EXHIBIT 10.34
[The Registrant shall furnish supplementally a copy of any omitted Schedule to
the Commission upon request.]
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into this 3rd day of
October, 1996, to be effective as of September 30, 1996, by and among SOFTEACH
CORPORATION, a Colorado corporation ("Seller"), ARIS CORPORATION, a Washington
corporation ("Purchaser"), and Xxxxx X. Xxxxx and Xxxx X. Xxxxx (sometimes
referred to herein as the "Indemnifying Shareholders"). The parties have joined
in the execution of this Agreement for the purposes herein provided, including
the indemnification obligations undertaken by them as herein provided.
RECITALS
WHEREAS, Seller is engaged in the business of among other things, providing
computer and software training services to individuals, organizations, groups,
and entities (the "Business");
WHEREAS, the Indemnifying Shareholders own an aggregate of 100% of the
issued and outstanding capital stock of Seller on a fully diluted basis and are
officers, directors and key employees of the Seller, and have joined into the
execution hereof in consideration of the direct or indirect benefits expected to
be derived by them from the sale of the Business to the Purchaser, as herein
provided; and
WHEREAS, Purchaser desires to purchase from Seller and Seller desires to
sell to Purchaser substantially all of Seller's assets and the Business pursuant
to the terms hereof, and in connection therewith provide for related
arrangements and agreements, all in accordance with and pursuant to the terms,
conditions and provisions contained in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises contained
in this Agreement and of other good and valuable consideration, Purchaser and
Seller agree as follows:
ARTICLE I
Purchase and Sale
1.1 Transaction. On and subject to the terms, conditions and provisions
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of this Agreement, at the Closing:
(a) Purchaser will purchase from Seller, and Seller will sell,
transfer, and assign to Purchaser, the Acquired Assets, as hereinafter
defined and described.
(b) Purchaser will pay the Purchase Price, will deliver the ARIS
Stock, and will assume the obligation for payment or discharge of the
Assumed Liabilities, in each case as hereinafter defined and described.
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1.2 Acquired Assets. As used in this Agreement, the term "Acquired
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Assets" means the assets, properties and rights which are owned or used by
Seller in connection with the conduct of the Business, including without
limitation the assets reflected on the Financial Statements, all of which shall
be transferred at the Closing to the Purchaser free and clear of any liens,
encumbrances or rights in any other party except the Assumed Liabilities.
Without limiting the generality of the foregoing, the Acquired Assets include
the following assets of the Business:
(a) Cash and Accounts Receivable. All of Seller's cash, including
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cash on hand and in bank accounts, time deposits, certificates of deposit,
marketable and other securities, billed and unbilled accounts receivable
(whether or not the same have arisen in the ordinary course of business of
the Seller) and proceeds of accounts receivable held by Seller at Closing,
including specifically and without limitation those described or referred
to on SCHEDULE 1.2(a) (the "Cash and Accounts Receivable"). Notwithstanding
the foregoing, Seller is not selling and Purchaser is not purchasing any
cash constituting a part of the Purchase Price or designated by Seller as a
reserve for the payment of the liabilities and obligations of Seller not
assumed by Purchaser at the time of Closing including amounts withheld to
pay taxes, employee salaries, and accounts payable which are incurred in
the ordinary course of the Business and which come due prior to Closing
(the "Cash Reserve"), and which are specifically identified on SCHEDULE
1.2(a). The excluded cash and Cash Reserve of Seller specifically
identified on SCHEDULE 1.2(a) as not constituting a part of "Cash and
Accounts Receivable" are not included within the definition of "Cash and
Accounts Receivable".
(b) Furniture, Equipment and Tangible Personal Property. All of
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Seller's furniture, equipment, computer hardware, instruments of all kinds,
office equipment, automobiles and other vehicles, and including
specifically and without limitation those described or referred to on
SCHEDULE 1.2(b) (the "Personal Property"). Notwithstanding the foregoing,
Seller is not selling and Purchaser is not purchasing certain items of
tangible personal property specifically identified on SCHEDULE 1.2(b) as
not constituting a part of "Personal Property" and not included within the
definition of "Personal Property".
(c) Inventories. All of Seller's inventories, wherever located and on
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all mediums, of computer hardware and software manuals, training programs,
courseware, and materials, all computer programs, disks, printed products,
including, without limitation, those inventories described on SCHEDULE
1.2(c) (the "Inventories").
(d) Contracts.
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(1) Customer Contracts. Subject to the consequences of
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assignment and without warranty of assignability, Seller's rights
under those certain orders,
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contracts and commitments for the purchase of goods or services listed
on SCHEDULE 1.2(d)(1) (collectively, the "Customer Contracts"). Seller
agrees that it will use its best efforts to seek applicable third-
party consents to the transfer and assignment of such Customer
Contracts as may be reasonably requested by Purchaser.
(2) Pending Contracts and Proposals. Without warranty as to
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transfer or assignability, Seller's rights under those certain orders,
contracts, proposals and commitments for goods or services by Seller
listed on SCHEDULE 1.2(d)(2) (collectively, the "Proposals"). Seller
agrees that it will use its best efforts to seek applicable third-
party consents to the transfer and assignment of such Proposals as may
be reasonably requested by Purchaser.
(3) Agency Contracts. Subject to the consequences of assignment
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and without warranty of assignability, Seller's rights under those
certain sales representative and trainer agreements related to the
Seller's Business and other service or sales agency agreements or
arrangements listed on SCHEDULE 1.2(d)(3) (the "Agency Contracts").
Seller agrees that it will use its best efforts to seek applicable
third-party consents to the transfer and assignment of such Agency
Contracts as may be requested by Purchaser.
(4) Material Contracts. Seller's rights under those certain
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contracts and leases listed on SCHEDULE 1.2(d)(4) (the "Material
Contracts").
(5) General Contracts and Commitments. Subject to the
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consequences of assignment and without warranty of assignability,
Seller's rights under all other contracts, leases, licenses,
warranties, arrangements and other agreements not otherwise specified
herein (the "General Contracts"). Seller agrees that it will use its
best efforts to seek applicable third-party consents to the transfer
and assignment of such General Contracts as may be requested by
Purchaser.
(6) Prepaids and Deposits. All of Seller's prepayments, deposits
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and similar items, including, without limitation, all prepaid
expenses, deferred charges, advance payments, purchase rebates,
utility or other product or service deposits and other prepaid items,
and including specifically and without limitation those prepaid
expenses, deferred charges, advance payments, deposits and other items
described or referred to on SCHEDULE 1.2(d)(6) the "Prepaid Items and
Deposits").
(e) Intellectual Property. All of Seller's (i) patents and patent
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applications (including renewals, extensions, or modifications thereof);
(ii) confidential and proprietary information and trade secrets, including
without limitation, know-how, inventions, computerized data and
information, computer software and programs,
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business records, files and data, discoveries, processes and techniques,
testing and quality control processes and techniques, drawings, customer
and client lists; (iii) all trademarks, service marks (including
SofTeach(R)), and any applications for registration of same; (iv)
copyrights; (v) trade names (including SofTeach Corporation); (vi) computer
software, courseware, books, technical specifications, manuals, and (vii)
other intellectual property owned by Seller or used in connection with the
Business, whether presently existing or in process of development, and
including specifically and without limitation the intellectual property
described or referred to on the Intellectual Property Questionnaire
attached hereto as SCHEDULE 1.2(e) (the "Intellectual Property").
(f) Permits. To the extent transferrable or assignable, those certain
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permits, approvals, qualifications, authorizations, licenses, consents,
certifications or clearances and the like held, used or required in the
conduct of the Business issued by any government or governmental unit,
agency, board, body, or instrumentality, whether federal, state or local,
and all applications therefor, including specifically and without
limitation the permits, approvals and qualifications described or referred
to on SCHEDULE 1.2(f) (the "Permits").
(g) Books and Records. All business books and records, including
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without limitation all financial, operating, inventory, legal, personnel
and payroll records of those employees of Seller who are hired by Purchaser
at Closing, customer lists and records, supplier lists and records, and all
sales and promotional literature, correspondence and files related to the
business and all original plans, drawings, specifications, building
permits, certificates of occupancy, governmental licenses for improvements,
and architectural documents pertaining to the facility and including
specifically and without limitation the books and records described or
referred to on SCHEDULE 1.2(g) (the "Books and Records"). Notwithstanding
the foregoing, Seller is not selling and Purchaser is not purchasing
Seller's corporate minute book, stock transfer records and legal files and
records related to this Agreement or to the organization, governance and
dissolution of the Seller, and the minute book, stock transfer records and
legal files and records related to this Agreement or to the organization,
governance and dissolution of the Seller are not included within the
definition of "Books and Records."
(h) Post Office Box, Telephone and Electronic Addresses. All of
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Seller's post office boxes, telephone and facsimile numbers, and e-mail
and/or internet domain addresses and/or web sites used in connection with
the Business including without limitation those described on SCHEDULE
1.2(h).
1.3 Assumed Liabilities. As used in this Agreement, the term "Assumed
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Liabilities" means only the liabilities and obligations of Seller assumed by
Purchaser and described in this Section 1.3 as such items shall exist at the
time of the Closing. The Assumed Liabilities include only the following
liabilities:
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(a) Trade Accounts Payable. Accrued accounts payable to suppliers of
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Seller incurred in the ordinary course of business of the Business as of
the date of Closing as listed and set forth on SCHEDULE 1.3(a), plus an
amount for additional accounts payable which are unknown to Seller or not
billed on the date of Closing not to exceed $10,000 in the aggregate (the
"Trade Payables").
(b) Contract Obligations. The obligations of Seller under contracts
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and agreements listed on SCHEDULES 1.2(d)(1), 1.2(d)(2), 1.2(d)(3),
1.2(d)(4) and 1.2(d)(6) but only to the extent that such obligations have
arisen in the ordinary course of business of the Seller, and other
contracts assumed by the Purchaser, and have not been performed prior to
the Closing (the "Contract Obligations").
(c) Office Lease. Obligations of Seller arising from and after the
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date hereof under that certain Lease Agreement dated May 20, 1992, as
amended, for the Seller's office suite commonly known as Xxxxx 000, 0000
Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxx 00000 (the "Lease").
Purchaser shall not assume, and does not hereby assume, any obligation of Seller
except as expressly set forth herein. Purchaser hereby agrees to indemnify,
defend, and hold Seller and the Indemnifying Shareholders harmless from and
against any and all liabilities, penalties, damages, losses, claims, costs and
expenses (including reasonable attorneys' fees and expenses for the defense of
any claim which, if proved, would give rise to an obligation of indemnity
hereunder), but not including lost profits or consequential damages, arising out
of or resulting directly or indirectly from the Purchaser's failure to fully pay
or satisfy or cause to be paid or satisfied any liabilities expressly assumed by
Purchaser pursuant to the terms hereof.
1.4 Purchase Price. Subject to the terms and conditions of this
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Agreement, the purchase price (the "Purchase Price") to be paid by the Purchaser
to the Seller for the Acquired Assets, upon consummation of the Closing, is as
follows:
(a) Cash Payment. At the Closing, Purchaser will pay Seller Seven
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Hundred Fifty Thousand and No/100ths Dollars ($750,000.00) by wire transfer
to an account designated by the Seller in writing at least three business
days prior to the Closing.
(b) ARIS Stock. At the Closing, and upon Seller's execution of a
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subscription agreement in a form substantially similar to that set forth as
SCHEDULE 1.4(b), Purchaser will deliver to Seller Forty-Two Thousand
(42,000) shares of no par common stock in ARIS Corporation (the "ARIS
Stock"). Seller shall be free to assign or transfer all or any portion of
the ARIS Stock to Xxxxx X. Xxxxx or Xxxx X. Xxxxx ("ARIS Stock
Transferees"), so long as the ARIS Stock Transferees shall execute the ARIS
Corporation Amended and Restated Shareholders Agreement and a subscription
agreement in a form
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substantially similar to that set forth as SCHEDULE 1.4(b) (the
"Subscription Agreement"), and thus agree to be bound by all terms and
conditions thereof.
(c) Balance of Purchase Price. At the Closing, Purchaser will deliver
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to Seller its promissory note in the principal amount of Five Hundred
Thousand and No/100ths Dollars ($500,000.00), bearing interest at the rate
of six percent per annum (6% A.P.R.), payable as follows: Two Hundred Fifty
Thousand and No/100ths Dollars ($250,000.00) plus then-accrued interest on
April 1, 1997, with the balance of all unpaid principal and accrued
interest payable on July 1, 1997 (the "Promissory Note").
(d) Collateral. Purchaser agrees to execute at Closing such security
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agreement and other documents requested by Seller, in a form acceptable to
Purchaser, evidencing a grant of a security interest in the Acquired
Assets. Such security interest in the Acquired Assets (the "Security
Interest") shall not be a purchase money security interest and shall be in
any event subordinate to the security interest in all of Purchaser's
assets, including the Acquired Assets, held by U.S. Bank of Washington,
N.A. of Seattle, Washington.
The Purchase Price shall be allocated among the Acquired Assets as provided in
SCHEDULE 1.4.
1.5 Closing Financial Statements. At the time of Closing, Seller shall
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deliver to Purchaser a balance sheet, income statement and other financial
statements of the Seller as of the date of Closing (the "Closing Financial
Statements"), which shall be prepared in accordance with generally accepted
accounting principles, consistently applied.
ARTICLE II
Representations and Warranties
2.1 Representations and Warranties of Seller and Indemnifying
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Shareholders. Seller and each Indemnifying Shareholder hereby jointly and
severally represent and warrant to the Purchaser, both as of the date hereof and
as of the time of Closing:
(a) Accounts Receivable. SCHEDULE 1.2(a) includes a true and complete
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list of all billed and unbilled accounts receivable of the Seller as of the
date thereof. The Accounts Receivable represent all receivables of the
Business. All of the Accounts Receivable have been generated by Seller in
the ordinary course of business of the Business. Except as specifically
identified on SCHEDULE 1.2(a), all obligations of Seller under the
contracts generating the Accounts Receivable have been fully and completely
performed or otherwise satisfied and any products or services related
thereto have been delivered.
(b) Inventories. Subject to any vendor's lien associated with any of
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the Trade Payables, Seller has good and marketable title to the
Inventories, free and clear of any
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lien, claim, encumbrance or other right of any third party.
(c) Equipment and Other Personal Property.
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(1) Seller has good and marketable title to the Personal
Property, free and clear of any lien, claim, charge, encumbrance or
other right of any third party. All of the personal property listed as
owned is owned by Seller free and clear of any lien or encumbrance,
and all of the personal property listed as leased is leased under
valid and existing leases to possess and control as lessee all of such
tangible personal property listed as leased and neither Seller nor any
lessor is in default under any such lease agreement.
(2) The Personal Property to be purchased hereunder (or for which
this Agreement contemplates the assumption by Purchaser of the related
lease agreement) constitutes all of the tangible assets necessary or
desirable for the continued operation of the Business by Purchaser
following the Closing in a manner consistent with the historical
practice of Seller in the conduct of the Business.
(3) All of the Personal Property is in good operation and repair.
(d) Real Property. Seller has, and following the Closing Purchaser
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will have, full right, power and authority to use the leasehold premises
presently used in connection with the Business under the terms of the
Lease. Seller has not received any notice of any special assessments being
contemplated against Seller related to Seller's use of the leasehold
premises. All water, sewer, electric and telephone facilities and all other
utilities required by law for the normal operation of the Business are in
good working order and are adequate to serve the operation of the Business
to the best of Seller's knowledge after reasonable inquiry. The Seller's
occupancy, operation and use of the leasehold premises do not violate any
state, federal, county or city statute, ordinance, code, rule or regulation
or the terms of the Lease.
(e) Contracts.
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(1) Subject to the provisions contained in Section 1.2(d)(1)
hereof, SCHEDULE 1.2(d)(1) constitutes a complete and accurate list of
all Customer Contracts to be acquired by Purchaser categorized by
customer, project, pricing and training schedule and payment status.
(2) Subject to the provisions contained in Section 1.2(d)(2)
hereof, SCHEDULE 1.2(d)(2) constitutes a complete list of all
Proposals to be acquired by Purchaser which have associated with them
any continuing obligation of
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performance or liability, including, without limitation, any liability
in the nature of continuing service or warranty (whether express or
implied) or arising by course of conduct or business. Each such order,
contract or proposal is accurately identified and categorized by
customer, project, pricing, training schedule and any other material
term or condition. Any such arrangements with any entity related to
Seller or any shareholder is so indicated on SCHEDULE 1.2(d)(2).
(3) Subject to the provisions contained in Section 1.2(d)(3)
hereof, SCHEDULE 1.2(d)(3) constitutes a complete and accurate list of
all Agency Contracts to be acquired by Purchaser under the terms
hereof.
(4) SCHEDULE 1.2(d)(4) constitutes a complete and accurate list
of the Material Contracts to be acquired by Purchaser under the terms
hereof.
(5) The appropriate Schedules referenced in this Section 2.1(e)
indicate all prepaid and similar items related to the subject matter
thereof, including, without limitation, all prepaid expenses,
deposits, deferred charges, advance payments, and other prepaid items
held by Seller with respect to the Business.
Except as otherwise disclosed on the respective Schedules described in this
Section 2.1(e): (1) each of the contracts, commitments, arrangements or
obligations referred to therein is a valid and binding obligation of Seller
and the other party or parties thereto and was made and entered into in the
ordinary course of business of the Seller; (2) all of such contracts,
commitments, other arrangements or obligations are included in the Acquired
Assets, and constitute substantially all of such contracts, commitments,
arrangements or obligations involved in the Business; (3) except as noted,
none of the parties to any of such contracts, commitments, arrangements or
obligations has terminated, canceled or substantially modified such
contract, commitment, arrangement or obligation to the best of Seller's
knowledge after reasonable inquiry; and (4) neither Seller nor any other
party is in default thereunder.
(f) Permits. SCHEDULE 1.2(f) constitutes a complete and accurate list
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of the Permits. Seller is not in default, breach or noncompliance under
any of the Permits and the Permits constitute all of such items as are
necessary for the conduct of the Business.
(g) Books and Records. The Books and Records are located at the
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business office of the Seller and copies of excerpts from the Books and
Records provided to Purchaser are true, correct and complete copies of the
originals.
(h) Post Office Boxes, Telephone Numbers and Electronic Addresses.
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The post office boxes, telephone and facsimile numbers, and e-mail and/or
internet domain
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addresses and/or web sites set forth on SCHEDULE 1.2(h) constitute all of
the active post office boxes and telephone and facsimile numbers used in
the Business during the three (3) year period prior to the date of this
Agreement.
(i) Trade Payables. SCHEDULE 1.3(A) constitutes a complete and
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accurate list of the Trade Payables. The Trade Payables have been accrued
by Seller in the ordinary course of business of the Business and none of
which are aged beyond forty-five (45) days. There are no accounts payable
of the Business except for the items listed in the Trade Payables.
(j) Certain Secured Obligations. All accrued interest and previously
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payable lease or other payments have been made on the leases, and Seller is
not in default with respect to any provision of such obligations. The
amount due by Seller on the leases are not in excess of the amounts
indicated on the Latest Balance Sheet.
(k) Disclosure. Neither the financial statements nor any
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representation or warranty contained herein, nor any information delivered
or to be delivered by the Seller pursuant to this Agreement, contains or
shall contain an untrue statement of a material fact, nor do the financial
statements, representations, warranties and other information omit to
state, nor will they omit to state, any material fact necessary in order to
make the statements made not misleading.
(l) Intellectual Property. Seller owns, or has a valid and binding
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license or licenses (as to all of which there are no defaults by any of the
parties thereto) to use, all Intellectual Property necessary to or used in
the conduct of its business as now conducted and as proposed to be
conducted. Seller has provided Purchaser, via the Intellectual Property
Questionnaire attached as SCHEDULE 1.2(e), with complete and accurate lists
of all issued patents, patent applications, registered trademarks and
registered service marks and related applications, registered trade names
and registered copyrights owned by or licensed to Seller, and a description
of any material agreements relating to the acquisition by Seller of any
such Intellectual Property in the form attached as SCHEDULE 1.2(e).
Neither Seller, nor, to the best of Seller's belief after reasonable
inquiry, any employee, agent or representative of Seller, has distributed
or disclosed confidential, proprietary information of Seller except under
the terms of a confidentiality agreement. Seller owns or possesses
adequate licenses or other rights to use, sell and license or dispose of
all of the Intellectual Property, and has the exclusive right to bring
actions for the infringement of any Intellectual Property owned by it.
Seller has good and marketable title or license rights to all of the
Intellectual Property and owns such property free and clear of all security
interests, liens, encumbrances, claims and rights of any kind or nature.
No person or entity other than Seller has any right to market the
Intellectual Property, make any derivative of the Intellectual Property, or
make any sale of or involving any Intellectual Property. Except as set
forth on SCHEDULE 1.2(e), there are no royalties,
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honoraria, fees or other payments payable by Seller to any person or entity
by reason of the ownership, use, license, sale or disposition of the
Intellectual Property. The conduct of the business of Seller does not
conflict with or infringe upon any intellectual property rights of any
other person, and no claims of conflict or infringement are pending or
threatened against Seller.
(m) Organization and Existence. Seller is a corporation duly
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organized, validly existing, and in good standing under the laws of the
State of Colorado. The Indemnifying Shareholders own an aggregate of 100%
of the issued and outstanding stock of the Seller.
(n) Power and Authority. Seller has full right, power and authority
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to execute, deliver and perform this Agreement. Seller is not a party to
any contract and is not subject to any other legal restrictions that would
prevent or restrict complete fulfillment of any of the terms and conditions
of this Agreement or compliance with any of Seller's obligations hereunder.
(o) Authorization. The Indemnifying Shareholders hold all of the
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capital stock of the Seller or any rights to acquire or subscribe to
capital stock of the Seller. The execution, delivery, and performance of
this Agreement by Seller has been duly authorized by all requisite
corporate action on its part, including action by both the directors and
shareholders of Seller.
(p) Binding Effect. This Agreement is a valid, binding, and legal
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obligation of Seller, enforceable against Seller and each Indemnifying
Shareholder in accordance with the terms hereof.
(q) No Default. Neither the execution and delivery of this Agreement
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nor the Seller's and the Indemnifying Shareholders' full performance of
their respective obligations hereunder will violate or breach, or otherwise
constitute or give rise to a Default under the terms or provisions of
Seller's Articles of Incorporation, Seller's Bylaws, any regulations or any
material contract, commitment, instrument, notice, writ, injunction, order
or decree of any court, agency, or other governmental authority or other
obligation to which Seller or any Indemnifying Shareholder is a party.
(r) Finders. Neither Seller nor any Indemnifying Shareholder has
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engaged, nor is directly or indirectly obligated to anyone acting as a
broker, finder, or in any other similar capacity in connection with the
sale of the Acquired Assets or any other transaction contemplated by this
Agreement.
(s) Liens and Encumbrances. Except for the Assumed Liabilities, the
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Acquired Assets are, and at Closing will be, owned by Seller free and clear
of any and all liens, claims, charges or encumbrances whatsoever and any
right of any party other than
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Seller.
(t) Financial Statements. SCHEDULE 2.1(t) is a listing of financial
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statements, information and schedules, covering the Business, true, correct
and complete copies of which have been previously delivered to Purchaser
(collectively, the "Financial Statements"). Each of the Financial
Statements is (and upon the preparation thereof the Closing Financial
Statements will be) true, correct and complete in all material respects and
fairly presents (or, in the case of the Closing Financial Statements, will
fairly present) the financial condition as of the date indicated and the
results of operations for any period including therein, in each case in
accordance with generally accepted accounting principles, consistently
applied.
(u) Liabilities for Payment. SCHEDULE 2.1(u) contains a complete and
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accurate list of all indebtedness (including accrued interest and taxes)
related to the Business with respect to which Seller is liable. Seller is
not in default under any note, bond, debenture, mortgage, indenture,
security agreement, guaranty, or other instrument of indebtedness, or any
other material agreement or commitment, or pursuant to which, with the
passage of time, would Seller be in default thereunder.
(v) Litigation. There is no litigation, proceeding, action, claim, or
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governmental investigation pending or threatened against or relating to the
Acquired Assets or the Business which would, individually or in the
aggregate, have a material or adverse effect on the Business, and neither
Seller nor any Indemnifying Shareholder has knowledge of any facts or
circumstances which could give rise to any such litigation, proceeding or
investigation. Neither Seller nor any Indemnifying Shareholder is subject
to any notice, writ, injunction, order, or decree of any court, agency, or
other governmental authority which would materially or adversely affect the
Business or the consummation of the transaction contemplated hereby.
(w) Employees. SCHEDULE 2.1(w) constitutes a complete and accurate
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listing of (i) all employees currently involved in the operation of the
Business and all contracts or other arrangements under which they are
currently employed, and (ii) all pension, retirement, profit-sharing,
employee stock option or stock purchase, bonus, deferred compensation,
incentive compensation, life insurance, health insurance, fringe benefit,
or other employee benefit plans of Seller, or applicable to the Business or
its employees.
(x) Compliance with Laws. Seller is, and at all times prior to the
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date hereof has been, in full compliance with all statutes, ordinances,
codes, restrictions, regulations, and other governmental requirements
applicable to the Business or the operation thereof. Without in any manner
limiting the generality of the foregoing, Seller specifically represents
that Seller is in compliance with the Americans With Disabilities Act and
regulations promulgated thereunder.
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(y) Payment of Taxes; Tax Liens. All tax returns, declarations of
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estimated tax and tax reports ("Tax Returns") required to be filed by
Seller have been filed in timely fashion with the appropriate government
agency, and all federal, state and local income, profits, employment,
franchise, sales, use, occupation, property, excise or other taxes or
charges ("Tax Liability") reported or due with respect to Seller's Tax
Returns for the last six (6) years have been paid and all required
estimated payments of Tax Liability applicable to the Business have been
paid when due and Seller has withheld and paid to the appropriate taxing
authority or jurisdiction any and all amounts required by law or agreement
to be withheld from the wages or salaries of its employees. There are no
agreements by Seller for the extension of the time for the assessment of
any Tax Liability. The Acquired Assets are not in any manner encumbered by
or vulnerable to liens arising out of any Tax Liability nor shall any such
lien arise on account of any Tax Liability for any period prior to the
Closing. Seller has provided Purchaser with a copy of any audit report
resulting from any audit performed with respect to any tax return filed or
required to be filed by Seller in the past three (3) years.
(z) No Material Events. Other than as disclosed herein, the Business
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has been conducted only in the ordinary and usual course since May 1991,
and no event, condition, circumstance, or occurrence which has had or is
likely to have a material or adverse effect on the Business or the
properties, assets, liabilities (fixed or otherwise) or condition
(financial or otherwise) of the Business has occurred since such date.
(aa) Environmental Matters. Neither Seller nor, to the knowledge of
---------------------
Seller, any other person has generated, processed, stored, transported,
disposed of or otherwise handled any Hazardous Materials in any manner on
the Seller's premises (1355 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx) or at any other site from which the Business was conducted (the
"Business Premises") that has resulted, or that could result, in a
Hazardous Materials Contamination on the Business Premises. Neither Seller
nor any Shareholder has received any notice from any governmental authority
or other person respecting or related to any actual, threatened or
potential release of Hazardous Materials, and no investigation or
proceeding with respect to Hazardous Materials or Hazardous Materials
Contamination is threatened, anticipated or in existence with respect to
the Business Premises.
As used herein, the term "Hazardous Materials" shall include any hazardous
waste, as defined by the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Section 6901 et seq.), as amended from time to time, and regulations
promulgated thereunder, and any hazardous substance, as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"), as amended from time to
time, and regulations promulgated thereunder. As used herein, the term
"Hazardous Materials Contamination" shall mean contamination (whether
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presently existing or hereafter occurring) of premises, buildings,
facilities, soil, groundwater, air or other elements as a result of
Hazardous Materials.
(bb) Labor Relations; Collective Bargaining Agreements. Seller has
-------------------------------------------------
good and amicable relations with its employees, and there are no
controversies pending or, to the knowledge of Seller or any Indemnifying
Shareholder threatened between Seller and its employees. Seller is not a
party to any collective bargaining or union contract and, to the knowledge
of Seller and the Indemnifying Shareholders, there exists no current union
organizational effort with respect to employees of Seller.
(cc) True and Complete Copies. Seller has delivered or made available
------------------------
to Purchaser true, complete and accurate copies of all contracts,
agreements and documents referred to in this Agreement or related to the
Business, together with all modifications thereof and amendments thereto,
and all business books and records, including without limitation all
financial, operating, inventory, legal, personnel, payroll, customer lists
and records, supplier lists and records, and all sales and promotional
literature, correspondence and files of Seller with respect to the
Business.
(dd) Safety Requirements. The operation of the Business is presently
-------------------
in full compliance with, and at all times prior to the date of the Closing
will have been in full compliance with, any and all job safety requirements
applicable thereto, including without limitation any and all requirements
of the Occupational Safety and Health Act of 1970, as amended, and any
other requirements of any governmental authority with respect to the health
or safety of workers. Seller has received no notice of any failure to
comply with any such law, order, rule or regulation, nor is any such
complaint pending or threatened from any other party. Seller has provided
Purchaser with a copy of any report resulting from any audit, study or
review performed with respect to health or safety of workers employed by
Seller. Seller has not entered into any agreements with respect to health
or safety matters, nor has Seller been subject to any complaint with
respect to worker safety or health, nor is Seller or any Shareholder aware
of any fact or circumstance which would give rise to any such claim.
(ee) Disclosure. Neither the Financial Statements nor any
----------
representation or warranty contained herein, nor any information delivered
or to be delivered by the Seller or the Indemnifying Shareholders, pursuant
to this Agreement, contains or shall contain an untrue statement of a
material fact, nor do the financial statements, representations, warranties
and other information omit to state, nor will they omit to state, any
material fact necessary in order to make the statements made not
misleading.
2.2 Purchaser's Representations and Warranties. Purchaser hereby
------------------------------------------
represents and warrants to Seller that as of the time of Closing:
(a) Organization and Existence. Purchaser is a Washington corporation
--------------------------
duly
-13-
organized, validly existing, and in good standing under the laws of the
State of Washington, and will be qualified as a foreign corporation in
Colorado prior to Closing or as soon thereafter as is reasonably
practicable.
(b) Power and Authority. Purchaser has full corporate power and
-------------------
authority under its Articles of Incorporation, Bylaws and the laws of the
State of Washington to execute, deliver and perform this Agreement.
Purchaser is not a party to any contract and is not subject to any other
legal restriction that would prevent or restrict complete fulfillment of
any of the terms and conditions of this Agreement or compliance with any of
Purchaser's obligations hereunder.
(c) Authorization. The execution, delivery, and performance of this
-------------
Agreement have been duly authorized by all requisite corporate actions on
the part of Purchaser.
(d) Binding Effect. This Agreement is a valid, binding, and legal
--------------
obligation of Purchaser, enforceable in accordance with its terms.
(e) No Default. Neither the execution and delivery of this Agreement
----------
nor Purchaser's full performance of its obligations hereunder will violate
or breach, or otherwise constitute or give rise to a default under, the
terms or provisions of the Purchaser's Articles of Incorporation, bylaws
laws or any material contract, commitment, instrument, notice, writ,
injunction, order or decree of any court, agency, or other governmental
authority or other obligation to which the Purchaser is a party.
(f) Finders. Purchaser has not engaged, nor is directly or indirectly
-------
obligated to anyone acting as a broker, finder, or in any other similar
capacity in connection with the sale of the Acquired Assets or any other
transaction contemplated by this Agreement.
(g) ARIS Stock. In reliance on the representations and warranties
----------
contained in the executed Subscription Agreement, Purchaser believes that
the transfer of the ARIS Stock to Seller, pursuant to this Agreement, does
not require the ARIS Stock to be registered pursuant to the Securities Act
of 1933 and, again in reliance on the representations and warranties
contained in the executed Subscription Agreement, that any subsequent
transfer by Seller of the ARIS Stock to the Transferees only shall not
violate any federal securities law, Colorado Blue Sky law, or any other law
regulating the transfer of corporate securities. When issued, the ARIS
Stock will be fully paid and nonassessable.
ARTICLE III
Actions Before Closing
3.1 General Inspection. Between the date hereof and the Closing, Seller
------------------
covenants to
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Purchaser that Seller will afford Purchaser and Purchaser's counsel, accountants
and other representatives full access, during normal business hours, to all of
Seller's assets, properties, books, records, personnel, accountants, attorneys,
customers, clients, contractors and suppliers and will furnish Purchaser during
such period with all such information concerning the Business as Purchaser may
reasonably request. Seller specifically covenants that it will permit duly
authorized representatives of Purchaser to conduct an audit of Seller's Books
and Records and such tests of the assets, including such physical inspection,
inventory and evaluation as Purchaser may request, provided that any such tests
are performed in such a manner as will not disrupt the operation of the
Business. In addition, Seller will permit such representatives to make abstracts
from, or take copies of, such books, records or other documentation, or to
obtain temporary possession of any thereof as may be reasonably required by
Purchaser, and Seller will furnish to Purchaser such information concerning the
Business, and its assets, liabilities, or condition, as Purchaser may reasonably
request.
3.2 Interim Conduct of the Business. Seller hereby covenants to Purchaser
-------------------------------
that, from the date of this Agreement to the Closing, Seller will conduct the
Business only in the ordinary and usual course, subject to Purchaser's approval
of certain transactions pursuant to Section 3.3. Without limiting the
generality of the foregoing, Seller hereby covenants to Purchaser that, insofar
as the Business is concerned, Seller will use its best efforts to:
(a) Preserve intact the Business's relationships with suppliers,
customers, employees, creditors, and others having business dealings with
the Business.
(b) Maintain in full force and effect its existing policies of
insurance which affect the Business.
(c) Preserve, protect and maintain the Acquired Assets.
(d) Take no action which would interfere with or prevent performance
and consummation of this Agreement.
(e) Continue performance in the ordinary course of its obligations
under contracts, commitments, or other obligations.
(f) Take all reasonable action to consummate the transaction
contemplated by this Agreement, including cooperating with Purchaser's
representatives for purposes of facilitating the orderly transfer to
Purchaser of the Acquired Assets and the Business.
(g) Not solicit from any other person, firm or corporation any
inquiries or proposals related to the disposition of all or any substantial
potion of the Acquired Assets or the Business or pursue or engage in
discussions with respect thereto.
-15-
(h) Not waive any right, cancel any debt or claim, or voluntarily
suffer any extraordinary loss.
3.3 Purchaser's Approval of Certain Transactions. Seller hereby covenants
--------------------------------------------
to Purchaser that, except as may otherwise be required under this Agreement,
from the date hereof to the Closing, insofar as the Business is concerned,
Seller will not directly or indirectly take any of the following actions without
the prior written consent of Purchaser:
(a) Incur or permit the incurrence of any debt for borrowed money or
incur any obligation or other liability except in the ordinary course of
business.
(b) Enter into any lease of real or personal property or any renewals
thereof involving a rental obligation.
(c) Permit any encumbrances against any of the Acquired Assets.
(d) Not make any dividend or other distribution to shareholders.
(e) Pay any bonus or increase the rate of compensation payable to any
of the employees of the Business or otherwise enter into or alter any
employment, consulting, or managerial services agreement affecting the
Business.
(f) Commence, enter into, or alter any pension, retirement, profit-
sharing, employee stock option or stock purchase, bonus, deferred
compensation, incentive compensation, life insurance, health insurance,
fringe benefit, employment contracts or other employee benefit plan or
arrangement affecting employees of the Business.
(g) Except with respect to the excluded tangible personal property
identified on SCHEDULE 1.2(b), make any commitments or increase any
previous commitments for capital expenditures or sell or otherwise dispose
of any capital asset.
(h) Accelerate or delay any performance of a contract for goods or
services, except as may be necessary in the ordinary course of business.
(i) Enter into or materially modify any transaction, contract or
commitment, other than modifications to Seller's employment agreements with
Xxxxx X. Xxxxx, whether or not in the ordinary course of business, or waive
any right, cancel any debt or claim, or voluntarily suffer any
extraordinary loss, however nothing herein shall preclude Seller from
employing such professional consultants (including accountants and
attorneys) to advise Seller with respect to the transactions contemplated
by this Agreement.
(j) Acquire, maintain or hold Inventories in excess of that required
for a
-16-
particular project or in excess of the amount of Inventories reasonably
required for operation of the Business in the ordinary course.
(k) Sell, assign, transfer, license, or convey any of the Intellectual
Property to be included as part of the Acquired Assets.
3.4 UCC Searches. Within five (5) business days from the date of this
------------
Agreement, Seller shall furnish to Purchaser certificates from the Secretary of
the State of Colorado providing a listing of all financing statements and all
other documents on file in that office, including but not limited to,
continuation, amendment, release or assignment statements, in each case filed
with the Colorado Secretary of State's office against Seller or any of the
Acquired Assets, together with true and complete copies of said financing
statements (the "UCC Searches"). Effective as of the date of the Closing, Seller
shall cause the UCC Searches to be updated. In each case, the Acquired Assets
shall be subject only to liens and encumbrances expressly consented to in
writing by the Purchaser. Any additional liens and encumbrances on the Acquired
Assets shall be satisfied and the Seller shall, prior to Closing, file, or cause
to be filed with the Colorado Secretary of State's office, a termination
statement for any lien or encumbrance affecting any of the Acquired Assets not
consented to by Purchaser.
ARTICLE IV
Conditions
4.1 Conditions to Purchaser's Obligations. The obligation of Purchaser to
-------------------------------------
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions at or prior to the Closing:
(a) Each representation and warranty of Seller or any Indemnifying
Shareholder contained in this Agreement shall be true, accurate and
complete in all material respects as of the date of Closing and shall be
deemed to have been remade at and as of the date of Closing.
(b) Seller and each Indemnifying Shareholder shall have performed and
complied with all agreements and conditions required by this Agreement to
be performed or complied with by Seller or any Indemnifying Shareholder
prior to or at the Closing and shall have delivered to Purchaser all
documents, certificates, and instruments required to be delivered under the
terms of this Agreement. In addition, Purchaser shall have received an
opinion, dated as of the date of Closing, of Seller's counsel in form and
content satisfactory to Purchaser in Purchaser's reasonable discretion.
(c) Seller shall have obtained all of the consents, approvals, and
novations, or effective waivers thereof, which Seller is required to obtain
under the terms of this Agreement.
-17-
(d) There shall not have been issued and in effect any injunction or
similar legal order prohibiting or restraining consummation of any of the
transactions contemplated by this Agreement and no legal action or
governmental investigation which might reasonably be expected to result in
any such injunction or order shall be pending or threatened.
(e) Purchaser shall have entered into employment or consulting
agreements with the employees of Seller described on SCHEDULE 4.1(e) upon
such terms and conditions as are satisfactory to Purchaser in Purchaser's
reasonable discretion, but which will give credit to such employees for
their years of service with the Seller as if same had occurred in the
employ of Purchaser for purposes of determining vacation and annual leave
benefits.
(f) There shall not have occurred any material adverse change, or any
event or circumstance which could result in a material adverse change in
the Business or its prospects.
(g) Seller shall have provided to Purchaser a certificate executed by
Seller's president verifying that Seller has obtained all necessary and
appropriate consents required for Seller to execute, deliver and perform
this Agreement.
(h) Seller shall have provided to Purchaser a certificate executed by
Seller's president verifying that Seller has given any employee
notification required under applicable laws, if any, and has received the
approval of any governmental authority required in order to consummate the
transactions herein described, if any is so required.
(i) At the Closing, Seller shall provide Purchaser with evidence that
Seller has amended its Articles of Incorporation, effective no later than
three (3) days after the Closing Date, to change its corporate name to a
name that does not contain the word "SofTeach" or any word or words similar
thereto, and that Seller has abandoned any assumed name containing the word
"SofTeach" or any word or words similar thereto.
4.2 Conditions to Seller's Obligations. The obligation of Seller to
----------------------------------
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions at or prior to Closing:
(a) Each representation and warranty of Purchaser contained in this
Agreement shall be true, accurate, and complete in all material respects as
of the date of Closing and shall be deemed to have been remade at and as of
the date hereof and as of the Closing.
(b) Purchaser shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or complied with
by Purchaser
-18-
prior to or at the Closing and shall have delivered all documents,
certificates, and instruments required to be delivered under the terms of
this Agreement.
(c) Purchaser shall have taken all corporate and other actions and
obtained all of the consents necessary for Purchaser to execute, deliver
and perform this Agreement.
(d) There shall not have been issued and in effect any injunction or
similar legal order prohibiting or restraining consummation of any of the
transactions contemplated by this Agreement and no legal action or
governmental investigation which might reasonably be expected to result in
any such injunction or order shall be pending or threatened.
(e) There shall not have occurred any material adverse change, or any
event or circumstance which could result in a material adverse change to
the business of the Purchaser.
(f) The ARIS Stock will not be required to be registered, pursuant to
the Securities Act of 1933, and thus shall be exempt from registration, as
a consequence of the transaction contemplated by this Agreement.
ARTICLE V
Closing
5.1 The Closing. As used in this Agreement, the term "Closing" means the
-----------
time at which the transactions contemplated hereby will be consummated after
satisfaction or waiver of the conditions set forth in Article IV.
5.2 Time, Date, and Place of Closing. The Closing shall occur at 11:00
--------------------------------
a.m. (Mountain Time) on October 3, 1996, but effective as of September 30, 1996
(the "Closing Date"). The Closing shall take place at the offices of ANTONIO
XXXXX XXXXXXX Professional Corporation, 0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, or at such other place as the parties may agree in
writing.
5.3 Purchaser's Obligations. At the Closing, Purchaser shall deliver the
-----------------------
following:
(a) Purchaser shall execute and deliver to Seller the following
documents, certificates, and other items:
(i) Xxxx of Sale and Assumption Agreement in the form attached
hereto as SCHEDULE 5.3(a)(i);
(ii) The ARIS Stock;
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(iii) The Promissory Note;
(iv) Officer's Certificate, including an incumbency
certification and further certifying as to the existence
and good standing of the Purchaser, the accuracy of all
representations and warranties of the Purchaser, and the
adoption by the Board of Directors of the Purchaser of
resolutions authorizing and approving the transaction;
(v) A Certificate of Good Standing of the Purchaser issued by
the office of the Secretary of State of Washington dated as
of a date within fifteen (15) days prior to Closing;
(vi) Executed employment agreements between Purchaser and
certain individuals formerly employed by Seller, which
employment agreements will become effective upon Closing;
and
(vii) Such other documents, certificates, and other items as may
be required to be delivered by the Purchaser pursuant to
the terms of this Agreement or as may be reasonably
requested by the Seller to effectuate the transaction
herein described.
(b) Purchaser shall deliver to Seller the amount of the cash payment
to be made to the Seller as specified in Section 1.4(a) hereof.
5.4 Seller's Obligations. At the Closing, Seller shall deliver the
--------------------
following:
(a) Seller shall execute and deliver to Purchaser the following
documents, certificates, and other items:
(i) Xxxx of Sale and Assumption Agreement in the form attached
hereto as SCHEDULE 5.3(a)(i);
(ii) Officer's Certificate, including an incumbency
certification and further certifying as to the existence
and good standing of the Seller, the accuracy of all
representations and warranties of the Seller, the adoption
by the Board of Directors and shareholders of the Seller of
resolutions authorizing and approving the transaction;
(iii) Certificate of Good Standing of the Seller issued by the
Office of Secretary of State of Colorado dated as of a date
not more than ten (10) days prior to the Closing; and
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(iv) Such other documents, certificates, and other items as may
be required to be delivered by the Seller pursuant to the
terms of this Agreement or as may be reasonably requested
by the Purchaser to effectuate the transaction herein
described.
(b) Seller shall deliver to Purchaser ownership of and title to the
Acquired Assets, free and clear of any and all liens, claims and
encumbrances, except as otherwise herein contemplated;
(c) Seller shall deliver to Purchaser such confirmations of the
consent to assumption of the Assumed Liabilities as may be requested by
Purchaser; and
(d) Seller shall have provided Purchaser with an opinion of Seller's
counsel, in form and content as herein contemplated.
5.5 Closing Costs and Expenses. Each party hereto shall bear its own
--------------------------
expenses of the transaction herein described.
ARTICLE VI
Actions After Closing
6.1 Further Conveyances. After the Closing, Seller and each Indemnifying
-------------------
Shareholder will, without further cost or expense to Purchaser, execute and
deliver to Purchaser (or cause to be executed and delivered to Purchaser) such
additional instruments of conveyance and transfer and take such other and
further actions as Purchaser may reasonably request more effectively to convey,
transfer to and vest in Purchaser, and to put Purchaser in possession and
operating control of, all or any part of the Acquired Assets and the Business
and otherwise effect the terms of this Agreement. In case of contracts and
rights, if any, which cannot be transferred effectively without the consent of
third parties, which consent is unobtainable, Seller and the Indemnifying
Shareholders shall use their best efforts to secure Purchaser the benefits
thereof.
6.2 Further Consents to Assignment. As and to the extent Seller shall
------------------------------
have failed to obtain prior to Closing the consent or approval (or an acceptable
effective waiver thereof) of any person or persons in respect of any item
described in Section 4.1 hereof or the parties shall have failed to obtain any
other consent to the assumption of any contract included as a part of the
Acquired Assets or Assumed Liabilities, if Purchaser shall nonetheless have
elected to proceed to purchase the Acquired Assets, Seller and the Indemnifying
Shareholders shall continue to use their best efforts to obtain from such person
or persons the consents or approvals (or effective waivers thereof).
6.3 Right of Access. For a period of not less than five (5) years from
---------------
the date of
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Closing, Purchaser shall retain the Books and Records and each party shall have
reasonable access to the Books and Records which shall be stored in the Denver,
Colorado metropolitan area unless otherwise agreed by the parties.
6.4 Right to Audit. For a period of not less than five (5) years from the
--------------
date of Closing, Purchaser, at its sole expense, shall have the right to conduct
such audits of all books and records maintained by Seller after Closing or not
otherwise within the definition of Books and Records set forth in SECTION 1.2(g)
hereof.
6.5 Registration Rights. Purchaser has agreed to grant Indemnifying
-------------------
Shareholders registration rights regarding the ARIS Stock. Within thirty (30)
days of the Closing, Purchaser and Indemnifying Shareholders shall enter into an
agreement setting forth, defining and describing such registration rights.
ARTICLE VII
Employees and Employee Benefits
7.1 Employment. Purchaser shall offer to employ such of Seller's
----------
employees, on such terms and with such compensation, as Purchaser may determine
in its sole discretion.
7.2 Accrued Commissions, Vacation. Seller shall be responsible for, and
-----------------------------
shall pay as of the time of Closing or segregate funds for the payment of, all
obligations of Seller to all current and former employees of the Business for
accrued payroll, commissions and other compensation, and any and all SARSEP
contributions, deferred compensation or vacation owed to current or former
employees of the Business as of the Closing.
7.3 Workers' Compensation. Seller will bear the entire cost and expense
---------------------
of all workers compensation claims arising out of injuries identifiably
sustained by employees of the Business on or before the Closing Date. Purchaser
will bear the entire cost and expense of all workers compensation claims arising
out of injuries identifiably sustained by employees of the Business after the
Closing Date. As to any workers' compensation claims arising out of injuries
without an identifiable date of occurrence either before or after the Closing
Date, the Purchaser and Seller agree to work together to reasonably allocate the
cost and expenses arising from said claims.
ARTICLE VIII
Indemnification
8.1 Indemnification of Purchaser. Seller and each Indemnifying
----------------------------
Shareholder, jointly and severally, hereby agree to indemnify, defend, and hold
Purchaser harmless from and against any and all liabilities, penalties, damages,
losses, claims, costs, and expenses (including reasonable attorneys fees and
expenses for the defense of any claim which, if proved, would give
-22-
rise to an obligation of indemnity hereunder whether or not such claim may be
ultimately proved), arising out of or resulting directly or indirectly from (a)
any misrepresentation or breach of any representation or warranty by Seller or
any Indemnifying Shareholder; (b) failure of Seller to fully pay or satisfy or
cause to be paid or satisfied any liabilities not expressly assumed by Purchaser
pursuant to the terms hereof; (c) nonperformance of any obligations or covenants
on the part of Seller or Indemnifying Shareholder under this Agreement,
including, without limitation, the failure of Seller to pay accrued
compensation, retirement, pension, or vacation of current or former employees of
Seller; and (d) the conduct of the Business prior to the Closing (other than
liabilities expressly assumed by the Purchaser pursuant to the terms hereof),
including any violation of laws occurring or alleged to have occurred prior to
the Closing provided, however, that Purchaser shall not have caused or procured
such event through its own acts.
8.2 Responsibility for Defense. Within thirty (30) days after receipt of
--------------------------
any notice of a claim made under Section 8.1 hereof, but not less than five (5)
working days prior to the time Purchaser is required to respond to a Claim,
Seller and each Indemnifying Shareholder will, by giving written notice to
Purchaser, have the right to assume responsibility for the defense of the Claim
in the name of Purchaser or otherwise as Seller and each Indemnifying
Shareholder may elect; provided that Seller and each Indemnifying Shareholder
also acknowledge in writing their responsibility to indemnify Purchaser with
respect to such Claim; and provided further that failure of Seller and the
Indemnifying Shareholders to exercise their rights to assume responsibility for
the defense of the Claim shall not restrict the ability of Purchaser from
subsequently joining such indemnitor as a party in any litigation respecting
such Claim, nor shall Purchaser be obligated to permit Seller or any
Indemnifying Shareholder to assume responsibility for the defense if Purchaser
shall have a reasonable basis to believe that its ability to receive full
indemnification hereunder is in jeopardy for any reason, including without
limitation the financial solvency of Seller or the Indemnifying Shareholder. In
such event, Purchaser shall have the right to defend the Claim and shall be
automatically deemed to have reserved all of its rights against Seller and each
Indemnifying Shareholder. Seller and the Indemnifying Shareholders are herein
sometimes called the "Defending Party." Notwithstanding a Defending Party's
responsibility for the defense of a Claim, the other party shall have the right
to participate, at its own expense and with its own counsel, in the defense of a
Claim and the Defending Party will consult with the other party from time to
time on matters relating to the defense of such Claim and will provide such
information and assistance as the parties deem reasonably necessary to defend
the Claim. The Defending Party will provide the other party with copies of all
pleadings and correspondence relating to such Claim and will keep the other
party appraised of proposed adjustment, compromises and settlements.
Notwithstanding anything herein to the contrary, the Defending Party shall not
be entitled to compromise or settle any such action without the prior written
consent of the Purchaser.
8.3 Payment of Fees and Expenses. If Purchaser shall be entitled under
----------------------------
this Article VIII to indemnification for fees and expenses, Purchaser shall be
entitled to currently offset any amounts due Seller upon the submission to the
Seller of a request for reimbursement setting forth
-23-
in reasonable detail such costs and expenses to be reimbursed.
8.4 Right to Offset. At any time that Purchaser shall have a right of
---------------
indemnification against Seller or any Indemnifying Shareholder under this
Article VIII, Purchaser shall be entitled to offset any claim against any
amounts then owing by Purchaser to Seller or any Indemnifying Shareholder.
8.5 Environmental Indemnification. In addition to any other
-----------------------------
indemnification rights contained herein, Seller and each Indemnifying
Shareholder, jointly and severally, hereby specifically indemnify, defend and
hold harmless Purchaser from any and all liabilities, actions, demands,
penalties, losses, costs or expenses (including, without limitation, attorney's
fees and cost of suit), suits, cost of settlement or judgment, and claims of any
and every kind whatsoever which now or in the future may be paid, incurred or
suffered by or asserted against Purchaser or any person holding by, through or
under Purchaser, as a direct or indirect result of, the presence on or under, or
the escape, seepage, leakage, spillage, discharge, emission or release of any
Hazardous Materials or any Hazardous Materials Contamination occurring on the
Business Premises at any time prior to Closing.
ARTICLE IX
Amendment, Waiver, and Termination
9.1. Amendment. This Agreement may be amended at any time prior to the
---------
Closing only by written instrument executed by all of the parties hereto.
9.2 Waiver. Either party may at any time waive compliance by the other of
------
any covenants or conditions contained in this Agreement but only by written
instrument executed by the party waiving such compliance. No such waiver,
however, shall be deemed to constitute the waiver of any such covenant or
condition in any other circumstance or the waiver of any other covenant or
condition. The failure of Purchaser to enforce, at any time or for any period of
time, any of the provisions of this Agreement shall not constitute a waiver of
such provisions.
9.3 Termination. In addition to any right of termination herein provided,
-----------
this Agreement may be terminated at any time prior to the Closing, but only by
written instrument signed by both parties.
ARTICLE X
Miscellaneous
10.1 Cooperation. Each of Purchaser, Seller and each Indemnifying
-----------
Shareholder will cooperate with the other party, at the other party's request
and expense, in furnishing information, testimony, and other assistance in
connection with any actions, proceedings, arrangements, and disputes with other
persons, or governmental inquiries or investigations involving Seller or
-24-
Purchaser's conduct of the Business or the transactions contemplated hereby.
10.2 Confidentiality. After the Closing, Seller and each Indemnifying
---------------
Shareholder will hold all information related to the Business or the operation
thereof in strictest confidence and will use neither such information nor other
information concerning the Business that Seller or any Indemnifying Shareholder
may retain after the Closing for any purpose intended to result in a competitive
economic gain to Seller or any Indemnifying Shareholder, whether or not such
undertaking might actually be competitively disadvantageous to Purchaser or the
Business. Seller and Purchaser shall not issue any press release concerning the
transaction herein described unless such press release is either jointly issued
or has been approved by the other party.
10.3 Severability. If any term or provision of this Agreement or the
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application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the extent
permitted by law.
10.4 Expenses. Except as otherwise expressly provided in this Agreement,
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each party will bear its own expenses incurred in connection with this Agreement
and the transaction contemplated hereby, whether or not such transaction shall
be consummated.
10.5 Transfer Taxes. Purchaser will bear any state, federal or foreign
--------------
transfer, sales or use taxes, if any, which may result from the transfer of the
Acquired Assets from Seller to Purchaser.
10.6 Notices. All notices, offers, approvals and other communications
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hereunder shall be in writing and shall be deemed given upon mailing by
registered or certified United States mail, postage prepaid and return receipt
requested, to the other party addressed as follows:
If to Purchaser: ARIS Corporation
0000 Xx. Xxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
With a copy to: ANTONIO XXXXX XXXXXXX
Professional Corporation
0000 Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to Seller: SofTeach Corporation
0000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
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Attention: Xxxxx X. Xxxxx
With a copy to: Xxxxx X. Xxxxx, Esq.
0000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Any writing which may be mailed pursuant to the foregoing may also be delivered
by hand or transmitted by telecopier and in such event shall be effective when
actually received by the addressee. Either party may from time to time specify
as its address for purposes of this Agreement any other address within the
continental United States upon the giving of ten (10) days written notice
thereof to the other party.
10.7 Assignment. This Agreement and the rights, obligations and
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liabilities hereunder shall be binding upon and inure to the benefit of the
successors and assignees of each of the parties hereto, but no rights,
obligations or liabilities hereunder shall be assignable or delegable by any
party without the prior written consent of the other parties hereto.
10.8 No Third Parties. This Agreement is not intended to, and shall not,
----------------
create any rights in or confer any benefits upon any person other than the
parties hereto.
10.9 Incorporation by Reference. All Schedules, Appendices and other
--------------------------
attachments to this Agreement constitute integral parts to this Agreement and
are hereby incorporated into this Agreement by this reference for all relevant
purposes. The Schedules referred to herein have been separately compiled, and
initialed by the undersigned representatives of Seller, the Indemnifying
Shareholders and Purchaser.
10.10 Counterparts and Facsimile Copies. This Agreement may be executed
---------------------------------
in two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one counterpart. A facsimile copy, including a facsimile copy of
a signature, shall have the same force and effect as an original.
10.11 Entire Agreement; Time is of the Essence. This Agreement, together
----------------------------------------
with the instruments and other documents described or referred to herein,
including those employment agreements referred to in Section 4.1(e) herein and
SCHEDULE 4.1(e) hereof, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes any prior oral or
written agreement. Time is of the essence of this Agreement.
10.12 No Waiver of Rights. While Purchaser shall have the opportunity, as
-------------------
provided herein, to make inspections, reviews and evaluations and to obtain or
give consents related to the Business, under no circumstances shall Purchaser be
liable with respect to any such consents or be limited in any manner whatsoever
in its ability to rely upon the covenants and representations
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of Seller or any Indemnifying Shareholder made herein.
10.13 Interpretation. Any headings in this Agreement are for convenience
--------------
of reference only and shall not define or limit any of the terms or provisions
hereof. All pronouns shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons referred to
may require. Each defined term identified herein with initial capital letters
shall have the meaning ascribed to such term herein. Each party agrees that the
language and all parts of this Agreement shall be construed as a whole according
to its fair meaning, and irrespective of any party or its counsel's role in
drafting this Agreement shall not be strictly construed for or against any
party. The parties acknowledge that each has reviewed this Agreement and has had
the opportunity to have it reviewed by its attorney and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement or any
part thereof or attachment thereto.
10.14 Survival of Representations and Covenants. All statements contained
-----------------------------------------
in any certificate or other instrument delivered by or on behalf of Seller or
any Indemnifying Shareholder pursuant to this agreement or in connection with
the transactions contemplated hereby shall be deemed representations and
warranties by Seller and each Indemnifying Shareholder hereunder. With respect
to all representations, warranties, covenants and agreements made by Seller and
any Indemnifying Shareholder in this Agreement or as provided herein, the
liabilities of Seller and each Indemnifying Shareholder shall be joint and
several. All representations, warranties, covenants and agreements made in this
Agreement or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing of the transaction herein described
without limitation.
10.15 Choice of Law. This Agreement and its validity, interpretation,
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performance and enforcement shall be governed by the laws of the State of
Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
SELLER:
SOFTEACH CORPORATION,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx, President
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INDEMNIFYING SHAREHOLDERS:
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
-------------------------------
Xxxx X. Xxxxx
PURCHASER:
ARIS CORPORATION,
a Washington corporation
By: /s/ Xxxx Song
----------------------------
Xxxx Song, President
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