Exhibit 10.1
STOCK PURCHASE AGREEMENT
by and between
HIS ASIA, PTE. LIMITED, HOTEL INFORMATION SYSTEMS, INC.
and
HOSPITALITY SERVICES & SOLUTIONS PTE LTD.
AND ITS SUBSIDIARIES
AND SHAREHOLDERS
Dated as of June 23, 2002
TABLE OF CONTENTS
ARTICLE I
Purchase and Sale
1.1 Purchase and Sale............................................................... 6
1.2 Purchase Price.................................................................. 6
1.3 Payment of Purchase Price and Other Obligations................................. 6
1.4 Closing......................................................................... 6
ARTICLE II
Representations and Warranties of HSS, the HSS Subsidiaries
and the HSS Shareholders
2.1 Organization and Authority...................................................... 7
2.2 Noncontravention................................................................ 8
2.3 No Governmental Consent or Approval Required.................................... 8
2.4 Subsidiaries of the HSS Subsidiaries............................................ 8
2.5 Capitalization of HSS........................................................... 8
2.6 Financial Statements............................................................ 8
2.7 Undisclosed Liabilities......................................................... 9
2.8 Absence of Certain Developments................................................. 9
2.9 Title to Properties............................................................. 9
2.10 Contracts...................................................................... 10
2.11 Litigation..................................................................... 10
2.12 Compliance with Law; Governmental Permits...................................... 10
2.13 Employee Benefit Plans......................................................... 11
2.14 Certain Interests.............................................................. 11
2.15 Intercompany and Related Party Transactions.................................... 12
2.16 No Brokers or Finders.......................................................... 12
2.17 Environmental Matters.......................................................... 12
2.18 HSS Shareholder's Breach of Representations and Warranties - Post Closing...... 12
ARTICLE III
Representations and Warranties of HIS Asia and HIS
3.1 Organization and Authority...................................................... 13
3.2 Noncontravention................................................................ 13
3.3 No Governmental Consent or Approval Required.................................... 13
3.4 Financial Capability............................................................ 14
ARTICLE IV
Covenants
4.1 Due Diligence and Access........................................................ 14
4.2 Conduct of Business............................................................. 14
4.3 Commercially Reasonable Efforts; Government Approvals........................... 15
4.4 Confidentiality................................................................. 16
4.5 Employee Benefits; Employees.................................................... 16
4.6 Insurance ...................................................................... 17
4.7 Local Laws Relating to Corporate Changes in Control and Personnel............... 17
ARTICLE V
Tax Matters
5.1 Definitions..................................................................... 17
5.2 Tax-Related Representations and Warranties...................................... 17
5.3 Liability for Taxes and Related Matters......................................... 18
5.4 Tax Returns..................................................................... 19
5.5 Transfer Taxes.................................................................. 19
5.6 Information to be Provided by the Purchaser..................................... 19
5.7 Tax Proceedings................................................................. 19
5.8 Assistance and Cooperation...................................................... 20
5.9 Survival, Etc................................................................... 20
ARTICLE VI
Conditions to Closing
6.1 Conditions to the Obligations of the Purchaser.................................. 20
6.2 Conditions to the Obligations of HSS............................................ 21
ARTICLE VII
Investment Representations and Shareholder Rights
7.1 Shareholder's Investment Representations ....................................... 22
7.2 Accredited Investor............................................................. 23
7.3 Purchaser Information........................................................... 23
7.4 HIS Asia and MAI Shares Legend.................................................. 23
7.5 Purchaser's Investment Representations.......................................... 23
7.6 Shareholder's Agreement......................................................... 24
7.7 Registration of MAI Common Stock................................................ 24
ARTICLE VIII
Indemnification
8.1 Survival of Representations, Warranties, Covenants and Agreements............... 24
ARTICLE IX
Certain Definitions
9.1 Certain Definitions............................................................. 24
ARTICLE X
Miscellaneous
10.1 Amendments..................................................................... 27
10.2 Assignment..................................................................... 27
10.3 Notices........................................................................ 28
10.4 Severability................................................................... 29
10.5 Governing Law.................................................................. 29
10.6 Interpretation................................................................. 29
10.7 Entire Agreement............................................................... 30
10.8 Publicity and Confidentiality.................................................. 30
10.9 Expenses....................................................................... 30
10.10 No Third Party Beneficiaries.................................................. 30
10.11 Jurisdiction; Arbitration; Waivers............................................ 30
10.12 Counterparts.................................................................. 31
EXHIBITS
A. Opinion of HSS' Counsel
B. HSS Closing Certificate
C. Opinion of Purchaser's Counsel
D. Purchaser's Closing Certificate
E. Shareholder's Agreement
SCHEDULES
0.1 HSS Subsidiaries
2.4(a) Exceptions to Qualification to do Business
2.4(b) Directors and Executive Officers of HSS
2.4(c) List of Subsidiaries of HSS Subsidiaries
2.9(a) Personal Property
2.9(b) Real Property (Including Premises Lease)
2.10(a) Agreements
2.10(b) Consents, Approvals and Waivers Relating to Material Contracts
2.11 Litigation
2.12 Compliance with Law
2.13 Employee plan exceptions
2.13(a) List of Employee Benefit Plans
2.14 Certain Interests
2.15 Intercompany and Related Party Transactions
2.17 Environmental Matters
5.2(a) Tax sharing agreements, etc.
5.2(b) Tax Returns, etc.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated as of June ___, 2002, is made by and
between HIS Asia, Pte. Limited, a Singapore Corporation ("HIS ASIA") and Hotel
Information Systems, Inc., a Delaware corporation ("HIS"), MAI Systems
Corporation, a Delaware corporation ("MAI")(HIS Asia and HIS are referred to
collectively herein as the "Purchaser"), and Hospitality Services & Solutions,
Pte Ltd., a Singapore limited liability company ("HSS") and its subsidiaries,
Hospitality Solutions (Malaysia) Sdn Bhd, a Malaysian company; HSI (Thailand)
Ltd., a Thai company; and Xxxxxx Business Systems Pte Ltd, a Singapore company
(collectively, "HSS Subsidiaries") and the shareholders of HSS, Xxxxxxx Xxxxx
and Regional Investment Co. Ltd., a Singapore company (collectively, "HSS
Shareholders").
RECITALS
A. Xxxxxxx Xxxxx, an Individual residing in Singapore (the
"Individual Shareholder") and Regional Investment Co. Ltd., a Singapore company
(the "Corporate Shareholder")(the Individual Shareholder and the Corporate
Shareholder are referred to collectively herein as the "HSS Shareholders") own
200,000 shares representing 100% of the issued and outstanding capital stock of
HSS (the "Stock"). HSS owns the percentage interests in the HSS Subsidiaries as
set forth on Schedule 0.1 attached hereto.
B. For purposes of this Agreement, the Stock shall also include
HSS' ownership interest in each of HSS's subsidiaries existing on the Closing
Date as set forth on Schedule 0.1 attached hereto, through which a significant
portion of the Business is conducted. As used herein the term "Business" shall
include the business and operations of HSS and the HSS Subsidiaries. HSS and the
HSS Subsidiaries are engaged in the Business of developing, selling and
supporting products that serve the hospitality and lodging industry (this and
other capitalized terms shall have the meanings assigned to such terms in
Article IX).
C. The Purchasers desires to purchase the Stock, and HSS
Shareholders desire to sell the Stock to the Purchaser, all on the terms and
conditions set forth herein.
D. HIS Asia, the successor to Purchasers' hospitality businesses
servicing Asia and Australia, including Hotel Information Systems Pte Ltd., a
Singapore Company; HIS Solutions Malaysia Sdn Bhd, a Malaysian company; Hotel
Information Systems, Ltd., a Hong Kong company; and Boss Solutions Limited, a
Hong Kong company, has been formed to continue the Business on and after the
Closing hereinafter described.
5
NOW THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale
I.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, the HSS Shareholders shall sell to the Purchaser,
and the Purchaser shall purchase from the HSS Shareholders, all of their right,
title and interest in and to the Stock, free and clear of all Liens (as defined
in Article IX.1). Any reference herein to the transfer of the Stock or similar
reference shall be deemed to include the transfer of the shares of each of the
HSS Subsidiaries owned by HSS and their ownership interest in their own
subsidiaries as listed on Schedule 2.4(c). The HSS Shareholders shall deliver at
the Closing the certificate(s) evidencing the Stock, properly endorsed, or
accompanied by a duly executed stock power duly endorsed, in blank.
I.2 Purchase Price. In consideration for the Stock and as payment
in full therefor, the Purchaser shall pay the Purchase Price as follows: (a) the
HSS Shareholders shall receive (in such proportions as they shall agree among
themselves and advise Purchaser of on or prior to the Closing) (i) 20% of the
outstanding stock of HIS Asia, which the parties agree shall consist of 200
shares of HIS Asia's common stock to be delivered within ten (10) business days
after Closing; (ii) US$75,000 in cash payable US$50,000 within 30 days of
Closing and US$25,000 payable in eleven payments of US$2,000 and a final payment
of US$3,000, with the initial monthly payment commencing 60 days from Closing
and continuing monthly thereafter until paid; and (iii) 100,000 shares of MAI
restricted (Rule 144) common stock to be delivered to the HSS Shareholders (in
such proportions as they shall agree among themselves and advise Purchaser of on
or prior to the Closing) within ten (10) business days after Closing.
I.3 Payment of Purchase Price and Other Obligations. If the
obligations of the parties to proceed with the Closing set forth in Article VI
are satisfied or waived, at the Closing, the Purchaser shall pay the Purchase
Price as described in Section I.2 above. The Purchaser shall pay the liabilities
of HSS and the HSS Subsidiaries to their officers and directors as set forth in
Schedule 2.14 as of May 31, 2002 and excluding accrued interest, in twelve (12)
monthly installments commencing twelve (12) months after the Closing described
in Section I.4 .
I.4 Closing. The closing (the "Closing") of the purchase and sale
of the Stock shall take place no later than June 30, 2002 at the offices of MAI
Systems Corporation, 0000 Xxxxxxxx Xxxx, Xxxxxx, XX 00000 as soon as practicable
after the
6
satisfaction or waiver of the conditions set forth in Article VI, or at such
other time and place as the parties shall mutually agree. The date on which the
Closing actually occurs is herein referred to as the "Closing."
ARTICLE II
Representations and Warranties of HSS, the HSS Subsidiaries and
the HSS Shareholders
HSS, the HSS Subsidiaries and the HSS Shareholders (as the case
may be) represent and warrant to the Purchaser as of the Closing that:
II.1 Organization and Authority. HSS and the HSS Subsidiaries are
companies duly organized, validly existing and in good standing under the laws
of the jurisdiction of their formation and have full corporate power and
authority to conduct the Business as it was conducted prior to Closing and to
own or lease all of their properties and assets. HSS and each of the HSS
Subsidiaries is duly qualified or licensed to do business as a foreign
corporation, and is in good standing as a foreign corporation, in every
jurisdiction in which the ownership of its property or assets or the conduct or
nature of the Business requires such qualification or license, and Schedule 0.1
sets forth a true and complete list of all such jurisdictions. HSS and each of
the HSS Subsidiaries has previously delivered to the Purchaser true and complete
copies of their Certificates of Incorporation and Bylaws (or their equivalents)
as in effect on Closing. The Corporate Shareholder is a company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation. HSS and the Corporate Shareholder have the requisite corporate power
and authority to execute, deliver and perform this Agreement and such other
documents as are contemplated hereunder to be executed and delivered at or prior
to the Closing. The execution, delivery and performance by HSS and the Corporate
Shareholder of this Agreement and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of HSS and the Corporate Shareholder.
This Agreement constitutes a valid and, assuming due execution and delivery by
the Purchaser, binding obligation of HSS and the Corporate Shareholder,
enforceable against HSS and the Corporate Shareholder in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting creditors' rights generally, and to general equitable
principles. Upon execution and delivery of the Ancillary Agreements by the
parties thereto, such Ancillary Agreements will constitute valid and binding
obligations of HSS and the Corporate Shareholder, enforceable against HSS and
the Corporate Shareholder in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally, and to general equitable principles.
7
II.2 Noncontravention. The execution, delivery and performance of
this Agreement by HSS and the Corporate Shareholder, the performance of this
Agreement by HSS and the Corporate Shareholder and the consummation of the
transactions contemplated hereby will not violate or conflict with, or
constitute a breach or default under (a) the certificate of incorporation or
bylaws (or equivalents) of HSS, the HSS Subsidiaries and the Corporate
Shareholder or (b) any law, regulation, order, judgment or decree applicable to
HSS, the HSS Subsidiaries or the Corporate Shareholder.
II.3 No Governmental Consent or Approval Required. No
authorization, consent, Permit, approval or other order of, declaration to, or
registration, qualification, designation or filing with, any Governmental Entity
is required for or in connection with the execution, delivery and performance of
this Agreement by HSS and the Corporate Shareholder, the performance of this
Agreement by HSS and and the Corporate Shareholder and the consummation of the
transactions contemplated hereby, other than (a) the filing of notification
under any applicable laws and the expiration or early termination of the waiting
period thereunder, and (b) any consents, the failure to obtain would not
prohibit the transfer of the Stock or the consummation of any of the
transactions contemplated hereby or create a Lien on the Stock.
II.4 Subsidiaries of the HSS Subsidiaries. The HSS Subsidiaries
have no subsidiaries except as listed on Schedule 2.4(c). References herein to
the HSS Subsidiaries include their subsidiaries, except as the context may
otherwise require.
II.5 Capitalization of HSS. The entire authorized capital stock
of HSS consists of 200,000 shares of Common Stock of which 200,000 shares are
issued and outstanding. All of the Stock has been duly authorized and validly
issued and is fully paid and non-assessable. There are no outstanding warrants,
options, subscription, conversion, pre-emptive or other rights entitling any
other Person to purchase or otherwise acquire any capital stock of HSS or the
HSS Subsidiaries . The HSS Shareholders have good and valid title to all of the
Stock, free and clear of all Liens and, subject to applicable securities laws
and competition laws, free of any restriction on their right to transfer or
exercise any voting or other right with respect thereto. At the Closing, good
and valid title to the Stock, free and clear of all Liens, encumbrances,
equities or claims shall be transferred from the HSS Shareholders to the
Purchaser who has purchased such Stock without notice of an adverse claim
thereto (within the meaning of applicable foreign laws and the Uniform
Commercial Code).
II.6 Financial Statements. HSS will, prior to closing, have
delivered to the Purchaser the consolidated balance sheets of HSS and the HSS
Subsidiaries as of May 31, 2002 (the "Balance Sheet") and its consolidated
statements of operations and cash flows for the years ended December 31, 2000
and 2001 (together with the Balance Sheet, the "Financial Statements"). HSS will
also, within ten (10) days after Closing, deliver a final
8
Balance Sheet dated as of the Closing Date. The Financial Statements were
prepared in accordance with GAAP or its local equivalent, consistently applied,
and, fairly and accurately present the financial position of HSS and the HSS
Subsidiaries as of the respective dates thereof and the results of operations,
changes in financial position and cash flow of HSS and the HSS Subsidiaries for
the respective periods covered thereby.
II.7 Undisclosed Liabilities. HSS, the HSS Subsidiaries and the
HSS Shareholders have no Knowledge of any liabilities required to be set forth
on the Balance Sheet in accordance with GAAP or its local equivalent, except for
(a) liabilities incurred in the ordinary course of business since the date of
the Balance Sheet and (b) liabilities that would not reasonably be expected to
have a Material Adverse Effect.
II.8 Absence of Certain Developments. Since the date of the
Balance Sheet, there has not been, , (a) any change or event that has had or
would reasonably be expected to have a Material Adverse Effect on the Business,
other than (x) changes relating to or arising from general economic, market or
financial conditions or generally affecting the industries or markets in which
HSS or the HSS Subsidiaries operate or (y) changes relating to or arising from
the consummation or disclosure of this Agreement or any transaction contemplated
by this Agreement, (b) any declaration, setting aside or payment of any dividend
or other distribution with respect to the capital stock of HSS or the HSS
Subsidiaries, (c) any loss, destruction or damage to any property of HSS or the
HSS Subsidiaries, whether or not insured, that has had or would reasonably be
expected to have a Material Adverse Effect on the Business, or (d) any material
change in any of the significant accounting policies, practices or procedures of
HSS or the HSS Subsidiaries with respect to the Business.
II.9 Title to Properties.
(a) Personal Property. Schedule II.9(a) sets forth the list of
personal property of HSS and the HSS Subsidiaries being transferred to Purchaser
at Closing. Except as disclosed in the Financial Statements, HSS and the HSS
Subsidiaries have, good and marketable title to, or a valid leasehold interest
in, all of the personal properties and assets held, occupied or used primarily
in the Business, free and clear of all Liens other than (a) the lien of current
taxes not yet due and payable, (b) Permitted Liens or (c) such other Liens which
do not materially detract from the use of the property.
(b) Real Property. Schedule 2.9(b) lists all real properties
currently owned or leased by HSS and the HSS Subsidiaries, including all
premises leases (collectively, the "Real Property"). HSS or the HSS Subsidiaries
have good and marketable title to (or a leasehold interest in) all Real Property
shown as owned or leased, if applicable, by it on Schedule 2.9(b), free and
clear of all Liens other than Permitted Liens or such other Liens which do not
materially detract from the value of such property.
9
II.10 Contracts. Attached as Schedule 2.10(a) is a true and
complete list of all debt instruments, contracts, leases, license agreements,
employment and labor agreements, and other agreements to which HSS or the HSS
Subsidiaries or any of their respective properties is subject or by which any
thereof is bound which is either (a) material to the continued conduct of the
Business as currently conducted or (b) which pursuant to its terms imposes
payment obligations on HSS or the HSS Subsidiaries in excess of $50,000 annually
or $300,000 in the aggregate ("Material Contracts"). Except as disclosed in
Schedule 2.10(b), each Material Contract is in full force and effect; and no
breach or default or event which would (with the passage of time, notice or
both) constitute a breach or default thereunder by HSS or the HSS Subsidiaries
or, to the Knowledge of HSS, any other party or obligor with respect thereto,
exists and is continuing which in each case would reasonably be expected to
materially impair the benefits expected to be derived therefrom. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in a breach of or default under
any Material Contract, will not (and will not give any Person a right to)
terminate or modify any rights of, or accelerate or augment any material
obligation of, HSS or the HSS Subsidiaries, and do not require any consent,
approval, waiver or other action by any party to any such Material Contract,
other than the matters identified in Schedule 2.10(b).
II.11 Litigation. To the Knowledge of HSS, the HSS Subsidiaries
and the HSS Shareholders and except as disclosed in Schedule 2.11, there is no
written claim, filed complaint, arbitration, action, suit, proceeding or
investigation pending or threatened, against or affecting the Business, (a)
which if resolved adversely to would reasonably be expected to result in a
Material Adverse Effect on the Business, or (b) seeking to prevent or challenge
in any other manner the consummation of the transactions contemplated hereby.
There is no organized labor strike, dispute, slowdown or stoppage, or collective
bargaining or unfair labor practice claim pending, or to the Knowledge of HSS,
threatened, against or affecting the Company, nor are there, to the Knowledge of
HSS, any union organizing efforts with respect to employees of HSS or the HSS
Subsidiaries..
II.12 Compliance with Law; Governmental Permits. To the Knowledge
of HSS, the HSS Subsidiaries and the HSS Shareholders and except as set forth in
Schedule 2.12, HSS or the HSS Subsidiaries are in compliance with all laws,
regulations, orders, judgments and decrees of any Governmental Entity which are
applicable to the Business, except such noncompliance as would not reasonably be
expected to have a Material Adverse Effect on the Business and HSS holds and
will transfer to the Purchaser at Closing, all Permits that are required by any
Governmental Entity to permit the Purchaser to conduct the Business as now
conducted, except for such Permits the absence of which would not reasonably be
expected to have a Material Adverse Effect on the Business. To the Knowledge of
HSS, each such material Permit is in full force and effect, except for any such
Permit the absence of which would not reasonably be expected to have a Material
10
Adverse Effect on the Business. To the Knowledge of HSS, no suspension,
cancellation or termination of any of such material Permits is threatened or
imminent.
II.13 Employee Benefit Plans. Except as disclosed in Schedule
2.13:
(a) All benefit and compensation plans and agreements maintained
by HSS or the HSS Subsidiaries which cover current employees of HSS or the HSS
Subsidiaries (the "Employees"), including, but not limited to, employee benefit
plans, deferred compensation, stock option, stock purchase, stock appreciation
rights, stock based, incentive and bonus plans and severance plans (the "Benefit
Plans"), are listed in Schedule 2.13(a). True and complete copies of all Benefit
Plans, including, but not limited to, any trust instruments and insurance
contracts forming a part of any Benefit Plans, and all amendments thereto have
been provided or made available to Purchaser.
(b) To the Knowledge of HSS, the HSS Subsidiaries and the HSS
Shareholders, all Benefit Plans maintained by HSS or the HSS Subsidiaries which
cover Employees (the "Plans"), are in substantial compliance with any applicable
local laws and there is no material pending or, to the Knowledge of HSS,
threatened, litigation relating to the Plans. HSS or the HSS Subsidiaries have
not engaged in a transaction with respect to any Plan that, assuming the taxable
period of such transaction expired as of the date hereof, could subject them to
a tax or penalty imposed by local laws in an amount which would be material.
(c) To the Knowledge of HSS, the HSS Subsidiaries and the HSS
Shareholders, all contributions required to be made under the terms of any
Benefit Plan have been timely made or have been reflected on the Financial
Statements.
(d) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any employees of HSS or the HSS Subsidiaries to
severance pay, (ii) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Benefit Plans or (iii) result in any breach
or violation of, or a default under, any of the Benefit Plans.
II.14 Certain Interests. Except as set forth on Schedule 2.14
hereto, no officer or director of HSS or the HSS Subsidiaries is indebted or
otherwise obligated to HSS or the HSS Subsidiaries, and HSS or the HSS
Subsidiaries are not indebted or otherwise obligated to any such officer or
director, except for amounts due under normal arrangements applicable to all
employees generally as to salary or reimbursement of ordinary business expenses
or as set forth on Schedule 2.14.
11
II.15 Intercompany Transactions. To the Knowledge of HSS, the HSS
Subsidiaries and the HSS Shareholders and except as described in the financial
statements or Schedule 2.15, incurred in the ordinary course of business since
the date of the Balance Sheet or that is contemplated by, or will be discharged
or terminated pursuant to this Agreement, HSS has no liabilities or obligations
to the HSS Subsidiaries or related parties and none of the HSS Subsidiaries has
any obligations to HSS.
II.16 No Brokers or Finders. No agent, broker, finder, or
investment or commercial banker or other Person or firm engaged by or acting on
behalf of HSS or any of the HSS Subsidiaries in connection with the negotiation,
execution or performance of this Agreement or the transactions contemplated by
this Agreement, is or will be entitled to any brokerage or finder's or similar
fee or other commission as a result of this Agreement or such transaction.
II.17 Environmental Matters. To the Knowledge of HSS, the HSS
Subsidiaries and the HSS Shareholders and except as set forth in Schedule 2.17,
or as would not be expected to have a Material Adverse Effect on the Business:
(i) HSS and the HSS Subsidiaries are in substantial compliance with all
applicable Environmental Laws; (ii) HSS or the HSS Subsidiaries have not
received any written notices from any Governmental Entity alleging the violation
of any applicable Environmental Laws other than for matters that have been fully
resolved; (iii) HSS or the HSS Subsidiaries are not subject to any court order,
administrative order or decree arising under any Environmental Law; and (iv) HSS
or the HSS Subsidiaries have not disposed of any Hazardous Substance on any
property owned or operated by them or had any emissions or discharges of any
Hazardous Substances except as permitted under applicable Environmental Laws.
II. 18 HSS Shareholder's Breach of Representations and Warranties
-- Post Closing. In the event that any representation and warranty made by the
HSS Shareholders in this Agreement is determined after closing to have been
false when made, and HIS Asia sustains money damages as result thereof,
Purchaser, may for twelve (12) months following the Closing, pursue the HSS
Shareholders for its actual damages, subject to the limitations contained in
this section, incurred by HIS Asia solely as the result of such
misrepresentation. Notwithstanding anything to the contrary contained in this
Agreement, in no event whatsoever shall HIS Asia have the right to seek or
recover its first One Hundred Thousand ($100,000) Dollars of its money damages
from the HSS Shareholders nor shall it have the right to seek any sum in excess
of Two Hundred Thousand ($200,000.00) Dollars from the HSS Shareholders. The
foregoing states the HSS Shareholders' sole liability to Purchaser after the
Closing. Purchaser shall have no right to deduct or set off sums claimed under
this Section from any money or other consideration owed to Xxxxxxx Xxxxx
pursuant to his employment with HIS Asia.
12
ARTICLE III
Representations and Warranties of HIS Asia and HIS
The Purchaser, HIS Asia and HIS hereby represent and warrant to
HSS and the HSS Shareholders that:
III.1 Organization and Authority. HIS Asia and HIS are companies
or corporations duly organized, validly existing and in good standing under the
laws of Singapore and the state of Delaware, respectively, and HIS Asia is the
successor to Purchasers' hospitality businesses servicing Asia and Australia,
including Hotel Information Systems Pte Ltd., a a Singapore Company, HIS
Solutions Malaysia Sdn Bhd, a Malaysian company, Hotel Information Systems,
Ltd., a Hong Kong company, and Boss Solutions Limited, a Hong Kong company . The
Purchaser has full power and authority to execute, deliver and perform this
Agreement. The execution, delivery and performance by the Purchaser of this
Agreement and any Ancillary Agreement to which the Purchaser is to be a party
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement constitutes a valid and, assuming due execution by HSS
and the HSS Shareholders, binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles. Upon execution
and delivery of the Ancillary Agreements to which the Purchaser is to be a party
by the parties thereto, such Ancillary Agreements will constitute valid and
binding obligations of the Purchaser, enforceable against the Purchaser in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally, and to general equitable principles.
III.2 Noncontravention. The execution, delivery and performance
of this Agreement by the Purchaser and the consummation of the transactions
contemplated hereby will not violate or conflict with, or constitute a breach or
default (whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under (a) the charter documents of the Purchaser or (b) any law,
regulation, order, judgment, or decree applicable to the Purchaser.
III.3 No Governmental Consent or Approval Required. To the best
of its knowledge no authorization, consent, Permit, approval or other order of,
declaration to, or
13
registration, qualification, designation or filing with, any Governmental Entity
or any other Person is required for or in connection with the execution,
delivery and performance of this Agreement by the Purchaser and the consummation
of the transactions contemplated hereby, other than (a) the filing of
notification under appropriate local laws and the expiration or early
termination of the waiting period thereunder and (b) any consents, the failure
to obtain would not prohibit the transfer of the Stock or the consummation of
any of the transactions contemplated hereby.
III.4 Financial Capability. The Purchaser has, or has access to,
sufficient funds to make the payment of the Purchase Price on the terms and
conditions contemplated by this Agreement.
ARTICLE IV
Covenants
IV.1 Due Diligence and Access. HSS has permitted the Purchaser
and its representatives to have access, during regular business hours, to the
assets, employees, books and records of HSS or the HSS Subsidiaries relating to
the Business, and has furnished, or caused to be furnished, to the Purchaser and
its representatives such financial, tax and operating data and other available
information with respect to the Business as the Purchaser.
IV.2 Conduct of Business. Since the review by Purchasers, HSS has
conducted the Business in the ordinary and usual course consistent with past
practice, and use its commercially reasonable efforts to preserve intact the
Business and related relationships with customers, service providers and other
third parties and has not:
(a) issued or transferred any capital stock of HSS or the
HSS Subsidiaries or any security convertible into or exchangeable for
any such capital stock or any right to acquire any such capital stock;
(b) made any change in their respective certificates of
incorporation or bylaws;
(c) disposed of any material part of their assets or
property;
(d) incurred or assumed any indebtedness for borrowed
money or guarantee any such indebtedness other than in the ordinary
course of business consistent with past practice;
(e) liquidated, dissolved or otherwise reorganized or
sought protection from creditors;
14
(f) adopted or amended in any respect any Benefit Plan if
such will increase the obligation of Purchaser;
(g) entered into any lease for real property, except
renewals of existing leases in the ordinary course of business;
(h) entered into any contract or agreement or engage in
any other type of transaction with between HSS and the HSS Subsidiaries
other than in the normal course of business consistent with past
practice; or
(i) agreed or committed itself to do any of the
foregoing.
IV.3 Commercially Reasonable Efforts; Government Approvals.
(a) Upon the terms and subject to the conditions herein provided,
each of the parties hereto agrees to use its commercially reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary for it to do under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, (i) to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and the
transactions contemplated hereby (which actions shall include, without
limitation, furnishing all information required by applicable laws and
regulations in connection with approvals of or filings with any Governmental
Entity), (ii) to satisfy the conditions precedent to the obligations of the
parties hereto and (iii) to obtain any consent, authorization, order or approval
of, or any exemption by, any Governmental Entity or other public or private
third party required to be obtained or made by the Purchaser, HSS or the HSS
Subsidiaries in connection with the acquisition of the Stock or the taking of
any action contemplated by this Agreement.
(b) Subject to appropriate confidentiality protections, each of
the parties hereto shall furnish to the other party such necessary information
and reasonable assistance as such other party may reasonably request in
connection with the foregoing and shall provide the other party with copies of
all filings made by such party with any Governmental Entity and, upon request,
any other information supplied by such party to a Governmental Entity in
connection with this Agreement and the transactions contemplated hereby.
(c) Without limiting the generality of the foregoing, the
Purchaser and HSS agree to take or cause to be taken the following actions where
required by any appropriate local laws: (i) provide promptly to Governmental
Entities with regulatory jurisdiction over enforcement of any applicable
Competition Laws ("Governmental Antitrust Entity") information and documents
requested by any Governmental Antitrust Entity or
15
necessary, proper or advisable to permit consummation of the acquisition of the
Stock and the transactions contemplated by this Agreement and (ii) without in
any way limiting the other provisions of this Section 4.3, file any notification
and report form and related material required under applicable local laws as
soon as practicable and in any event not later than 10 Business Days after the
date hereof, and thereafter use its reasonable best efforts to certify as soon
as practicable its substantial compliance with any requests for additional
information or documentary material that may be made under local laws Each party
hereto shall provide to the other copies of all correspondence between it (or
its advisor) and any Governmental Antitrust Entity relating to the acquisition
of the Stock or any matters described in this Section 4.3. Each party hereto
agrees that the other party shall have the right to participate in any meeting
between the first party and any Governmental Antitrust Entity relating to the
acquisition of the Stock or any matters described in this Section 4.3.
IV.4 Confidentiality. Each party hereto, will hold all
confidential information provided to such party by or on behalf of the other
party hereto in confidence pursuant to the terms of the Confidentiality
Agreement. Upon any termination of this Agreement, each party hereto will
promptly return to the other party such information provided to the first party,
including any copies of such information. Each party hereto acknowledges that
the other party would be irreparably harmed by a breach of this Section 4.4 and
that there would be no adequate remedy at law or in damages to compensate the
other party for any such breach and agrees that, in addition to any other
remedy, the other party shall be entitled to one or more injunctions requiring
specific performance by the first party of this Section 4.4, and the first party
consents to the entry thereof.
IV.5 Employee Benefits; Employees. The Purchaser shall, on and
for at least one year after the Closing, provide the employees of HIS Asia with
employee benefit and compensation plans, programs, policies and arrangements
which are (i) no less favorable in the aggregate than the benefit and
compensation plans, programs, policies and arrangements currently being provided
by MAI's wholly owned Singapore subsidiary, Hotel Information Systems, Pte.
Limited, to their employees prior to the Closing. Each such employee benefit and
compensation plan, program, policy or arrangement shall give full credit for
each participant's period of service with HSS or the HSS Subsidiaries prior to
the Closing for purposes of determining eligibility, vesting and the amount of
benefits (including subsidies relating to such benefits). Each employee welfare
benefit plan provided to the employees of HIS Asia from and after the Closing
shall (i) give full credit for co-payments, deductibles and out-of-pocket
expenses under HSS or the HSS Subsidiaries' Benefit Plans with respect to the
current plan year toward any deductibles for the remainder of the plan year
during which the Closing occurs, and (ii) shall waive any pre-existing condition
limitation for any employee covered under a Benefit Plan (which is a group
health plan) immediately prior to the Closing.
16
IV.6 Insurance.
(a) Prior to the Closing, HSS shall have taken such action as may
have been required to ensure that any insurance coverage for any claims that
have been filed with the applicable insurers prior to the Closing relating to
HSS or the HSS Subsidiaries will continue with respect to such claims following
the Closing, and HSS agrees to pay insurance proceeds (net of any out-of-pocket
unreimbursed costs or expenses of HSS or the HSS Subsidiaries incurred in
defense of such claim) resulting from such coverage promptly after receipt
thereof. From and after the date hereof, HSS shall diligently pursue insurance
coverage for any claims filed with third party insurers prior to the Closing
relating to HSS or the HSS Subsidiaries. Following the Closing, HIS Asia shall
be responsible for the control of all claims filed with third party insurers,
subject to the control exercised by any insurers in accordance with the
applicable insurance policies.
(b) As of the Closing, the coverage under all insurance policies
related to HSS or the HSS Subsidiaries may be continued in force for the benefit
of HIS Asia at the expense of HIS Asia. HIS Asia agrees to arrange for its own
insurance policies with respect to its operations, within thirty (30) days after
Closing.
IV.7 Local Laws Relating to Corporate Changes in Control and
Personnel. The Purchaser shall comply with any local laws relating to corporate
changes in control or personnel.
ARTICLE V
Tax Matters
V.1 Definitions. For purposes of this Agreement, "Taxes" shall
mean all federal, state, local and foreign income, property, sales and use,
excise, withholding, franchise, transfer, gross receipt, capital stock,
production, business and occupation, disability, employment, payroll, severance
or similar taxes imposed on the income, properties or operations of HSS or the
HSS Subsidiaries, together with any penalties, additions or interest relating
thereto and any interest in respect of such additions or penalties; "Tax Return"
shall mean all reports and returns required to be filed with respect to Taxes
including, without limitation, combined or consolidated returns for HSS or the
HSS Subsidiaries.
17
V.2 Tax-Related Representations and Warranties.
(a) Tax Allocation Agreements. HSS represents and warrants to the
Purchaser that, except as disclosed in Schedule 5.2(a), HSS or the HSS
Subsidiaries are not a party to any agreement, contract or understanding
relating to any sharing by HSS or the HSS Subsidiaries of any Tax liability of
any other Person.
(b) Tax Returns and Reports. HSS represents and warrants to the
Purchaser that except as set forth in Schedule 5.2(b), (i) all Tax Returns that
are required to be filed by or with respect to HSS or the HSS Subsidiaries, have
been or will be duly filed, (ii) all Taxes shown to be due on the Tax Returns
referred to in clause (i) have been or will be paid in full, (iii) all
deficiencies asserted or assessments made on or before closing as a result of
any tax examinations have been settled or paid in full, (iv) no issues that have
been raised in writing on or before Closing by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred to in clause
(i) are currently pending and (v) no waivers of statutes of limitation have been
given by or requested with respect to any Taxes of HSS or the HSS Subsidiaries.
(c) No Withholding. HSS represents and warrants to the Purchaser
that no tax is required to be withheld pursuant to such local laws as are
applicable as a result of the transfer contemplated by this Agreement.
V.3 Liability for Taxes and Related Matters.
(a) Liability of HSS for Taxes. HSS and the HSS Subsidiaries
shall be liable for and indemnify Purchaser for all Taxes including, without
limitation, any obligation to contribute to the payment of a tax determined on a
consolidated, combined or unitary basis with respect to a group of corporations
that includes or included HSS or the HSS Subsidiaries and Taxes resulting from
HSS or the HSS Subsidiaries ceasing to be an affiliate, (i) imposed on HSS or
the HSS Subsidiaries for any taxable year, (ii) imposed on HIS Asia or for which
HIS Asia may otherwise be liable for any taxable year or period that ends on or
before the Closing and, with respect to any taxable year or period beginning
before and ending after the Closing Date, the portion of such taxable year
ending on and including the Closing Date. HSS shall be entitled to any refund of
Taxes of HIS Asia receives for such periods.
(b) Liability of Purchaser for Taxes. The Purchaser shall be
liable for and shall indemnify HSS, the HSS Subsidiaries and HSS Shareholders
for the Taxes of HIS Asia for any taxable year or period that begins after
Closing and, with respect to any taxable year or period beginning before and
ending after the Closing, the portion of such taxable year beginning after the
Closing. The Purchaser shall be entitled to any refund of Taxes of HIS Asia
received for such periods.
18
(c) Tax Periods. With respect to any Taxes for any taxable period
that includes but does not end as of the Closing, the amount of Taxes subject to
indemnification hereunder shall be calculated as if such taxable period ended as
of the close of business on the Closing, except that property Taxes and
exemptions, allowances or deductions that are calculated on an annual basis
shall be prorated based on the number of days in the annual period elapsed
through the Closing compared to the number of days in the annual period elapsing
after the Closing.
V.4 Tax Returns. HSS shall file or cause to be filed when due all
Tax Returns that are required to be filed by or with respect to HSS or the HSS
Subsidiaries for taxable years or periods ending on or before the Closing and
shall pay any Taxes due in respect of such Tax Returns, and Purchaser shall
prepare in accordance with past practice and shall file or cause to be filed
when due all Tax Returns that are required to be filed by or with respect to HIS
Asia for taxable years or periods ending after the Closing (and its predecessors
for periods ending after the Closing) and shall remit any Taxes due in respect
of such Tax Returns.
V.5 Transfer Taxes. Notwithstanding anything to the contrary in
this Article, the parties shall equally bear all transfer taxes arising in
connection with the transactions under this Agreement.
V.6 Information to be Provided by the Purchaser. With respect to
the period prior to the Closing, the Purchaser shall promptly cause HIS Asia to
prepare and provide to HSS a package of tax information materials (the "Tax
Package"), which shall be completed in accordance with past practice including
past practice as to providing the information, schedules and work papers and as
to the method of computation of separate taxable income or other relevant
measure of taxation of HIS Asia. The Purchaser shall cause the Tax Package for
the portion of the taxable period ending on the Closing to be delivered to HSS
within one hundred twenty (120) days after the Closing. The Tax Package shall
also include the reports prepared by MAI's auditors for each of the current
Asian subsidiaries of HIS or MAI.
V.7 Tax Proceedings.
(a) Right to Control Proceedings. HSS shall have the
responsibility for, and the right to control, at HSS's expense, the audit (and
disposition thereof) of any Tax Return relating to periods ending on or prior to
the Closing and to participate in the disposition of the audit of any Tax Return
relating to the periods ending after the Closing if such audit or disposition
thereof could give rise to a claim for indemnification hereunder (any such audit
or disposition, a "Tax Proceeding").
19
(b) Notice; Reports. HSS's right to control a Tax Proceeding
shall commence upon the receipt by the Purchaser or any of its Affiliates
(including, after the Closing, HIS Asia) of a proposed adjustment to Tax for the
period under audit or examination communicated in writing. The Purchaser shall
promptly notify HSS in writing upon their learning of the pendency of a Tax
Proceeding and shall fully cooperate with HSS in the conduct of such Tax
Proceeding. The failure on the part of the Purchaser to promptly notify HSS of
the pendency of a Tax Proceeding shall not in any way discharge HSS's indemnity
obligations hereunder, except that the Purchaser shall be liable for any
increase in penalties, interest, other assessments or fees and expenses which
are due to any delay in promptly notifying HSS of the pendency of any Tax
Proceeding and shall be responsible for any indemnity obligations to the extent
that HSS is prejudiced as a result of such delay. Without the prior written
consent of HSS (which consent shall not be unreasonably withheld), neither the
Purchaser nor any of its Affiliates shall settle or compromise any claim for
Taxes that might result in HSS's being required to make an indemnity payment
pursuant to Section 5.4(a). The Purchaser shall, and shall cause HIS Asia to,
cooperate with HSS including providing reasonable access to records, returns and
supporting information, in connection with any Tax Proceeding or matter as to
which the Purchaser may seek indemnity or other relief for HSS under this
Article V. The Purchaser promptly shall pay HSS any refunds, rebates or other
recoveries received by HIS Asia to which HSS is entitled pursuant to Section
5.3(a).
V.8 Assistance and Cooperation. After the Closing, each of HSS
and the Purchaser shall (i) assist (and cause their respective affiliates to
assist) the other party in preparing any Tax Returns or reports which such other
party is responsible for preparing and filing in accordance with this Article V,
(ii) cooperate fully in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns of HIS Asia, (iii) make available to the
other and to any taxing authority as reasonably requested all information,
records, and documents relating to Taxes of HIS Asia, (iv) provide timely notice
to the other in writing of any pending or threatened tax audits or assessments
of HIS Asia for taxable periods for which the other may have a liability under
this Article V and (v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any tax audit or
information request with respect to any such taxable period.
V.9 Survival, Etc. Notwithstanding anything to the contrary
contained in this Agreement, the representations and warranties and the
indemnification obligations set forth in this Article V shall survive the
Closing and shall remain in effect until the expiration of the applicable
statute of limitations.
ARTICLE VI
Conditions to Closing
20
VI.1 Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of the
conditions set forth in this Section 6.1, any one or more of which may be
waived, in whole or in part, by the Purchaser:
(a) Approvals. With respect to any applicable local laws, the
parties shall have procured such approvals, if applicable, or there shall have
occurred the expiration or early termination of the applicable waiting periods,
if any, with respect thereto without there being any continuing objection
thereto.
(b) Orders. No party hereto shall be subject to any order, decree
or injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the sale of the Stock or the transactions
contemplated by the Ancillary Agreements.
(c) Accuracy of Representations. The representations and
warranties of HSS and the HSS Shareholders in this Agreement shall be true and
correct at the Closing , except where the failure of the representations and
warranties to be true and correct would not reasonably be expected to have a
Material Adverse Effect on the Business, or Purchaser has knowledge of the
inaccuracy of such representations and warranties based up its due diligence
investigation of HSS and the HSS Shareholders, and the Purchaser shall have
received a certificate, dated the Closing, of the executive officer of HSS and
from HSS Shareholders to that effect in the form set forth as Exhibit B hereto.
(d) Performance of Covenants. HSS and the HSS Shareholders shall
have performed and complied in all material respects with all covenants and
agreements contained in this Agreement that are required to be performed or
complied with by it at or prior to the Closing, and the Purchaser shall have
received a certificate, dated as of the Closing, of the executive officer of HSS
to that effect.
(e) Resignation of Directors. The directors of HSS and the HSS
Subsidiaries shall have submitted their resignations in writing, effective as of
the Closing, to HIS Asia.
(f) Ancillary Agreements. The Ancillary Agreements shall have
been executed and delivered by the parties thereto and be in full force and
effect.
(g) Opinion of Counsel. Purchaser shall have received the opinion
of counsel for HSS in the form set forth as Exhibit A hereto.
(h) Closing Balance Sheet. HSS commits to use best efforts to
provide to Purchaser a Balance Sheet dated as of the Closing within ten (10)
days after Closing.
21
VI.2 Conditions to the Obligations of HSS. The obligations of HSS
and the HSS Shareholders to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of the
conditions set forth in this Section 6.2, any one or more of which may be
waived, in whole or in part, by the Purchaser.
(a) Approvals. With respect to applicable local laws , the
parties shall have procured such approvals, if applicable, or there shall have
occurred the expiration or early termination of the applicable waiting periods,
if any, with respect thereto without there being any continuing objection
thereto.
(b) Orders. No party hereto shall be subject to any order, decree
or injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the sale of the Stock or the transactions
contemplated by the Ancillary Agreements.
(c) Accuracy of Representations. The representations and
warranties of the Purchaser in this Agreement shall be true and correct in all
material respects at the Closing, . HSS shall have received a certificate, dated
the Closing, of an executive officer of the Purchaser to that effect, in the
form set forth as Exhibit D hereto.
(d) Performance of Covenants. The Purchaser shall have performed
and complied in all material respects with all covenants and agreements
contained in this Agreement that are required to be performed or complied with
by it at Closing, and HSS and the HSS Shareholders shall have received a
certificate, dated the Closing, of an executive officer of the Purchaser to that
effect.
(e) Ancillary Agreements. The Ancillary Agreements shall have
been executed and delivered by the parties thereto and be in full force and
effect.
(f) Opinion of Counsel. HSS shall have received the opinion of
counsel for Purchaser in the form set forth as Exhibit C hereto.
(g) Formation of HIS Asia. HIS Asia shall be formed within ten
(10) business days after Closing.
ARTICLE VII
Investment Representations and Shareholder Rights
VII.1 Shareholders' Investment Representations. Shareholders
understand that the shares to be issued to them in HIS Asia and MAI have not
been registered under any foreign
22
securities laws or the Securities Act of 1933, as amended (the "Securities Act")
and applicable state securities laws. HSS Shareholders also understand that the
shares of HIS Asia and MAI are being offered and sold pursuant to an exemption
from registration contained in applicable foreign securities laws and the
Securities Act and state securities laws based in part upon HSS Shareholders'
representations contained in this Agreement. Seller hereby represents and
warrants to the Purchaser as follows:
(a) Shareholders' Risk. HSS Shareholders must bear the economic
risk of this investment and understand that HIS Asia and MAI have no present
intention of registering the HIS Asia and MAI shares. HSS Shareholders also
understand that there is no assurance that any exemption from registration under
the Securities Act will be available and that, even if available, such exemption
may not allow HSS Shareholders to transfer all or any portion of the HIS Asia or
MAI shares under the circumstances, in the amounts or at the times HSS
Shareholders might propose.
(b) Acquisition for Shareholders' Own Account. HSS Shareholders
are acquiring the HIS Asia and MAI shares for theirs own account for investment
only, and not with a view towards their distribution.
VII.2 Accredited Investor. HSS Shareholders represent that they
are "accredited investors" within the meaning of Regulation D under the
Securities Act.
VII.3 Purchaser Information. HSS Shareholders have read the
information concerning MAI contained in its public reports as filed with the
Securities and Exchange Commission and has had an opportunity to discuss MAI's
business, management and financial affairs with directors, officers and
management of the Purchaser. HSS Shareholders have also had the opportunity to
ask questions of and receive answers from, MAI and its management regarding the
terms and conditions of this investment in MAI and HIS Asia.
VII.4 HIS Asia and MAI Shares Legend. Certificates evidencing the
HIS Asia and MAI shares shall bear appropriate legends concerning the
restrictions on transferability imposed by applicable foreign, Federal and state
securities laws including, without limitation, the following:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT.
23
VII.5 Purchaser's Investment Representations. Purchaser
understands that the HSS shares have not been registered under the Securities
Act or applicable foreign securities laws. Purchaser also understands that the
HSS shares are being offered and sold pursuant to an exemption from registration
contained in foreign securities laws and the Securities Act based in part upon
Purchaser's representations contained in this Agreement. Purchaser hereby
represents and warrants to HSS and the HSS Shareholders that it is an accredited
investor and as follows:
(a) Purchaser Bears Economic Risk. Purchaser must bear the
economic risk of this investment. Purchaser also understands that there is no
assurance that any exemption from registration under applicable foreign
securities laws and/or the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the HSS Shares under the circumstances, in the amounts or at the times
Purchaser might propose.
(b) Acquisition for Purchaser's Own Account. Purchaser is
acquiring the HSS Shares for Purchaser's own account for investment only, and
not with a view towards their distribution.
(c). HSS Shares Legend. Certificates evidencing the HSS shares
shall bear appropriate legends concerning the restrictions on transferability
imposed by applicable foreign, Federal and state securities laws.
VII.6 Shareholder's Agreement. The parties agree to execute the
Shareholders' Agreement in substantially the form set forth as Exhibit E hereto.
VII.7 Registration of MAI Common Stock. In the event that MAI
undertakes a registration of its common stock after the the Closing, MAI hereby
grants "piggyback" registration rights to the HSS Shareholders, such that MAI
will use its best efforts to include in such registration, any unregistered MAI
common stock in the hands of HSS Shareholders at no expense to the HSS
Shareholders. The HSS Shareholders agree to reasonably cooperate with MAI as
required to ensure the successful registration of their shares.
ARTICLE VIII
Indemnification
VIII.1 Survival of Representations, Warranties, Covenants and
Agreements. Except as provided in Section II.18, the representations and
warranties included or provided for herein shall not survive the Closing.
24
ARTICLE IX
Certain Definitions
IX.1 Certain Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
"Affiliate" means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agreement" means this Agreement by and between HSS, the HSS
Shareholders and the Purchaser, as amended or supplemented together with all
Exhibits and Schedules attached or incorporated by reference.
"Ancillary Agreements" shall mean the Shareholders' Agreement.
"Balance Sheet" has the meaning set forth in Section 2.6.
"Benefit Plans" has the meaning set forth in Section 2.13(a).
"Business" shall mean the hospitality software systems business
of HSS and the HSS Subsidiaries.
"Business Days" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York are authorized or obligated by law or
executive order to close.
"Closing" has the meaning set forth in Section 1.4.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended.
"Confidentiality Agreement" shall mean the Confidentiality
Agreement, dated January, 2000, between HSS and the Purchaser.
"Employees" has the meaning set forth in Section 2.13(a).
"Environmental Law" shall mean any applicable law, regulation,
code, license, permit, order, judgment, decree or injunction promulgated by any
Governmental
25
Entity (i) for the protection of the environment, (including air, water, soil
and natural resources) or (ii) regulating the use, storage, handling, release or
disposal of Hazardous Substances, in each case as presently in effect.
"Financial Statements" has the meaning set forth in Section 2.6.
"GAAP" shall mean generally accepted accounting principles in the
United States, or its local equivalent, as in effect from time to time.
"Governmental Antitrust Entity" has the meaning set forth in
Section 4.3(c).
"Governmental Entity" shall mean any court, administrative agency
or commission or other national, federal, state or local governmental authority
or instrumentality.
"HSS" has the meaning set forth in the first paragraph hereof.
"HSS Subsidiaries" has the meaning set forth in the first
paragraph hereof.
"Knowledge" shall mean, with respect to any Person, the actual
Knowledge of any officer with a rank of vice president or higher of such Person,
the law department of such Person or any other employee of such Person with
responsibility for the particular subject area or subject matter.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, encumbrance, equity, claim, option, tenancy, right or restriction on
transfer of any nature whatsoever.
"Losses" means any and all fines, liabilities, judgments, losses,
costs, expenses, or actual damages, including in each case, interest, penalties,
reasonable attorneys' fees and reasonable costs of investigations and
litigation.
"Material Adverse Effect" shall mean any material adverse effect
on the assets or properties used in, or the condition (financial or otherwise)
or results of operations with respect to, the Business taken as a whole.
"Material Contracts" has the meaning set forth in Section 2.10.
"Permit" shall mean any license, permit, franchise, certificate
of authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
26
"Permitted Liens" shall mean the following types of Liens: (a)
statutory Liens of landlords, statutory Liens of banks and rights of set-off,
statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, and other Liens imposed by law, in each case incurred in the
ordinary course of business (i) for amounts not yet overdue or (ii) for amounts
that are overdue and that (in the case of such amounts overdue for a period in
excess of 30 days) are being contested in good faith by appropriate proceedings,
so long as such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts; (b)
easements, rights-of-way, restrictions, encroachments, and other minor defects
or irregularities in title, in each case which do not and will not interfere in
any material respect with the ordinary conduct of the Business; and (c) any
zoning or similar law or right reserved to or vested in any Governmental Entity
to control or regulate the use of any real property.
"Person" shall mean an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization, a Governmental Entity or any other entity.
"Plans" has the meaning set forth in Section 2.13(b).
"Purchase Price" shall have the meaning as set forth in Section
I.2 herein.
"Real Property" has the meaning set forth in Section 2.9(b).
"Schedule" shall mean a disclosure schedule delivered by HSS to
the Purchaser on or prior to the date of this Agreement.
"Shareholders' Agreement" shall mean the Shareholders' Agreement
substantially in the form attached hereto as Exhibit E.
"Stock" has the meaning set forth in Recitals of this Agreement.
"Taxes" has the meaning set forth in Section 5.1.
"Tax Package" has the meaning set forth in Section 5.6.
"Tax Proceeding" has the meaning set forth in Section 5.7(a).
"Tax Return" has the meaning set forth in Section 5.1.
ARTICLE X
Miscellaneous
27
X.1 Amendments. This Agreement may not be amended or modified
except by the express written consent of the parties hereto.
X.2 Assignment. Neither party may assign this Agreement or its
rights or obligations hereunder, whether by operation of law or otherwise, to
any third party without the prior written consent of the other party.
X.3 Notices. All notices or communications hereunder shall be in
writing and shall be sent by personal service, by facsimile transmission or by
overnight mail by courier of internationally recognized standing addressed as
follows (or such other address as such party may designate in writing):
To the Purchaser:
MAI Systems Corporation
0000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: W. Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxx, General Counsel
MAI Systems Corporation
0000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
28
To HSS and the HSS Subsidiaries:
Hospitality Services and Solutions
--------------------------------
--------------------------------
Attention: Xxxxxx Xxxxx
Facsimile: ( ) -
To the Corporate Shareholder:
--------------------------------
--------------------------------
--------------------------------
Attention:
Facsimile: ( ) -
With a copy to:
Xxxxxxx Xxxxx
Xxxxxxx & Xxx
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Any notice hereunder shall be effective upon receipt by the intended recipient.
X.4 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 entity
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, entities 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.
X.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Singapore.
X.6 Interpretation. When a reference is made in this Agreement to
an Article, Section, Exhibit or Schedule, such reference is to an Article or
Section of, or an
29
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" and "including" are used in
this Agreement, they are deemed to be followed by the words "without
limitation." For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (a) the terms defined include
the plural as well as the singular, (b) all accounting terms not otherwise
defined herein have the meanings assigned under GAAP or local equivalent, and
(c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
X.7 Entire Agreement. This Agreement, together with any agreement
executed and delivered by the parties concurrently herewith and the Schedules
and Exhibits attached hereto and together with the Confidentiality Agreement,
constitutes the entire agreement between the Purchaser and HSS with respect to
the subject matter hereof. There are no representations, warranties, covenants
or undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements
between the parties with respect to the Stock purchased hereunder and the
subject matter hereof, other than the Confidentiality Agreement.
X.8 Publicity and Confidentiality. Concurrent with the Closing or
thereafter, the parties may jointly prepare a news release or other announcement
regarding this Agreement and, subject to their respective legal obligations or
stock exchange requirements, thereafter will consult with each other regarding
the text of any press release or other public statement relating to the
transaction contemplated by this Agreement prior to any release or filing
thereof. The Confidentiality Agreement shall survive the Closing, however, the
Purchaser may disclose such terms of the Agreement as are mandated by its
reporting requirements under the 1934 Securities Exchange Act, including filing
the Agreement as an exhibit to such reports.
X.9 Expenses. HSS, the HSS Subsidiaries, the HSS Shareholders,
and the Purchaser each shall pay their own expenses incident to the negotiation,
preparation and performance of this Agreement and the transactions contemplated
hereby, including but not limited to the fees, expenses and disbursements of
their respective investment bankers, accountants and counsel.
X.10 No Third Party Beneficiaries. Except for Section 4.5,
nothing in this Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto or their respective successors, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
X.11 Jurisdiction; Arbitration; Waivers. Any controversy arising
out of or
30
relating to this Agreement shall be submitted to arbitration in Singapore before
a panel of three (3) arbitrators selected in accordance with the Commercial
Arbitration Rules of the International Chamber of Commerce, and shall be
conducted in accordance with its Commercial Arbitration Rules; provided,
however, that provisional injunctive relief may, but need not, be sought by any
party in a court of law in Singapore while arbitration proceedings are pending,
and any provisional injunctive relief granted by such court shall remain
effective until the matter is finally determined by the Arbitrators. Final
resolution of any dispute through arbitration may include any remedy or relief
which the Arbitrators deem just and equitable, including any and all remedies
provided by Singapore law. At the conclusion of the arbitration, the Arbitrators
shall issue a written decision that sets forth the essential findings and
conclusions upon which the Arbitrators' award or decision is based. Any award or
relief granted by the Arbitrators hereunder shall be final and binding on the
parties hereto and may be enforced by any court of competent jurisdiction in
Singapore. All parties acknowledge and agree that they are hereby waiving any
rights to trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other in connection with any matter whatsoever
arising out of or in any way connected with this Agreement. The parties agree
that in any proceeding to enforce the terms of this Agreement, the prevailing
party shall be entitled to its or his or her reasonable attorneys' fees and
costs incurred by it or him or her in connection with resolution of the dispute
in addition to any other relief granted.
X.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first above written, by the duly authorized
representatives of the parties hereto.
[SIGNATURE BLOCKS ON NEXT PAGE]
31
HOTEL INFORMATION SYSTEMS, INC.
By:
--------------------------------
Name: W. Xxxxx Xxxxxxxx
Title: President
MAI SYSTEMS CORPORATION (as to the
obligations created by Sections I.2 (iii)
and VII.7 only)
By:
--------------------------------
Name: W. Xxxxx Xxxxxxxx
Title: President
HIS ASIA, PTE. LIMITED
By:
--------------------------------
Its:
--------------------------------
HOSPITALITY SERVICES & SOLUTIONS
By:
--------------------------------
Name: Xxxxxxx Xxxxx
Title: President
INDIVIDUAL SHAREHOLDER:
-------------------------------
Xxxxxxx Xxxxx
CORPORATE SHAREHOLDER:
By:
--------------------------------
Name:
Title:
32
