ASSET PURCHASE AGREEMENT
DATED
JUNE 2, 2000
AMONG
ARTISOFT, INC.,
TRITON TECHNOLOGIES, INC.,
SPARTACOM TECHNOLOGIES, INC.,
AND
SPARTACOM INC.
(FOR PURPOSES OF ARTICLES IV, VI, XI AND XIII HEREOF)
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of June 2, 2000, among Artisoft, Inc., a
Delaware corporation ("Artisoft"), Triton Technologies, Inc., a Delaware
corporation ("Triton"; Triton and Artisoft are referred to individually herein
as a "Seller" and collectively as the "Sellers"), Spartacom Technologies, Inc.,
a Delaware corporation ("Purchaser"), and, for purposes of Articles IV, VI, XI
and XIII hereof, SpartaCom Inc., a Georgia corporation ("SpartaCom").
This Agreement sets forth the terms and conditions upon which Sellers will
sell to Purchaser, and Purchaser will purchase from Sellers, certain assets of
Sellers.
In consideration of the mutual agreements contained herein, the parties
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement each of the following terms shall have the
following meaning:
1.01 "Acquired Assets" shall mean all right, title and interest in the
assets used to conduct the business currently conducted by Sellers of developing
network operating systems and communications software for small/medium sized
businesses and retail point-of-sale; remote computing and system recovery
software for enterprises of all sizes; and wireless messaging software for
digital pagers and PCS cellular telephones (the "CSG Business") excluding (i)
the Excluded Assets (as hereinafter defined), and (ii) any liabilities not
expressly assumed under this Agreement and shall include, without limitation,
the following:
(a) all computers, machinery and equipment, tools, furnishings and
other items of tangible personal property used in the CSG Business ("Equipment")
owned by Sellers, and leasehold interests in Equipment held by Sellers,
including the Equipment listed on Schedule 1.01(a);
(b) all software products, computer software in object code, in source
code and in binary form, technical information, software development, and
research procedures and records, engineering data, know-how and designs related
to the CSG Business, including those listed on Schedule 1.01(b);
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(c) all deferred charges and security deposits under leases to be
assumed by Purchaser including those listed on Schedule 1.01(c);
(d) with respect to the CSG Business, all rights and interest of
Sellers in, to and under, prepaid operating expenses, contract rights, backlog,
purchase orders and commitments, customer, prospect and reference lists,
goodwill, secrets, processes, and formulas, maintenance records and know-how,
work in progress, and supplies, including those listed on Schedule 1.01(d);
(e) all of Sellers' respective right, title and interest in all
trademarks, trademark applications and registrations, together with the goodwill
relating thereto, other than the trademark "Artisoft", all patents and patents
applications, and all copyright and copyright applications used in the CSG
Business, including those listed on Schedule 1.01(e);
(f) all of Sellers' Federal, state and local governmental licenses,
permits, approvals and authorizations relating to the CSG Business to the extent
such permits, approvals and authorizations are transferable, including those
listed on Schedule 1.01(f);
(g) all of Sellers' inventory, including raw materials, work in
process, finished goods, tooling, spare parts and supplies used in the CSG
Business (the "Inventory"), including the Inventory listed on Schedule 1.01(g);
(h) all intangible assets of Sellers used in the CSG Business,
including telephone and facsimile numbers, e-mail addresses, domain names,
customer, prospect and reference lists, technical information, manufacturing
procedures and records, computer software, trade secrets, formulae, processes,
technology, innovations, inventions, engineering drawings, designs, patterns and
similar information generally described as know-how, research, marketing and
other data, together with the goodwill relating thereto, including the domain
names and telephone numbers listed on Schedule 1.01(h) hereto;
(i) all of the books and records of Sellers related to the CSG
Business, including records relating to the purchase of supplies or services,
and to the production and sale of software products or services, catalogs,
manuals, computerized books and records, and maintenance records;
(j) all insurance benefits, rights and proceeds relating to the
Acquired Assets or the Assumed Liabilities (as hereinafter defined);
(k) all claims of Sellers against third parties relating to the
Acquired Assets, whether known or unknown, contingent or noncontingent;
(l) all rights of Sellers relating to the CSG Business relating to
deposits, prepaid expenses, claims for refunds (other than Tax refunds) and
rights of offset;
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(m) all leasehold interest in real property held by Sellers and used
in the CSG Business, including leasehold improvements thereto, listed on
Schedule 1.01(m); and
(n) all of Sellers' other rights, properties, assets, claims,
contracts and businesses of every kind, character and description, whether
tangible or intangible, real, personal or mixed, whether accrued, contingent or
otherwise and wherever located used in the CSG Business, except the Excluded
Assets.
1.02 "Assumed Liabilities" shall mean (and are expressly limited to):
(a) liability with respect to vacation accrued by employees of Sellers
employed in the CSG Business through the Closing Date who are hired on the
Closing Date by Purchaser, provided the same shall not exceed eighty thousand
dollars ($80,000) in the aggregate; and
(b) all obligations of Sellers to be performed or satisfied after the
Closing under all the contracts, leases, purchase orders, commitments and
agreements of Sellers listed on Schedule 1.02, which are included in the
Acquired Assets, but not liabilities or obligations resulting from any
performance, default or breach by either Seller thereunder prior to the Closing.
1.03 "Excluded Assets" shall mean:
(a) the accounts receivable of Sellers as at the Closing Date,
(b) the assets relating to Artisoft's computer telephony business
which are not used in the CSG Business;
(c) the minute books and stock records of Sellers;
(d) the capital stock of Triton owned by Artisoft;
(e) all personnel records or other records which either Seller is
required by law to retain in its possession;
(f) the trademark "Artisoft";
(g) any contract or agreement relating to a Limited Assignment Asset
(as hereinafter defined) where the counter party to such contract or agreement
has indicated that it will not consent to the transfer thereof to Purchaser; and
(h) the assets listed on Schedule 1.03, which are not being
transferred to Purchaser at the Closing pursuant to this Agreement.
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1.04 "Retained Liabilities" shall mean all liabilities and obligations of,
or claims against, Sellers of whatever nature, whether accrued, absolute,
contingent or otherwise, other than the Assumed Liabilities, including, without
limitation, the following:
(a) all liabilities and obligations of a Seller to pay Taxes (as
defined in Section 1.05 hereof), including all Taxes of whatever nature arising
from the transactions contemplated by this Agreement;
(b) all liabilities arising from or with respect to any Employee
Benefit Plan (as defined in Section 1.06 hereof) or collective bargaining
agreement of Sellers or inuring to the benefit of Sellers' respective employees
including, without limitation, any Severance Agreement or Change of Control
Agreement;
(c) any liability with respect to any actual or alleged employee or
former employee work-related injury which occurred on or prior to the Closing
Date;
(d) any liability of any kind (including, without limitation, life,
medical, accident and other insurance coverage) relating to any employee or
former employee of Sellers arising out of or relating to any event which
occurred prior to the Closing Date including, without limitation, any liability
with respect to accrued vacation through the Closing Date with respect to
employees of a Seller whom Purchaser does not hire on the Closing Date;
(e) any liability of a Seller under any litigation, proceeding or
claim of any nature by any person or entity, including for any violation of law
or other legal requirement, arising out of or relating to any event which
occurred prior to the Closing Date, whether or not such litigation, proceeding
or claim is pending, threatened or asserted before, on or after the Closing
Date;
(f) any liability relating to any Environmental Condition (as defined
in Section 5.17 hereof) which existed or occurred on or prior to the Closing
Date;
(g) any liability resulting from any defect or other deficiency
(whether in design, materials, workmanship, labeling, instruction or otherwise)
with respect to any product manufactured or sold or any service provided by a
Seller or any other business the assets of which have been purchased by a Seller
prior to the Closing, or any liability relating to any warranty obligation
incurred by a Seller or such other business for any such product or service
(other than any obligation arising out of any breach of warranty prior to the
Closing);
(h) all liabilities and obligations of a Seller for accounts payable,
whether or not reflected on the Balance Sheet (as defined in Section 5.05
hereof);
(i) any liability or obligation under any real property leases listed
on Schedule 1.04(i);
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(j) any liability or obligation under any contract, lease, purchase
order, commitment or agreement listed on Schedule 1.02 arising out of or
relating to any performance, default or breach by either Seller thereunder prior
to the Closing; and
(k) the liabilities referred to in Section 4.14;
(l) any liability or obligation under any contract or agreement
relating to a Limited Assignment Asset, where the counter party to such contract
or agreement has indicated that it will not consent to the transfer thereof to
Purchaser; and
(m) any liability, obligation or claim of whatever nature, whether
accrued, absolute, contingent or otherwise, which is not specifically assumed by
Purchaser pursuant to this Agreement.
1.05 "Taxes" shall mean all taxes, charges, fees, levies or other similar
assessments or liabilities, including, without limitation, income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll, alternative or
add-on minimum, estimated, license, environmental, customs duties, stamp, social
security, unemployment, disability, registration, and franchise taxes imposed by
the United States of America or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof or payable pursuant to any tax sharing agreement or
any other contract.
1.06 "Employee Benefit Plan" shall mean any "employee pension benefit plan"
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), any "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA), and any other written or oral plan, agreement or
arrangement involving direct or indirect severance benefits, disability
benefits, deferred compensation, bonuses, stock options, stock purchase, phantom
stock, stock appreciation or other forms of incentive compensation or
post-retirement compensation maintained or contributed by Sellers.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
AND ASSUMPTION OF LIABILITIES
2.01 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement and in reliance upon the representations, warranties and
covenants set forth herein, at the Closing, Sellers will sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser will purchase, acquire and accept
the Acquired Assets, free and clear of all liens, security interests, charges,
claims, equities or encumbrances of whatever nature.
2.02 CONSIDERATION. In consideration of the sale, assignment, transfer and
delivery of the Acquired Assets, Purchaser will deliver the following
consideration at the Closing:
(a) One Million Nine Hundred Ninety-One Thousand Dollars ($1,991,000)
in cash, less the amount of liability for accrued vacation assumed by Purchaser
in accordance with Section 1.02(a) hereof, to be paid to Sellers by certified or
official bank check or wire transfer of funds to an account designated by
Sellers to Purchaser at least five (5) business days prior to the Closing; and
(b) an Instrument of Assumption in the form of Exhibit A hereto,
relating to the Assumed Liabilities.
ARTICLE III
THE CLOSING
3.01 TIME AND PLACE. The Closing of the transactions contemplated by this
Agreement will take place at the offices of the Bureau Xxxxxxx Xxxxxxxx-New
York, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 A.M. local time, on the
Closing Date (as hereinafter defined). Subject to Section 12.01 hereof, the
Closing shall occur as soon as possible after all conditions set forth in
Articles IX and X have been satisfied or waived, on a date specified in a
written notice from Purchaser to Seller, given at least five (5) days prior to
such date. The date of the Closing is hereinafter sometimes referred to as the
"Closing Date."
3.02 DELIVERIES BY SELLER. As a condition to the obligations of Purchaser
hereunder, Sellers will deliver to Purchaser at the Closing the following:
(a) a duly executed Xxxx of Sale in the form of Exhibit B hereto;
(b) all documents of title necessary to transfer ownership to
Purchaser of any of the assets listed on Schedules 1.01(a) - (n) hereof;
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(c) all other deeds, endorsements, assignments and other instruments
as, in the reasonable opinion of counsel for Purchaser, are necessary to vest in
Purchaser good and marketable title to the Acquired Assets;
(d) all documents as, in the reasonable opinion of counsel for
Purchaser, are necessary to release and extinguish all liens and encumbrances on
any of the Acquired Assets;
(e) the agreements referred to in Article IV hereof, duly executed by
the Seller(s) party thereto; and
(f) all other previously undelivered agreements and other documents
required to be delivered by Sellers at or prior to the Closing in connection
with the transactions contemplated by this Agreement.
3.03 DELIVERIES BY PURCHASER. As a condition to the obligations of Sellers
hereunder, Purchaser will deliver to Sellers at the Closing the following:
(a) the consideration set forth in Section 2.02;
(b) the agreements referred to in Article IV hereof, duly executed by
Purchaser; and
(c) all other previously undelivered agreements and documents required
to be delivered by Purchaser at or prior to the Closing in connection with the
transactions contemplated by this Agreement.
3.04 LIMITED ASSIGNMENT ASSETS. If the Closing would cause any of the
Limited Assignment Assets (as hereinafter defined) automatically to revert to
any third parties, or to give rise to any right of purchase by any third party,
or would cause the agreement pursuant to which a Seller's rights in such Limited
Assignment Assets derives to be deemed terminated or otherwise breached, or if a
third party indicates its intention to exercise its right not to consent to the
transfer to Purchaser of a Limited Assignment Asset, and Purchaser elects to
waive any closing conditions relating to such consent, then, if the Closing
occurs, such Limited Assignment Asset shall not be transferred hereby and such
Seller shall retain the ownership of such Limited Assignment Asset but shall
provide to Purchaser substantially the same economic benefit in respect of such
Limited Assignment Asset as Purchaser would have received if such Limited
Assignment Asset were actually an Acquired Asset, by means of subcontract,
license or lease, to the extent permitted by such Limited Assignment Asset;
provided that Sellers jointly and severally agree to use their best commercial
efforts to obtain all approvals, consents and waivers relating to all Limited
Assignment Assets either before or as soon as practicable after the Closing.
"Limited Assignment Assets" shall mean Acquired Assets, if any, which may not be
transferred or assigned without the approval or consent of, or waiver by, a
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third party, or as to which the transfer or assignment thereof would otherwise
be deemed a breach of an agreement with a third party.
3.05 FURTHER ASSURANCES. After the Closing, Sellers shall from time to
time, at the request of Purchaser and without further cost or expense to
Purchaser, execute and deliver such other instruments of conveyance and transfer
and take such other actions as Purchaser may reasonably request in order to more
effectively consummate the transactions contemplated hereby and to vest in
Purchaser good and marketable title to the Acquired Assets including, without
limitation, all documents required to register the assignments to Purchaser of
all of Sellers' right, title and interest in and to the intellectual property
listed on Schedule 5.14(a) hereof.
ARTICLE IV
RELATED AGREEMENTS AND TRANSACTIONS
4.01 HOLD HARMLESS.
(a) Sellers jointly and severally covenant and agree to hold Purchaser
and its affiliates and associates (as hereinafter defined) harmless from and to
defend Purchaser and its affiliates and associates against any liability and
out-of-pocket expenses, including attorneys' fees and disbursements, arising out
of claims made, or suits or proceedings brought, against Purchaser or its
affiliates or associates by any party relating to any Retained Liabilities.
(b) Purchaser and SpartaCom jointly and severally covenant and agree
to hold Sellers and their respective affiliates and associates harmless from and
defend Sellers and their respective affiliates and associates against any
liability and out-of-pocket expenses, including attorneys' fees and
disbursements, arising out of claims made, or suits or proceedings brought,
against Sellers or their respective affiliates and associates by any party
relating to any Assumed Liabilities.
4.02 BULK SALES LAWS. Sellers jointly and severally covenant and agree to
indemnify and hold harmless Purchaser from any and all claims made by creditors
of Sellers (other than creditors with respect to the Assumed Liabilities)
relating to provisions of the "bulk sales laws" of any State or other
jurisdiction which may be applicable to the transactions contemplated hereby and
from all reasonable out-of-pocket costs (including reasonable attorneys' fees)
incurred in the defense of any claims made under such laws.
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4.03 MAIL RECEIVED AFTER CLOSING; INQUIRIES. For a period of five (5) years
from the Closing:
(a) Sellers shall promptly deliver or cause to be promptly delivered
to Purchaser all mail received by Sellers relating to the Acquired Assets or the
Assumed Liabilities;
(b) Sellers shall promptly redirect to Purchaser's electronic mail
server all electronic mail messages (i) relating to the Acquired Assets or the
Assumed Liabilities, (ii) addressed to former employees of the Sellers who are
then-current employees of Purchaser, or (iii) addressed to the e-mail addresses
listed on Schedule 4.03 hereto ("Schedule 4.03 Addresses"). Sellers shall
automatically forward to Purchaser's server all electronic messages received at
the Schedule 4.03 Addresses during the one (1) year period immediately following
the Closing. During the subsequent four (4) year period, Sellers shall manually
forward to Purchaser's server electronic messages received at the Schedule 4.03
Addresses which relate to the Acquired Assets or the Assumed Liabilities;
(c) Purchaser may receive and open all mail addressed to Sellers and
deal with the contents thereof in its discretion to the extent that such mail
and the contents thereof relate to the Acquired Assets or the Assumed
Liabilities, and Purchaser shall promptly deliver or cause to be promptly
delivered to Sellers all such mail received by Purchaser which does not relate
to the Acquired Assets or the Assumed Liabilities; and
(d) Sellers shall promptly refer or transmit to Purchaser any inquiry
received relating to the Acquired Assets or the Assumed Liabilities.
4.04 ACCESS BY SELLER. After the Closing, Purchaser shall afford Sellers
and their counsel, accountants and other representatives reasonable access
during regular business hours upon reasonable prior notice to such books and
records of Sellers acquired by Purchaser pursuant hereto as may be reasonably
necessary in order for Sellers to prepare tax reports and returns required to be
filed by them or to respond to inquiries by governmental authorities or for
other appropriate reasons. Purchaser shall not dispose of any such books or
records of Sellers until it has given reasonable written notice to Sellers of
its intention to do so and given Sellers a reasonable opportunity to take
possession of such books and records to be disposed of.
4.05 ALLOCATION AGREEMENT. At the Closing, Purchaser and Sellers shall
enter into an allocation agreement (the "Allocation Agreement") substantially in
the form of Exhibit C hereto satisfying the requirements of Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
promulgated pursuant thereto. Neither Purchaser nor Sellers shall take a
reporting position contrary to the Allocation Agreement.
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4.06 CONFIDENTIALITY; COMPETITION.
(a) The parties acknowledge that the value of confidential information
developed by Sellers and related to the Acquired Assets is attributable
substantially to the fact that such information is maintained by Sellers in the
strictest confidentiality and secrecy and is not available to others without the
expenditure of substantial time, effort and money. Sellers acknowledge that
Purchaser would be irreparably damaged if Sellers' confidential knowledge of and
directly related to the Acquired Assets were disclosed to or utilized on behalf
of Sellers or any other person, firm, corporation or other business organization
which engages in the design, research, development, manufacture, promotion,
marketing, distribution and/or sale of products of the type designed, developed,
manufactured, promoted, marketed, distributed and/or sold in connection with the
CSG Business by Purchaser or any of its affiliates, including the Acquired
Assets, or products which compete with such products, and Sellers jointly and
severally covenant and agree that they shall not, directly or indirectly, at any
time, and shall ensure that their respective directors, officers, then-current
employees, agents, affiliates, associates (as the terms "affiliate" and
"associate" are defined by the rules and regulations promulgated under the
Securities Act of 1933, as amended) (each a "Controlled Person", provided,
however, that "Controlled Person" shall not be deemed to include the directors
of Artisoft who are not and have not at any time been employed by either Seller)
shall not, directly or indirectly, at any time, without the prior written
consent of Purchaser, disclose or use any such confidential information.
Notwithstanding the foregoing, if a Seller or a Seller's Controlled Person is
requested or required by governmental or judicial authorities (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any such confidential
information, Sellers agree to provide Purchaser with prompt notice of such
request(s) so that Purchaser may seek an appropriate protective order and/or
waive the Sellers' compliance with this Section 4.06(a). It is further agreed
that, if in the absence of a protective order or the receipt of a waiver
hereunder, a Seller or a Seller's Controlled Person is nonetheless, in the
opinion of its counsel, compelled to disclose such confidential information
under penalty of contempt or other penalty or liability, such Seller or
Controlled Person may disclose such information to the extent required to avoid
such penalty or liability without liability hereunder. For purposes of this
Agreement, (i) a product "competes with" a CSG Business product of Purchaser or
any of its affiliates if such product can be substituted for any CSG Business
product, or any part thereof, designed, manufactured, promoted, marketed,
distributed and/or sold by Purchaser or any of its affiliates, and (ii) a
business "engages in competition" with Purchaser or its affiliates if it
designs, manufactures, promotes, markets, distributes or sells any such product
referred to in the preceding clause (i).
(b) To further secure the interests of Purchaser hereunder, Sellers
jointly and severally covenant and agree that for a period of five (5) years
from the Closing Date, neither Sellers nor any of their respective Controlled
Persons shall, directly or indirectly, engage in competition with, or directly
or indirectly perform services (as employee, manager, consultant, independent
contractor, advisor or otherwise) for any business, or own any equity interest
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in any enterprise (other than an aggregate of not more than one percent (1%) of
the stock issued by any publicly held corporation) that engages in competition
with Purchaser or any of its affiliates. In addition, during such period,
Sellers shall not (and shall assure that none of their respective Controlled
Persons shall) directly or indirectly solicit, raid or entice, or otherwise
induce any customer of Purchaser or any of its affiliates to cease doing
business therewith or to do business with a competitor with respect to products
that are competitive with the CSG Business products of Purchaser or any of its
affiliates.
(c) To further secure the interests of Purchaser hereunder, Sellers
jointly and severally agree that for a period of five (5) years from the Closing
Date, Sellers shall not (and shall assure that none of their respective
Controlled Persons shall), directly or indirectly, solicit for employment, offer
employment to, or employ for such person's own account or the account of any
other person, any person who is on the date hereof or on the Closing Date or
thereafter becomes an employee or consultant of Purchaser or any of its
affiliates.
(d) Each Seller agrees that the provisions of this Section 4.06 are
reasonable in scope and duration and necessary to protect the interests of
Purchaser in confidential information. Sellers expressly agree that, in addition
to any other rights or remedies which Purchaser may have, Purchaser shall be
entitled to injunctive and other equitable relief to prevent a breach of this
Section 4.06 by Sellers, including a temporary restraining order or an
injunction from any court of competent jurisdiction restraining any threatened
or actual violation, and Sellers waive the making of a bond or undertaking as a
condition for obtaining such relief.
4.07 NO DISPARAGEMENT. Sellers on one hand, and Purchaser and SpartaCom on
the other hand, each jointly and severally agree that such party shall not (and
shall assure that none of its Controlled Persons shall) at any time, directly or
indirectly, disparage the business reputation, products or services of the other
party or any of its affiliates.
4.08 TRADEMARK LICENSE AGREEMENT. At the Closing, Artisoft and Purchaser
shall enter into a trademark license agreement substantially in the form of
Exhibit D hereto.
4.09 CERTAIN EMPLOYEE MATTERS. Purchaser shall have the right to interview
and to hire the employees of the CSG Business, but Purchaser shall not be
obligated to hire any such employee. If Purchaser notifies Sellers at or prior
to the Closing that it intends to hire one or more employees, then effective
upon the Closing, Sellers shall terminate such employees and release them from
all obligations which might interfere with their ability to perform as employees
of Purchaser. Except as provided in Section 1.02(a), Sellers shall be
responsible and liable for any and all severance and other costs and liabilities
relating to all terminations of Sellers' employees. Sellers shall jointly and
severally indemnify and hold Purchaser harmless with respect to any liability or
expense (including reasonable attorneys' fees) arising from the matters referred
to in the pervious sentence. Nothing in this Agreement shall be construed as a
third-party beneficiary contract for the benefit of any employee of Sellers.
Nothing herein shall prevent or restrict in any way the right of Purchaser to
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terminate, reassign, demote or promote any employee or to change in any way the
titles, duties, authority, compensation or Employee Benefits or other terms of
employment of any employee it hires.
4.10 TRANSITIONAL SERVICES AGREEMENTS.
(a) At the Closing, Artisoft and Purchaser shall enter into a services
agreement substantially in the form of Exhibit E hereof; and
(b) Except as otherwise provided in the Services Agreement, within ten
(10) days following the termination or expiration of the Services Agreement,
Sellers shall have removed all software and data files which do not relate to
the CSG Business from all computers which are Acquired Assets, without damaging,
losing or impairing the capacity or functionality of any such computer or any
other data or software stored or installed in any such computer. Purchaser
shall, upon reasonable prior written notice, afford Sellers reasonable access to
such computers under supervision of Purchaser's employees or representatives for
the purpose of fulfilling Sellers' obligations under this Section 4.10(b).
4.11 WEB SITE LINKING. For a period of five (5) years following the
Closing, Artisoft shall (i) identify on its home page the CSG Business products
previously provided by Artisoft and thereafter provided by Purchaser or any of
its affiliates; and (ii) provide click-through capabilities to a web site
designated by Purchaser to Artisoft.
4.12 EMPLOYEE BENEFIT PLANS; INSURANCE. Sellers acknowledge that they will
be obligated to offer coverage under Sellers' group medical plan to the
employees of the Sellers following termination of their employment with the
Sellers pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"). Purchaser agrees to use its
best efforts to obtain health insurance coverage for its employees as soon as
practicable after the Closing. As an interim measure, Purchaser shall reimburse
Sellers for the Cost (as hereinafter defined) of such COBRA coverage for any
former employee of the Sellers hired by Purchaser while such employee remains in
Purchaser's employ ("Covered Employees") within 30 days after Purchaser's
receipt of Sellers' invoice therefor. "Cost" shall mean, with respect to COBRA
coverage extended to Covered Employees, the actual allocable premiums paid by
Sellers to provide COBRA coverage to the Covered Employees.
4.13 GFI SUBLICENSE. At the Closing, Artisoft and Purchaser shall enter
into a Sublicense in the form of Exhibit F hereto relating to the License
Agreement dated January 21, 1998 between GFI Fax and Voice, Ltd. and Artisoft.
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4.14 PRODUCT RETURNS.
(a) If any products sold by Sellers prior to the Closing are returned
to Purchaser for a cash refund or credit memo ("Returned Products"), Purchaser
shall promptly notify Sellers of such return and Sellers shall be solely liable
for paying such refund or reimbursing Purchaser for such credit, and the same
shall be a Retained Liability. Sellers shall pay such refunds promptly after
notice from Purchaser. The provisions of this Section 4.14(a) shall apply only
to Returned Products returned to Purchaser (i) within six (6) months after the
Closing and (ii) having an aggregate value not in excess of the greater of (A)
Fifty Thousand Dollars ($50,000) (based on the original invoice of the Returned
Products) or (B) twelve percent (12%) of "Channel Inventory" (as hereinafter
defined). As used herein, "Channel Inventory" shall mean products of the CSG
Business in the inventory of OEM's and distributors of the CSG Business on the
Closing Date, whether or not Sellers have received payment for such products.
(b) The provisions of Section 4.14(a) notwithstanding, during the six
(6)-month period after the Closing, if in Purchaser's sole discretion, Purchaser
determines to resell any Returned Products, Purchaser shall refund Sellers for
the cost of goods of such Returned Products promptly after Purchaser's receipt
of the proceeds of such resale.
4.15 FOURTH QUARTER OEM PAYMENTS. All payments received by either Purchaser
or Sellers with respect to sales of CSG Business products by the OEM's listed on
Schedule 4.15 for the quarter ending June 30, 2000 ("Fourth Quarter Sales")
shall be prorated such that Sellers shall receive payment for the number of days
elapsed from April 1, 2000 to the Closing Date and Purchaser shall receive
payment for the number of days elapsed from the Closing Date to June 30, 2000.
With respect to each payment for Fourth Quarter Sales received by a party, it
shall within ten (10) days of receipt thereof pay to the other party its pro
rata share of such payment and provide the other party with a written statement
specifying the manner in which the payment was calculated, together with a copy
of the statement(s) and report(s) submitted by the OEM.
4.16 COSESSION (EVALUATION VERSION) LICENSE AGREEMENT LICENSE AGREEMENT. At
the Closing, Artisoft and Purchaser shall enter into a CoSession (evaluation
version) license agreement substantially in the form of Exhibit G hereto.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF SELLERS
Sellers jointly and severally represent and warrant to Purchaser as set
forth below, subject to the exceptions set forth in the disclosure schedules
attached hereto ("Sellers' Disclosure Schedules"), the section numbers and
letters of which correspond to the section numbers and letters of this
Agreement. Notwithstanding anything to the contrary contained in this Agreement,
any information disclosed under one section of the Sellers' Disclosure Schedules
shall, should the existence of the information be relevant to any other section
of the Sellers' Disclosure Schedules, be deemed to be disclosed in all sections
of the Sellers' Disclosure Schedules but only to the extent that the relevance
of such information to such other section is reasonably apparent in the section
of the Sellers' Disclosure Schedules on which such information is disclosed. For
purposes of this Agreement, "Knowledge of Sellers" means that any director or
officer of a Seller is actually aware of the fact or matter in question or that
a prudent individual in the position of any of the foregoing could be expected
to become aware of such fact or matter in the course of conducting a reasonable
investigation regarding the accuracy of any representation or warranty contained
in this Agreement.
5.01 DUE AUTHORIZATION AND EXECUTION; VALID AND BINDING AGREEMENT.
(a) The execution, delivery and performance by each Seller of this
Agreement have been duly authorized by all necessary corporate action. The
copies of the respective corporate minutes or records of corporate action of
Sellers authorizing the execution of this Agreement and the actions contemplated
thereby, heretofore delivered to Purchaser, are accurate and complete copies of
such minutes and records and such minutes and records reflect in all material
respects the corporate actions of Sellers' respective boards. This Agreement has
been duly executed and delivered by Sellers and constitutes a valid and binding
agreement of each Seller, enforceable in accordance with its terms.
(b) No action, consent, authorization or approval of the stockholders
of Artisoft is required under its organizational documents or applicable law in
connection with the execution, delivery and performance of this Agreement or the
transactions contemplated hereby.
5.02 CORPORATE ORGANIZATION; ETC. Each Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns; and is duly
qualified or licensed to do business as a foreign company in good standing in
all jurisdictions in which the ownership of property or the conduct of its
business requires such qualification, except where such failure would not have a
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material adverse effect on the business, prospects, financial condition, working
capital, cash flow, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves or operations of the CSG Business (a "Seller Material
Adverse Effect"). The copies of the respective organizational documents of
Sellers and the certificates evidencing their good standing heretofore delivered
to Purchaser are accurate and complete copies of such instruments as presently
in effect.
5.03 NO VIOLATION. Neither the execution and delivery of this Agreement by
Sellers nor the consummation of the transactions contemplated hereby will
violate any provision of the respective organizational documents of Sellers, or
violate, or conflict with, or constitute a default under, or cause the
amendment, modification or acceleration of, or give any party the right to
amend, modify or refuse to perform, or modify the time within which duties are
to be performed or rights or benefits are to be received under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any security interest, lien or other encumbrance
upon any of the Acquired Assets under, any lease, agreement, understanding,
restriction or commitment to which a Seller is a party or by which a Seller is
bound, or to which any of the Acquired Assets is subject, or violate any statute
or law or any judgment, decree, order, regulation or rule of any court or
governmental or regulatory authority or agency.
5.04 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES; ETC. Except as
disclosed on Schedule 5.04, no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority, or consent or approval of any other person or entity, is required in
connection with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby by Sellers.
5.05 FINANCIAL STATEMENTS.
Sellers have heretofore delivered to Purchaser: (i) the Annual Reports of
Artisoft on Form 10-K for the fiscal years ended June 30, 1999 and June 30,
1998, including unaudited financial statements and supplementary data, (ii) the
unaudited balance sheet of Artisoft as at March 31, 2000 and an unaudited
statement of income for the nine (9)-month period then ended, and (iii) an
unaudited balance sheet of the CSG Business as at March 31, 2000 (the "Balance
Sheet") and an unaudited statement of income for the nine (9)-month period then
ended. Such balance sheets are true, complete and accurate and fairly present
the assets, liabilities and financial condition of Artisoft or the CSG Business
as at the respective dates thereof, and such statements of income are true,
complete and accurate and fairly present the results of operations for the
periods therein referred to; all in accordance with generally accepted
accounting principles, consistently followed throughout the periods involved,
except for unaudited statements which lack notes and are subject to normal audit
adjustments which are not expected to be material. The financial statements have
been prepared from and are in accordance with the books and records of Artisoft,
which books and records are complete and current and represent actual, bona fide
transactions and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal controls.
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Sellers have also delivered to Purchaser copies of all letters from Sellers'
auditors to Sellers' respective boards of directors or the audit committees
thereof during the three (3) years preceding the execution of this Agreement,
together with copies of all responses thereto.
5.06 NO UNDISCLOSED LIABILITIES; ETC. Sellers have no liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) related
to the CSG Business which were not fully reflected or reserved against in the
Balance Sheet, except for liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since the date thereof; and
the reserves reflected in the Balance Sheet are adequate, appropriate and
reasonable.
5.07 ABSENCE OF CERTAIN CHANGES. Except in the ordinary course of business
consistent with past practice, and except as disclosed on Schedule 5.07, since
the date of the Balance Sheet, Sellers have not:
(a) Suffered any adverse change in the CSG Business's working capital,
financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves, business, operations or prospects;
(b) Permitted or allowed any of the Acquired Assets (real, personal or
mixed, tangible or intangible) to be subjected to any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind, except for
liens for current taxes not yet due;
(c) Written down the value of any of the Inventory or written off as
uncollectible any notes or accounts receivable related to the Acquired Assets;
(d) Cancelled any debts or waived any claims or rights of value
related to the Acquired Assets;
(e) Disposed of or permitted to lapse any rights to the use of any
patent, trademark, trade name or copyright related to the Acquired Assets, or
disposed of or disclosed to any person (other than Sellers' employees and agents
who need to know such information to perform their duties within the scope of
their employment by Sellers and who have agreed in writing to maintain the
confidentiality of such information), any trade secret, formula, process or
know-how related to the CSG Business and not theretofore a matter of public
knowledge;
(f) Entered into any employment contracts or granted any increase in
the compensation of officers or employees employed in the CSG Business
(including any such increase pursuant to any bonus, pension, profit-sharing or
other plan or commitment) or any increase in the compensation payable or to
become payable to any officer or employee, and no such increase is required by
agreement or understanding;
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(g) Made any change in any method of accounting or accounting
practice;
(h) Made any material change in any purchasing, production or
marketing practice related to the distribution and/or sale of the Equipment.
(i) Suffered any labor dispute or threatened labor dispute or
commenced any negotiations with labor unions involving terms or conditions of
labor nor has any such negotiation been proposed to Seller by employees or
employee representatives;
(j) Become aware of any actual or threatened disputes with any of the
CSG Business's significant suppliers, or any actual or threatened significant
loss of business from any of the CSG Business's customers, sales
representatives, distributors, dealers or brokers;
(k) Suffered the cancellation of any purchase order or letter of
intent related to the CSG Business; or
(l) Sold, transferred, or otherwise disposed of any of the properties
or assets (real, personal or mixed, tangible or intangible) related to the CSG
Business, except sales of inventory in the ordinary course of business and
consistent with past practice;
(m) Made aggregate capital expenditures and commitments in excess of
twenty thousand dollars ($20,000) for additions to property, plant, equipment or
intangible capital assets related to the CSG Business;
(n) Suffered any damage or destruction to the Acquired Assets, whether
or not covered by insurance;
(o) Sold, transferred or leased any interest in any of the Acquired
Assets (real, personal or mixed, tangible or intangible) to, or entered into any
agreement or arrangement relating to any of the Acquired Assets with, any of
their respective officers or directors or any affiliate or associate of any of
their respective officers or directors; or
(p) Agreed, whether in writing or otherwise, to take or suffer to be
taken any action described in this Section 5.07.
5.08 TITLE TO PROPERTIES; ENCUMBRANCES. Sellers have good, valid and
marketable title to all the Acquired Assets (real, personal and mixed, tangible
and intangible) including, without limitation, all the Acquired Assets reflected
in the Balance Sheet (except for inventory sold in the ordinary course of
business since the date thereof). With the exception of intangible assets such
as goodwill, all properties and assets have a fair market or realizable value at
least equal to the value thereof as reflected therein, and none of such
properties or assets are subject to any mortgage, pledge, lien, security
interest, encumbrance or charge of any kind except (a) liens shown on the
Balance Sheet as securing specified Assumed Liabilities with respect to which no
default exists, (b) liens for current Taxes not yet due, and (c) liens described
in Schedule 5.08. The rights, properties and other assets presently owned,
leased or licensed by Sellers and described elsewhere in this Agreement include
all rights, properties and other assets necessary to permit Purchaser to conduct
the CSG Business in the same manner as the CSG Business has been conducted by
Sellers prior to the date hereof, with the exception of the Excluded Assets.
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5.09 OFFICES AND EQUIPMENT. The offices and Equipment owned or leased by
Sellers which are part of the Acquired Assets are structurally sound with no
known defects and in good operating condition and repair and are adequate for
the uses to which they are being put; and none of such offices or Equipment is
in need of maintenance or repairs except for ordinary, routine maintenance and
repairs which are not material in nature or cost. Sellers have not received
notification that they are in violation of any applicable building, zoning,
anti-pollution, health, occupational safety or other law, ordinance or
regulation in respect of such offices or structures or their operations
pertaining to the CSG Business and no such violation exists.
5.10 LEASES. Schedule 5.10 hereto contains an accurate and complete list of
all leases pursuant to which Sellers lease real or personal property related to
the Acquired Assets, true and complete copies of which have heretofore been
delivered to Purchaser. All such leases are valid, binding and enforceable in
accordance with their terms, and are in full force and effect; there are no
existing defaults by either Seller or, to the Knowledge of Sellers, any lessor
thereunder; no event of default by either Seller or, to the Knowledge of
Sellers, any lessor has occurred which (whether with or without notice, lapse of
time or the happening or occurrence of any other event) would constitute a
default thereunder; and all lessors under such leases have consented (where such
consent is necessary) to the consummation of the transactions contemplated by
this Agreement without requiring modification of, the rights or obligations of
the lessee under such leases.
5.11 NO CONDEMNATION OR EXPROPRIATION. Neither the whole nor any portion of
the leaseholds or any other assets of Sellers related to the Acquired Assets is
subject to any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or without payment
of compensation therefor, nor, to the Knowledge of Sellers, has any such
condemnation, expropriation or taking been proposed.
5.12 SOFTWARE
With respect to the CSG Business only:
(a) Schedule 5.12(a) sets forth a complete description of all software
which Sellers own, use or license or which Sellers otherwise have rights to
sell, modify, incorporate in other software, market, license, sublicense or
otherwise use (collectively, the "Software"). As used herein, "Software" shall
not include off-the-shelf software licensed pursuant to shrink wrap or click
wrap licenses ("OTSS"). Each Seller owns the entire right, title and interest in
and to all of the Software owned by it and each module contained therein.
Sellers have taken all commercially reasonable steps to maintain the Software
which they own as a patent, trade secret and/or as copyrighted material.
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(b) Except as set forth on Schedule 5.12(b), no third party has access
to the documentation, source code or similar material for the Software owned by
Sellers or is otherwise in a position to duplicate or make any unauthorized use
of any such Software, except for licensees of Sellers who have access to such
documentation or source code in the ordinary course of business and who have
agreed in their license agreements with Sellers to maintain such source code in
strict confidence. All such licensees are, to the Knowledge of Sellers, in full
compliance with such confidentiality obligations and there are no defaults or
breaches thereunder.
(c) Current and complete documentation and source code exist with
respect to all the Software.
(d) The Software owned by Sellers is not subject to any legal or
contractual restriction which would prevent such Software from being licensed,
sublicensed, marketed, incorporated in other software, modified, or otherwise
used or sold by Sellers without restriction. The consummation of the
transactions contemplated hereby will not alter any of the rights described in
the preceding sentence.
(e) Except as set forth on Schedule 5.12(e), no one has disputed
Sellers' respective right, title or interest in or to any of the Software owned
by them, and Sellers have not had any disputes with any licensor of any
Software. Neither the Software nor Sellers' use or licensing thereof infringes
upon, violates, misappropriates or conflicts with any patent, copyright, trade
secret or other proprietary right or right of exclusion of any third party. To
the Knowledge of Sellers as of the date hereof, no third party has infringed
upon, violated or misappropriated any of the Software owned by Sellers.
(f) Except as set forth on Schedule 5.12(f), Sellers have not (i)
conveyed any proprietary rights to the Software, or (ii) granted or provided,
and are not obligated to grant or provide, any right to license, sublicense,
market, incorporate in other software, sell or otherwise use any Software.
(g) Except as set forth on Schedule 5.12(g), none of the Software has
any significant operating problems, other than any such problems that have been
corrected or are correctable in the ordinary course of business. Such problems
will not in the aggregate result in material losses or expenses for the CSG
Business.
(h) Sellers have all rights necessary to use all hardware and Software
incorporated in all products sold or under development by Sellers, including,
without limitation, patented and copyrighted hardware and software. The
consummation of the transactions contemplated hereby will not alter any of the
rights described in the preceding sentence.
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(i) Except as disclosed on Schedule 5.12(i) hereto, all royalties due
and payable to licensors of Software or OTSS by Sellers on or prior to the date
hereof have been paid in full and all copies of licensed Software or OTSS used
by Sellers are the subject of valid licenses. None of the OTSS is subject to any
legal or contractual restrictions which would prohibit or prevent the transfer
of any of the OTSS to Purchaser pursuant to this Agreement or prevent Purchaser
from using any of the OTSS in the manner currently used by a Seller.
(j) All Software and, to the Knowledge of Sellers, all OTSS is free of
any computer viruses, trap doors, timers, clocks, counters, authorization codes,
copy protect or other limiting routines intended to limit use or unauthorized
copying, or instructions or designs that would erase data or programming or
otherwise cause the Software or OTSS to become inoperable or incapable of being
used in the manner described in or in accordance with, its documentation. All
Software and, to the Knowledge of Sellers, all OTSS has user interfaces, date
data fields and interfaces, processing logic and outputs which correctly
recognize, process, and otherwise support calendar sensitive date and data
processing.
5.13 DEVELOPMENT AND PROGRAMMING OF SOFTWARE.
(a) Except as set forth on Schedule 5.13, all the Software owned by
Sellers has been developed and written by employees of Sellers.
(b) No claims with respect to the Software by or against any of
Sellers' current or former employees or consultants have been made or now exist
and, to the Knowledge of Sellers, there is no basis for any such claims.
(c) None of Sellers' employees or consultants has assigned any rights
in the Software to any person including, without limitation, any person to whom
any employee or consultant has previously provided services as an employee,
independent contractor, consultant, or otherwise, and the Software does not
constitute a "work for hire" of any person other than Sellers under applicable
copyright laws.
5.14 PATENTS, TRADEMARKS, TRADE NAMES; ETC.
(a) With respect to the Acquired Assets only, Schedule 5.14(a) lists:
(i) all patents, if any, held by either Seller and all reissues,
divisions, continuations, continuations in part and extensions thereof and all
pending patent applications by either Seller including for each such patent the
serial or patent number, country, filing and expiration date and title;
20
(ii) all registered or unregistered trademarks, trade names,
logos and the like of either Seller and pending registrations by either Seller
of trademarks, including for each such trademark, the registration number,
country, filing and expiration date, xxxx and class; and
(iii) all registered or unregistered copyrights and maskworks of
either Seller and applications by either Seller for registration of copyrights
and maskworks, including the registration number, country and filing and
expiration date of each such copyright or maskwork.
(b) Schedule 5.14(b) identifies all licenses and other contracts or
commitments to which either Seller is a party (either as licensor or licensee)
or otherwise subject relating to patents, trademarks, trade names, copyrights
(or applications for any thereof), maskworks, trade secrets or other proprietary
know-how or technical information or assistance, other than those listed in
Schedule 5.12(f) ; and no claims have been asserted by any person to the use of
any such patents, trademarks, trade names, copyrights, maskworks, technology,
know-how or processes or challenging or questioning the validity or
effectiveness of any such license or agreement, and, to the Knowledge of
Sellers, there is no valid basis for any such claim.
(c) Sellers have not infringed upon any patent, trademark, trade name,
maskwork or copyright or misappropriated or misused any invention, trade secret
or other proprietary information entitled to legal protection, and neither
Seller has been alleged to have infringed upon any patent, trademarks, trade
name, maskwork or copyright or to have misappropriated or misused any invention,
trade secret or other proprietary information, except as set forth in Schedule
5.14(c). Sellers have not asserted any claim of infringement, misappropriation
or misuse, and to the Knowledge of Sellers, no third party has infringed,
misappropriated or misused any of Sellers' respective intellectual property.
(d) Each license or contract identified in Schedule 5.12(f) or 5.14(b)
is a valid, legally binding obligation of the Seller party thereto, and, to the
Knowledge of Sellers, of the other parties thereto, enforceable in accordance
with its terms. With respect to each there is no default (or event which with
the giving of notice and/or passage of time would constitute a default) by the
Seller party thereto or, to the Knowledge of Sellers, by any other party
thereto, and the consummation of the transactions contemplated hereby will not
constitute a default thereof.
(e) Except as listed on Schedule 5.12(f) or 5.14(b), neither Seller
has granted any outstanding licenses or other rights to any copyright, patent,
invention, mask work, know-how, technology, trade secret, innovation, formula,
process, trademark or trade name, nor are Sellers under any obligation to grant
the same. Except as provided in Schedule 5.14(e), Sellers have not given any
indemnification for patent, copyright, maskwork or trademark or other
intellectual property infringement.
21
(f) Except as listed on Schedule 5.14(f), all of each Seller's former
and current employees and consultants have executed written agreements that
assign to such Seller all rights to any inventions, improvements, discoveries,
or information relating to the business of such Seller and which protect the
confidential information thereof. No employee or consultant of either Seller has
entered into any agreement that restricts or limits in any way the scope or type
of work in which such employee or consultant may be engaged or requires such
employee or consultant to transfer, assign, or disclose information concerning
that work to anyone other than such Seller.
(g) (i) With respect to Sellers' know-how and trade secrets, the
documentation relating thereto is current, accurate, and sufficient in detail
and content to identify and explain it and to allow its full and proper use
without reliance on the knowledge or memory of any individual.
(ii) Sellers have taken all commercially reasonable precautions
to protect the secrecy, confidentiality and value of their respective know-how
and trade secrets.
(iii) Sellers have good title and, to the Knowledge of Sellers,
an absolute right to use such know-how and trade secrets. Such know-how and
trade secrets are not part of the public knowledge or literature, and, to the
Knowledge of Sellers, have not been used, divulged, or appropriated either for
the benefit of any other person or to the detriment of Sellers. No such know-how
or trade secret is subject to any adverse claim or has been challenged or
threatened in any way.
5.15 LITIGATION. Except as disclosed on Schedule 5.15, there is no action,
suit, claim, counterclaim, arbitration, proceeding or investigation pending or,
to the Knowledge of Sellers, threatened against or involving either Seller, or
which questions or challenges the validity of this Agreement or any action taken
or to be taken pursuant to this Agreement or in connection with the transactions
contemplated hereby; and to the Knowledge of Sellers there is no valid basis for
any such action, proceeding or investigation. Neither Seller is in default under
or in violation of, and there is no valid basis for any claim of default under
or violation of, any material contracts, commitments or restrictions relating to
the Acquired Assets to which such Seller is a party or is bound. Neither Seller
is subject to any judgment, order or decree entered in any lawsuit or
proceeding.
5.16 SUBSIDIARIES. Schedule 5.16 sets forth the Sellers' respective
subsidiaries. With the exception of Triton, no subsidiary of either Seller has
any right, title or interest in or to any of the Acquired Assets or is otherwise
involved in the operation of the CSG Business.
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5.17 TOXIC AND HAZARDOUS SUBSTANCES AND OTHER ENVIRONMENTAL, HEALTH AND
SAFETY ISSUES.
(a) No underground tanks or storage facilities are now located, or to
the Knowledge of Sellers at any time have been located, on the real property
used at any time by either Seller or its respective predecessors in interest in
the CSG Business and there are no present or, to the Knowledge of Sellers, past
Environmental Conditions (as hereinafter defined) in any way relating to the
property or assets of either Seller currently or formerly used in the CSG
Business. "Environmental Condition" means (i) any environmental pollution,
including, without limitation, any contaminant, irritant or pollutant, from any
spill, discharge, leak, emission, escape, injection, deposit, emanation, dumping
or release of any kind, in any amount whatsoever, or any substance or exposure
of any type in any work place or elsewhere or to any medium, including, without
limitation, air, land, surface waters or subsurface waters or from any
generation, transportation, treatment, discharge, storage or disposal of waste
materials, raw materials, hazardous materials, hazardous constituents, toxic
materials or products of any kind or from the storage, use or handling of any
waste, raw, hazardous, radioactive, infectious or toxic materials or products of
any kind or from the storage, use or handling of any waste, raw, hazardous,
radioactive, infectious or toxic materials or other substances, or (ii) any
noncompliance with any federal, state or local environmental law, rule,
regulation or order as a result of, or in connection with, any of the foregoing.
The operation of the CSG Business of either Seller does not violate and has not
violated any applicable law, rule, regulation or order, whether state, federal,
or local, relating to air, water, or noise pollution, or the production,
storage, labeling, transportation or disposition of waste or hazardous or toxic
substances or hazardous constituents. Except in compliance with all legal
requirements in the ordinary course of its business, neither Seller nor, to the
Knowledge of Sellers, any other person has stored any chemical substances,
including, without limitation, any waste materials, petroleum, crude oil, PCB's,
asbestos or any "Hazardous Substances," "Pollutants," "Hazardous Constituents"
or "Contaminants" (collectively, the "Contaminants"), as such terms are defined
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, on, beneath or about any of the properties or assets used at
any time in the business of Sellers. Neither Seller has received any notice
advising such Seller that it is potentially responsible for response or other
costs or remediation with respect to a release or threatened release of
Contaminants, and to the Knowledge of Sellers, no facts exist which might give
rise to such responsibility. Except in compliance with all legal requirements in
the ordinary course of its business, neither a Seller nor any Controlled Person
or director of a Seller nor, to the Knowledge of Sellers, any person with whom a
Seller arranged for the transport, disposal or treatment of any Contaminants,
has transported, buried, dumped or otherwise disposed of any Contaminants on,
beneath or about any other property. Sellers have not violated and to the
Knowledge of Sellers there is no alleged or potential violation of, any
applicable environmental, zoning or land use ordinance, law, rule, regulation or
order relating to the operation of the CSG Business of Sellers, or any of the
processes followed or products made thereby.
23
(b) Sellers have not exposed or, to the Knowledge of Sellers,
permitted the exposure of any of their respective employees or their respective
customers' employees to chemical or hazardous substances, which exposure could
give rise to any liability for occupational injury or illness which is not
covered by insurance.
5.18 GOOD TITLE CONVEYED, ETC. Sellers have complete and unrestricted power
and the unqualified right to sell, assign, transfer and deliver to Purchaser,
and Purchaser is acquiring, good, valid and marketable title to the Acquired
Assets, free and clear of all mortgages, pledges, liens, security interests,
conditional sales agreements, encumbrances, claims or charges of any kind,
except those described in Section 5.08. The Xxxx of Sale and the deeds,
endorsements, assignments and other instruments being executed and delivered to
Purchaser by Sellers at the Closing are valid and binding obligations of the
respective Sellers, enforceable in accordance with their terms, and will
effectively vest in Purchaser good, valid and marketable title to all the
Acquired Assets, subject to the obligations of Sellers set forth in Section 3.05
to provide further assurances.
5.19 COMPLIANCE WITH LAW. The operations of the CSG Business have been
conducted in accordance with all applicable laws, regulations and other
requirements of all federal and state governmental authorities, and of all
municipalities and other political subdivisions and agencies thereof, having
jurisdiction over either Seller, including, without limitation, all such laws,
regulations and requirements relating to antipollution, consumer protection,
environmental, equal opportunity, health, occupational safety, pension and
securities matters. Sellers have received no notification of any asserted
present or past failure by either Seller to comply with any law, rule or
regulation. Sellers have all permits, governmental licenses, registrations and
approvals necessary to carry out the CSG Business as currently conducted and as
required by applicable law or regulation, except where the failure to have such
permits, governmental licenses, registrations or approvals would not have a
Seller Material Adverse Effect.
5.20 INSURANCE. Schedule 5.20 contains an accurate and complete description
of all policies of general liability, fire, workmen's compensation, computer
software liability, and other forms of insurance owned or held by Sellers and
related to the Acquired Assets, including self-insurance programs.
5.21 CONTRACTS AND COMMITMENTS. With respect to the CSG Business only,
except as set forth in Schedule 5.21:
(a) Sellers have no agreements, contracts, commitments or restrictions
(oral or written) related to the Acquired Assets which are for an amount in
excess of Twenty Thousand Dollars ($20,000) per annum or are material to their
respective businesses, operations or prospects;
24
(b) No purchase contracts or commitments of Sellers related to the
Acquired Assets continue for a period of more than twelve (12) months or are in
excess of the normal, ordinary and usual requirements of business or in excess
of prevailing market prices;
(c) There are no outstanding sales contracts, commitments or proposals
of Sellers related to the Acquired Assets which will result in any loss to
Sellers upon completion or performance thereof, nor are there any outstanding
contracts, bids or sales or service proposals quoting prices which will not
result in a profit;
(d) Sellers have no outstanding contracts with officers, employees,
agents, consultants, advisors, salesmen, sales representatives, distributors or
dealers that are not cancellable by Sellers on notice of not longer than thirty
(30) days and without liability, penalty or premium or any agreement or
arrangement providing for the payment of any bonus or commission based on sales
or earnings;
(e) Except as set forth on Schedule 5.21(e), Sellers have no
employment agreement, or any other agreement that contains any severance or
termination pay liabilities or obligations;
(f) Sellers have no collective bargaining or union contracts or
agreements;
(g) Sellers are not restricted by agreement from carrying on their
business in any geographic location;
(h) Except as set forth on Schedule 5.21(h), Sellers are under no
liability or obligation with respect to the return of inventory or merchandise
in the possession of wholesalers, distributors, retailers or other customers;
(i) Sellers have not experienced any shortage of raw materials or
other supplies which has interfered with their ability to conduct the CSG
Business;
(j) Sellers are not subject to any obligation or requirement to
provide funds to or make an investment (in the form of a loan, capital
contribution or otherwise) in any person or entity; and
(k) Sellers have no agreements, commitments or restrictions which were
entered into outside the ordinary course of business.
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5.22 PERSONNEL. Schedule 5.22 sets forth a true and complete list of:
(a) the names and current salaries of all officers and other salaried
employees of the CSG Business;
(b) the wage rates for non-salaried and non-executive salaried
employees of the CSG Business; and
(c) the amount of accrued vacation of each employee of the CSG
Business.
5.23 LABOR DIFFICULTIES.
With respect to the CSG Business only:
(a) Sellers are in compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and are not engaged in any unfair labor practice;
(b) there is no unfair labor practice, wrongful termination or
employment discrimination, including harassment (age, sex, race or otherwise)
charge or complaint against either Seller pending, or to the Knowledge of
Sellers, threatened;
(c) there is no labor strike, dispute, slowdown or stoppage actually
pending or threatened against or affecting Sellers;
(d) no organized labor representation question exists with respect to
the respective employees of Sellers;
(e) no grievance or arbitration proceedings arising out of or under
collective bargaining agreements is pending and no claim therefor exists;
(f) no collective bargaining agreement which is binding on Sellers
restrict them from relocating or closing any of their respective operations; and
(g) no organizational effort has been or to the Knowledge of Sellers
is being made by or on behalf of any labor union with respect to the respective
employees of Sellers.
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5.24 CUSTOMERS AND SUPPLIERS. Schedule 5.24 sets forth:
(a) a list of the CSG Business's ten (10) largest customers during the
last two fiscal years showing the approximate total sales by the CSG Business to
each such customer during each such fiscal year; and
(b) a list of the CSG Business's ten (10) largest suppliers during the
last two fiscal years, showing the approximate total purchases by the CSG
Business from each such supplier during each such fiscal year. Except to the
extent set forth in Schedule 5.24, neither Seller has been advised by any
customer or supplier of a refusal to deal with such Seller in the future based
upon past actions or performance of such Seller or a refusal to extend credit in
accordance with terms previously extended to such Seller due to such Seller's
past payment history.
5.25 NO PRODUCT LIABILITIES. Except as set forth on Schedule 5.25, since
January 1, 1997, Sellers have not incurred nor will they incur any liability,
damage, loss, cost or expense as a result of any defect or other deficiency
(whether of design, materials, workmanship, labeling, instructions or otherwise)
with respect to any product manufactured or sold by the CSG Business, whether
such liability, damage, loss, cost or expense is incurred by reason of any
express or implied warranty (including without limitation any warranty of
merchantability or fitness), any doctrine of common law (tort, contract or
other), any statutory provision or otherwise.
5.26 INVENTORY. All of the Inventory has been acquired in the ordinary
course of business, in the ordinary and customary quantities and amounts, and at
then-prevailing market prices. The Inventory has been valued at cost or market,
whichever is lower, in accordance with generally accepted accounting principles,
consistently applied; and, as of March 31, 2000, all damaged or otherwise
unmerchantable Inventory has been written off. All Inventory, other than that
written off in accordance with the preceding sentence, is usable and saleable in
the ordinary course of business. Sellers are not in possession of any Inventory
not owned by Sellers.
5.27 BACKLOG. Schedule 5.27 sets forth the dollar amount (i.e., amount of
payment remaining on the contract assuming full delivery or performance) of
backlog orders by the CSG Business customers as of April 24, 2000, together with
a statement as to the shipping schedule of the backlog orders and seasonal or
other material aspects of such backlog orders. All of such backlog orders are
the subject of valid and binding written agreements enforceable in accordance
with their respective terms; and Sellers have received no indication that any
such order will be cancelled or materially altered. All of such outstanding
contracts, bids or sales or service proposals quote prices which exceed all
direct costs, including, without limitation, materials, labor, royalties and
commissions.
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5.28 PRODUCT AND SERVICE WARRANTIES. Except as set forth in Schedule 5.28,
neither Seller has given any third party any product or service guaranties or
warranties, rights of return or other indemnity relating to products
manufactured or delivered by the CSG Business or services performed by the CSG
Business prior to the Closing.
5.29 TAX.
(a) Sellers have complied with all Tax laws in all jurisdictions in
which each is or has been subject to taxation of any nature whatsoever and each
has timely filed, or caused to be filed, all federal, state, local and foreign
tax returns of any nature whatsoever which are required to be filed by it and
has paid or caused to be paid all Taxes required to be paid by it; all such tax
returns and reports are true, accurate and complete; there are no Taxes being
contested by a Seller; there are no unpaid penalties or interest relating to Tax
deficiencies of any nature whatsoever owed by a Seller; there is no taxable
income required to be reported by a Seller in any Tax period ending after the
Closing Date, which income is attributable to a change in accounting methods
which required or permitted the deferral of gross or net income to a later Tax
period; there are, and will hereafter be, no Tax deficiencies payable by a
Seller of any kind for any Tax periods (or portion thereof) ending on or before
the Closing Date; neither Seller has granted any extension of the statute of
limitations relating to any tax matters of such Seller and is not the
beneficiary of any extension of time within which to file any tax return; all
Taxes and other assessments or levies which a Seller is required by law to
withhold or to collect have been duly withheld and collected, and have been paid
on a timely basis to the proper governmental authorities or, if not yet due, are
held by such Seller in a separate bank account or otherwise segregated on the
books of such Seller for payment; and each Seller has made adequate provision
for payment of Taxes of any nature whatsoever payable by such Seller for any
current period for which returns are not yet due.
(b) There are no federal, state, local or foreign Tax liens,
encumbrances, charges or other security interests in or upon any property or
assets of a Seller, whether for income, payroll, sales, or Taxes of any other
kind; neither has received notice that it is delinquent in the payment of any
Tax or estimated Tax payments, and neither Seller has requested any extension of
time within which to file any tax return which has not since been filed.
Schedule 5.29 lists the periods through which such Seller's tax returns have
been examined or audited by the Internal Revenue Service or other appropriate
taxing authorities. Each Seller has heretofore furnished Purchaser with true and
complete copies of (i) all audit reports received from any taxing authority
within the last five (5) years, (ii) all federal income tax returns of such
Seller for all fiscal years ending on or after June 30, 1997, and (iii) all
other tax returns filed with respect to Seller for all fiscal years ending on or
after June 30, 1997. No notices respecting asserted or assessed deficiencies for
any Tax have been received by either Seller. Neither Seller is required to file
tax returns in any foreign, state or local jurisdiction for any tax period
except in those foreign, state and local jurisdictions in which it has filed.
Each Seller has paid or accrued on its Balance Sheet (i) all Taxes (including
interest, penalties or additions) for all Taxable periods ended on or prior to
Xxxxx 00, 0000 , xxx (xx) all Taxes (including interest, penalties or additions)
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properly apportionable to any day through March 31, 2000 (apportioned as if
March 31, 2000 were the end of the Taxable year or period) for all taxable years
or periods including, but not ending on, March 31, 2000. No investigation,
examination or audit by any Tax agency or authority is presently pending or, to
the Knowledge of Sellers, threatened, and neither Seller is a party to any
action or proceeding by any governmental authority for the assessment or
collection of Taxes, nor has any such event been asserted or, to the Knowledge
of Sellers, threatened. Neither Seller has filed any consent of the type
described under Section 341(f) of the Code or made any election or deemed
election pursuant to Section 338 of the Code. Neither Seller has made any
payments, is obligated to make any payments or is a party to any agreement that
could obligate it to make any payments that would not be deductible under Code
Section 280G. For purposes of this Agreement, "tax returns" means all reports,
returns, declarations, statements or other information required to be supplied
to a taxing authority in connection with Taxes, including any schedule or
attachment thereto and any amendment thereof.
(c) Neither Seller is a party to any Tax allocation or sharing
agreement. Neither Seller has any liability for the Taxes of any other entity or
person, as a transferee or successor, under applicable federal, state, local or
foreign law, by contract or otherwise.
5.30 EMPLOYEE BENEFITS.
(a) Schedule 5.30 contains a complete and accurate list of all
Employee Benefit Plans (as hereinafter defined). For purposes of this Agreement,
"Employee Benefit Plan" means any "employee pension benefit plan" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), any "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), and any other written or oral plan, agreement or arrangement involving
direct or indirect severance benefits, disability benefits, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
compensation maintained or contributed by a Seller or any ERISA Affiliate (as
defined below). For purposes of this Agreement, "ERISA Affiliate" means any
entity which is a member of (i) a controlled group of corporations (as defined
in Section 414(b) of the Code), (ii) a group of trades or businesses under
common control (as defined in Section 414(c) of the Code), or (iii) an
affiliated service group (as defined in Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes a Seller.
Complete and accurate copies of (i) all Employee Benefit Plans which have been
reduced to writing, (ii) written summaries of all unwritten Employee Benefit
Plans, (iii) all related trust agreements, insurance contracts and summary plan
descriptions, and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R
for the last three plan years for each Employee Benefit Plan, have been
delivered to Purchaser. Each Employee Benefit Plan has been administered in
accordance with its terms and each of the Sellers and the ERISA Affiliates has
met its obligations with respect to such Employee Benefit Plan and has made all
required contributions thereto. No Seller has made any commitments to make any
voluntary contributions to or to voluntarily fund any Employee Benefit Plans.
Sellers and all Employee Benefit Plans are in compliance with the currently
applicable provisions of ERISA and the Code and the regulations thereunder.
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(b) There are no termination proceedings or other claims, suits or
proceedings, or, to the Knowledge of Sellers, investigations, by any
governmental entity against or involving any Employee Benefit Plan or asserting
any rights or claims to benefits under any Employee Benefit Plan.
(c) All Employee Benefit Plans that are intended to be qualified under
Section 401(a) of the Code have received determination letters from the Internal
Revenue Service to the effect that such Employee Benefit Plans are qualified and
the plans and the trusts related thereto are exempt from federal income taxes
under Sections 401(a) and 501(a), respectively, of the Code, no such
determination letter has been revoked and, to the Knowledge of Sellers, such
revocation has not been threatened, and no such Employee Benefit Plan has been
amended since the date of its most recent determination letter or application
therefor in any respect, and no act or omission has occurred, that would
adversely affect its qualification or increase its cost.
(d) Neither a Seller nor any ERISA Affiliate has, during the six (6)
years preceding the date hereof, maintained an Employee Benefit Plan subject to
Section 412 of the Code or Title IV of ERISA.
(e) At no time has a Seller or any ERISA Affiliate been obligated to
contribute to any "multi-employer plan" (as defined in Section 4001(a)(3) of
ERISA).
(f) There are no unfunded obligations under any Employee Benefit Plan
providing benefits after termination of employment to any employee of a Seller
(or to any beneficiary of any such employee), including but not limited to
retiree health coverage and deferred compensation, but excluding continuation of
health coverage required to be continued under Section 4980B of the Code or
state insurance law.
(g) No act or omission has occurred and no condition exists with
respect to any Employee Benefit Plan maintained by a Seller or any ERISA
Affiliate that would subject any Seller or ERISA Affiliate to any fine, penalty,
tax or liability of any kind imposed under ERISA or the Code.
(h) No Employee Benefit Plan is funded by, associated with, or related
to a "voluntary employee's beneficiary association" within the meaning of
Section 501(c)(9) of the Code.
(i) No Employee Benefit Plan, plan documentation or agreement, summary
plan description or other written communication distributed generally to
employees by its terms prohibits a Seller or, if applicable, the ERISA
Affiliate, from amending or terminating any such Employee Benefit Plan.
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(j) No Seller or ERISA Affiliate has any accumulated funding
deficiency under Section 412 of the Code or any termination or withdrawal
liability under Title IV of ERISA.
(k) All contributions, premiums or other payments due from a Seller
under any Employee Benefit Plan have been fully paid or adequately provided for
on the books and financial statements of such Seller. All accruals (including,
where appropriate, proportional accruals for partial periods) have been made in
accordance with generally accepted accounting practices.
(l) Except as set forth in Schedule 5.30(l), the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current or
former employee, officer or consultant of a Seller to severance pay,
unemployment compensation or any other similar payment, (ii) accelerate the time
of payment or vesting under any Employee Benefit Plan, (iii) increase the amount
of compensation due any such employee, officer or consultant, (iv) directly or
indirectly cause a Seller to transfer or set aside any assets to fund or
otherwise provide for the benefits under any Employee Benefit Plan for any
current or former employee, officer or director, or (v) result in any non-exempt
prohibited transaction described in ERISA Section 406 or Code Section 4975.
(m) No statement, either oral or written, has been made by either
Seller to anyone with regard to any Employee Benefit Plan that was not in
accordance with such Plan which could have an adverse economic consequence for a
Seller or Purchaser.
5.31 INSOLVENCY. Neither Seller is a party (other than as a creditor) to
any pending insolvency proceeding of any nature, including, without limitation,
bankruptcy, receivership, reorganization, composition or arrangement with
creditors, voluntary or involuntary, and neither Seller has made any assignment
for the benefit of creditors, or taken any action with a view to, or which would
constitute the basis for, the institution of any such insolvency proceeding
against it.
5.32 RELATIONSHIP WITH RELATED PERSONS. Except as disclosed in Schedule
5.32, no officer, director or employee of a Seller or any Controlled Person of
any of them has, or since January 1, 1999 has had, any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in
or pertaining to the CSG Business. No officer, director or employee of a Seller
or any Controlled Person of any of them owns, or since January 1, 1999 has
owned, of record or as a beneficial owner, an equity interest or any other
financial or profit interest in any person or entity that (a) has had business
dealing or a financial interest in any transaction with a Seller pertaining to
the CSG Business, or (b) competes with a Seller with respect to any line of the
products or services of the CSG Business in any market presently served by the
CSG Business, except for ownership of less than one percent (1%) of the
outstanding capital stock of any company that is publicly traded on any
recognized exchange or in the over-the-counter market, provided, however, that
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the provisions of (b) above shall not apply to the Outside Directors. Except as
set forth in Schedule 5.32, no officer, director or employee of a Seller or any
Controlled Person of any of them is a party to any contract or understanding
with, or has any claim or right against, either Seller pertaining to the CSG
Business.
5.33 DISCLOSURE. Sellers have disclosed to Purchaser all facts which, to
the Knowledge of Sellers, are material to the condition, assets, liabilities,
businesses, operations and prospects of the Acquired Assets. No representations
or warranties by Sellers in this Agreement, and no statement contained in the
Exhibits hereto or Sellers' Disclosure Schedules, or in any certificate
delivered or to be delivered by Sellers to Purchaser pursuant to the provisions
hereof or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of material fact or omits or will omit to
state any material fact necessary in order to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND SPARTACOM
Purchaser and SpartaCom hereby jointly and severally represent and warrant
to Sellers as follows:
6.01 CORPORATE ORGANIZATION; ETC. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to carry on its business as
it is now being conducted and to own the properties and assets it now owns; and
Purchaser is duly qualified or licensed to do business as a foreign corporation
in good standing in all jurisdictions in which the ownership of property or the
conduct of its business requires such qualification.
6.02 AUTHORIZATION, ETC. Purchaser has full corporate power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby and thereby. Purchaser has taken all action required by law, its
Certificate of Incorporation, its By-Laws or otherwise to authorize the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and thereby, and this Agreement is a valid and
binding agreement of Purchaser enforceable in accordance with its terms.
6.03 NO VIOLATION. Neither the execution and delivery of this Agreement by
Purchaser nor the consummation of the transactions contemplated hereby will
violate any provision of the respective organizational documents of Purchaser,
or violate, or conflict with, or constitute a default under, or cause the
amendment, modification or acceleration of, or give any party the right to
amend, modify or refuse to perform, or modify the time within which duties are
to be performed or rights or benefits are to be received under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any security interest, lien or other encumbrance
32
upon any property or assets of Purchaser under, any lease, agreement,
understanding, restriction or commitment to which Purchaser is a party or by
which Purchaser is bound, or to which the property of Purchaser is subject, or
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or governmental or regulatory authority or agency.
6.04 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES; ETC. Except as set
forth in Schedule 6.04, no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority, or consent or approval of any other person or entity, is required by
Purchaser in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE CLOSING
Pending the Closing, and except as otherwise consented to or approved by
Purchaser in writing, Sellers agree to do the following:
7.01 REGULAR COURSE OF BUSINESS. Sellers shall conduct the CSG Business
diligently and substantially in the same manner as heretofore conducted, and,
with respect to the CSG Business, Sellers shall not institute any new methods of
manufacture, purchase, sale, lease, management, accounting or operation or
engage in any transaction or activity, enter into any agreement or make any
commitment, except in the ordinary course of business and consistent with past
practice.
7.02 AMENDMENTS. No change or amendment shall be made in the respective
organizational documents of Sellers.
7.03 CAPITAL CHANGES. Sellers will not issue or sell any shares or
interests of their respective capital stock or other securities, acquire
directly or indirectly, by redemption or otherwise, any such capital stock,
reclassify or split-up any such capital stock, declare or pay any dividends
thereon or make any other distribution with respect thereto, or grant or enter
into any options, warrants, calls or commitments of any kind with respect
thereto.
7.04 ORGANIZATION. Sellers shall use their best efforts to preserve the
legal existence and organization of the CSG Business intact and to preserve the
CSG Business's relationships with licensors, suppliers, distributors, customers
and others having business relations with it. Sellers shall use their best
efforts to keep available the CSG Business's officers and key employees.
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7.05 INSURANCE; PROPERTY. Sellers shall adequately insure against all
ordinary and insurable risks all property, real, personal and mixed, owned or
leased by Sellers and related to the Acquired Assets; and all such property
shall be used, operated, maintained and repaired in a careful and reasonably
efficient manner.
7.06 NO DEFAULT. Sellers shall not do any act or omit to do any act, or
permit any act or omission to act, which will cause a breach of any contract or
commitment of Sellers related to the CSG Business, or which would cause the
breach of any warranty made hereunder.
7.07 COMPLIANCE WITH LAWS. Sellers shall duly comply with all laws and
regulations applicable to the CSG Business and the properties, operations,
business and employees related thereto.
7.08 GENERAL. Without limiting the generality of the foregoing, Sellers
shall not take, or voluntarily suffer to be taken, any of the actions listed in
Section 5.07 hereof.
ARTICLE VIII
OBLIGATIONS PENDING THE CLOSING
Sellers hereby jointly and severally covenant and agree with Purchaser, and
Purchaser hereby covenants and agrees with Sellers, that:
8.01 ACCESS. Sellers shall afford to Purchaser, its counsel, accountants
and other authorized representatives, including its environmental consultants,
reasonable access to the plants, offices, warehouses, properties, books and
records of Seller in order that Purchaser may have full opportunity to make such
investigations as it shall desire to make of the Acquired Assets; and will cause
Sellers' respective officers, employees and accountants to furnish such
additional financial and operating data and other information as Purchaser shall
from time to time reasonably request.
8.02 CONFIDENTIALITY. Each party will hold and will cause its consultants
and advisors to hold in strict confidence, unless compelled to disclose by
judicial or administrative process or, in the opinion of its counsel, by other
requirements of law, all documents and information concerning the other party
furnished it by such other party or its representatives in connection with the
transactions contemplated by this Agreement (except to the extent that such
information can be shown to have been (i) previously known by the party to which
it was furnished, (ii) in the public domain through no fault of such party, or
(iii) later lawfully acquired from other sources by the party to which it was
furnished) and each party will not release or disclose such information to any
other person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors in connection with this Agreement. If the
transactions contemplated by this Agreement are not consummated, such confidence
34
shall be maintained except to the extent such information comes into the public
domain through no fault of the party required to hold it in confidence, and such
information shall not be used to the detriment of, or in relation to any
investment in, the other party and all such documents (including copies thereof)
shall immediately thereafter be returned to the other party upon the written
request of such other party. Each party shall be deemed to have satisfied its
obligation to hold such information confidential if it exercises the same care
as it takes to preserve confidentiality for its own similar information.
8.03 OTHER TRANSACTIONS; ETC. From the date hereof until the earlier of (a)
the Closing contemplated hereby or (b) the termination of this Agreement,
Sellers shall not, directly or indirectly, solicit or entertain offers from,
enter into negotiations with, or furnish information to, other parties with
respect to any sale of assets (except inventory in the ordinary course of
business) related to the business, securities or control of either Seller or any
business combination transaction involving either Seller, however structured.
8.04 FURTHER ASSURANCES. Each party hereto shall execute and deliver such
instruments and take such other actions as the other party or parties, as the
case may be, may reasonably require in order to carry out the intent of this
Agreement.
8.05 SUPPLEMENTS TO SCHEDULES. From time to time prior to the Closing,
Sellers shall promptly supplement or amend the Sellers' Disclosure Schedules
with respect to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in a Sellers' Disclosure Schedule hereto. For purposes of determining
the satisfaction of the condition set forth in Section 9.01 hereof, the Sellers'
Disclosure Schedules shall be deemed to include only the information contained
therein on the date hereof, without regard to any supplement or amendment.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
Each and every obligation of Purchaser under this Agreement to be performed
on or before the Closing Date shall be subject to the satisfaction, on or before
the Closing Date, of each of the following conditions, unless waived in writing
by Purchaser:
9.01 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Sellers contained in Article V hereof, the Sellers' Disclosure
Schedules and in all certificates and other documents delivered by Sellers to
Purchaser pursuant hereto or in connection with the transactions contemplated
hereby shall be in all material respects true and accurate as of the date when
made and at and as of the Closing Date as though such representations and
warranties were made at and as of such date.
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9.02 PERFORMANCE. Sellers shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by them on or prior to the Closing Date.
9.03 INVESTIGATIONS; ETC. No investigation of Sellers or the CSG Business
by Purchaser pursuant to Section 8.01 hereof nor the Sellers' Disclosure
Schedules or any supplement thereto, shall have revealed any facts or
circumstances which, in the good faith judgment of Purchaser, would have a
Seller Material Adverse Effect.
9.04 NO GOVERNMENT PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental body or other
person or legal or administrative proceeding shall have been instituted or
threatened which if adversely determined could have a Seller Material Adverse
Effect.
9.05 MATERIAL ADVERSE CHANGE. From the date of this Agreement to the
Closing Date, the CSG Business shall not have suffered any material adverse
change in its business, prospects, financial condition, working capital, cash
flow, assets, liabilities (absolute, accrued, contingent or otherwise), reserves
or operations.
9.06 CONSENTS. Sellers shall have obtained and delivered to Purchaser all
government and third party consents set forth on Schedule 9.06 hereto.
9.07 RELATED TRANSACTIONS. All transactions referred to in Article IV
hereof shall have been consummated.
9.08 KEY EMPLOYEES. No key employee of Seller listed on Schedule 9.08
hereto shall have terminated his or her employment or have indicated an
intention to do so.
9.09 LIENS. Purchaser shall have furnished Seller with satisfactory
evidence that all liens and encumbrances on the Acquired Assets listed on
Schedule 5.08 have been released.
9.10 CERTIFICATES. Sellers shall have furnished Purchaser with such
respective certificates of Sellers to evidence compliance with the conditions
set forth in this Article IX as may reasonably be requested by Purchaser.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF
SELLERS
Each and every obligation of Sellers under this Agreement to be performed
on or before the Closing Date shall be subject to the satisfaction, on or before
the Closing Date, of each of the following conditions, unless waived in writing
by Sellers.
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10.01 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Purchaser contained in Article VI hereof, shall be in all material
respects true and accurate as of the date when made and at and as of the Closing
Date as though such representations and warranties were made at and as of such
date.
10.02 PERFORMANCE. Purchaser shall have complied with and performed all
agreements, obligations and conditions required by this Agreement to be complied
with or performed by them on or prior to the Closing Date.
10.03 CERTIFICATES. Purchaser shall have furnished Sellers with such
certificates of its officers to evidence compliance with the conditions set
forth in this Article X as may reasonably be requested by Sellers.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
11.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by any party in this Agreement or pursuant hereto shall survive
the Closing hereunder and any investigation at any time made by or on behalf of
any party hereto for a period of eighteen (18) months following the Closing;
provided that the representations and warranties set forth in Sections 5.08 and
5.18 shall survive the Closing in perpetuity, and the representations and
warranties set forth in Sections 5.17, 5.29 and 5.30 shall survive the Closing
through the applicable statute of limitations period.
11.02 STATEMENTS AS REPRESENTATIONS. All statements contained herein,
including in the Exhibits and Schedules hereto, or in any certificate delivered
pursuant hereto or in connection with the transactions contemplated hereby shall
be deemed representations and warranties within the meaning of Section 11.01
hereof.
11.03 AGREEMENT TO INDEMNIFY.
(a) Sellers hereby jointly and severally agree to indemnify, defend
and hold harmless Purchaser and each affiliate, director, officer, employee or
agent of Purchaser, from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and attorneys' fees
(collectively "Damages"), asserted against or imposed upon or incurred by
Purchaser, or any subsidiary or affiliate, director, officer, employee or agent
of Purchaser resulting from a breach of any representation, warranty or covenant
of either Seller contained in or made pursuant to this Agreement.
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(b) Purchaser and SpartaCom hereby jointly and severally agree to
indemnify, defend and hold harmless Sellers, and each affiliate, director,
officer, employee or agent of either Seller, from and against all Damages
asserted against or imposed upon or incurred by Sellers, or any subsidiary,
affiliate, director, officer, employee or agent of either Seller, resulting from
a breach of any representation, warranty or covenant of Purchaser or SpartaCom
contained in or made pursuant to this Agreement.
11.04 LIMITATIONS ON INDEMNIFICATION. Indemnification under this Article XI
shall be subject to the following limitations: (a) the provisions of Section
11.03 (a) or (b), as they relate to breaches of representations or warranties,
shall be effective only if the aggregate amount of all Damages for which a party
required to indemnify ("Indemnitor") under either Section 11.03 (a) or (b), as
the case may be, shall be liable under this Article XI exceeds $20,000, in which
case the Indemnitor shall be liable for the full amount of such Damages; and (b)
in no event shall the Sellers' aggregate liability under this Article XI for
breaches of representations and warranties exceed $2,000,000. The limitations in
this Section 11.04 shall not apply to the extent the claim for such
indemnification arises or results from fraud.
11.05 INDEMNIFICATION FOR CLAIMS. The obligations and liabilities of the
Indemnitor to the party to whom an indemnity is owed (the "Indemnitee") with
respect to claims for Damages resulting from the assertion of liability by third
parties ("Claims"), shall be subject to the following terms:
(a) Indemnitee will give Indemnitor prompt notice of any Claim
asserted against or imposed upon or incurred by Indemnitee, and the Indemnitor
shall undertake the defense thereof by representatives of its own choosing.
Failure by Indemnitee to give any such notice shall not affect the obligations
of Indemnitor to indemnify hereunder, except to the extent that such failure
shall result in any prejudice to Indemnitor.
(b) In the event that Indemnitor, within a reasonable time after
notice of any such Claim, fails to defend Indemnitee, then Indemnitee will (upon
further notice to Indemnitor) have the right to undertake the defense,
compromise or settlement of such Claim for the account of the Indemnitor,
subject to the right thereof to assume the defense of such Claim at any time
prior to settlement, compromise or final determination thereof.
(c) Anything in this Section 11.05 to the contrary notwithstanding,
(i) if there is a reasonable probability that a Claim may materially and
adversely affect Indemnitee, then Indemnitee shall have the right to defend such
Claim, but shall not compromise or settle such Claim without the consent of
Indemnitor, which consent shall not be unreasonably withheld, delayed or
conditioned, and (ii) Indemnitor shall not, without Indemnitee's prior written
consent, settle or compromise any Claim or consent to entry of any judgment
which does not include as an unconditional term thereof the release by the
claimant or the plaintiff of Indemnitee from all liability in respect of such
Claim.
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(d) If Indemnitor assumes the defense of a Claim, (i) it will be
conclusively established for purposes of this Agreement that Indemnitee is
entitled to indemnification pursuant to this Article XI with respect to that
Claim; and (ii) no compromise or settlement of such Claim may be effected by
Indemnitor without Indemnitee's prior written consent unless (A) there is no
finding or admission of any violation of law or of the rights of any person by
Indemnitee and no effect on any other claims that may be made by Indemnitee, and
(B) the sole relief provided is monetary damages that are paid in full by
Indemnitor.
11.06 PAYMENT OF DAMAGES. Payment or reimbursement of any Damages incurred
by an Indemnitee shall be made upon Indemnitee's demand therefor, except that
payment of any Damages relating to a Claim shall be made by Indemnitor no later
than the time that such Damages are required to be satisfied. Sellers and
Purchaser mutually agree that any payment or reimbursement of Damages made by
one party to the other pursuant to this Article XI shall be treated as an
adjustment to the purchase price, and shall be accounted as such for all tax
purposes.
11.07 INDEMNIFICATION IN CASE OF STRICT LIABILITY OR INDEMNITEE NEGLIGENCE.
THE INDEMNIFICATION PROVIDED IN SECTION 4.01 HEREOF AND IN THIS ARTICLE XI SHALL
BE APPLICABLE WHETHER OR NOT THE SOLE OR CONCURRENT NEGLIGENCE OR GROSS
NEGLIGENCE OF THE INDEMNITEE, OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED
ON THE INDEMNITEE, OR THE SOLE OR CONCURRENT LIABILITY IMPOSED VICARIOUSLY ON
THE INDEMNITEE, IS ALLEGED OR PROVEN.
11.08 REMEDY EXCLUSIVE. The remedies for breach of representations or
warranties under this Article XI shall be exclusive of any other remedies that
the parties may have in law or equity for breach of representations or
warranties.
ARTICLE XII
TERMINATION AND REMEDIES
12.01 TERMINATION. Anything in this Agreement to the contrary
notwithstanding:
(a) Mutual Consent. This Agreement may be terminated by the mutual
written consent of the parties hereto.
(b) Default. In the event that a party hereto shall, contrary to the
terms of this Agreement, intentionally fail or refuse to consummate the
transactions contemplated herein or to take any other action referred to herein
necessary to consummate the transactions contemplated herein, then the
non-defaulting party, after affording the defaulting party a 10-day period after
notice in which to cure such breach or default, shall have the right, in
addition to the other rights specified in Section 12.02 below, to terminate this
Agreement by written notice given to the other party hereto.
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(c) Upset Date. The parties shall use their best efforts to consummate
promptly the transactions contemplated hereby. In the event that the Closing
shall not have occurred on or prior to August 30, 2000, then, unless otherwise
agreed to in writing between the parties hereto, this Agreement shall terminate
on or following such date (as such date may be postponed pursuant hereto), upon
written notice given by one party to the other, unless the absence of such
occurrence shall be due to the failure or refusal of the party seeking to
terminate this Agreement of the type described in Section 12.01(b).
(d) Legal Restraint. Either Sellers or Purchaser may, by written
notice to the other party, terminate this Agreement if at the time the written
notice of termination is given, there is in effect a preliminary or permanent
injunction enjoining consummation of the transactions contemplated hereby.
12.02 REMEDIES.
(a) Specific Performance. Subject to compliance with the terms of
Section 12.02(d) hereof, any party desiring to proceed with the Closing despite
any failure or refusal of the other party hereto of the type described in
Section 12.01(b) hereof shall have the right to pursue the remedy of specific
performance.
(b) Damages. Subject to compliance with the terms of Section 12.02(d)
hereof, any party terminating this Agreement pursuant to Section 12.01(b) hereof
shall, if the failure or refusal referred to in Section 12.01(b) hereof
constituted a material breach of this Agreement, have the right to xxx for
damages and all reasonable out-of-pocket costs and expenses theretofore suffered
and sustained by the non-defaulting party; provided, that no party shall be
liable to the other for special, consequential or punitive damages by reason of
such breach.
(c) Effect of Termination. Except as set forth in Section 12.02(b)
above, any termination of this Agreement by any party hereto shall have the
effect of causing this Agreement to thereupon become void and of no further
force or effect whatsoever, and thereupon no party hereto will have any rights,
duties, liabilities or obligations of any kind or nature whatsoever against any
other party hereto based upon either this Agreement or the transactions
contemplated hereby, except in each case the obligations of each party for its
own expenses incurred in connection with the transactions contemplated by this
Agreement as provided in Section 13.04 and the obligations of each party with
respect to confidentiality set forth in Section 8.02 hereof.
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(d) Cure Period. Any party seeking any form of relief referred to in
Sections 12.02(a) or (b) hereof shall, as a condition to the right to seek such
relief, afford the defaulting party hereto with a ten (10)-day period to effect
reasonable cure of such breach or default.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 COMMISSIONS AND FINDER'S FEES. Except as otherwise provided herein,
each party represents that the negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Sellers directly with
Purchaser in such manner as not to give rise to any claims against any party
hereto for a brokerage commission, finder's fee or other like payment. Insofar
as any such claims are made which are alleged to be based on an agreement or
arrangements made by, or on behalf of, a party, such party agrees to indemnify
and hold the other party harmless from and against all liability, loss, cost,
charge or expense, including reasonable counsel fees, arising therefrom. Any
fees payable to Xxxxxx Xxxxxxx Xxxxxx Gull shall be solely the responsible of
Sellers.
13.02 AMENDMENT AND MODIFICATION. Subject to applicable law, this Agreement
may be amended, modified and supplemented by written agreement of the parties
hereto with respect to any of the terms contained herein.
13.03 WAIVER OF COMPLIANCE. The rights and remedies of the parties under
this Agreement are cumulative and not exclusive. Any failure by Sellers or
Purchaser to comply with any obligation, covenant, agreement or condition herein
may be expressly waived in writing by the other party or parties, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
13.04 EXPENSES. Each party hereto will pay the expenses incurred by such
party or on such party's behalf in connection with this Agreement or any
transaction contemplated by this Agreement, whether or not such transaction
shall be consummated, including, without limitation, all fees of its counsel.
Sellers shall bear the expense of any transfer tax or sales tax applicable to
the transactions contemplated hereby.
13.05 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail
with postage prepaid or delivered by express delivery or facsimile transmission
(with copy by mail) or electronic mail (with copy by mail):
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(a) If to Artisoft or Triton, to:
Artisoft, Inc.
0 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Chairman
Fax: (000) 000-0000
e-mail: xxxxxxxx@xxxxx.xxx
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
00000 XxxXxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
e-mail: xxxxxxxx@xxxx.xxx
or to such other person or address as Sellers shall furnish to the other parties
in writing.
(b) If to Purchaser or SpartaCom, to:
SpartaCom Inc.
0000-X Xxxxxxxxx Xxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xx Xxxx, President and CEO
Fax (000) 000-0000
e-mail: xxxxxxx@xxxxxxxxx.xxx
with a copy to:
Prologue Software
Z.A. de Courtaboeuf
12, av des Tropiques
X.X. 00
00000 Xxx Xxxx Xxxxx
Attention: Xxxxxxxxx Xxxxxxxx, Directeur General
Fax: (011-33) 0.00.00.00.00
e-mail: xxxxxxxxx@xxxxxxxx-xxxxxxxx.xx
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with a copy to:
Bureau Xxxxxxx Xxxxxxxx - New York
000 Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
e-mail: xxxxxxxxxx@xxxxx.xxx
or to such other person or address as Purchaser or SpartaCom shall furnish to
the other parties in writing.
13.06 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other party, except that Purchaser may
assign this Agreement to an affiliate of Purchaser or to any financial
institution providing financing to Purchaser, provided, however, that such
assignment shall not relieve Purchaser or SpartaCom of their respective
obligations and liabilities hereunder.
13.07 GOVERNING LAW; ETC.
(a) This Agreement and the legal relations among the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to any choice of law or its conflicts of law doctrine
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware. In the event of a breach of this Agreement, the non-breaching party
shall be entitled to recover its costs, and expenses (including reasonable legal
fees) incurred in enforcing this Agreement.
(b) The parties hereto, acting for themselves and for their respective
successors and assigns, without regard to domicile, citizenship or residence,
hereby expressly and irrevocably consent and subject themselves to the exclusive
jurisdiction of the United States District Court for the District of Delaware or
any Delaware state court in respect of any and all matters arising under or in
connection with this Agreement and service of process, notices and demands of
any such court and any other notices or the communications required or permitted
under this Agreement may be made upon any of them by personal service at any
place where they may be found or by mailing copies of such process, notices,
demands and communications by certified or registered mail, postage prepaid and
return receipt requested, to the addresses hereinabove set forth.
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(c) EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY (I) WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY AND ALL QUESTIONS OF FACT, LAW OR BOTH, AND WHETHER IN
TORT, CONTRACT OR OTHERWISE, IN ANY ACTION OR PROCEEDING, WHETHER AT LAW OR IN
EQUITY, COMMENCED BY ANY OF THEM, WHICH IN ANY WAY ARISES OUT OF OR IN ANY WAY
IS CONNECTED, WHETHER DIRECTLY OR INDIRECTLY, WITH THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECITON WITH THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY, AND ANY AND ALL COUNTERCLAIMS WITH RESPECT
THERETO, AND (II) AGREES AND CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE
A COPY OF THIS SECTION 13.07(C) WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY AS PROVIDED
IN THIS SECTION 13.07(C).
13.08 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.09 EFFECTIVENESS; BINDING EFFECT. This Agreement shall become effective
as to each party hereto when and only when this Agreement shall have been
executed by such party; provided, however, that this Agreement shall be null and
void ab initio as to each party hereto in the event that all parties hereto
shall not have executed this Agreement within five (5) days of the date upon
which any party hereto shall have executed this Agreement.
13.10 HEADINGS. The headings of the Sections and Articles of this Agreement
are inserted for convenience only and shall not constitute a part hereof.
13.11 ENTIRE AGREEMENT. This Agreement including the Exhibits and Schedules
hereto and other documents and certificates delivered pursuant to the terms
hereof, set forth the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein, and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto.
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13.12 THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or entity other than the parties hereto and
their successors or assigns, any rights or remedies under or by reason of this
Agreement.
13.13 MUTUAL AGREEMENT. This Agreement embodies the arm's-length
negotiation and mutual agreement among the parties hereto and shall not be
construed against any party as having been drafted by it.
13.14 SEVERABILITY. If in any jurisdiction, any provision of this Agreement
or its application to any party or circumstance is restricted, prohibited or
unenforceable, such provision shall, as to such jurisdiction, be ineffective
only to the extent of such restriction, prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting the validity
or enforceability of such provision in any other jurisdiction or its application
to other parties or circumstances. In addition, if any one or more of the
provisions contained in this Agreement shall for any reason in any jurisdiction
be held to be excessively broad as to time, duration, geographical scope,
activity or subject, it shall be construed, by limiting and reducing it, so as
to be enforceable to the extent compatible with the application law of such
jurisdiction as it shall then appear.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their respective duly authorized officers, all as of the day and year first
above written.
SPARTACOM TECHNOLOGIES, INC.
By: /s/ Xxxxxxxxx Xx Xxxx
-------------------------------------
Xxxxxxxxx Xx Xxxx
President
SPARTACOM INC.
(for purposes of
Articles IV, VI, XI and XIII)
By: /s/ Xxxxxxxxx Xx Xxxx
-------------------------------------
Xxxxxxxxx Xx Xxxx
President and CEO
ARTISOFT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Chairman of the Board
Acting CEO
TRITON TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Chairman of the Board
Acting CEO
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