EXHIBIT 10.29
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of October 9,
2001, by and among (i) Optimal Robotics Inc., a corporation organized and
existing under the laws of the State of Delaware ("Purchaser"), and (ii) MAI
Systems Corporation, a corporation organized and existing under the laws of the
State of Delaware ("Seller").
WHEREAS Seller maintains a legacy hardware maintenance business (defined
in Section 10.1 as the "Business"), in respect of which Purchaser provides all
of the hardware maintenance service to customers of the Business pursuant to the
2000 Agreement (as hereinafter defined in Section 10.1);
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
acquire from Seller all of the assets relating to the Business, which assets
consist of the Customer Contracts, the Inventory, the Equipment and the Accounts
Receivable (as such terms are hereinafter defined in Section 1.1), the whole on
the terms and subject to the conditions set forth herein (the "Acquisition").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF CUSTOMER CONTRACT
LIABILITIES
1.1 ACQUIRED ASSETS. Subject to and upon the terms and conditions
set forth in this Agreement, Seller hereby sells, transfers,
conveys, assigns and delivers to Purchaser, and Purchaser hereby
purchases, free and clear of all Liabilities and Liens, other
than the Assumed Obligations, such that Purchaser shall have
good and marketable title thereto, free and clear of all
Liabilities and Liens other than the Assumed Obligations, all of
Seller's right, title and interest in and to the following
assets of the Business (collectively, the "Acquired Assets"):
1.1.1. the customer contracts listed on Schedule 1.1.1, to the
extent only that such rights, title and interest pertain
to the provision of hardware maintenance services (the
"Customer Contracts"). The Seller will retain all rights
under such contracts to the extent that they relate to
the provision of software maintenance and support;
1.1.2. all of the inventory used exclusively in the Business
(including, without limitation, all replacement parts)
of Seller, whether in transit or otherwise, which
inventory is the inventory set forth on Schedule 1.1.2,
(the "Inventory"), which Inventory is currently in the
possession of the Purchaser's field technicians or is in
the possession of BCP Systems, Inc. ("BCP"), in
Placentia, California;
1.1.3. all machinery, equipment, parts, tools and other fixed
assets that are owned by Seller and used in the carrying
on of the Business, wherever
located, which includes the machinery, equipment, parts,
tools, and other fixed assets set forth on Schedule
1.1.3 (the "Equipment"), which Equipment is currently in
the possession of the Purchaser's field technicians or
is in the possession of BCP, in Placentia, California;
and
1.1.4. the "T&M" accounts receivable of the Business as at the
date hereof, for which a partial listing, as of August
31, 2001, is set forth on Schedule 1.1.4 (the "Accounts
Receivable"). The Seller undertakes to provide to the
Purchaser, on or prior to October 15, 2001, a
replacement Schedule 1.1.4, initialed on behalf of the
Seller by its signatory hereto. The Seller represents
and warrants to the Purchaser that the aggregate face
amount of the Accounts Receivable, as shall be set forth
on the replacement Schedule 1.1.4, shall be at least
$40,000, less the aggregate amount of any credits issued
by Seller and approved by Purchaser, from August 31,
2001 to the date hereof. For the purposes hereof,
"Accounts Receivable" shall be deemed to include amounts
owing to Seller for services rendered but not invoiced
as of the date hereof, to the extent listed on Schedule
1.1.4.
The Inventory and Equipment are sold on an "as is" basis, the
Seller hereby excluding any and all express or implied
warranties as to fitness for a purpose or merchantability in
regard to the Inventory and Equipment. Purchaser acknowledges
having had the opportunity to evaluate an/or inspect the
Inventory and Equipment and accepts them in their current
condition.
The Seller makes no representation that the Accounts Receivable
are collectable.
For no additional consideration, the Seller hereby grants to the
Purchaser a non-exclusive, non-transferable (except as provided
in the next following paragraph of this Section 1.1),
irrevocable, worldwide, perpetual, royalty-free license (the
"License") of the right to use all documentation, schematics,
software and diagnostic software (collectively, the "Licensed
Material") required in order to setup, configure, test,
troubleshoot and repair the products that are to be serviced
pursuant to the Customer Contracts, and the Seller hereby
delivers to the Purchaser a copy of the Licensed Material.
Notwithstanding the foregoing paragraph of this Section 1.1, the
Purchaser shall have the right to transfer the License and the
Licensed Materials to its affiliates and, with the Seller's
prior written consent, which consent shall not be unreasonably
withheld, to any successor in interest as a result of the sale
of Purchaser's business or any part thereof, a consolidation or
a merger of Purchaser with or into another entity.
1.2 NON-ASSIGNABLE CONTRACTS. To the extent that any Customer
Contract is not assignable or transferable without the consent
or waiver of the other party thereto or any third party
(including, but not limited to, any Governmental or Regulatory
Authority) (a "Non-assignable Contract"), or if such assignment
or transfer or attempted assignment or transfer would constitute
a breach thereof or a violation of any Law or Order, this
Agreement shall not constitute an assignment or
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transfer, or an attempted assignment or transfer thereof until
such consent or waiver has been obtained, and the following
provisions shall be applicable:
1.2.1. Seller shall use its best efforts, and Purchaser shall
reasonably cooperate therewith, to obtain the consents
and waivers referred to in Section 1.2. To the extent
that any consent or waiver referred to in Section 1.2 is
not obtained by Seller, Seller shall (A) provide to
Purchaser at Seller's expense the benefits of any such
Non-assignable Contract, (B) cooperate in any reasonable
and lawful arrangement requested by Purchaser designed
to provide such benefits to Purchaser; and (C) at the
request of Purchaser, enforce for the account of
Purchaser at Seller's expense any right of Seller
arising from any such Non-assignable Contract against
such other party or parties thereto (including the right
to elect to terminate in accordance with the terms
thereof on the advice of Purchaser).
1.2.2. To the extent that Purchaser is provided the benefits
pursuant to this Section 1.2 of any such Non-assignable
Contract, Purchaser shall perform for the benefit of the
other party or parties thereto, the obligations of
Seller thereunder or in connection therewith, but only
to the extent that (i) such performance would not result
in any default thereunder or in connection therewith and
(ii) such obligations would have been Assumed
Obligations, but for the non-assignability or
non-transferability thereof.
1.2.3. The provisions of this Section 1.2 shall not affect
Seller's indemnification obligations pursuant to Section
8.
1.3 ASSUMED OBLIGATIONS. In connection with the sale, transfer,
conveyance, assignment and delivery of the Acquired Assets
pursuant to this Agreement, on the terms and subject to the
conditions set forth in this Agreement, Purchaser hereby assumes
and agrees to perform and discharge when due those obligations
of Seller under the Customer Contracts (the "Assumed
Obligations").
1.4 RETAINED OBLIGATIONS. Purchaser shall not assume any of the
Liabilities of Seller other than the Assumed Obligations.
1.5 PURCHASE PRICE. The purchase price for the Acquired Assets (the
"Purchase Price") is $815,522.55, which sum is allocated among
the Acquired Assets as follows:
(a) As to $50,000 to the Inventory;
(b) As to $50,000 to the Equipment;
(c) As to $20,000 to the Accounts Receivable; and
(d) As to the balance, to the Customer Contracts.
1.6 PAYMENT OF PURCHASE PRICE. The Purchase Price is payable:
(a) as to an amount of $487,522.55, by way of
set-off and compensation against the $487,522.55
of accounts receivable
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owing by Seller to Purchaser as of the date
hereof, which accounts receivable are hereby
deemed to have been paid in full;
(b) as to an amount of $28,000, by way of set off
and compensation against the $28,000 prepayment
due by Seller to Purchaser for the October 2001
Hospitality and Process Manufacturing services
to be performed by Purchaser under the 2000
Agreement; and
(c) as to the balance of $300,000, by bank wire,
receipt whereof is hereby acknowledged by
Seller.
1.7 ADDITIONAL CONSIDERATION. Purchaser shall pay to Seller, as
additional consideration for the Acquired Assets, twelve and
one-half percent (12.5%) of the gross revenues, if any, earned
by Purchaser pursuant to the Customer Contracts from and after
the first day of October 2003 through and including the 30th day
of September 2006 (the "Additional Consideration"); provided,
however, that if in any calendar quarter during such period, the
gross profit earned by Purchaser pursuant to the Customer
Contracts is less than or greater than forty-five percent (45%)
of gross revenues earned on the Customer Contracts, the
Additional Consideration payable to Seller in respect of such
quarter shall be proportionately reduced or increased, as the
case may be. Within thirty days after the publication by Optimal
Robotics Corp. of its quarterly or annual consolidated financial
statements, as the case may be, Purchaser shall certify to
Seller the amount of the Additional Consideration in respect of
the preceding calendar quarter and shall forthwith thereafter
pay to Seller such Additional Consideration. Seller shall have
the right, on not less than 15 days' notice, directly or through
the agency of its auditors, to audit the books and records of
the Purchaser in order to confirm the accuracy of the
Purchaser's determination as to the amount of the Additional
Consideration. Such audit may be performed not more than once
during any period of 12 consecutive months and, in any fiscal
year of Purchaser, may not be performed during the first
calendar month following the end of the first, second or third
fiscal quarter or the second and third calendar months following
the end of the fiscal year. The date of the audit shall be as
agreed upon by the parties, acting reasonably. In the event of
any dispute between the parties as to the gross revenues or
gross profit earned by Purchaser pursuant to the Customer
Contracts during any calendar quarter, the matter shall be
submitted to arbitration in accordance with the provisions of
Section 11.13 hereof.
2. CLOSING
2.1 SELLER DELIVERIES. Concurrently with the execution of this
Agreement, Seller has delivered to Purchaser:
2.1.1. a xxxx of sale and general assignment in the form of
Schedule 2.1.1, duly executed by Seller; and
2.1.2. such documents as Purchaser has requested, evidencing
the release of all outstanding Liens on the Acquired
Assets (duly executed by the respective secured
parties).
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2.2 PURCHASER DELIVERIES. Concurrently with the execution of this
Agreement, Purchaser has delivered to Seller an assumption
agreement in the form of Schedule 2.2 hereto, duly executed by
Purchaser.
2.3 FURTHER ASSURANCES AND POST-CLOSING COOPERATION.
2.3.1. At any time or from time to time, at Purchaser's request
and without further consideration, Seller shall execute
and deliver to Purchaser such other instruments of sale,
transfer, conveyance, assignment and confirmation,
provide such materials and information and take such
other actions as Purchaser may reasonably deem necessary
or desirable in order to more effectively transfer,
convey and assign to Purchaser, and to confirm
Purchaser's title to, all of the Acquired Assets and, to
the fullest extent permitted by Law, to put Purchaser in
actual possession and operating control of the Acquired
Assets and to assist Purchaser in exercising all rights
with respect thereto, and otherwise to fulfill its
obligations under this Agreement.
2.3.2. Seller hereby constitutes and appoints Purchaser the
true and lawful attorney of Seller, with full power of
substitution, in the name of Seller, or Purchaser, but
on behalf of and for the benefit of Purchaser: (i) to
demand and receive from time to time any and all the
Acquired Assets and to make endorsements and give
receipts and releases for and in respect of the same and
any part thereof; (ii) to institute, prosecute,
compromise and settle any and all Actions or Proceedings
that Purchaser may deem proper in order to collect,
assert or enforce any claim, right or title of any kind
in or to the Acquired Assets, and (iii) to do all such
acts and things in relation to the matters set forth in
the preceding clauses (i) and (ii) as Purchaser shall
deem desirable. Seller hereby acknowledges that the
appointment hereby made and the powers hereby granted
are coupled with an interest and are not and shall not
be revocable by it in any manner or for any reason.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants
to Purchaser as follows:
3.1 ORGANIZATION OF SELLER. Seller is duly organized, validly
existing and in good standing under the Laws of the State of
Delaware.
3.2 POWER AND AUTHORITY. Seller has the full power and authority to
execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly approved by
all requisite corporate action of Seller and has been duly and
validly executed and delivered by Seller. This Agreement
constitutes the legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms.
3.3 NO CONFLICTS. The execution and delivery by Seller of this
Agreement, the performance by Seller of its obligations
hereunder and the consummation of the transactions contemplated
hereby do not and will not:
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3.3.1. conflict with or result in a violation or breach of any
of the terms, conditions or provisions of the articles
or by-laws of Seller;
3.3.2. conflict with or result in a violation or breach of any
term or provision of any Law, Contract, or Order
applicable to Seller or any of its Assets and
Properties;
3.3.3. (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time
or both) a default under, (iii) require Seller to obtain
any consent, approval or action of, make any filing with
or give any notice to any Person as a result or under
the terms of, (iv) result in or give to any Person any
right of termination, cancellation, acceleration or
modification in or with respect to, (v) result in or
give to any Person any additional rights or entitlement
to increased, additional, accelerated or guaranteed
payments under, or (vi) result in the creation or
imposition of any Lien upon Seller or any of its Assets
and Properties under, any Contract to which Seller is a
party or by which any of its Assets and Properties are
bound; or
3.3.4. (i) cause Purchaser to become subject to, or to become
liable for the payment of, any Tax, or (ii) cause any of
the Acquired Assets to be reassessed or revalued by any
Taxing Authority or other Governmental or Regulatory
Authority.
3.4 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval or
action of, filing with or notice to any Governmental or
Regulatory Authority on the part of Seller is required in
connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated
hereby.
3.5 LEGAL PROCEEDINGS.
3.5.1. There are no:
(a) Actions or Proceedings pending or, to the
Knowledge of Seller, threatened against,
relating to or affecting Seller or any of its
Assets and Properties that could reasonably be
expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any of the
transactions contemplated by this Agreement or
otherwise result in a material diminution of the
benefits contemplated by this Agreement to
Purchaser;
(b) facts or circumstances Known to Seller that
could reasonably be expected to give rise to any
Action or Proceeding that would be required to
be disclosed pursuant to Section 3.5.1; and
(c) Orders outstanding against Seller restraining,
enjoining or otherwise prohibiting or making
illegal the consummation of any of the
transactions contemplated by this Agreement or
which would
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otherwise result in a material diminution of the
benefits contemplated by this Agreement to
Purchaser.
3.5.2. There are no Actions or Proceedings relating to or
affecting Seller or any of its Assets and Properties.
3.6 EQUIPMENT AND INVENTORY.
3.6.1. The Equipment constitutes all tangible personal property
(other than Inventory) used in the conduct of the
Business. All of the Equipment is owned free and clear
of all Liens and all of the Equipment is in good working
order and condition, ordinary wear and tear excepted,
and its use complies with all applicable Laws.
3.6.2. None of the Inventory represents goods sold on
consignment or on a guaranteed sale basis, on approval
or on a sale-or-return basis or subject to any other
repurchase or return arrangement.
3.6.3. Attached as Schedule 3.6.3 is a copy of various form
agreements (the "Form Agreements") used by Seller in the
carrying on of the Business (and which have been used
for the entering into of Customer Contracts), and Seller
has not given any warranty to any existing customer of
the Business except for the warranties expressly
provided for in the Form Agreements.
3.7 CONTRACTS.
3.7.1. Schedule 1.1.1 contains a true and complete list of each
of the customers of the Business. A copy of all signed
original contracts with these customers that are in the
possession of the Seller, together with all amendments
and supplements thereto and all waivers of any terms
thereof, shall be delivered to Purchaser within 21 days
of the date hereof.
3.7.2. Each Customer Contract is in full force and effect and
constitutes a legal, valid and binding Contract,
enforceable in accordance with its terms, of each party
thereto. Seller and each other party to the Customer
Contracts have complied with such contracts and there is
not under any such contract any existing default, or
event which, after notice or lapse of time, or both,
would constitute a default or result in a right to
accelerate or loss of rights thereunder. Seller is not
obligated, nor can Seller be compelled, to renegotiate
any such contract.
3.7.3. Seller neither Knows nor has reason to know that any
party to any Customer Contract intends to terminate or
seek to renegotiate such contract, whether due to the
transactions contemplated by this Agreement or
otherwise.
3.7.4 All consents (or in lieu thereof waivers) to the
assignment of the Customer Contracts or to the
consummation by Seller of the transactions contemplated
hereby as are required under any Contract to which
Seller is a party or by which any of its Assets and
Properties are bound (a) have
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been obtained, (b) are not subject to the satisfaction
of any condition that has not been satisfied or waived
and (c) are in full force and effect.
3.8 OTHER NEGOTIATIONS; BROKERS. Neither Seller nor any investment
banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of Seller has (i) entered
into any Contract that conflicts with any of the transactions
contemplated by this Agreement or (ii) has entered into any
Contract or had any discussions with any other Person regarding
any transaction involving Seller that could result in Purchaser,
or any director, officer, employee or agent of Purchaser or any
Affiliate of Purchaser being subject to any claim for liability
as a result of entering into this Agreement or consummating the
transactions contemplated hereby. No agent, broker, finder,
investment banker, financial advisor or other similar Person
will be entitled to any fee, commission or other compensation in
connection with any of the transactions contemplated by this
Agreement on the basis of any act or statement made or alleged
to have been made by Seller, or any investment banker, financial
advisor, attorney, accountant or other Person retained by or
acting for or on behalf of Seller. Seller shall pay all amounts,
if any, due to any investment banker, financial advisor,
attorney, accountant or other Person retained by or acting for
or on behalf of Seller.
3.9 RESTRICTIONS ON CONDUCT OF BUSINESS. Seller is not prohibited or
restricted from conducting the Business (as presently conducted
and as intended in the future to be conducted) by any Contract,
any Order, any Governmental or Regulatory Authority or any Law.
3.10 ENTIRE BUSINESS. No Person other than Seller owns any of the
Acquired Assets.
3.11 CUSTOMERS. To the Seller's Knowledge, the relationships of
Seller with its customers are good commercial working
relationships and the Seller is not aware of any customer
identified in Schedule 1.1.1 that has canceled or otherwise
terminated, or threatened to cancel or otherwise terminate, its
relationship with Seller, or has during the last 12 months,
decreased or limited materially or threatened to decrease or
limit materially, its usage of Seller's hardware maintenance
services. Seller has not received any notice that any such
customer intends to cancel or otherwise modify its relationship
with Seller and the sale of the Acquired Assets to Purchaser
will not adversely affect the relationship of any such customer
with the Business.
3.12 TITLE. Seller has good and marketable title to all of the
Acquired Assets, free and clear of all Liens and Liabilities,
and upon transfer thereof to Purchaser pursuant hereto, Seller
has vested in Purchaser good and marketable title thereto, free
and clear of all Liens and Liabilities.
3.13 SOLVENCY. There has not been filed any petition or application,
or any proceeding commenced which has not been discharged, by or
against Seller with respect to any Assets and Properties of
Seller under any Law relating to bankruptcy, reorganization,
fraudulent transfer, compromise, arrangements, insolvency,
readjustment of debt or creditors' rights, and no assignment has
been made by Seller for the benefit of creditors.
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3.14 HOLDBACK PURSUANT TO 2000 AGREEMENT. The amounts taken as a
reserve by Seller in calculating "Net Revenues" (as defined in
the 2000 Agreement), have not exceeded, nor have they been
exceeded by, Seller's actual non-paid revenues by an amount
which has resulted in the underpayment, or overpayment, as the
case may be, to Purchaser of more than $35,000 on account of
"Revenue Sharing" (as defined in the 2000 Agreement).
As contemplated in the 2000 Agreement, Purchaser shall have the
right, on not less than 15 days' notice, directly or through the
agency of its auditors, to audit the books and records of the
Seller in order to confirm the accuracy of the Seller's
representation in this Section 3.14. If the Purchaser determines
to exercise such right to audit the books and records of the
Seller, Purchaser shall provide notice to Seller, to that
effect, on or prior to March 1, 2002 and such audit shall be
conducted on such date as shall be agreed upon by the parties,
acting reasonably, in order that the audit may be completed
prior to April 1, 2002. In the event of the inaccuracy of such
representation, Seller shall immediately pay to Purchaser the
full amount of the underpayment and shall reimburse to Purchaser
its out-of-pocket cost in relation to the conduct of the audit;
provided, however, that in the event that the inaccuracy of such
representation relates to an overpayment, Purchaser shall
immediately refund to Seller the full amount of such overpayment
and shall reimburse to Seller its out-of-pocket cost in relation
to the conduct of the audit. Whether or not Purchaser chooses to
exercise such right to audit the books and records of the
Seller, in the event that the Seller determines that the
representation is inaccurate and that an overpayment has been
made, the Seller may claim reimbursement from the Purchaser for
the full amount of the overpayment, in which event the Purchaser
shall either reimburse the amount of the overpayment to the
Seller or exercise its right to audit the books and records of
the Seller and thereafter if the representation is determined to
have been inaccurate, an adjusting payment shall be made. The
Seller's right set forth in the preceding sentence must be
exercised, by notice to the Purchaser, on or prior to March 17,
2002.
3.15 OCTOBER PRE-XXXXXXXX. The Purchaser's portion of the Net
Revenues (as defined in the 2000 Agreement) for the month of
October 2001, net of a bad debt reserve of $21,399, did not
exceed $104,480.
3.16 ACCOUNTS RECEIVABLE. All of the Accounts Receivable (i) are not
subject to any valid set-off or counterclaim, and (ii) are not
the subject of any Actions or Proceedings brought by or on
behalf of Seller.
3.17 DISCLOSURE REGARDING SELLER AND THE BUSINESS. No representation
or warranty contained in this Agreement, and no statement
contained in any Schedule hereto, or in any certificate, list or
other writing furnished to Purchaser pursuant to any provision
of this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary in order to
make the statements herein or therein, in the light of the
circumstances under which they were made, not misleading. All
documents and other papers delivered by or on behalf of Seller
to Purchaser in connection with this Agreement and the
transactions contemplated hereby are true, complete and
authentic.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
and warrants to Seller as follows:
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4.1 ORGANIZATION. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware.
4.2 POWER AND AUTHORITY. Purchaser has full corporate power and
authority to execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery by Purchaser of
this Agreement, and the performance by Purchaser of its
obligations hereunder, have been duly and validly authorized by
all necessary corporate action. This Agreement has been duly and
validly executed and delivered by Purchaser and constitutes the
legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms.
4.3 OTHER NEGOTIATIONS; BROKERS. Neither Purchaser nor any
investment banker, financial advisor, attorney, accountant or
other Person retained by or acting for or on behalf of Purchaser
has (i) entered into any Contract that conflicts with any of the
transactions contemplated by this Agreement or (ii) has entered
into any Contract or had any discussions with any other Person
regarding any transaction involving Purchaser that could result
in Seller, or any director, officer, employee or agent of Seller
or any Affiliate of Seller being subject to any claim for
liability as a result of entering into this Agreement or
consummating the transactions contemplated hereby. No agent,
broker, finder, investment banker, financial advisor or other
similar Person will be entitled to any fee, commission or other
compensation in connection with any of the transactions
contemplated by this Agreement on the basis of any act or
statement made or alleged to have been made by Purchaser, or any
investment banker, financial advisor, attorney, accountant or
other Person retained by or acting for or on behalf of
Purchaser. Purchaser shall pay all amounts, if any, due to any
investment banker, financial advisor, attorney, accountant or
other Person retained by or acting for or on behalf of
Purchaser.
4.4 DISCLOSURE REGARDING PURCHASER. No representation or warranty
contained in this Agreement, and no statement contained in any
certificate or other writing furnished to Seller pursuant to any
provision of this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements herein or therein, in the light of
the circumstances under which they were made, not misleading.
All documents and other papers delivered by or on behalf of
Purchaser to Seller in connection with this Agreement and the
transactions contemplated hereby are true, complete and
authentic.
5. SELLER'S EMPLOYEES. Purchaser shall have no obligation to (i) offer
employment to any employee of Seller or (ii) make any severance payment
or make any other payment or provide any benefit to any employee of
Seller.
6. NON-COMPETITION. To induce Purchaser to enter into this Agreement,
Seller agrees that for a period of two (2) years following the date
hereof, it shall not directly or indirectly own, manage, operate,
control, be an agent or representative of, be a shareholder, partner or
member of (other than being a shareholder of a publicly traded company
in which Seller owns not more than one percent (1%) of the issued and
outstanding shares and is a passive investor and does not otherwise
violate this Section 6 with respect to such publicly traded company),
participate in, be a consultant to, contract with or be connected in any
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similar capacity or manner with any business that is directly or
indirectly (whether through related companies or otherwise) engaged in
any aspect of the Business in the United States.
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Notwithstanding any right of either party (whether or not exercised) to
investigate the affairs of the other party or any right of either party
(whether or not exercised) to investigate the accuracy of the
representations and warranties of the other party contained in this
Agreement, Purchaser and Seller have the right to rely fully upon the
representations, warranties, covenants and agreements of the other
contained in this Agreement. The representations, warranties, covenants
and agreements of Purchaser and Seller contained in this Agreement shall
survive forever, other than the representations and warranties contained
in Sections 3.6, 3.7, 3.11 and 3.14 which shall survive until September
30, 2002.
8. INDEMNIFICATION
8.1 INDEMNIFICATION BY SELLER. Seller hereby agrees to indemnify,
defend and hold Purchaser, its directors, officers, employees
and agents and their respective Affiliates (the "Purchaser's
Indemnified Persons") harmless from, against and in respect of,
and shall on demand reimburse the Purchaser's Indemnified
Persons for any and all Loss suffered or incurred by any of them
in connection with or arising from:
(a) any breach by Seller of any of its covenants or
agreements in this Agreement;
(b) any failure by Seller to perform any of its
obligations in this Agreement;
(c) any breach of any warranty or the inaccuracy of
any representation of Seller contained in this
Agreement;
(d) any third party claim in connection with any
product manufactured or sold or services
performed by Seller on or before the date
hereof;
(e) any Liabilities of Seller other than the Assumed
Obligations.
8.2 INDEMNIFICATION BY PURCHASER. Purchaser hereby agrees to
indemnify, defend and hold Seller, its directors, officers,
employees and agents and their respective Affiliates (the
"Seller's Indemnified Persons") harmless from, against and in
respect of, and shall on demand reimburse the Seller's
Indemnified Persons for any and all Loss suffered or incurred by
any of them in connection with or arising from:
(a) any breach by Purchaser of any of its covenants
or agreements in this Agreement;
(b) any failure by Purchaser to perform any of its
obligations in this Agreement;
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(c) any breach of any warranty or the inaccuracy of
any representation of Purchaser contained in
this Agreement;
(d) any Liabilities of Purchaser including the
Assumed Obligations.
8.3 SET-OFF. Purchaser shall be entitled to set off any amounts
owing to Seller pursuant to this Agreement against any amounts
owed to Purchaser by Seller pursuant to this Agreement or
otherwise.
8.4 METHOD OF ASSERTING CLAIMS. All claims for indemnification under
Section 8 shall be asserted and resolved as follows:
8.4.1. The party claiming indemnification (the "Indemnified
Party") in respect of, arising out of or involving a
claim or demand made by a third party against the
Indemnified Party (a "Third Party Claim") shall deliver
notice (a "Claim Notice") to the Seller or Purchaser, as
the case may be, (the "Indemnifying Party") within
thirty (30) days after receipt by such Indemnified Party
of written notice of the Third Party Claim; provided,
however, that failure to give such Claim Notice shall
not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure. The
Indemnifying Party shall promptly mitigate any such
prejudice to the extent possible.
8.4.2. If a Third Party Claim is made against an Indemnified
Party, the Indemnifying Party shall be entitled to
participate in the defense thereof and, if it
acknowledges that as between it and the Indemnified
Party, it is responsible for such Third Party Claim, the
Indemnifying Party may choose to assume the defense
thereof with counsel selected by the Indemnifying Party,
which counsel must be reasonably satisfactory to the
Indemnified Party. Should the Indemnifying Party so
assume the defense of a Third Party Claim, the
Indemnifying Party shall not be liable to the
Indemnified Party for legal expenses subsequently
incurred by the Indemnified Party in connection with the
defense thereof, but shall continue to pay for any
expenses of investigation and any Loss suffered. If the
Indemnifying Party assumes such defense, the Indemnified
Party shall have the right to participate in the defense
thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying
Party. If (i) the Indemnifying Party shall not assume
the defense of a Third Party Claim with counsel
satisfactory to the Indemnified Party within five days
of any Claim Notice, or (ii) legal counsel for the
Indemnified Party notifies the Indemnifying Party that
there are or may be legal defenses available to the
Indemnified Party that are different from or additional
to those available to the Indemnifying Party, which, if
the Indemnified Party and the Indemnifying Party were to
be represented by the same counsel, would constitute a
conflict of interest for such counsel or prejudice
prosecution of the defenses available to such
Indemnified Party, or (iii) if the Indemnifying Party
shall assume the defense of a Third Party Claim and fail
to prosecute such defense with reasonable diligence,
then in each such case the Indemnified Party, by notice
to the Indemnifying Party, may employ its
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own counsel and control the defense of the Third Party
Claim and the Indemnifying Party shall be liable for the
reasonable fees, charges and disbursements of counsel
employed by the Indemnified Party and the Indemnified
Party shall be promptly reimbursed for any such fees,
charges and disbursements, as and when incurred. Whether
the Indemnifying Party or the Indemnified Party controls
the defense of any Third Party Claim, the parties shall
cooperate in the defense thereof. Such cooperation shall
include the retention and provision to the counsel of
the controlling party of records and information that
are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient
basis to provide additional information and explanation
of any material provided hereunder. The Indemnifying
Party shall have the right to settle, compromise or
discharge a Third Party Claim (other than any such Third
Party Claim in which criminal conduct is alleged)
without the Indemnified Party's consent if such
settlement, compromise or discharge (i) constitutes a
complete and unconditional discharge and release of the
Indemnified Party, and (ii) provides for no relief other
than the payment of monetary damages and such monetary
damages are paid in full by the Indemnifying Party.
8.4.3. If any Indemnified Party should have a claim under
Section 8 against any Indemnifying Party that does not
involve a Third Party Claim, the Indemnified Party shall
deliver notice (an "Indemnity Notice") with reasonable
promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not
impair such party's rights hereunder except to the
extent that an Indemnifying Party demonstrates that it
has been actually prejudiced thereby. The Indemnifying
Party shall promptly mitigate any such prejudice to the
extent practicable.
8.5 INDEMNIFICATION RIGHTS NOT EXCLUSIVE. The rights accorded to the
parties hereunder shall be in addition to any rights that they
may have at law or in equity, under federal and state securities
laws, by separate agreement or otherwise.
9. POST-CLOSING MATTERS
9.1 NOTICE TO CUSTOMERS. On or prior to October 12, 2001, Seller
shall notify all customers of the Business that, commencing
October 29, 2001 (the "Transition Date"), all calls for service
in regard to the Business shall be made directly to the
Purchaser, at such telephone number as Purchaser shall
communicate to Seller. Seller shall obtain Purchaser's prior
approval in respect of the form and substance of such notice,
such notice not to be unreasonably withheld.
9.2 CALL HANDLING. Seller shall continue to receive and screen
customer calls to determine whether they are software or
hardware related. If the nature of the problem is hardware
related, Seller will either forward the call handling
information to Purchaser or advise the customer to contact the
Purchaser for service; provided, however, that through the
Transition Date, the Seller shall in all instances forward the
call handling information to Purchaser. From and after the
Transition Date, the Purchaser will receive and screen customer
calls to determine whether they are software or hardware
related. If the nature of the
13
problem is software related, Seller will either forward the call
handling information to Seller or advise the customer to contact
the Seller for service. The level of service to be provided by
both parties in the handling of all such calls shall equivalent
to the level of service provided to date by the Seller pursuant
to the 2000 Agreement.
9.3 CUSTOMER CONTRACTS. Until the Transition Date, the Seller shall
track and notify the Purchaser of all changes to Customer
Contracts, including, without limitation, all changes of address
or contract renewals or cancellations. Seller shall also notify
the Purchaser of any and all inquiries from new potential
customers of the Business. All such notices shall be provided to
the Purchaser weekly, on the first business day of each week.
9.4 CUSTOMER PAYMENTS. In the event that the Seller eventually
receives payment from any customer of the Business in respect of
an invoice rendered by the Purchaser, Seller shall forthwith
remit to Purchaser the amount of such payment.
9.5 ACCOUNTS RECEIVABLE. The Seller shall lend to the Purchaser
reasonable assistance in its efforts to collect the Accounts
Receivable. Such reasonable assistance shall include, without
limitation, the provision to Purchaser of a copy of the invoices
pertaining to the Accounts Receivable and, if requested by the
Purchaser from time to time, a copy of all documentation
supporting such invoices. The Purchaser shall also promptly
execute and deliver to Purchaser any reasonable instrument
prepared by the Purchaser to evidence the Seller's agreement to
the release and discharge of any portion of the Accounts
Receivable.
The Seller shall remit to the Purchaser, not less than once per
week, a check in an amount equal to the amounts, if any,
received by the Purchaser on account of the Accounts Receivable
and, if requested by the Purchaser, the Seller shall cause the
president of its Legacy Division to certify to the Purchaser in
writing, not more often than once per month, the amount, if any,
received by the Seller on account of the Accounts Receivable.
10. DEFINITIONS
10.1 Definitions. As used in this Agreement, the following defined
terms shall have the meanings indicated below:
"Accounts Receivable" has the meaning set forth in Section
1.1.4.
"Acquired Assets" has the meaning set forth in Section 1.1.
"Action or Proceeding" means any action, suit, hearing,
proceeding, arbitration or Governmental or Regulatory Authority
investigation or audit, whether civil, criminal, administrative
or otherwise. For purposes of this Agreement, "pending" Actions
and Proceedings include, without limitation, demands, claims,
notices of violations, and demand letters.
"Affiliate" means, as applied to any Person, (a) any other
Person directly or indirectly controlling, controlled by or
under common control with, that Person, (b)
14
any other Person that owns or controls 5% or more of any class
of Equity Interest (including any Equity Interest issuable upon
the exercise of any Option or convertible security) of that
Person or any of its Affiliates, or (c) any director, manager,
member, partner, officer, agent, employee or relative of such
Person. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling",
"controlled by", and "under common control with") as applied to
any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of that Person, whether through ownership of voting
securities or by Contract or otherwise.
"Agreement" means this Agreement and the Schedules hereto and
the certificates delivered in connection herewith, as the same
may be amended, modified or restated from time to time in
accordance with the terms hereof.
"2000 Agreement" means that certain Equipment Support
Subcontract between Seller and Alpha Microsystems, LLC
(Purchaser's predecessor in interest) effective as of December
1, 2000, as amended as of the date hereof;
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description
(whether real, personal or mixed, whether tangible or
intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including, without limitation
the goodwill related thereto, operated, owned or leased by or in
the possession of such Person, including without limitation
cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general
intangibles, real estate, equipment, inventory, goods and
intellectual property including, without limitation, the
goodwill related thereto.
"Assumed Obligations" has the meaning set forth in Section 1.3.
"Business" means any and all of Seller's lawful business
operations and activities directly or indirectly related to its
U.S. Legacy Hardware Service business, which for greater
certainty shall exclude the Seller's software support and
maintenance relating to its Legacy operations and the hardware
and software support and maintenance relating to the Seller's
Hospitality and Process Manufacturing software businesses.
"Claim Notice" has the meaning set forth in Section 8.4.1.
"Contract" means any agreement, lease, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract
(whether written or oral), to which Seller is a party and which
relates to the carrying on of the Business.
"Customer Contracts" has the meaning set forth in Section 1.1.1.
"Equipment" has the meaning set forth in Section 1.1.3.
"Equity Interest" means (i) in the case of a corporation, shares
of stock, (ii) in the case of a general or limited partnership,
a partnership interest, and (iii) in the case of a limited
liability company, membership units.
15
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, board, bureau, department, authority,
agency, commission, official or other instrumentality of the
United States, any foreign country or any domestic or foreign
state, county, city or other political subdivision.
"Indebtedness" of any Person means all obligations of such
Person (or any other Persons if secured by the Assets and
Properties of such first Person) (i) for borrowed money, (ii)
evidenced by notes, bonds, debentures or similar instruments,
(iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary
course of business), (iv) under capital leases or (v) in the
nature of guarantees of the obligations described in clauses (i)
through (iv) above of any other Person.
"Indemnified Party" has the meaning set forth in Section 8.4.1.
"Indemnifying Party" has the meaning set forth in Section 8.3.1.
"Indemnity Notice" has the meaning set forth in Section 8.4.3.
"Inventory" has the meaning set forth in Section 1.1.2.
"Investment Assets" means all debentures, notes and other
evidences of Indebtedness, Equity Interests (including rights to
purchase and securities convertible into or exchangeable for
Equity Interests or other securities), interests in joint
ventures and general and limited partnerships, mortgage loans
and other investment or portfolio assets owned of record or
beneficially.
"Knowledge" or "Know" means, with respect to Seller, the
knowledge of any director or officer of Seller, or all of them,
as the case may be, as well as matters that any director or
officer of Seller, or all of them, as the case may be, should
have known, after due inquiry.
"Laws" means all laws, statutes, rules, regulations, ordinances
and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state,
county, city or other political subdivision or of any
Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent,
known or unknown, fixed or otherwise, or whether due or to
become due).
"Liens" means any mortgage, deed of trust, pledge, assessment,
security interest, lease, lien, adverse claim, levy, charge or
other encumbrance of any kind, or any conditional sale Contract,
title retention Contract or other Contract to give any of the
foregoing.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, Liabilities, losses and expenses, including
without limitation, interest, reasonable expenses of
investigation, court costs, reasonable fees and expenses of
attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or
assessment (such fees and expenses to
16
include without limitation, all fees and expenses, including,
without limitation fees and expenses of attorneys, incurred in
connection with (i) the investigation or defense of any third
party claims or (ii) successfully asserting or disputing any
rights under this Agreement against any party hereto or
otherwise). Also included within the meaning of Loss shall be
the diminution in value to Purchaser's investment hereunder.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other
Contract that gives the right to (i) purchase or otherwise
receive or be issued any Equity Interest of such Person or any
security of any kind convertible into or exchangeable or
exercisable for any Equity Interest of such Person or (ii)
receive any benefits or rights similar to any rights enjoyed by
or accruing to the holder of Equity Interests of such Person,
including without limitation any rights to participate in the
equity, income or election of directors or officers or Persons
holding like positions or performing like functions of such
Person.
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such
case whether preliminary or final).
"Person" means any natural person, corporation, limited
liability company, general partnership, limited partnership,
proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority and also
includes a division of any other Person.
"Purchase Price" has the meaning set forth in Section 1.5.
"Purchaser" has the meaning set forth in the preamble.
"Seller" has the meaning set forth in the preamble.
"Tax" or "Taxes" means all federal, state, local or foreign net
or gross income, gross receipts, net proceeds, sales, use, ad
valorem, value added, franchise, bank shares, withholding,
payroll, employment, excise, sales, use, property, alternative
or add-on minimum, environmental or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature
whatever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect
thereto.
"Taxing Authority" means any Governmental or Regulatory
Authority of any United States federal, state or local
jurisdiction, or any foreign jurisdiction having or purporting
to exercise jurisdiction with respect to any Tax.
"Third Party Claim" has the meaning set forth in Section 8.4.1.
10.2 Unless the context of this Agreement otherwise requires, (i)
words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or
singular number, respectively; (iii) the terms "hereof,"
"herein," "hereby" and derivative or similar words refer to this
entire Agreement; (iv) the term "Section" refer to the specified
Section of this Agreement; (v) the
17
term "other party" refer to Seller, on the one hand, and
Purchaser, on the other; (vi) the phrases "ordinary course of
business" and "ordinary course of business consistent with prior
practice" refer to the business and practice of Seller and (vii)
the phrase "including" shall mean "including without
limitation". All accounting terms used herein and not expressly
defined herein shall have the meanings given to them under
Canadian GAAP.
11. MISCELLANEOUS
11.1 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt
or by facsimile transmission or mailed by prepaid first class
certified mail, return receipt requested, or mailed by overnight
courier prepaid, to the parties at the following addresses or
facsimile numbers:
If to Seller to:
MAI Systems Corporation
0000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx
00000
Attn: Xxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
If to Purchaser, to:
Optimal Robotics Inc.
X/x 0000 xx xx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attn: Xxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
11.2 ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to
the subject matter hereof and contains the sole and entire
agreement between the parties hereto with respect to the subject
matter hereof.
18
11.3 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party will pay its own costs and expenses,
provided that Seller shall pay all transfer Taxes, sales Taxes
and other similar costs, if any, directly related to the
Acquisition.
11.4 PUBLIC ANNOUNCEMENTS. Purchaser, on the one hand, and Seller, on
the other, will not issue or make any statements or releases to
the public with respect to this Agreement or the transactions
contemplated hereby without the consent of the other, which
consent shall not be unreasonably withheld, except to the extent
such party is advised by counsel that such disclosure is
required under applicable securities laws or the rules and
regulations of any applicable self-regulatory organization
(including without limitation the Nasdaq National Market). If
either party is unable to obtain the approval of its public
statement or release from the other party and such statement or
release is, in the opinion of legal counsel to such party,
required by Law in order to discharge such party's disclosure
obligations, then such party may make or issue the legally
required statement or release and promptly furnish the other
party with a copy thereof. Purchaser, on the one hand, and
Seller, on the other, will also obtain the other party's prior
approval of any press release to be issued immediately following
the execution of this Agreement announcing the consummation of
the transactions contemplated by this Agreement.
11.5 WAIVER. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof,
but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any
term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any
future occasion. All remedies, either under this Agreement or by
Law or otherwise afforded, will be cumulative and not
alternative.
11.6 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on
behalf of each party hereto.
11.7 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns, and
it is not the intention of the parties to confer third-party
beneficiary rights, and this Agreement does not confer any such
rights, upon any other Person other than any Person entitled to
indemnity under Section 8.
11.8 HEADINGS. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the
provisions hereof.
11.9 INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or
future Law, and if the rights or obligations of any party hereto
under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable,
(b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised
a part hereof, (c) the remaining provisions of this Agreement
will remain in full force and effect and will not be
19
affected by the illegal, invalid or unenforceable provision or
by its severance herefrom and (d) in lieu of such illegal,
invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
11.10 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
11.11 CONSTRUCTION. The parties hereto agree that this Agreement is
the product of negotiation between sophisticated parties and
individuals, all of whom were represented by counsel, and each
of whom had an opportunity to participate in and did participate
in, the drafting of each provision hereof. Accordingly,
ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather
shall be given a fair and reasonable construction without regard
to the rule of contra proferentum.
11.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
11.13 ARBITRATION. Any controversy of any nature whatsoever, including
but not limited to tort claims or contract disputes, between the
parties to this Agreement or their respective successors and
assigns, as applicable, arising out of or related to this
Agreement or the transactions arising or contemplated hereunder,
including the implementation, applicability and interpretation
thereof, shall, upon the written request of one party served
upon the other, be submitted to and settled by arbitration in
accordance with the provisions of the Federal Arbitration Act,
9. U.S.C. Sections 1-15, as amended. The terms of the commercial
arbitration rules (the "Rules") of the American Arbitration
Association (the "AAA") shall apply except to the extent they
conflict with the provisions of this paragraph. The arbitration
proceeding and all proceedings related thereto shall be held in
New York, New York. If the amount in controversy in the
arbitration exceeds Two Hundred and Fifty Thousand Dollars
($250,000), exclusive of interest, attorneys' fees and costs,
the arbitration shall be conducted by a panel of three
independent arbitrators. Otherwise, the arbitration shall be
conducted by a single independent arbitrator. The parties shall
endeavor to select independent arbitrators of mutual agreement.
If such agreement cannot be reached within 30 calendar days
after a dispute has arisen which is to be decided by
arbitration, the selection of the arbitrator(s) shall be made in
accordance with Rule 13 of the Rules as presently in effect. If
the three arbitrators are selected, the arbitrators shall elect
a chairperson to preside at all meetings and hearings. Each
arbitrator shall be a member of a state bar engaged in the
practice of law in the United States or a retired member of a
state of the federal judiciary in the United States. The award
of the arbitrator(s) shall require a majority of the arbitrators
in the case of a panel of arbitrators, shall be based on the
evidence admitted and the substantive law of the State of New
York and shall contain an award for each issue and counterclaim.
The award shall be made 30 days following the close of
20
the final hearing and the filing of any post hearing briefs
authorized by the arbitrator(s). The award of the arbitrator(s)
shall be final and binding on the parties hereto. Each party
shall be entitled to inspect and obtain a copy of non-privileged
relevant documents in the possession or control of the other
party. All such discovery shall be in accordance with procedures
approved by the arbitrator(s). Unless otherwise provided in the
award, each party shall bear its own costs of discovery. Each
party shall be entitled to take three depositions. Each party
shall be entitled to submit two sets of interrogatories each of
which require no more than 30 answers. All discovery shall be
expedited, consistent with the nature and complexity of the
claim or dispute and consistent with fairness and justice. The
arbitrator(s) shall have the power to compel any party to comply
with discovery requests of the other parties and to issue
binding orders relating to any discovery dispute which shall be
enforceable in the same manner as awards. The arbitrator(s) also
shall have the power to impose sanctions for abuse or
frustration of the arbitration process, including without
limitation, the refusal to comply with orders of the
arbitrator(s) relating to discovery and compliance with
subpoenas. The arbitrator(s) may require the non-prevailing
party to pay the prevailing party's reasonable attorneys' fees
and reasonable costs incurred in connection with the
arbitration. It is further agreed that any of the parties hereto
may petition the United States District Court, Southern District
of New York, any state court for the State of New York, for a
judgment to be entered upon any award entered through such
arbitration proceedings.
11.14 WAIVER OF TRIAL BY JURY. THE PARTIES HEREBY EXPRESSLY WAIVE ANY
RIGHT TO TRIAL BY JURY AS TO ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION ARISING OUT OF OR RELATING TO (I) THIS AGREEMENT, (II)
ANY OTHER DOCUMENT DESCRIBED HEREIN (III) ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT, EXECUTED BY OR DELIVERED TO EITHER PARTY
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, OR (IV) THE
TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER SUCH
MATTER IS NOW EXISTING OR HERE AFTER ARISING, AND WHETHER THE
CLAIM IS MADE IN CONTRACT OF TORT OR OTHERWISE; AND THE PARTIES
HEREBY AGREE AND CONSENT THAT, SUBJECT TO THE PROVISIONS OF
SECTION 10.13, ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL, WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR COPY
OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
11.15 SCHEDULES. The following are all of the schedules to this
Agreement:
1.1.1: Customer Contracts
1.1.2: Inventory
1.1.3: Equipment
1.1.4 Accounts Receivable
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2.1.1: Xxxx of Sale and General Assignment
2.2: Assumption Agreement
3.6.3 Form Agreements
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by each party hereto as of the date first above written.
OPTIMAL ROBOTICS INC.
By: _____________________________________
Xxxx X. Xxxxxxxx
Co-Chairman and
Chief Executive Officer
MAI SYSTEMS CORPORATION
By: __________________________________
Xxxxx X. Xxxxx
Chief Financial and Accounting Officer
22
