EXHIBIT 10.6
OPTION AGREEMENT
----------------
This OPTION AGREEMENT (this "Agreement"), is made and entered into as of
_________ __, 2001, by and among HOTEL OUTSOURCE SERVICES, INC., a Delaware
corporation (the "Company"), BARTECH SYSTEMS INTERNATIONAL, INC., a Delaware
corporation ("Bartech"), BARTECH MEDITERRANEAN LTD., a Delaware corporation
("BarMedit"), BarMedit's wholly-owned subsidiary, HILA INTERNATIONAL CORP., a
Delaware corporation ("BarMedit Sub"), and each of the individuals or entities
who hereinafter become stockholders of the Company and parties to this Agreement
(each an "Additional Stockholder"). The Additional Stockholders, if any,
BarMedit Sub, and, if it should hereinafter acquire shares of the Company's
Common Stock, par value $.01 (the "Common Stock") and BarMedit, are referred to
collectively herein as the "Other Stockholders."
RECITALS:
WHEREAS, as of the date of this Agreement, BarMedit Sub is the
beneficial owner of 700 shares of the Common Stock;
WHEREAS, concurrently with the execution of this Agreement, Bartech
has purchased 300 shares of the Common Stock;
WHEREAS, Bartech desires to obtain from the Other Stockholders, and the
Other Stockholders desire to grant to Bartech, an option to purchase all, but
not less than all, of the shares of Common Stock or securities directly or
indirectly exercisable or exchangeable for or convertible into Common Stock
(collectively, the "Option Shares") now owned or hereinafter acquired by the
Other Stockholders.
AGREEMENT:
NOW, THEREFORE, in consideration of $1.00, the premises and mutual
covenants of the parties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. OPTION.
------
1.1 Option.
------
(a) Grant of Option. The Other Stockholders hereby grant to Bartech the
-----------------
right and option (sometimes referred to herein as the "Option") to purchase all,
but not less than all, of the Option Shares, at the purchase price set
forth in Section 1.1(c) hereof.
(b) Exercise Period. The Option evidenced hereby shall vest and become
----------------
exercisable with respect to all, but not less than all, of the Option Shares on
the date that the Minibar Threshold has been reached and shall expire on the
60-month anniversary of the date thereof (the "Option Period"). For purposes of
this Agreement, "Minibar Threshold" shall mean the installment of at least
5,000 minibars in United States hotels in connection with outsourcing services
to be provided by the Company.
(c) Purchase Price. The aggregate purchase price payable to the Other
---------------
Stockholders by Bartech in respect of all of the Option Shares shall be the
product of (i) the quotient obtained by dividing the number of Option Shares
held by all Other Stockholders, by the total number of shares of Common Stock or
other securities of the Company then outstanding, and (ii) the Company
Valuation. For purposes hereof, the "Company Valuation" shall mean, the greater
of (A) the product obtained by multiplying $2,250 by the number of minibars
operated or outsourced by the Company as of the date of exercise, and (B) an
amount equal to the product obtained by multiplying (x) the Company's net after
tax income, determined in accordance with United States generally accepted
accounting principals ("GAAP"), for the 12 full months immediately preceding the
month in which Bartech exercises the Option, by (y) 15. If there are securities
other than Common Stock outstanding and the parties are unable to agree as to
how to allocate the purchase price among the Common Stock and such other
securities, Bartech shall deposit the purchase price with BarMedit, as escrow
agent, the Other Stockholders shall be responsible for settling the allocation
among themselves, and Bartech shall have no further obligation with respect to
such allocation.
1.2 Manner of Exercise.
--------------------
(a) Notice of Intent. At any time during the Option Period, Bartech may
------------------
deliver to the Company and each Other Stockholder written notice of Bartech's
intention to exercise the Option, substantially in the form annexed hereto as
Exhibit A (the "Notice of Intent"). Promptly upon receipt of the Notice of
----------
Intent and, in any event within ten days thereafter, the Company and each Other
Stockholder shall jointly furnish to Bartech (i) copies of the Company's then
Current Financial Statements (as hereinafter defined), and (ii) a certificate (a
"Certificate"), executed by an executive officer of the Company and each
Other Stockholder, certifying (x) that the representations and warranties
contained in Section 2 and Section 3 of this Agreement, are true and correct as
of the date thereof or setting forth in reasonable detail any amendments or
modifications thereof, including any amendments or modifications to the
Schedules (as hereinafter defined), and (y) as to the number of minibars
operated or outsourced by the Company as of the date thereof and the amount of
the Company's net after tax income, determined in accordance with GAAP, for the
immediately preceding 12 months. As used herein, "Current Financial Statements"
shall mean (i) a balance sheet of the Company as of the most recent quarter and
fiscal year then ended and statements of income, cash flows and changes in
stockholders' equity for the quarter and fiscal year then ended (which shall be
audited in the case of fiscal year end statements), and (ii) a balance sheet of
the Company as of the most recent practicable date. The Notice of Intent shall
not obligate Bartech to exercise the Option (which can only be exercised by the
Option Notice (as defined below)).
(b) Exercise of Option. The Option may be exercised by Bartech at any time
-------------------
during the Option Period by delivery to the Company and each Other Stockholder
of written notice of same, substantially in the form of Exhibit B to this
---------
Agreement (the "Option Notice"). Promptly after receipt of such Option Notice,
Bartech and the Other Stockholders will jointly and in good faith work
expeditiously to (i) execute and deliver a Purchase Agreement, substantially in
the form annexed hereto as Exhibit C to this Agreement (the "Purchase
----------
2
Agreement"), and (ii) consummate the transactions contemplated by the Purchase
Agreement as soon as reasonably practicable, and in any event within 30 days
following the effective date of the Option Notice.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
--------------------------------------------------
2.1 The Company and each of the Other Stockholders, jointly and
severally, represent and warrants to Bartech as follows:
2.2 Organization. The Company is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of its jurisdiction of
incorporation.
2.3 Authority. The Company has full power and authority to execute, deliver
---------
and perform this Agreement. All action on the part of the Company and its
officers, directors, and stockholders, necessary for the authorization,
execution, delivery and performance by the Company of all its obligations under
this Agreement has been taken. This Agreement and the Purchase Agreement, when
executed and delivered by the Company and the other parties thereto, will
constitute legally binding and valid obligations of the Company, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, moratorium, creditors' rights and other
similar laws.
2.4 No Conflict. The execution, delivery and performance by the Company of
------------
this Agreement and the consummation of the transactions contemplated hereby will
not result in any violation of, conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under, with or
without the passage of time or the giving of notice, or both, (i) any provision
of the Company's Certificate of Incorporation or By-laws (each as may have been
amended, supplemented or restated); (ii) any provision of any judgment, writ,
injunction, decree or order to which the Company is bound; (iii) any law,
statute, rule or regulation applicable to the Company; or (iv) any contract,
agreement or understanding to which the Company is a party or by which any of
its properties or assets are bound.
2.5 Government Consents. No consent, approval, order or authorization of,
--------------------
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the execution, delivery and performance of this
Agreement.
2.6 Litigation. There is no action, suit, proceeding or investigation
----------
pending or, to the knowledge of the Company, currently threatened against the
Company.
2.7 Additional Representations and Warranties. Attached hereto as Exhibit D
----------------------------------------- ---------
are all the Schedules (the "Schedules") to the Purchase Agreement completed as
if the Purchase Agreement were executed as of the date hereof. The
representations and warranties of each Other Stockholder contained in Article 3
thereof, as modified by Exhibit D, are true and correct as of the date hereof.
3
3. REPRESENTATIONS AND WARRANTIES OF THE OTHER STOCKHOLDERS
--------------------------------------------------------------
Each of the Other Stockholders, severally and not jointly, represent and
warrant to Bartech, with respect to himself, herself or itself only, as follows:
3.1 Organization. If such Other Stockholder is a corporation, partnership,
------------
limited liability company or other entity, it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization.
3.2 Authority. Such Other Stockholder has full power and authority to
---------
execute, deliver and perform this Agreement and the Purchase Agreement. If such
Other Stockholder is a corporation, partnership, limited liability company
or other entity, all action on the part of such Other Stockholder and its
officers, directors, stockholders, partners and members, necessary for the
authorization, execution, delivery and performance by such Other Stockholder of
all its obligations under this Agreement and the Purchase Agreement has been
taken. This Agreement and the Purchase Agreement, when executed and delivered by
such Other Stockholder and the other parties thereto will constitute legally
binding and valid obligations of such Other Stockholder, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, moratorium, creditors' rights and other
similar laws.
3.3 No Conflict. The execution, delivery and performance by such Other
------------
Stockholder of this Agreement and the Purchase Agreement and the consummation of
the transactions contemplated hereby and thereby will not result in any
violation of, conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice under, with or without the
passage of time or the giving of notice, or both, (i) any provision of the
constituent documents of such Other Stockholder, including such Other
Stockholder's certificate of incorporation, bylaws, partnership agreement,
operating agreement or other governing document, as applicable (each as may have
been amended, supplemented or restated); (ii) any provision of any judgment,
writ, injunction, decree or order to which such Other Stockholder is bound;
(iii) any law, statute, rule or regulation applicable to such Other Stockholder;
or (v) any contract, agreement or understanding to which such Other Stockholder
is a party or by which any of its properties or assets are bound.
3.4 Governmental Consents. No consent, approval, order or authorization of,
---------------------
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of such Other
Stockholder is required in connection with the execution, delivery and
performance of this Agreement or the Purchase Agreement.
3.5 Litigation. There is no action, suit, proceeding or investigation
----------
pending or, to the knowledge of such Other Stockholder, currently threatened
against such Other Stockholder which questions the validity of this Agreement or
the Purchase Agreement or such Other Stockholder's right to enter into any such
agreements or to consummate the transactions contemplated hereby and thereby.
4
4. OTHER AGREEMENTS.
-----------------
4.1 Covenants of the Company. During the Option Period, the Company shall
--------------------------
not, and no Other Stockholders shall cause or permit the Company to, without the
prior written consent of Bartech, (a) authorize or issue any capital stock
or any option, warrant, put, call, note, bond, debenture, or other right
exercisable, convertible or exchangeable for the Company's capital stock, (b)
take any action relating to the merger, sale, consolidation, dissolution,
winding-up, liquidation or similar transaction, in one or more related
transactions, involving all or substantially all of the capital stock or assets
of the Company, or (c) take any other action which might reasonably be expected
to adversely affect the rights of Bartech hereunder.
4.2 Covenants Relating to the Option Shares. During the Option Period, no
-----------------------------------------
Other Stockholder will sell, assign, gift, transfer, pledge, encumber, grant any
right in or otherwise dispose of (each a "Transfer") any of the Option
Shares potentially subject to purchase and sale hereunder, or any portion
thereof, or agree to do any of the foregoing without Bartech's prior written
consent. Each certificate or other instrument evidencing an Option Share shall
bear a legend to the effect that it is subject to this Agreement.
4.3 No Rights as Shareholder Bartech shall not be entitled to any rights of
-------------------------
a stockholder of the Company with respect to any of the Option Shares until such
Option Shares have been purchased and sold in accordance with the terms
hereof.
4.4 Reclassifications, Mergers, etc. In case of any (i) reclassification or
-------------------------------
change of the Company's capitalization (other than a change resulting from
a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company), (ii) merger or consolidation of the Company with
or into any other corporation or other entity (other than a merger or
consolidation in which the Company is the surviving or continuing corporation),
(iii) sale, lease or conveyance to another corporation or other entity of the
property and assets of any nature of the Company as an entirety or substantially
as an entirety, or (iv) liquidation, dissolution or other winding-up of the
Company (any such case, an "Event") which has been consented to by Bartech in
accordance with Section 4.1 hereof, this Option shall thereafter be exercisable
for the kind and amount of shares of stock and other securities, property, cash,
or any combination thereof receivable upon such Event by a holder of the number
of Common Shares for which this Option might have been exercised or converted
immediately prior to such Event. The Company shall not effect, and the Other
Stockholders shall not cause or permit the Company to effect, any such Event
unless all necessary steps shall have been taken to ensure that Bartech shall
thereafter be entitled to receive the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof which Bartech shall
be entitled in accordance with this Section 4.4.
4.5 Notification of Certain Events. During the Option Period, if the
---------------------------------
Company shall propose to effect an Event, the Company shall, and each Other
Stockholder shall cause the Company to, give written notice thereof to Bartech,
at least 30 days prior to the earlier of (i) the date on which any such Event is
expected to become effective, and (ii) the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange their
shares for securities or other property, if any, deliverable upon such Event.
5
4.6 Financial Statements. During the Option Period, the Company hereby
---------------------
covenants and agrees, and each Other Stockholder covenants and agrees to cause
the Company, to deliver to Bartech the following financial statements (the
"Financial Statements"):
(a) as soon as available, and in any event within 30 days after the end of
each month, a profit and loss statement and key monthly metrics for such monthly
accounting period and on a cumulative basis for the fiscal year to date and a
balance sheet as at the last day of such monthly accounting period;
(b) as soon as available, and in any event within 45 days after the end of
each quarterly fiscal period of each fiscal year of the Company, consolidated
statements of income, retained earnings and cash flow of the Company, for such
period and for the period from the beginning of the respective fiscal year to
the end of such period, and the related consolidated balance sheet of the
Company as at the end of such period setting forth in the case of each such
statement in comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, if any;
(c) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, consolidated statements of income, retained
earnings and cash flow of the Company for such fiscal year, and the related
consolidated balance sheet of the Company as at the end of such fiscal year,
setting forth in the case of each such statement in comparative form the
corresponding figures for the preceding fiscal year, if any, and accompanied by
an audit report from the Company's independent public accountants.
4.7 Other Information Rights. During the Option Period, the Company hereby
-------------------------
covenants and agrees, and each Other Stockholder hereby covenants and agrees to
cause the Company, to deliver to Bartech (a) with reasonable promptness after
the date on which the Company or any Other Stockholder first obtains knowledge
of such, written notice of all legal or arbitration proceedings, and all
proceedings by or before any governmental or regulatory authority or agency, and
each material development in respect of such legal or other proceedings,
affecting the Company, which proceeding involves at least $25,000; (b) as soon
as available, but in any event within 90 days after commencement of each new
fiscal year, a budget consisting of a business plan and projecting financial
statements for such fiscal year; and (c) with reasonable promptness, such other
notices, information and data as the Company or any such Other Stockholder deems
material to the Company's business or operations. In addition, Bartech and its
representatives shall be permitted to visit and inspect the properties of the
Company, including its corporate and financial records, and to discuss its
business and finances with officers of the Company, during normal business hours
following reasonable notice and as often as may be reasonably requested, without
interruption of the business of the Company.
4.8 Updated Representations and Warranties. On each six-month anniversary
----------------------------------------
of the date of this Agreement, the Company and the Other Stockholders shall
jointly furnish Bartech with any amendments or modifications to the Schedules,
such amendments and modifications to be set forth in reasonable detail.
4.9 Additional Other Stockholders. The Company and each Other Stockholder
-------------------------------
agrees that, during the Option Period, unless Bartech consents to the contrary,
6
the Company will cause, and each Other Stockholder will use its best efforts to
cause, each Person who acquires shares of the Company's Common Stock to enter
into this Agreement and thereby to be bound by the terms hereof, all by
execution of an instrument of accession substantially in the form annexed hereto
as Exhibit E. Any such person so entering into this Agreement shall be
----------
deemed to be an Other Stockholder for purposes of this Agreement.
5. INDEMNIFICATION.
----------------
5.1 Indemnification Obligations of the Company. The Company and each Other
-------------------------------------------
Stockholder, jointly and severally, agrees to and will indemnify, defend and
hold Bartech (including for purposes of this Section 5, each officer, director,
employee, stockholder, agent and representative of Bartech) harmless from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties and reasonable attorneys' fees and expenses (hereinafter
collectively referred to as "Damages"), imposed upon or incurred by Bartech by
reason of or resulting from or arising out of a breach of any representation,
warranty, covenant or agreement of the Company or any Other Stockholder
contained in this Agreement.
5.2 Third Party Claims; Notification of Claims. Any party entitled to
-----------------------------------------------
indemnification pursuant to Section 5.1 hereof (each, an "Indemnified Party")
shall (i) provide the Company and each Other Stockholder with prompt notice of
all third party actions, suits, proceedings, claims, demands or assessments
subject to the indemnification provisions of this Section 5 (collectively,
"Third Party Claims") brought at any time following the date hereof, and (ii)
provide the Company and each Other Stockholder with notice of all other claims
or demands for indemnification pursuant to the provisions of this Section 4;
provided, however, that the failure to provide timely notice shall not affect
----- -------
the indemnification obligations of the Company or any Other Stockholders except
to the extent the Company or such Other Stockholder shall have been materially
prejudiced as a result of such failure. In the case of a Third Party Claim, the
Indemnified Party shall make available to the Company all relevant information
material to the defense of such claim. The Company shall have the right to
control the defense of all Third Party Claims with counsel reasonably acceptable
to the Indemnified Party, subject to the Indemnified Party's right to
participate in the defense; provided, that the Indemnified Party may control
--------
such defense at the Company and Other Stockholders' expense in the event (i) of
a failure by the Company to assume control of the defense of any Third Party
Claim within five days after the Company is notified of such Third Party Claim,
(ii) that the defense of the Indemnified Party by the Company would be
inappropriate due to actual or potential conflicts of interest between such
Indemnified Party and any other party represented by such counsel in such
proceeding, or (c) the actual or potential defendants in, or targets of, any
such action include both the Indemnified Party and the Company or any Other
Stockholder, and the Indemnified Party reasonably determines that there may be
legal defenses available to such Indemnified Party which are different from or
in addition to those available to the Company and/or any Other Stockholder.
Notwithstanding any assumption of such defense and without limiting the
indemnification obligations provided for under this Section 5, the Indemnified
Party shall have the right to elect to join or participate in the defense of any
Third Party Claim (at its sole expense if the Company is permitted to assume and
continue control of the defense and has elected to do so and otherwise at the
expense of the Company and the Other Stockholders), and no claim shall be
settled or compromised without the consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed.
7
6. MISCELLANEOUS.
--------------
6.1 Governing Law. This Agreement shall be governed by the laws of the
--------------
State of New York.
6.2 Entire Agreement. This Agreement and the other documents delivered
-----------------
pursuant to this Agreement constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof and supersede all prior agreements and merge all prior discussions,
negotiations, proposals and offers (written or oral) between them, and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein. The Exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof.
6.3 Amendments and Waivers. Except as expressly provided in this Agreement,
----------------------
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
6.4 Headings. The titles and subtitles used in this Agreement are used for
--------
convenience only and are not considered in construing or interpreting this
Agreement.
6.5 Construction. All pronouns shall be deemed to refer to the masculine,
------------
feminine or neuter, as the identity of the person referred to may require; the
singular imports the plural and vice versa.
6.6 Notices. All notices and other communications required or permitted
-------
under this Agreement shall be sent by registered or certified mail, postage
prepaid, overnight courier, confirmed telex or facsimile transmission or
otherwise delivered by hand or by messenger, addressed to the parties as follows
(or at such other address as any such party shall have furnished to the other
parties hereto in writing):
If to the Company: With a Copy to:
Hotel Outsource Services, Inc. ________________________________
00 Xxxx Xxxxxx, Xxxxx 00X ________________________________
Xxx Xxxx, Xxx Xxxx 00000 ________________________________
Attention: Xxxxx Xxxxxx Attention:________________________
Facsimile: 011-9723-516-8577 Facsimile:________________________
8
If to Bartech: With a Copy to:
Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx
Bartech Systems International, Inc. and Popeo, P.C.
000 Xxxxxxx Xxxx, Xxxxx X 000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to BarMedit: With a Copy to:
Bartech Mediterranean Ltd.
Trade Tower Building _______________________________
Hammered 25 _______________________________
Tel-Aviv 61500 _______________________________
Israel _______________________________
Attention: Xxxxx Xxxxxx Attention:____________________
Facsimile: 011-9723-516-8577 Facsimile:____________________
If to BarMedit Sub: With a Copy to:
Hila International Corp. ______________________________
00 Xxxx Xxxxxx, Xxxxx 0000 ______________________________
Xxx Xxxx, Xxx Xxxx 00000 ______________________________
Attention: Xxxxx Xxxxxx Attention:____________________
Facsimile: 011-9723-516-8577 Facsimile:____________________
If to any Other Stockholder: With a Copy to:
To the address set forth on Such other person
the Instrument of Accession. as listed on the Instrument
of Accession.
6.7 Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given (i) when delivered if
delivered personally, (ii) if sent by registered or certified mail, at the
earlier of its receipt or three business days after registration or
certification thereof, (iii) if sent by overnight courier, on the next business
day after the same has been deposited with a nationally recognized courier
service, or (iv) when sent by confirmed telex or facsimile, on the day sent (if
a business day) if sent during normal business hours of the recipient, and if
not, then on the next business day.
6.8 No Third Party Beneficiaries. This Agreement shall not confer any
-------------------------------
rights or remedies upon any person other than the parties hereto and their
permitted successors and assigns.
9
6.9 Severability. In the event that any provision of this Agreement becomes
------------
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
6.10 Successors and Assigns. The provisions of this Agreement shall inure
------------------------
to the benefit of, and be binding upon, the permitted successors and assigns of
the parties to this Agreement. Notwithstanding the foregoing, neither Company
nor any Other Stockholder may assign this Agreement without the written consent
of Bartech, and Bartech may not assign this Agreement or its rights hereunder to
any party other than a person or entity that controls, is controlled by, or is
under common control with, Bartech.
6.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument. This Agreement may be delivered by facsimile, and facsimile
signatures shall be treated as original signatures for all applicable purposes.
6.12 Delays and Omissions. Except as expressly provided in this Agreement,
---------------------
no delay or omission to exercise any right, power or remedy accruing any party
hereto or their respective successors or assigns, upon any breach or default by
another party hereto under this Agreement shall impair any such right, power or
remedy of such first party or their respective successors or assigns, as the
case may be, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of a waiver of or acquiescence in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring; provided, however, that this Section 6.11
shall not be interpreted to extend the date or time for any right, privilege or
option beyond that expressly set forth elsewhere in this Agreement. Any waiver,
permit, consent or approval of any kind or character on the part of any holder
of any breach or default under this Agreement, or any waiver on the part of any
holder of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any
holder shall be cumulative and not alternative.
6.13 Further Assurances. The parties agree (a) to furnish upon request to
-------------------
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as they
other party may reasonable request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
{Signature Page Follows.}
10
6.14 IN WITNESS WHEREOF, the parties have hereunto set their hands as
of the date first above written.
HOTEL OUTSOURCE SERVICES, INC.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: /s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: CEO COO
BARTECH SYSTEMS INTERNATIONAL,
INC.
/s/ Xxxxxx Xxxxx
By:_____________________________
Name: Xxxxxx Xxxxx
Title: President and CEO
BARTECH MEDITERRANEAN LTD.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: /s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: Director Director
HILA INTERNATIONAL CORP.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: /s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: Director Director
EXHIBIT A
FORM OF
NOTICE OF INTENT
__________________________
Date
Hotel Outsource Services, Inc.
[Address]
[Address]
[OTHER STOCKHOLDERS]
[Address]
[Address]
Ladies and Gentlemen:
Reference is hereby made to that certain Option Agreement (the "Option
Agreement"), dated as of __________ ___, 2001, between you and Bartech Systems
International, Inc. ("Bartech"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Option Agreement.
You are hereby notified that, pursuant to Section 1.2 of the Option
Agreement, Bartech intends to exercise the Option and is initiating the
procedures set forth and defined in Section 1.2 of the Option Agreement.
Accordingly, please deliver to Bartech the Financial Statements and the
Company's Certificate pursuant to and as required by Section 1.2.
Very truly yours,
BARTECH SYSTEMS INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
A-1
EXHIBIT B
FORM OF
OPTION NOTICE
__________________________
Date
Hotel Outsource Services, Inc.
[Address]
[Address]
[OTHER STOCKHOLDERS]
[Address]
[Address]
Ladies and Gentlemen:
Reference is hereby made to that certain Option Agreement (the "Option
Agreement") dated as of __________ ___, 2001, between you and Bartech Systems
International, Inc. ("Bartech"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Option Agreement.
Bartech hereby exercises its right to purchase all of the Option Shares
covered by the Option Agreement and in accordance with Section 1.2(b) thereof,
requests that you exercise and deliver to Bartech, the Purchase Agreement,
together with all Schedules thereto, and otherwise comply with the requirements
of the Option Agreement in accordance with the terms and provisions set forth
therein.
Very truly yours,
BARTECH SYSTEMS INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
B-1
EXHIBIT C
FORM OF PURCHASE AGREEMENT
(TO BE ATTACHED)
C-1
EXHIBIT D
INSTRUMENT OF ACCESSION
This Instrument of Accession (this "Instrument of Accession") is executed
pursuant to the terms of the Option Agreement by and among Hotel Outsource
Services, Inc., Bartech Systems International, Inc., and certain others parties
thereto, dated as of __________ ___, 2001 (as amended, supplemented or restated,
the "Option Agreement"), a copy of which is attached hereto, by the undersigned.
By executing this instrument of Accession, the undersigned agrees as follows:
1. Acknowledgment. The undersigned acknowledges receipt of the Option
--------------
Agreement and that the undersigned is acquiring _________ shares of the common
stock of Hotel Outsource Services, Inc., subject to the terms and conditions of
the Option Agreement. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Option Agreement.
2. Agreement. The undersigned agrees to be bound by the terms of the Option
---------
Agreement as an "Other Stockholder" with the same force and effect as if the
undersigned were originally a party thereto.
3. Notice. Any notice required or permitted by the Option Agreement shall be
------
given to the undersigned at the address listed below the undersigned's
signature.
Agreed this ____ day of _______, 20___. _______________________________
{Print Name}
Address for Notice Purposes:
_______________________________
_________________________________ {Signature and Title, if applicable}
_________________________________
_________________________________
With a Copy to:
_________________________________
_________________________________
D-1
EXHIBIT 10.6
OPTION AGREEMENT
----------------
This OPTION AGREEMENT (this "Agreement"), is made and entered into as of
_________ __, 2001, by and among HOTEL OUTSOURCE SERVICES, INC., a Delaware
corporation (the "Company"), BARTECH SYSTEMS INTERNATIONAL, INC., a Delaware
corporation ("Bartech"), BARTECH MEDITERRANEAN LTD., a Delaware corporation
("BarMedit"), BarMedit's wholly-owned subsidiary, HILA INTERNATIONAL CORP., a
Delaware corporation ("BarMedit Sub"), and each of the individuals or entities
who hereinafter become stockholders of the Company and parties to this Agreement
(each an "Additional Stockholder"). The Additional Stockholders, if any,
BarMedit Sub, and, if it should hereinafter acquire shares of the Company's
Common Stock, par value $.01 (the "Common Stock") and BarMedit, are referred to
collectively herein as the "Other Stockholders."
RECITALS:
WHEREAS, as of the date of this Agreement, BarMedit Sub is the
beneficial owner of 700 shares of the Common Stock;
WHEREAS, concurrently with the execution of this Agreement, Bartech
has purchased 300 shares of the Common Stock;
WHEREAS, Bartech desires to obtain from the Other Stockholders, and the
Other Stockholders desire to grant to Bartech, an option to purchase all, but
not less than all, of the shares of Common Stock or securities directly or
indirectly exercisable or exchangeable for or convertible into Common Stock
(collectively, the "Option Shares") now owned or hereinafter acquired by the
Other Stockholders.
AGREEMENT:
NOW, THEREFORE, in consideration of $1.00, the premises and mutual
covenants of the parties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. OPTION.
------
1.1 Option.
------
(a) Grant of Option. The Other Stockholders hereby grant to Bartech the
-----------------
right and option (sometimes referred to herein as the "Option") to purchase all,
but not less than all, of the Option Shares, at the purchase price set
forth in Section 1.1(c) hereof.
(b) Exercise Period. The Option evidenced hereby shall vest and become
----------------
exercisable with respect to all, but not less than all, of the Option Shares on
the date that the Minibar Threshold has been reached and shall expire on the
60-month anniversary of the date thereof (the "Option Period"). For purposes of
this Agreement, "Minibar Threshold" shall mean the installment of at least
5,000 minibars in United States hotels in connection with outsourcing services
to be provided by the Company.
(c) Purchase Price. The aggregate purchase price payable to the Other
---------------
Stockholders by Bartech in respect of all of the Option Shares shall be the
product of (i) the quotient obtained by dividing the number of Option Shares
held by all Other Stockholders, by the total number of shares of Common Stock or
other securities of the Company then outstanding, and (ii) the Company
Valuation. For purposes hereof, the "Company Valuation" shall mean, the greater
of (A) the product obtained by multiplying $2,250 by the number of minibars
operated or outsourced by the Company as of the date of exercise, and (B) an
amount equal to the product obtained by multiplying (x) the Company's net after
tax income, determined in accordance with United States generally accepted
accounting principals ("GAAP"), for the 12 full months immediately preceding the
month in which Bartech exercises the Option, by (y) 15. If there are securities
other than Common Stock outstanding and the parties are unable to agree as to
how to allocate the purchase price among the Common Stock and such other
securities, Bartech shall deposit the purchase price with BarMedit, as escrow
agent, the Other Stockholders shall be responsible for settling the allocation
among themselves, and Bartech shall have no further obligation with respect to
such allocation.
1.2 Manner of Exercise.
--------------------
(a) Notice of Intent. At any time during the Option Period, Bartech may
------------------
deliver to the Company and each Other Stockholder written notice of Bartech's
intention to exercise the Option, substantially in the form annexed hereto as
Exhibit A (the "Notice of Intent"). Promptly upon receipt of the Notice of
----------
Intent and, in any event within ten days thereafter, the Company and each Other
Stockholder shall jointly furnish to Bartech (i) copies of the Company's then
Current Financial Statements (as hereinafter defined), and (ii) a certificate (a
"Certificate"), executed by an executive officer of the Company and each
Other Stockholder, certifying (x) that the representations and warranties
contained in Section 2 and Section 3 of this Agreement, are true and correct as
of the date thereof or setting forth in reasonable detail any amendments or
modifications thereof, including any amendments or modifications to the
Schedules (as hereinafter defined), and (y) as to the number of minibars
operated or outsourced by the Company as of the date thereof and the amount of
the Company's net after tax income, determined in accordance with GAAP, for the
immediately preceding 12 months. As used herein, "Current Financial Statements"
shall mean (i) a balance sheet of the Company as of the most recent quarter and
fiscal year then ended and statements of income, cash flows and changes in
stockholders' equity for the quarter and fiscal year then ended (which shall be
audited in the case of fiscal year end statements), and (ii) a balance sheet of
the Company as of the most recent practicable date. The Notice of Intent shall
not obligate Bartech to exercise the Option (which can only be exercised by the
Option Notice (as defined below)).
(b) Exercise of Option. The Option may be exercised by Bartech at any time
-------------------
during the Option Period by delivery to the Company and each Other Stockholder
of written notice of same, substantially in the form of Exhibit B to this
---------
Agreement (the "Option Notice"). Promptly after receipt of such Option Notice,
Bartech and the Other Stockholders will jointly and in good faith work
expeditiously to (i) execute and deliver a Purchase Agreement, substantially in
the form annexed hereto as Exhibit C to this Agreement (the "Purchase
----------
2
Agreement"), and (ii) consummate the transactions contemplated by the Purchase
Agreement as soon as reasonably practicable, and in any event within 30 days
following the effective date of the Option Notice.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
--------------------------------------------------
2.1 The Company and each of the Other Stockholders, jointly and
severally, represent and warrants to Bartech as follows:
2.2 Organization. The Company is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of its jurisdiction of
incorporation.
2.3 Authority. The Company has full power and authority to execute, deliver
---------
and perform this Agreement. All action on the part of the Company and its
officers, directors, and stockholders, necessary for the authorization,
execution, delivery and performance by the Company of all its obligations under
this Agreement has been taken. This Agreement and the Purchase Agreement, when
executed and delivered by the Company and the other parties thereto, will
constitute legally binding and valid obligations of the Company, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, moratorium, creditors' rights and other
similar laws.
2.4 No Conflict. The execution, delivery and performance by the Company of
------------
this Agreement and the consummation of the transactions contemplated hereby will
not result in any violation of, conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under, with or
without the passage of time or the giving of notice, or both, (i) any provision
of the Company's Certificate of Incorporation or By-laws (each as may have been
amended, supplemented or restated); (ii) any provision of any judgment, writ,
injunction, decree or order to which the Company is bound; (iii) any law,
statute, rule or regulation applicable to the Company; or (iv) any contract,
agreement or understanding to which the Company is a party or by which any of
its properties or assets are bound.
2.5 Government Consents. No consent, approval, order or authorization of,
--------------------
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the execution, delivery and performance of this
Agreement.
2.6 Litigation. There is no action, suit, proceeding or investigation
----------
pending or, to the knowledge of the Company, currently threatened against the
Company.
2.7 Additional Representations and Warranties. Attached hereto as Exhibit D
----------------------------------------- ---------
are all the Schedules (the "Schedules") to the Purchase Agreement completed as
if the Purchase Agreement were executed as of the date hereof. The
representations and warranties of each Other Stockholder contained in Article 3
thereof, as modified by Exhibit D, are true and correct as of the date hereof.
3
3. REPRESENTATIONS AND WARRANTIES OF THE OTHER STOCKHOLDERS
--------------------------------------------------------------
Each of the Other Stockholders, severally and not jointly, represent and
warrant to Bartech, with respect to himself, herself or itself only, as follows:
3.1 Organization. If such Other Stockholder is a corporation, partnership,
------------
limited liability company or other entity, it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization.
3.2 Authority. Such Other Stockholder has full power and authority to
---------
execute, deliver and perform this Agreement and the Purchase Agreement. If such
Other Stockholder is a corporation, partnership, limited liability company
or other entity, all action on the part of such Other Stockholder and its
officers, directors, stockholders, partners and members, necessary for the
authorization, execution, delivery and performance by such Other Stockholder of
all its obligations under this Agreement and the Purchase Agreement has been
taken. This Agreement and the Purchase Agreement, when executed and delivered by
such Other Stockholder and the other parties thereto will constitute legally
binding and valid obligations of such Other Stockholder, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, moratorium, creditors' rights and other
similar laws.
3.3 No Conflict. The execution, delivery and performance by such Other
------------
Stockholder of this Agreement and the Purchase Agreement and the consummation of
the transactions contemplated hereby and thereby will not result in any
violation of, conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice under, with or without the
passage of time or the giving of notice, or both, (i) any provision of the
constituent documents of such Other Stockholder, including such Other
Stockholder's certificate of incorporation, bylaws, partnership agreement,
operating agreement or other governing document, as applicable (each as may have
been amended, supplemented or restated); (ii) any provision of any judgment,
writ, injunction, decree or order to which such Other Stockholder is bound;
(iii) any law, statute, rule or regulation applicable to such Other Stockholder;
or (v) any contract, agreement or understanding to which such Other Stockholder
is a party or by which any of its properties or assets are bound.
3.4 Governmental Consents. No consent, approval, order or authorization of,
---------------------
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of such Other
Stockholder is required in connection with the execution, delivery and
performance of this Agreement or the Purchase Agreement.
3.5 Litigation. There is no action, suit, proceeding or investigation
----------
pending or, to the knowledge of such Other Stockholder, currently threatened
against such Other Stockholder which questions the validity of this Agreement or
the Purchase Agreement or such Other Stockholder's right to enter into any such
agreements or to consummate the transactions contemplated hereby and thereby.
4
4. OTHER AGREEMENTS.
-----------------
4.1 Covenants of the Company. During the Option Period, the Company shall
--------------------------
not, and no Other Stockholders shall cause or permit the Company to, without the
prior written consent of Bartech, (a) authorize or issue any capital stock
or any option, warrant, put, call, note, bond, debenture, or other right
exercisable, convertible or exchangeable for the Company's capital stock, (b)
take any action relating to the merger, sale, consolidation, dissolution,
winding-up, liquidation or similar transaction, in one or more related
transactions, involving all or substantially all of the capital stock or assets
of the Company, or (c) take any other action which might reasonably be expected
to adversely affect the rights of Bartech hereunder.
4.2 Covenants Relating to the Option Shares. During the Option Period, no
-----------------------------------------
Other Stockholder will sell, assign, gift, transfer, pledge, encumber, grant any
right in or otherwise dispose of (each a "Transfer") any of the Option
Shares potentially subject to purchase and sale hereunder, or any portion
thereof, or agree to do any of the foregoing without Bartech's prior written
consent. Each certificate or other instrument evidencing an Option Share shall
bear a legend to the effect that it is subject to this Agreement.
4.3 No Rights as Shareholder Bartech shall not be entitled to any rights of
-------------------------
a stockholder of the Company with respect to any of the Option Shares until such
Option Shares have been purchased and sold in accordance with the terms
hereof.
4.4 Reclassifications, Mergers, etc. In case of any (i) reclassification or
-------------------------------
change of the Company's capitalization (other than a change resulting from
a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company), (ii) merger or consolidation of the Company with
or into any other corporation or other entity (other than a merger or
consolidation in which the Company is the surviving or continuing corporation),
(iii) sale, lease or conveyance to another corporation or other entity of the
property and assets of any nature of the Company as an entirety or substantially
as an entirety, or (iv) liquidation, dissolution or other winding-up of the
Company (any such case, an "Event") which has been consented to by Bartech in
accordance with Section 4.1 hereof, this Option shall thereafter be exercisable
for the kind and amount of shares of stock and other securities, property, cash,
or any combination thereof receivable upon such Event by a holder of the number
of Common Shares for which this Option might have been exercised or converted
immediately prior to such Event. The Company shall not effect, and the Other
Stockholders shall not cause or permit the Company to effect, any such Event
unless all necessary steps shall have been taken to ensure that Bartech shall
thereafter be entitled to receive the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof which Bartech shall
be entitled in accordance with this Section 4.4.
4.5 Notification of Certain Events. During the Option Period, if the
---------------------------------
Company shall propose to effect an Event, the Company shall, and each Other
Stockholder shall cause the Company to, give written notice thereof to Bartech,
at least 30 days prior to the earlier of (i) the date on which any such Event is
expected to become effective, and (ii) the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange their
shares for securities or other property, if any, deliverable upon such Event.
5
4.6 Financial Statements. During the Option Period, the Company hereby
---------------------
covenants and agrees, and each Other Stockholder covenants and agrees to cause
the Company, to deliver to Bartech the following financial statements (the
"Financial Statements"):
(a) as soon as available, and in any event within 30 days after the end of
each month, a profit and loss statement and key monthly metrics for such monthly
accounting period and on a cumulative basis for the fiscal year to date and a
balance sheet as at the last day of such monthly accounting period;
(b) as soon as available, and in any event within 45 days after the end of
each quarterly fiscal period of each fiscal year of the Company, consolidated
statements of income, retained earnings and cash flow of the Company, for such
period and for the period from the beginning of the respective fiscal year to
the end of such period, and the related consolidated balance sheet of the
Company as at the end of such period setting forth in the case of each such
statement in comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, if any;
(c) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, consolidated statements of income, retained
earnings and cash flow of the Company for such fiscal year, and the related
consolidated balance sheet of the Company as at the end of such fiscal year,
setting forth in the case of each such statement in comparative form the
corresponding figures for the preceding fiscal year, if any, and accompanied by
an audit report from the Company's independent public accountants.
4.7 Other Information Rights. During the Option Period, the Company hereby
-------------------------
covenants and agrees, and each Other Stockholder hereby covenants and agrees to
cause the Company, to deliver to Bartech (a) with reasonable promptness after
the date on which the Company or any Other Stockholder first obtains knowledge
of such, written notice of all legal or arbitration proceedings, and all
proceedings by or before any governmental or regulatory authority or agency, and
each material development in respect of such legal or other proceedings,
affecting the Company, which proceeding involves at least $25,000; (b) as soon
as available, but in any event within 90 days after commencement of each new
fiscal year, a budget consisting of a business plan and projecting financial
statements for such fiscal year; and (c) with reasonable promptness, such other
notices, information and data as the Company or any such Other Stockholder deems
material to the Company's business or operations. In addition, Bartech and its
representatives shall be permitted to visit and inspect the properties of the
Company, including its corporate and financial records, and to discuss its
business and finances with officers of the Company, during normal business hours
following reasonable notice and as often as may be reasonably requested, without
interruption of the business of the Company.
4.8 Updated Representations and Warranties. On each six-month anniversary
----------------------------------------
of the date of this Agreement, the Company and the Other Stockholders shall
jointly furnish Bartech with any amendments or modifications to the Schedules,
such amendments and modifications to be set forth in reasonable detail.
4.9 Additional Other Stockholders. The Company and each Other Stockholder
-------------------------------
agrees that, during the Option Period, unless Bartech consents to the contrary,
6
the Company will cause, and each Other Stockholder will use its best efforts to
cause, each Person who acquires shares of the Company's Common Stock to enter
into this Agreement and thereby to be bound by the terms hereof, all by
execution of an instrument of accession substantially in the form annexed hereto
as Exhibit E. Any such person so entering into this Agreement shall be
----------
deemed to be an Other Stockholder for purposes of this Agreement.
5. INDEMNIFICATION.
----------------
5.1 Indemnification Obligations of the Company. The Company and each Other
-------------------------------------------
Stockholder, jointly and severally, agrees to and will indemnify, defend and
hold Bartech (including for purposes of this Section 5, each officer, director,
employee, stockholder, agent and representative of Bartech) harmless from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties and reasonable attorneys' fees and expenses (hereinafter
collectively referred to as "Damages"), imposed upon or incurred by Bartech by
reason of or resulting from or arising out of a breach of any representation,
warranty, covenant or agreement of the Company or any Other Stockholder
contained in this Agreement.
5.2 Third Party Claims; Notification of Claims. Any party entitled to
-----------------------------------------------
indemnification pursuant to Section 5.1 hereof (each, an "Indemnified Party")
shall (i) provide the Company and each Other Stockholder with prompt notice of
all third party actions, suits, proceedings, claims, demands or assessments
subject to the indemnification provisions of this Section 5 (collectively,
"Third Party Claims") brought at any time following the date hereof, and (ii)
provide the Company and each Other Stockholder with notice of all other claims
or demands for indemnification pursuant to the provisions of this Section 4;
provided, however, that the failure to provide timely notice shall not affect
----- -------
the indemnification obligations of the Company or any Other Stockholders except
to the extent the Company or such Other Stockholder shall have been materially
prejudiced as a result of such failure. In the case of a Third Party Claim, the
Indemnified Party shall make available to the Company all relevant information
material to the defense of such claim. The Company shall have the right to
control the defense of all Third Party Claims with counsel reasonably acceptable
to the Indemnified Party, subject to the Indemnified Party's right to
participate in the defense; provided, that the Indemnified Party may control
--------
such defense at the Company and Other Stockholders' expense in the event (i) of
a failure by the Company to assume control of the defense of any Third Party
Claim within five days after the Company is notified of such Third Party Claim,
(ii) that the defense of the Indemnified Party by the Company would be
inappropriate due to actual or potential conflicts of interest between such
Indemnified Party and any other party represented by such counsel in such
proceeding, or (c) the actual or potential defendants in, or targets of, any
such action include both the Indemnified Party and the Company or any Other
Stockholder, and the Indemnified Party reasonably determines that there may be
legal defenses available to such Indemnified Party which are different from or
in addition to those available to the Company and/or any Other Stockholder.
Notwithstanding any assumption of such defense and without limiting the
indemnification obligations provided for under this Section 5, the Indemnified
Party shall have the right to elect to join or participate in the defense of any
Third Party Claim (at its sole expense if the Company is permitted to assume and
continue control of the defense and has elected to do so and otherwise at the
expense of the Company and the Other Stockholders), and no claim shall be
settled or compromised without the consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed.
7
6. MISCELLANEOUS.
--------------
6.1 Governing Law. This Agreement shall be governed by the laws of the
--------------
State of New York.
6.2 Entire Agreement. This Agreement and the other documents delivered
-----------------
pursuant to this Agreement constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof and supersede all prior agreements and merge all prior discussions,
negotiations, proposals and offers (written or oral) between them, and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein. The Exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof.
6.3 Amendments and Waivers. Except as expressly provided in this Agreement,
----------------------
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
6.4 Headings. The titles and subtitles used in this Agreement are used for
--------
convenience only and are not considered in construing or interpreting this
Agreement.
6.5 Construction. All pronouns shall be deemed to refer to the masculine,
------------
feminine or neuter, as the identity of the person referred to may require; the
singular imports the plural and vice versa.
6.6 Notices. All notices and other communications required or permitted
-------
under this Agreement shall be sent by registered or certified mail, postage
prepaid, overnight courier, confirmed telex or facsimile transmission or
otherwise delivered by hand or by messenger, addressed to the parties as follows
(or at such other address as any such party shall have furnished to the other
parties hereto in writing):
If to the Company: With a Copy to:
Hotel Outsource Services, Inc. ________________________________
00 Xxxx Xxxxxx, Xxxxx 00X ________________________________
Xxx Xxxx, Xxx Xxxx 00000 ________________________________
Attention: Xxxxx Xxxxxx Attention:________________________
Facsimile: 011-9723-516-8577 Facsimile:________________________
8
If to Bartech: With a Copy to:
Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx
Bartech Systems International, Inc. and Popeo, P.C.
000 Xxxxxxx Xxxx, Xxxxx X 000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to BarMedit: With a Copy to:
Bartech Mediterranean Ltd.
Trade Tower Building _______________________________
Hammered 25 _______________________________
Tel-Aviv 61500 _______________________________
Israel _______________________________
Attention: Xxxxx Xxxxxx Attention:____________________
Facsimile: 011-9723-516-8577 Facsimile:____________________
If to BarMedit Sub: With a Copy to:
Hila International Corp. ______________________________
00 Xxxx Xxxxxx, Xxxxx 0000 ______________________________
Xxx Xxxx, Xxx Xxxx 00000 ______________________________
Attention: Xxxxx Xxxxxx Attention:____________________
Facsimile: 011-9723-516-8577 Facsimile:____________________
If to any Other Stockholder: With a Copy to:
To the address set forth on Such other person
the Instrument of Accession. as listed on the Instrument
of Accession.
6.7 Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given (i) when delivered if
delivered personally, (ii) if sent by registered or certified mail, at the
earlier of its receipt or three business days after registration or
certification thereof, (iii) if sent by overnight courier, on the next business
day after the same has been deposited with a nationally recognized courier
service, or (iv) when sent by confirmed telex or facsimile, on the day sent (if
a business day) if sent during normal business hours of the recipient, and if
not, then on the next business day.
6.8 No Third Party Beneficiaries. This Agreement shall not confer any
-------------------------------
rights or remedies upon any person other than the parties hereto and their
permitted successors and assigns.
9
6.9 Severability. In the event that any provision of this Agreement becomes
------------
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
6.10 Successors and Assigns. The provisions of this Agreement shall inure
------------------------
to the benefit of, and be binding upon, the permitted successors and assigns of
the parties to this Agreement. Notwithstanding the foregoing, neither Company
nor any Other Stockholder may assign this Agreement without the written consent
of Bartech, and Bartech may not assign this Agreement or its rights hereunder to
any party other than a person or entity that controls, is controlled by, or is
under common control with, Bartech.
6.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument. This Agreement may be delivered by facsimile, and facsimile
signatures shall be treated as original signatures for all applicable purposes.
6.12 Delays and Omissions. Except as expressly provided in this Agreement,
---------------------
no delay or omission to exercise any right, power or remedy accruing any party
hereto or their respective successors or assigns, upon any breach or default by
another party hereto under this Agreement shall impair any such right, power or
remedy of such first party or their respective successors or assigns, as the
case may be, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of a waiver of or acquiescence in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring; provided, however, that this Section 6.11
shall not be interpreted to extend the date or time for any right, privilege or
option beyond that expressly set forth elsewhere in this Agreement. Any waiver,
permit, consent or approval of any kind or character on the part of any holder
of any breach or default under this Agreement, or any waiver on the part of any
holder of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any
holder shall be cumulative and not alternative.
6.13 Further Assurances. The parties agree (a) to furnish upon request to
-------------------
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as they
other party may reasonable request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
{Signature Page Follows.}
10
6.14 IN WITNESS WHEREOF, the parties have hereunto set their hands as
of the date first above written.
HOTEL OUTSOURCE SERVICES, INC.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: /s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: CEO COO
BARTECH SYSTEMS INTERNATIONAL,
INC.
/s/ Xxxxxx Xxxxx
By:_____________________________
Name: Xxxxxx Xxxxx
Title: President and CEO
BARTECH MEDITERRANEAN LTD.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: /s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: Director Director
HILA INTERNATIONAL CORP.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: /s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: Director Director
EXHIBIT A
FORM OF
NOTICE OF INTENT
__________________________
Date
Hotel Outsource Services, Inc.
[Address]
[Address]
[OTHER STOCKHOLDERS]
[Address]
[Address]
Ladies and Gentlemen:
Reference is hereby made to that certain Option Agreement (the "Option
Agreement"), dated as of __________ ___, 2001, between you and Bartech Systems
International, Inc. ("Bartech"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Option Agreement.
You are hereby notified that, pursuant to Section 1.2 of the Option
Agreement, Bartech intends to exercise the Option and is initiating the
procedures set forth and defined in Section 1.2 of the Option Agreement.
Accordingly, please deliver to Bartech the Financial Statements and the
Company's Certificate pursuant to and as required by Section 1.2.
Very truly yours,
BARTECH SYSTEMS INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
A-1
EXHIBIT B
FORM OF
OPTION NOTICE
__________________________
Date
Hotel Outsource Services, Inc.
[Address]
[Address]
[OTHER STOCKHOLDERS]
[Address]
[Address]
Ladies and Gentlemen:
Reference is hereby made to that certain Option Agreement (the "Option
Agreement") dated as of __________ ___, 2001, between you and Bartech Systems
International, Inc. ("Bartech"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Option Agreement.
Bartech hereby exercises its right to purchase all of the Option Shares
covered by the Option Agreement and in accordance with Section 1.2(b) thereof,
requests that you exercise and deliver to Bartech, the Purchase Agreement,
together with all Schedules thereto, and otherwise comply with the requirements
of the Option Agreement in accordance with the terms and provisions set forth
therein.
Very truly yours,
BARTECH SYSTEMS INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
B-1
EXHIBIT C
FORM OF PURCHASE AGREEMENT
(TO BE ATTACHED)
C-1
EXHIBIT D
INSTRUMENT OF ACCESSION
This Instrument of Accession (this "Instrument of Accession") is executed
pursuant to the terms of the Option Agreement by and among Hotel Outsource
Services, Inc., Bartech Systems International, Inc., and certain others parties
thereto, dated as of __________ ___, 2001 (as amended, supplemented or restated,
the "Option Agreement"), a copy of which is attached hereto, by the undersigned.
By executing this instrument of Accession, the undersigned agrees as follows:
1. Acknowledgment. The undersigned acknowledges receipt of the Option
--------------
Agreement and that the undersigned is acquiring _________ shares of the common
stock of Hotel Outsource Services, Inc., subject to the terms and conditions of
the Option Agreement. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Option Agreement.
2. Agreement. The undersigned agrees to be bound by the terms of the Option
---------
Agreement as an "Other Stockholder" with the same force and effect as if the
undersigned were originally a party thereto.
3. Notice. Any notice required or permitted by the Option Agreement shall be
------
given to the undersigned at the address listed below the undersigned's
signature.
Agreed this ____ day of _______, 20___. _______________________________
{Print Name}
Address for Notice Purposes:
_______________________________
_________________________________ {Signature and Title, if applicable}
_________________________________
_________________________________
With a Copy to:
_________________________________
_________________________________
D-1
