Exhibit 4.4
ASSET PURCHASE AGREEMENT
dated as of
September 26, 1997
among
PAREXEL International Corporation
Perceptive Systems, Inc.
and Xxxxxx X. Xxxxxx
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
1.01. Definitions 1
ARTICLE II PURCHASE AND SALE 3
2.01. Purchase and Sale 3
2.02. Excluded Assets 5
2.03. Assumption of Liabilities 5
2.04. Excluded Liabilities 5
2.05. Assignment of Contracts and Rights 6
2.06. Purchase Price; Allocation of Purchase Price 7
2.07. Closing 7
2.08. Certificates for Parent Stock 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND XXXXXX 9
3.01. Corporate Existence and Power 9
3.02. Authority 10
3.03. Governmental Authorization 10
3.04. Non-Contravention 10
3.05. Required Consents 10
3.06. Financial Statements 10
3.07. Absence of Certain Changes 11
3.08. Property and Equipment 12
3.09. Sufficiency of Purchased Assets 12
3.10. Title to Purchased Assets 12
3.11. No Undisclosed Material Liabilities 12
3.12. Litigation 13
3.13. Material Contracts 13
3.14. Licenses and Permits 14
3.15. Insurance Coverage 14
3.16. Compliance with Laws 14
3.17. Inventories 14
3.18. Receivables 14
3.19. Proprietary Rights 15
3.20. Products 16
3.21. Finders' Fees 16
3.22. Other Information 17
3.23. Environmental Compliance 17
3.24. Representations 17
3.25. Purchase for Investment 17
3.26. Consultants 17
3.27. Site Licenses 17
3.28 Source Code Licenses 17
3.29 Other Licenses 18
3.30 Resellers, Distributors, etc. 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 18
4.01. Organization and Existence 18
4.02. Corporate Authorization 18
4.03. Governmental Authorization 18
4.04. Non-Contravention 18
4.05. Common Stock 19
ARTICLE V COVENANTS OF SELLER 19
5.01. Conduct of the Business 19
5.02. Access to Information 19
5.03. Notices of Certain Events 20
5.04. Noncompetition and Nonsolicitation 20
5.05. Confidentiality 21
5.06. Trademarks; Tradenames 21
5.07. No Negotiation with Third Parties 22
5.08. Use of Proprietary Rights 22
5.09. Continuing Disclosure 22
ARTICLE VI COVENANTS OF BUYER 23
6.01. Confidentiality 23
6.02 Software Engineer 23
ARTICLE VII COVENANTS OF BOTH PARTIES 23
7.01. Best Efforts; Further Assurances 23
7.02. Certain Filings 24
ARTICLE VIII TAX MATTERS 24
8.01. Tax Definitions 24
8.02. Tax Matters 25
8.03. Tax Cooperation; Allocation of Taxes 25
ARTICLE IX EMPLOYEE BENEFITS 26
9.01. Employee Benefits Representations 26
9.02. No Third Party Beneficiaries 27
ARTICLE X CONDITIONS TO CLOSING 27
10.01. Conditions to the Obligations of Each Party 27
10.02. Conditions to Obligation of Buyer 28
10.03. Conditions to Obligations of Seller and Xxxxxx 29
ARTICLE XI SURVIVAL, INDEMNIFICATION 29
11.01. Survival 29
11.02. Indemnification 29
11.03. Environmental Indemnification 30
11.04. Procedures; No Waiver 30
ARTICLE XII TERMINATION 31
12.01. Grounds for Termination. 31
12.02. Effect of Termination 32
ARTICLE XIII MISCELLANEOUS 32
13.01. Notices 32
13.02. Amendments; No Waivers 33
13.03. Expenses 33
13.04. Successors and Assigns 33
13.05. Governing Law 33
13.06. Counterparts; Effectiveness 33
13.07. Entire Agreement 33
13.08. Bulk Sales Laws 34
13.09. Captions 34
13.10. Jurisdiction 34
13.11. Other Remedies; Specific Performance 34
Exhibits
Exhibit A -- Letter Agreement between Buyer and Xxxxxx X. Xxxxxx
Exhibit B -- Form of Assignment and Assumption Agreement and
Xxxx of Sale and General Assignment
Exhibit C -- Form of Assignment of Trademarks
Exhibit D -- Form of Assignment of Lease
Exhibit E -- Registration Rights Agreement between Buyer and
Seller
Schedules
Schedule 2.02 Excluded Assets
Schedule 2.03 Assumed Liabilities
Schedule 2.07(e) Software
Schedule 3.03 Governmental Authorization
Schedule 3.04 Non Contravention
Schedule 3.05 Required Consents
Schedule 3.06 Financial Statements
Schedule 3.08 Property and Equipment
Schedule 3.13 Material Contracts
Schedule 3.14 Licenses and Permits
Schedule 3.18 Receivables
Schedule 3.19 (a) and (b) Proprietary Rights
Schedule 3.26 Consultants
Schedule 3.27 Site Licenses
Schedule 3.29 Other Licenses
Schedule 3.30 Resellers, Distributors, etc.
Schedule 9.01 Employee Benefits
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of September 26, 1997 among PAREXEL
International Corporation, a Massachusetts corporation ("Buyer"),
Perceptive Systems, Inc. a Colorado corporation doing business as
Hayden Image Processing Group ("Seller"), and Xxxxxx X. Xxxxxx,
sole stockholder of Seller ("Xxxxxx").
W I T N E S S E T H :
WHEREAS, Seller develops, produces and markets image
analysis and related software (including without limitation,
whether commercially available or under development, software
known as CHESHIRE and XXXXX) and provides consulting and product
development services to clients (the "Business");
WHEREAS, Buyer desires to purchase substantially all of
the assets of the Business from Seller, and Seller desires to
sell substantially all of the assets of the Business to Buyer,
upon the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as
used herein, have the following meanings:
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under
common control with such other Person.
"Ancillary Agreements" means the Letter Agreement between
Buyer and Xxxxxx attached hereto as Exhibit A, the Xxxx of Sale
and General Assignment in the form attached hereto as Exhibit B,
the Assignment of Trademarks in the form attached hereto as
Exhibit C, the Assignment of Lease in the form attached hereto as
Exhibit D and the Registration Rights Agreement in the form
attached hereto as Exhibit E.
"Balance Sheet" means the unaudited balance sheet of the
Business as of
June 30, 1997 found in Schedule 3.06.
"Balance Sheet Date" means June 30, 1997.
"Closing Date" means the date of the Closing.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset except for (a) mechanic's
materialmen's, and similar liens, (b) liens for taxes not yet due
and payable or for taxes that the taxpayer is contesting in good
faith through appropriate proceedings, (c) purchase money liens
and securing rental payments under capital lease arrangements,
and (d) other liens arising in the ordinary course of business
and not incurred in connection with the borrowing of money.
"Material Adverse Change" means a material adverse change
in the business, assets, condition (financial or otherwise),
results of operations or prospects of the Business taken as a
whole.
"Material Adverse Effect" means a material adverse effect
on the business, assets, condition (financial or otherwise),
results of operations or prospects of the Business taken as a
whole.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a
government or political subdivision or an agency or
instrumentality thereof.
"Proprietary Rights" means all (A) patents, patent
applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, re-examination,
utility, model, certificate of invention and design patents,
patent applications, registrations and applications for
registrations, (B) trademarks, service marks, trade dress, logos,
tradenames, service names and corporate names and registrations
and applications for registration thereof, (C) copyrights and
registrations and applications for registration thereof, (D) mask
works and registrations and applications for registration
thereof, (E) computer software, data and documentation, (F) trade
secrets and confidential business information, whether patentable
or nonpatentable and whether or not reduced to practice, know-
how, manufacturing and product processes and techniques, research
and development information, copyrightable works, financial,
marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and
information, (G) other proprietary rights relating to any of the
foregoing (including without limitation associated goodwill and
remedies against infringements thereof and rights of protection
of an interest therein under the laws of all jurisdictions) and
(H) copies and tangible embodiments thereof.
"Seller's Proprietary Rights" means all Proprietary Rights
relating to the Business and listed on Schedule 3.19(a) attached
hereto.
(b) Each of the following terms is defined in the Section
set forth opposite such term:
Term Section
Allocation Statement 2.06
Apportioned Obligations 8.03
Assumed Liabilities 2.03
Buyer Common Stock 2.06
Closing 2.07
Code 8.01
Contracts 2.01
Environmental Liabilities 3.23
ERISA 9.01
Excluded Assets 2.02
Excluded Liabilities 2.04
Financial Statements 3.06
Indemnified Party 11.04
Indemnifying Party 11.04
Loss 11.02
Permit 3.14
Xxxxx Cash 2.01
Post-Closing Tax Period 8.01
Pre-Closing Tax Period 8.01
Purchased Assets 2.01
Purchase Price 2.06
Required Consent 3.05
Software 2.07
Taxes 8.01
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to
the conditions of this Agreement, Buyer agrees to purchase from
Seller and Seller and Xxxxxx agree to sell, transfer, assign and
deliver, or cause to be sold, transferred, assigned and
delivered, to Buyer at Closing, free and clear of all Liens, all
of the assets, properties and business, other than the Excluded
Assets, of every kind and description, wherever located, real,
personal or mixed, tangible or intangible, owned, held or used in
the conduct of the Business of Seller as the same shall exist on
the Closing Date, including without limitation all assets shown
on the Balance Sheet and not disposed of in the ordinary course
of business, and all assets of the Business acquired by Seller
and Xxxxxx between the Balance Sheet Date and the Closing Date
(the "Purchased Assets"), and including, without limitation, all
right, title and interest of Seller, its Affiliates and Xxxxxx
in, to and under such of the foregoing as are more specifically
described below:
(i) all real property and leases of, and other interests
in, real property, in each case together with all buildings,
fixtures, and improvements erected thereon;
(ii) all personal property and interests therein, including
machinery, equipment, furniture, office equipment,
communications equipment, vehicles, storage tanks, spare and
replacement parts, fuel and other tangible property,
including without limitation the items listed on Schedule
3.08;
(iii) all raw materials, work-in-process, finished goods,
supplies and other inventories, wherever situated;
(iv) all rights under all contracts, agreements, leases,
licenses, sales and purchase orders and other instruments,
including without limitation the items listed on Schedule
3.13 (collectively, the "Contracts");
(v) all accounts, notes and other receivables of the
Seller;
(vi) all prepaid expenses and deposits including without
limitation ad valorem taxes, leases and rentals;
(vii) all of Seller's cash and cash equivalents on hand and
in banks as of the Closing Date and all xxxxx cash located at
operating facilities of the Business ("Xxxxx Cash");
(viii) all of Seller's rights, claims, credits, causes of
action or rights of set-off against third parties relating to
the Purchased Assets, including, without limitation,
unliquidated rights under manufacturers' and vendors'
warranties;
(ix) all of Seller's Proprietary Rights owned, licensed or
used in the Business including without limitation the items
listed on Schedule 3.19 (such software in source code and
object code forms, fully documented including any and all
related technical and user documentation);
(x) all transferable licenses, permits or other
governmental authorizations affecting, or relating in any way
to, the Business, including without limitation the items
listed on Schedule 3.14;
(xi) all books, records, files and papers, whether in hard
copy or computer format, including, without limitation,
engineering information, sales and promotional literature,
manuals and data, sales and purchase correspondence, lists of
present and former suppliers, lists of present and former
customers, personnel and employment records, and any
information relating to Taxes imposed on the Purchased
Assets; and
(xii) all right, title and interest of Seller and Xxxxxx in
or to any prototypes, enhancements, improvements, or other
tangible work product, technology or process developed,
created or otherwise acquired in connection with the design,
research and development, implementation, market research or
marketing of products of the Business; and
(xiii) all goodwill associated with the Business or the
Purchased Assets, together with the right to represent to
third parties that Buyer is the successor to the Business.
2.02. Excluded Assets. Buyer expressly understands and
agrees that Buyer is acquiring substantially all of the assets of
Seller and that the following assets and properties of Seller
(the "Excluded Assets") shall be excluded from the Purchased
Assets:
(i) rights under those contracts, agreements and
commitments listed on Schedule 2.02 and under this Agreement;
(ii) the right of Seller and Xxxxxx to receive the purchase
price; and
(iii) any Purchased Assets sold or otherwise disposed of in
the ordinary course of the operation of the Business and not
in violation of any provisions of this Agreement during the
period from the date hereof until the Closing Date.
2.03. Assumption of Liabilities. Upon the terms and
subject to the conditions of this Agreement, Buyer agrees,
effective at the time of Closing, to assume the following
liabilities (the "Assumed Liabilities"):
(i) all operating liabilities accrued on the Balance
Sheet; and
(ii) all liabilities arising out of or relating primarily
to the Business, and incurred in the ordinary course of
Business since the Balance Sheet Date, but only to the extent
listed on Schedule 2.03;
(iii) all liabilities and obligations of Seller arising
under the Contracts (other than liabilities or obligations
attributable to any failure by Seller to comply with the
terms thereof);
(iv) all obligations of Seller and Xxxxxx under that
certain Vectra Bank Building Lease by and among the Colorado
Building Group, Seller and Xxxxxx dated as of September 23,
1994 and extended by that certain letter agreement dated
September 27, 1996;
provided, however, that the foregoing Assumed Liabilities
shall be in the aggregate no greater than $5,000.
2.04. Excluded Liabilities. Notwithstanding any
provision in this Agreement or any other writing to the contrary,
Buyer is assuming only the Assumed Liabilities and is not
assuming any other liability or obligation of Seller or Xxxxxx or
any Affiliate of Seller (or any predecessor owner of all or part
of its business and assets) of whatever nature whether presently
in existence or arising or asserted hereafter. All such other
liabilities and obligations shall be retained by and remain
obligations and liabilities of Seller or its Affiliate (all such
liabilities and obligations not being assumed being herein
referred to as the "Excluded Liabilities"). Without limiting the
foregoing, none of the following shall be Assumed Liabilities for
the purposes of this Agreement:
(i) except to the extent of the specific reserves on the
Balance Sheet, any obligation or liability for Tax arising
from or with respect to the Purchased Assets or the operation
of the Business which is incurred in or attributable to any
Pre-Closing Tax Period;
(ii) except to the extent provided in Article IX, any
liabilities or obligations relating to employee benefits or
compensation arrangements existing as of the end of the day
on the day preceding the Closing Date, including, without
limitation, any liabilities or obligations under any of
Seller's employee benefit agreements, plans or other
arrangements listed on Schedule 9.01;
(iii) any liability or obligation for damages (whether based
on negligence, breach of warranty, strict liability or any
other theory) caused by or arising out of or resulting from,
directly or indirectly, the sale by Seller or its Affiliates
of any products or services prior to the Closing Date;
(iv) all liabilities and obligations relating to any claim,
dispute or litigation asserted or threatened or governmental
proceeding or investigation instituted or threatened, arising
out of, or in connection with, any alleged violation or
noncompliance by Seller of, or failure to perform any
obligations imposed upon Seller in its conduct of the
Business under any statute, rule, regulation or ordinance
pertaining to protection of the environment (including any
Environmental Law), employee or occupational safety and
health, wage and hour, Hazardous Substances, civil rights,
customs and export control and zoning, which alleged
violation, noncompliance or failure to perform occurred or
existed on or prior to the Closing Date, but only to the
extent of such pre-existing violation, noncompliance or
failure to perform;
(v) all liabilities and obligations relating to any
products manufactured or sold by the Business on or prior to
the Closing Date, including without limitation warranty
obligations and product liability claims;
(vi) any Environmental Liability;
(vii) any liability or obligation relating to an Excluded
Asset; and
(viii) Assumed Liabilities which in the aggregate exceed
$5,000, as permitted by Section 2.03.
2.05. Assignment of Contracts and Rights.
Notwithstanding, anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any
Purchased Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment
thereof, without consent of a third party thereto, would
constitute a breach or other contravention thereof or in any way
adversely affect the rights of Buyer or Seller thereunder.
Seller and Xxxxxx agree to use their commercially reasonable best
efforts (but without any payment of money by Seller or Buyer) to
obtain the consent of the other parties to any such Purchased
Asset or claim or right or any benefit arising thereunder for the
assignment thereof to Buyer as Buyer may reasonably request. If
such consent is not obtained, or if an attempted assignment
thereof would be ineffective or would adversely affect the rights
of Seller thereunder so that Buyer would not in fact receive all
such rights, Seller and Buyer will cooperate in a mutually
agreeable arrangement under which Buyer would obtain the benefits
and assume the obligations thereunder in accordance with this
Agreement, including subcontracting, sub-licensing, or subleasing
to Buyer, or under which Seller or Xxxxxx would enforce for the
benefit of Buyer, with Buyer assuming Seller's obligations, any
and all rights of Seller or Xxxxxx against a third party thereto.
Seller or Xxxxxx will promptly pay to Buyer when received all
monies received by Seller under any Purchased Asset or any claim
or right or any benefit arising thereunder, except to the extent
the same represents an Excluded Asset. In such event, Seller,
Xxxxxx and Buyer shall, to the extent the benefits therefrom and
obligations thereunder have not been provided by alternate
arrangements satisfactory to Buyer, Seller and Xxxxxx, negotiate
in good faith an adjustment in the consideration paid by Buyer
for the Purchased Assets.
2.06. Purchase Price; Allocation of Purchase Price.
(a) The purchase price for the Purchased Assets (the "Purchase
Price") is (i) $200,000 to be paid in shares of common stock of
the Buyer, $.01 par value per share ("Buyer Common Stock"), and
issued at the Closing; such number of shares to be determined in
accordance with Section 2.07(a) below; (ii) the contingent
payments as provided for in Section 2.07(e); and (iii) the
assumption of the Assumed Liabilities.
(b) Seller and Buyer agree that $10,000 of the Purchase
Price shall be allocated as consideration for the covenant not to
compete set forth in Section 5.04 of this Agreement.
2.07. Closing. The closing (the "Closing") of the
purchase and sale of the Purchased Assets and the assumption of
the Assumed Liabilities hereunder shall take place at the offices
of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower, 000 Xxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 at a time and on a date
mutually agreeable to Buyer, Seller and Xxxxxx as soon as
practicable after satisfaction of the conditions set forth in
Article X, but in no event later than September 30, 1997, or at
such other time or place as Buyer, Seller and Xxxxxx may agree.
At the Closing,
(a) Buyer shall deliver to Seller a stock certificate
representing the number of shares of Buyer Common Stock as is
determined by dividing $200,000 by the average of the last
reported sale price of the Buyer Common Stock on the Nasdaq
National Market on each of the ten (10) business days up to and
including the second business day preceding the Closing Date
(subject to appropriate adjustment in the event of a stock split,
reverse stock split, stock dividend or recapitalization by the
Company). The certificate shall be duly endorsed by the Buyer's
transfer agent and registered in the name of the Seller;
(b) Seller shall have delivered to Buyer via courier or by
hand all source code and object code of the software forming part
of the Purchased Assets, fully documented, including any and all
related technical and user documentation;
(c) Seller, Xxxxxx and Buyer shall enter into the
Ancillary Agreements and Seller and Xxxxxx shall deliver to Buyer
such bills of sale, endorsements, consents, assignments and other
good and sufficient instruments of conveyance and assignment (the
"Conveyance Documents") as the parties and their respective
counsel shall deem reasonably necessary or appropriate to vest in
Buyer all right, title and interest in, to and under the
Purchased Assets.
(d) Seller and Buyer shall also execute and deliver all
such instruments, documents and certificates as may be reasonably
requested by the other party that are necessary, appropriate or
desirable for the consummation at the Closing of the transactions
contemplated by this Agreement.
(e) In addition to the payment of stock issued on the
Closing Date as provided for in Section 2.07(a), Buyer shall
issue to Seller up to three (3) additional stock certificates
representing contingent payments from Buyer over the three year
period set forth below. The number of shares of Buyer Common
Stock issued with respect to each contingent payment will be
determined by dividing the dollar value of the contingent
payment, calculated as set forth below, by the average of the
last reported sale price of Buyer Common Stock on the Nasdaq
National Market on each of the ten (10) business days up to and
including the last day of each Annual Payment Period (as defined
below), subject to appropriate adjustment in the event of a stock
split, reverse stock split, stock dividend or recapitalization by
the Company. The dollar value of each contingent payment will be
calculated as a percentage of "net receipts" (as defined below)
collected by the Buyer during the period to which the payment
relates (the "Annual Payment Period") and attributable to all
licenses, and complete or partial sales or dispositions by the
Buyer of the software products listed on Schedule 2.07(e), and
their "upgrades" (as defined below), (collectively, the
"Software"), according to the following schedule:
During the period beginning with the Closing Date 7.0% of "net
and ending September 30, 1998 : receipts"
During the period beginning October 1, 1998 and 5.0% of "net
ending September 30, 1999: receipts"
During the period beginning October 1, 1999 and 3.0% of "net
ending September 30, 2000: receipts"
Such contingent payments will be paid to Seller along with a
statement indicating in detail sufficient for Seller to determine
the calculation of such payment, once per year, within 45 days of
the last day of each Annual Payment Period beginning with the
period ending September 30, 1998. For purposes of this
Section 2.07(e), "net receipts" shall mean all payments actually
received by the Buyer with respect to the Software (including,
but not limited to, royalties, licensing fees, and proceeds of
the complete or partial sale or other disposition of the
Software, but excluding consulting fees, maintenance fees or any
other service fees paid to Buyer in connection with the Software)
net of all sales tax or other similar amounts properly paid or
accrued by the Buyer with respect to such payments so received
and any amounts refunded or rebated by Buyer to payers of amounts
which might otherwise constitute "net receipts". Notwithstanding
anything in this Section 2.07 to the contrary at such time as
Buyer has issued Common Stock to Seller pursuant to this Section
2.07(e) with a value in the aggregate of $228,000, Buyer's
obligation to issue any additional shares of Common under this
Section 2.07(e) shall cease. Seller and Xxxxxx agree that Buyer
shall use its commercially reasonable best efforts to market and
distribute the Software and continue the sale and promotion of
the Software until at least September 30, 2000; provided,
however, Buyer shall have complete authority related to all
decisions with respect to pricing, shipment terms, return
policies, distribution discounts and all other marketing related
factors in connection with the marketing and distribution of the
Software and shall have no liability to Seller or Xxxxxx if
Buyer's commercially reasonable best efforts to market and
distribute the Software are unsuccessful or result in fewer sales
than Seller or Xxxxxx expect. The term "upgrades" shall mean any
modification, enhancement, improvement or version release of the
Software as may be generally commercially licensed by the Buyer
to third parties.
2.08. Certificates for Parent Stock. Each certificate
for Buyer Common Stock issued to the Seller pursuant to this
Agreement shall bear the following legend:
"The securities represented hereby have not
been registered under the Securities Act of
1933, as amended, and may not be sold,
transferred or otherwise disposed of except in
accordance with the terms thereof and unless
registered with the Securities and Exchange
Commission of the United States and the
securities regulatory authorities of certain
states or unless an exemption from such
registration is available."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND XXXXXX
Seller and Xxxxxx hereby jointly and severally represent
and warrant to Buyer as of the date hereof and as of the Closing
Date that:
3.01. Corporate Existence and Power. Seller is a
corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted. Seller is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased
by it or the nature of its activities make such qualification
necessary, except for those jurisdictions where failure to be so
qualified would not, individually or in the aggregate, have a
Material Adverse Effect. Seller has heretofore delivered to
Buyer true and complete copies of the corporate charter and
bylaws of Seller as currently in effect and no action has been
taken or authorized to amend any of such documents.
3.02. Authority. (a) The execution, delivery and
performance by Seller of this Agreement and each of the Ancillary
Agreements, and the consummation by Seller of the transactions
contemplated hereby and thereby are within Seller's corporate
powers and have been duly authorized by all necessary corporate
action on the part of Seller. This Agreement and each of the
Ancillary Agreements to which Seller is a party constitute valid
and binding agreements of Seller.
(b) Xxxxxx has the legal power, right and authority to
enter into and perform this Agreement, and to perform each of his
obligations hereunder. The execution, delivery and performance
of this Agreement by Xxxxxx does not contravene, or constitute a
default under, any provision of applicable law or regulation or
of any agreement, judgment, injunction, order, decree or any
other instrument binding upon Xxxxxx. This Agreement has been
duly executed and delivered by Xxxxxx and constitutes a valid and
binding obligation of Xxxxxx, enforceable in accordance with its
terms.
3.03. Governmental Authorization. Except as set forth on
Schedule 3.03, to the knowledge of Seller or Xxxxxx, the
execution, delivery and performance by Seller and Xxxxxx of this
Agreement and each of the Ancillary Agreements do not require any
action by or in respect of, or filing with, any governmental
body, agency, official or authority.
3.04. Non-Contravention. Except as set forth on Schedule
3.04, to the knowledge of Seller or Xxxxxx, the execution,
delivery and performance by Seller and Xxxxxx of this Agreement
and each of the Ancillary Agreements and the consummation of the
transactions contemplated hereby do not and will not
(i) contravene or conflict with the corporate charter or bylaws
of Seller, (ii) contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to Seller
or the Business; (iii) assuming the receipt of all Required and
other Consents, constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right
or obligation of Seller or to a loss of any benefit relating to
the Business to which Seller is entitled under any provision of
any agreement, contract or other instrument binding upon Seller
or by which any of the Purchased Assets is or may be bound, or
any Permit (as defined below) or (iv) result in the creation or
imposition of any Lien on any Purchased Asset.
3.05. Required Consents. Schedule 3.05 sets forth each
agreement, contract or other instrument binding upon Seller or
Xxxxxx or any Permit requiring a consent or any consent that may
be required from any former employees or shareholders of Seller,
as a result of the execution, delivery and performance of this
Agreement and the Ancillary Agreements or the consummation of the
transactions contemplated hereby and thereby (each such consent,
a "Required Consent").
3.06. Financial Statements. Seller has previously
furnished Buyer with a true and complete copy of the Balance
Sheet and the related unaudited statements of operations for the
Business taken as a whole for the years ended December 31, 1996,
the unaudited interim balance sheet relating to the Business for
the six months ended June 30, 1997, and the related unaudited
interim statement of operations for the Business taken as a whole
for the six months ended June 30, 1997, (collectively, the
"Financial Statements") of the Business. The Financial
Statements fairly present in all material respects the financial
position of the Business as of the dates thereof and its results
of operations for the period then ended. The Financial
Statements were prepared in accordance with the books and records
of the Seller and are attached hereto as Schedule 3.06.
3.07. Absence of Certain Changes. Since the Balance
Sheet Date, Seller has conducted the Business in the ordinary
course consistent with past practices, and there has not been:
(a) Any Material Adverse Change or any event, occurrence,
development or state of circumstances or facts which could
reasonably be expected to result in a Material Adverse
Change;
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any Seller
ownership interest, except Seller may declare, set aside or
pay a cash dividend to Xxxxxx, provided, however, that Seller
maintains cash of at least $5,000 on and as of the Closing
Date;
(c) any incurrence, assumption or guarantee by Seller of
any indebtedness for borrowed money with respect to the
Business other than in the ordinary course of business and in
amounts and on terms consistent with past practices;
(d) any creation , assumption or other incurrence by
Seller of any Lien on any Purchased Asset;
(e) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the Business
or any Purchased Asset which, individually or in the
aggregate, has had or could reasonably be expected to have a
Material Adverse Effect;
(f) any transaction, contract, agreement or other
instrument entered into, or commitment made, by Seller
relating to the Business or any Purchased Asset (including
the acquisition or disposition of any assets) or any
relinquishment by Seller of any contract or other right, in
either case, material to the Business taken as a whole, other
than transactions and commitments in the ordinary course of
business consistent with past practices and those
contemplated by this Agreement;
(g) any change in any method of accounting or accounting
or collection practice by Seller with respect to the
Business;
(h) any (i) grant of any severance or termination pay to
any director, officer or employee of the Business,
(ii) entering into of any employment, deferred compensation
or other similar agreement (or any amendment to any such
existing agreement) with any employee of the Business,
(iii) change in benefits payable under an existing severance
or termination pay policies or employment agreements or
(iv) change in compensation, bonus or other benefits payable
to employees of the Business;
(i) any lease of real or personal property or any capital
expenditure, or commitment for a capital expenditure, for
additions or improvements to property, plant and equipment;
(j) any making of any loan, advance or capital
contributions to or investment in any Person;
(k) any change in the business or operations or in the
manner of conducting the business or operations of the Seller
other than changes in the ordinary course of business;
(l) any mortgage, pledge or subjection of any properties
or assets to any claim, Lien or liability, except claims,
Liens or liabilities for taxes not yet due;
(m) any write-down of the value of any inventory, or write-
off of any notes or accounts receivable or any portion
thereof as uncollectible, other than valuation reserves
established for inventory and receivables;
(n) any cancellation or release of any other debts or
claims, or waivers of any rights;
(o) any sale, transfer or conveyance of any property or
assets, except in the ordinary course of business consistent
with past practice;
(p) any disposition of, or lapse, or other failure to
preserve the exclusive rights of Seller to any Proprietary
Rights; or
(q) any agreement, whether in writing or otherwise, to
take any action described in this Section 3.07.
3.08. Property and Equipment. The Company has good title
to, or in the case of leased property has valid leasehold
interests in, all property and assets (whether real or personal,
tangible or intangible) used regularly in the conduct of the
Business . Except as disclosed on Schedule 3.08, none of such
properties or assets is subject to any Liens.
3.09. Sufficiency of Purchased Assets. The Purchased
Assets and the Excluded Assets together constitute, and on the
Closing Date will constitute, all of the assets or property
necessary to operate the Business.
3.10. Title to Purchased Assets. Upon consummation of
the transactions contemplated hereby, Buyer will have acquired
good and marketable title in and to, or a valid leasehold
interest in, each of the Purchased Assets, free and clear of all
Liens.
3.11. No Undisclosed Material Liabilities. To the
knowledge of Seller or Xxxxxx, there are no liabilities of the
Business of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than:
(i) liabilities disclosed in any Schedule hereto or
provided for in the Balance Sheet; and
(ii) liabilities incurred in the ordinary course of
business consistent with past practices since the Balance
Sheet Date, which in the aggregate are not material to the
Business, taken as a whole.
3.12. Litigation. There is no action, suit, or
proceeding (or to the knowledge of Seller or Xxxxxx, any
investigation or basis therefor) pending against, or to the
knowledge of Seller or Xxxxxx, threatened against or affecting,
the Business or any Purchased Asset before any court or
arbitrator or any governmental body, agency, official or
authority.
3.13. Material Contracts. (a) Except for this
Agreement, any Ancillary Agreement entered into by Seller or
Xxxxxx in connection herewith, or the Contracts disclosed in
Schedule 3.13 or any other Schedule to this Agreement, with
respect to the Business, Seller is not a party to or subject to:
(i) any lease providing for annual rental;
(ii) any contract or the purchase of materials, supplies,
goods, services, equipment or other assets;
(iii) any sales, distribution or other similar agreement
providing for the sale by Seller of materials, supplies,
goods, services, equipment or other assets;
(iv) any partnership, joint venture or other similar
contract, arrangement or agreement;
(v) any contract relating to indebtedness for borrowed
money or the deferred purchase price of property (whether
incurred, assumed, guaranteed or secured by an asset), except
contracts relating to indebtedness incurred in the ordinary
course of business;
(vi) any license agreement, franchise agreement or
agreement in respect of similar rights granted to or held by
Seller;
(vii) any agency, dealer, sales representative or other
similar agreement;
(viii) any agreement, contract or commitment that
substantially limits the freedom of Seller to compete in any
line of business or with any Person or in any area or to own,
operate, sell, transfer, pledge or otherwise dispose of or
encumber any Purchased Asset or that would so limit the
freedom of the Buyer after the Closing Date;
(ix) any agreement, contract or commitment which is or
relates to an agreement with or for the benefit of any
Affiliate of Seller; or
(x) any other agreement, contract or commitment not made
in the ordinary course of business which is material to the
Business taken as a whole.
(b) Each Contract disclosed in any Schedule to this
Agreement or required to be disclosed pursuant to Section 3.13(a)
is valid and binding agreement of Seller and is in full force and
effect, and neither Seller nor, to the knowledge of Seller and
Xxxxxx, any other party thereto is in default in any material
respect under the terms of any such Contract, nor, to the
knowledge of Seller and Xxxxxx, has any event or circumstance
occurred that, with notice or lapse of time or both, would
constitute any event of default thereunder.
3.14. Licenses and Permits. To the knowledge of Seller
and Xxxxxx, Schedule 3.14 correctly describes each license,
franchise, permit or other similar authorization affecting, or
relating in any way to, the Business, together with the name of
the government agency or entity issuing such license or permit
(the "Permits"). Such Permits are valid and in full force and
effect and, assuming the related Required Consents have been
obtained prior to the Closing Date, are transferable by Seller
and will not be terminated or impaired or become terminable as a
result of the transactions contemplated hereby. Upon
consummation of such transactions, Buyer will, assuming the
related Required Consents have been obtained prior to the Closing
Date, have all of the right, title and interest in all the
Permits.
3.15. Insurance Coverage. Seller maintains no insurance
coverage with respect to the Purchased Assets, the business and
operations of the Business and its employees.
3.16. Compliance with Laws. Seller is not in violation
of, has not violated, and to Seller's and Xxxxxx'x knowledge is
not under investigation with respect to and has not been
threatened to be charged with or given notice of any violation
of, any law, rule, ordinance or regulation, or judgment, order or
decree entered by any court, arbitrator or governmental
authority, domestic or foreign, applicable to the Purchased
Assets or the conduct of the Business, except for violations that
have not had and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
3.17. Inventories. The Seller has no inventories.
3.18. Receivables. Except as set forth on Schedule 3.18,
all accounts, notes receivable and other receivables (other than
receivables collected since the Balance Sheet Date) reflected on
the Balance Sheet are, and all accounts and notes receivable
arising from or otherwise relating to the Business at the Closing
Date will be, valid, genuine and fully collectible in the
aggregate amount thereof, subject to normal and customary trade
discounts. All accounts, notes receivable and other receivables
arising out of or relating to the Business at the Balance Sheet
Date have been included in the Balance Sheet.
3.19. Proprietary Rights.
(a) Schedule 3.19(a) contains a list of all of
Seller's Proprietary Rights, including but not limited to: (i)
computer software, data and documentation; (ii) patents and
patent applications; (iii) trademarks, tradenames and service
marks and registrations thereof and applications therefor; (iv)
registered copyrights and applications for copyright
registration; and (v) logos; as well as licenses relating to any
of the foregoing. Schedule 3.19(a) identifies the owner of each
item listed thereon and, in the case of registrations and
applications, the application or registration number and date.
(b) Seller or Xxxxxx owns or has the right to use all
of Seller's Proprietary Rights. Upon execution and delivery by
Seller and Xxxxxx to Buyer of the instruments of conveyance
contemplated by this Agreement, each item of Seller's Proprietary
Rights will be owned or available for use by Buyer on identical
terms and conditions immediately following the Closing, except as
otherwise indicated on Schedule 3.19(b). Seller has taken
reasonable measures to protect the proprietary nature of Seller's
Proprietary Rights and to maintain in confidence the trade
secrets and confidential information that it owns or uses in the
Business. To Seller's and Xxxxxx'x knowledge, no other Person
has any rights to any item of Seller's Proprietary Rights or has
any rights to any of Seller's Proprietary Rights, except that the
items of Seller's Proprietary Rights identified on Schedule
3.19(a) as licensed to Seller are owned by the respective owners
identified on Schedule 3.19(a), and, to Seller's or Xxxxxx'x
knowledge, no other Person is infringing, violating or
misappropriating any of Seller's Proprietary Rights, except as
otherwise indicated on Schedule 3.19(b).
(c) Except as set forth in Schedule 3.19(b), to
Seller's knowledge, none of the activities or business presently
conducted by the Business infringes or violates, or constitutes a
misappropriation of, any Proprietary Rights of any other person
or entity. Except as set forth in Schedule 3.19(b), the Seller
has not received any complaint, claim or notice alleging any such
infringement, violation or misappropriation.
(d) Except as set forth in Schedule 3.19(b), with
respect to each item of Seller's Proprietary Rights:
(i) Seller possesses all right, title and
interest in and to such item;
(ii) such item is not subject to any outstanding
judgment, order, decree, stipulation, injunction or any
other encumbrance; and
(iii) Neither Seller nor Xxxxxx has agreed to
indemnify any person or entity for or against any
infringement, misappropriation or other conflict with
respect to such item.
(e) Schedule 3.19(a) also identifies each item of
Seller's Proprietary Rights used in the operation of the Business
that is owned by a party other than Seller. All licenses or
other agreements pursuant to which Seller uses such items are
listed on Schedule 3.19(a). Except as set forth in Schedule
3.19(b), with respect to each such item:
(i) the license or other agreement, covering such
item is legal, valid, binding, enforceable and in full
force and effect with respect to Seller and Xxxxxx,
and, to Seller's and Xxxxxx'x knowledge, with respect
to every other party thereto;
(ii) except as set forth in Schedule 3.19(b), each
such license or other agreement to which Seller or
Xxxxxx is a party is assignable by Seller or Xxxxxx to
Buyer without the consent or approval of or any payment
to any party, and all such licenses and other
agreements will continue to be legal, valid, binding,
enforceable and in full force and effect immediately
following the Closing in accordance with the terms
thereof as in effect immediately prior to the Closing,
and the consummation of the transactions contemplated
herein will not conflict with, result in a violation or
breach of or constitute a default under (or would
result in a violation, breach or default with the
giving of notice or the passage of time or both) any
such license or other agreement;
(iii) except as set forth in Schedule 3.19(b),
neither Seller or Xxxxxx, nor, to Seller's or Xxxxxx'x
knowledge, any other party is in breach or default
under any such license or other agreement, and no event
has occurred which, with notice and/or lapse of time,
would constitute such a breach or default or permit
termination, modification or acceleration thereunder;
(iv) to Seller's and Xxxxxx'x knowledge, the
underlying item of Seller's Proprietary Rights is not
subject to any outstanding judgment, order, decree,
stipulation or injunction; and
(v) Seller or Xxxxxx has not agreed to indemnify
any Person for or against any interference,
infringement, misappropriation or other conflict with
respect to such item.
3.20. Products. Each of the products produced or sold by
Seller in connection with the Business (i) is, and at all times
has been, in compliance in all material respects with all
applicable federal, state, local and foreign laws and regulations
and (ii) is, and at all relevant times has been, fit for the
ordinary purposes for which it is intended to be used and
conforms in all material respects to any promises or affirmation
of fact made on the container or liable for such products or in
connection with its sale. To Seller's or Fosters' knowledge,
there is no design defect with respect to any of such products.
3.21. Finders' Fees. There is no investment banker,
broker, finder or other intermediary which has been retained by
or is authorized to act on behalf of Seller or Xxxxxx who might
be entitled to any fee or commission from Buyer or Seller or any
of their respective Affiliates upon consummation of the
transactions contemplated by this Agreement.
3.22. Other Information. To Seller's or Xxxxxx'x
knowledge, none of the documents or information delivered to
Buyer in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained therein not
misleading.
3.23. Environmental Compliance. (i) Seller and Xxxxxx
have materially complied with all applicable foreign, national,
federal, state and/or local laws (including without limitation
case law, rules, regulations, orders, judgments, decrees,
permits, licenses and governmental approvals) that are intended
to protect the environment and/or human health or safety
(collectively, "Environmental Laws"); (ii) neither Seller nor
Xxxxxx has handled, generated, used, stored, transported or
disposed of any substance or waste which is regulated by
Environmental Laws, except for reasonable amounts of ordinary
office supplies and/or office-cleaning supplies which have been
handled in compliance with Environmental Laws; and (iii) to the
knowledge of Seller or Xxxxxx, there are no "Environmental
Liabilities." For purposes of this Agreement, "Environmental
Liabilities" are any liabilities which (y) arise out of or in any
way relate to Seller or any real estate at any time owned, used
or leased by Seller, or Seller's or Xxxxxx'x use or ownership
thereof, whether vested or unvested, contingent or fixed, actual
or potential, and (z) arise from or relate to actions occurring
(including any failure to act) or conditions existing on or
before the Closing Date.
3.24. Representations. The representations and
warranties of Seller and Xxxxxx contained in this Agreement, as
modified by the corresponding schedules hereto, disregarding all
qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, are true and correct with
only such exceptions as would not in the aggregate reasonably be
expected to have a Material Adverse Effect.
3.25. Purchase for Investment. The Seller is acquiring
the shares of Buyer Common Stock for investment for its own
account and not with a view to, or for sale in connection with,
any distribution thereof. The Seller agrees that the shares of
Buyer Common Stock acquired by the Seller may not be sold,
transferred or otherwise disposed of unless such shares are
registered with the Securities and Exchange Commission and the
securities regulatory authorities of certain states or unless an
exemption from such registration is available.
3.26. Consultants. Except as set forth on Schedule 3.26,
there have been no consultants hired by Seller or employed by
Seller in connection with the Business.
3.27. Site Licenses. Except as set forth on Schedule
3.27, there have been no site licenses granted in connection with
the Business by Seller to any third party.
3.28. Source Code Licenses. There have been no source
code licenses of the core module granted by Seller of any
Software manufactured and developed in connection with the
Business.
3.29. Other Licenses. Except as set forth on Schedule
3.29, there have been no source code licenses of task, tools and
reader software modules granted by Seller in connection with the
Business.
3.30. Resellers, Distributors, etc. Except as set forth
on Schedule 3.30, there have been no distributors,
representatives or resellers of any software used in connection
with the Business and purchased by the Buyer. Furthermore,
except for the Seller, no other Person is authorized or licensed
to distribute source code, developed or used in connection with
the Business, to a third party.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warranties to Seller that:
4.01. Organization and Existence. Buyer is a corporation
duly incorporated, validly existing and in good standing under
the laws of Massachusetts and has all corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
4.02. Corporate Authorization. The execution delivery
and performance by Buyer of this Agreement and of each of the
Ancillary Agreements and the consummation by Buyer of the
transactions contemplated hereby and thereby are within the
corporate powers of Buyer and have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement
and each of the Ancillary Agreements to which Buyer is a party
constitute valid and binding agreements of Buyer.
4.03. Governmental Authorization. The execution,
delivery and performance by Buyer of this Agreement and each of
the Ancillary Agreements require no action by or in respect of,
or filing with, any governmental body, agency, official or
authority.
4.04. Non-Contravention. The execution and delivery of
this Agreement by the Buyer, the performance by the Buyer of its
obligations under this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i)
contravene or conflict with the corporate charter or bylaws of
the Buyer, (ii) contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to the
Buyer; (iii) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or
obligation of the Buyer or to a loss of any benefit to which the
Buyer is entitled under any provision of any agreement, contract
or other instrument binding upon the Buyer or any permit held by
the Buyer or (iv) assuming the receipt of all required consents,
result in the creation or imposition of any Lien on any asset of
the Buyer.
4.05. Common Stock. Buyer covenants and agrees that the
Common Stock to be delivered to Seller in connection with this
Agreement will, at the time of such delivery, be validly issued
and outstanding and be fully paid and nonassessable.
ARTICLE V
COVENANTS OF SELLER AND XXXXXX
Seller and Xxxxxx jointly and severally agree that:
5.01. Conduct of the Business. From the date hereof
until the Closing Date, Seller shall conduct the Business in the
ordinary course consistent with past practice, use its best
efforts to preserve intact the business organization and
relationships with third parties of the Business, and to keep
available the services of the present employees of the Business.
Without limiting the generality of the foregoing, from the date
hereof until the Closing Date, Seller will not:
(a) merge or consolidate with any other Person or
acquire a material amount of assets from any other Person;
(b) sell, lease, license or otherwise dispose of any
Purchased Assets except (i) pursuant to existing contracts or
commitments and (ii) in the ordinary course consistent with
past practice;
(c) declare, set aside or pay any dividend or make any
other distribution of assets of any kind whatsoever with
respect to any Seller ownership interests, except that Seller
may declare, set aside or pay to Xxxxxx a cash dividend
provided, however, Seller maintains cash of at least $5,000
on and as of the Closing Date;
(d) adopt or propose any change in its constitutional
documents; or
(e) agree or commit to do any of the foregoing.
Seller will not (i) take or agree or commit to take any action
that would make any representation and warranty of Seller
hereunder inaccurate in any respect at, or as of any time prior
to, the Closing Date or (ii) omit or agree or commit to omit to
take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
5.02. Access to Information. From the date hereof until
the Closing Date, Seller (a) will give Buyer, its counsel,
financial advisors, financing sources, auditors and other
authorized representatives full access to the offices,
properties, books and records of Seller related to the Business,
(b) will furnish to Buyer, its counsel, financial advisors,
financing sources, auditors and other authorized representatives
such financial and operating data and other information relating
to the Business as such Persons may reasonably request and
(c) will instruct the employees, counsel and financial advisors
of Seller to cooperate with Buyer in its investigation of the
Business; provided that no investigation pursuant to this Section
shall affect any representation or warranty given by Seller
hereunder; and provided further that any investigation pursuant
to this Section shall be conducted in such manner as not to
interfere unreasonably with the conduct of the business of
Seller.
5.03. Notices of Certain Events. Seller shall promptly
notify Buyer of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be
required in connection with the transactions contemplated by
this Agreement;
(ii) any notice or other communication from any
governmental or regulatory agency or authority in connection
with the transactions contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge
threatened against, relating to or involving or otherwise
affecting Seller or Xxxxxx or the Business that, if pending
on the date of this Agreement, would have been required to
have been disclosed pursuant to Section 3.12 or that relate
to the consummation of the transactions contemplated by this
Agreement.
5.04. Noncompetition and Nonsolicitation. (a) Seller and
Xxxxxx agree that for a period of one (1) full year from the
Closing Date, neither Seller, Xxxxxx nor any of their respective
Affiliates shall:
(i) without the Buyer's prior written consent, directly or
indirectly, alone or as a partner, joint venturer, officer,
director, employee, consultant, agent, independent
contractor, unpaid volunteer or stockholder of any company or
business, engage in any business activity which is or may be
directly or indirectly in competition with any of the
products or services developed, marketed, licensed,
distributed, planned or sold by Seller or Buyer. The
ownership by Seller or Xxxxxx of not more than two percent of
the shares of stock of any corporation having a class of
equity securities actively traded on a national securities
exchange or on Nasdaq shall not be deemed, in and of itself,
to violate the prohibitions of this paragraph.
(ii) solicit, divert or take away, directly or indirectly,
whether alone or as a sole proprietor, partner, officer,
director, consultant, employee, joint venturer, agent,
representative, unpaid volunteer or independent contractor,
whether for the Seller's or Xxxxxx'x own interest or for the
interest of any other person or entity, existing customers or
business of Seller or Buyer or hire or attempt to hire, or
solicit, receive or accept the performance of services by, or
discuss with any employee of Seller or Buyer the employment
of such employee by, any company, business organization or
any other entity that develops, licenses, produces or
manufactures any product or provides services that directly
or indirectly compete with those developed, produced,
licensed, manufactured or marketed by Seller or Buyer.
(b) If any provision contained in this Section shall for
any reason by held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Section, but this Section
shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants
contained herein is held to cover a geographic area or to be for
a length of time which is not permitted by applicable law, or in
any way construed to be too broad or to any extent invalid, such
provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or
enforceable under applicable law, a court of competent
jurisdiction shall construe and interpret or reform this Section
to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater
than those contained herein) as shall be valid and enforceable
under such applicable law. Seller acknowledges that Buyer would
be irreparably harmed by any breach of this Section and that
there would be no adequate remedy at law or in damages to
compensate Buyer for any such breach. Seller agrees that Buyer
shall be entitled to injunctive relief requiring specific
performance by Seller of this Section, and Seller consents to
the entry thereof.
5.05. Confidentiality. Seller and Xxxxxx will hold, and
will use its or his commercially reasonable best efforts to cause
Seller's officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by
other requirements of law, all confidential documents and
information concerning Buyer or the Business furnished to Seller
or Xxxxxx in connection with the transactions contemplated by
this Agreement, and (after the Closing Date) all confidential
documents and information concerning Seller, except to the extent
that such information can be shown to have been (i) previously
known on a nonconfidential basis by Seller or Xxxxxx, (ii) in the
public domain through no fault of Seller or Xxxxxx or (iii) later
lawfully acquired by Seller or Xxxxxx from sources other than
Seller or Buyer; provided that Seller may disclose such
information to Seller's officers, directors, employees,
accountants, counsel, consultants, advisors and agents in
connection with the transactions contemplated by this Agreement
so long as such persons are informed by Seller or Xxxxxx of the
confidential nature of such information and are directed by
Seller or Xxxxxx to treat such information confidentially. The
obligation of Seller and Xxxxxx to hold any such information in
confidence shall be satisfied if they exercise the same care with
respect to such information as they would take to preserve the
confidentiality of their own similar information but in no event
less than a reasonable degree of care. If this Agreement is
terminated, Seller and Xxxxxx will, and will use their best
efforts to cause Seller's officers, directors, employees,
accountants, counsel, consultants, advisors and agents to,
destroy or deliver to Buyer, upon request, all documents and
other materials, and all copies thereof, obtained by Seller or
Xxxxxx, or on their behalf from Buyer in connection with this
Agreement that are subject to such confidence.
5.06. Trademarks; Tradenames. As soon as practicable
after the Closing Date, Seller shall eliminate the use of all of
the trademarks, tradenames, service marks and service names used
in the Business, in any of their forms or spellings, on all
advertising, stationery, business cards, checks, purchase orders
and acknowledgments, customer agreements and other contracts and
all business documents.
5.07. No Negotiation with Third Parties. From the date
hereof until the Closing, Seller and Xxxxxx agree not to,
directly or indirectly, through agent, representative,
stockholder or otherwise: (i) solicit or entertain offers from,
negotiate with or in any manner encourage, discuss, accept or
consider, any proposal of any third party relating to an
investment in Seller or the acquisition of Seller, its capital
stock, its assets (or rights thereto) or its business, in whole
or in part, whether through direct purchase, merger,
consolidation or business combination or licensing transaction
(all such transactions being referred to herein as "Acquisition
Proposals"); (ii) disclose to any third party any non-published
information concerning Seller, its business, or financial
condition in connection with an acquisition or investment in
Seller, provided, however; Seller may disclose such information
to its accountants and legal counsel, or (iii) withdraw their
intention to engage in a transaction with Buyer. If Seller or
Xxxxxx or any of Seller's employees, stockholders, agents, or
representatives receive any unsolicited inquiry (however
preliminary), offer or proposal, Seller or Xxxxxx shall promptly
notify Buyer.
5.08. Use of Proprietary Rights. Seller and Xxxxxx shall
not use any source materials (any source code, algorithms,
computer program designs, subroutines, system specifications and
other technical information relating to the development and
architecture of the software included in the Purchased Assets and
the design, configuration, programming or protocol relating to
such software) transferred as part of the Purchased Assets for
its own benefit, or for the benefit of others, except, in the
case of Xxxxxx who is a natural person, in his capacity as an
employee of Buyer or for inadvertent and incidental uses as may
be due to memories related to aspects of such source materials.
5.09. Continuing Disclosure. Until the Closing, Seller
and Xxxxxx shall have the continuing obligation promptly to
advise Buyer with respect to any matter hereafter arising or
discovered that, if existing or known at the date of this
Agreement, would have been required to be set forth or described
in a schedule to this Agreement, or that constitutes a breach or
prospective breach of this Agreement by Seller or Xxxxxx. The
delivery of any such notice shall not affect Buyer's remedies
hereunder.
ARTICLE VI
COVENANTS OF BUYER
Buyer agrees that:
6.01. Confidentiality. Prior to the Closing Date and
after any termination of this Agreement, Buyer and its Affiliates
will hold, and will use their commercially reasonable best
efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold,
in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all
confidential documents and information concerning the Business or
Seller furnished to Buyer or its Affiliates in connection with
the transactions contemplated by this Agreement, except to the
extent that such information can be shown to have been
(i) previously known on a nonconfidential basis by Buyer, (ii) in
the public domain through no fault of Buyer or (iii) later
lawfully acquired by Buyer from sources other than Seller;
provided that Buyer may disclose such information to its
officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such
persons are informed by Buyer of the confidential nature of such
information and are directed by Buyer to treat such information
confidentially. The obligation of Buyer and its Affiliates to
hold any such information in confidence shall be satisfied if
they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own
similar information but in no event less than a reasonable degree
of care. If this Agreement is terminated, Buyer and its
Affiliates will, and will use their best efforts to cause their
respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to, destroy or deliver to
Seller, upon request, all documents and other materials, and all
copies thereof, obtained by Buyer or its Affiliates or on their
behalf from Seller in connection with this Agreement that are
subject to such confidence.
6.02. Software Engineer Support. Following the closing,
the Buyer agrees to hire a full-time software engineer and make
such engineer available to support the Software purchased by the
Buyer.
ARTICLE VII
COVENANTS OF BOTH PARTIES
The parties hereto agree that:
7.01. Best Efforts; Further Assurances. (a) Subject to
the terms and conditions of this Agreement, each party will use
its commercially reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.
Seller and Buyer each agree to execute and deliver such other
documents, certificates, agreements and other writings and to
take such other actions as may be necessary in order to
consummate or implement expeditiously the transactions
contemplated by this Agreement and to vest in Buyer good and
marketable title to the Purchased Assets.
(b) Seller hereby constitutes and appoints, effective as
of the Closing Date, Buyer and its successors and assigns as the
true and lawful attorney of Seller with full power of
substitution in the name of Buyer or in the name of Seller, but
for the benefit of Buyer (i) to collect for the account of Buyer
any items of Purchased Assets and (ii) to institute and prosecute
all proceedings which Buyer may in its sole discretion deem
proper in order to assert or enforce any right, title or interest
in, to or under the Purchased Assets, and to defend or compromise
any and all actions, suits or proceedings in respect of the
Purchased Assets. Buyer shall be entitled to retain for its
account any amounts collected pursuant to the foregoing powers,
including any amounts payable as interest in respect thereof.
7.02. Certain Filings. Seller and Buyer shall cooperate
with one another (a) in determining whether any action by or in
respect of, or filing with, any governmental body, agency,
official or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to
any material contracts, in connection with the consummation of
the transactions contemplated by this Agreement and (b) in taking
such actions or making any such filings, furnishing information
required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers.
ARTICLE VIII
TAX MATTERS
8.01. Tax Definitions. The following terms, as used
herein, have the following meanings:
"Code" means the Internal Revenue Code of 1986, as
amended.
"Post-Closing Tax Period" means any Tax period (or portion
thereof) ending after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion
thereof) ending on or before the close of business on the date
preceding the Closing Date.
"Taxes" means all federal, state, local, foreign and other
net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs duties,
or other Taxes, fee, assessments or other charges of any kind
whatsoever, together with any interest or any penalty, addition
to tax or additional amount imposed by any governmental authority
(foreign or domestic), and the term "Tax" means any one of the
foregoing taxes. The term "Returns" as used herein, means all
returns, declarations, reports, statements and other documents
required to be filed in respect of Taxes, and "Return" means any
one of the foregoing Returns.
8.02. Tax Matters. Seller and Xxxxxx jointly and
severally hereby represent and warrant to Buyer that:
(a) Seller has timely paid all Taxes, and all interest and
penalties due thereon and payable by it, for the Pre-Closing Tax
Period which will have been required to be paid on or prior to
the Closing Date.
(b) Seller has established, in accordance with generally
accepted accounting principles applied on a basis consistent with
that of preceding periods, adequate reserves for the payment of,
and will timely pay all Tax liabilities, assessments, interest
and penalties which arise from or with respect to the Purchased
Assets or the operation of the Business and are incurred in or
attributable to the Pre-Closing Tax Period.
(c) Seller has filed any and all necessary elections and
has received confirmation that Seller is an "S Corporation" and
has been an "S Corporation" (within the meaning of Section
1361(a)(1)) at all times from inception through the Closing Date.
Xxxxxx has timely paid (or will pay) all Taxes arising from or
with respect to the Purchased Assets or the operation of the
Business, the nonpayment of which would result in a Lien on any
Purchased Asset, would otherwise affect the Business or would
result in Buyer becoming liable therefor.
(d) There has not been any audit of any Return filed by
the Seller with respect to, or which may relate to, items of
income, gain, deduction, loss or credit of Seller, and no such
audit of Seller is in progress and Xxxxxx has not received notice
from any Tax authority that any such audit is contemplated or
pending.
8.03. Tax Cooperation; Allocation of Taxes. (a) Buyer
and Seller agree to furnish or cause to be furnished to each
other, upon request, as promptly as practicable, such information
and assistance relating to the Purchased Assets and the Business
as is reasonably necessary for the filing of all Tax returns, and
making of any election related to Taxes, the preparation for any
audit by any taxing authority, and the prosecution or defense of
any claim, suit or proceeding relating to any Tax return. Seller
and Buyer shall cooperate with each other in the conduct of any
audit or other proceeding related to Taxes involving the Business
and each shall execute and deliver such powers of attorney and
other documents as are necessary to carry out the intent of this
paragraph (a) of Section 8.03.
(b) All real property taxes, personal property taxes and
similar ad valorem obligations levied with respect to the
Purchased Assets for a taxable period which includes (but does
not end on) the Closing Date (collectively, the "Apportioned
Obligations") shall be apportioned between Seller and Buyer as of
the Closing Date based on the number of days of such taxable
period included in the Pre-Closing Tax Period and the number of
days of such taxable period included in the Post-Closing Tax
Period. Seller shall be liable for the proportionate amount of
such taxes that is attributable to the Pre-Closing Tax Period.
Within 90 days after the Closing, Seller and Buyer shall present
a statement to the other setting forth the amount of
reimbursement to which each is entitled under this
Section 8.03(b) together with such supporting evidence as is
reasonably necessary to calculate the proration amount. The
proration amount shall be paid by the party owing it to the other
within 10 days after delivery of such statement. Thereafter,
Seller shall notify Buyer upon receipt of any xxxx for real or
personal property taxes relating to the Purchased Assets, part or
all of which are attributable to the Post-Closing Tax Period, and
shall promptly deliver such xxxx to Buyer who shall pay the same
to the appropriate taxing authority, provided that if such xxxx
covers the Pre-Closing Tax Period, Seller shall also remit prior
to the due date of assessment to Buyer payment for the
proportionate amount of such xxxx that is attributable to the Pre-
Closing Tax Period. If either Seller or Buyer shall thereafter
make a payment for which it is entitled to reimbursement under
this Section 8.03(b), the other party shall make such
reimbursement promptly but in no event later than 30 days after
the presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along
with such supporting evidence as is reasonably necessary to
calculate the amount of reimbursement. Any payment required
under this Section and not made within 10 days of delivery of the
statement shall bear interest at the rate per annum determined,
from time to time, under the provisions of Section 6621(a)(2) of
the Code for each day until paid.
(c) Any transfer, documentary, sales, use or other Taxes
assessed upon or with respect to the transfer of the Purchased
Assets to Buyer and any recording or filing fees with respect
thereto shall be the responsibility of Seller.
(d) The parties shall treat for all United States federal
income tax purposes the transaction evidenced by this Agreement
as a reorganization within the meaning of 368(a)(i)(c) of the
Code.
ARTICLE IX
EMPLOYEE BENEFITS
9.01. Employee Benefits Representations. Seller and Xxxxxx
hereby represent and warrant to Buyer that:
(a) Seller does not maintain, administer or contribute to,
nor did Seller at any time in the past maintain, administer or
contribute to, any (A) employee pension benefit plan (as defined
in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")); (B) employee welfare benefit plan
(as defined in Section 3(1) of ERISA; or (C) benefit arrangement,
including but not limited to a contract, arrangement or policy
providing for severance, insurance coverage (including any self-
insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits,
pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights
or other forms of incentive compensation or post-retirement
insurance, compensation or benefits.
(b) No employee of the Seller will become entitled to any
bonus, retirement, severance or similar benefit or enhanced
benefit solely as a result of the transactions contemplated
hereby.
(c) Except as disclosed in Schedule 9.01 hereto, there are
no oral or written agreements or other arrangements with respect
to present or former employees or consultants to which Seller is
a party, or by which Seller is bound, and the employment of each
employee of Seller is at-will.
9.02. No Third Party Beneficiaries. No provision of this
Article shall create any third party beneficiary or other rights
in any employee or former employee (including any beneficiary or
dependent thereof) of Seller in respect of continued employment
(or resumed employment) with either Buyer or the Business or any
of their Affiliates and no provision of this Article IX shall
create any such rights in any such Persons in respect of any
benefits that may be provided, directly or indirectly, under any
benefit plan or arrangement that may be established by Buyer or
any of its Affiliates. No provision of this Agreement shall
constitute a limitation on rights to amend, modify or terminate
after the Closing Date any such plans or arrangements of Buyer or
any of its Affiliates.
ARTICLE X
CONDITIONS TO CLOSING
10.01. Conditions to the Obligations of Each Party. The
obligations of Buyer, Seller and Xxxxxx to consummate the Closing
are subject to the satisfaction or waiver of the following
conditions:
(a) No provision of any applicable law or regulation and
no judgment, injunction, order or decree shall prohibit the
consummation of the Closing.
(b) No proceeding challenging this Agreement or the
transactions contemplated hereby or seeking to prohibit,
alter, prevent or materially delay the Closing shall have
been instituted by any Person before any court, arbitrator or
governmental body, agency or official and be pending.
(c) Each of Buyer, Seller and Xxxxxx shall have executed
and delivered to the other each of the Ancillary Agreements
to be entered into at Closing, in each case substantially in
the form attached as an Exhibit to this Agreement.
(d) All actions by or in respect of or filings with any
governmental body, agency, official or authority required to
permit the consummation of the Closing shall have been
obtained.
10.02. Conditions to Obligation of Buyer. The obligation
of Buyer to consummate the Closing is subject to the satisfaction
or waiver of the following further conditions:
(a)(i) Seller and Xxxxxx shall have performed in all
material respects all of their respective obligations hereunder
required to be performed by them at or prior to the Closing Date,
(ii) the representations and warranties of Seller contained in
this Agreement as of the date hereof shall be true and correct in
all material respects at and as of the Closing Date as if made at
and as of such date and (iii) Buyer shall have received
certificates signed by the President of Seller and Xxxxxx to the
foregoing effect.
(b) No provision of any applicable law or regulation and
no judgment, injunction, order or decree shall restrain, prohibit
or otherwise interfere with the effective operation or enjoyment
by Buyer of all or any material portion of the Purchased Assets.
(c) Execution and delivery of other relevant agreements,
including non-compete, employment agreements, trademark or
software licenses, leases, supply, service or administrative
agreements or other transition agreements.
(d) Seller shall have received all Required Consents, all
consents required under and referred to in Section 2.05, and all
consents, authorizations or approvals from the governmental
agencies referred to in Section 3.03, in each case in form and
substance reasonably satisfactory to Buyer, and no such consent,
authorization or approval shall have been withdrawn.
(e) Buyer shall have received such closing documents as it
may reasonably request, all in form and substance reasonably
satisfactory to Buyer.
(f) Assumed Liabilities shall be in the aggregate no
greater than $5,000.
(g) Buyer shall have physically received all source code
and object code of all software forming part of the Purchased
Assets, fully documented, including all related technical and
user documentation.
(h) Buyer shall have physically received a bank check in
an amount equal to all of Seller's cash, xxxxx cash and cash
equivalents on hand and in banks, such amount to be not less than
$5,000 in the aggregate.
(i) Seller and Xxxxxx shall have executed and delivered
each of the Ancillary Agreements to be entered into by each of
them at the closing, in each case substantially in the form
attached as an exhibit to this Agreement.
(j) Buyer shall have received all proper authorization to
enter into this Agreement and the Ancillary Agreements.
10.03. Conditions to Obligations of Seller and Xxxxxx.
The obligation of Seller and Xxxxxx to consummate the Closing is
subject to the satisfaction or waiver of the following further
conditions:
(a) (i) Buyer shall have performed in all material respect
all of its obligations hereunder required to be performed by it
at or prior to the Closing Date, (ii) the representations and
warranties of Buyer contained in this Agreement as of the date
hereof and in any certificate or other writing delivered by
Seller pursuant hereto shall be true and correct in all material
respects at and as of the Closing Date, as if made at and as of
such date and (iii) Seller shall have received a certificate
signed by the Chief Financial Officer of Buyer to the foregoing
effect.
(b) Execution and delivery of other relevant agreements,
including non-compete, employment agreements, trademark or
software licenses, leases, supply, service or administrative
agreement or other transition agreements.
(c) Buyer shall have received all consents, authorizations
or approvals from governmental agencies referred to in
Section 4.03, in each case in form and substance reasonably
satisfactory to Seller, and no such consent, authorization or
approval shall have been removed.
(d) Seller shall have received all other closing documents
it may reasonably request, all in form and substance reasonably
satisfactory to Seller.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01. Survival. The covenants, agreements,
representations and warranties of the parties hereto contained in
this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall survive the
Closing until the third anniversary of the Closing Date or (i) in
the case of Sections 5.04 and 5.05, for the period set forth
therein, (ii) in the case of Sections 5.05 and 6.01,
indefinitely; and (iii) in the case of the covenants, agreements,
representations and warranties contained in Articles VIII or IX,
until expiration of the applicable statutory period of
limitations (giving effect to any waiver, mitigation or extension
thereof), if later. Notwithstanding the preceding sentence, any
covenant, agreement, representation or warranty in respect of
which indemnity may be sought under Sections 11.02 or 11.03 shall
survive the time at which it would otherwise terminate pursuant
to the preceding sentence, if notice of the inaccuracy or breach
thereof giving rise to such right to indemnity shall have been
given to the party against whom such indemnity may be sought
prior to such time.
11.02. Indemnification. (a) Seller and Xxxxxx hereby
jointly and severally indemnify Buyer and its directors,
officers, stockholders and Affiliates against and agrees to hold
each of them harmless from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses
of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) (collectively,
"Loss") incurred or suffered by Buyer or any of its directors,
officers, stockholders and Affiliates arising out of:
(i) any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by Seller and Xxxxxx
pursuant to this Agreement (determined without regard to any
materiality qualification contained in any representation,
warranty or covenant giving rise to the claim for indemnity
hereunder and whether or not discovered by Buyer prior to
Closing); or
(ii) the failure of Seller to assume full responsibility
for any Excluded Liability or any obligation or liability of
the Business relating to the Excluded Assets; provided
however that Seller and Xxxxxx shall not be liable under this
Section 11.02(a) unless the aggregate amount of Loss with
respect to all matters referred to in this Section 11.02(a)
exceeds $10,000; provided, further, that once the Loss
exceeds $10,000, the Buyer shall be entitled to
indemnification for the full amount of such Loss. The
maximum liability of the Seller and Xxxxxx, in the aggregate,
pursuant to this Section 11.02(a) shall be $190,000 plus the
dollar value of all contingent payments calculated and issued
to the Seller pursuant to Section 2.07(e).
(b) Buyer hereby indemnifies Seller and Xxxxxx, their
respective agents and affiliates against and agrees to defend
and hold them harmless from any and all Loss incurred or
suffered arising out of any misrepresentation or breach of
warranty, covenant or agreement made or to be performed by
Buyer pursuant to this Agreement. The maximum liability of
the Buyer pursuant to this Section 11.02(b) shall be $190,000
plus the dollar value of all contingent payments calculated
and issued to the Seller pursuant to Section 2.07(e).
11.03. Environmental Indemnification. On the terms and
subject to the conditions of this Article XI, Seller hereby
agrees to indemnify, defend and hold harmless Buyer and its
directors, officers, stockholders and affiliates from and against
any and all Losses (including reasonable expenses of
investigation (including, but not by way of limitation,
investigation by engineers, environmental consultants and similar
technical personnel)) incurred or suffered by Buyer or any of its
directors, officers, stockholders and Affiliates arising out of,
in respect of or in connection with Environmental Liabilities.
11.04. Procedures; No Waiver. (a) The party seeking
indemnification under Section 11.02 or 11.03 (the "Indemnified
Party") agrees to give prompt notice to the party against whom
indemnity is sought (the "Indemnifying Party") of the assertion
of any claim, or the commencement of any suit, action or
proceeding in respect of which indemnity may be sought under such
Section. The Indemnifying Party may, and at the request of the
Indemnified Party shall, participate in and control the defense
of any such third party suit, action or proceeding at its own
expense. The Indemnifying Party shall not be liable under
Section 11.02 or 11.03 for any settlement effected without its
consent of any claim, litigation or proceeding in respect of
which indemnity may be sought hereunder.
(b) No waiver of a closing condition by either Buyer or
Seller shall limit its rights under Section 11.02.
ARTICLE XII
TERMINATION
12.01. Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(i) by mutual written agreement of Seller, Xxxxxx and
Buyer;
(ii) by either Seller or Buyer if the Closing shall not
have been consummated on or before 11:59 p.m., Boston time,
on September 30, 1997; provided, however, that the right to
terminate this Agreement under this Section 12.01 shall not
be available to any party whose action or failure to act has
been a principal cause of or resulted in the failure of the
Closing to occur on or before such date and such action or
failure to act constitutes a breach of this Agreement;
(iii) by either Seller or Buyer if there shall be any law or
regulation that makes the consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if
consummation of the transactions contemplated hereby would
violate any nonappealable final order, decree or judgment of
any court or governmental body having competent jurisdiction;
(iv) by Buyer, if there shall have occurred any Material
Adverse Change in the financial condition, results of
operations, business, properties, assets or operations of
Seller since the date of this Agreement;
(v) by Buyer, upon breach of any representation, warranty,
covenant or agreement on the part of Seller or Xxxxxx set
forth in this Agreement, or if any representation or warranty
of Seller or Xxxxxx shall have become untrue, in either case
such that the conditions set forth in Section 10.02(a) would
not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become
untrue;
(vi) by Seller, upon a breach of any representation,
warranty, covenant or agreement on the part of Buyer set
forth in this Agreement, or if any representation or warranty
of Buyer shall have become untrue, in either case such that
the conditions set forth in Section 10.03(a) would not be
satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue.
The party desiring to terminate this Agreement pursuant to
this Section 12.01 shall give notice of such termination to the
other party.
12.02. Effect of Termination. If this Agreement is
terminated as permitted by Section 12.01, such termination shall
be without liability of either party (or any shareholder,
director, officer, employee, agent, consultant or representative
of such party) to the other party to this Agreement; provided
that if such termination shall result from the willful failure of
either party to fulfill a condition to the performance of the
obligations of the other party or to perform a covenant of this
Agreement or from a willful breach by either party to this
Agreement, such party shall be fully liable for any and all
Losses incurred or suffered by the other party as a result of
such failure or breach. The provisions of Sections 6.01 and
13.03 shall survive any termination hereof pursuant to
Section 12.01.
ARTICLE XIII
MISCELLANEOUS
13.01. Notices. All notices, requests and other
communications to either party hereunder shall be in writing
(including telex, telecopy or similar writing) and shall be
given,
if to Buyer, to:
PAREXEL International Corporation
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Xx.
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower, 000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
if to Seller, to:
Perceptive Systems, Inc.
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxxxx
Telecopy:
with a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
Holland & Xxxx
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
if to Xxxxxx, to:
Xx. Xxxxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
or such other address or addresses as may be specified by
written notice given in accordance with this provision.
13.02. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Closing Date if,
and only if, such amendment or waiver is in writing and signed by
the Buyer, Seller and Xxxxxx,
(b) No failure or delay by either party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
13.03. Expenses. Except as otherwise provided herein,
all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense;
provided, however, all costs and expenses incurred by Seller
shall be paid or reimbursed by Xxxxxx.
13.04. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns;
provided that no party may assign, delegate or otherwise transfer
any of his or its rights or obligations under this agreement
without the consent of the other parties hereto.
13.05. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the Commonwealth of
Massachusetts, without regard to the conflicts of law rules of
such state.
13.06. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall
become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
13.07. Entire Agreement. This Agreement (including the
exhibits and schedules hereto) and the Ancillary Agreements
between Seller, Xxxxxx and Buyer constitute the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth
herein has been made or relied upon by either party hereto.
Neither this Agreement, nor the Ancillary Agreements, nor any
provision hereof or thereof, is intended to confer upon any
Person other than the parties hereto any rights or remedies
hereunder.
13.08. Bulk Sales Laws. Buyer and Seller each hereby
waive compliance by Seller with the provisions of the "bulk
sales", "bulk transfer" or similar laws of any state. Seller
agrees to indemnify and hold Buyer harmless against any and all
claims, losses, damages, liabilities, costs and expenses incurred
by Buyer or any of its Affiliates as a result of any failure to
comply with any such "bulk sales", "bulk transfer" or similar
laws.
13.09. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the
construction or interpretation hereof.
13.10. Jurisdiction. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of,
this Agreement may be brought against any of the parties in the
federal courts of the Commonwealth of Massachusetts, and each of
the parties hereby consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or
proceeding and waives any obligation to venue laid therein.
Process in any such action or proceeding may be served on any
party anywhere in the world, whether within or without the
Commonwealth of Massachusetts.
13.11. Other Remedies; Specific Performance. Any and
all remedies herein expressly conferred upon a party will be
deemed cumulative and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by
a party of any one remedy will not preclude the exercise of any
other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto here caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
PAREXEL INTERNATIONAL CORPORATION
By: Xxxxx X. xxx Xxxxxxxxxx
Name: Xxxxx X. xxx Xxxxxxxxxx
Title: President and CEO
PERCEPTIVE SYSTEMS, INC.
By: Xxxxxx X. Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
