<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report: January 1, 1997
ASA INTERNATIONAL, LTD.
(Exact name of registrant as specified in its charter)
Delaware 0-14741 02-0398205
- ---------------------------- ------------- -------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10 Speen Street, Framingham, Massachusetts 01701
--------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number Including Area Code: (508) 626-2727
--------------
<PAGE> 2
TABLE OF CONTENTS
FORM 8-K
January 1, 1997
<TABLE>
<CAPTION>
Item Page
<S> <C> <C>
Item 2. Disposition of Assets 1
Item 7. Exhibit and Financial Statements 1
Signature 2
Exhibit and Financial Statements E-1
</TABLE>
-i-
<PAGE> 3
Item 2. Disposition of Assets
ASA International Ltd. (the "Registrant") has completed the disposition
of substantially all of the assets and liabilities of the Company's
International Trade and Transportation Systems Division (the "International
Division") to TradePoint Systems LLC ("TradePoint"), a New Hampshire limited
liability company. In exchange for the assets of the International Division and
the assumption of the International Division's liabilities, the Registrant
received a 16% membership interest in TradePoint and a subordinated promissory
note in the face amount of $600,000.00 from TradePoint (the "Note"). The
remaining 84% interest in TradePoint is owned by Christopher J. Crane, the
former president of and a former director of the Registrant. Simultaneously
with the completion of this transaction, Mr. Crane resigned all of his
positions with the Registrant. In exchange for his interest in TradePoint, Mr.
Crane (i) contributed all of the Registrant's common stock, $.01 par value per
share (the "Common Stock") owned by him, totaling 665,597 shares; (ii) assigned
to the Registrant a 16% partnership interest in the ASA Investment Partnership,
a partnership by and among Mr. Crane, the Registrant, and Alfred C. Angelone,
the Registrant's Chief Executive Officer and Chairman; and (iii) cancelled
all of his options to purchase 245,000 shares of Common Stock. The
consideration to be paid was determined by negotiations between the parties and
was independently evaluated on behalf of the Registrant by Shields & Company,
Inc. The Registrant will account for its investment in TradePoint under the
cost method.
In connection with the transaction, TradePoint granted to the
Registrant an irrevocable proxy covering the Registrant's Common Stock owned by
TradePoint. The Registrant has the right to cause TradePoint to redeem the 16%
membership interest in TradePoint held by the Registrant by notice given on or
after March 1, 2002, in exchange for the Registrant's Common Stock held by
TradePoint and the fair market value of the 16% membership interest in
TradePoint. TradePoint has the right to redeem the Registrant's membership
interest by notice given or after December 31, 2001 in exchange for the
Registrant's Common Stock held by it and the greater of $400,000 or the fair
market value of the 16% membership interest in TradePoint.
Item 7. Exhibit and Financial Statements
The following exhibits and financial statements are filed herewith:
a. Financial statements of businesses acquired (not
applicable).
b. Pro-forma financial information for the Registrant.
The following unaudited pro forma condensed consolidated
financial statements are filed with this report:
Pro Forma Condensed Consolidated Balance Sheet at
September 30, 1996 F-1 to F-2.
Pro Forma Condensed Consolidated Statements of Operations.
Year Ended December 31, 1995 F-3
Nine Months Ended September 30, 1996 F-4
The Pro Forma Condensed Consolidated Balance Sheet of the
Registrant as of September 30, 1996 reflects the financial
position of the Registrant after giving effect to the disposition
of the assets and assumption of the liabilities discussed in Item
2 and assumes the disposition took place on September 30, 1996.
The Pro Forma Condensed Consolidated Statements of Operations for
the fiscal year ended December 31, 1995 and the nine months ended
September 30, 1996 assume that the disposition occurred on
January 31, 1995 and are based on the operations of the
Registrant for the year ended December 31, 1995 and the nine
months ended September 30, 1996, respectively.
The unaudited pro forma condensed consolidated financial
statements have been prepared by the Registrant based upon
assumptions deemed proper by it. The unaudited pro forma
condensed consolidated financial statements are not necessarily
indicative of the future financial position or results of
operations or actual results that would have occurred had the
transactions been in effect as of the dates presented.
The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the Registrants
historical financial statements and related notes.
c. Exhibit.
Exhibit
No. Title
- ------- -----
2 Reorganization Agreement by and between the Registrant,
TradePoint and Mr. Crane.
-1-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ASA International, Ltd.
By:/s/ Alfred C. Angelone
-------------------------
Alfred C. Angelone,
Chief Executive Officer
Date: January 15, 1997
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<PAGE> 5
PRO FORMA FINANCIAL INFORMATION
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
----Pro Forma Adjustments----
Historical TradePoint(a) Other Pro Forma
----------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 442,916 $ -- $ -- $ 442,916
Receivables - net 4,840,632 1,243,925 -- 3,596,707
Computer hardware held for resale 98,599 -- -- 98,599
Other current assets 914,843 107,199 66,279(b) 873,923
----------- ---------- ---------- -----------
TOTAL CURRENT ASSETS 6,296,990 1,351,124 66,279 5,012,145
PROPERTY AND EQUIPMENT - NET 4,626,181 192,400 -- 4,433,781
SOFTWARE - NET 5,811,079 1,547,318 -- 4,263,761
COST EXCEEDING NET ASSETS
ACQUIRED - NET 1,343,513 413,325 -- 930,188
OTHER ASSETS 606,634 -- -- 606,634
NOTE RECEIVABLE, LESS
CURRENT PORTION -- -- 533,721(b) 533,721
INVESTMENT IN TRADEPOINT, LLC -- -- 453,000(b) 453,000
----------- ---------- ---------- -----------
$18,684,397 $3,504,167 $1,053,000 $16,233,230
=========== ========== ========== ===========
<FN>
- -----------------------------------------------------------------------------------------------------
(a) To eliminate the assets and liabilities included in the balance sheet of the Company's TradePoint
business as of September 30, 1996.
(b) To reflect the exchange of the note ($600,000), stock ($1,034,000), options ($398,700), and
interest in the TradePoint, LLC ($453,000) for the net assets of TradePoint.
(c) To reflect transaction costs and liabilities retained by the Company.
</TABLE>
<PAGE> 6
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
----Pro Forma Adjustments----
Historical TradePoint(a) Other Pro Forma
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit and bank note $ 1,125,000 $ -- $ -- $ 1,125,000
Accounts payable 1,413,541 186,638 -- 1,226,903
Accrued expenses 1,843,565 534,337 70,000(c) 1,379,228
Other current liabilities 1,184,636 119,064 -- 1,065,572
----------- ---------- ----------- -----------
TOTAL CURRENT LIABILITIES 5,566,742 840,039 70,000 4,796,703
LONG-TERM OBLIGATIONS, NET OF
CURRENT MATURITIES 2,519,543 19,493 -- 2,500,050
DEFERRED TAXES 617,000 -- -- 617,000
COMMITMENTS -- -- -- --
SHAREHOLDERS' EQUITY:
Common stock 39,839 -- -- 39,839
Additional paid-in capital 7,742,952 1,922,997 1,524,297(b) 7,344,252
Retained earnings 2,618,763 721,638 492,703(b,c) 2,389,828
----------- ---------- ----------- -----------
10,401,554 2,644,635 2,017,000 9,773,919
Less: treasury stock, at cost 420,442 -- (1,034,000)(b) 1,454,442
----------- ---------- ----------- -----------
9,981,112 2,644,635 983,000 8,319,477
----------- ---------- ----------- -----------
$18,684,397 $3,504,167 $ 1,053,000 $16,233,230
=========== ========== =========== ===========
<FN>
- -----------------------------------------------------------------------------------------------
(a) To eliminate the assets and liabilities included in the balance sheet of the Company's
TradePoint business as of September 30, 1996.
(b) To reflect the exchange of the note ($600,000), stock ($1,034,000), options ($398,700), and
interest in the TradePoint, LLC ($453,000) for the net assets of TradePoint.
(c) To reflect transaction costs and liabilities retained by the Company.
</TABLE>
<PAGE> 7
PRO FORMA FINANCIAL INFORMATION
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(Unaudited)
<CAPTION>
----Pro Forma Adjustments----
Historical TradePoint(a) Other(b) Pro Forma
----------- ------------- --------- -----------
<S> <C> <C> <C> <C>
REVENUE
Computer and add-on hardware $ 8,443,995 $1,316,417 $ -- $ 7,127,578
Services 16,654,125 3,957,359 -- 12,696,766
Product licenses 5,934,237 1,694,654 -- 4,239,583
----------- ---------- --------- -----------
NET REVENUE 31,032,357 6,968,430 -- 24,063,927
COST OF REVENUE
Computer and add-on hardware 6,920,796 1,003,918 -- 5,916,878
Services 12,136,916 2,125,671 -- 10,011,245
Product licenses and development 2,598,035 1,403,047 -- 1,194,988
----------- ---------- --------- -----------
TOTAL COST OF REVENUE 21,655,747 4,532,636 -- 17,123,111
EXPENSES
Marketing and sales 4,362,178 1,011,339 -- 3,350,839
General and administrative 3,252,289 590,394 -- 2,661,895
Amortization of goodwill 260,523 42,515 -- 218,008
----------- ---------- --------- -----------
TOTAL EXPENSES 7,874,990 1,644,248 -- 6,230,742
EARNINGS FROM OPERATIONS 1,501,620 791,546 -- 710,074
INTEREST EXPENSE - NET 452,306 9,196 (54,000) 389,110
----------- ---------- --------- -----------
EARNINGS BEFORE INCOME TAXES 1,049,314 782,350 54,000 320,964
INCOME TAXES 592,000 441,000 30,000 181,000
----------- ---------- --------- -----------
NET EARNINGS $ 457,314 $ 341,350 $ 24,000 $ 139,964
=========== ========== ========= ===========
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
NET EARNINGS $.11 $-- $-- $.04
==== === === ====
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES
OUTSTANDING 4,224,503 -- 706,286(c) 3,518,217
========= == ======= =========
<FN>
- --------------------------------------------------------------------------------------------
(a) To eliminate the profit and loss of TradePoint for the entire period.
(b) To reflect interest income on the $600,000 note receivable and the related
tax effect.
(c) To adjust weighted shares outstanding for 665,597 shares returned to the
Company and equivalent shares under options cancelled.
</TABLE>
<PAGE> 8
PRO FORMA FINANCIAL INFORMATION
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
----Pro Forma Adjustments----
Historical TradePoint(a) Other(b) Pro Forma
----------- ------------- --------- -----------
<S> <C> <C> <C> <C>
REVENUE
Computer and add-on hardware $ 3,189,092 $ 979,902 $ -- $ 2,209,190
Services 11,881,517 2,709,742 -- 9,171,775
Product licenses 3,750,965 864,367 -- 2,886,598
----------- ---------- --------- -----------
NET REVENUE 18,821,574 4,554,011 -- 14,267,563
COST OF REVENUE
Computer and add-on hardware 2,620,284 698,929 -- 1,921,355
Services 7,659,746 1,466,849 -- 6,192,897
Product licenses and development 2,538,927 621,383 -- 1,917,544
----------- ---------- --------- -----------
TOTAL COST OF REVENUE 12,818,957 2,787,161 -- 10,031,796
EXPENSES
Marketing and sales 2,974,953 683,602 -- 2,291,351
General and administrative 2,699,920 429,721 -- 2,270,199
Amortization of goodwill 194,201 18,179 -- 176,022
----------- ---------- --------- -----------
TOTAL EXPENSES 5,869,074 1,131,502 -- 4,737,572
EARNINGS (LOSS) FROM OPERATIONS 133,543 635,348 -- (501,805)
INTEREST EXPENSE - NET 323,966 2,507 (54,000) 267,459
----------- ---------- --------- -----------
EARNINGS (LOSS) BEFORE INCOME
TAXES (190,423) 632,841 54,000 (769,264)
INCOME TAXES -- -- -- --
----------- ---------- --------- -----------
NET EARNINGS (LOSS) $ (190,423) $ 632,841 $ 54,000 $ (769,264)
=========== ========== ========= ===========
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE:
NET EARNINGS $(.05) -- -- $(.24)
===== == == =====
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES
OUTSTANDING 3,822,989 -- 665,597(c) 3,157,392
========= == ======= =========
<FN>
- ----------------------------------------------------------------------------------------------
(a) To eliminate the profit and loss of TradePoint for the entire period.
(b) To reflect interest income on the $600,000 note receivable.
(c) To reflect weighted shares outstanding for 665,597 shares returned to the Company.
</TABLE>
<PAGE> 1
EXHIBIT 2
REORGANIZATION AGREEMENT
------------------------
THIS REORGANIZATION AGREEMENT (the "Agreement") is entered into by and among
ASA International Ltd., a Delaware corporation ("ASA"), TradePoint Systems LLC
("TradePoint"), a New Hampshire limited liability company, and Christopher J.
Crane, an individual residing in Harvard, Massachusetts ("Crane").
WHEREAS, TradePoint has been organized for the purposes of entering into
this Agreement and effecting the transactions contemplated by this Agreement.
WHEREAS, ASA desires to transfer to TradePoint and TradePoint and Crane
desire that TradePoint acquire from ASA all of the assets owned and used by ASA
in the operation of ASA's International Trade and Transportation Systems
Division (the "International Division").
WHEREAS, in connection with the transfer of the assets of the International
Division, TradePoint shall assume all of the liabilities and obligations of ASA
incurred in the operation of the International Division, and ASA shall assign
and transfer such liabilities.
WHEREAS, ASA, TradePoint and Crane desire that, upon the transfer of assets
to TradePoint from ASA and the assumption of liabilities by TradePoint as herein
contemplated, a 16% membership interest in TradePoint and a Note in the
principal amount of $600,000 (as defined in Section 3) will be issued to ASA in
exchange for said transfer of assets and assumption of liabilities and an 84%
membership interest in TradePoint be issued to Crane in exchange for Crane's
shares of the common stock of ASA, $.01 par value per share ("ASA Common
Stock").
NOW, THEREFORE, in consideration of the mutual promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Transfer of Assets to TradePoint.
--------------------------------
1.1 ACQUIRED ASSETS. ASA hereby agrees to assign, convey, transfer and
deliver to TradePoint, and TradePoint hereby agrees to acquire from ASA, at the
Closing (as defined in Section 10.1) all of ASA's right, title and interest in
and to the following assets of ASA which shall be referred to herein as the
"Acquired Assets" and which together constitute all of the assets used and
useful in the conduct of business of the International Division:
<PAGE> 2
(a) TANGIBLE PERSONAL PROPERTY. All of the equipment, inventory,
work-in-process, backlog, tools, fixtures, supplies, packages, boxes,
catalogues, computer hardware, software, systems applications, books, records,
cash at December 31, 1996, and other supplies relating to the International
Division existing at the Closing as described on Schedule 1.1(a) hereto.
(b) INTANGIBLE PROPERTY. (i) All of ASA's patents, trademarks,
trademark registrations, service marks, trade names, patent applications,
trademark applications, processes, proprietary know-how, licenses, blueprints,
drawings, designs, patterns, copyrights and formulas relating to the
International Division existing at the Closing as described on Schedule
1.1(b)(i) hereto with the exception of certain licensed material, for which
TradePoint will pay ASA a royalty, which is included in the amount of the
consideration in Section 3.1 as described more fully in a License Agreement in
substantially the form attached hereto as EXHIBIT 1.1(b)(i) (the "License
Agreement"); and (ii) all of ASA's bank and investment accounts, trade accounts
receivable, prepaid expenses and accounts, rights under all contracts,
agreements, leases and licenses together with all security and deposits relating
thereto, customer lists, property lists, payroll and personnel records, sales
records, account books and supplier lists relating to the International Division
existing at the Closing including those items described on Schedule 1.1(b)(ii)
hereto.
1.2 STATUS OF ACQUIRED ASSETS. THE ACQUIRED ASSETS WHICH ARE TANGIBLE
PERSONAL PROPERTY ARE TRANSFERRED AND SOLD TO TRADEPOINT "AS IS" AND "WHERE IS"
WITHOUT ANY WARRANTIES OF QUALITY OR FITNESS, EXCEPT AS HEREINAFTER SPECIFICALLY
SET FORTH.
1.3 REAL ESTATE. The real estate located at 615 Amherst Street, Nashua, New
Hampshire (the "Real Estate"), subject to the appropriate third party consents,
shall be leased to TradePoint pursuant to a Lease (the "Lease") in substantially
the form attached hereto as EXHIBIT 1.3.
2. ASSUMPTION OF LIABILITIES. ASA hereby agrees to assign and TradePoint
hereby agrees to assume any and all liabilities and obligations of ASA arising
from the ordinary course of business of the International Division at Closing,
whether known or unknown, contingent or otherwise, as follows, which shall be
referred to herein as the "Assumed Liabilities" including without limitation the
following:
(a) ACCOUNTS PAYABLE. All of ASA's accounts payable to trade creditors
due at Closing and listed on Schedule 2(a) hereto;
2
<PAGE> 3
(b) CONTRACTS. All of ASA's obligations for the performance of, and all
liability arising under, all contracts and leases assigned by ASA to TradePoint
existing at Closing, including but not limited to unfilled customer purchase
orders, and listed on Schedule 2(b) hereto;
(c) EMPLOYEE BENEFITS. All obligations for the payment of salaries and
other benefits due to employees existing at Closing pursuant to any employee
benefit plans, employment contracts or otherwise (including but not limited to
the sub-account attributable to International Division employees' health benefit
plan administered by Massachusetts Financial Group) as listed on Schedule 2(c)
hereto;
(d) WARRANTY CLAIMS. All claims, now existing or hereafter asserted,
for the repair or replacement of products manufactured, produced, designed and
sold prior to Closing and listed on Schedule 2(d) hereto.
(e) APPLICATION DEVELOPMENT AGREEMENT. All obligations under an
Application Development Agreement by and between ASA and International Business
Machines Corporation (the "Application Development Agreement") dated as of
February 18, 1991.
3. Consideration.
-------------
3.1 CONSIDERATION FOR TRANSFER OF ASSETS. ASA and TradePoint agree that, in
consideration for the transfer of the Acquired Assets, at the Closing,
TradePoint shall issue and ASA shall accept (i) a 16% membership interest in
TradePoint and (ii) a subordinated promissory in the principal amount of
$600,000, payable in accordance with its terms (the "Note"), in substantially
the form attached hereto as Exhibit 3.1 to be secured by a pledge of the ASA
Common Stock to be transferred to TradePoint by Crane pursuant to Section 3.2
hereunder.
3.2 CONSIDERATION FOR CRANE'S INTEREST IN TRADEPOINT. ASA, TradePoint and
Crane agree that, in consideration for the issuance of an 84% membership
interest in TradePoint to Crane, Crane shall tender and TradePoint shall accept
(i) certificates evidencing 665,597 shares of ASA Common Stock owned by Crane at
the Closing; (ii) a 16% partnership interest in the ASA Investment Partnership
under a Partnership Agreement dated as of March 31, 1987 by and among ASA,
Alfred C. Angelone and Crane, and (iii) the surrender by Crane and the
cancellation and termination by the Board of Directors of ASA of Crane's options
to purchase 245,000 shares of ASA Common Stock (which includes options to
purchase 40,000 shares of ASA Common Stock granted but unvested and
unexercisable as of the date hereof).
3
<PAGE> 4
4. Treatment of Asa Common Stock.
-----------------------------
4.1 IRREVOCABLE PROXY. TradePoint and ASA hereby agree that TradePoint
shall grant to ASA an irrevocable Proxy (the "Proxy") in substantially the form
attached hereto as EXHIBIT 4.1, for a period of five (5) years from the date of
the Closing.
4.2 PLEDGE OF ASA COMMON STOCK. As security and collateral for the $600,000
of indebtedness of TradePoint to ASA evidenced by the Note, the shares of ASA
Common Stock to be held by TradePoint upon closing shall be pledged to ASA
pursuant to a Pledge and Security Agreement (the "Pledge and Security
Agreement") in substantially the form attached hereto as EXHIBIT 4.2.
5. NONCOMPETITION, NONSOLICITATION AND NONDISCLOSURE AGREEMENT. For a
period of five (5) years from the date of the Closing, Crane and TradePoint
hereby agree not to compete with ASA, disclose any confidential information with
respect to ASA or solicit any of ASA's customers or employees, in accordance
with the Noncompetition, Nonsolicitation and Nondisclosure Agreement (the
"Noncompetition Agreement") attached hereto as Exhibit 5. Likewise, for a period
of five (5) years from the date of the Closing, ASA and Alfred C. Angelone
hereby agree not to compete with TradePoint and Crane, and ASA hereby agrees not
to disclose any confidential information with respect to TradePoint and Crane or
solicit any of TradePoint's customers or employees in accordance with the
Noncompetition Agreement.
6. REPRESENTATIONS AND WARRANTIES OF ASA. ASA represents and warrants to
Crane and TradePoint as follows:
6.1 CORPORATE STATUS. ASA is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. ASA has
the corporate power and authority to own its properties and to conduct business.
6.2 DUE AUTHORIZATION. The entry by ASA into this Agreement, the
performance of its obligations hereunder, the transfer of the Acquired Assets by
ASA to TradePoint and the assignment and assumption of the Assumed Liabilities
by TradePoint in exchange for the issuance by TradePoint of a 16% membership
interest in TradePoint and the Note hereunder have been duly authorized by all
requisite corporate action. This Agreement and the other instruments to be
executed and delivered by ASA and TradePoint hereunder will constitute valid and
binding obligations.
4
<PAGE> 5
6.3 TITLE TO ACQUIRED ASSETS. Except as described on Schedule 6.3
hereto, ASA has good and marketable title to the Acquired Assets free and clear
of all liens, encumbrances and restrictions on transferability.
6.4 SUFFICIENCY OF ACQUIRED ASSETS. The Acquired Assets transferred
by ASA to TradePoint pursuant to this Agreement, in combination with the
assignment and assumption of the Assumed Liabilities transferred hereunder and
the license of certain intellectual property pursuant to the License Agreement,
constitute all of the assets and liabilities used by ASA exclusively in the
conduct of the business of the International Division and, are sufficient to
conduct the business of the International Division as presently
conducted by ASA.
6.5 INTELLECTUAL PROPERTY. The intellectual property described on
Schedule 1.1(b)(i) hereto constitutes all such intellectual property rights
owned by or licensed to ASA which are used and useful in the conduct of the
business of the International Division. Except as set forth on said schedule,
ASA is not a party to any written or oral agreement whereby the intellectual
property is permitted to be used by a third party.
6.6 INVESTMENT BANKING REPORT. ASA has received an investment
banking report from Shields and Company, satisfactory in form and substance to
the Board of Directors of ASA, regarding certain financial considerations of the
transactions contemplated by this Agreement.
6.7 Legal Compliance.
----------------
(a) ASA has all governmental licenses and permits necessary to
conduct business as presently conducted and all such permits are in full force
and effect.
(b) ASA has duly complied in all material respects with all
applicable federal, state and local laws pertaining to the operation of the
business of the International Division with respect to health, environmental
protection and the use and disposal of hazardous or toxic materials. There is no
liability attaching to the use of the Real Estate or the operation of the
business of the International Division therein as a result of the disposal,
discharge or release of any oil, toxic or hazardous substance.
7. REPRESENTATIONS AND WARRANTIES OF TRADEPOINT. TradePoint hereby
represents and warrants to ASA as follows:
7.1 CORPORATE STATUS. TradePoint is a limited liability company duly
organized, validly existing and in good
5
<PAGE> 6
standing under the laws of the State of New Hampshire. TradePoint has the legal
power and authority to own its properties and to conduct its business.
7.2 DUE AUTHORIZATION. The entry by TradePoint into this Agreement,
the performance of its obligations hereunder, the acceptance of the transfer of
the Acquired Assets by ASA to TradePoint, the assignment and assumption of the
Assumed Liabilities, the issuance of membership interests of 16% to ASA and 84%
to Crane, respectively, and the issuance of and obligations under the Note
hereunder have been duly authorized by all requisite action. This Agreement and
the other instruments to be executed and delivered by TradePoint hereunder will
constitute valid and binding obligations.
8. REPRESENTATIONS AND WARRANTIES OF CRANE. Crane represents and warrants
to ASA as follows:
8.1 TITLE TO ASA COMMON STOCK. Crane has good and marketable title
to the ASA Common Stock, free and clear of all liens, encumbrances and
restrictions on transferability except those imposed under (i) the state or
federal securities laws; and (ii) under ASA's organizational and corporate
documents.
8.2 NET WORTH. TradePoint has or shall have at the Closing a net
worth sufficient to operate after the Closing the business of the International
Division as it is presently operated.
9. Conditions Precedent to the Closing.
-----------------------------------
9.1 CONDITIONS PRECEDENT TO ASA'S OBLIGATIONS TO CLOSE. The obligations of
ASA under this Agreement are subject to the satisfaction, at or before the
Closing, of the conditions set out below:
(a) ABSENCE OF LITIGATION. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or its consummation, will have been instituted or
threatened as of the Closing.
(b) ACCURACY OF REPRESENTATIONS. All representations and warranties
made by TradePoint and Crane in this Agreement will be true as of the Closing as
though made at that time.
(c) ASSIGNMENT & ASSUMPTION AGREEMENT. An Assignment and Assumption
Agreement, in substantially the form attached hereto as EXHIBIT 9.1(c) (the
"Assignment and Assumption Agreement") assigning and transferring to TradePoint
all of ASA's
6
<PAGE> 7
right, title and interest in and to the Assumed Liabilities listed on Schedules
2(a) through 2(d) attached hereto shall have been executed and delivered by
TradePoint.
(e) LEASE OF REAL ESTATE. The Lease, negotiated at arm's length and
containing a provision with respect to the equity participation of TradePoint in
any sale of the Real Estate to a third party as contemplated under Section 12.3
below, shall have been executed and delivered by TradePoint.
(f) LICENSE AGREEMENT. The License Agreement, in substantially the
form attached hereto as EXHIBIT 1.1(b), shall have been executed and delivered
by TradePoint.
(g) MUTUAL RELEASE OF CLAIMS. Crane shall have waived any and all
claims that it may now or in the future have against ASA in accordance with a
Release in substantially the form attached hereto as Exhibit 9.1(g) (the
"Release").
(h) NONCOMPETITION AGREEMENT. TradePoint and Crane shall have executed
and delivered the Noncompetition Agreement in substantially the form attached
hereto as Exhibit 5.
(i) NOTE. The Note shall have been executed and delivered by
TradePoint, in substantially the form attached hereto as Exhibit 3.1(i).
(j) NOTICE TO EMPLOYEES. Notice shall have been given to employees of
the International Division listed on Schedule 9.1(j) attached hereto as required
under applicable federal and state laws.
(k) OPINION OF COUNSEL. ASA shall have received an opinion from
counsel for TradePoint and Crane with respect to the transactions contemplated
herein.
(l) OPTION TERMINATION AGREEMENT. TradePoint and Crane shall have
executed and delivered an Option Termination Agreement in substantially the form
attached hereto as Exhibit 9.1(l)(the "Option Termination Agreement").
(m) PLEDGE AND SECURITY AGREEMENT. The Pledge and Security Agreement
shall have been executed and delivered by TradePoint in substantially the form
attached hereto as EXHIBIT 4.2.
(n) PROXY FOR ASA STOCK. The Proxy under which the ASA Common Stock is
to be voted shall have been executed and delivered by TradePoint in
substantially the form attached hereto as EXHIBIT 4.1.
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(o) RELEASE OF LIABILITY. ASA shall have been released from any and
all liability on any guaranties, promissory notes, liens, security agreements,
leases or other documents on which it is a guarantor or in any way liable as
described more fully on Schedule 6.3 attached hereto; said releases being in
form and substance satisfactory to ASA.
(p) THIRD PARTY CONSENTS. CoreStates Bank and all other third
parties whose consent is necessary for the transfer of Assets and other
transactions contemplated herein, as set forth on Schedule 6.3 attached hereto,
shall have consented to the transactions contemplated herein.
9.2 Conditions Precedent to Tradepoint's and Crane's Obligation to
--------------------------------------------------------------
Close.
- -----
The obligations of TradePoint and Crane under this Agreement are subject to
the satisfaction, at or before the Closing, of the conditions set out below.
(a) ACCURACY OF REPRESENTATIONS. All representations and
warranties made by ASA in this Agreement will be true as of the Closing as
though made at that time.
(b) ABSENCE OF LITIGATION. No action, suit, or proceeding before
any court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or its consummation, will have been instituted or
threatened as of the Exchange.
(c) MUTUAL RELEASE OF CLAIMS. ASA shall have waived any and all
claims it may now or in the future have against TradePoint and/or Crane in
accordance with the Release.
(d) OPINION OF COUNSEL. TradePoint and Crane shall have received
an opinion from counsel of ASA with respect to the transactions contemplated
herein.
(e) CONSENT TO LEASE. ASA shall have obtained consents from Sun
Life Assurance Company of Canada and Granite State Economic Development
Corporation (the "Consents") with respect to the Lease of the Real Estate.
(f) RELEASE OF LIEN ON ACQUIRED ASSETS. ASA shall have obtained
a release from its financial institution from any liens or security arrangements
(the "Lien Release") regarding the Acquired Assets.
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(g) NONCOMPETITION AGREEMENT. ASA shall have executed and
delivered the Noncompetition Agreement.
10. Closing.
-------
10.1 Closing.
-------
(a) Time and Place.
--------------
The transfer of the Acquired Assets by ASA to TradePoint in exchange
for the issuance of a 16% membership interest in TradePoint and the Note as well
as the tender and delivery of Crane's shares of ASA Common Stock in exchange for
an 84% membership interest in TradePoint (the "Closing") shall take place at the
close of business on December 31, 1996 at the offices of Hinckley, Allen &
Snyder, One Financial Center, Boston, Massachusetts, or at such other time as
the parties shall mutually agree.
(b) ASA'S Obligations at Closing.
----------------------------
At the Closing, ASA will deliver to TradePoint and Crane the following
documents:
(i) The Assignment and Assumption Agreement duly executed by
ASA, assigning and transferring to TradePoint all of ASA's right, title and
interest in and to the Assumed Liabilities listed on Schedules 2(a) through 2(d)
attached hereto.
(ii) A Bill of Sale, in substantially the form attached hereto
as EXHIBIT 10.1(b)(ii), transferring the Acquired Assets from ASA to TradePoint.
(iii) The License Agreement, duly executed by ASA.
(iv) The Lease, duly executed by ASA
(v) The Noncompetition Agreement, duly executed by ASA.
(vi) The Pledge and Security Agreement, duly executed by ASA.
(vii) The Consent, in substantially the form attached hereto as
EXHIBIT 10.1(b)(vii).
(viii) The Lien Release, in the form of Uniform Commercial Code
Termination Statements, to the transfer of the Acquired Assets.
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(ix) The Option Termination Agreement, duly executed by ASA.
(x) Proof of notice to employees of the International
Division as required under applicable federal and state laws.
(xi) That portion of the books, papers, records, stock
ledgers, tax returns and other related correspondence relating to the Acquired
Assets and the conduct of the business of the International Division.
(xii) A Limited Liability Operating Company Agreement of
TradePoint in substantially the form attached hereto as EXHIBIT 10.1(b)(xii)
(the "LLC Agreement"), duly executed by ASA.
(xiii) A Members' Purchase Agreement (the "Purchase Agreement"),
in substantially the form attached hereto as EXHIBIT 10.1(b)(xiii), duly
executed by ASA.
(c) Tradepoint's Obligations at Closing.
-----------------------------------
(i) The Assignment and Assumption Agreement, duly executed by
TradePoint.
(ii) The License Agreement, duly executed by TradePoint.
(iii) The Lease, duly executed by TradePoint.
(iv) The Noncompetition Agreement, duly executed by TradePoint.
(v) The Note, duly executed by TradePoint.
(vi) The Pledge and Security Agreement, duly executed by
TradePoint.
(vii) The Proxy, duly executed by TradePoint.
(viii) The Purchase Agreement, duly executed by TradePoint.
(ix) A certificate evidencing 16% membership interest in
TradePoint in the name of ASA and a certificate evidencing 84% membership
interest in TradePoint in the name of Crane.
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(d) Crane's Obligations at Closing.
------------------------------
(i) The Noncompetition Agreement, duly executed by Crane.
(ii) The Option Termination Agreement, duly executed by Crane.
(iii) The LLC Agreement, duly executed by Crane.
(iv) The Purchase Agreement, duly executed by Crane.
(v) Share certificates evidencing the ASA Common Stock, or
stock powers representing such shares, duly endorsed in blank.
(vi) Certificate evidencing a 16% interest in the ASA
Investment partnership, duly endorsed in blank.
(vii) An Assignment of Partnership Interest, in substantially
the form attached hereto as Exhibit 10.1(d)(vii), duly executed by Crane.
11. EFFECTIVE TIME. The effective time of the transfer of the Acquired
Assets to, and the assumption of liabilities by TradePoint shall be the close of
business on December 31, 1996.
12. Covenants of Asa, Tradepoint and Crane.
--------------------------------------
12.1 ACCESS TO INFORMATION. Following the execution of this Agreement
until the Closing as well as after the Closing, ASA agrees to provide to
TradePoint and its authorized representatives, and TradePoint agrees to provide
to ASA and its authorized representatives, upon reasonable notice and during
normal business hours, access to the books and records relating to the Assets
and the conduct of the business of the International Division, as may reasonably
be required for purposes of compliance with the tax, financial reporting and
legal obligations of TradePoint and ASA.
12.2 INDEMNIFICATION. (a) INDEMNIFICATION OF ASA. TradePoint and Crane
hereby agree to indemnify and hold ASA harmless for any loss, liability, damage
or reasonable out-of-pocket expense suffered or incurred by ASA as a result of
any claim, action or proceeding which may arise after the Closing in connection
with (i) the operation of the business of the International Division or (ii)
claims from third parties arising under the Assumed Liabilities. TradePoint and
Crane shall reimburse ASA for all reasonable costs and expenses incurred by
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ASA in connection with any action, proceeding, claim, assessment or judgment
incident to any of the foregoing matters, including but not limited to
reasonable attorney's fees.
In the event of a claim, ASA shall promptly notify TradePoint in
writing of the facts surrounding the claim within thirty (30) days of receipt of
the claim. TradePoint or its authorized representative shall acknowledge the
claim in writing as well as its obligation to defend such claim within twenty
(20) days of receipt of the claim from ASA. In the event of a dispute regarding
the claim, TradePoint shall notify ASA in writing of its objection to defense of
the claim within twenty (20) days of receipt of such claim. The validity of the
claim shall then be submitted to an arbitrator mutually agreed upon by ASA and
TradePoint. In the event that the parties are unable to mutually agree upon an
arbitrator, ASA shall choose one arbitrator, TradePoint shall choose a second
arbitrator, and these two arbitrators shall choose a third arbitrator. The final
determination of the arbitration shall be binding, and the party who is liable
to defend and pay the claim shall pay the costs and expenses of arbitration of
the party who is not liable.
(b) INDEMNIFICATION OF TRADEPOINT. ASA hereby agrees to indemnify
and hold TradePoint harmless for any loss, liability, damage or reasonable
out-of-pocket expense suffered or incurred by TradePoint as a result of any
claim, action or proceeding which may arise after the Closing in connection with
the operation of the business of ASA other than the International Division. ASA
shall reimburse TradePoint for all reasonable costs and expenses incurred by
TradePoint in connection with any action, proceeding, claim, assessment or
judgment incident to any of the foregoing matters, including but not limited to
reasonable attorney's fees.
In the event of a claim, TradePoint shall promptly notify ASA in writing of
the facts surrounding the claim within thirty (30) days of receipt of the claim.
ASA or its authorized representative shall acknowledge the claim in writing as
well as its obligation to defend such claim within twenty (20) days of receipt
of the claim from TradePoint. In the event of a dispute regarding the claim, ASA
shall notify TradePoint in writing of its objection to defense of the claim
within twenty (20) days of receipt of such claim. The validity of the claim
shall then be submitted to an arbitrator mutually agreed upon by TradePoint and
ASA. In the event that the parties are unable to mutually agree upon an
arbitrator, TradePoint shall choose one arbitrator, ASA shall choose a second
arbitrator, and these two arbitrators shall choose a third arbitrator. The final
determination of the arbitration shall be binding, and the party who is liable
to
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defend and pay the claim shall pay the costs and expenses of arbitration of the
party who is not liable.
12.3 SALE OF REAL ESTATE. In the event that TradePoint and ASA mutually
agree that ASA should sell the Real Estate to a third party after the date of
the Closing and during the period in which TradePoint is a tenant occupying the
Real Estate pursuant to the Lease, for a minimum of One Million Two Hundred
Thousand Dollars ($1,200,000), ASA shall pay to TradePoint fifty percent (50%)
of any net proceeds over One Million Dollars ($1,000,000). "Net Proceeds" shall
mean proceeds after satisfaction of all mortgage indebtedness on the Real Estate
as well as payment of any and all costs and expenses, direct or indirect,
related to the sale of the Real Estate.
13. Tax Matters.
-----------
(a) FILING OF RETURNS AND PAYMENT OF TAXES. ASA, after the date hereof,
will (i) prepare and file all tax returns relating to ASA for all periods (or
portions thereof) ending on or prior to the date hereof and (ii) be responsible
for the conduct of all tax examinations relating to all tax returns relating to
ASA filed for all periods (or portions thereof) ending on or prior to the date
hereof.
(b) TRANSFER TAXES. ASA and TradePoint shall each be responsible for and
pay one-half (50%) of transfer, recording ad valorem and similar taxes and fees
incurred or due to the United States Government or the State of New Hampshire as
a result of the transactions contemplated by this Agreement, whether levied upon
ASA or TradePoint.
(c) PROPERTY TAXES. All personal or real property taxes imposed with
respect to the Assets or the operation of the Business shall be apportioned
between Seller and Buyer as of the close of business on the day of the Closing.
(d) COOPERATION; RECORDS. Each party hereto, at its own cost and expense,
shall provide any other party hereto with such assistance as may reasonably be
requested by such party in connection with the preparation and filing of any
financial statement or tax return, including the completion of ASA's tax return
information package, audit or other examination by any taxing authority, and any
judicial or administrative proceedings relating to liability for taxes
attributable to the Assets or the operation of the business, and each party, at
its own cost and expense, shall retain for a reasonable period of time (but not
less than six years after the date hereof or until the expiration of all
applicable statutes of limitation, whichever is later), and provide the other
party with all accounting, business,
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<PAGE> 14
financial and tax records, or information which may be relevant to such
financial statement, return, audit or examination, proceedings or determination.
14. NOTICES. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail, return receipt requested, postage prepaid:
(a) if to ASA, to:
-------------
ASA International Ltd.
10 Speen Street
Framingham, MA 01701
Attention: Alfred C. Angelone, Chairman
and Chief Executive Officer
(b) if to Tradepoint, to:
--------------------
TradePoint Systems LLC
615 Amherst Street
Nashua, NH
Attention: Christopher J. Crane,
President
(c) if to Crane, to:
---------------
Christopher J. Crane
283 Littleton Road
Harvard, MA 01451
or to such other address as the parties shall specify in writing
to the other.
15. FURTHER ASSURANCES. ASA, TradePoint and Crane will promptly execute and
deliver such additional instruments and documents and take such additional
actions as may be necessary to carry out or implement any provision of this
Agreement or to facilitate the lawful exercise by TradePoint of its rights as
owner of the Acquired Assets or to confirm the assumption by TradePoint of the
Assumed Liabilities.
16. TITLES. The title of this Agreement and the titles of sections and
subsections, and of exhibits, are for convenience of reference only and will not
be considered in the construction or interpretation hereof.
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<PAGE> 15
17. SURVIVAL. All representations and warranties of the parties contained in
this Agreement will not survive after the date of the Closing, however, the
agreements and covenants of the parties, including the provision for
indemnification, shall survive after the date of the Closing.
18. ENTIRE AGREEMENT. This Agreement and the schedules hereto constitute the
entire agreement and understanding between the parties in respect of the subject
matter hereof and supersede any prior or contemporaneous agreement or
understanding between the parties, written or oral, which relates to the subject
matter hereof.
19. SUCCESSORS AND ASSIGNS. References in this Agreement to the parties
hereto will be deemed to include their successors and permitted assigns and this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns.
20. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
22. AMENDMENTS. This Agreement may be amended or modified only by a written
instrument signed by the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the 20th day
of December, 1996.
ASA INTERNATIONAL LTD.
By: /s/ Alfred C. Angelone
----------------------------
Alfred C. Angelone
Title: Chairman and Chief
Executive Officer
TRADEPOINT SYSTEMS LLC
By: /s/ Christopher J. Crane
----------------------------
Christopher J. Crane
Title: President
/s/ Christopher J. Crane
--------------------------------
Christopher J. Crane,
individually
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LIST OF EXHIBITS AND SCHEDULES
------------------------------
TO REORGANIZATION AGREEMENT BY
AND BETWEEN ASA INTERNATIONAL LTD.,
TRADEPOINT SYSTEMS LLC, AND CHRISTOPHER J. CRANE
Schedules
---------
Schedule 1.1(a) Assets to be Transferred
Schedule 1.1(b)(i) Intangible Property to be Transferred
Schedule 2(a) Accounts Payable
Schedule 2(b) Assumed Contracts
Schedule 2(c) Employee Benefits
Schedule 2(d) Warranty Claims
Schedule 6.3 Restrictions on Transferability
Schedule 9.1(j) Employee Contracts
Exhibits
--------
Schedule 1.1(b)(i) License Agreement
Schedule 1.3 Lease Agreement
Schedule 3.1 Promissory Note
Schedule 4.1 Irrevocable Proxy
Schedule 4.2 Stock Pledge Agreement
Schedule 5 Non-Competition Agreement
Schedule 9.1(c) Assignment and Assumption Agreement
Schedule 9.1(g) Mutual Release of Claims
Schedule 10.1(b)(ii) Bill of Sale
Schedule 10.1(b)(vii) Consents
Schedule 10.1(d)(vii) Assignment of Partnership Interest
Schedule 10.1(b)(xii) Limited Liability Operating Company Agreement
Schedule 10.1(b)(xiii) Members' Purchase Agreement
Pursuant to Instruction (2) to Item 601 of Regulation s-k, the ehibits
and schedules listed above are omitted. The Registrant agrees to file copies of
such exhibits and schedules if so requested by the Securities and Exchange
Commission.
