SHARE PURCHASE AGREEMENT
BETWEEN
AREMISSOFT CORPORATION,
a Delaware corporation
AREMISSOFT (E.E. M.E. A.) LIMITED,
a Cyprus corporation
AND
E-CHARM PVT LTD
AND
STILL & LIFE GMBH
December 5, 2000
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made and entered into as of
December 5, 2000, by and between AremisSoft Corporation, a Delaware USA
corporation, on behalf of AremisSoft (E.E. M.E. A.) Limited, a corporation
wholly owned by AremisSoft Corporation and organized under the laws of Cyprus
(collectively "AremisSoft"), e-ChaRM Pvt Ltd, , a corporation organized under
the laws of India (the "Company") and the shareholders of the Company listed on
the signature page hereof (collectively, the "Company Shareholders).
W I T N E S S E T H:
A. The Company is the legal successor to all the right, title and interest in
e-CRM Pvt Ltd (hereinafter referred to as the "Acquired Business")
B. The Company Shareholders are the owners of all the outstanding shares of
the Capital Stock of the Company (the "Shares"); and
C. AremisSoft, by and through its wholly-owned subsidiary AremisSoft (E.E.
M.E. A.) Limited, desires to acquire the Acquired Businesses by purchasing
all of the issued and outstanding Shares of the Company from the Company
Shareholders, on the terms and subject to the conditions set forth herein;
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, AremisSoft, the
Company and the Company Shareholders agree as follows:
1. Purchase and Sale of the Shares.
1.1 Agreements to Sell and Purchase; Closing. Subject to the terms and
conditions of this Agreement, the Company Shareholders agree to sell to one
hundred percent (100%) of the issued and outstanding Shares of Capital Stock of
the Company, and AremisSoft agrees to purchase such Shares from the Company
Shareholders for the aggregate purchase price set forth in Paragraph 1.2. The
exact number of Shares held by each of the Company Shareholders is set forth
below:
Still & Life GmbH 1495
Nominee for Still & Life GmbH 5
----
TOTAL 1500
1.2 Purchase Price.
(a) Subject to the terms and conditions set forth in this Agreement,
AremisSoft shall pay to the Company Shareholders an aggregate purchase price for
all of the issued and outstanding Shares equal to Ten million Nine hundred
thousand United States Dollars ($10,900,000) as the purchase price (the
"Purchase Price") for the Shares in the following amounts to the Company
Shareholders:
Still & Life GmbH $10,863,666.65
Nominee for Still & Life GmbH 36,333.35
--------------
TOTAL $10,900,000.00
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(b) Hundred percent (100%) of the Purchase Price shall be paid in cash by
wire transfer at the Closing pursuant to written wire transfer instructions
provided by the Company Shareholders.
1.3. The Closing; Closing Date.
1.3.1. Time shall be of the essence for the obligations of AremisSoft and
the Company Shareholders under this Agreement. The purchase and sale of the
Shares shall take place at a closing (the "Closing") to be held at the offices
of AremisSoft, 123 Strovolos Avenue, Nicosia, Cyprus, at 11:00 A.M., Cyprus
time, on December 5, 2000, or on such other date and time as may be agreed upon
in writing by AremisSoft, the Company and the Company Shareholders (the "Closing
Date").
1.3.2. At the Closing, each of the Company Shareholder shall deliver to
AremisSoft (i) a certificate or certificates representing the number of shares
of Capital Stock set forth beside such Company Shareholder's name in Section 1.1
above, (ii) stock powers executed in favor of AremisSoft (or in favor of such
Affiliate of the AremisSoft as the AremisSoft may in writing at the Closing
direct) sufficient to validly transfer title to the Shares, and ownership
thereof, to AremisSoft , (iii) a Certificate from the chief executive of the
Company stating that all of the representations and warranties of the Company
provided for in this Agreement are true and correct as of the Closing Date and
that all conditions to the Company's performance under this Agreement have been
satisfied or waived as of the Closing Date; (iv) a duly executed Confidentiality
Agreement as provided for in Section 9 of this Agreement and (v) a Certificate
from each of the Company Shareholders stating that all of the representations
and warranties of the Company Shareholders provided for in this Agreement are
true and Correct as of the Closing Date and that all conditions to the Company
Shareholder's performance under this Agreement have been satisfied or waived as
of the Closing Date.
1.3.3. At the Closing, AremisSoft shall deliver to the Company Shareholders
(i) irrevocable wire transfer instructions transferring a total of Ten million
Nine Hundred thousand United States Dollars ($10,900,000) with of Ten million
Eight Hundred Sixty three thousand Six Hundred Sixty Six United States
($10,863,666) to be transferred to Still & Life GmbH and the remaining Thirty
six Thousand Three Hundred Thirty four United States Dollars ($36,334) to be
transferred to the Nominee for Still & Life GmbH and (ii) a Certificate from the
chief executive of AremisSoft Corporation stating that all of the
representations and warranties of AremisSoft provided for in this Agreement are
true and correct as of the Closing Date and that all conditions to AremisSoft's
performance under this Agreement have been satisfied or waived as of the Closing
Date.
1.3.4. At the Closing, for each of the employees set forth on Schedule
1.1.4, the Company shall deliver fully executed employment agreements on terms
and conditions acceptable to AremisSoft and in substantially similar form to the
form of employment agreement attached to the Closing Memorandum as an exhibit.
The salary and benefits of the employees set forth in Schedule 1.1.4 shall be no
greater than the salary and benefits received by the employees during the year
2000, unless otherwise agreed to by AremisSoft.
2. Representations and Warranties of the Company Shareholders. Each of the
Company Shareholders represents and warrants to AremisSoft that, as applied
solely itself, all of the following representations and warranties in this
Section 2 are true and correct as of the date of this Agreement, and will be
true and correct, as amended or supplemented pursuant to this Agreement, on and
immediately prior to the Closing Date:
2.1. Ownership and Status of the Company Shares. The Company Shareholder is
the record and beneficial owner (or, if the Company Shareholder is a trust or
estate or a deceased natural person, the legal owner) of the number of Company
sets opposite the Company Shareholder's name in Section 1.1 above, free and
clear of all liens, encumbrances, and charges except as set forth in the
Disclosure Memorandum all of which shall be released on or before the Closing
Date.
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2.2 Power and Authority of the Company Shareholder. The Company Shareholder
has the full power, legal capacity and authority to execute and deliver this
Agreement and any other document to which the Company Shareholder is a party and
to perform the Company Shareholder's obligation under this Agreement and in all
other documents to which the Company Shareholder is a party. This Agreement
constitutes the legal, valid and binding obligation of the Company Shareholder,
enforceable against the Company Shareholder in accordance with its terms, except
as that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law). If the Company Shareholder is an Entity, the Company
Shareholder has obtained, in accordance with all applicable Laws and its Charter
Documents, all approvals and the taking of all actions necessary for the
authorization, execution, delivery and performance by the Company Shareholder of
this Agreement and any other document to which the Company Shareholder is a
party. If the Company Shareholder is acting otherwise than in an individual
capacity (whether as an executor or a guardian or in any other fiduciary or
representative capacity), all actions on the part of the Company Shareholder and
all other Persons (including any court) necessary for the authorization,
execution, delivery and performance by the Company Shareholder of this Agreement
and the any other documents to which the Company Shareholder is a party have
been duly taken.
2.3 No Conflicts or Litigation. The Company Shareholder's execution,
delivery and performance in accordance with the respective terms of this
Agreement and any other document to which the Company Shareholder is a party do
not and will not (i) violate or conflict with any Laws, (ii) breach or
constitute a default under (A) any agreement or instrument to which the Company
Shareholder is a party or by which the Company Shareholder or any Company Shares
the Company Shareholder owns is bound, or (B) any Company Contract (except as
the Disclosure Memorandum sets forth), (iii) result in the creation or
imposition of, or afford any Person the right to obtain any Lien upon any
Company Shares the Company Shareholder owns (or upon any revenues, income or
profits of the Company Shareholder therefrom), or (iv) if the Company
Shareholder is an Entity, violate the Company Shareholder's Charter Documents.
No Litigation is pending or threatened to which the Company Shareholder is or
may become a party which (i) questions or involves the validity or
enforceability of any of the Company Shareholders' obligations under this
Agreement or other documents under this Agreement, or (ii) seeks (or reasonably
may be expected to seek) (A) to prevent or delay the consummation by the Company
Shareholder of the transactions this Agreement contemplates, or (B) damages in
connection with any such consummation.
2.4 No Brokers. Except as the Disclosure Memorandum sets forth, the Company
Shareholder has not, directly or indirectly, in connection with this Agreement
or the transactions contemplated hereby (i) employed any broker, finder or
agent, or (ii) agreed to pay or incurred any obligation to pay any broker's or
finder's fee, any sales commission or any similar fee or compensation.
2.5 Preemptive and Other Rights; Waiver. The Company Shareholder either (i)
does not own or otherwise have any statutory or contractual preemptive or other
right of any kind (including any right of first offer or refusal) to acquire any
Company Shares, or (ii) hereby irrevocably waives each right of that type the
Company Shareholder does own or otherwise has.
2.6 Control of Related Businesses. Except as the Disclosure Memorandum sets
forth, the Company Shareholder is not, alone or with one or more other Persons,
the controlling Affiliate of any Entity, business or trade (other than the
Company or any Entity the Company includes, if the Company Shareholder is an
Affiliate of any thereof) that (i) is engaged in any line of business which is
the same as or similar to any line of business in which the Company or any
Entity the Company includes is engaged, or (ii) is, or has within the three (3)
year period ending on the date of this Agreement, engaged in any transaction
with an Entity the Company includes, except for transactions in the ordinary
course of business of that Entity.
3.0 Representations and Warranties of the Company Shareholders. The Company
and each Company Shareholder jointly and severally represent and warrant to, and
agree with, AremisSoft that all of the following representations and warranties
in this Section 3 of this Agreement are as of the date of this Agreement, and
will be, on and immediately prior to the Closing Date, true and correct.
<PAGE>
3.1 Organization, Authority and Qualification.
3.1.1 The Company is duly organized and validly existing under the laws
India. The Company and each of the Company Subsidiaries has full corporate power
and authority and is entitled to own or lease its properties and to carry on its
business as and in all places where such business is conducted and such
properties are owned or leased. The Company and the Company Subsidiaries are
qualified as a foreign corporation in all jurisdictions it is required to
register as such. The Company Shareholders have attached true, correct and
complete copies of the Charter Documents and bylaws of the Company and each of
the Company Subsidiaries, as amended to date, to the Disclosure Memorandum. The
Company Shareholders have attached to the Disclosure Memorandum true, correct
and complete copies of: (i) the minutes and other similar records of meetings of
the shareholders of the Company and its board of directors, which contain all
records of meetings and actions taken in lieu thereof by the Company's
shareholders and show all corporate actions taken by the Company's shareholders,
the Company's Directors, or any committees thereof, and (ii) the share transfer
records, which fully reflect all issuances, transfers and redemptions of the
Company's shares since the date of its incorporation. The Company Shareholders
have attached to the Disclosure Memorandum true, correct and complete copies of:
(i) the minutes and other similar records of meetings of the shareholders of the
Acquired Businesses and their respective board of directors, which contain all
records of meetings and actions taken in lieu thereof by the Acquired
Businesses' shareholders and show all corporate actions taken by the Acquired
Businesses' shareholders, the Acquired Businesses' Directors, or any committees
thereof, and (ii) the share transfer records, which fully reflect all issuances,
transfers and redemptions of the Acquired Businesses shares since the date of
their respective incorporation.
3.1.2 The Company has the full corporate power and authority to execute,
deliver and perform this Agreement and any other documents hereunder to which it
is a party. . This Agreement constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law).
3.2 Capitalization of the Company; Ownership of Shares; Subsidiaries.
3.2.1 The authorized equity capital of the Company consists of 5,000 equity
shares of Rs 100 per share, of which 1500 shares are issued and outstanding as
of the date of this Agreement and as of the Closing Date.
3.2.2 All of the issued and outstanding shares of the Company are owned of
record and beneficially by the Company Shareholders as set forth in Section 1.1
of this Agreement.
3.2.3 All of the issued and outstanding Shares of the Company are duly
authorized, validly issued, fully paid and non-assessable and were authorized,
offered, issued and sold in accordance with all applicable securities and other
Laws and all rights of the shareholders. No Person has any preemptive rights
with respect to shares of the Company. There are no outstanding securities
convertible into the equity capital of he Company or rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements or
arrangements providing for the issuance (contingent or otherwise) of, or any
Actions relating to, the capital stock of the Company. There are no voting
trusts, proxies or other agreements or understandings with respect to the voting
of the Capital Stock of the Company. The Company is not subject to any
obligation to repurchase or otherwise acquire or retire any of its capital
stock, and the Company has no Liability for dividends declared or accrued, but
unpaid, with respect to its capital stock. Neither the Company nor any Acquired
Business have purchased or redeemed any of its capital stock, and except as set
forth in the Disclosure Memorandum, has not paid any dividend or made any other
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payment to any of the Company Shareholders or other Related Parties within the
past two (2) years.
3.2.4 The Company does not own or have an interest, direct or indirect, or
any commitment to purchase or otherwise acquire, any capital stock or other
equity interest, direct or indirect, in any other Person, except as set forth in
the Disclosure Memorandum. All such interests so set forth are owned of record
and beneficially by the Company as set forth in the Disclosure Memorandum and
are duly authorized, validly issued, fully paid and non-assessable, and were
authorized, offered, issued and sold in accordance with all applicable
securities and other Laws.
3.2.5 Each Company Shareholder is the legal and beneficial owner of the
Company Shares as set forth in Section 1.1 of this Agreement, free and clear of
any and all Liens. There are no outstanding contracts, demands, commitments or
other agreements or arrangements under which the Company Shareholders (or any of
them) or the Company are or may become obligated to sell, transfer or assign any
of the Company Shares to any Person.
3.2.6 The Disclosure Memorandum either (i) sets forth the form of
organization, legal name, each assumed name and Organization State of each
Company Subsidiary, or (ii) correctly states no Entity is a Company Subsidiary.
Except as set forth in the Disclosure Memorandum, each Company Subsidiary is a
Wholly Owned Subsidiary. In the case of any Company Subsidiary that is not a
Wholly Owned Subsidiary, the Disclosure Memorandum sets forth, by each class and
each series within each class, the number of outstanding shares (or other
percentage of ownership interest) of Capital Stock of the Company Subsidiary,
(i) the Company's aggregate direct and indirect ownership of those shares (or
interests), and (ii) the name and address of record and percentage ownership of
those shares (or interests) of each holder of record thereof other than the
Company or a Company Subsidiary. No Lien exists upon any outstanding share (or
other percentage ownership interests) of Capital Stock of any Company Subsidiary
which the Company, directly or indirectly, owns other than the Liens, if any,
the Disclosure Memorandum describes, all of which will be released at or before
the Closing Date.
3.3 Capacity; Inconsistent Obligations. Except as set forth in the
Disclosure Memorandum, the execution, delivery and performance of this Agreement
and each of the documents hereunder to which any Company Shareholder or the
Company is a party will not (i) result in a violation of the Company's Charter
Documents or bylaws, or any Law, or (ii) result in a breach of, conflict with or
default under any term or provision of any indenture, note, mortgage, bond,
security agreement, loan agreement, guaranty, pledge, or other instrument,
contract, agreement or commitment or any Order, to which the Company or any
Company Shareholder is a party or by which any of them or any of their
respective assets and properties, including, without limitation, the Company
Shares, is subject or bound; nor will such actions result in (A) the creation of
any Lien on any of the Company Shares or any of the Company's assets or
properties, (B) the acceleration or creation of any Liability of the Company,
(C) the forfeiture of any right or privilege of the Company, or (D) the
forfeiture of any right or privilege of any Company Shareholder which may affect
such Company Shareholder's ability to perform under this Agreement.
3.4 Consents. Except as set forth in the Disclosure Memorandum, the
execution, delivery and performance by each Company Shareholder and the Company
of this Agreement and each of the documents hereunder to which he, she or it is
a party, and the consummation of the transactions contemplated herein and
therein does not (a) require the consent, approval or action of, or any filing
with or notice to, any Government or other Person, or (b) impose any other term,
condition or restriction on AremisSoft or the Company (or any successor thereto)
pursuant to any business combination or takeover Law.
3.5 No Violation; Compliance with Laws. Except as set forth in the
Disclosure Memorandum, the Company and the Company Subsidiaries are not in
default under or in violation of (a) its Charter Documents or bylaws, or (b) any
Order. Except as set forth in the Disclosure Memorandum, the operations of the
Company and its predecessors have been conducted in all material respects in
compliance with all applicable Laws. (For purposes of this paragraph, any
violation of applicable Law that could result in imposition of a fine or other
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monetary penalty upon the Company shall be deemed to be a Material
non-compliance). Neither the Company nor any Company Shareholder has received
any notification of any asserted past or present failure by the Company to
comply with any applicable Law.
3.6 Possession of Licenses. Except as set forth in the Disclosure
Memorandum, the Company and the Company Subsidiaries possess all franchises,
certificates, licenses, permits and other authorizations from Governments and
all other Persons, free from burdensome restrictions, that are necessary for the
ownership, maintenance and operation of its properties and assets and the
conduct of its business, and the Company and the Company Subsidiaries are not in
violation thereof.
3.7 Financial Statements; Financial Condition. The Company and the
Company Shareholders have to the Disclosure Memorandum copies of the Company's
financial statements which include the historical financial statements of the
Acquired Businesses and related documents as identified in the Disclosure
Memorandum (collectively, the "Financial Statements"). The Financial Statements
include the Company's most recent Balance Sheet (the "Reference Date Balance
Sheet"). The date of the Reference Date Balance Sheet is referred to herein as
the "Reference Date". The Financial Statements include the balance sheet of each
of the Acquired Businesses for the prior two fiscal years and a profit and loss
statement for each of the Acquired Businesses for the last three full fiscal
years. Except as set forth in the Disclosure Memorandum, the Financial
Statements are true and correct, in all Material respects, have been prepared in
accordance with Indian GAAP consistently applied, present fairly the financial
condition of the Company as at the respective dates thereof and the results of
the Company's operations and cash flows for the periods then ended, and are
consistent with the books and records of the Company and the Acquired
Businesses. The books and records of the Company and the Acquired Businesses are
true, correct and complete in all Material respects and, except as set forth in
the Disclosure Memorandum, are maintained in accordance with Indian GAAP.
3.8 Liabilities. Set forth in the Disclosure Memorandum is a complete, true
and correct listing of all Liabilities of the Company as of the Closing Date.
The Company has no Liability, except as may be set forth in the Disclosure
Memorandum.
3.9 Title to Properties. Except as set forth in the Disclosure Memorandum,
the Company has good and marketable title to all properties and assets reflected
in the Reference Date Balance Sheet, except inventories and other immaterial
assets which have been disposed of in the ordinary course of business since the
Reference Date, and all other properties and assets necessary to conduct its
business as currently being conducted and as conducted during the periods
covered by the Financial Statements (other than any leased property), free and
clear of Liens, except as may be set forth in the notes to the Reference Date
Balance Sheet.
3.10 Receivables; Debtors. Except as set forth in the Disclosure
Memorandum, all notes and accounts receivable shown on the Reference Date
Balance Sheet and all such receivables now held by the Company are valid and
collectible obligations and were not and are not subject to any offset or
counterclaim, except for amounts reserved against such receivables which are
reflected on the Reference Date Balance Sheet or otherwise set forth in the
Disclosure Memorandum and, with respect to notes and accounts receivable arising
after the Reference Date and now outstanding, except for a percentage thereof
equal to the percentage which said reserved amounts on the Reference Date
Balance Sheet or in the Disclosure Memorandum constituted of the aggregate of
notes and accounts receivable on such Reference Date Balance Sheet.
3.11 Personal Property.
3.11.1 Except as set forth in the Disclosure Memorandum, all machinery,
equipment, vehicles, and other items of tangible personal property which are
owned or leased by the Company are in good condition and repair, subject to
normal wear and tear, suited for the use intended and are and have been operated
in conformity with all applicable Laws. To the knowledge of the Company and the
Company Shareholders, except as set forth in the Disclosure Memorandum, there
are no defects or conditions which would cause such tangible personal property
to be or become inoperable or unsafe.
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3.11.2 To the knowledge of the Company and the Company Shareholders, except
as set forth in the Disclosure Memorandum, all lessors of
machinery, equipment or other tangible personal property leased by the Company
have performed and satisfied their respective duties and obligations under such
leases. The Company has not brought or threatened any Action against any such
lessor for failure to perform and satisfy its duties and obligations thereunder.
3.12 Real Property.
3.12.1 The Company has good and marketable title to all of the
real property reflected on the Reference Date Balance Sheet as owned by the
Company (collectively, the "Owned Real Property"), free and clear from all
defects and Liens, except as may be set forth in the notes to the Reference Date
Balance Sheet or in the Disclosure Memorandum. The Disclosure Memorandum lists
all Real Property, whether owned or leased by the Company, listing with respect
to each parcel the street address and the owner or lessor.
3.12.2 Except as set forth in the Disclosure Memorandum, each
parcel or tract of real property which is used by the Company in its business
and that is not Owned Real Property (the "Leased Real Property," and
collectively with the Owned Real Property, the "Real Property") is subject to a
written lease or sublease to which the Company is a party as lessee or sublessee
(individually a "Real Property Lease"). All such Real Property Leases are valid
and in full force and effect in accordance with their terms. The Company
Shareholders have attached to the Disclosure Memorandum true, correct and
complete copies of all Real Property Leases. There is not, with respect to any
Real Property Lease (i) any default by the Company, or any event of default or
event which with notice or lapse of time, or both, would constitute a default by
the Company, or (ii) to the knowledge of the Company and the Company
Shareholders, any existing default by any other party to any Real Property
Lease, or event of default or event which with notice or lapse of time, or both,
would constitute a default by any other party to any Real Property Lease.
3.12.3 All of the Real Property is free from development, use or
occupancy restrictions, (except those imposed by applicable Law), and from
special taxes or assessments, (except those generally applicable to other
properties in the tax districts in which the Real Property is located or as
otherwise described in the Disclosure Memorandum). No options have been granted
to others to purchase, lease or otherwise acquire any interest in the Real
Property. The Company has the exclusive right of possession of each tract or
parcel comprising its Real Property.
3.12.4 Except as set forth in the Disclosure Memorandum, the present use,
occupancy and operation of the Real Property, and all aspects of the
Improvements to the Real Property are in compliance with all Laws and private
restrictive covenants, and to the Company's and the Company Shareholders'
knowledge there has not been any proposed change thereto that would affect any
of the Real Property or its use, occupancy or operation. There exists no
conflict or dispute with any Government or other Person relating to any Real
Property or the activities thereon. No portion of the Real Property is subject
to any classification, designation or preliminary determination of any
Government or pursuant to any Law which would restrict its use, development,
occupancy or operation in connection with the Company's business. Except as set
forth in the Disclosure Memorandum, all Improvements are in good condition and
repair, and are suited for the operation of the Company's business.
3.12.5 Neither the Company nor any other Person has caused any work or
improvements to be performed upon or made to any of the Real Property for which
there remains outstanding any payment obligation that would or might serve as
the basis for any Lien in favor of the Person who performed the work.
3.12.6 Except as set forth in the Disclosure Memorandum, all requisite
certificates of occupancy and other permits and approvals required with respect
to the Real Property or the Improvements and the use, occupancy and operation
thereof have been obtained and paid for and are currently in effect and free of
restrictions.
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3.13 Intellectual Property.
3.13.1 All Intellectual Property belonging to the Acquired
Businesses have been transferred to the Company. The Company and the Company
Shareholders have attached to the Disclosure Memorandum true and correct copies
of all transfer documents and deeds reflecting the transfer of the Intellectual
Property of the Acquired Businesses to the Company. No Company Intellectual
Property or product or service of the Company is subject to any proceeding or
outstanding decree, Order, judgment, agreement, or stipulation restricting in
any manner the use, transfer, or licensing thereof by the Company, or which may
affect the validity, use or enforceability of such Company Intellectual
Property, which in any such case would be reasonably likely to have a Material
Adverse Effect on the Company.
3.13.2 Each Material item of Company Registered Intellectual Property is
valid and subsisting. All necessary registration, maintenance and renewal fees
currently due in connection with such Registered Intellectual Property have been
made and all necessary documents, recordation and certificates in connection
with such Registered Intellectual Property have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining such
Registered Intellectual Property, except where the failure to do so would not be
reasonably likely to have a Material Adverse Effect on the Company.
3.13.3 The Disclosure Memorandum lists all of the Company's Intellectual
Property. The Company or the Company Subsidiaries own and have good and
exclusive title to, or have licenses (sufficient for the conduct of its business
as currently conducted and as proposed to be conducted) to, each Material item
of Company Intellectual Property used in connection with the conduct of its
business as currently conducted and as proposed to be conducted free and clear
of any Lien or encumbrance (excluding licenses and related restrictions); and
the Company or the Company Subsidiaries are the exclusive owners of all
trademarks and trade names used in connection with and Material to the operation
or conduct of the business of the Company and the Company Subsidiaries,
including the sale of any products or the provision of any services by the
Company and the Company Subsidiaries.
3.13.4 The Company or the Company Subsidiaries own exclusively, and have
good and marketable title to, all copyrighted works that are the Company's
products or which the Company otherwise expressly purports to own.
3.13.5 To the extent that any Material Intellectual Property has been
developed or created by a third party for the Company or the Company
Subsidiaries, as the case may be, the Company has a written agreement with such
third party with respect thereto and the Company or the Company Subsidiary
thereby either (i) have obtained ownership of and are the exclusive owners of,
or (ii) have obtained a license (sufficient for the conduct of its business as
currently conducted and as proposed to be conducted) to all such third party's
Intellectual Property in such work, material or invention by operation of law or
by valid assignment, to the fullest extent it is legally possible to do so.
3.13.6 The Disclosure Memorandum lists all Company Contracts, licenses and
agreements to which the Company is a party (i) with respect to Company
Intellectual Property licensed or transferred to any third party (other than
end-user licenses in the ordinary course), or (ii) pursuant to which a third
party has licensed or transferred any Material Intellectual Property to the
Company.
3.13.7 All Material contracts, licenses and agreements relating to Company
Intellectual Property are in full force and effect. The consummation of the
transactions contemplated by this Agreement will neither violate nor result in
the breach, modification, cancellation, termination, or suspension of such
contracts, licenses and agreements in accordance with its terms, the effect of
which would have a Material Adverse Effect on the Company. The Company is in
Material compliance with, and has not materially breached any term of any of
such contracts, licenses and agreements and, to the knowledge of the Company and
the Company Shareholders, all other parties to such contracts, licenses and
agreements are in compliance in all Material respects with, and have not
materially breached any term of, such contracts, licenses and agreements.
Following the Closing Date, AremisSoft will be permitted to exercise all of the
<PAGE>
Company's rights under such contracts, licenses and agreements to the same
extent the Company would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which the Company
would otherwise be required to pay.
3.13.8 The operation of the business of the Company as such business
currently is conducted and has been historically conducted by the Acquired
Businesses, including the Company's design, development, marketing and sale of
the products or services of the Company and including with respect to products
currently under development has not, does not and will not infringe or
misappropriate in any Material manner the Intellectual Property of any third
party or, to the knowledge of the Company and the Company Shareholders,
constitute unfair competition or trade practices under the laws of any
jurisdiction.
3.13.9 The Company has not received written notice from any third party,
and to the knowledge of the Company and the Company Shareholders, no other
pending overt threat from any third party, that the operation of the business of
the Company or any act, product or service of the Company, infringes or
misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction.
3.13.10 To the knowledge of the Company and the Company Shareholders, no
person has or is infringing or misappropriating any Company Intellectual
Property.
3.13.11 The Company and the Company Subsidiaries have taken reasonable
steps to protect the its rights in its confidential information and trade
secrets that they wish to protect or any trade secrets or confidential
information of third parties provided them.
3.14 Contracts.
3.14.1 Except as set forth in the Disclosure Memorandum, all Company
Contracts have been entered into in the ordinary course of the Company's
business on commercially reasonable terms, are valid and enforceable in all
Material respects in accordance with their terms, are in full force and effect,
and will continue to be valid and enforceable and in full force and effect on
identical terms following the Closing Date. Except as set forth in the
Disclosure Memorandum, no Company Contract is likely to result in a loss to the
Company upon completion of performance, and all Company Contracts can be
fulfilled or performed by the Company in accordance with their respective terms
without undue or unusual expenditures of money or effort. All Company Contracts
are listed in the Disclosure Memorandum, and true, correct and complete copies
of all Company Contracts in excess of $250,000 USD have been attached to the
Disclosure Memorandum.
3.14.2 There are no existing Material defaults, events of default
or events which, with the giving of notice or lapse of time, or both, would
constitute a Material default by the Company under any Company Contract. No
event has occurred which may hereafter give rise to any right of termination,
acceleration, Damages or any other remedy under any Company Contract.
3.14.3 To the knowledge of the Company and the Company
Shareholders, neither this Agreement, the Closing or the relationship between
the Company and AremisSoft has caused or is likely to cause the termination or
non-renewal of any Company Contract.
3.15 Insurance. The Company has obtained and maintains insurance policies
which provide adequate coverage to insure its assets, properties and business
against such risks and in such amounts as are prudent and customary in the
industry in which the Company operates, and all such policies are in full force
and effect. All premiums due on such policies have been paid, and the Company
has not received any notice of cancellation with respect thereto. The Company
has no Liability for premiums or for retrospective premium adjustments for any
<PAGE>
period. The Disclosure Memorandum lists the types, amounts of coverage and
deductibles of all such insurance policies, and true, correct and complete
copies thereof have been attached thereto.
3.16 Litigation; Contingencies. Except as set forth in the Disclosure
Memorandum, no Action is pending or, to the knowledge of the Company
Shareholders and the Company, threatened against, by or affecting the Company or
the Company Shares. There are no unsatisfied judgments or Orders against the
Company or any Company Shareholder to which any of them or their assets and
properties are subject.
3.17 Taxes. Except as set forth in the Disclosure Memorandum, the Company
and any entity at any time eligible or required to file a consolidated or
combined Tax Return with the Company, including the Acquired Businesses
(individually, an "Affiliated Entity" and collectively,the "Affiliated
Entities"), has duly and timely filed all federal, state, municipal, local and
foreign, if any, Tax Returns and reports (including returns for estimated tax),
and all reports and returns of all other Governments having jurisdiction
(collectively, "Returns") with respect to all Taxes (including, without
limitation, consolidated or combined Tax Returns of some or all of the Company
and the Affiliated Entities); all such Tax Returns and reports show the correct
and proper amount due; and the Taxes shown on all Tax Returns and reports and
all Tax assessments received by the Company or any Affiliated Entity have been
paid to the extent that such Taxes or estimates are due. The Company has
attached to the Disclosure Memorandum true, correct and complete copies of all
Returns filed with respect to the five (5) tax years preceding the date hereof.
Except as set forth in the Disclosure Memorandum, all Taxes imposed on the
Company and its Affiliated Entities by any Government (including all deposits in
connection therewith required by applicable Law, and all interest and penalties
thereon) which have become due and payable by the Company for all periods
through the date hereof have been paid in full, and adequate reserves for all
other Taxes, whether or not due and payable, and whether or not disputed, have
been set up on the books of the Company, and such reserves will be adequate to
pay all Taxes of the Company for all periods through the Closing. There is not
now any proposed assessment against the Company or any Affiliated Entity of
additional Taxes of any kind. The Company is not a party to any Tax sharing or
Tax allocation agreement, understanding, arrangement or commitment. There is no
dispute or Action concerning any Tax Liability of the Company raised by a
Government in writing.
3.18 Employment and Labor Matters. Except as set forth in the Disclosure
Memorandum, to the Company's and the Company Shareholders' knowledge, no
employee, agent, consultant or independent contractor who performs services on a
regular basis for the Company plans to discontinue such relationship with the
Company after the Closing.
3.18.1 The Company is not a party to any agreement of any kind which deals
with wages, conditions of employment, benefits or other matters affecting the
employer/employee relationship with any union, labor organization or employee
group. There are no controversies pending, or to the Company's and the Company
Shareholders' knowledge threatened, between the Company and any union, labor
organization or employee group representing, or seeking to represent, any of its
employees, and there has been no attempt by any union, labor organization or
employee group to organize any of the Company's employees at any time in the
past five (5) years. The Company has substantially complied with all applicable
Laws relating to wages, hours, health and safety, payment of Social Security
withholding and other taxes, maintenance of workers' compensation insurance,
labor and employment relations and employment discrimination.
3.18.2 The Disclosure Memorandum lists all contracts, agreements or
arrangements (written or oral) concerning the employment of any individual by
the Company, including each such individual's title, compensation and duties.
3.19 Employee Benefit Matters
3.19.1 The Disclosure Memorandum lists all "employee benefit plans" (the
"Employee Plans") to which the Company contributes or is required to contribute
and all other practices, commitments, arrangements and agreements pursuant to
<PAGE>
which the Company provides, directly or indirectly, any benefits for employees.
True, correct and complete copies of all Employee Plans, together with related
trusts, insurance contracts, summary plan descriptions, and annual reports for
the past three (3) years, have been attached to the Disclosure Memorandum.
3.19.2 Each Employee Plan has been operated and administered in all
Material respects in accordance with all applicable Laws. There are no pending
claims or, to the Company's and the Company Shareholders' knowledge threatened
claims, by or against any of the Employee Plans by any employee or beneficiary
covered under such Employee Plan, or by any Government or otherwise involving
such Employee Plan or any of its fiduciaries (other than for routine claims for
benefits).
3.19.3 The Company is not bound to provide, and the Company does not
provide, benefits, including, without limitation, death, health or medical
benefits (whether or not insured), with respect to current or former employees
of the Company other than as required by applicable Law. Neither this Agreement
nor any transaction contemplated hereby will entitle any current or former
employee, officer or director of the Company to severance pay, unemployment
compensation, "change of control" compensation or any similar payment.
3.20 Environmental Matters. Except as set forth in the Disclosure
Memorandum, the Company holds all Environmental Permits necessary for conducting
its business and operations and has conducted, and is presently conducting, its
business and operations in full compliance with all applicable Environmental
Laws and Environmental Permits, including, without limitation, all record
keeping and filing requirements. There is no existing or, to the knowledge of
the Company or Company Shareholders, pending Environmental Law with a future
compliance date that will require Material operational changes, business
practice modifications or capital expenditures at any Real Property (or any
other property presently or formerly owned, operated or controlled by the
Company or as to which the Company may bear responsibility or Liability), or any
of the Improvements thereon. There are no presently pending, or to the Company's
and the Company Shareholders' knowledge, threatened Actions or Orders against or
involving the Company (including any Person for whose acts or omissions the
Company is responsible) relating to any alleged, past or ongoing violation.
3.21 Absence of Certain Business Practices. Neither the Company nor any
officer, employee or agent of the Company, nor any other person acting on behalf
of the Company, has, directly or indirectly, within the past five (5) years,
given or agreed to give any gift or similar benefit to any Person who is or may
be in a position to help or hinder the Company's business (or assist the Company
in connection with any actual or proposed transaction) which (a) might subject
the Company to any Material Damage in any Action or which might have an effect
on the Company or its assets and properties, (b) if not given in the past, might
have had an effect on the Company's business or its assets and properties, or
(c) if not continued in the future, might have an effect on the Company or which
might subject the Company to suit or penalty in any Action.
3.22 Agreements and Transactions with Related Parties. Except as set forth
in the Disclosure Memorandum, the Company is not, directly or indirectly, a
party to any contract, agreement or lease with, or any other commitment to, (a)
any Person owning, or formerly owning, beneficially or of record, directly or
indirectly, any of the Company Shares of or other equity interest in the
Company, (b) any Affiliate of such Person, (c) any director or officer of the
Company, (d) any Person in which any of the foregoing Persons has, directly or
indirectly, at least a three percent (3.0%) beneficial interest in the Capital
Stock or other type of equity interest of such Person, or (e) any partnership in
which any of the foregoing Persons is a general partner or has at least a three
percent (3.0%) beneficial interest (any or all of the foregoing being referred
to herein as "Related Parties"). Without limiting the generality of the
foregoing, (i) no Related Party, directly or indirectly, owns or controls any
assets or properties which are or have been used in the Company's business, and
(ii) no Related Party, directly or indirectly, engages in or has any significant
interest in or connection with any business (A) which is or which within the
last three (3) years has been a competitor, customer or supplier of the Company
or has done business with the Company, or (B) which as of the date hereof sells
or distributes products or services which are similar or related to the
Company's products or services.
<PAGE>
3.23 Absence of Changes. Except as expressly provided for in this
Agreement, or as set forth in the Disclosure Memorandum, since the Reference
Date:
3.23.1 There has been no change in the business, assets, properties,
Liabilities, affairs, results of operations, condition (financial or otherwise),
cash flows or prospects of the Company or in its respective relationships with
suppliers, customers, employees, lessors or others, other than changes in the
ordinary course of business, none of which have had or will have a Material
Adverse Effect on the Company, in the aggregate.
3.23.2 There has been no Material damage, destruction or loss to the
assets, properties, or business of the Company, whether or not covered by
insurance.
3.23.3 The business of the Company has been operated in the ordinary course
and consistent with its prior practices.
3.23.4 The books, accounts and records of the Company have been maintained
in the usual, regular and ordinary manner on a basis consistent with prior years
and with the basis in which the Financial Statements were prepared.
3.23.5 There has been no declaration, setting aside or payment of any
dividend or other distribution on or in respect of the Capital Stock of the
Company, nor has there been any direct or indirect redemption, retirement,
purchase or other acquisition of any of the Capital Stock or other securities of
the Company.
3.23.6 The Company has not discontinued or determined to discontinue
selling any products or services previously sold by the Company, the sales of
which have been Material to the Company.
3.23.7 There has been no Lien (other than Liens for current Taxes which are
not yet due and payable) created on or in the assets of the Company.
3.23.8 There has been no sale, transfer, lease or other disposition of any
asset of the Company to any Related Party or, except in the ordinary course of
the Company's business, to any other Person, and no debt to, or Material claim
or right of, the Company has been canceled, compromised, waived or released.
3.23.9 There has been no amendment, termination or waiver of, or any notice
of any amendment, termination or waiver of, any right of the Company under any
Company Contract or under any franchise, certificate, license, permit or
authorization from any Government, and there has been no amendment to the
Charter Documents or bylaws of the Company.
3.23.10 The Company has not delayed or postponed the payment of any
accounts payable or other Liabilities outside the ordinary course of business.
3.23.11 The Company has not paid or committed to pay any bonus,
profit-share or other extraordinary compensation payment or other arrangement
(except in the ordinary course of business and consistent with past practices),
nor has the Company entered into any agreement, contract or commitment with any
Company Shareholder or any Related Party or amended the terms of any existing
agreement, contract or commitment with any Company Shareholder or any Related
Party.
3.23.12 There has been no change in the authorized, issued or outstanding
Capital Stock or other securities of the Company.
<PAGE>
3.24 Bank Accounts and Safe Deposit Boxes. The Disclosure Memorandum
lists each bank in which the Company maintains an account or safe deposit box,
the account numbers, and the names of all persons authorized to draw thereon or
have access thereto.
4. Representations and Warranties of AremisSoft Corporation. As an
inducement to the Company and the Company Shareholders to enter into and perform
this Agreement, AremisSoft Corporation on behalf of itself and its wholly owned
subsidiary, AremisSoft (E.E. M.E. A.) Limited, hereby represents and warrants as
follows:
4.1. Organization. AremisSoft Corporation is a corporation duly organized
and validly existing under the Laws of Delaware, USA. AremisSoft (E.E. M.E. A.)
Limited is a corporation wholly-owned by AremisSoft Corporation, directly or
indirectly, duly organized and validly existing under the laws of Cyprus.
4.2. Authorization. No Inconsistent Agreements. AremisSoft Corporation has
full corporate power and authority to execute and deliver this Agreement and to
its obligations thereunder. This Agreement constitutes the legal, valid and
binding obligation of AremisSoft Corporation, enforceable against AremisSoft
Corporation in accordance with its terms, except as that enforceability may be
(i) limited by any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and
(ii) subject to general principles of equity (regardless of whether that
enforceability is considered in a proceeding in equity or at law).
4.3. Consents. The execution, delivery and performance by AremisSoft
Corporation of this Agreement and the consummation of the transactions
contemplated herein does not require the consent, approval or action of, or any
filing with or notice to, any Government or other Person.
5. Covenants Extending to the Closing Date.
5.1. Access and Cooperation; Due Diligence.
5.1.1. From the date hereof and until the Closing Date, the Company will
(i) afford to the Representatives of AremisSoft reasonable access to all the key
employees, sites, properties, books and records of the Company and the Company
Subsidiaries, (ii) AremisSoft with such additional financial and operating data
and other information relating to the business and properties of each of the
Company and the Company Subsidiaries as AremisSoft may from time to time
reasonably request, and (iii) cooperate with AremisSoft and its Representatives
in the preparation of any documents or other material that may be required in
order to consummate the transactions contemplated by the Agreement.
5.1.2. Each of the Company and the Company Shareholders will use their best
efforts to secure, as soon as practicable after the date hereof, all approvals
or consents of third persons as may be necessary to enable them to consummate
the transactions contemplated hereby. AremisSoft will use its best efforts to
secure, as soon as practicable after the date hereof, all approvals or consents
of third persons as may be necessary to enable AremisSoft to consummate the
transactions contemplated hereby.
5.1.3. If this Agreement is terminated pursuant to Section 8 of this
Agreement, AremisSoft will promptly return all written Confidential Information
of Company it possess to the Company.
5.2 Conduct of Business Pending the Closing Date . Except as and only to
the extent set forth in Disclosure Memorandum, from the date hereof and until
the Closing Date, the Company will, and will cause each Company Subsidiary to:
<PAGE>
5.2.1 carry on its business in substantially the same manner as it has
heretofore and not introduce any new methods of management, operation or
accounting that in the aggregate are Material to the Company or the Company
Shares;
5.2.2 maintain its properties and facilities, including those held under
leases, in as good working order and condition as at present, ordinary wear and
tear excepted;
5.2.3 promptly perform all its obligations under agreements relating to or
affecting its business, assets, properties and other rights;
5.2.4 keep in full force and effect without interruption all of its present
insurance policies or other comparable insurance coverage;
5.2.5 use reasonable commercial efforts to (i) maintain and preserve its
business organization intact; (ii) retain its present employees; and (iii)
maintain its relationships with suppliers, customers and others having business
relations with it; and
5.2.6 comply with all applicable Laws.
5.3 Prohibited Activities. Except as and only to the extent set forth in
the Disclosure Memorandum, from the date hereof and until the Closing Date ,
without the prior written consent of AremisSoft, the Company will not, and will
not permit any Company Subsidiary to,:
5.3.1 make any change in its Charter Documents;
5.3.2 issue any of its Company Shares or issue or otherwise create any of
its Derivative Securities;
5.3.3 make any Restricted Payment;
5.3.4 make any investments in the Company Shares, Derivative Securities or
Indebtedness of any Person;
5.3.5 enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures in a single transaction or
a series of related transactions involving an aggregate amount of more than
twenty-five Thousand Dollars ($25,000) otherwise than in the ordinary course of
its business and consistent with its past practice;
5.3.6 increase or commit or promise to increase the Cash Compensation
payable or to become payable to any officer, director, shareholder, employee or
agent, consultant or independent contractor of the Company and the Company
Subsidiaries or make any discretionary bonus or management fee payment to any
such Person, except bonuses or salary increases to employees (other than the
Company Shareholders or their Immediate Family Members) at the times and in the
amounts consistent with its past practice;
5.3.7 create, assume or permit to be created or imposed any Liens
upon any of its assets or properties, whether now owned or hereafter acquired,
except for purchase money Liens incurred in connection with the acquisition of
equipment with an aggregate cost not in excess of Twenty-Five Thousand Dollars
($25,000) and necessary or desirable for the conduct of the business of the
Company and the Company Subsidiaries;
5.3.8 (i) adopt, establish or terminate any Employee Plan; or (ii) take any
discretionary action, or omit to take any contractually required action, if that
action or omission could either (A) deplete the assets of any Employee Plan, or
(B) increase the liabilities or obligations under any such Employee Plan;
<PAGE>
5.3.9 sell, assign, lease or otherwise transfer or dispose of any of its
owned or leased property or equipment otherwise than in the ordinary course of
its business and consistent with its past practice;
5.3.10 negotiate for the acquisition of any business or the start-up of any
new business;
5.3.11 merge, consolidate or effect a share exchange with, or
agree to merge, consolidate or effect a share exchange with, any other Entity;
5.3.12 waive any of its rights or claims that in the aggregate are Material
to the Company, provided that it may negotiate and adjust invoices in the course
of good faith disputes with customers in manner consistent with past practice;
5.3.13 commit breaches that in the aggregate are Material to the Company or
amend or terminate any Company Contract or any of its Governmental Approval; or
5.3.14 enter into any other transaction (i) outside the ordinary course of
business and consistent with its past practice, or (ii) prohibited hereby.
5.4 No Shop. Each of the Company and the Company Shareholders agree that,
from the date hereof and until the first to occur of the Closing Date or the
termination of this Agreement in accordance with Section 8 below, neither the
Company nor any Company Shareholder, nor any of their respective officers,
directors or shareholders will, and the Company and each Company Shareholder
will direct and use their reasonable best efforts to cause each of their
respective Representatives not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including any proposal or offer to the Company Shareholders) with respect
to a merger, acquisition, consolidation or similar transaction involving the
Company Shares, or any purchase of all or any significant portion of the assets
or any equity securities of, the Company (any such proposal or offer being an
"Acquisition Proposal") or engage in any activities, discussions or negotiations
concerning, or provide any Confidential Information respecting, the Company, or
a Company Subsidiary, or have any discussions with, any Person relating to an
Acquisition Proposal or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. The Company and each Company Shareholder
will: (i) immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and each will take the steps necessary to inform the
Persons referred to in the first sentence of this Section of the obligations
undertaken in this Section, and (ii) notify AremisSoft immediately if any such
inquiries or proposals are received by, any such information is requested from
or any such discussions or negotiations are sought to be initiated or continued
with the Company or any Company Shareholder.
5.5 Notification of Certain Matters. The Company Shareholders and the
Company will give prompt notice to AremisSoft of (i) the existence or occurrence
of each condition or state of facts which will or reasonably could be expected
to cause any representation or warranty of the Company or any Company
Shareholder contained herein to be untrue or incorrect in any Material respect
on or prior to the Closing Date, and (ii) any Material failure of any Company
Shareholder or the Company to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by that Person hereunder. AremisSoft
will give prompt notice to the Company of (i) the existence or occurrence of
each condition or state of facts which will or reasonably could be expected to
cause any representation or warranty of AremisSoft contained herein to be untrue
or inaccurate on or prior to the Closing Date, and (ii) any Material failure of
AremisSoft to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder. The delivery of any notice pursuant
to this Section will not be deemed to (i) modify the representations or
warranties herein of the party delivering that notice, or any other party, which
modification may be made only pursuant to Section 11.7 of this Agreement, or
(ii) limit or otherwise affect the remedies available hereunder to the party
receiving that notice.
5.6 Supplemental Information. Each of the Company and the Company
Shareholders agree that, with respect to the representations and warranties of
that party contained in this Agreement, that party will have the continuing
<PAGE>
obligation until the Closing to provide AremisSoft promptly with such additional
supplemental information (collectively, the "Supplemental Information"), in the
form of (i) amendments to then existing Disclosure Memorandum, or (ii)
additional Schedules, as would be necessary, in light of the circumstances,
conditions, events and state of facts then known to the Company or any Company
Shareholder, to make each of those representations and warranties true and
correct as of the Effective Date. For the purpose only of determining whether
the conditions to the obligations of AremisSoft which are specified in Section
6.3 have been satisfied, the Disclosure Memorandum as of the Closing Date will
be deemed to be the Disclosure Memorandum as of the date hereof as amended or
supplemented by the Supplemental Information provided to AremisSoft prior to the
Closing pursuant to this Section; provided, however, that if the Supplemental
Information so provided discloses the existence of circumstances, conditions,
events or state of facts which, in any combination thereof, (i) have had a
Material Adverse Effect in the sole judgment of AremisSoft (which will be
conclusive for purposes of this Section), or (ii) are having or will have a
Material Adverse Effect, AremisSoft will be entitled to terminate this Agreement
pursuant to Section 8.14); and provided, further, that if AremisSoft is entitled
to terminate this Agreement pursuant to Section 8.14. but elects not to do so,
it will be entitled to treat as Indemnified Losses (which treatment will not
prejudice the right of any Company Shareholder to contest the Indemnified
Losses), as applicable, all which are attributable to the circumstances,
conditions, events and state of facts first disclosed herein after the date
hereof in the Supplemental Information.
6. Conditions to the Closing and the Consummation of the Transactions
Contemplated Hereby.
6.1. Conditions to the Obligations of Each Party. The obligation of each
party hereto to take the actions contemplated to be taken by that party at the
Closing is subject to the satisfaction on or before the Closing Date or written
waiver pursuant to the provisions of this Agreement of each of the following
conditions:
6.1.1. No Litigation shall be pending on the Closing Date to restrain,
prohibit or otherwise interfere with, or to obtain Material Damages or other
relief from AremisSoft in connection with the consummation of the transactions
contemplated by this Agreement; and
6.1.2. All Governmental Approvals required to be obtained by any of the
Company Shareholders, the Company, and AremisSoft as a result of this Agreement
shall have been obtained. 6.2 Conditions to the Obligations of the Company and
the Company Shareholders. The obligations of the Company and each Company
Shareholder with respect to actions to be taken by them on or before the Closing
Date are subject to the satisfaction on or before the Closing Date, or the
written waiver by the Company on behalf of itself and each Company Shareholder
pursuant to the provisions of this Agreement of (i) all the conditions of
Section 6.1 set forth, and (ii) all the following conditions:
6.2.1 All the representations and warranties of AremisSoft in this
Agreement shall be true and correct as of the Closing Date as though made at
that time.
6.2.2 AremisSoft shall have delivered to the Company Shareholders executed
copies of the officer's certificate respecting the representations and
warranties of AremisSoft in this Agreement and compliance with the covenants of
AremisSoft in Section 5 of this Agreement and in a form substantially similar to
the form thereof attached as an exhibit to the Closing Memorandum.
6.2.3 AremisSoft shall have delivered the Purchase Price it is obligated to
deliver pursuant to Section 1.2 of this Agreement.
6.3 Conditions to the Obligations of AremisSoft. The obligations of
AremisSoft with respect to actions to be taken by it on or before the Closing
Date are subject to the satisfaction on or before the Closing Date, or the
written waiver by AremisSoft pursuant to the terms of this Agreement, of (i) all
the conditions of Section 6.1 above set forth, and (ii) all the following
conditions: 6.3.1 All the representations and warranties of the Company
Shareholders and the Company in this Agreement shall be true and correct as of
the Closing Date as though made at that time.
<PAGE>
6.3.2 The Company Shareholders and the Company shall have delivered to
AremisSoft:
(i) a certificate, signed by an authorized officer of the Company
Shareholders, or individually signed if the Company Shareholder is not an
Entity, respecting the representations and warranties of the Company
Shareholders and the Company in this Agreement and compliance with the covenants
of the Company Shareholders and the Company in Section 5 of this Agreement and
in a form substantially similar to the form thereof attached as an exhibit to
the Closing Memorandum;
(ii) a certificate, signed by an authorized officer of the Company
respecting the representations and warranties of the Company Shareholders and
the Company in this Agreement and compliance with the covenants of the Company
Shareholders and the Company in Section 5 of this Agreement and in a form
substantially similar to the form thereof attached as an exhibit to the Closing
Memorandum;
(iii) with respect to the Company and any Company Subsidiaries, a
certificate, dated as of a current date, duly issued by the appropriate
Government in its Organization State and, in each other jurisdiction the
Disclosure Memorandum lists for it, showing it to be in good standing and
authorized to do business in its Organization State and those other
jurisdictions set forth in the Disclosure Memorandum; and
(iv) the Company Shares, duly endorsed with signature guarantees acceptable
to AremisSoft, together with a any other document reasonably necessary to
complete the transfer of the Company Shares to AremisSoft.
7. Indemnities.
7.1. Indemnification by the Company Shareholders.
7.1.1. In accordance with and subject to the provisions of this Section 7,
the Company Shareholders shall indemnify and hold harmless the Company,
AremisSoft, their respective Affiliates, and the officers, directors, agents and
employees of the Company, AremisSoft and their Affiliates (collectively, the
"Indemnitees") from and against and in respect of any and all loss, damage,
diminution in value, Liability, cost and expense, including reasonable
attorneys' fees and amounts paid in settlement (collectively, the Indemnified
Losses"), suffered or incurred by any one or more of the Indemnitees by reason
of, or arising out of:
(i) any misrepresentation or breach of representation or warranty contained
in this Agreement, any other document delivered by the Company Shareholders to
the Indemnitees under this Agreement, the Disclosure Memorandum or any
certificate, instrument, schedule, agreement or other writing delivered by or on
behalf of any Company Shareholder or the Company pursuant to this Agreement or
in connection with the transactions contemplated herein, or the breach of any
covenant or agreement of any Company Shareholder or the Company contained in
this Agreement or any certificate, instrument, schedule, agreement or other
writing delivered to the Indemnitees by or on behalf of any Company Shareholder
or the Company pursuant to this Agreement or in connection with the transactions
contemplated herein;
(ii) any and all Liabilities of the Company arising or incurred prior to
the Closing Date except for any Liability arising from those matters described
in the Disclosure Memorandum;
(iii) any and all Actions, Orders, assessments, fees and expenses incident
to any of the foregoing or incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnification.
<PAGE>
7.1.2 The Company Shareholders shall reimburse Indemnitees on demand for
any Indemnified Losses suffered by the Indemnitees, based on the judgment of any
court of competent jurisdiction or pursuant to a bona fide compromise or
settlement of claims, demands, or actions in respect of any Indemnified Losses.
The Company Shareholders shall have the opportunity to defend at their expense
any claim, action or demand for which the Indemnitees claim indemnity against
the Company Shareholders; provided that (i) the defense is conducted by
reputable counsel approved by the Indemnitees, which approval shall not be
unreasonably withheld or delayed, (ii) the defense is expressly assumed in
writing within ten (10) days after written notice of the claim, action or demand
is given to the Company Shareholders, and (iii) counsel for the Indemnitees may
participate at all times and in all proceedings (formal and informal) relating
to the defense, compromise and settlement of the claim, action or demand at the
expense of the Indemnitees.
7.2 Limitations and Payment on Claims. No claim shall be brought by any
Indemnitee under this Section 7 for breach of any representation or warranty,
and none of them shall be entitled to receive any payment with respect thereto,
unless and until the aggregate amount of such claim(s) equals or exceeds Twenty
Five Thousand Dollars ($25,000), and after such time as the amount of such
claim(s) equals or exceeds Twenty Five Thousand Dollars ($25,000), the
Indemnitees may assert all such prior and all future claims against the Company
Shareholders hereunder, and any such delay in asserting a claim or claims
against the Company Shareholders pursuant to this Section shall in no way
prejudice the Indemnitees under any statute or period of limitations or similar
Law or under any principle of equity.
7.3 No Liability or Contribution by the Company. The Company shall not have
any Liability to any Company Shareholder as a result of any misrepresentation or
breach of representation or warranty by the Company contained in this Agreement,
any other document delivered pursuant to this Agreement, the Disclosure
Memorandum or any certificate, instrument, agreement or other writing delivered
by or on behalf of any Company Shareholder or the Company pursuant to this
Agreement or in connection with the transactions contemplated herein, or the
breach of any covenant or agreement of any Company Shareholder or the Company
contained in this Agreement, any other document delivered pursuant to this
Agreement, or the Disclosure Memorandum or any certificate, instrument,
agreement or other writing by or on behalf of any Company Shareholder or the
Company pursuant to the provisions of this Agreement or in connection with the
transactions contemplated herein, and no Company Shareholder shall have any
right of indemnification or contribution against the Company on account of any
event or condition occurring or existing prior to or on the date hereof or prior
to the Closing Date.
7.4 Survival. The representations and warranties of each Company
Shareholder and the Company contained in this Agreement, any other document
delivered pursuant to this Agreement, the Disclosure Memorandum or in any
certificate, instrument, agreement or other writing delivered by or on behalf of
any Company Shareholder or the Company pursuant to this Agreement or in
connection with the transactions contemplated herein shall survive any
investigation heretofore or hereafter made by or on behalf of AremisSoft and the
consummation of the transactions contemplated herein and all such
representations and warranties shall be of no further force and effect after the
expiration of five (5) years from the date of the Closing Date ("Survival
Period"). Anything to the contrary notwithstanding, a claim for indemnification
which is made but not resolved prior to the expiration of the Survival Period
may be pursued and resolved after such expiration.
7.5 Hold Back Amount. Each of the Company Shareholders agrees that
AremisSoft shall have the right to off set all or a portion of the Hold Back
Amount approximately equal in value to the total amount of any Indemnified
Losses which are discovered prior to June 30, 2000. To the extent that the
Indemnified Losses exceed the value of the Hold Back Amount, or in the event the
Indemnified Losses are discovered after the Hold Back Amount has been paid to
the Company Shareholders, the Company Shareholders shall make payment for
Indemnified Losses under this Section 7 in cash legal tender of the United
States of America to the extent sufficient to satisfy all Indemnified Losses.
<PAGE>
8. Termination of the Agreement.
8.1. Termination. This Agreement may be terminated at any time prior to the
Closing solely:
8.1.1. by the mutual consent of AremisSoft and the Company Shareholders;
8.1.2. by the Company Shareholders or the Company, on one hand, or by
AremisSoft on the other hand, if the transactions contemplated by this Agreement
to take place at the Closing shall not have been consummated by January 31,
2000, unless the parties shall have agreed in writing to a different date;
8.1.3. by the Company Shareholders or the Company, on the one hand, or by
AremisSoft, on the other hand, if a Material breach or default is made by the
other party (or in the case of the Company Shareholder and the Company, any of
them ) in the observance or in the due and timely performance of any of the
covenants, agreements or conditions contained herein; or
8.1.4. by AremisSoft if the Company has suffered a Material Adverse Effect
not disclosed in the Disclosure Memorandum as of the date of this Agreement.
8.2. Liabilities in Event of Termination. If this Agreement is terminated
pursuant to Section 8.1, there shall be no Liability or obligation on the part
of any party hereto except to the extent that such Liability is based on the
breach by that party of any of its representations, warranties or covenants set
forth in this Agreement.
9. Confidentiality Agreements; Prohibited Activities.
9.1. In order to induce AremisSoft to enter into this Agreement and make
payments as provided herein, each Company Shareholder agrees that, for the
period of five (5) years immediately following the date of the Closing, he will
not, without the prior written consent of AremisSoft, for his own account or
jointly with another, directly or indirectly, for or on behalf of any Person, as
principal, agent or otherwise:
9.1.1. own, control, manage or otherwise participate in the ownership,
control or management of a business engaged in the business of selling any
product or providing any services in competition with the Company, AremisSoft or
any of its subsidiaries within any Territory in which the Company was engaged in
business on the date of the Closing (for purposes of this Section 9, Territory
will be the online cyber community of businesses which the Company is a part of
that are web enabled through the Internet);
9.1.2. solicit, call upon or attempt to solicit the patronage of any person
having an office or place of business within the Territory and to whom the
Company has sold or has provided services on, or during the two (2) year period
prior to, the date of the Closing, for the purpose of obtaining the patronage of
any such person for the purchase of such services, except as an employee or on
behalf of AremisSoft or the Company or their respective Affiliates; or
9.1.3. solicit or induce, or in any manner attempt to solicit or induce,
any person employed or engaged by AremisSoft or the Company in any capacity
(including, without limitation, as an employee, distributor, independent
contractor or agent), to leave such employment or engagement, whether or not
such employment or engagement is pursuant to a contract or is at will.
9.2 Notwithstanding anything contained herein to the contrary, it shall not
be a breach of the covenants contained in this Section 9 for any Company
Shareholder to own not more than two percent (2%) of the equity interests of any
person described in Section 9.1.1 above whose equity interests are publicly
traded.
<PAGE>
9.3 The parties hereto each agree that this Section 9 imposes a reasonable
restraint on the Company Shareholders in light of the activities and business of
AremisSoft on the date hereof, the current business plan of AremisSoft and the
consideration each Company Shareholder received as a result of this acquisition.
9.4 The covenants in this Section 9 are severable and separate, and the
unenforceability of any specific covenant in this Section 9 is not intended by
any party hereto to, and will not, affect the provisions of any other covenant
in this Section 9. If any court of competent jurisdiction determines that the
scope, time or territorial restrictions Section 9.1 sets forth are unreasonable
as applied to any Company Shareholder, the parties hereto including that Company
Shareholder, acknowledge their mutual intentional and agreement that those
restrictions be enforced to the fullest extent the court deems reasonable, and
thereby will be reformed to that extent as applied to that Company Shareholder
and any other Company Shareholder similarly situated.
9.5 Each of the Company Shareholders, for themselves and their successors
and assigns, agree to execute a Confidentiality Agreement in substantially
similar form to the form attached as an exhibit to the Closing Memorandum.
10. Arbitration of Disputes.
10.1. All disputes, controversies or claims between the parties hereto,
arising under, out of, or in any way relating to this Agreement including
without limitation, the execution, delivery, validity, enforceability,
performance, breach, discharge, interpretation or construction of this
Agreement, that are not settled within thirty (30) days (or such longer period
as may be mutually agreed upon) from the date that either party notifies the
other in writing that such dispute or disagreement exists shall be finally
settled by arbitration in a proceeding conducted under the then existing
UNCITRAL Arbitration Rules by three (3) arbitrators appointed and acting in
accordance with said rules and the procedure set forth herein, whose award shall
final and binding upon the parties.
10.2. Each party may select one (1) arbitrator, and the two (2) selected
arbitrators shall choose a third arbitrator to serve as chairman of the
arbitration. If the party fails to select an arbitrator within ten (10) days
after the arbitration is sought, or the two (2) arbitrators fail to select a
third arbitrator within ten (10) days after they are both appointed, the
President of the Stockholm Chamber of Commerce shall make the appointment.
10.3. The arbitrators to be appointed herein shall have no interest in this
Agreement or either of the parties, and need not be a resident of the country of
the parties or among those individuals on the list of any commercial arbitration
association. Any challenge to the suitability of an arbitrator shall be decided
by the President of the Stockholm Chamber of Commerce whose decision on the
matter shall be final.
10.4. The cost of any arbitration conducted pursuant to this Agreement
shall be borne equally by the parties, provided, however, that each party shall
pay its own attorney's fees. Notwithstanding the foregoing, as part of the
arbitration award, the arbitrators may include in the award the reasonable
attorneys' fees and cost of the arbitration to the prevailing party.
10.5. The arbitrators shall endeavor to issue a decision in writing
suitable for enforcement under international law within six months from the date
the party seeking arbitration files its written claim under the UNCITRAL
Arbitration Rules. The decision of a majority of the arbitrators shall be final
and binding upon the parties and neither party shall seek recourse to a court of
law or to other authorities to appeal or request revision of the award. Judgment
upon the award returned by the arbitrators may be entered and enforced in any
court having jurisdiction over the parties or the parties' assets.
10.6. The arbitration proceeding shall take place in Stockholm, Sweden, at
the premises of the Stockholm Chamber of Commerce Institute of Arbitration and
shall be conducted in the English language.
<PAGE>
11. Miscellaneous Provisions.
11.1. Notices. All notices required or permitted hereunder must be made in
writing, in the English language, and will be deemed to be delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom notice
is sent, or (ii) if delivered by mail (whether actually received or not), at the
close of business on the seventh London Business Day next following the day when
placed in the mail, postage prepaid, certified or registered, addressed to the
appropriate party or parties, at the address of such party or parties set forth
below (or at such other address as such party may designate by written notice to
all other parties in accordance herewith):
If to AremisSoft: AremisSoft Corporation
Goldsworth House
Denton Way
Goldsworth Park
Woking Surrey GU213LG
United Kingdom
Attn: Mr Roys Poyiadjis
with a copy to (which will not constitute notice for purposes of this
Agreement):
Scott E. Bartel, Esq.
Bartel Eng Linn & Schroder
300 Capitol Mall, Suite 1100
Sacramento, California 95814
Facsimile: (916) 442-3442
If to the Company Shareholders:
Still & Life GmbH
Bauernmarkt 24/36
Vienna
General Manager
Michael Poehn
Company Registration Nr. FN77768s Commercial Court Vienna
11.2 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted
successors and assigns. Neither the Company nor any Company Shareholder may
assign, delegate or otherwise transfer any of their rights or obligations under
this Agreement without the written consent of AremisSoft.
11.3 Partial Invalidity and Severability. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable Laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a Forum of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part thereof, shall constitute their
agreement with respect to the subject matter hereof and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally permissible, any illegal, invalid or unenforceable provision of this
Agreement shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable provision.
11.4 Waiver. Any term or condition of this Agreement may be waived at any
time by the party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such party. No failure on the part of
<PAGE>
any party hereto to exercise, and no delay in exercising any right, power or
remedy created hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy by either party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. No waiver by either party hereto of any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.
11.5 Headings. The headings of particular provisions of this Agreement are
inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
11.6 Number and Gender. Where the context requires, the use of the singular
form herein shall include the plural, the use of the plural shall include the
singular, and the use of any gender shall include any and all genders.
11.7 Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof, and
this Agreement contains the sole and entire agreement between the parties with
respect to the matters covered hereby. This Agreement shall not be altered or
amended except by an instrument in writing signed by or on behalf of the party
entitled to the benefit of the provision against whom enforcement is sought.
11.8 Governing Law. The Agreement and the rights and obligations of the
parties hereto shall be governed by and construed and enforced in accordance
with the substantive laws of the State of California (U.S.A.), without regard to
its conflicts of laws provisions thereof.
11.9 Counterparts; Signatures. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. This Agreement may be
signed by the parties in various locations and signatures sent to a party via
facsimile machine shall have equal dignity with the original signature for all
purposes.
11.10 Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified with respect thereto below:
"Action" shall mean any action, suit, Litigation, complaint, counterclaim,
claim, petition, mediation contest, or administrative proceeding, whether at
Law, in equity, in arbitration or otherwise, and whether conducted by or before
any Government or other Person.
"Affiliate" means, as to any specified Person, any other Person that,
directly or indirectly through one or more intermediaries or otherwise,
Controls, is controlled by or is under common Control with the specified Person.
"Affiliated Entity" or "Affiliated Entities" shall have the meaning set
forth in Section 3.17.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which commercial banks in the United States are required or authorized to be
closed.
"Capital Stock" means, with respect to: (i) any corporation, any share, or
any depositary receipt or other certificate representing any share, of an equity
ownership interest in that corporation, and (ii) any other Entity, any share,
membership or other percentage interest, unit of participation or other
equivalent (however designated) of an equity interest in that entity.
"Cash Compensation" means, as applied to any employee, non-employee
director or officer of, or any natural person who performs consulting or other
independent contractor services for, the Company or any Company Subsidiary, the
wages, salaries, bonuses (discretionary and formula), fees, and other cash
compensation paid or payable by the Company and each Company Subsidiary to that
employee or other natural person.
<PAGE>
"Charter Documents" means, with respect to any Entity, in each case as
amended, modified and supplemented at that time, (i) the articles or certificate
of formation, incorporation or organization (or the equivalent organizational
documents) of that Entity, (ii) by bylaws or limited liability company agreement
or regulations (or the equivalent governing documents) of that Entity, and (iii)
each document setting forth the designation, amount and relative rights,
limitations and preferences of any class or series of that Entity's Capital
Stock or of any rights in respect of that Entity's Capital Stock.
"Company Contracts" means all existing written and oral Material Agreements
and commitments of the Company, including, without limitation, all employment
and consulting contracts, union contracts, distributorship agreements,
agreements with suppliers and customers (except purchase or sale orders entered
into in the ordinary course of business involving the purchase or sale of goods
or services for not more than Ten Thousand Dollars ($10,000) and for a term of
not more than twelve (12) months), leases, licenses, employee benefit plans,
deferred compensation agreements, indentures, notes, bonds, mortgages, security
agreements, loan agreements, guarantees, franchise agreements, agreements in
respect of the issuance, sale, repurchase or transfer of the Company's Capital
Stock, bonds or other securities, powers of attorney, and any contract which
involves a payment by the Company of more than Ten Thousand Dollars ($10,000) or
has a term or requires performance by the Company over a period of more than
ninety (90) days.
"Company Intellectual Property" shall mean any Intellectual Property that
is owned by, or exclusively licensed to the Company or one of its subsidiaries
and shall include all Intellectual Property of the Acquired Businesses as
defined in the recitals to this Agreement.
"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of the Company or one of
its subsidiaries.
"Company Subsidiary" means at any time any Entity that is a Subsidiary of
the Company at that time.
"Confidential Information" means, with respect to any Person, all trade
secrets and other confidential, non-public and/or proprietary information of
that Person, including information derived from reports, investigations,
research, work in progress, codes, marketing and sales programs, capital
expenditure projects, cost summaries, pricing formulae, contract analyses,
financial information, projections, confidential filings with any Government and
all other confidential, non-public concepts, methods of doing business, ideas,
materials or information prepared or performed for, by or on behalf of that
Person.
"Control" means a Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of another Person,
whether through the ownership of voting Capital Stock, by contract or otherwise.
"Damages" to any Person means any cost, damage (including any
consequential, exemplary, punitive or treble damage) or expense (including
reasonable fees and actual disbursements by attorneys, consultants, experts or
other Representatives and Litigation costs) to, any fine of or penalty on or any
Liability (including loss of earnings or profits) of any other nature of that
Person.
"Derivative Securities" of a specified Entity means any Capital Stock, debt
security or other indebtedness of the specified Entity or any other Person which
is convertible into or exchangeable for, or any option, warrant or other right
to acquire, (i) any unissued Capital Stock of the specified Entity, or (ii) any
Capital Stock of the specified Entity which has been issued and is being held by
the Entity, directly or indirectly, as treasury Capital Stock.
"Disclosure Memorandum" means certain information regarding the Company and
the Company Shareholders which have been delivered by the Company Shareholders
and the Company pursuant to this Agreement. The Disclosure Memorandum shall be
deemed to be part of and qualify those sections in this Agreement which refer to
in the sections of the Disclosure Memorandum.
<PAGE>
"Employee Plan" shall have the meaning set forth in Section 3.19.
"Entity" means any sole proprietorship, corporation, partnership of any
kind having a separate legal status, limited liability company, business trust,
unincorporated organization or association, mutual company, joint stock company
or joint venture.
"Environmental Laws" shall mean all Laws, general or particular conditions,
requirements, decrees, and covenants relating to health, safety and the
environment, including, without limitation, Laws and covenants relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or Hazardous Materials or wastes
of every kind and nature into the environment (including without limitation
ambient air, surface water, ground water, soil and subsoil), or otherwise
relating to the manufacture, generation, processing, distribution, application,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes,
or to occupational or worker safety and health, and any and all Laws,
directives, guidelines, policies, plans, Orders, stipulations, provisions and
conditions of Environmental Permits, licenses, stipulations, certificates of
authorization, and other operating authorizations, notices or demand letters
issued, entered, promulgated or approved thereunder.
"Environmental Permits" shall mean all permits, licenses, certificates,
approvals, authorizations, regulatory plans or compliance schedules required by
applicable Environmental Laws, or issued by a Government pursuant to applicable
Environmental Laws, or entered into by agreement of the party to be bound,
relating to activities that affect human health or the environment, including,
without limitation, permits, licenses, certificates, approvals, authorizations,
regulatory plans and compliance schedules for air emissions, water discharges,
pesticide and herbicide or other agricultural chemical storage, use or
application, and Hazardous Material or Solid Waste generation, use, storage,
treatment and disposal.
"Financial Statements" shall have the meaning set forth in Section 3.07.
"Forum" shall mean any federal, national, state, local, municipal or
foreign court, governmental agency, administrative body or agency, tribunal,
private alternative dispute resolution system, or arbitration panel.
"GAAP" shall mean generally accepted accounting principles, consistently
applied in India.
"Government" means (i) any national, state, county, municipal or other
government, domestic or foreign, or any agency, board, bureau, commission,
court, department or other instrumentality of any such government, or (ii) any
Person having the authority under applicable Law to assess and collect Taxes for
its own account.
"Governmental Approval" means at any time authorization, consent, approval,
permit, franchise, certificate, license, implementing order or exemption of, or
registration or filing with, any Government, including any certification or
licensing of a natural person to engage in a profession or trade or a specific
regulated activity, at that time.
"Hazardous Material" shall mean any substance or material, including
without limitation raw materials, commercial products and wastes or waste
products that, because of its quantity, concentration, or physical, chemical or
infectious characteristics may cause or significantly contribute to an increase
in mortality or an increase in serious, irreversible or incapacitating illness,
or pose a substantial hazard to human health or the environment, including
without limitation petroleum and all substances and materials designated as
hazardous or toxic under any applicable Environmental Law.
<PAGE>
"Immediate Family Member" of a Company Shareholder means at any time: (i)
if that Company Shareholder is a natural person, any child or grandchild (by
blood or legal adoption) or spouse of that Company Shareholder at that time, or
any child of that spouse, and (ii) if that Company Shareholder is an Entity
whose ultimate beneficial owner is a natural person, or a natural person and his
spouse, any child or grandchild (by blood or adoption) or spouse at that time
(if not then an ultimate beneficial owner of that Entity), or any child of that
spouse, of the ultimate beneficial owner or owners.
"Improvements" shall mean all buildings, structures and other improvements
of any and every nature located on the Real Property and all fixtures attached
or affixed, actually or constructively, to the Real Property or to any such
buildings, structures or other improvements.
"Indemnified Losses" shall have the meaning set forth in Section 7.1.1.
"Indemnitees" shall have the meaning set forth in Section 6.1.1.
"Intellectual Property" shall mean any or all of the following and all
rights in, arising out of or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof, (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, software, source code, object code, technical data and
customer lists, and all documentation relating to any of the foregoing, (iii)
all copyrights, copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world, (iv) all industrial
designs and any registrations and applications therefor throughout the world,
(v) all trade names, logos, common law trademarks and service marks, trademark
and service mark registrations and applications therefor throughout the world,
(vi) all databases and data collections and all rights therein throughout the
world, (vii) all moral and economic rights of authors and inventors, however
denominated, throughout the world, and (viii) any similar or equivalent rights
to any of the foregoing anywhere in the world.
"Known," "to the knowledge of," "aware" or words of similar import employed
in this Agreement with reference to any individual or Entity shall be
conclusively presumed to mean that the individual or Entity has made reasonable
efforts under the circumstances to become knowledgeable; in the case of the
Company, "knowledge" shall be deemed to be the individual and collective
knowledge (as defined above) of its directors and senior officers and managers.
"Law" shall mean all federal, national, state, provincial, local, municipal
or foreign constitutions, statutes, rules, regulations, norms, ordinances, acts,
codes, legislation, treaties, conventions, common law principles, judicial
decisions and similar laws and legal requirements, whether of the United States
of America, India, or any other jurisdiction as in effect from time to time.
"Leased Real Property" shall have the meaning set forth in Section 3.12.
"Liability" shall mean any liability or obligation whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due.
"Lien" shall mean any mortgage, pledge, hypothecation, security interest,
encumbrance, claim, restriction on use, lien or charge of any kind, or any
rights of others, however evidenced or created (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the lien notice records or other similar legislation
of any jurisdiction).
"Litigation" means any action, case, proceeding, claim, grievance, suit or
investigation or other proceeding conducted by or pending before any Government
or any arbitration proceeding.
<PAGE>
"Material" means, as applied to any Entity or the Company, of a like or
character affecting or effecting the business, operations, property, property or
assets, liabilities, financial condition or result of operations of that Entity
and its Subsidiaries considered as a whole, as the case may be, which a
reasonable person would like to know as part of the total mix of information
considered by such person in making a decision to acquire the Company Shares.
"Material Adverse Effect" means, with respect to the consequences of any
fact or circumstance (including the occurrence or non-occurrence of any event)
to the Company, that such fact or circumstance has caused, is causing or will
cause, directly, indirectly or consequentially, singly or in the aggregate with
other facts and circumstances, any Damages in excess of Twenty-Five Thousand
Dollars ($25,000).
"Material Agreement" of any Entity means any contract or agreement (i) to
which that Entity or any of its Subsidiaries is a party, or by which that Entity
or any of its Subsidiaries is bound or to which any property or assets of that
Entity or any of its Subsidiaries is subject, and (ii) which is Material to that
Entity.
"Orders" shall mean all applicable orders, writs, judgments,
injunctions, decrees, rulings, consent agreements, and awards of or by any Forum
or entered by consent of the party to be bound.
"Organization State" means, as applied to (i) any corporation, its state or
other jurisdiction of incorporation, (ii) any limited liability company or
limited partnership, the state or other jurisdiction under whose laws it is
formed, organized and existing in that legal form, and (iii) any other Entity,
the state or other jurisdiction whose laws govern that Entity's internal
affairs.
"Owned Real Property" shall have the meaning set forth in Section 3.12.
"Person" shall include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a Government.
"Real Property" shall have the meaning set forth in Section 3.12.
"Real Property Lease" shall have the meaning set forth in Section 3.12.
"Reference Date" shall have the meaning set forth in Section 3.07.
"Reference Date Balance Sheets" shall have the meaning set forth in Section
3.07.
"Registered Intellectual Property" means all United States, Indian,
international and foreign (i) patents and patent applications (including
provisional applications), (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks, (iii) registered copyrights and applications for
copyright registration, and (iv) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any state, government or other public legal
authority.
"Related Parties" shall have the meaning set forth in Section 3.22.
"Representatives" means, with respect to any Person, the directors,
officers, employees, affiliates, accountants (including independent certified
public accounts), advisors, attorneys, consultants or other agents of that
Person, or any other representatives of that Person of any of those directors,
officers, employees, Affiliates, accountants, (including independent certified
accountants), advisors, attorneys, consultants, or other agents.
"Restricted Payment" means, with respect to any Entity at any time, any of
the following that Entity effects: (i) any declaration or payment of any
dividend or other distribution, direct or indirect, on account of any Capital
<PAGE>
Stock of that Entity or any Affiliate of that Entity, or (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value of, or
any direct or indirect purchase, payment or sinking fund or similar deposit for
the redemption, retirement, purchase or other acquisition for value of, or to
obtain the surrender of, any then outstanding Capital Stock of that Entity or
any Affiliate of that Entity or any then outstanding warrants, options, or other
rights to acquire or subscribe for or purchase unissued or treasury Capital
Stock of that Entity or any Affiliate of that Entity.
"Returns" shall have the meaning set forth in Section 3.17.
"Solid Waste" shall mean any garbage, refuse, sludge from a waste treatment
plant, water supply treatment plant, or air pollution control facility and other
discarded material, including solid, liquid, semi-solid, or contained gaseous
material resulting from industrial, commercial, mining and agricultural
operations, and from community activities.
"Subsidiary" of any specified Person at any time, means any Entity a
majority of the Capital Stock of which is at that time owned or controlled,
directly or indirectly, by the specified Person.
"Supplemental Information" shall have the meaning set forth in Section 5.6.
"Survival Period" shall have the meaning set forth in Section 7.4.
"Taxes" shall mean any present or future taxes, levies, imposts duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including without limitation income, gross receipts, excise, property, sales,
use, customs, value added, consumption, transfer, license, payroll, employee
income, withholding, Social Security, and franchise taxes, now or hereafter
imposed or levied by the United States of America, India, or any other
Government or by any department, agency or other political subdivision or taxing
authority thereof or therein, all deposits required in connection therewith, and
all interests, penalties, additions to tax, and other similar Liabilities with
respect thereto.
"Wholly Owned Subsidiary" means any corporation or other Entity, all of
whose outstanding Capital Stock on a fully diluted basis is owned by another
Person, directly or indirectly.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement as of the date first above written.
"AREMISSOFT"
AremisSoft Corporation
By:
Lycourgos K. Kyprianou
Title: Chairman
AremisSoft (E.E. M.E. A.) Limited
By:
Lycourgos K. Kyprianou
Title: Chairman
THE "COMPANY"
e-ChaRM Pvt Ltd
By: Benley Noronah
Title: Managing Director
THE "COMPANY SHAREHOLDERS"
Still & Life GmbH
Name: Michael Poehn
Title: General Manager
