller") and Candle Corporation ("Buyer") have
made regarding Buyer's acquisition of MQView Business Unit ("MQView") from
Seller.
In consideration of Buyer's agreement to expend time, money and effort in
conducting due diligence regarding the Assets (as described above):
1. Description of Assets. As used in this letter agreement, the term
"Assets" shall mean: (i) the product known as MQView, which includes; (1) its
related technology and intellectual property; (2) all MQView maintenance
agreements and other contracts with existing customers; (3) the agreement with
IBM for maintenance of IBM's Level 1 code base (known as EZBridge); (4) the
royalty agreement for the transition from Level 1 code (EZBridge) to Level 2;
(5) the employment rights identified in Section 5 of this Letter Agreement; and
(6) the MQView Business Unit's associated hardware and software, and (ii)
subject to the consent of the landlord, the Apertus Long Island office facility
lease. Purchase of both the agreement with IBM for maintenance of IBM's Level 1
code base and the royalty agreement for the transition from Level 1 code and are
subject to the consent of IBM.
2. Purchase Price. The purchase price for the Assets shall be the sum of
$7,400,000 (Seven million, four hundred thousand US dollars), payable $250,000
(two hundred and fifty thousand US dollars) as a non-refundable deposit by wire
transfer no later than 3pm cst on January 3, 1997 and $7,150,000 (Seven million,
one hundred and fifty thousand US dollars) at the time of closing.
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December 27, 1996
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3. Due Diligence Period. Buyer shall have until January 17, 1997 to
review all aspects of the Assets, and Seller shall give Buyer access to all of
Seller's files, materials, books and records (interpreted broadly) regarding the
Assets. Buyer may terminate this letter agreement by written notice to Seller
on or before January 31, 1997, if Buyer is not satisfied with the results of its
due diligence review in its sole and subjective determination.
4. Closing. The closing shall take place on or before January 31, 1997
at Buyer's (or its counsel's) offices in Los Angeles County, California. At the
closing, Seller shall execute, acknowledge (where appropriate) and deliver
conveyance documents in form reasonably requested by Buyer transferring the
Assets to Buyer. Buyer shall concurrently pay all amounts required to be paid
by Buyer at closing.
5. Employees. Candle shall have the right, at its sole discretion, to
offer employment to all key sales, marketing, development and support employees
of the MQView Business Unit of Apertus. Candle will evaluate these employees
for those management, technical, sales and marketing skills necessary for the
success of the business and negotiate employment Agreements in good faith.
Candle will assume responsibility for accrued salary and paid time off of any
Apertus employee which becomes a Candle employee pursuant to this paragraph.
6. Limitation on Contracts and Liabilities Assumed. Buyer shall not be
liable for any contracts or liabilities of Seller except for those expressly
assumed by Buyer.
7. Confidentiality. I. Prior to Closing, neither the Buyer nor Seller
shall make any public announcement or otherwise disclose the transaction
contemplated in this letter agreement to any third persons whatsoever except (a)
as agreed upon in advance by both parties, (b) to lenders, creditors or other
persons whose consent is required before the disclosing party may consummate the
contemplated transaction, (c) as contemplated by the Agreement, (d) to
accountants, attorneys and other professionals engaged by the parties to
facilitate the transaction, or (e) otherwise as may be required by law.
II. In accordance with Section 7(I)(a), the parties agree that
subsequent to the execution of this Letter Agreement, Seller may inform Xxxxx &
Baggage Inc. of the existence of this Letter Agreement. This consent shall not
allow either party to inform Xxxxx & Babbage Inc. of the terms and conditions of
this Letter Agreement.
8. Non-Compete Clauses. For a period of 3 years, commencing on the
closing date, Apertus will not develop, manufacture, market, and/or distribute
any products similar or competitive to the "Assets".
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9. Agreement to Continue Customary Operations. Seller agrees to operate
and cause Seller's business to be operated from the date hereof until the
closing in a manner consistent with which such business has been operated for
the one year period prior to the date hereof, including, but not limited to, the
manner Seller collects its receivables and pays its payables. Seller agrees to
refrain from selling any asset, incurring any liability or making any
distributions to stockholders until the closing other than in the ordinary
course of business.
10. Costs and Expenses; Brokerage Fees. Each party shall bear all costs
incurred by it, including brokerage fees and commissions, in connection with the
transaction contemplated by this letter.
11. Representations and Warranties. Each party represents and warrants
that (i) this letter agreement is binding upon and enforceable against such
party, (ii) such party is authorized to enter into this letter agreement by all
required corporate actions, (iii) no consent of any other party is required for
the execution and performance of this letter agreement, nor is such execution
and performance prevented in whole or part by any order, decree or ruling of any
court or governmental agency. Seller represents and warrants it owns all right,
title and interest in and to the Assets, free and clear of any encumbrance, lien
or obligation of any kind or nature. Any representations or warranties
contained in this letter agreement shall survive the closing and the conveyance
of the assets.
12. Further Documentation. The parties anticipate negotiating and
executing additional documentation regarding the business transactions of this
letter agreement by January 31, 1997. From and after the execution of this
letter agreement, however, the parties may fully enforce each provision of this
letter agreement, even if no subsequent detailed documentation is executed and
delivered, unless the due diligence is unsatisfactory to Buyer and Buyer
terminates this letter agreement pursuant to Paragraph 4.
13. Miscellaneous. This letter agreement contains the entire agreement of
the parties regarding the subject matter and may be amended only in writing. In
the event of any dispute, the prevailing party shall be entitled to attorneys'
fees. This letter agreement shall be binding upon and inure to the benefit
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of the parties' successors and assigns. This Agreement shall be interpreted
under the laws of the state of California, where venue shall lie.
Agreed:
Apertus Technologies, Inc. Candle Corporation
By /s/ Xxx Xxxxx - for X.X. Xxxxxx By /s/ Xxxx Xxxxxxx
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Name Xxx Xxxxx for X.X. Xxxxxx Name
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Title VP & CFO Title
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