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: August 13, 1999
ASA International Ltd.
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(Exact name of Registrant as specified in its Charter)
Delaware O-14741 02-0398205
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
10 Speen Street, Framingham, MA 01701
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 508-626-2727
<PAGE>
TABLE OF CONTENTS
FORM 8-K
August 13, 1999
Item Page
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Item 5. Other Events 1
Item 7. Financial Statements and Exhibits 2
Signature 4
Exhibits E-1
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Item 5. Other Events
Item 7. Financial Statements and Exhibits
Item 5. Other Events
Effective August 2, 1999, and pursuant to that certain Option to
Purchase Agreement (the "Agreement") of even date by and between the Registrant,
InterPro Expense Systems, Inc., a Delaware corporation ("InterPro") and ASA
InterPro SmartTime LLC, a Delaware limited liability company (the "LLC"), the
Registrant granted to InterPro an option to purchase the Registrant's SmartTime
business. Pursuant to the Agreement, the Registrant transferred the assets and
liabilities of its SmartTime business to the newly formed LLC, of which the
Registrant is the sole member and InterPro is the manager.
The Agreement provides that InterPro has the option to purchase the
SmartTime business from the LLC at anytime from August 1, 2000 through August
31, 2000 (the "Option Period"), or at such earlier date as agreed to by the
parties, for an aggregate purchase price of $7,020,000, less any option fee paid
to date (the "Purchase Price"). The terms and conditions of the acquisition
under the option are set forth in the Asset Purchase Agreement dated as of
August 2, 1999 (the "Purchase Agreement"). The Purchase Agreement provides that
the sale will occur, if at all, within two days after exercise of the option and
the satisfaction of certain other conditions as more fully set forth in the
Purchase Agreement. During the Option Period, InterPro will employ the employees
of the SmartTime business and will bear the risk of its financial performance.
InterPro paid an initial option fee in the amount of $1,660,000 upon
execution of the Agreement and is required to pay a second option fee on August
1, 2000 in the amount of $540,000, unless InterPro exercises the option prior to
such date. The option fees are non-refundable to InterPro in the event that
InterPro does not exercise the option to purchase the SmartTime business, as to
which there can be no assurance. As more fully set forth in the Agreement and
exhibits thereto, InterPro has loaned to the Registrant the sum of $3,200,000
(with respect to which the Registrant has prepaid $160,000 in interest). In
addition, the LLC has agreed to loan InterPro an amount equal to the net cash of
the LLC available after collection of the LLC's accounts receivable and payment
of the LLC's accounts payable.
In addition, and as set forth in the Agreement and exhibits thereto,
InterPro has purchased exclusive licenses to use the customer intangibles and
intellectual property of the SmartTime business during the Option Period for
$300,000 and $500,000, respectively. In the event that InterPro does not
exercise the option to purchase the SmartTime business prior to the expiration
of the Option Period, InterPro's rights under the above-mentioned license
agreements would terminate and the Registrant, through the LLC, would retain
ownership of these assets.
Item 7. Financial Statements and Exhibits
c. Exhibits
Exhibit
No. Title
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10.1 Option to Purchase Agreement dated as of August 2, 1999.
10.2 Asset Purchase Agreement dated as of August 2, 1999.
10.3 Operating Agreement dated as of August 2, 1999.
10.4 Sublease and Consent Agreement dated as of August 2, 1999.
10.5 Revolving Promissory Note dated as of August 2, 1999.
10.6 Customer Intangibles License Agreement dated as of August 2, 1999.
10.7 Intellectual Property License Agreement dated as of August 2, 1999.
10.8 Promissory Note dated as of August 2, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and 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/ Terrence C. McCarthy
-------------------------------
Terrence C. McCarthy
Vice President and Treasurer
Date: August 13, 1999
Exhibit 10.1
OPTION TO PURCHASE AGREEMENT
This OPTION TO PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of August 2, 1999 by and among InterPro Expense Systems, Inc., a
Delaware corporation ("Optionee"), ASA InterPro SmartTime LLC, a Delaware
limited liability company (herein "Grantor" or "SmartTime LLC"), and ASA
International, Ltd., a Delaware corporation and the sole member of Grantor
("ASA").
W I T N E S S E T H:
WHEREAS, each of Grantor and Optionee believe it is in the best
interests of each company that Optionee acquire the option to acquire the assets
of, and assume the liabilities of, Grantor (the "Acquisition"), such acquisition
to be made, if completed, in accordance with the Asset Purchase Agreement
annexed hereto as EXHIBIT A (the "Purchase Agreement"); and
WHEREAS, Grantor is engaged in the business previously conducted by
the SmartTime division of ASA of designing, developing, selling, marketing and
implementing software commonly referred to as "SmartTime Software" (the
"Business", which term excludes the business related to the Legacy Products and
the Lavie Products, as each is defined in the Purchase Agreement) for time and
attendance information management ("SmartTime"); and
WHEREAS, each of Grantor and Optionee believe that is in its
respective best interests that during the period of the Option (as defined
below) granted hereunder that the Optionee operate the Business; and
WHEREAS, in order for the Optionee to operate the Business it is
necessary for the Grantor to license certain of its assets to the Optionee; and
WHEREAS, in order to induce ASA, as the sole member of the Grantor, to
authorize the Grantor to enter into this Agreement and the transactions
contemplated hereby, the Optionee is willing to lend certain sums to ASA.
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, it is agreed:
1. OPTION.
1.1 GRANT OF OPTION. Based upon and subject to the terms,
agreements, warranties, representations and conditions of this Agreement and the
Purchase Agreement, and in consideration of (a) the sum of One Million Six
Hundred Sixty Thousand Dollars ($1,660,000) (the "Initial Option Fee") paid by
Optionee to Grantor upon the execution hereof and, if the Option (defined below)
has not been exercised on or prior to August 1, 2000, (b) the sum of Five
Hundred Forty Thousand Dollars ($540,000) (the "Second Option Fee") to be paid
by Optionee to Grantor on August 1, 2000 (subject to adjustment as set forth
herein and to the terms of the Purchase Agreement), Grantor irrevocably grants
to Optionee an option to purchase the Assets (the "Option") upon and subject to
the further terms and conditions set forth in this Agreement and the Purchase
Agreement. The Initial Option Fee and the Second Option Fee are sometimes
collectively referred to as the "Option Fee".
1.2 OPTION TERM. The Option shall expire at five o'clock p.m.,
Boston time, on August 31, 2000 (the "Expiration Date").
1.3 EXERCISE OF OPTION. The Option may be exercised by Optionee
at any time beginning August 1, 2000 and prior to the Expiration Date by giving
written notice to Grantor designating a date, time and place for the purchase of
the Assets (the "Closing Date"), which date shall be not earlier than the close
of business on August 1, 2000, nor later that the close of business on August
31, 2000. The Option may be exercised by Optionee prior to August 1, 2000 with
the prior written consent of Grantor.
1.4 PURCHASE PRICE. In the event that Optionee exercises the
Option, subject to the further conditions of this Agreement, Optionee agrees to
purchase the Assets from Grantor for the purchase price of $7,020,000 less the
Option Fee and the Adjustment (the "Purchase Price"), all in accordance with the
Purchase Agreement; PROVIDED that Optionee shall have the right offset the
Purchase Price by any amount then due and payable from ASA to Optionee under the
ASA Note (as defined in Section 7 below).
1.5 NO RETURN OF OPTION FEE. The Option Fee shall be
non-refundable and shall be retained by Grantor whether or not the Option is
exercised by Optionee.
2. REPRESENTATIONS AND WARRANTIES OF GRANTOR AND ASA. Grantor and ASA
hereby repeat and incorporate in this Agreement by reference as if fully set
forth herein each of the representations and warranties of Grantor and ASA set
forth in Article II of the Purchase Agreement. All references therein to the
Purchase Agreement shall be deemed for purposes of this Section 2 to apply to
this Agreement, the Intellectual Property License Agreement and the Customer
Intangibles License Agreement (as each is hereinafter defined.).
3. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby repeats
and incorporates in this Agreement by reference as if fully set forth herein
each of the representations and warranties of Optionee set forth in Article III
of the Purchase Agreement. All references therein to the Purchase Agreement
shall be deemed for purposes of this Section 3 to apply to this Agreement, the
Intellectual Property License Agreement and the Customer Intangible License
Agreement.
4. OPERATION OF THE BUSINESS PRIOR TO THE EARLIER OF THE EXPIRATION
DATE AND THE CLOSING DATE. During the term of this Agreement Optionee shall
operate the Business. In connection therewith, the parties agree to take the
following actions:
4.1 MANAGEMENT AGREEMENT. Simultaneously with the execution of
this Agreement, ASA and Optionee shall enter into the Operating Agreement in the
form annexed hereto as EXHIBIT B (the "Operating Agreement") regarding the
management of Grantor's business and affairs.
4.2 EMPLOYEES. Simultaneously with the execution of this
Agreement, ASA shall transfer all of its employees (excluding the Contracted
Employees, as defined herein) to the employment of Optionee and Optionee shall
continue the employment of all of such individuals as Optionee's employees at
compensation and benefit levels reasonably comparable to such individuals'
compensation and benefits as employees of ASA.
4.3 CONTRACTED EMPLOYEES. The individuals listed on SCHEDULE A
annexed hereto shall remain employees of ASA, which shall provide the services
of such individuals to Optionee on terms mutually agreeable to ASA and Optionee.
4.4 LEASE. Simultaneously with the execution of this Agreement,
ASA and Optionee shall enter into a lease for premises located at 10 Speen
Street, Framingham, Massachusetts, in the form annexed hereto as EXHIBIT C (the
"Lease").
4.5 OPERATING EXPENSES. Following the execution of this
Agreement, Optionee shall be responsible for and pay all of the expenses and
costs of operating the Business. In connection therewith, Optionee hereby
assumes and shall pay for or perform all of the Implementation Obligations and
Maintenance Obligations (as each is defined in the Purchase Agreement, and,
collectively, the "Assumed Obligations".
4.6 USE OF FIXED ASSETS. During the term of this Agreement,
Grantor shall make available to Optionee, without charge, the use of all
computers, furniture and other fixed assets of Grantor to use in the operation
of the Business.
4.7 OPTIONEE LOAN. Grantor hereby agrees to loan to Optionee, in
accordance with the provisions of a promissory note in the form annexed hereto
as EXHIBIT D (the "InterPro Note"), the Net Cash of the Grantor. For purposes of
this Agreement, "Net Cash" shall mean the cash remaining available to Grantor
resulting from the collection of the accounts receivable of Grantor existing on
the date of this Agreement, after payment therefrom of the Grantor's Balance
Sheet Liabilities (as defined in the Purchase Agreement).
5. CUSTOMER INTANGIBLES LICENSE AGREEMENT. Simultaneously with the
execution of this Agreement, Grantor and Optionee shall enter into the Customer
Intangibles License Agreement in the form annexed hereto as EXHIBIT E (the
"Customer Intangibles License Agreement").
6. INTELLECTUAL PROPERTY LICENSE AGREEMENT. Simultaneously with the
execution of this Agreement, Grantor and Optionee shall enter into the
Intellectual Property License Agreement in the form annexed hereto as EXHIBIT F
(the "Intellectual Property License Agreement").
7. ASA LOAN. Simultaneously with the execution of this Agreement,
Optionee shall loan to ASA the sum of Three Million Two Hundred Thousand Dollars
($3,200,000) to be evidenced by a promissory note in the form annexed hereto as
EXHIBIT G (the "ASA Note").
8. CONFIDENTIALITY. Each of the parties hereto hereby agrees to keep
such information or knowledge obtained pursuant to the negotiation and execution
of this Agreement or the effectuation of the transactions contemplated hereby,
confidential; provided, however, that the foregoing shall not apply to
information or knowledge which (a) a party can demonstrate was already lawfully
in its possession prior to the disclosure thereof by the other party, (b) is
generally known to the public and did not become so known through any violation
of law or this Agreement, (c) became known to the public through no fault of
such party, (d) is later lawfully acquired by such party from other sources, (e)
is required to be disclosed by order of court or government agency with subpoena
powers or (f) which is disclosed in the course of any litigation between any of
the parties hereto.
9. SURVIVAL OF REPRESENTATIONS. The representations and warranties of
each of the parties set forth herein shall survive the execution of this
Agreement and continue until the earlier of (a) the Expiration Date or (b) the
Closing Date.
10. EXPENSES Subject to the terms in the Purchase Agreement, whether
or not the transactions contemplated by this Agreement are consummated, all fees
and expenses incurred in connection therewith including, without limitation, all
legal, accounting, financial advisory, consulting and all other fees and
expenses of third parties incurred by a party in connection with the negotiation
and effectuation of the terms and conditions of this Agreement and the
transactions contemplated hereby, shall be the obligation of the respective
party incurring such fees and expenses.
11. PUBLIC DISCLOSURE Unless otherwise required by law or this
Agreement, no disclosure (whether or not in response to an inquiry) of the
subject matter of this Agreement or the transactions contemplated hereby shall
be made by a party unless approved by the other parties.
12. REASONABLE COMMERCIAL EFFORTS Subject to the terms and conditions
provided in this Agreement, each of the parties hereto shall use its reasonable
commercial efforts to take promptly, or cause to be taken promptly, all actions,
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations: to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement.
13. ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES Each party hereto, at
the request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be reasonably
necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.
14. NON-COMPETITION AND NON-SOLICITATION During the term of this
Agreement, each of Grantor and ASA agree to be bound by the provisions of
Sections 5.13 and 5.14 of the Purchase Agreement as if such provisions were
fully set forth herein.
15. ATTORNEYS' FEES Subject to the provisions of Section 7.2 of the
Purchase Agreement, if any party to this Agreement brings an action against
another party to this Agreement to enforce its rights under this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable
costs and expenses, including attorneys' fees and costs incurred in connection
with such action, including the appeal of such action.
16. NOTICES All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via telecopy (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Optionee, to:
InterPro Expense Systems, Inc.
4125 Hopyard Road
Pleasanton, California
Attention: Edward Comfoltey
Telecopy No.: (925) 730-7642
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attention: Brian C. Erb, Esq.
John Whittle, Esq.
Telecopy No.: (650) 493-6811
(b) if to Grantor or ASA, to:
SmartTime LLC
or
ASA International, Ltd.
10 Speen Street
Framingham, MA
Attention: Alfred C. Angelone
Telecopy No.: (508) 626-0644
with a copy to:
Stroock & Stroock & Lavan LLP
100 Federal Street
Boston, MA 02110
Attention: Paul D. Broude, Esquire
Telecopy No.: (617) 330-5111
17. INTERPRETATION When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. COUNTERPARTS This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
19. ENTIRE AGREEMENT This Agreement and the Schedules and Exhibits
hereto: (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof; (b) are not intended to confer upon any other person any rights or
remedies hereunder, unless expressly provided otherwise; and (c) shall not be
assigned by operation of law or otherwise except as otherwise specifically
provided.
20. SEVERABILITY In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
21. OTHER REMEDIES Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
22. GOVERNING LAW This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
23. RULES OF CONSTRUCTION The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
24. DISPUTE RESOLUTION. Any dispute between the parties arising out of
or related to this Agreement shall be settled by arbitration in accordance with
the provisions of the Purchase Agreement as if such provisions were fully set
forth herein.
IN WITNESS WHEREOF, InterPro Expense Systems, Inc., SmartTime LLC and
ASA International, Ltd. have caused this Agreement to be signed by their duly
authorized respective officers, all as of the date first written above.
INTERPRO EXPENSE SYSTEMS, INC.
By: /S/ ED COMFOLTEY
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SMARTTIME LLC
By: /S/ ALFRED C. ANGELONE
--------------------------
ASA INTERNATIONAL, LTD.
By: /S/ ALFRED C. ANGELONE
--------------------------
Exhibit 10.2
ASSET PURCHASE AGREEMENT
BY AND AMONG
INTERPRO EXPENSE SYSTEMS, INC.,
SMARTTIME LLC
AND
ASA INTERNATIONAL, LTD.
DATED AS OF AUGUST 2, 1999
TABLE OF CONTENTS
<PAGE>
PAGE
ARTICLE I THE ACQUISITION..............................................1
PURCHASE OF ASSETS.............................................1
CONSIDERATION FOR ASSETS.......................................4
SALES TAXES....................................................4
ALLOCATION.....................................................4
CLOSING ......................................................5
ADJUSTMENT TO CONSIDERATION....................................5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER AND
ASA............................................................6
ORGANIZATION OF SELLER.........................................6
DUE AUTHORIZATION..............................................6
DUE EXECUTION AND ENFORCEABILITY...............................6
NO CONFLICT....................................................6
CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES.............7
SELLER FINANCIAL STATEMENTS....................................7
OWNERSHIP AND TRANSFER OF ASSETS...............................8
RESTRICTIONS ON BUSINESS ACTIVITIES............................8
CAPITAL EQUIPMENT AND HARD ASSETS..............................8
INTELLECTUAL PROPERTY..........................................8
CONTRACTS......................................................9
GOVERNMENTAL AUTHORIZATION.....................................9
COMPLIANCE WITH APPLICABLE LAWS...............................10
MATERIAL ADVERSE EFFECT.......................................10
TAXES.........................................................10
BROKERS' OR FINDERS' FEES.....................................10
REPRESENTATIONS COMPLETE......................................10
MATERIAL ADVERSE CHANGE.......................................11
LITIGATION....................................................11
YEAR 2000 PREPAREDNESS........................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER...................11
ORGANIZATION, STANDING AND POWER..............................11
AUTHORITY; DUE EXECUTION; ENFORCEABILITY......................11
NON-CONTRAVENTION; CONSENTS...................................12
NO CONFLICT...................................................12
REPRESENTATIONS COMPLETE......................................12
ARTICLE IV CONDUCT PRIOR TO THE CLOSING DATE..........................12
NO SOLICITATION...............................................12
ARTICLE V ADDITIONAL AGREEMENTS.......................................13
ACCESS TO INFORMATION.........................................13
CONFIDENTIALITY...............................................13
EXPENSES .....................................................13
PUBLIC DISCLOSURE.............................................13
CONSENTS .....................................................14
REASONABLE COMMERCIAL EFFORTS.................................14
NOTIFICATION OF CERTAIN MATTERS...............................14
ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES...................14
TAX RETURNS...................................................14
STATE TAX CERTIFICATES........................................14
BULK SALES....................................................15
PAYMENT OF TAXES..............................................15
NON-COMPETITION AGREEMENT.....................................15
NON-SOLICITATION AGREEMENT....................................16
ARTICLE VI CONDITIONS TO THE ACQUISITION..............................16
CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT
THE ACQUISITION..........................................16
ADDITIONAL CONDITIONS TO OBLIGATIONS OF SELLER................17
ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BUYER.............17
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNITY.................................................18
SURVIVAL OF REPRESENTATIONS AND WARRANTIES....................18
SELLER AND ASA INDEMNITY......................................18
BUYER INDEMNITY...............................................20
THIRD PARTY CLAIMS............................................20
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER........................21
TERMINATION...................................................21
EFFECT OF TERMINATION.........................................22
AMENDMENT.....................................................22
EXTENSION; WAIVER.............................................22
ARTICLE IX CERTAIN POST-CLOSING COVENANTS.............................22
TAX CERTIFICATES..............................................22
PAYMENT OF TAXES..............................................22
ARTICLE X GENERAL PROVISIONS..........................................22
ATTORNEYS' FEES...............................................22
NOTICES.......................................................22
INTERPRETATION................................................23
COUNTERPARTS..................................................23
ENTIRE AGREEMENT..............................................24
SEVERABILITY..................................................24
OTHER REMEDIES................................................24
GOVERNING LAW.................................................24
RULES OF CONSTRUCTION.........................................24
ASSIGNMENT....................................................24
<PAGE>
INDEX OF EXHIBITS
EXHIBIT DESCRIPTION
Exhibit A Form of Instrument of Assumption of Liabilities
Exhibit B Bill of Sale and General Assignment of Seller Assets
Exhibit C Trademark Assignment
Exhibit D Copyright Assignment
Exhibit E Form of Lease
<PAGE>
INDEX OF SCHEDULES
ASA SCHEDULE DESCRIPTION PREPARED BY
1.1(A) EXCLUDED ASSETS ASA
1.1(A)(I) INTELLECTUAL PROPERTY ASA
1.1(A)(II) LICENSE AGREEMENTS ASA
1.1(A)(III) MAINTENANCE AGREEMENTS ASA
1.1(A)(IV) IMPLEMENTATION AGREEMENTS ASA
1.1(A)(IX) COMPUTER EQUIPMENT ASA
1.1(C)(I) IMPLEMENTATION OBLIGATIONS ASA
1.1(C)(II) MAINTENANCE OBLIGATIONS ASA
2.4 CONFLICTS ASA
2.6 FINANCIAL STATEMENTS ASA
2.7 LIENS ASA
2.9 CAPITAL EQUIPMENT AND HARD ASSETS ASA
2.10(A) INTELLECTUAL PROPERTY RIGHTS OF OTHERS ASA
2.10(B) SOFTWARE RIGHTS OF OTHERS ASA
2.11 ASSIGNED CONTRACTS ASA
2.12 GOVERNMENTAL AUTHORIZATION ASA
2.16 BROKERS' OR FINDERS' FEES ASA
6.3(H) THIRD PARTY RIGHTS ASA
<PAGE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the or this "AGREEMENT") is made and
entered into as of August 2, 1999 by and among InterPro Expense Systems, Inc., a
Delaware corporation ("BUYER"), ASA InterPro SmartTime LLC, a Delaware limited
liability company ("SMARTTIME" or "SELLER"), and ASA International Ltd., a
Delaware corporation and the sole member of Seller ("ASA").
RECITALS
A. Each of Seller and Buyer believe it is in the best interests of
each company that Buyer acquire certain of the assets of, and assume certain of
the liabilities of, Seller (the "ACQUISITION"), including certain software
technology currently under development by Seller to be further developed by
Buyer in order to improve the software's suitability for sale to customers.
B. Seller is engaged in the business of designing, developing, selling
and marketing and implementing software commonly referred to as "SmartTime
Software" (the "BUSINESS", which term excludes the business related to the
Legacy Products and the Lavie Products, as each is defined in Section 2.6(a))
for time and attendance information management, which was previously conducted
through ASA's SmartTime business unit ("SMARTTIME").
C. In connection with the transactions contemplated by this Agreement,
Buyer, Seller and ASA have entered into an Option to Purchase Agreement (the
"OPTION AGREEMENT"), and Buyer and Seller have entered into an Intellectual
Property License Agreement (the "IP LICENSE AGREEMENT") and a Customer
Intangibles License Agreement (the "CUSTOMER INTANGIBLES LICENSE AGREEMENT"),
and Buyer and ASA have entered into an Operating Agreement (the "OPERATING
AGREEMENT"), each as of even date herewith (the "OPTION DATE"), which agreements
are sometimes collectively referred to as the "ANCILLARY AGREEMENTS" and which
agreements are intended to govern the relationship of the parties and the
operation of the Business during the period from the Option Date until the
Closing Date (as defined herein).
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
ARTICLE I
THE ACQUISITION
1.1 PURCHASE OF ASSETS
(a) PURCHASE AND SALE OF ASSETS. On the terms and subject to the
conditions set forth in this Agreement, Seller will sell, convey, transfer,
assign and deliver to Buyer, and Buyer will purchase and acquire from Seller on
the Closing Date (as defined in Section 1.5), all of Seller's rights, title and
interest in and to all of the assets and properties of Seller used exclusively
in the Business (collectively the "SELLER ASSETS") free and clear of all liens,
pledges, charges, claims, security interests or other encumbrances of any sort
(collectively, "LIENS"), including without limitation, the following (provided,
however, that the Seller Assets shall not include those assets set forth on
SCHEDULE 1.1(A), which schedule shall include but not be limited to the Legacy
Products and the Lavie Products):
(i) All rights, title and interest in and to, including,
among others, the rights, title and interests listed on SCHEDULE 1.1(A)(I), (a)
the software previously developed and sold by SmartTime, including all released
and unreleased source code and object code versions thereof, all work in process
related thereto, and all related documentation and development notes (the
"SOFTWARE"), and (b) except for the Customer Intangibles (as defined in the
Customer Intangibles License Agreement), all other intellectual property and
intellectual property rights related to, or used by ASA and/or Seller
exclusively in connection with, the Business or the Software, including
databases, market information, research and development, patents, patent
applications, copyrights, copyright registration applications, trademarks and
service marks and related applications and goodwill, trade names, trade secrets,
proprietary information, technology rights and licenses, proprietary rights and
processes, know-how, research and development in progress, and any and all other
intellectual property including, without limitation, all things authored,
discovered, developed, made, perfected, improved, designed, engineered, devised,
acquired, produced, conceived or first reduced to practice by ASA or Seller that
pertain to or are or were used in the Business, or that are relevant to an
understanding or to the development of the Business or to the performance by
Software and other products of the Business of their intended functions or
purposes, whether tangible or intangible, in any stage of development, including
without limitation enhancements, designs, technology, improvements, inventions,
works of authorship, formulas, processes, routines, subroutines, techniques,
concepts, object code, flow charts, diagrams, coding sheets, source code,
listings and annotations, programmers' notes, information, work papers, work
product and other materials of any types whatsoever, and all rights of any kind
in or to any of the foregoing (collectively, with the Software, "INTELLECTUAL
PROPERTY");
(ii) All rights, title and interest in and to all end-user
software licenses (the "LICENSE AGREEMENTS") sold by SmartTime in connection
with the use of the Software (any such licenses to be listed on SCHEDULE
1.1(A)(II));
(iii) All rights, title and interest in and to any contracts
for maintenance in connection with the Software (any such contracts to be listed
on SCHEDULE 1.1(A)(III) and to be referred to as the "MAINTENANCE AGREEMENTS");
(iv) All rights, title and interest in and to any contracts
for implementation of the Software (any such contracts to be listed on SCHEDULE
1.1(A)(IV) and to be referred to as the "IMPLEMENTATION AGREEMENTS");
(v) All accounts receivable relating to SmartTime which are
outstanding as of the Closing Date;
(vi) All prepaid expenses relating specifically to SmartTime
as of the Closing Date;
(vii) All other current assets relating specifically to
SmartTime as of the Closing Date; and
(viii) All computers, computer equipment and related
software used exclusively in conjunction with all aspects of the SmartTime
business (as listed on SCHEDULE 1.1(A)(IX)).
(b) ASSETS NOT ACQUIRED. Seller shall retain all assets not used
in the conduct of the Business, including all cash and cash equivalents existing
as of the Option Date.
(c) ASSUMPTION OF LIABILITIES. Buyer shall not assume any
liabilities or obligations of Seller or ASA except for those liabilities and
obligations which Buyer expressly assumes pursuant to this Section 1.1(c).
Without limiting the foregoing, it is expressly agreed that Buyer shall not
assume any liabilities for employment, income, sales, property or other taxes
incurred or accrued by Seller. Seller and ASA will indemnify and hold Buyer
harmless in accordance with the provisions of Article VII from and against any
and all losses, costs, expenses, claims, liabilities, deficiencies, judgments
and damages incurred or suffered by Buyer or any of its affiliates related to or
arising out of any liabilities or obligations of Seller or ASA, except for those
liabilities or obligations expressly assumed by Buyer in this Section 1.1(c). At
the Closing, Buyer shall assume the following obligations and liabilities of
Seller (collectively, the "ASSUMED LIABILITIES"):
(i) All of Seller's implementation obligations pursuant to
the Implementation Agreements ("IMPLEMENTATION OBLIGATIONS") as of the Closing
Date, provided that Seller identifies on SCHEDULE 1.1(C)(I) each such
Implementation Obligation to Buyer and provides to Buyer on SCHEDULE 1.1(C)(I)
the following information for each such Implementation Obligation:
(1) Customer name;
(2) Commencement date and estimated completion dates of
implementation project;
(3) Method of fee calculation (time & materials or
fixed price) and the agreed upon billing rates involved, where applicable;
(4) Amount, if any, of cash deposits received from
customer in advance of work performed;
(5) Nature of any custom software development involved
with the implementation, excluding normal configuration and integration to
back-end accounting systems; and
(6) Material problems, if any, known to Seller in
connection with the implementation;
(ii) All of Seller's maintenance obligations pursuant to the
Maintenance Agreements ("MAINTENANCE OBLIGATIONS") as of the Closing Date,
provided that Seller identifies each such Maintenance Obligation to Buyer on
SCHEDULE 1.1(C)(II) and provides to Buyer on SCHEDULE 1.1(C)(II) the following
information for each such Maintenance Obligation:
(1) Customer name;
(2) Maintenance period and related maintenance fee; and
(3) Any Maintenance Obligations assumed by Seller that
are out of the ordinary course of business.
(iii) All of Seller's accounts payable, lease obligations,
deferred revenue, customer deposits and accrued liabilities incurred by
SmartTime in the ordinary course of business as of the Option Date
(collectively, the "BALANCE SHEET LIABILITIES"); and
(iv) All of Seller's liabilities and obligations arising
from and after the Option Date other than those pursuant to breaches by Seller
or ASA of any of their representations, warranties, covenants or other
obligations hereunder.
(d) RISK OF LOSS. In the event any of the Seller Assets are
unavailable for delivery to Buyer on the Closing Date as a result of risks for
which such Seller Assets were insured by Seller and/or ASA, Buyer may at its
option elect (i) to require Seller and/or ASA to deliver to Buyer assignments of
such Seller's and/or ASA's rights under its insurance policies, if any,
applicable to such Seller Assets and to close on that basis, or (ii) to not
close due to the failure of a condition to closing if the amount of the loss
reasonably can be expected to be in excess of $50,000. With respect to the
Seller Assets, Seller and ASA hereby agree to make an assignment of its rights
under their insurance policies if Buyer so elects.
1.2 CONSIDERATION FOR ASSETS Subject to the Adjustment in Section 1.6,
as consideration (the "CONSIDERATION") for the sale of the Assets to Buyer, in
addition to the assumption of the Assumed Liabilities provided by Section
1.1(c), at the Closing, on the terms and subject to the conditions set forth in
this Agreement, Buyer shall pay to Seller or its designee, by wire transfer of
same day funds, an amount equal to $7,020,000, less any portion of the Option
Fee (as defined in the Option Agreement) previously paid to Seller (the
"PURCHASE PRICE").
1.3 SALES TAXES. Seller shall bear and pay, and shall reimburse Buyer
for, any sales taxes, use taxes, transfer taxes, documentary charges, recording
fees or similar taxes, charges, fees or expenses ("SALES TAXES") that may become
payable in connection with the sale of the Seller Assets to Buyer. The parties
shall cooperate with each other to the extent reasonably requested and legally
permitted to minimize any such Sales Taxes.
1.4 ALLOCATION. Within 45 days of the Closing, Buyer and Seller shall
mutually agree on the manner in which the consideration referred to in Section
1.2, as adjusted in Section 1.6, is to be allocated among the Seller Assets (the
"ALLOCATION"), which Allocation shall be substantially identical to SCHEDULE
1.4. The Allocation shall be conclusive and binding upon Buyer and Seller for
all purposes, and the parties agree that all tax returns and reports (including
Internal Revenue Service ("IRS") Form 8594) and all financial statements shall
be prepared in a manner consistent with (and the parties shall not otherwise
file a tax return position inconsistent with) the Allocation unless required by
the IRS or state taxing authority. The Allocation shall be prepared in a manner
consistent with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "CODE"), and the income tax regulations promulgated thereunder.
1.5 CLOSING .
(a) CLOSING. Unless this Agreement is earlier terminated pursuant
to Section 8.1, the closing of the transactions contemplated by this Agreement
(the "CLOSING") shall be held at the offices of Wilson Sonsini Goodrich &
Rosati, 650 Page Mill Road, Palo Alto, CA 94304, at 10:00 a.m. on the date which
is two business days following satisfaction or waiver of the last of the
conditions to the Acquisition as set forth in Article VI hereof, or on such
other time and/or date as to which the parties agree (the actual date on which
the Closing occurs is referred to herein as the "CLOSING DATE").
(b) DELIVERY. At the Closing:
(i) Seller shall deliver to Buyer, and Buyer shall deliver
to Seller, an Instrument of Assignment and Assumption of Liabilities in
substantially the form of EXHIBIT A hereto by which Seller shall assign the
Seller Assets to Buyer and Buyer shall assume the Assumed Liabilities as of the
Closing;
(ii) Seller shall deliver to Buyer all bills of sale,
endorsements, assignments, consents to assignments to the extent obtained and
other instruments and documents as Buyer may reasonably request to sell, convey,
assign, transfer and deliver to Buyer good title to all the Seller Assets free
and clear of any and all Liens, including, without limitation, a Bill of Sale
and General Assignment of Seller Assets in substantially the form attached
hereto as EXHIBIT B;
(iii) Seller shall deliver to Buyer a Trademark Assignment
in substantially the form attached hereto as EXHIBIT C;
(iv) Seller shall deliver to Buyer a Copyright Assignment in
substantially the form attached hereto as EXHIBIT D; and
(v) Seller and Buyer shall deliver or cause to be delivered
to one another such other instruments and documents necessary or appropriate to
evidence the due execution, delivery and performance of this Agreement.
(c) TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time
after the Closing Date, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest Buyer with full right, title and
possession to all Seller Assets, the officers and directors of Seller and ASA
are fully authorized in the name of Seller or ASA or otherwise to take, and will
take, all such lawful and necessary and/or desirable action.
1.6 ADJUSTMENT TO CONSIDERATION. The Consideration shall be reduced by
one dollar for every dollar that SmartTime's Net Worth is less than $0 as of the
Option Date (the "ADJUSTMENT"). "Net Worth" means, as of the Option Date, the
accounts receivable of SmartTime, less the allowance for doubtful accounts
applicable to those accounts receivable, less the Balance Sheet Liabilities.
Seller and Buyer shall agree upon the Adjustment amount prior to the Closing,
and Seller shall provide Buyer a schedule specifying in detail its method for
calculating the Net Worth and specifying the Net Worth (the "NET WORTH
SCHEDULE").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND ASA
Seller and ASA represent and warrant to Buyer, as of the Option Date,
as follows:
2.1 ORGANIZATION OF SELLER. Seller is a corporation duly incorporated
and validly existing under the laws of the State of Delaware and has full
corporate power and authority to carry on the Business as it is now being
conducted and to own the Seller Assets. Seller is duly qualified or licensed to
do business as a foreign corporation in good standing in every jurisdiction in
which the ownership of the Seller Assets or the conduct of the Business requires
such qualification, except where the failure to so qualify or be licensed would
not have a material adverse effect on the business or financial condition of the
Business.
2.2 DUE AUTHORIZATION. Seller and/or ASA, as the case may be, has the
corporate power and authority to execute and deliver this Agreement, and each
document, instrument or agreement contemplated hereby, including but not limited
to the documents delivered at Closing, and to perform its obligations hereunder
and thereunder. The execution, delivery and performance of this Agreement and
each document, instrument or agreement executed pursuant to this Agreement by
Seller and/or ASA, as the case may be, and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action and no further corporate action is necessary in that regard.
2.3 DUE EXECUTION AND ENFORCEABILITY. This Agreement, and each
document, instrument or agreement executed pursuant to this Agreement by Seller
and/or ASA, as the case may be, including but not limited to the Ancillary
Agreements and any other documents delivered at Closing, have been duly executed
and delivered by Seller or ASA, as the case may be, and assuming due
authorization, execution and delivery by Buyer, if required, this Agreement and
each document, instrument or agreement executed pursuant to this Agreement by
Seller or ASA, as the case may be, including but not limited to the Ancillary
Agreements and any other documents delivered at Closing, constitute the legal,
valid and binding obligations of Seller or ASA, as the case may be, enforceable
against Seller or ASA, as the case may be, in accordance with their terms.
2.4 NO CONFLICT. The execution and delivery of this Agreement, and
each document, instrument or agreement executed pursuant to this Agreement,
including but not limited to the Ancillary Agreements and any other documents
delivered at Closing, and the performance of Seller's or ASA's obligations
hereunder and thereunder, (i) are not in violation or breach of, and will not
conflict with or constitute a default under, any of the terms of the certificate
of incorporation or bylaws of ASA or the operating agreement of Seller or any
material contract, agreement or commitment binding upon Seller or ASA or any
contract, agreement or commitment binding upon any of the Seller Assets; and
(ii) will not conflict with or violate any applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court having jurisdiction over Seller or ASA or any of the Acquired Assets.
2.5 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be made or obtained, or will
be required to be made or obtained, by Seller or ASA in connection with the
execution, delivery and performance of this Agreement and each document,
instrument and agreement executed pursuant to this Agreement.
2.6 SELLER FINANCIAL STATEMENTS.
(a) SCHEDULE 2.6 sets forth (i) ASA's audited balance sheet as of
December 31, 1998 and unaudited balance sheet as of March 31, 1999 and the
related audited statements of income, stockholder's equity and cash flows for
the one-year period ending December 31, 1998 and unaudited statements of income,
stockholder's equity and cash flows for the three-month period ending March 31,
1999 (the "ASA FINANCIALS"), and (ii) ASA's SmartTime division's unaudited
balance sheets as of December 31, 1998 and March 31, 1999 and the related
statements of income for the one-year period ending December 31, 1998 and the
three-month period ending March 31, 1999 (the "SMARTTIME FINANCIALS"). The
SmartTime Financials include results solely in connection with (i) the Seller
Assets, (ii) and SmartTime's legacy products not being purchased pursuant to
this Agreement (the "LEGACY PRODUCTS") and (iii) the products related to ASA's
joint venture with Lavie Computers Ltd. not being purchased pursuant to this
Agreement (the "LAVIE PRODUCTS"). The ASA Financials and the SmartTime
Financials have been prepared in good faith in accordance with generally
accepted accounting principles applied on a basis consistent throughout the
periods indicated. The ASA Financials and the SmartTime Financials present
fairly the operating results of the Business during the periods indicated
therein. The results reported in ASA's divisional financial statements,
including the SmartTime Financials, are consolidated to form the ASA Financials.
All material results reported in the SmartTime Financials were included in the
ASA Financials. The ASA Financials and SmartTime Financials include all sales of
products and services by SmartTime to any other division of ASA and all expenses
charged to SmartTime by any other division of ASA. For the year ending December
31, 1998, revenues recognized by SmartTime from the Seller Assets (excluding the
Legacy Products) were $5.7 million and income before taxes from the Seller
Assets (excluding the Legacy Products) was not less than $50,000. March 31, 1999
is referred to herein as the "BALANCE SHEET DATE." The Net Worth Schedule will
present a true and accurate calculation of the Net Worth as of the Option Date.
(b) All accounts receivable of SmartTime have arisen from bona
fide transactions by SmartTime in the ordinary course of its business. All
accounts receivable reflected in the SmartTime Financials are good and
collectible in the ordinary course of business at the aggregate recorded amounts
thereof, net of any applicable allowance for doubtful accounts reflected in the
SmartTime Financials, and all accounts receivable to be reflected on the books
and records of SmartTime as of the Option Date, taken as a whole, will be good
and collectible in the ordinary course of business at the aggregate recorded
amounts thereof, net of any applicable allowance for doubtful accounts, which
allowances will be determined on a basis consistent with the basis used in
determining the allowances for doubtful accounts reflected in the SmartTime
Financials.
2.7 OWNERSHIP AND TRANSFER OF ASSETS.
(a) OWNERSHIP. Except as set forth in SCHEDULE 2.7(A) Seller owns
all rights, title and interest in and to the Seller Assets (collectively, the
"PROPRIETARY RIGHTS") free and clear of any Liens, and has the rights to sell,
assign, transfer, license and deliver, as applicable, such Proprietary Rights as
contemplated herein. Pursuant to the Assignment, Bill of Sale and Assumption
Agreement, dated July 28, 1999, ASA has duly transferred all rights, title and
interest in and to the Seller Assets to Seller, free and clear of any Liens.
(b) NO INFRINGEMENT. Except as set forth in SCHEDULE 2.7(B) the
Proprietary Rights do not infringe, and no one has asserted to Seller or ASA
that such rights infringe, any proprietary rights owned, possessed or used by
any third party. There are no claims, disputes, actions, proceedings, suits or
appeals pending against Seller or ASA with respect to any Proprietary Rights and
none has been threatened against Seller or ASA. There are no facts or alleged
facts which would reasonably serve as a basis for any claim that Seller does not
have the right to use, free of any rights or claims of others, all Proprietary
Rights in the Business and services presently being used, furnished or sold in
the conduct of the Business as it has been and is now being conducted.
(c) EFFECTIVE TRANSFER OF NECESSARY RIGHTS. By means of this
Agreement, together with the documents, instruments and agreements contemplated
hereby, Seller will transfer to Buyer good and marketable title to all Seller
Assets and the related Proprietary Rights. The Seller Assets and the Proprietary
Rights sold to Buyer, and the Customer Intangibles licensed to Buyer, pursuant
to this Agreement, the Customer Intangibles License and the documents,
instruments and agreements contemplated hereby and thereby, will transfer all
assets and intellectual property rights (a) used by ASA and/or Seller in
conducting the Business and (b) required by Buyer to conduct the Business as
previously conducted by Seller and ASA.
2.8 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set forth on
Schedules 2.10(a) and 2.10(b), there is no agreement, commitment, judgment,
injunction, order or decree binding upon ASA, Seller, the Seller Assets or any
employee of Seller or ASA, which has or could reasonably be expected to have the
effect of prohibiting or impairing in any material respect any use by Buyer of
the Seller Assets following the Option Date in the manner generally used prior
to the Option Date.
2.9 CAPITAL EQUIPMENT AND HARD ASSETS. All tangible assets and
equipment of Seller other than those listed on SCHEDULE 1.1(A) are in
substantially good condition and repair, reasonable wear and tear excepted, and
are adequate for the uses to which they are being put or would be put in the
ordinary course of business consistent with industry standards and will be
transferred to Buyer without any Liens.
2.10 INTELLECTUAL PROPERTY.
(a) Except as set forth in SCHEDULE 2.10(A), Seller owns all
rights, title and interest in and to the Intellectual Property, and the conduct
of the activities of the Business currently and in the past by Seller and ASA
does not conflict with and has not conflicted with intellectual property rights
of others. All Intellectual Property is owned exclusively by Seller free and
clear of all Liens and no other person, including without limitation any present
or former employee, officer or director of Seller, has any right whatsoever
therein. Neither Seller nor ASA has violated or by conducting the activities of
the Business in the ordinary course consistent with past practice would violate,
and to Seller's and ASA's knowledge no present or former employee of Seller or
ASA has violated, any intellectual property rights whatsoever of any other
person or entity. Neither Seller nor ASA has any obligation to compensate any
person or entity for the use of any Intellectual Property relating to the Seller
Assets. Neither Seller nor ASA has granted to any person or entity any license,
option or other rights to use in any manner any Intellectual Property whether
requiring the payment of royalties or not.
(b) Seller owns exclusively all right, title and interest in and
to the Software. No person or entity other than Seller owns any right, title or
interest in the Software including, without limitation, any right to
manufacture, use, copy, distribute or sublicense any object code or source code
thereof. The Intellectual Property is (i) not subject to any Liens, (ii) not
subject to any pending or, to Seller's or ASA's knowledge, threatened challenge
of infringement of the rights of others, nor to the knowledge of Seller or ASA
is there any basis for a challenge of infringement of any such rights of others,
and (iii) freely transferable and assignable to Buyer. To the knowledge of
Seller and ASA, no third party is infringing or misappropriating any
Intellectual Property.
2.11 CONTRACTS. SCHEDULE 2.11 accurately lists all of the contracts to
be assigned to Buyer in connection with the Acquisition (the "ASSIGNED
CONTRACTS"). Each of the Assigned Contracts is a legal, binding and enforceable
obligation by or against Seller, subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar federal or state laws
affecting the rights of creditors and the effect or availability of rules of law
governing specific performance, injunctive relief or other equitable remedies
(regardless of whether any such remedy is considered in a proceeding at law or
in equity). Neither Seller nor ASA has breached, violated or defaulted under, or
received notice that it has breached, violated or defaulted under, any of the
terms or conditions of any agreement required to be set forth in SCHEDULE 2.11.
Each Assigned Contract is in full force and effect and is not subject to any
default thereunder of which Seller or ASA has knowledge by any party obligated
to Seller or ASA pursuant thereto. Seller and ASA have obtained all necessary
consents, waivers and approvals of parties to any Assigned Contract necessary to
effect the transactions contemplated hereby and pursuant to the Option Agreement
and to assign all rights and benefits thereunder to Buyer as of the Option Date
and as of the Closing Date.
2.12 GOVERNMENTAL AUTHORIZATION. SCHEDULE 2.12 accurately lists each
material consent, license, permit, grant or other authorization issued to Seller
or ASA by each court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (each a "GOVERNMENTAL ENTITY")
(i) pursuant to which Seller currently operates or holds any interest in any of
the Seller Assets or (ii) which is required for the operation of the activities
of the Business or the holding of any such interest (herein collectively called
"SMARTTIME AUTHORIZATIONS"), which SmartTime Authorizations are in full force
and effect and constitute all SmartTime Authorizations required to permit Seller
to operate or conduct the activities of the Business or hold any interest in the
Seller Assets. No Governmental Entity has at any time notified Seller or ASA of
any challenge or question regarding the legal right of Seller or ASA to
manufacture, offer or sell any of the products of the Business, including the
Seller Assets, in the present manner or style thereof.
2.13 COMPLIANCE WITH APPLICABLE LAWS. Seller and ASA have complied
with all laws, regulations, rules and orders (including those relating to
environmental matters) of each Governmental Entity applicable to them which
relate to the Seller Assets. Neither Seller nor ASA has received any written
notice of any asserted violation of any such laws, regulations, rules or orders.
Neither Seller nor ASA has received any written notice that any investigation or
review by any Governmental Entity with respect to the Business is pending or
that any such investigation or review is contemplated, except where the outcome
of such investigation or review would not have a material adverse effect on the
business or financial condition of the Business.
2.14 MATERIAL ADVERSE EFFECT. There is no fact, circumstance or
condition of any kind or nature whatsoever known to Seller or ASA which
reasonably would be expected to have a material adverse effect on SmartTime or
the Seller Assets ("MATERIAL ADVERSE EFFECT").
2.15 TAXES. To the extent a failure to do so would materially and
adversely affect Buyer, the Seller Assets or Buyer's use of the Seller Assets,
(i) each of ASA and Seller has timely filed within the time the period for
filing or any extension granted with respect thereto, all federal, state, local
and foreign tax returns, reports and estimates ("RETURNS") which it is required
to file, and (ii) paid any and all taxes ("TAXES") it is required to pay in
connection with the taxable periods to which such Returns relate. There are (and
immediately following the Closing there will be) no Liens or similar
encumbrances on the Seller Assets relating or pertaining to taxes, except with
respect to taxes not yet due and payable. Neither Seller nor ASA has any
knowledge of any basis for the assertion of any material claims for Taxes which,
if adversely determined, would result in a Lien or other encumbrance on the
Seller Assets or otherwise materially and adversely affect Buyer or the Seller
Assets.
2.16 BROKERS' OR FINDERS' FEES. Except as disclosed in SCHEDULE 2.16,
neither Seller nor ASA is a party to, or in any way obligated under, any
contract or outstanding claim for the payment of any broker's or finder's fee in
connection with the origin, negotiation, execution or performance of this
Agreement, the nonpayment of which could result in the placement of a lien or
other encumbrance on the Acquired Assets, or a claim against Buyer or its
affiliates.
2.17 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Seller or ASA (as modified by the Disclosure Schedules), nor
any statement made in any Exhibit or certificate furnished by Seller or ASA
pursuant to this Agreement, contains or will contain at the Closing Date, any
untrue statement of a material fact, or omits or will omit at the Closing Date
to state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading. There is no fact, circumstance or condition of any kind or nature
whatsoever known to Seller or ASA which reasonably would be expected to have a
Material Adverse Effect that has not been set forth in this Agreement.
2.18 MATERIAL ADVERSE CHANGE. Between the Balance Sheet Date and the
date hereof, to Seller's and ASA's knowledge, there has not been any change in
or effect (or any development that is reasonably likely to result in any change
or effect) that has resulted in or could reasonably be expected to result in a
Material Adverse Effect.
2.19 LITIGATION. There is no suit, action or proceeding pending in
connection with SmartTime or the Seller Assets, nor is there any judgment,
decree, injunction or order of any Governmental Entity or arbitrator outstanding
against SmartTime or the Seller Assets that would have, individually or in the
aggregate, a Material Adverse Effect. Seller has not received any written
communication threatening litigation with respect to SmartTime.
2.20 YEAR 2000 PREPAREDNESS. With respect to the computing platforms
on which it is designed to run and on which it is being offered, including the
Microsoft NT Operating system, the Oracle database and the Intel Pentium class,
the Software is fully Year 2000 compliant in that it (i) has been designed to
ensure date and time entry recognition and calculations, and date data interface
values that reflect the century (except for interfaces that are created by a
party other than the ASA and/or Seller), (ii) accurately manages and manipulates
data involving dates and times (in conformity with the operating principles of
the products), including single century formulas and multi-century formulas, and
will not cause an abnormal ending scenario within the application or generate
incorrect values or invalid results involving such dates, (iii) accurately
processes any date rollover, and (iv) accepts and responds to two-digit year
date input in a manner that resolves any ambiguities as to the century (except
for the integrity of data which is the sole responsibility other than ASA and/or
Seller).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and ASA as follows:
3.1 ORGANIZATION, STANDING AND POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the corporate power to own its properties and to carry on
its business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
3.2 AUTHORITY; DUE EXECUTION; ENFORCEABILITY. Buyer has all requisite
corporate power and authority to execute and deliver this Agreement, and each
document, instrument or agreement contemplated hereby, including, but not
limited to the documents to be delivered at Closing, and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement, and each document, instrument or agreement executed pursuant to this
Agreement by Buyer and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Buyer. This Agreement has and each document, instrument or agreement executed
pursuant to this Agreement by Buyer, including but not limited to the documents
delivered at Closing, have been duly executed and delivered by Buyer and
constitutes the valid and binding obligation of Buyer, enforceable in accordance
with its terms.
3.3 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery of
this Agreement by Buyer, nor the consummation or performance of any of the
transactions contemplated hereby by Buyer, will contravene, conflict with or
result in a material violation of, or give any Governmental Entity or other
person the right to challenge any of such transactions or to exercise any remedy
or obtain any relief under, any federal, state, local, municipal, foreign or
other law, statute, ordinance, code, decree, rule, regulation or ruling issued,
enacted, adopted, implemented or otherwise put into effect by or under the
authority of any Governmental Entity to which Buyer is subject. Buyer is not and
will not be required to make any filing with or give any notice to, or to obtain
any consent from, any Governmental Entity in connection with the execution and
delivery of any of this Agreement by Buyer or the consummation or performance of
any of the transactions contemplated hereby by Buyer.
3.4 NO CONFLICT. The execution and delivery of this Agreement, and
each document, instrument or agreement executed pursuant to this Agreement,
including but not limited to the documents delivered at Closing, and the
performance of Buyer's obligations hereunder and thereunder, (i) are not in
violation or breach of, and will not conflict with or constitute a default
under, any of the terms of the certificate of incorporation or bylaws of Buyer
or any contract, agreement or commitment binding upon Buyer, or (ii) will not
conflict with or violate any applicable law, rule, regulation, order or decree
of any government, governmental instrumentality or court having jurisdiction
over Buyer.
3.5 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Buyer, nor any statement made in any Exhibit or certificate
furnished by Buyer pursuant to this Agreement, contains or will contain at the
Closing Date, any untrue statement of a material fact, or omits or will omit at
the Closing Date to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which made, not misleading.
ARTICLE IV
CONDUCT PRIOR TO THE CLOSING DATE
4.1 NO SOLICITATION. Until the earlier of (i) the Closing, and (ii)
the termination of this Agreement, neither Seller, ASA nor any of their
respective officers, directors, agents, representatives and affiliates, will
directly or indirectly take any of the following actions with any party other
than Buyer and its designees:
(a) solicit, encourage, initiate or participate in any
negotiations or discussions with respect to any offer or proposal to acquire all
or any portion of the Business or the Seller Assets,
(b) except as required by law (in the opinion of outside
counsel), including fiduciary duties required by law, disclose any information
not customarily disclosed to any person other than its attorneys or financial
advisors concerning Seller's business and properties or afford to any person or
entity access to its properties, books or records, or
(c) assist or cooperate with any person to make any proposal to
purchase all or any part of the Seller Assets, other than selling products of
Seller in the ordinary course of business.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 ACCESS TO INFORMATION. Seller shall afford Buyer and its
accountants, counsel and other representatives, full access during the period
prior to the Closing Date to (a) all of Seller's properties, books, contracts,
commitments and records, (b) the employees, customers and suppliers of Seller
and (c) all other information concerning the business, properties and personnel
(subject to restrictions imposed by applicable law) of Seller as Buyer may
reasonably request. Seller agrees to maintain and retain any and all information
regarding its business operations on or prior to the Closing Date necessary for
Buyer to calculate the availability to it of tax credits for research activities
under Section 41 of the Code. Seller agrees to provide to Buyer and its
accountants, counsel and other representatives copies of internal financial
statements promptly upon request. No information or knowledge obtained in any
investigation pursuant to this Section 5.1 shall affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Acquisition.
5.2 CONFIDENTIALITY. Each of the parties hereto hereby agrees to keep
such information or knowledge obtained in any investigation pursuant to Section
5.1, or pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby, confidential; provided,
however, that the foregoing shall not apply to information or knowledge which
(a) a party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is generally known to the public and
did not become so known through any violation of law or this Agreement, (c)
became known to the public through no fault of such party, (d) is later lawfully
acquired by such party from other sources, (e) is required to be disclosed by
order of court or government agency with subpoena powers or (f) which is
disclosed in the course of any litigation between any of the parties hereto.
5.3 EXPENSES. Whether or not the Acquisition is consummated, all fees
and expenses incurred in connection with the Acquisition including, without
limitation, all legal, accounting, financial advisory, consulting and all other
fees and expenses of third parties ("THIRD PARTY EXPENSES") incurred by a party
in connection with the negotiation and effectuation of the terms and conditions
of this Agreement and the transactions contemplated hereby, shall be the
obligation of the respective party incurring such fees and expenses; provided
that ASA shall reimburse Buyer for all reasonable legal fees and expenses of
Buyer related to this transaction from July 1, 1999 forward up to a maximum
amount of $25,000.
5.4 PUBLIC DISCLOSURE. Unless otherwise required by law or this
Agreement, prior to the Closing Date, no disclosure (whether or not in response
to an inquiry) of the subject matter of this Agreement shall be made by Seller
or Buyer unless approved by the other party.
5.5 CONSENTS. Seller shall obtain any consents as may be required by
the Assigned Contracts in connection with the Acquisition so as to transfer to
Buyer all rights of Seller thereunder as of the Option Date and the Closing
Date.
5.6 REASONABLE COMMERCIAL EFFORTS. Subject to the terms and conditions
provided in this Agreement, each of the parties hereto shall use its reasonable
commercial efforts to take promptly, or cause to be taken promptly, all actions,
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations: to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement.
5.7 NOTIFICATION OF CERTAIN MATTERS. Seller and ASA shall give prompt
notice to Buyer, and Buyer shall give prompt notice to Seller, of (i) the
occurrence or non-occurrence of any event, the occurrence or non-occurrence of
which is likely to cause any representation or warranty of Seller or ASA or
Buyer, respectively, contained in this Agreement to be untrue or inaccurate as
of the Option Date, and (ii) any failure of Seller or ASA or Buyer, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; PROVIDED, HOWEVER, that the delivery
of any notice pursuant to this Section 5.7 shall not limit or otherwise affect
any remedies available to the party receiving such notice.
5.8 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Each party hereto, at
the request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
5.9 TAX RETURNS. Seller and ASA shall be responsible for and pay when
due (i) all of Seller's Taxes attributable to or levied or imposed upon the
Seller Assets relating or pertaining to the period (or that portion of any
period) ending on or prior to the Option Date and (ii) all Taxes attributable
to, levied or imposed upon, or incurred in connection with the Seller's business
operations ending on or prior to the Option Date. Seller and ASA shall continue
to timely file within the time period for filing, or any extension granted with
respect thereto, all Returns required to be filed in connection with the Seller
Assets and any portion of any such Returns connected therewith shall be true and
correct and completed in accordance with applicable laws.
5.10 STATE TAX CERTIFICATES. Within ten (10) business days of the date
of this Agreement, Seller shall file or cause to be filed in all Tax
jurisdictions in which Seller operates properly completed applications or other
appropriate forms of request with the appropriate governmental agencies required
to obtain certificates of release or other appropriate forms of release or proof
of payment with respect to Seller's Taxes, if any, for which Buyer may be liable
under any state or local law as a "successor-in-interest" or otherwise (the "TAX
CERTIFICATES").
<PAGE>
5.11 BULK SALES. Seller hereby agrees to comply with any bulk transfer
law which may be applicable to the transactions contemplated by this Agreement.
5.12 PAYMENT OF TAXES. As of the Closing, Seller shall have (i) paid
all Taxes it is required to pay as of such time and (ii) withheld with respect
to its employees all federal and state income taxes, FICA, FUTA and other Taxes
required to be withheld as of such time.
5.13 NON-COMPETITION AGREEMENT.
(a) RESTRICTED ACTIVITY. Seller and ASA agree that, during the
two (2) year period following the Option Date and ending on the second
anniversary of the Option Date (the "NON- COMPETE PERIOD"), the Seller and ASA
will not, without Buyer's prior written consent, directly or indirectly, own,
manage, operate, join, control, advise or participate in, as a shareholder
(other than as a shareholder with less than 1% of the outstanding common stock
of a publicly traded corporation), director (other than as an outside director
of a public company), officer, manager, executive, partner, consultant or
technical or business advisor (or any foreign equivalents of the foregoing) any
company that is engaged in the Business anywhere within the Restricted Area (as
defined below) or any company or entity controlling, controlled by or under
common control with any company engaged in such Business (any of the foregoing,
a "RESTRICTED COMPANY").
(b) ASSOCIATION WITH RESTRICTED COMPANY. In the event that the
Seller or ASA intends to associate with any Restricted Company during the
Non-compete Period, such party must provide information in writing to Buyer
relating to the business engaged in or proposed to be engaged in by such
Restricted Company. All such current associations are set out in Schedule
5.13(b) hereto. In the event that Buyer authorizes the Seller or ASA to engage
in such activity in writing, any activity by the Seller or ASA described in the
written information furnished to Buyer and so authorized shall be conclusively
deemed not to be a violation of Section 5.13(a) hereof.
(c) SPECIFIC ENFORCEMENT. The Seller and ASA acknowledge that
Buyer will be irreparably injured if the provisions of this Section 5.13 are not
specifically enforced. If the Seller or ASA commits, or in the reasonable belief
of Buyer threatens to commit, a breach of any of the provisions of this Section
5.13, Buyer shall have the right and remedy, in addition to any other right or
remedy that may be available at law or in equity, to have the provisions of this
Section 5.13 specifically enforced by any court having equity jurisdiction
together with an accounting for any benefit or gain by the Seller or ASA in
connection with any such breach, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to Buyer and its
affiliates and that money damages will not provide an adequate remedy therefor.
Such injunction shall be available without the posting of any bond or other
security, and the Seller and ASA hereby consent to the issuance of such
injunction.
(d) RESTRICTED AREA. The parties acknowledge that although the
current market for Seller's products is world-wide and although products from
all nations compete with products from all other nations in that market, Seller
currently predominantly competes in markets in the United States and Europe.
Accordingly, the parties agree that the term "Restricted Area" shall be the
United States and Europe.
(e) SEVERABILITY. The parties intend that the covenants contained
in this Section 5.13 shall be construed as a series of separate covenants, one
for each county of California, each state of the United States, and each nation
that is included in the Restricted Area. Except for geographic coverage, each
such separate covenant shall be deemed identical in terms to the covenant
contained in the preceding paragraphs in this Section 5.13. If, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants (or
any part thereof) included or deemed included in any of the preceding paragraphs
in this Section 5.13, then such unenforceable covenant (or such part) shall be
deemed eliminated from this Agreement for the purpose of those proceedings to
the extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced. In the event that any of the provisions of this Section
5.12 should ever be deemed to exceed the time or geographic limitations, or the
scope of the covenants contained therein, permitted by applicable law, then such
provisions shall be reformed to the maximum time or geographic limitations, as
the case may be, permitted by applicable law.
5.14 NON-SOLICITATION AGREEMENT. For two (2) years after the date
hereof, the Seller shall not solicit, encourage, or take any other action which
is intended to induce any existing employee of Buyer or any of its subsidiaries
or affiliates known to Seller or any of the employees listed on SCHEDULE 5.13
hereto to terminate employment with Buyer provided, however that this provision
shall not limit Seller's general advertising for employees or hirings that
result therefrom.
5.15 GOVERNMENTAL APPROVALS. Seller shall have obtained as of the date
hereof all consents, waivers and approvals required from any governmental entity
necessary to effect the Acquisition, and, as of the Closing Date, Seller shall
have timely obtained any and all consents, waivers and approvals required from
any governmental entity necessary to effect the Acquisition. In the event that
any of such consents, waivers and approvals shall not be obtainable, at Buyer's
election, Seller shall extend the duration of any Ancillary Agreements and shall
take any other action necessary to effect in full the substance of this
transaction.
5.16 LIENS. ASA and Seller shall have removed as of the Closing Date
the security interest as set forth in that certain Security Agreement between
ASA and CoreStates Bank, N.A. (now known as "First Union"), dated November 3,
1994, such that it no longer encumbers the Seller Assets in any manner, and ASA
and Seller shall not subject the Seller Assets to any Liens.
ARTICLE VI
CONDITIONS TO THE ACQUISITION
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE ACQUISITION.
The respective obligations of each party to this Agreement to effect the
Acquisition shall be subject to the satisfaction at or prior to the Closing Date
of the following conditions:
(a) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Acquisition shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Acquisition, which makes the consummation of the Acquisition illegal.
(b) EXERCISE OF OPTION. Buyer shall have given written notice to
Seller of Buyer's exercise of the Option in accordance with the provisions of
the Option Agreement.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing, by
Seller:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Buyer in this Agreement were true and correct
on and as of the Option Date and Buyer shall have performed and complied with
all covenants, obligations and conditions of this Agreement required to be
performed and complied with by them as of the Closing Date.
(b) CERTIFICATE OF BUYER. Seller shall have been provided with a
certificate duly executed on behalf of Buyer to the effect that, as of the
Closing Date:
(i) all representations and warranties made by Buyer in this
Agreement were true and complete as of the Option Date; and
(ii) all covenants, obligations and conditions of this
Agreement to be performed by Buyer on or before the Closing Date have been so
performed.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations
of Buyer to consummate and effect this Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived, in
writing, exclusively by Buyer:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller in this Agreement were true and correct
on and as of the Option Date and Seller shall have performed and complied with
all covenants, obligations and conditions of this Agreement required to be
performed and complied with by them as of the Closing Date.
(b) CERTIFICATE OF SELLER. Buyer shall have been provided with a
certificate executed on behalf of Seller by its Member to the effect that, as of
the Closing Date:
(i) all representations and warranties made by Seller in
this Agreement were true and complete as of the Option Date; and
(ii) all covenants, obligations and conditions of this
Agreement to be performed by Seller on or before such date have been so
performed.
<PAGE>
(c) CLAIMS. There shall not have occurred any claims (whether or
not asserted in litigation) arising out of the conduct of the Business prior to
the Option Date which may materially and adversely affect the consummation of
the transactions contemplated hereby or the Business, the Seller Assets or
financial condition of Seller or Buyer.
(d) THIRD PARTY CONSENTS. Seller shall have obtained and provided
Buyer any and all consents, waivers, and approvals required from third parties
relating to the Assigned Contracts so as to assign all rights of Seller
thereunder to Buyer as of the Option Date and the Closing Date.
(e) GOVERNMENTAL APPROVALS. Any and all consents, waivers and
approvals required from any governmental entity reasonably deemed necessary by
Buyer to effect the Acquisition shall have been timely obtained.
(f) NO INJUNCTIONS OR RESTRAINTS ON CONDUCT OF BUSINESS. No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint or provision challenging Buyer's proposed acquisition of the Seller
Assets, or limiting or restricting Buyer's conduct or operation of the Business
(or its own business) as a result of the Acquisition) following the Acquisition
shall be in effect, nor shall any proceeding brought by an administrative agency
or commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending.
(g) TAX CERTIFICATES. Seller shall have delivered to Buyer the
Tax Certificates, if any, which it has received as of Closing.
(h) THIRD PARTY RIGHTS. No third party shall have any right of
any nature whatsoever (including, without limitation, any right to receive
royalty payments) in respect of any of the Seller Assets, except as stated in
SCHEDULE 6.3(H), which rights arose out of the conduct of the Business prior to
the Option Date.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Seller's and ASA's
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Acquisition and continue until
eighteen (18) months following the Option Date (the "EXPIRATION DATE");
PROVIDED, HOWEVER, that the representations and warranties set forth in Section
2.15 shall survive until the expiration of the applicable statute of limitations
with respect thereto. All of Buyer's representations and warranties contained in
or in any instrument delivered pursuant to this Agreement shall survive the
Acquisition and continue until the Expiration Date.
7.2 SELLER AND ASA INDEMNITY.
(a) SELLER AND ASA INDEMNITY. Seller and ASA agree to indemnify
and hold Buyer and its officers, directors and affiliates (the "INDEMNIFIED
PARTIES") harmless against all claims, losses, liabilities, damages,
deficiencies, costs and expenses, including reasonable attorneys' fees and
expenses of investigation, (hereinafter individually a "LOSS" and collectively
"LOSSES") incurred by Buyer, its officers, directors, or affiliates directly or
indirectly which exceed in the aggregate $100,000 as a result of (i) any
inaccuracy or breach of a representation or warranty of Seller or ASA contained
in this Agreement, or (ii) any failure by Seller or ASA to perform or comply
with any covenant contained in this Agreement. Notwithstanding anything else
herein, the maximum amount for which Seller shall indemnify Buyer pursuant to
this Section 7.2 shall be Seven Million Five Hundred Thousand Dollars
($7,500,000). In the event Seller has collected fees for services that must be
performed by Buyer, the Losses shall equal Buyer's costs for direct labor,
fringe benefits and occupancy of its employees performing such services.
(b) RIGHTS TO PAYMENT AND SET OFF. Buyer may not receive any
payment from Seller or ASA unless and until Officer's Certificates (as defined
in paragraph (c) below) identifying Losses in the aggregate exceeding $100,000
(the "BASKET AMOUNT") have been delivered to the Seller as provided in paragraph
(c) below, in which case Buyer shall be entitled to recover only those Losses
exceeding the Basket Amount. As partial security for the indemnity provided in
this Agreement, Buyer shall have the right to set off amounts owed to Seller
pursuant to SECTION 7.2(D) in connection with the Purchase Price and Second
Option Fee, up to $500,000. In connection with any amounts set off, Buyer shall
provide Seller notice of any claims pursuant to SECTION 7.2(C) below and shall
resolve any such claims pursuant to SECTION 7.2(D) below.
(c) CLAIMS NOTICES. Subject to the proviso below, thirty (30)
days after receipt by Seller or ASA at any time on or before the Expiration Date
of a certificate signed by any officer of Buyer (an "OFFICER'S CERTIFICATE"):
(A) stating that Buyer has paid or properly accrued or reasonably anticipates
that it will have to pay or accrue Losses with respect to an Indemnity Matter
(as defined below), and (B) specifying in reasonable detail the individual items
of Losses included in the amount so stated, the date each such item was paid or
properly accrued, or the basis for such anticipated liability, and the nature of
the misrepresentation, breach of warranty or covenant to which such item is
related, and (C) a request that the Seller or ASA deliver to Buyer the relevant
dollar amount, Seller or ASA, as the case may be, shall deliver to Buyer, as
promptly as practicable, the dollar amount with a value equal to such Losses;
PROVIDED, HOWEVER, that no such payment or delivery shall be made if Seller or
ASA shall object in a written statement to the claim made in the Officer's
Certificate, and such statement shall have been delivered to Buyer prior to the
expiration of such thirty (30) day period, whereby the conflict will be resolved
as provided below in SECTION 7.2(D). For purposes of this Agreement, "INDEMNITY
MATTER" shall mean any matter for which any Indemnified Party is entitled to
indemnification pursuant to SECTION 7.2(A).
(d) RESOLUTION OF CONFLICTS; ARBITRATION.
(i) In case Seller or ASA shall object in writing as
discussed in SECTION 7.2(C) above to any claim or claims made in any Officer's
Certificate, Seller or ASA and Buyer shall attempt in good faith to agree upon
the rights of the respective parties with respect to each of such claims. If
Seller or ASA and Buyer should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both parties and shall be furnished to
each party. Promptly following such agreement, Seller or ASA, as the case may
be, shall pay dollar amounts in accordance with the terms thereof.
(ii) If no such agreement can be reached within thirty (30)
days of Buyer's receipt of Seller's or ASA's objection, then such dispute shall
be submitted for arbitration unless the amount of the damage or Loss is at issue
in pending litigation with a third party, in which event arbitration shall not
be commenced until such amount is ascertained or both parties agree to
arbitration; and in either such event the matter shall be settled by arbitration
conducted by one arbitrator mutually agreeable to Buyer and Seller or ASA. In
the event that within thirty (30) days after submission of any dispute to
arbitration, Buyer and Seller or ASA cannot mutually agree on one arbitrator,
Buyer and Seller or ASA shall each select one arbitrator, and the two
arbitrators so selected shall select a third arbitrator. The arbitrator or
arbitrators, as the case may be, shall set a limited time period and establish
procedures designed to reduce the cost and time for discovery while allowing the
parties an opportunity, adequate in the sole judgement of the arbitrator or
majority of the three arbitrators, as the case may be, to discover relevant
information from the opposing parties about the subject matter of the dispute.
The arbitrator or a majority of the three arbitrators, as the case may be, shall
rule upon motions to compel or limit discovery and shall have the authority to
impose sanctions, including attorneys' fees and costs, to the extent as a
competent court of law or equity, should the arbitrators or a majority of the
three arbitrators, as the case may be, determine that discovery was sought
without substantial justification or that discovery was refused or objected to
without substantial justification. The decision of the arbitrator or a majority
of the three arbitrators, as the case may be, as to the validity and amount of
any claim in such Officer's Certificate shall be binding and conclusive upon the
parties to this Agreement. Such decision shall be written and shall be supported
by written findings of fact and conclusions which shall set forth the award,
judgment, decree or order awarded by the arbitrator(s).
(iii) Judgment upon any award rendered by the arbitrator(s)
may be entered in any court having jurisdiction. Any such arbitration shall be
held in Wilmington, Delaware, under the rules then in effect of the American
Arbitration Association. The arbitrator(s) shall determine how all expenses
relating to the arbitration shall be paid, including without limitation, the
respective expenses of each party, the fees of each arbitrator and the
administrative fee of the American Arbitration Association.
7.3 BUYER INDEMNITY. Buyer shall indemnify and hold Seller, ASA and
their respective officers, directors and affiliates (the "SELLER PARTIES")
harmless against all Losses incurred by them directly or indirectly which exceed
in the aggregate $100,000 as a result of (i) any inaccuracy or breach of a
representation or warranty or Buyer contained in this Agreement, or (ii) any
failure by Buyer to perform or comply with any covenant contained in this
Agreement. The Seller Parties shall not receive any payment from Buyer unless
and until the Losses in the aggregate exceed $100,000, in which case the Seller
Parties shall recover only Losses exceeding $100,000.
7.4 THIRD PARTY CLAIMS. In the event that a party seeking indemnity
pursuant to this Agreement ("INDEMNITEE") shall become aware of a third-party
claim with respect to any matter as to which the other party ("INDEMNITOR") has
agreed to indemnify Indemnitee under the provisions of this Agreement (a "THIRD
PARTY CLAIM"), Indemnitee shall give notice thereof in writing to Indemnitor
together, in each instance, with a statement of such information respecting such
Third Party Claim as Indemnitee shall then have. Upon notice by Indemnitor of
its request to contest a Third Party Claim delivered to Indemnitee within twenty
(20) calendar days from the date of receipt by Indemnitor of notice of the Third
Party Claim, Indemnitor may assume the right to contest and defend by all
appropriate legal or other proceedings the Third Party Claim with respect to
which it has been called upon to indemnify Indemnitee under the provisions of
this Agreement. If Indemnitor assumes such defense, Indemnitee shall have the
right to participate in, but not control, the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by Indemnitor.
If Indemnitor shall have assumed the defense of any claim, Indemnitee shall not
admit any liability with respect to, or settle, compromise or discharge, such
claim without Indemnitor's prior written consent. In no event may Indemnitee
settle any such claim without the written consent and agreement of Indemnitor,
which consent and agreement shall not be unreasonably withheld.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. Except as provided in Section 8.2 below, this
Agreement may be terminated and the Acquisition abandoned at any time prior to
the Closing Date:
(a) by mutual consent of Seller and Buyer;
(b) by Buyer or Seller if: (i) the Closing has not occurred by
August 31, 2000; (ii) there shall be a final nonappealable order of a federal or
state court in effect preventing consummation of the Acquisition; or (iii) there
shall be any statute, rule, regulation or order enacted, promulgated, issued or
deemed applicable to the Acquisition by any Governmental Entity that would make
consummation of the Acquisition illegal;
(c) by Buyer if there shall be any action taken, or any statute,
rule, regulation or order enacted, promulgated, issued or deemed applicable to
the Acquisition by any Governmental Entity, which would: (i) prohibit Buyer's
ownership or operation of all or a portion of the Business or the Seller Assets,
or (ii) compel Buyer to dispose of or hold separate all or a portion of the
Business or the Seller Assets or other businesses or Seller Assets of Buyer as a
result of the Acquisition;
(d) by Buyer if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
Seller and such breach has not been cured within ten (10) business days after
written notice to Seller (provided that, no cure period shall be required for a
breach which by its nature cannot be cured);
(e) by Seller if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of Buyer
and such breach has not been cured within ten (10) business days after written
notice to Buyer (provided that, no cure period shall be required for a breach
which by its nature cannot be cured).
8.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of Buyer or Seller, or
their respective officers, directors or stockholders, provided that each party
shall remain liable for any breaches of this Agreement prior to its termination;
and provided further that, the provisions of Sections 5.2, 5.3, 5.4 and Article
X of this Agreement, and the provisions of the Ancillary Agreements, subject to
their terms, shall remain in full force and effect and survive any termination
of this Agreement.
8.3 AMENDMENT. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf of each of
the parties hereto.
8.4 EXTENSION; WAIVER. At any time prior to the Closing Date, Buyer on
the one hand, and Seller, on the other, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations of the other party
or parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party or parties contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the agreements
or conditions for the benefit of such party contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party or
parties.
ARTICLE IX
CERTAIN POST-CLOSING COVENANTS
9.1 TAX CERTIFICATES. Seller and ASA shall file or cause to be filed
properly completed Tax Certificates in a timely manner in all Tax jurisdictions
in which Seller operates except those jurisdictions in which (i) a Tax
Certificate is not required in order that Buyer avoid liability with respect to
Seller's taxes as a "successor in interest" or otherwise, or (ii) Seller filed a
Tax Certificate and delivered same to Buyer prior to Closing.
9.2 PAYMENT OF TAXES. Seller shall pay all Taxes incurred but not paid
prior to Closing in a timely manner and in accordance with applicable legal
requirements.
ARTICLE X
GENERAL PROVISIONS
10.1 ATTORNEYS' FEES. Subject to the provisions of Section 7.2, if any
party to this Agreement brings an action against another party to this Agreement
to enforce its rights under this Agreement, the prevailing party in such action
shall be entitled to recover its reasonable costs and expenses, including
attorneys' fees and costs incurred in connection with such action, including the
appeal of such action.
10.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via telecopy (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Buyer, to:
InterPro Expense Systems, Inc.
4125 Hopyard Road
Pleasanton, California
Attention: Edward Comfoltey
Telecopy No.: (925) 730-7642
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attention: Brian C. Erb, Esq.
John Whittle, Esq.
Telecopy No.: (650) 493-6811
(b) if to Seller, to:
ASA International, Ltd.
10 Speen Street
Framingham, MA
Attention: Alfred C. Angelone
Telecopy No.: (508) 626-0644
with a copy to:
Stroock & Stroock & Lavan LLP
100 Federal Street
Boston, MA 02110
Attention: Paul D. Broude, Esquire
Telecopy No.: (617) 330-5111
10.3 INTERPRETATION. When a reference is made in this Agreement to
Schedules or Exhibits, such reference shall be to a Schedule or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
10.5 ENTIRE AGREEMENT. This Agreement and the Schedules and Exhibits
hereto, together with the Ancillary Agreements: (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; (b) are not intended to
confer upon any other person any rights or remedies hereunder, unless expressly
provided otherwise; and (c) shall not be assigned by operation of law or
otherwise except as otherwise specifically provided.
10.6 SEVERABILITY. In the event that any provision of this Agreement
or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
10.7 OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
10.9 RULES OF CONSTRUCTION. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
10.10. ASSIGNMENT. Notwithstanding anything to the contrary contained
herein, in the Ancillary Agreements or in the related Promissory Note and
Revolving Promissory Note of even date herewith, Buyer may assign, without the
consent of Seller or ASA, its rights and obligations under this Agreement, any
of the Ancillary Agreements and the related Promissory Note and Revolving
Promissory Note to any party acquiring all or substantially all of Buyer's
assets or a majority of Buyer's capital stock, provided that the acquiring party
agrees to be bound by the terms of the agreements so assigned. Otherwise, no
party to this Agreement, the Ancillary Agreements, the Promissory Note or the
Revolving Promissory Note of even date herewith may assign any of its rights or
obligations hereunder or thereunder without the prior written consent of the
other parties hereto or thereto.
<PAGE>
IN WITNESS WHEREOF, InterPro Expense Systems, Inc., SmartTime LLC and
ASA International, Ltd. have caused this Agreement to be signed by their duly
authorized respective officers, all as of the date first written above.
INTERPRO EXPENSE SYSTEMS, INC.
By: /S/ ED COMFOLTEY
------------------------
Name: E. M. COMFOLTEY
----------------------
Title: CEO
---------------------
ASA INTERNATIONAL, LTD.
By: /S/ ALFRED C. ANGELONE
-------------------------
Name: ALFRED C. ANGELONE
-----------------------
Title: CEO
----------------------
SMARTTIME LLC
By: /S/ ALFRED C. ANGELONE
-------------------------
Name: ALFRED C. ANGELONE
-----------------------
Title: PRESIDENT
----------------------
<PAGE>
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT is made, executed and
delivered as of the ___ day of ________, 2000 by and between SmartTime LLC, a
Delaware limited liability company (the "SELLER"), and InterPro Expense Systems,
Inc., a Delaware corporation (the "BUYER").
W I T N E S S E T H
WHEREAS, by Bill of Sale being executed and delivered by the Seller to
the Buyer simultaneously herewith pursuant to an Asset Purchase Agreement
between the Seller, Buyer and ASA International Ltd. dated ________, 1999 (the
"AGREEMENT"), the Seller is selling, conveying, assigning, transferring and
delivering to the Buyer all of the Seller Assets (capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Agreement),
for the consideration, in the amount and upon the terms and subject to the
conditions contained in the Agreement; and
WHEREAS, in partial consideration therefor, the Agreement requires
that the Buyer undertake to assume and to agree to perform, pay or discharge the
Assumed Liabilities.
NOW, THEREFORE,
1. The Seller hereby sells, conveys, assigns, transfers and delivers
the Seller Assets and in partial consideration of such sale, conveyance,
assignment, transfer and delivery, the Buyer hereby undertakes, assumes and
agrees to perform, to the extent not heretofore performed, the Assumed
Liabilities, as described in Section 1.1(b) of the Agreement.
2. The assumption by the Buyer of an obligation of the Seller shall
not be construed to defeat, impair or limit, in any way, any rights, or remedies
of the Buyer to contest or dispute versus the obligee in good faith the validity
or amount thereof.
3. Other than as specifically set forth above, the Buyer assumes no
liability of the Seller of any kind, character or description, including without
limitation, liabilities based on tort, contract or other claims.
4. Buyer agrees to indemnify and hold Seller, and its directors,
officers, and stockholders, harmless against and in respect of any loss, cost,
expense (including expenses of investigation), claim, liability, deficiency,
judgment or damage, including reasonable legal and accounting fees and expenses
incurred by Seller, its officers, directors, or stockholders, by reason of
Buyer's failure to satisfy or discharge in a timely manner any of the Assumed
Liabilities. This provision does not affect Buyer's rights and remedies,
including without limitation Buyer's indemnification rights pursuant to the
Agreement.
<PAGE>
5. This Agreement shall be enforceable against and inure to the
benefit of the successors and assigns of the Buyer and shall be enforceable
against and inure to the benefit of the successors and assigns of the Seller.
6. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to its conflicts of law
rules.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the Buyer and the Seller as of the
date first above written.
SMARTTIME LLC
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Attest:
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
INTERPRO EXPENSE SYSTEMS, INC.
By:
----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Attest:
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE>
EXHIBIT B
BILL OF SALE AND GENERAL ASSIGNMENT OF ASSETS
KNOW ALL MEN AND WOMEN BY THESE PRESENTS THAT:
SmartTime LLC, a Delaware limited liability company ("SELLER"),
pursuant to that certain Asset Purchase Agreement dated as of ________, 1999
(the "AGREEMENT"), by and between the Seller, ASA International Ltd. and
InterPro Expense Systems, Inc., a Delaware corporation ("BUYER"), for and in
consideration of good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, does hereby grant, bargain, sell, convey,
transfer, assign, set over and deliver to Buyer, its successors and assigns, all
of Seller's right, title and interest in and to all of the Seller Assets
(capitalized terms used but not otherwise defined herein shall have the meanings
set forth in the Agreement).
TO HAVE AND TO HOLD all of the properties, assets and rights granted
and transferred hereby, with the appurtenances thereof, unto Buyer, its
successors and assigns forever, for their own use and benefit.
For the consideration aforesaid, Seller hereby constitutes and
appoints Buyer, its successors and assigns, the true and lawful attorney or
attorneys of Seller, with full power of substitution, for Seller and in its name
and stead, or otherwise, but on behalf and for the benefit of Buyer, its
successors and assigns, to demand and receive from time to time, any and all
properties hereby given, granted, bargained, sold, assigned, transferred,
conveyed, set over, confirmed and delivered and give receipts and releases for
and in respect of the same and any part thereof, and from time to time to
institute and prosecute in the name of Seller or otherwise, but for the benefit
of Buyer, its successors and assigns, any and all proceedings at law, in equity
or otherwise, which Buyer, its successors or assigns, may deem proper in order
to collect, assert or enforce any claim, right or title of any kind in and to
the properties hereby given, granted, bargained, sold, assigned, transferred,
set over, conformed, delivered or conveyed, and to defend or compromise any or
all actions, suits or proceedings in respect of any said properties and do all
such acts and things in relation thereto as Buyer, its successors and assigns,
shall deem advisable, Seller hereby declaring that the appointment made and the
powers hereby granted are coupled with an interest and are and shall be
irrevocable by Seller in any manner and for any reason.
Seller for itself and its successors and assigns, does hereby covenant
with Buyer, its successors and assigns, that Seller and its successors and
assigns will do, execute, acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered all such further acts, deeds, bills of
sale, transfers, assignments and conveyances, powers of attorney, conveying and
confirming unto Buyer, its successors and assigns, all and singular, the
properties hereby granted, sold, assigned, transferred, conveyed and delivered
as Buyer, its successors or assigns, shall reasonably require, provided,
however, that the Buyer, its successors and assigns shall prepare all necessary
documentation in conformity with the terms and conditions of the Agreement.
<PAGE>
This Bill of Sale and General Assignment of Assets may be executed in
one or more counterparts, each of which shall be an original, but which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, SmartTime LLC and InterPro Expense Systems, Inc.
have each caused this instrument to be signed in its name by its duly authorized
officer to be effective as of the ___ day of ________.
SMARTTIME LLC
By:
---------------------------
Name:
-------------------------
Title:
-----------------------
INTERPRO EXPENSE SYSTEMS, INC.
By:
--------------------------
Name:
-----------------------
Title:
-----------------------
<PAGE>
State of _____________ )
) ss.
County of _____________ )
On this ______________________, before me the undersigned, a Notary
Public in and for the County and State aforesaid for the State of _____________,
personally appeared _________________, who is personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to within instrument and acknowledged to me that he executed the same
in his authorized capacity and that by his signature on such instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
On this ______________________, before me the undersigned, a Notary
Public for the State of ____________, personally appeared ____________________,
who is personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to within instrument and
acknowledged to me that he executed the same in his authorized capacity and that
by his signature on such instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS, my hand and official seal.
- ------------------------------------------
Signature
<PAGE>
EXHIBIT C
ASSIGNMENT OF TRADEMARKS
WHEREAS, SmartTime LLC, a Delaware limited liability company, having
its principal place of business at 10 Speen Street, Framingham, Massachusetts
("ASSIGNOR"), is the owner of the trademarks/service marks as listed on SCHEDULE
A attached hereto; and
WHEREAS, InterPro Expense Systems, Inc., a Delaware corporation,
having its principal place of business at 4125 Hopyard Road, Pleasanton,
California ("ASSIGNEE"), is desirous of acquiring said trademarks/service marks
together with the good will of the business with which said trademark/service
marks are used and which are symbolized by said marks and any and all
registrations and applications for registration of said marks;
NOW, THEREFORE, be it known that for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by Assignor,
Assignor has, subject to the penultimate paragraph hereof, assigned and by these
presents, does hereby sell, transfer, convey and assign unto Assignee the entire
right, title, and interest of Assignor in and to said marks, all registrations
and all applications for registration of said marks, including without
limitation the right to recover for past infringement of said marks, and the
good will of the Assignor's SmartTime business in connection with which said
marks are used and which are symbolized by said marks.
Assignor hereby covenants and represents that the execution, delivery
and performance of this Trademark Assignment by Assignor has been duly and
validly authorized by all necessary corporate action and this Trademark
Assignment has been duly and validly executed and delivered by Assignor and
constitutes a valid and legally binding agreement of Assignor, enforceable
against Assignor in accordance with its terms. The execution, delivery and
performance of this Trademark Assignment does not conflict with, result in a
breach of, or constitute a default under any applicable law, judgment, order,
injunction, decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby further covenants and agrees that Assignor will
communicate to Assignee, its successors, legal representatives and assignees,
any facts known to Assignor respecting said marks, and at Assignee's sole
expense testify in any legal proceeding, sign all lawful papers, execute all
applications for registration, make all rightful oaths, and generally do
everything possible to aid the said Assignee, its successors, legal
representatives and assigns, to obtain and enforce proper protection for said
marks in all countries.
Assignor and Assignee agree that, notwithstanding any other provision
of this Trademark Assignment, this Trademark Assignment shall be effective on
and after ____________.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Trademarks is executed at
____________, ______________, this ___ day of ________.
SMARTTIME LLC
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
ATTEST:
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
<PAGE>
CERTIFICATION
STATE OF _______________ )
) ss.
COUNTY OF _________________ )
On this ____ day of __________ 1999, before me, the undersigned, a
Notary Public for the State of _______________, personally appeared
________________________, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person who executed the foregoing instrument
as _________________ ___________ of the corporation named therein, and
acknowledged to me that he executed the same as his voluntary act on behalf of
such corporation with authority to do so for the purposes therein set forth.
---------------------------------------
Notary Public
My Commission expires: ___________________
<PAGE>
SCHEDULE A TO ASSIGNMENT OF TRADEMARKS
<PAGE>
EXHIBIT D
ASSIGNMENT OF COPYRIGHTS
WHEREAS, SmartTime LLC, a Delaware limited liability company, having
its principal place of business at 10 Speen Street, Framingham, Massachusetts
("ASSIGNOR"), and InterPro Expense Systems, Inc., a Delaware corporation having
its principal place of business at 4125 Hopyard Road, Pleasanton, California
("ASSIGNEE"), are parties to that certain Asset Purchase Agreement dated as of
________, 1999 (the "AGREEMENT"); and
WHEREAS, Assignor owns all right, title and interest in original works
(whether regarded as literary works or computer programs under applicable law)
relating to products designed and manufactured by Assignor, in its business unit
conducted under the name SmartTime (capitalized terms used but not otherwise
defined herein shall have the meanings set forth in the Agreement), including,
but not limited to, those listed on SCHEDULE A attached hereto (collectively,
the "WORK"); and
WHEREAS, Assignee desires to obtain the entire right, title, and
interest in, to and under the Work including the copyright(s) thereof;
NOW, THEREFORE, for good and valuable consideration paid by the
Assignee to the Assignor simultaneously herewith, receipt of which is hereby
acknowledged by the Assignor, and for other good and valuable consideration, the
said Assignor, subject to the penultimate paragraph hereof;
Assignor hereby assigns, transfers and sets over unto the Assignee the
entire right, title, and interest in and to the Work, the entire right, title
and interest in and to any and all statutory or common law copyrights or
copyright registrations covering the Work, including: any and all renewals and
extensions of those copyrights that may be secured under the laws now or
hereafter in force in the United States and throughout the world; any and all
causes of action heretofore accrued in the Assignor's favor for infringement of
the aforesaid copyright(s); and any and all rights, including but not limited
to, the rights to reproduce the Work in copies or other embodiment; to prepare
derivative works based upon the Work; to distribute copies or other embodiments
of the Work to the public by sale or other transfer of ownership, or by rental,
lease or lending; to perform the Work publicly; and to display the Work
publicly;
To have and to hold the same unto the Assignee, its successors, legal
representatives and assigns, for and during the existence of all copyright(s)
and any and all renewals and extensions thereof absolutely and forever; and
Assignor hereby authorizes and requests the Register of Copyrights of the United
States, and any official of any country or countries foreign to the United
States, and any official of any country or countries foreign to the United
States, whose duty it is to issue copyright registrations or similar indicia of
copyright, to issue such copyright, registrations for said Work to Assignee, its
successors, legal representatives and assigns.
<PAGE>
Assignor hereby covenants and represents that the execution, delivery
and performance of this Copyright Assignment by Assignor has been duly and
validly authorized by all necessary corporate action and this Copyright
Assignment has been duly and validly executed and delivered by Assignor and
constitutes a valid and legally binding agreement of Assignor, enforceable
against Assignor in accordance with its terms. The execution, delivery and
performance of this Copyright Assignment does not conflict with, result in a
breach of, or constitute a default under, any applicable law, judgment, order,
injunction, decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby covenants and agrees that Assignor shall forthwith
upon Assignee's written request and at Assignee's sole expense take any and all
steps and execute, acknowledge, and deliver to the Assignee any and all further
instruments and assurances necessary or expedient in order to vest the aforesaid
Work and copyright(s) and causes of action more effectively in the Assignee.
Assignor hereby further covenants and agrees that Assignor will
communicate to the Assignee, its successors, legal representatives and assigns,
any facts known to Assignor respecting said Work and said copyright(s), and at
Assignee's sole expense testify in any legal proceedings, sign all lawful
papers, execute all copyright applications and copyright renewal applications,
make all rightful oaths, and generally do everything possible to aid the said
Assignee, its successors, legal representatives and assigns, to obtain and
enforce proper copyright protection for said Work in all countries.
Assignor hereby constitutes and appoints the Assignee its true and
lawful attorney-in-fact with full power of substitution, in Assignor's name and
stead, but for the Assignee's benefit, to take any and all steps (including
proceeding at law, in equity or otherwise), and to execute, acknowledge and
deliver any and all instruments and assurances necessary or expedient in order
to vest the aforesaid Work and copyright(s) and causes of action more
effectively in the Assignee, or to protect the same, or to enforce any claim or
right of any kind with respect thereto. The Assignor hereby declares that the
foregoing power is coupled with an interest and is irrevocable.
Assignor and assignee agree that, notwithstanding any other provision
of this Copyright Assignment, this Copyright Assignment shall be effective on
and after ____________.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Copyrights is executed at
____________, _____________, this ___ day of ________.
SMARTTIME LLC
By:
------------------------
Name:
----------------------
Title:
---------------------
ATTEST:
By:
------------------------
Name:
-----------------------
Title:
----------------------
<PAGE>
CERTIFICATION
STATE OF _______________ )
) ss.
COUNTY OF ____________ )
On this ____ day of __________, 1999, before me, the undersigned, a
Notary Public for the State of ______________, personally appeared
________________________, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person who executed the foregoing instrument
as __________________ __________________ of the corporation named therein, and
acknowledged to me that he executed the same as his voluntary act on behalf of
such corporation with authority to do so for the purposes therein set forth.
--------------------------
Notary Public
My Commission expires:
<PAGE>
SCHEDULE A TO ASSIGNMENT OF COPYRIGHTS
Exhibit 10.3
ASA INTERPRO SMARTTIME LLC
OPERATING AGREEMENT
Limited Liability Company Operating Agreement, effective as of the 2nd
day of August, 1999, by and between ASA International Ltd. (the "Member") and
InterPro Expense Systems, Inc. (the "Manager").
WHEREAS, ASA InterPro SmartTime LLC (the "LLC") has been formed
pursuant to the provisions of the Delaware Limited Liability Company Act, as
amended (the "Act"), by filing on July 28, 1999 a Certificate of Formation (as
such Certificate may be amended from time to time, the "Certificate of
Formation"), in the office of the Secretary of State of Delaware.
NOW, THEREFORE, in consideration of the mutual covenants herein
expressed, MEMBER and MANAGER hereby agree as follows:
1. MANAGEMENT.
(a) The Manager shall manage the business and affairs of the LLC
until the earlier of (i) August 31, 2000 or (ii) the Manager's exercise of its
option to purchase the assets of the LLC pursuant to the Option Purchase
Agreement dated the date hereof between the LLC, the Manager and the Member (the
"Option Purchase Agreement"). "Person" shall mean an individual, or any other
legal entity, and may, but need not be a Member. No Manager may resign, retire,
abandon or otherwise terminate his status as a Manager, other than by reason of
death, except after 90 days advance written notice to all Members, in which case
said Manager shall designate his, her or its replacement to serve as a successor
Manager.
(b) The LLC is formed for the purpose of engaging in any lawful
act or activity for which limited liability companies may be formed under the
Act and engaging in any and all activities necessary, advisable, convenient or
incidental thereto. The LLC shall have all the powers necessary or convenient to
carry out the purposes for which it is formed, including all powers granted by
the Act.
(c) No Member shall have any authority, power or privilege to act
on behalf of or to bind the LLC except as specifically provided in this
Agreement.
(d) There shall only be one Manager serving at any time
hereunder. The signature of the Manager on any agreement, contract, instrument
or other document shall be sufficient to bind the LLC in respect thereof and
conclusively evidence the authority of the LLC with respect thereto, and no
third party need look to any other evidence or the consent of any other party to
bind the LLC or to evidence such Manager's authority.
(e) The Manager shall be entitled to reimbursement from the LLC
for all expenses incurred by such Manager in managing and conducting the
business and affairs of the LLC and shall be paid a management fee in an amount
equal to the lesser of (a) $50,000 or (b) net income of the LLC as determined
for federal income tax purposes.
(f) The Manager may cause the LLC to enter into one or more
agreements, leases, contracts or other arrangements for the furnishing to or by
the LLC of goods, services or space with the Member or an affiliate thereof, and
may pay compensation thereunder for such goods, services or space.
(g) Except as otherwise required by this Agreement, the Act or
other applicable law, the Manager shall have the authority to (i) exercise all
the powers and privileges granted to an LLC by the Act or any other law or this
Agreement, together with any powers incidental thereto, so far as such powers
are necessary or convenient to the conduct, promotion or attainment of the
business, trade, purposes or activities of the LLC and (ii) take any other
action not prohibited under the Act or other applicable law, to manage, control,
administer, and operate the business and affairs of the LLC for the purposes
herein stated, and to make all decisions affecting such business and affairs,
including, without limitation, the power to:
(i) acquire by purchase, lease, or otherwise, any real or
personal property, tangible or intangible;
(ii) construct, operate, maintain, finance, and improve, and
to own, sell, convey, assign, mortgage, or lease any real estate and any
personal property;
(iii) sell, dispose, trade, or exchange the LLC assets in
the ordinary course of the LLC's business;
(iv) enter into agreements and contracts and to give
receipts, releases and discharges;
(v) purchase liability and other insurance to protect the
LLC's properties and business;
(vi) borrow money for and on behalf of the LLC,
(vii) execute or modify leases with respect to any part or
all of the assets of the LLC;
(viii) prepay, in whole or in part, refinance, amend,
modify, or extend any mortgages or deeds of trust which may affect any asset of
the LLC and in connection therewith to execute for and on behalf of the LLC any
extensions, renewals or modifications of such mortgages or deeds of trust;
(ix) execute any and all other instruments and documents
which may be necessary or in the opinion of the Manager desirable to carry out
the intent and purpose of this Agreement, including, but not limited to,
documents whose operation and effect extend beyond the term of the LLC;
(x) make any and all expenditures which the Manager, in its
sole discretion, deems necessary or appropriate in connection with the
management of the affairs of the LLC and the carrying out of its obligations and
responsibilities under this Agreement, including, without limitation, all legal,
accounting and other related expenses incurred in connection with the
organization and financing and operation of the LLC;
(xi) enter into any kind of activity necessary to, in
connection with, or incidental to, the accomplishment of the purposes of the
LLC; and
(xii) invest and reinvest the LLC reserves in short-term
instruments, money market funds or in any other manner deemed appropriate by the
Manager.
(h) Notwithstanding anything to the contrary in this Agreement,
the Manager shall not undertake any of the following without the "Consent of the
Member" which, for the purposes of this Agreement, means the written consent of
the Member:
(i) the sale of all or substantially all of the assets of
the LLC;
(ii) the entering into or amending one or more agreements,
leases, or contracts with the Manager or an affiliate thereof;
(iii) the admission of additional Members to the LLC;
(iv) liquidating, dissolving or merging the LLC;
(v) commencing any voluntary bankruptcy, insolvency or
similar proceeding with the LLC as debtor; or
(vi) obligating the Member for any obligations or
liabilities of the LLC.
(i) The Manager agrees to execute all documents as reasonably
requested by the Member to assist the Member in its pursuit of a "like-kind
exchange" under the provisions of Section 1031 of the Internal Revenue Code of
1986, as amended (the "Code") in connection with the disposition of the LLC's
assets.
2. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; AND LIABILITY OF MEMBERS.
(a) The Member has contributed to the capital of the LLC the
property set forth opposite such Member's name on SCHEDULE A hereto and the
Member's percentage interest in the ownership of the LLC ("Percentage
Interest"), is also set forth thereon.
(b) No Member shall be obligated to contribute any additional
capital to the LLC. No interest shall accrue on any contributions to the capital
of the LLC for the benefit of a Member.
(c) A separate capital account ("Capital Account") shall be
established for each Member, and shall be maintained in accordance with
applicable regulations under Section 704(b) of the Code.
(d) Other than as set forth in the Option Purchase Agreement and
the Asset Purchase Agreement dated the date hereof between the LLC, the Manager
and the Member (the "Purchase Agreement"), the liability of the Members for the
losses, debts and obligations of the LLC shall be limited to their capital
contributions not then previously repaid to or withdrawn by them in accordance
with the terms of this Agreement. No Member shall have any liability to restore
any negative balance in his Capital Account. In no event shall any Member be
personally liable for any liabilities or obligations of the LLC.
3. RETURN OF CONTRIBUTIONS. No Member shall have the right to withdraw
or to be repaid any capital contributed by him or to receive any other payment
in respect of such Member's interest in the LLC, including, without limitation,
as a result of the withdrawal or resignation of such Member from the LLC, except
as specifically provided in this Agreement.
4. SHARE OF PROFITS AND OTHER ITEMS.
(a) Except as may be required by the Code or this Operating
Agreement, as amended from time to time, profits, losses, and other items of
income, gain, loss, deduction and credit of the LLC shall be allocated among the
Members in accordance with their Percentage Interests.
(b) The Manager may make distributions to Members from time to
time. Distributions may be made only after the Manager determines in its
reasonable judgment that the LLC has cash on hand sufficient for the current and
anticipated needs of the LLC to fulfill its business purposes. All distributions
shall be made to the Members in accordance with this Agreement. Distributions
may be in cash or property or partially in both, as determined by the Manager.
No distribution shall be declared or made if, after giving it effect, the LLC
would not be able to pay its debts as they become due in the usual course of
business or the LLC's total assets would be less than the sum of its total
liabilities.
(c) Notwithstanding the foregoing, the Manager shall distribute
to the Members, immediately upon their receipt by the LLC, all payments received
by the LLC from the Manager pursuant to (i) the Option Purchase Agreement and
(ii) the Intellectual Property License Agreement and the Customer Intangibles
License Agreement, each dated of even date herewith between the Manager and the
LLC.
(d) Notwithstanding the foregoing, the Manager shall distribute
annually to each Member such amounts as are necessary to pay the tax liability
(other than a tax liability arising in connection with a distribution
contemplated by subsection (c) above) of such Member due as a result of such
Member's interest hereunder.
5. NO TRANSFERS. Without the Consent of the Manager, no Member may
"Transfer" such Member's interest in the LLC or any part thereof or in all or
any part of the assets of the LLC. For this purpose, "Transfer" shall mean any
sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer,
including, without limitation, any assignment or transfer by operation of law or
by order of court in a bankruptcy proceeding or otherwise. In the event of any
attempted or purported Transfer of a Member's interest in the LLC in
contravention of any of the provisions of this Agreement (an "Ineffective
Transfer"), such Transfer shall be null and void and ineffective to transfer any
interest in the LLC and shall not bind, or be recognized by or on the books of,
the LLC, and any purported transferee or assignee shall not be a Member for any
purpose. In the event of such Ineffective Transfer, the LLC, the Manager and
each other Member shall, in addition to all rights and remedies at law and
equity, be entitled to a decree or order restraining and enjoining such
Ineffective Transfer, and the offending Member shall not plead in defense
thereto that there would be an adequate remedy at law, it being acknowledged and
agreed that damages at law would be an inadequate remedy for a breach or
threatened breach of the provisions set forth in this Agreement concerning any
such attempted or purported Transfer.
6. PRIORITIES. No Member shall have any rights or priority over any
other Members as to contributions or as to distributions or compensation by way
of income, except as specifically provided in this Agreement or by Consent of
the Members.
7. DISSOLUTION AND CONTINUATION OF THE LLC.
(a) The LLC shall be dissolved and its affairs wound up upon:
(i) the election to dissolve the LLC by Consent of the
Members at any time after the earlier of (i) August 31, 2000 or (ii) the
Manager's exercise of its option to purchase the assets of the LLC pursuant to
the Option Purchase Agreement; or
(ii) the withdrawal, bankruptcy or dissolution of a Member,
if there is no election pursuant to Section 7(b) to continue the LLC.
(b) The Members may continue the business of the LLC upon the
occurrence of any event of dissolution described in Section 7(a) by electing to
do so within 90 days after the occurrence of any of such event. Any such
election shall be made by Consent of the Members.
(c) In the event of a dissolution or liquidation of the LLC, the
Manager shall have the right to immediately exercise the option granted to it
under the Option Purchase Agreement.
8. BOOKS AND RECORDS; BANK ACCOUNTS.
(a) The Manger shall keep or cause to be kept complete and
accurate books and records of the LLC, using the same methods of accounting that
are used in preparing the Federal income tax returns of the LLC to the extent
applicable and otherwise in accordance with generally accepted accounting
principles consistently applied. Such books and records shall be maintained and
be available, in addition to any documents and information required to be
furnished to the Members under the Act, at an office of the LLC for examination
and copying by any Member or Manager, or his duly authorized representative, at
his reasonable request and at his expense during ordinary business hours. A
current list of the following items shall be kept by the LLC: (i) full name and
last known address of each Member and Manager, (ii) a copy of this Agreement and
any amendments thereto, (iv) the Certificate of Formation, (v) executed copies
of all powers of attorney, if any, pursuant to which this Agreement, any
amendment, or the Certificate of Formation has been executed, (vi) copies of the
LLC's financial statements, and (vii) Federal, State and local income tax
returns and reports, if any, for each year. All of the above-referenced items
shall be maintained at the registered office of the LLC along with such other
information, if any, as may be required to be made available to Members pursuant
to the Act. On or before the due date (including extensions) of the Federal
income tax return of the LLC for each fiscal year of the LLC, each Member shall
be furnished with copies of the LLC's Federal income tax return for the fiscal
year then ended and any other tax information reasonably required for State or
local tax purposes. Any Member may, at any time, at his own expense, and upon
reasonable notice, cause an audit or review of the LLC books to be made by a
certified public accountant of his own selection.
(b) Bank accounts and/or other accounts of the LLC shall be
maintained in such banking and/or other financial institution(s) as shall be
selected by the Manger, and withdrawals shall be made and other activity
conducted on such signature or signatures as shall be designated by the Manager.
(c) The fiscal year of the LLC shall end on March 31 of each
year.
9. INDEMNITY; OTHER BUSINESS.
(a) Each Member, the Manager and any other entities or
individuals authorized to act on behalf of the LLC, shall be entitled to
indemnity from the LLC for any liability incurred and/or for any act performed
within the scope of the authority conferred to them by this Agreement, and/or
for any act omitted to be performed, except for gross negligence or willful
misconduct, which indemnification shall include all reasonable expenses
incurred, including reasonable legal and other professional fees and expenses
that are to be paid within forty-five 45 days receipt by the LLC of any invoice
for such expenses.
(b) Subject to the provisions of the Purchase Agreement, the
Members, the Manager, and any affiliates of any of them may engage in and
possess interests in other business ventures and investment opportunities of
every kind and description, independently or with others, including serving as
manager, member and general partner of other limited liability companies and
partnerships with purposes similar to those of the LLC. Neither the LLC nor any
other Member or the Manager shall have any rights in or to such ventures or
opportunities or the income or profits therefrom.
10. MISCELLANEOUS.
(a) Subject to the restrictions on transfers set forth herein,
the terms of this Agreement shall be binding upon and shall inure to the benefit
of the LLC, the Manager, and the Members, their respective successors,
successor-in-title, heirs and assigns; and each and every successor-in-interest
to any Member, whether such successor acquires such interest by way of
inheritance, gift, purchase, foreclosure or any other method, and the Members
shall hold such interest subject to all of the terms and provisions of this
Agreement. None of the provisions of this Agreement shall be for the benefit of
or enforceable by any other person, including without limitation, any creditor
of any Member (including any Member acting in his capacity as a creditor of the
LLC).
(b) No change, modification or amendment of this Agreement shall
be valid or binding unless such change, modification or amendment shall be in
writing and duly executed by all of the Manager and Members.
(c) This Agreement and the rights and obligations of the parties
hereunder shall be governed by and interpreted and enforced in accordance with
the laws of the State of Delaware, notwithstanding any choice of law rules to
the contrary.
(d) This Agreement may be executed in any number of counterparts,
all of which together shall for all purposes constitute one Agreement, binding
on all the Members notwithstanding that all Members have not signed the same
counterpart.
(e) Any and all notices under this Agreement shall be effective
(i) on the fourth business day after being sent by registered or certified mail,
return receipt requested, postage prepaid, or (ii) on the first business day
after being sent by express mail, courier (with receipt) or telecopy. All such
notices in order to be effective shall be addressed, if to the LLC at its
registered office under the Act, if to a Member at the last address of record on
the LLC books, and copies of such notices shall also be sent to the last address
for the recipient which was recorded in the records of the LLC, if different
from the address so specified.
(f) As used herein, the singular shall include the plural and the
masculine gender shall include the feminine and neuter, and vice versa, unless
the context otherwise requires.
(g) This Agreement, including the Certificate of Formation, which
is hereby incorporated herein, embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter.
(h) The Members shall reimburse the Manager for any professional,
legal, accounting or other costs reasonably incurred by the Manager in
performing its duties as Manager, provided such costs have been approved in
writing in advance by the Members.
(i) DISPUTE RESOLUTION. Any dispute between the parties arising
out of or related to this Agreement shall be settled by arbitration in
accordance with the provisions of the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned have signed and sworn to this
Agreement as of the date first above written.
MEMBER:
ASA INTERNATIONAL LTD.
By: /S/ ALFRED C. ANGELONE
-------------------------
Title: CEO
----------------------
MANAGER:
INTERPRO EXPENSE SYSTEMS, INC.
By: /S/ ED COMFOLTEY
-------------------------
Title: CEO
-------------------
<PAGE>
SCHEDULE A
MEMBERS
PERCENTAGE CAPITAL
INTEREST CONTRIBUTION
ASA International Ltd. 100% Assets of ASA International
Ltd.'s SmartTime Division
Exhibit 10.4
SUBLEASE AND CONSENT AGREEMENT
This Sublease and Consent Agreement ("Sublease") by and among ASA
International Ltd., InterPro Expense Systems, Inc. and 10 SPEEN STREET, LLC is
made as of the 2d day of August, 1999.
RECITALS
WHEREAS, 10 Speen Street, LLC and ASA International Ltd. (hereinafter,
"ASA International" or "LESSOR" as the context may require) have entered into
that certain master lease as of September 15, 1998 whereby ASA International has
leased the entire Building from 10 Speen Street, LLC (the "Master Lease"); and
WHEREAS, ASA International and InterPro Expense Systems, Inc.
(hereinafter, "InterPro" or "LESSEE" as the context may require) intend to enter
into a sublease under the terms and conditions as set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
TERMS
1. & 2. PARTIES AND PREMISES.
ASA INTERNATIONAL, a Delaware corporation, with a principal place of
business at 10 Speen Street, Framingham, MA 01701 does hereby sublease to
INTERPRO, a Delaware corporation, with a principal place of business at 10 Speen
Street, Framingham, MA 01701, and the LESSEE hereby subleases the following
described Premises:
approximately 7,021 rentable square feet of space located on the first
floor (the "First Floor Premises") and approximately 7,854 rentable
square feet of space located on the second floor (the "Second Floor
Premises) at 10 Speen Street, Framingham, MA 01701 (collectively, the
"Premises"), as more particularly described on the floor plan attached
hereto as Exhibit A,
together with the right to use in common, with others entitled thereto, the
hallways, stairways, and elevators, necessary for access to said Premises, and
the lavatories nearest thereto. The entire building at 10 Speen Street,
Framingham, MA of which the Premises is a part shall be referred to herein as
the "Building". ASA International hereby acknowledges to InterPro that, to its
knowledge, the First Floor Premise are 7,021 square feet and the Second Floor
Premises are 7,854 square feet, and the parties hereto agree that if said square
footage, in either or both cases, is established to be otherwise, the payment
obligations under this sublease shall be adjusted proportionately.
3. TERM.
The term (the "Term") of this Sublease shall commence: (A) with
respect to the Second Floor Premises, as of the date hereof (the "Second Floor
Commencement Date"), and (B) with respect to the First Floor Premises, on the
date when Lessor Substantially Completes (as defined below) the Lessor
Improvements (as hereinafter defined in Paragraph 12 of this Sublease) and
delivers the First Floor Premises to Lessee, provided that, if Lessee occupies
any portion of the First Floor Premises prior to the date Lessor Substantially
Completes them, the term of this Sublease shall commence with respect only to
the occupied portion of the First Floor Premises, such that Lessee shall pay
rent pro-rata based on the portion occupied, upon such occupation. The Term of
this Sublease shall end on July 30, 2004 (the "Expiration Date"). For purposes
of this paragraph, "Substantially Completes" shall mean at such time as Lessor
has completed the Lessor Improvements to such extent that the First Floor
Premises may be utilized by Lessee for its intended purpose without unreasonable
interruption to Lessee for Lessor.
<PAGE>
4. RENT.
The LESSEE shall pay to the LESSOR a base rent ("Base Rent")
commencing on the Second Floor Commencement Date at the rate of Fifteen Thousand
Seven Hundred Eight Dollars ($15,708) per month. Commencing on the First Floor
Commencement Date, Base Rent shall be increased to Twenty- Nine Thousand Seven
Hundred Fifty Dollars ($29,750) per month, payable in advance on the first of
each month. Rent for any period during the Term hereof which is for less than
one (1) month of the Term shall be a pro rata portion of the monthly installment
based on the number of days in such month.
Any payment of rent or any other monetary sum due hereunder from
LESSEE to LESSOR which is more than ten (10) days late shall bear interest at
the rate of one and one-half (1 1/2%) percent per month.
5. SECURITY DEPOSIT.
Upon the execution of this Sublease, the LESSEE shall pay to the
LESSOR the amount of Fifty-Nine Thousand Five Hundred Dollars ($59,500) Dollars,
which shall be held as a security for the LESSEE's performance as herein
provided and refunded to the LESSEE at the end of this Sublease subject to the
LESSEE's satisfactory compliance with the conditions hereof.
6. RENT ADJUSTMENT.
A. TAX CALCULATION. If in any tax year commencing with the
fiscal year 2000, the real estate taxes on the land and
buildings, of which the Premises are a part, are in excess
of the amount of the real estate taxes thereon for the
fiscal year 1999 (the "Base Year"), LESSEE will pay to
LESSOR as additional rent hereunder, within seven (7) days
of notice in writing by LESSOR, Forty-Five and one-half
percent (45.5%) ("LESSEE'S SHARE") of such excess that may
occur in each year of the term of this lease or any
extension or renewal thereof and proportionately for any
part of a fiscal year. If the LESSOR obtains an abatement of
any such excess real estate tax, a proportionate share of
such abatement, less the proportionate share of reasonable
fees and costs incurred in obtaining the same, if any, shall
be refunded to the LESSEE.
B. OPERATING EXPENSES. Commencing on the Second Floor
Commencement Date, the LESSEE shall pay to the LESSOR as
additional rent hereunder when and as designated by notice
in writing by LESSOR, LESSEE'S SHARE (as proportionately
adjusted for any part of a calendar year) of any increase in
operating expenses paid in proportion to the space occupied
over those incurred during the calendar year ending December
31, 1998 (the "Operating Expense Base Year"). If the
Building was not fully occupied during the Operating Expense
Base Year, operating expenses for the Operating Expense Base
Year shall be increased to reflect a fully-occupied
Building. Operating expenses shall include for the purposes
of this agreement, without limitation:
(i) All expenses incurred by LESSOR or LESSOR's agents
which shall be directly related to employment of
personnel, including amounts incurred for wages,
salaries, and other compensation for services,
payroll, social security, unemployment and similar
taxes, workman's compensation insurance,
disability benefits, pensions, hospitalization,
retirement plans and group insurance, uniforms and
working clothes and the cleaning thereof, and
expenses imposed on LESSOR or LESSOR's agents
pursuant to any collective bargaining agreement
for the services of employees of LESSOR or
LESSOR's agents in connection with the operation,
repair, maintenance, common area cleaning,
management and protection of the Building or the
property of which it is part and its mechanical
systems including, without limitation, day and
night supervisors, property manager, accountants,
bookkeepers, janitors, carpenters, engineers,
mechanics, electricians and plumbers and personnel
engaged in supervision of any of the persons
mentioned above.
(ii) The cost of services, materials and supplies
furnished or used in the operation, repair,
maintenance, cleaning management and protection of
the Building or the property of which it is part,
including without limitation fees, if any, imposed
upon LESSOR, or charged to the Building, by the
state or municipality in which the Building is
located on account of the need of the Building or
the property of which it is part for increased or
augmented public safety services.
(iii) The cost of replacements for tools and other
similar equipment used in the repair, maintenance,
cleaning and protection of the Building or the
property of which it is part.
(iv) Where the Building or the property of which it is
part is managed by LESSOR or an affiliate of
LESSOR, a sum equal to the amounts customarily
charged by management in the Framingham area for
similar properties, whether or not actually paid,
or where managed by other than LESSOR or an
affiliate thereof, the amounts accrued for
management, together with, in either case, amounts
accrued for legal and other professional fees
relating to the Building or the property of which
it is part, but excluding such fees and
commissions paid in connection with services
rendered for securing or renewing leases and for
matters not related to the normal administration
and operation of the Building or the property of
which it is part.
(v) Premiums for any insurance against damage or loss
to the Building for such hazards as shall from
time to time be customarily carried by prudent
owners of similar first class office properties,
including, but not by way of limitation, insurance
covering loss of rent attributable to any such
hazards, and public liability insurance.
(vi) Costs for common area electricity, water and sewer
use charges, and other utilities supplied to the
Building or the property of which it is part and
not paid for directly by tenants.
(vii) Betterment assessments provided the same are
apportioned equally over the longest period
permitted by law.
(viii) Amounts paid to independent contractors for
services, materials and supplies furnished for the
operation, repair, maintenance, cleaning and
protection of the Building or the property of
which it is part.
C. Operating expenses shall not include the following: (a)
costs which could be considered capital costs except to the
extent amortized over the useful life of such capital item;
(b) costs of structural repairs to the Building; (c)
insurance deductibles; and (d) costs in connection with
hazardous materials in the Building except to the extent
caused by Lessee or anyone claiming under Lessee.
D. Lessee may audit the books, records and supporting documents
of Lessor to the extent necessary to determine the accuracy
of Lessor's calculation of operating expenses. Tenant shall
bear the cost of such audit, unless such audit discloses
that Lessor has overstated the total costs by more than
three percent (3%) of the actual amount of such costs, in
which event Lessor shall pay the cost of Tenant's audit.
Lessor shall promptly refund any overcharges to Tenant.
7. UTILITIES.
The LESSOR agrees to provide electricity twenty-four (24) hours per
day, seven (7) days per week, and all other utility service and to furnish
reasonably hot and cold water and reasonable heat and air conditioning to the
Premises, the hallways, stairways, elevators, and lavatories during normal
business hours on regular business days of the heating and air conditioning
seasons of each year, to furnish elevator service and to light passageway and
stairway during business hours, all subject to interruption due to any accident,
to the making of repairs, alterations, or improvements, to labor difficulties,
to trouble in obtaining fuel, electricity, service, or supplies from the sources
from which they are usually obtained for said building, or to any cause beyond
the LESSOR's control.
LESSOR shall have no obligation to provide utilities or equipment
other than the utilities and equipment within the Premises as of the
Commencement Date of this Sublease. In the event LESSEE requires additional
utilities or equipment, the installation and maintenance thereof shall be
LESSEE's sole obligation, provided that such installation shall be subject to
the written consent of the LESSOR.
8. USE OF SUBLEASED PREMISES.
The LESSEE shall use the Premises only for the purpose of general
offices including, without limitation, software development, but for no other
purpose.
9. COMPLIANCE WITH LAWS.
A. The LESSEE acknowledges that no trade or occupation shall be
conducted in the Premises or use made thereof which will be unlawful, improper,
noisy or offensive, or contrary to any law or any municipal by-law or ordinance
in force in the city or town in which the Premises are situated, or which tend
to degrade the economic status of the Building.
B. (i) LESSEE shall not introduce on or transfer to the Premises, any
hazardous materials (as herein defined); nor dump, flush, or otherwise dispose
of any hazardous materials into the drainage, sewage, or waste disposal systems
serving the Premises or Building in violation of applicable law; nor generate,
store, use, release, spill, or dispose of any hazardous materials in or on the
Premises or the Building, or transfer any hazardous materials from the Premises
to any other location in violation of applicable law; and not commit or suffer
to be committed in or on the Premises or Building any act which would require
any reporting or filing of any notice with any governmental agency pursuant to
any statues, laws, codes, ordinances, rules or regulations, present or future,
applicable to the Building or to hazardous material (hereinafter collectively
called "Environmental Laws").
(ii) LESSEE agrees that if it or anyone claiming under it shall
generate, store, release, spill, dispose of, or transfer to the Premises or
Building any hazardous materials, it shall forthwith remove the same, at its
sole cost and expense in the matter provided by all applicable Environmental
Laws, regardless of when such hazardous materials shall be discovered.
Furthermore, LESSEE shall pay any fines, penalties, or other assessments imposed
by any governmental agency with respect to any such hazardous materials and
shall forthwith repair and restore any portion of the Premises or Building which
it shall disturb in so removing any such hazardous materials to the condition
which existed prior to LESSEE's disturbance thereof.
(iii) LESSEE agrees to deliver to LESSOR any notices, orders, or
similar documents received by LESSEE from any governmental agency or official
concerning any violation of any Environmental Law or with respect to any
hazardous materials affecting the Premises or Building and LESSOR shall deliver
to LESSEE any notices it receives from any governmental agency or officer.
(iv) For purposes of this Sublease, the term "hazardous
materials" shall mean and include any oils, petroleum products, asbestos, and
any other toxic or hazardous wastes, materials, and such substances which are
defined, determined, or identified as such in any Environmental Laws, or in any
judicial or administrative interpretations of "Environmental Laws."
(v) To the best knowledge of Lessor, (a) no hazardous materials
are present in the Premises or at the Building or the soil, surface water or
groundwater thereof, (b) no underground storage tanks are present in or about
the Building, and (c) no action, proceeding or claim is pending or threatened
regarding the Premises or the Building concerning any hazardous materials or
pursuant to any environmental Law. Notwithstanding anything to the contrary in
the Lease, under no circumstance shall Lessee be liable for any losses, costs,
claims, liabilities and damages (including attorneys' and consultants' fees) of
every type and nature, directly or indirectly arising out of or in connection
with any hazardous materials present at any time in, on or about the Premises,
the Building, or the soil, air, improvements, groundwater or surface water
thereof, or the violation of any environmental law, except to the extent that
any of the foregoing actually results from the release or emission of hazardous
materials by Lessee or its agents, contractors or invitees.
10. FIRE INSURANCE.
The LESSEE shall not permit any use of the Premises which will make
voidable any insurance on the property of which the Premises are a part, or on
the contents of said property or which shall be contrary to any law or
regulation from time to time established by the New England Fire Insurance
Rating Association, or any similar body succeeding to its powers. The LESSEE
shall on demand reimburse the LESSOR, and all other Lessees, all extra insurance
premiums caused by the LESSEE's use of the Premises.
11. MAINTENANCE.
A. LESSEE'S OBLIGATIONS. The LESSEE agrees to maintain the Premises in
good conditions, damage by fire and other casualty only excepted, and whenever
necessary, to replace plate glass and other glass therein, acknowledging that
the Premises are now in good order and the glass whole. The LESSEE shall not
permit the Premises to be overloaded, damaged, stripped, or defaced, nor suffer
any waste. LESSEE shall obtain written consent of LESSOR before erecting any
sign on the Premises. LESSEE shall be responsible for the maintenance, repair,
and if, as a result of the LESSEE's negligence, it is required, replacement of
all electrical, plumbing, heating, air conditioning, ventilation, and other
mechanical installations located entirely on, or serving only, the Premises.
B. LESSOR'S OBLIGATIONS. The LESSOR agrees to maintain the structure
of the Building of which the Premises are a part in good condition, reasonable
wear and tear, damage by fire and other casualty only excepted, unless such
maintenance is required because of the conduct of LESSEE or those for whose
conduct the LESSEE is legally responsible. LESSOR shall be responsible for
maintaining the Building's mechanical and electrical systems.
12. ALTERATIONS - ADDITIONS.
The LESSEE shall not make structural alterations or additions to the
Premises, but may make non-structural alterations provided the LESSOR consents
thereto in writing, which consent shall not be unreasonably withheld or delayed.
All such allowed alterations shall be at LESSEE's expense and shall be in
quality at least equal to the present construction. LESSEE shall not permit any
mechanic's liens, or similar liens, to remain upon the leased Premises for labor
and material furnished to LESSEE or claimed to have been furnished to LESSEE in
connection with work of any character performed or claimed to have been
performed at the direction of LESSEE and shall cause any such lien to be
released of record forthwith without cost to LESSOR. Any alterations or
improvements made by the LESSEE shall become the property of the LESSOR at the
termination of occupancy as provided herein.
Lessor shall perform, at it sole cost and expense, the improvements
set forth on the preliminary plan attached hereto as Exhibit B and shall
recarpet the entire Premises (collectively, the "Lessor Improvements"), all in a
good workmanlike manner and in compliance with all laws.
13. ASSIGNMENT - SUBLEASING.
LESSEE shall not assign, sublet, underlet, mortgage, pledge or
encumber (collectively referred to as "Transfer") this Sublease without LESSOR's
prior written consent which consent shall not be unreasonably withheld. LESSOR's
refusal to consent to a Transfer for any use or purpose other than specifically
stated in paragraph 8 herein shall not be deemed to be unreasonable withholding
of consent.
In the event the LESSEE desires to Transfer this Sublease to a
proposed new LESSEE to whom LESSOR is required to give its reasonable consent
pursuant to the foregoing paragraph, LESSOR shall have the option of either (1)
allowing LESSEE to Transfer this Sublease, in which case LESSEE shall remain
primarily liable upon all the terms, conditions, and covenants hereof, will bind
any Transferee to the terms and provisions of this Sublease and will pay to
LESSOR the amount by which the sum of rent, additional rent due to taxes, and
all other money or consideration it received from a Transferee exceeds the sum
of all monetary obligations which LESSEE owes to LESSOR for the period of such
Transfer after subtracting Lessee's reasonable costs in connection therewith; or
(2) in the event an entire floor is proposed to be subleased, terminating this
Sublease as to such proposed portion and relieving LESSEE of all its future
obligations hereunder as to such portion. In the event that LESSOR decides to
terminate this Sublease as to such portion, it shall be free to enter into a new
Sublease as to such portion with the proposed new Lessee or anyone else on
whatever terms and conditions it chooses.
Consent by LESSOR, whether express or implied, to any Transfer shall
not constitute a waiver of LESSOR's right to prohibit any subsequent Transfer;
nor shall such consent be deemed a waiver of LESSOR's right to terminate this
Sublease upon any subsequent Transfer.
Notwithstanding anything to the contrary in the Lease, Lessee may,
without Lessor's prior written consent and without being subject to any
recapture or bonus rent provisions, sublease the Premises or assign the Sublease
to any of the following: (i) a subsidiary, affiliate, division or corporation
controlling, controlled by or under common control with Lessee; (ii) a successor
corporation related to Lessee by merger, consolidation, nonbankruptcy
reorganization, or government action; or (iii) a purchaser of substantially all
of Lessee's assets. For the purpose of this Sublease, any sale or transfer of
Lessee's capital stock, including without limitation, a transfer in connection
with the merger, consolidation or nonbankruptcy reorganization of Lessee and any
sale through any national market system or public exchange, shall not be deemed
an assignment, subletting, or any other transfer of the Sublease or the
Premises. In the event Lessee subleases the Premises or assigns the Sublease
pursuant to this paragraph, Lessee shall give Lessor reasonable notice thereof,
and Lessee and the successor shall be jointly and severally liable for the
obligations hereunder.
14. SUBORDINATION.
Intentionally deleted.
15. LESSOR'S ACCESS.
The LESSOR or agents of the LESSOR may, at reasonable times, enter to
view the Premises and remove placards and signs not approved and affixed as
herein provided, and make repairs and alterations as LESSOR should elect to do
and may show the premises to others provided, however, that showings for
reletting will be confined to a time within the nine (9) months before
expiration of the term. At any time within nine (9) months before expiration of
the terms, LESSOR may affix to any suitable part of the Premises a notice for
letting or selling the Premises or property of which the Premises are a part and
keep the same so affixed without hindrance or molestation.
16. INDEMNIFICATION AND LIABILITY.
LESSEE covenants with LESSOR to pay, protect, indemnify, and save
harmless, to the extent permitted by law, LESSOR and any partner, officer,
director, agent, employee, or beneficiary of LESSOR, holders of mortgages on the
Building and any other party having an interest in the Building from and against
any and all liabilities, costs, expenses, causes of action, injuries, accidents,
injunctions, or penalties of any nature (including court costs and reasonable
attorney's fees), resulting from a claim by or on behalf of any person, party,
or governmental authority whatsoever on account of injury, death, damage, or
loss to person or property in or upon the Premises, or any area adjacent to or
in proximity to the Premises, arising out of any act, negligence, or omission of
LESSEE, or arising as a result of any use or occupancy of, or travel over or
upon the Premises, or any area adjacent to or in proximity to the Premises, by
LESSEE or by any person claiming by, through, or under LESSEE (including,
without limitation, all patrons, guests, employees, agents, contractors, and
customers of LESSEE), or arising out of any delivery to or services supplied to
the Premises, or on account of or based upon anything whatsoever done on the
Premises, or any area adjacent to or in proximity to the Premises, by LESSEE or
by any person claiming by, through, or under LESSEE, except if the same was
caused by the negligence or willful misconduct of LESSOR, its agents, or
employees or contractors; and, if required by law, to keep all of LESSEE's
employees working in or about the Premises covered by workers, compensation
insurance. In respect to all of the foregoing, LESSEE shall indemnify and hold
harmless LESSOR from and against all costs, expenses (including reasonable
attorneys' fees) and liabilities incurred in or in connection with any such
claim, action, or proceeding brought thereon.
The removal of snow and ice from the sidewalks bordering upon the
Building and the parking lot of the Building shall be LESSOR's responsibility.
17. LESSEE'S LIABILITY INSURANCE.
The LESSEE shall maintain, with respect to the Premises and the
property of which the Premises are a part, comprehensive public liability
insurance in the amount of One Million Dollars ($1,000,000), combined
single-limit bodily injury and property damage in responsible companies
qualified to do business in Massachusetts and in good standing therein, insuring
the LESSEE (and including Lessor as additional insured) against injury to
persons or damage to property as provided. The LESSEE shall deposit with the
LESSOR certificates for such insurance at, or prior to, commencement of the term
and thereafter within thirty (30) days prior to the expiration of any such
policies. All such insurance certificates shall provide that such policies shall
not be canceled without at least ten (10) days prior written notice to each
assured named therein.
18. FIRE, CASUALTY - EMINENT DOMAIN.
Lessor shall carry standard "all risk" issuance covering the building
for the full replacement cost thereof. Should a substantial portion of the
Premises, or of the property of which they are a part, be substantially damaged
by fire or other casualty, or be taken by eminent domain, the LESSOR may elect
to terminate this Sublease. When such fire, casualty, or taking renders the
Premises substantially unsuitable for their intended use, a just and
proportionate abatement of rent shall be made, and the LESSEE may elect to
terminate this Sublease if:
(a) The LESSOR fails to give written notice within thirty
(30) days of its intention to restore Premises, or
(b) The LESSOR fails to restore the Premises to a
condition substantially suitable for their intended
use within seventy-five (75) days of said fire,
casualty, or taking, or
(c) If said fire, casualty, or taking happens within nine
(9) months of the Expiration Date.
The LESSOR reserves, and the LESSEE grants to the LESSOR, all rights
which the LESSEE may have for damages or injury to the Premises for any taking
by eminent domain, except for damage to the LESSEE's fixtures, property, or
equipment.
If required by a financing institution which has provided financing
for Lessor, Lessor shall have the right to demolish the Building of which the
Premises are a part, or any part thereof, provided Lessor gives Lessee at least
eighteen (18) months prior termination notice and Lessor pays Lessee's
reasonable costs to move.
19. DEFAULT AND BANKRUPTCY.
In the event that:
(a) The LESSEE shall default in the payment of any installment of rent
or other sum herein specified and such default shall continue for seven (7) days
after written notice thereof; or
(b) The LESSEE shall default in the observance or performance of any
other of the LESSEE's covenants, Subleases, or obligations hereunder and such
default shall not be corrected within thirty (30) days after written notice
thereof or, if such default shall reasonably require longer than thirty (30)
days to cure, shall not within said period commence and diligently proceed to
cure such default; or
(c) The LESSEE shall be declared bankrupt or insolvent according to
law, or, if any assignment shall be made of LESSEE's property for the benefit of
creditors, then the LESSOR shall have the right thereafter, while such default
continues to declare the term of this Sublease ended. The LESSEE shall indemnify
the LESSOR against all loss of rent and other Payments which the LESSOR may
incur by reason of such termination during the residue of the term. If the
LESSEE shall default, after reasonable written notice thereof, in observance or
performance of any conditions or covenants on LESSEE's part to be observed or
performed under or by virtue of any of the provisions in any article of this
Sublease, the LESSOR, without being under any obligation to do so and without
thereby waiving such default, may remedy such default for the account and at the
expense of the LESSEE. If the LESSOR makes any expenditures or incurs any
obligations for the payment of money in connection therewith, including but not
limited to, reasonable attorney's fees in instituting, prosecuting, or defending
any action or proceeding, such sums paid or obligation incurred with interest at
the rate of 18% per annum and costs, shall be paid to the LESSOR by the LESSEE
as additional rent.
20. NOTICE.
Any notice from the LESSOR to the LESSEE relating to the Premises or
to the occupancy thereof, shall be deemed duly served if mailed to the LESSEE's
place of business at 4125 Hopyard Road, Pleasanton, CA 94588-8534, Attention:
Ted Comfoltey registered or certified mail, return receipt requested, postage
prepaid, addressed to the LESSEE. Any notice from the LESSEE to the LESSOR
relating to the Premises or to the occupancy thereof, shall be deemed duly
served, if mailed to the LESSOR by registered or certified mail, return receipt
requested, postage prepaid, addressed to the LESSOR at such address as the
LESSOR may from time to time advise in writing. All rent notices shall be paid
and sent to the LESSOR at: ASA International Ltd., 10 Speen Street, Framingham,
MA 01701, Attention: Accounting Department.
21. SURRENDER.
The LESSEE shall at the expiration or other termination of this
Sublease remove all LESSEE's goods and effects from the Premises, (including,
without hereby limiting the generality of the foregoing, all signs and lettering
affixed or painted by the LESSEE, either inside or outside the Premises). LESSEE
shall deliver to the LESSOR the Premises and all keys, locks thereto, and other
fixtures connected therewith and all alterations and additions made to or upon
the Premises, in good condition, damage by fire or other casualty and normal
wear and tear only excepted. If the Sublease term terminates by acceleration or
expiration of time and LESSEE does not surrender the Premises and remove his
effects from the Premises, and LESSOR obtains an order of eviction from a court,
then LESSOR may enter the Premises for the purpose of removing LESSEE's goods
and effects, without prejudice to any other remedies, and LESSOR may remove and
store such goods and effects at LESSEE's expense, LESSEE hereby granting LESSOR
an irrevocable power of attorney to accomplish the same.
22. BROKERAGE.
Intentionally Deleted.
23. RELEASES AND WAIVER OF SUBROGATION.
LESSOR and LESSEE hereby release each other from any and all liability
or responsibility to the other or anyone claiming through or under them by way
of subrogation or otherwise for any loss or damage to property caused by fire or
any of the extended coverage or supplementary contract casualties, even if such
fire or other casualty shall have been caused by the fault or negligence of the
other party, or anyone for whom such party may be responsible, provided,
however, that this release shall be applicable and in force and effect only to
the extent permitted by law. LESSOR and LESSEE each agree that it will request
its insurance carriers to include in its policies whether or not such policies
are required hereunder, such a clause or endorsement. In any of LESSEE'S
insurance policies with respect to the Premises which do not contain a waiver of
subrogation rights, LESSEE shall have LESSOR designated as one of the insured.
24. LIABILITY
LESSEE hereby agrees that any judgment, decree, or award obtaining
against the LESSOR which is related to this Sublease, the Premises, or the
LESSEE's use or occupancy of the Premises or the Building, whether at law or in
equity, shall be satisfied out of property owned by, or cash or other assets of,
ASA International with a value not to exceed $1 million, and further agrees to
look only to such assets and to no other assets for satisfaction, after
application of insurance proceeds of any party hereto to the extent applicable.
In no event shall LESSOR be liable for consequential or any indirect damages.
25. HOLDOVER.
If the LESSEE remains on the Premises beyond the Expiration Date (or
such earlier termination date as provided for hereunder), such holding over
shall not be deemed to create any Tenancy at will, but the LESSEE shall be a
Lessee at sufferance only, at a daily rate equal to one hundred fifty percent
(150%) of the rent and other charges for the last year under this Sublease.
However, all other conditions of this Sublease to be performed by LESSEE shall
continue in force.
26. NON-WAIVER PROVISION.
No acceptance by LESSOR of a lesser sum than the rent, additional
rent, or any other charge then due shall be deemed to be other than on account
of the earliest installment of such rent or charge due, nor shall any
endorsement or statement on any check or any charge be deemed an accord and
satisfaction, and LESSOR may accept such check or payment without prejudice to
LESSOR's right to recover the balance of such installment or pursue any other
remedy provided in this Sublease.
No provisions of this Sublease shall be deemed to have been waived by
LESSOR or LESSEE unless such waiver is in writing signed by LESSOR or LESSEE. No
assent, express or implied, by either party to any breach of any Sublease or
condition herein contained on the part of the other to be performed or observed,
and no 'waiver, express or implied, of any such agreement or condition, shall be
deemed to be a waiver or an assent to any succeeding breach of the same or any
other agreement or condition. No act or thing done by LESSOR, its agents, or
employees, during the Term shall be deemed an acceptance of a surrender of the
Premises. The delivery of keys to any of LESSOR's agents or employees shall not
operate as a termination of this Sublease or a surrender of the Premises.
27. NO OFFER TO SUBLEASE.
Intentionally Deleted.
28. PARTIAL INVALIDITY.
The invalidity of one or more phrases, sentences, clauses, or articles
shall not affect the remaining portions of this Sublease, and if any part of
this Sublease should be declared invalid by the final order, decree, or judgment
of a court of competent jurisdiction, this Sublease shall be construed as if
such invalid phrases, sentences, clauses, or articles had not been inserted.
29. NO RECORDING.
This Sublease shall not be recorded.
30. PARKING.
LESSEE shall have, in common with other tenants, access to the parking
areas at 10 Speen Street. Lessee shall have the non-exclusive use of sixty-five
parking spaces in such parking area (one of which shall be specifically
designated the "employee of the month" space).
31. ADDENDA.
Intentionally Deleted.
32. RULES.
From time to time, the LESSOR has and will adopt reasonable rules for
the safety, benefit, and convenience of all tenants and other persons in the
Building (attached hereto as Exhibit "A"). LESSEE shall at all times comply
with, and shall cause its employees, agents, licensees, and invitees to comply
with the Rules from time to time in effect.
33. LESSEE ACCESS TO PREMISES.
LESSEE shall have access to the Building and the Premises twenty-four
(24) hours a day, seven (7) days per week.
34. ENTIRE AGREEMENT.
This Sublease contains the entire agreement between the parties hereto
with respect to the subject matter of this Sublease. LESSEE acknowledges and
agrees that it has not relied upon any statement, representation, agreement, or
warranty except such as are set out in this Sublease.
35. AMENDMENT OR MODIFICATION.
Unless otherwise specifically provided in this Sublease, no amendment,
modification, or supplement to this Sublease shall be valid or binding unless
set out in writing and executed by the parties hereto in the same manner as the
execution of this Sublease.
36. WAIVER OF JURY TRIAL.
Except as otherwise provided under this Sublease, any controversy or
claim arising out of, or relating to, this Sublease or the existence, validity,
breach, or termination thereof will be finally settled by compulsory arbitration
in accordance with the commercial arbitration rules of the American Arbitration
Association, Boston, Massachusetts, and nowhere else. The Arbitration award
shall be the exclusive remedies of the parties for all claims, counter claims,
or issues presented or plead to the arbitrators and each party hereby waives,
any right to jury trial in any forum. LESSOR and LESSEE each shall bear their
own expenses, costs and fees, including legal fees unless otherwise ordered.
37. ESTOPPEL CERTIFICATES.
LESSOR and LESSEE agree that at any time and from time to time, upon
not less than ten (10) days' prior written request by the other, each will
execute, acknowledge, and deliver to the requesting party a statement in writing
certifying that this Sublease is unmodified and in full force and effect (or, if
there have been modifications, that the same are in full force and effect as
modified and starting the modifications), that to the knowledge of such party no
uncured defaults exist, and the dates to which the rent and other charges due
hereunder have been paid in advance, if any, it being intended that any such
statement delivered pursuant to this section 37 may be relied upon by any
mortgagee or prospective mortgagee or purchaser of the Property. LESSEE agrees
that if it shall fail at any time to execute, acknowledge, and deliver any such
instrument within fifteen (15) days after request, then LESSOR may execute,
acknowledge, and deliver such instrument as the attorney in fact of LESSEE; and
LESSEE hereby makes, constitutes, and irrevocably appoints LESSOR its attorney
in fact, coupled with an interest, for that purpose.
38. CLEANING.
LESSOR will clean the premises daily after normal business hours. Said
cleaning to be comparable to that of comparable office buildings in the area.
39. SUBORDINATION OF SUBLEASE AND NON-DISTURBANCE OF LESSEE.
Notwithstanding anything contained herein, this Sublease is and shall
be subject and subordinate at all times to all the terms, covenants and
conditions of the Master Lease; provided, however, that so long as the LESSEE is
not in default of any of the terms, covenants and conditions of this Sublease 10
Speen Street, LLC or its successor in interest, including, without limitation,
its successor in interest through foreclosure proceedings or a deed in lieu of
foreclosure, hereby agrees not to disturb the LESSEE in its possession of the
Premises.
40. LESSOR'S FURNITURE AND NETWORK EQUIPMENT.
Lessee may use during the term the furniture currently existing in the
First Floor Premises and more particularly described in Exhibit C attached
hereto (the "Furniture"). Lessee shall maintain such Furniture in its current
condition at the time of occupancy and first use, reasonable wear and tear and
casualty excepted. Upon the expiration of the Term, Lessee shall surrender such
Furniture with the Premises in their current location.
41. LESSEE PROPERTY
Lessee's trade fixtures, furniture, equipment and other personal
property installed in the Premises ("Lessee's Property") shall at all times be
and remain Lessee's property. Lessee may at any time remove Lessee's Property
from the Premises, provided that Lessee repairs all damage caused by such
removal. Lessor shall have no security interest or lien on any item of Lessee's
Property other than those statutory liens that may arise by operation of law.
Lessee's trade fixtures, furniture, equipment and other personal property
installed in the Premises ("Lessee's Property") shall at all times be and remain
Lessee's property. Lessee may at any time remove Lessee's Property from the
Premises, provided that Lessee repairs all damage caused by such removal. Lessor
shall have no lien on any item of Lessee's Property other than those statutory
liens that may arise by operation of law. Lessor hereby covenants and agrees to
comply with any reasonable request of Lessee for Lessor's execution of one or
more consent, waiver and estoppell certificate in favor of a lendor to Lessee as
such certificate may be required in connection with such financing provided that
Lessee is not in default hereunder. Notwithstanding the foregoing, in no event
shall Lessor have any lien on Lessee's software or intellectual property as a
result of this Sublease and / or Lessor's capacity as a lessor.
42. CONSENT
10 Speen Street, LLC hereby consents to this Sublease upon and subject
to the terms and conditions contained herein. Subject to financing arrangements
entered into by 10 Speen Street, LLC, so long as Lessee is not then in default
under the Sublease beyond applicable notice and cure periods, in the event of
any termination of the Master Lease, the Sublease shall not terminate as a
result thereof and Lessee shall instead automatically become primary lessee of
the Premises on the terms and conditions of the Sublease. In such event, Lessee
shall be bound and attorn to 10 Speen Street, LLC, and 10 Speen Street, LLC
shall recognize and shall not disturb the rights and interest of Lessee under
all of the terms and conditions of the Sublease as if 10 Speen Street, LLC had
been the original Lessor under the Sublease.
IN WITNESS WHEREOF, the said parties hereto set their hands and seals
as of this 2d day of August, 1999.
LESSOR: ASA INTERNATIONAL LTD. LESSEE: INTERPRO EXPENSE SYSTEMS, INC.
/S/ TERRENCE C. MCCARTHY /S/ E. M. COMFOLTEY
----------------------------- -------------------------
By: Terrence C. McCarthy By: Edward M. Comfoltey
Vice President & Treasurer
Address: Address:
10 Speen Street 4125 Hopyard Road
Framingham, MA 01701 Pleasanton, CA 94588
THE UNDERSIGNED ACCEPTS AND AGREES
TO BE BOUND BY THE PROVISIONS OF
PARAGRAPH 41 HEREOF:
10 SPEEN STREET, LLC
By: ASA Properties, Inc., its managing member
By: /S/ TERRENCE C. MCCARTHY
------------------------------
Terrence C. McCarthy,
Vice President and Treasurer
<PAGE>
SUBLEASE AGREEMENT BETWEEN
ASA INTERNATIONAL LTD., LESSOR
AND
INTERPRO EXPENSE SYSTEMS, INC., LESSEE
DATED AS OF AUGUST ____, 1999
EXHIBIT A: RULES AND REGULATIONS
1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors, or halls shall not be obstructed or encumbered
by any LESSEE or used for any purpose other than for ingress to and egress from
the Premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
LESSOR. There shall not be used in any space, or in the public hall of the
Building, either by a LESSEE or by jobbers or others in the delivery or receipt
of merchandise, any hand trucks, except those equipped with rubber tires and
sideguards.
2. The water and wash closets and plumbing fixtures shall not be used
for any purpose other than those for which they were designated or constructed
and no sweepings, rubbish, rags, acids, or other substances shall be deposited
therein, and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the LESSEE who, or whose clerks,
agents, employees, or visitors, shall have caused it.
3. No LESSEE shall sweep or throw or permit to be swept or thrown from
the Premises any dirt or other substances into any of the corridors or halls,
elevators, or out of the doors or windows or stairways of the Building and
LESSEE shall not use, keep, or permit to be used or kept any foul or noxious gas
or substance in the Premises or permit or suffer the Premises to be occupied or
used in a manner offensive or objectionable to LESSOR or other occupants of the
Building by reason of noise, odors, and/or vibrations, or interfere in any way
with other LESSEES or those having business therein, nor shall any animals or
birds be kept in or about the Building. Smoking or carrying lighted cigars or
cigarettes in the elevators of the Building is prohibited.
4. No awnings or other projections shall be attached to the outside
walls of the Building without the prior written consent of LESSOR.
5. No sign, advertisement, notice, or other lettering shall be
exhibited, inscribed, painted, or affixed by any LESSEE on any part of the
outside of the Premises or the Building or on the inside of the Premises if the
same is visible from the outside of the Premises without the prior written
consent of LESSOR, except that the name of LESSEE may appear on the entrance
door of the Premises.
In the event of the violation of the foregoing by any LESSEE, LESSOR
may remove same without any liability, and may charge the expense incurred by
such removal to LESSEE or LESSEES violating this rule. Interior signs on doors
and directory tablet shall be inscribed, painted, or affixed for each LESSEE by
LESSOR at the expense of such LESSEE, and shall be of a size, color, and style
acceptable to LESSOR.
6. Except with prior written consent of LESSOR and as LESSOR may
direct, no LESSEE shall mark, paint, drill into, or in any way deface any part
of the Premises or the Building of which they form a part or cut or string
wires, lay linoleum, or other similar floor covering, so that the same shall
come in direct contact with the floor of the Premises, and, if linoleum or other
similar floor covering is desired to be used, an interlining of builder's
deadening felt shall be first affixed to the floor, by a paste or other
material, soluble in water, the use of cement or other similar adhesive material
being expressly prohibited.
7. Except with the prior written consent of LESSOR, no additional
locks or bolts of any kind shall be placed upon any of the doors or windows by
any LESSEE, nor shall any changes be in existing locks or mechanism thereof. If
requested, LESSEE shall provide LESSOR with a copy of a key for all new locks or
bolts. Each LESSEE shall, upon the termination of his Tenancy, restore to LESSOR
all keys either furnished to or otherwise procured by, such LESSEE. In the event
of the loss of any keys furnished to LESSEE, LESSEE shall pay to LESSOR the cost
thereof.
8. LESSEE shall use reasonable care in delivering and removing from
the Premises freight, furniture, business equipment, merchandise and bulky
matter of, any description.
9. Canvassing, soliciting, and peddling in the Building is prohibited
and each LESSEE shall cooperate to prevent the same.
10. LESSOR shall have the right to prohibit any advertising by any
LESSEE which, in LESSOR's reasonable opinion, tends impair the reputation of the
Building or its desirability as building for offices, and upon written notice
from LESSOR, LESSEE shall refrain from or discontinue such advertising.
11. Except for those items necessary for the cleaning and maintenance
of LESSEE's business, including office supplies, which shall be properly stored
to minimize the risk of fire and explosion, LESSEE shall not bring or permit to
be brought or kept in or on the Premises, any inflammable, combustible, or
explosive fluid, material, chemical or substance, or cause or permit any odors
of cooking or other process, at any unusual or other objectionable odors to
permeate in or emanate from the Premises.
Exhibit 10.5
REVOLVING PROMISSORY NOTE
AUGUST 2, 1999
FOR VALUE RECEIVED, the undersigned, InterPro Expense Systems, Inc., a
Delaware corporation ("Borrower"), promises to pay to ASA InterPro SmartTime
LLC, a Delaware limited liability company ("Payee"), or order, the principal
amount set forth on SCHEDULE A hereto, plus interest thereon at a fixed rate
equal to 5% per annum. Interest shall in all cases be calculated on the basis of
actual days elapsed and a 365 day year.
All outstanding principal and any accrued but unpaid interest
hereunder shall be due and payable on August 31, 2000 (the "Maturity Date").
This Note is the Note referred to in Section 4.7 of the Option to
Purchase Agreement of even date by and among Borrower, Payee and ASA
International Ltd. (the "Option Agreement").
This Note is a revolving note and subject to the foregoing the
Borrower may, at its option, at any time prior to the Maturity Date, borrow,
pay, prepay and reborrow hereunder, all in accordance with the provisions hereof
and of any and all other agreements between the Borrower and the Lender related
hereto; provided, however, that the principal balance outstanding shall at no
time exceed the lesser of (a) the face amount of the Note or (b) the Net Cash
(as defined in the Option Agreement) of the Payee.
Any payments, including any prepayments, received by Payee on account
of this Note prior to demand or acceleration shall be applied first, to any
costs, expenses or charges then owed Payee by Borrower in respect of this Note,
second, to accrued and unpaid interest, and third, to the unpaid principal
balance. Any payments received after demand or acceleration shall be applied in
such manner as Payee may, in its sole discretion, determine.
Payee, at its option, may declare the entire unpaid balance of this
Note and all accrued and unpaid interest thereon to be immediately due and
payable without demand, notice or protest (which are hereby waived) upon the
occurrence of any one or more of the following events: (a) the failure to pay
principal or interest of this Note within ten (10) days of the due date; or (b)
Borrower's exercise of the Option as defined in the Option Agreement.
No delay or omission by Payee in exercising or enforcing any of
Payee's powers, rights, privileges or remedies hereunder shall operate as a
waiver thereof on that occasion or on any other occasion. No waiver of any
default hereunder shall operate as a waiver of any other default hereunder, nor
as a continuing waiver.
Borrower will pay on demand all reasonable costs and expenses of
collection, including reasonable attorneys' fees incurred or paid by Payee in
enforcing this Note on default.
Borrower hereby waives presentment, demand, notice and protest, and
also waives any delay on the part of Payee, except such notice as is required
under the Option Agreement.
This Note shall be binding upon Borrower and each endorser and
guarantor hereof and upon their respective successors, and shall inure to the
benefit of Payee and its successors, endorsees and assigns. This Note may not be
amended except by an instrument in writing signed by Borrower and Payee.
This Note shall not be assigned by Borrower without the prior written
consent of Payee. Notwithstanding the foregoing sentence, Borrower may assign
this Note to a Permissible Assignee without such written consent; PROVIDED
HOWEVER that Borrower and such Permissible Assignee shall be jointly and
severally liable to Payee for any and all obligations of Borrower and such
Permissible Assignee hereunder. For purposes herein, a "Permissible Assignee"
shall mean (i) a corporation which acquires substantially all of the assets of
Borrower, or (ii) a corporation into which or with which Borrower merges .
This Note shall be governed by and construed in accordance with the
laws of the State of Delaware.
Any dispute between the parties arising out of or related to this
Agreement shall be settled by arbitration in accordance with the provisions of
the Asset Purchase Agreement of even date by and among Borrower, Payee and ASA
International Ltd.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of
the date first written above.
INTERPRO EXPENSE SYSTEMS, INC.
By: ED COMFOLTEY
-------------------------
Title: CEO
----------------------
<PAGE>
SCHEDULE A TO REVOLVING PROMISSORY
The principal amount of this Note shall equal the cash remaining
available to Payee resulting from the collection of the accounts receivable of
Payee existing on the date hereof, after payment therefrom of the Payee's
Balance Sheet Liabilities (as defined in the Asset Purchase Agreement of even
date by and between Payee, Borrower and ASA International Ltd).
Exhibit 10.6
CUSTOMER INTANGIBLES LICENSE AGREEMENT
THIS AGREEMENT, made this 2nd day of August, 1999, by and between ASA
INTERPRO SMARTTIME LLC, a Delaware limited liability company (herein "SMLLC" or
"SMARTTIME LLC"), and INTERPRO EXPENSE SYSTEMS, INC., a Delaware corporation
("INTERPRO").
W I T N E S S E T H:
WHEREAS, SMLLC, INTERPRO and ASA INTERNATIONAL LTD. ("ASA") are
parties to an Option to Purchase Agreement dated of even date herewith (the
"Option Agreement"), pursuant to which SMLLC has granted to INTERPRO an option
to purchase all of the assets of SMLLC; and
WHEREAS, during the term of the Option Agreement SMLLC and INTERPRO
desire that INTERPRO conduct the Business (as defined in the Option Agreement);
and
WHEREAS, to facilitate the conduct of the Business by INTERPRO during
the term of the Option Agreement, SMLLC and INTERPRO desire to enter into this
License Agreement in which SMLLC grants to INTERPRO a license for the use of
SMLLC's Customer Intangibles (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, IT IS AGREED:
1. CUSTOMER INTANGIBLES. "Customer Intangibles" shall mean any and all
information regarding the composition, with respect to the Business, of the
customer market, market share, and any other value resulting from the future
provision by SMLLC of goods or services pursuant to relationships with customers
(contractual or otherwise) in the ordinary course of business, including but not
limited to the customer list of the Business attached hereto as EXHIBIT A.
Customer Intangibles shall not include any such information ("InterPro
Information") acquired by INTERPRO from any source other than SMLLC.
2. GRANT OF LICENSE. SMLLC hereby grants to INTERPRO and INTERPRO
hereby accepts upon the terms and conditions hereinafter set forth, under all of
SMLLC's Property and other rights in the Customer Intangibles, royalty-free,
worldwide right and license (the "License"), to (a) use, for any purpose,
reproduce, distribute, publicly perform, display and sell the Customer
Intangibles, and (b) make, have made, use, sell, offer for sale and import any
product and practice any process. The License hereunder includes the right to
grant sublicenses. During the term of the License, SMLLC shall not use or grant
to any other party the right to use the Customer Intangibles for any purpose
which would be competitive with the Business, and SMLLC shall keep confidential
all of the information contained in the Customer Intangibles. In this Agreement,
"Initial Period" means the period commencing on the Option Date and ending on
the sooner to occur of (a) the date INTERPRO exercises its option to purchase
the assets of SMLLC pursuant to the Option Agreement, and (b) August 31, 1999.
3. TERM. The term of this Agreement shall commence on the date of the
execution of this Agreement and shall continue until August 31, 2000; provided,
however, that if, prior to the expiration of this Agreement, INTERPRO exercises
its option to purchase the assets of SMLLC pursuant to the Option Agreement,
then, immediately prior to such exercise, the term of this Agreement shall be
deemed to be extended until August 31, 2009 (the "Extended Term"). At any time
after August 31, 2009, if the Extended Term occurs, INTERPRO shall have the
right to acquire all of SMLLC's right, title and interest in and to the Customer
Intangibles free and clear of all Liens (as defined in the Purchase Agreement
attached to the Option Agreement), for a cash payment equal to the fair market
value of the Customer Intangibles on the date purchased, as determined by an
appraiser selected by INTERPRO.
4. LICENSE FEE. Upon execution of this Agreement, INTERPRO shall pay
SMLLC a non-refundable license fee for use of the Customer Intangibles during
the term of this Agreement (including any Extended Term) in the amount of Three
Hundred Thousand Dollars ($300,000) by wire transfer of immediately available
funds.
5. OWNERSHIP. During the term of this Agreement (including any
Extended Term), all Customer Intangibles shall remain the property of SMLLC. At
all times during the term of this Agreement and thereafter, INTERPRO shall own
the InterPro Intangibles.
6. PROTECTION OF THE CUSTOMER INTANGIBLES. Subject to Section 2, The
parties agree that, during the term of this Agreement, each shall take all such
steps as may be necessary or reasonable to safeguard the confidentiality of the
Customer Intangibles and shall not disclose any of the foregoing to any third
party, except for purposes consistent with this Agreement.
7. TERMINATION. This Agreement, and the License granted hereby, will
terminate on August 31, 2000 unless INTERPRO exercises its option to purchase
the assets of SMLLC pursuant to the Option Agreement, in which event the term of
this Agreement and the License granted hereunder shall be extended pursuant to
Section 3 hereof.
8. WARRANTY. SMLLC represents and warrants to INTERPRO that at all
times during the term of this Agreement (a) SMLLC has the full right, power and
authority to enter into this Agreement and fully perform its obligations
hereunder, and (b) SMLLC shall own exclusively all right, title and interest in
and to the Customer Intangibles, except as set forth in the Purchase Agreement
(as defined in the Option Agreement).
9. ASSIGNMENT. Neither this Agreement nor any interest herein may be
assigned, in whole or in part, by either party without the prior written consent
of the other party; provided, however, that at any time during the Extended Term
INTERPRO may assign or transfer this Agreement, or any of its rights hereunder,
to a third party that agrees to be bound by the terms of this Agreement.
10. WAIVER. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.
11. NOTICES. Any notice to be given hereunder shall be deemed
sufficient if in writing and delivered in accordance with the notice provisions
of the Option Agreement.
12. SEVERABILITY. In the event that any provisions shall be held to be
invalid or unenforceable for any reason whatsoever, it is agreed that such
invalidity or unenforceability shall not affect any other provision of this
Agreement and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and that any court of competent jurisdiction may
so modify the objectionable provisions as to make it valid, reasonable and
enforceable.
13. ENTIRE AGREEMENT. This Agreement and the schedules attached hereto
constitute the entire agreement between the parties hereto and supersede all
prior agreements, understandings and arrangements, oral or written, between the
parties with respect to the subject matter hereof.
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
15. HEADINGS. The headings of this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
16. RELATIONSHIP. Nothing in this Agreement is intended to or shall
(i) establish any agency, partnership or joint venture relationship between the
parties hereto; or (ii) except as otherwise specifically provided, confer on any
person other than the parties, or their authorized assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
17. DISPUTE RESOLUTION. Any dispute between the parties arising out of
or related to this Agreement shall be settled by arbitration in accordance with
the provisions of the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers or representatives.
SMARTTIME LLC
By: /S/ ALFRED C. ANGELONE
-----------------------------
INTERPRO EXPENSE SYSTEMS, INC.
By: /S/ ED COMFOLTEY
-----------------------------
Exhibit 10.7
INTELLECTUAL PROPERTY LICENSE AGREEMENT
THIS AGREEMENT, made this 2nd day of August, 1999, by and between ASA
INTERPRO SMARTTIME LLC, a Delaware limited liability company (herein "SMLLC" or
"SMARTTIME LLC"), and INTERPRO EXPENSE SYSTEMS, INC., a Delaware corporation
("INTERPRO").
W I T N E S S E T H:
WHEREAS, SMLLC, INTERPRO and ASA INTERNATIONAL LTD. ("ASA") are
parties to an Option to Purchase Agreement dated of even date herewith (the
"Option Agreement"), pursuant to which SMLLC has granted to INTERPRO an option
to purchase all of the assets of SMLLC; and
WHEREAS, during the term of the Option Agreement SMLLC and INTERPRO
desire that INTERPRO conduct the Business (as defined in the Option Agreement);
and
WHEREAS, to facilitate the conduct of the Business by INTERPRO during
the term of the Option Agreement, SMLLC and INTERPRO desire to enter into this
License Agreement in which SMLLC grants to INTERPRO a license for the use of
SMLLC's Intellectual Property (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, IT IS AGREED:
1. INTELLECTUAL PROPERTY. "Intellectual Property" shall mean (a) all
of SMLLC's right, title and interest in and to (i) the software previously
developed and sold by ASA and commonly referred to as "SmartTime Software",
including all released and unreleased source code and object code versions
thereof, all work in process related thereto, and all related documentation and
development notes (the "Software"), and (ii) except for the Customer
Intangibles, as defined in the Customer Intangibles License Agreement by and
between SMLLC and INTERPRO of even date herewith, all other intellectual
property and intellectual property rights owned by SMLLC including databases,
market information, research and development, patents, patent applications,
copyrights, copyright registration applications, trademarks and service marks
and related applications and goodwill, trade names, trade secrets, proprietary
information, technology rights and licenses, proprietary rights and processes,
know-how, research and development in progress, and any and all other
intellectual property including, without limitation, all things authored,
discovered, developed, made, perfected, improved, designed, engineered, devised,
acquired, produced, conceived or first reduced to practice by SMLLC whether
tangible or intangible, in any stage of development, including without
limitation enhancements, designs, technology, improvements, inventions, works of
authorship, formulas, processes, routines, subroutines, techniques, concepts,
object code, flow charts, diagrams, coding sheets, source code, listings and
annotations, programmers' notes, information, work papers, work product and
other materials of any types whatsoever, and all rights of any kind in or to any
of the foregoing; and (b) all improvements to the foregoing or additions to the
foregoing made or acquired during the term of this Agreement, whether by SMLLC
or INTERPRO.
2. GRANT OF LICENSE. SMLLC hereby grants to INTERPRO and INTERPRO
hereby accepts upon the terms and conditions hereinafter set forth, an
exclusive, royalty-free, worldwide right and license (the "License"), under all
of SMLLC's rights in and to the Intellectual Property, (a) to use, reproduce,
distribute, publicly perform, display and sell the Intellectual Property, and
(b) to make, have made, use, sell, offer for sale and import any product and
practice any process, subject, however, to the terms and provisions of this
Agreement. The License hereunder includes the right to grant sublicenses. During
the term of the License, SMLLC shall not use or grant to any other party the
right to use the Intellectual Property for any purpose and SMLLC shall keep
confidential all of the information contained in the Intellectual Property.
3. TERM. The term of this Agreement shall commence on the date of the
execution of this Agreement and shall continue until August 31, 2000, unless
this Agreement is terminated pursuant to Section 7.
4. LICENSE FEE. Upon execution of this Agreement, INTERPRO shall pay
SMLLC a non-refundable license fee for use of the Intellectual Property during
the term of this Agreement in the amount of Five Hundred Thousand Dollars
($500,000) by wire transfer of immediately available funds.
5. OWNERSHIP. During the term of this Agreement, all Intellectual
Property shall remain the property of SMLLC.
6. PROTECTION OF THE INTELLECTUAL PROPERTY. Subject to Section 2, the
parties agree that, during the term of this Agreement, each shall take all such
steps as may be necessary or reasonable to safeguard the confidentiality of the
Intellectual Property and shall not disclose any of the foregoing to any third
party, except for purposes consistent with this Agreement.
7. TERMINATION. This Agreement, and the License granted hereby, will
terminate upon the earlier of (i) August 31, 2000 or (ii) the date on which
INTERPRO exercises its option to purchase the assets of SMLLC pursuant to the
Option Agreement.
8. WARRANTY. SMLLC represents and warrants to INTERPRO that at all
times during the term of this Agreement (a) SMLLC has the full right, power and
authority to enter into this Agreement and fully perform its obligations
hereunder, and (b) SMLLC owns exclusively all right, title and interest in and
to the Intellectual Property, except as set forth in the Purchase Agreement (as
defined in the Option Agreement).
9. ASSIGNMENT. Neither this Agreement nor any interest herein may be
assigned, in whole or in part, by either party without the prior written consent
of the other party.
10. WAIVER. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.
11. NOTICES. Any notice to be given hereunder shall be deemed
sufficient if in writing and delivered in accordance with the notice provisions
of the Option Agreement.
12. SEVERABILITY. In the event that any provisions shall be held to be
invalid or unenforceable for any reason whatsoever, it is agreed that such
invalidity or unenforceability shall not affect any other provision of this
Agreement and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and that any court of competent jurisdiction may
so modify the objectionable provisions as to make it valid, reasonable and
enforceable.
13. ENTIRE AGREEMENT. This Agreement and the schedules attached hereto
constitute the entire agreement between the parties hereto and supersede all
prior agreements, understandings and arrangements, oral or written, between the
parties with respect to the subject matter hereof.
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
15. HEADINGS. The headings of this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
16. RELATIONSHIP. Nothing in this Agreement is intended to or shall
(i) establish any agency, partnership or joint venture relationship between the
parties hereto; or (ii) except as otherwise specifically provided, confer on any
person other than the parties, or their authorized assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
17. DISPUTE RESOLUTION. Any dispute between the parties arising out of
or related to this Agreement shall be settled by arbitration in accordance with
the provisions of the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers or representatives.
SMARTTIME LLC
By: /S/ ALFRED C. ANGELONE
-------------------------------
INTERPRO EXPENSE SYSTEMS, INC.
By: /S/ ED COMFOLTEY
-------------------------------
Exhibit 10.8
PROMISSORY NOTE
$3,200,000 AUGUST 2, 1999
FOR VALUE RECEIVED, the undersigned, ASA International Ltd., a
Delaware corporation ("Borrower"), promises to pay to Interpro Expense Systems,
Inc., a Delaware corporation ("Payee"), or order, the principal amount of Three
Million Two Hundred Thousand Dollars ($3,200,000), plus interest thereon at a
fixed rate equal to 5% per annum. Interest shall in all cases be calculated on
the basis of actual days elapsed and a 365 day year.
All outstanding principal and any accrued but unpaid interest
hereunder shall be due and payable on August 31, 2000 (the "Maturity Date"). The
Borrower shall, upon execution of this Note, prepay interest in the amount of
One Hundred Sixty Thousand Dollars ($160,000), representing interest for the
period from August 1, 1999 through July 31, 2000 (the "Prepaid Interest").
This Note is the Note referred to in Section 7 of the Option to
Purchase Agreement of even date by and among Borrower, Payee and ASA Interpro
SmartTime LLC ("SmartTime LLC") (the "Option Agreement").
Any payments, including any prepayments, received by Payee on account
of this Note prior to demand or acceleration shall be applied first, to any
costs, expenses or charges then owed Payee by Borrower in respect of this Note,
second, to accrued and unpaid interest, and third, to the unpaid principal
balance. No Prepaid Interest shall be refundable in the event this Note is
prepaid prior to August 1, 2000. Any payments received after demand or
acceleration shall be applied in such manner as Payee may, in its sole
discretion, determine.
Payee, at its option, may declare the entire unpaid balance of this
Note and all accrued and unpaid interest thereon to be immediately due and
payable without demand, notice or protest (which are hereby waived) upon the
occurrence of any one or more of the following events: (a) the failure to pay
principal or interest of this Note within ten (10) days of the due date; or (b)
Payee's exercise of the Option as defined in the Option Agreement.
No delay or omission by Payee in exercising or enforcing any of
Payee's powers, rights, privileges or remedies hereunder shall operate as a
waiver thereof on that occasion or on any other occasion. No waiver of any
default hereunder shall operate as a waiver of any other default hereunder, nor
as a continuing waiver.
Borrower will pay on demand all reasonable costs and expenses of
collection, including reasonable attorneys' fees incurred or paid by Payee in
enforcing this Note on default.
This Note shall be binding upon Borrower and each endorser and
guarantor hereof and upon their respective successors, and shall inure to the
benefit of Payee and its successors, endorsees and assigns. This Note may not be
amended except by an instrument in writing signed by Borrower and Payee.
This Note shall not be assigned by Borrower without the prior written
consent of Payee.
This Note shall be governed by and construed in accordance with the
laws of the State of Delaware.
Any dispute between the parties arising out of or related to this
Agreement shall be settled by arbitration in accordance with the provisions of
the Asset Purchase Agreement of even date by and among Borrower, Payee and
SmartTime LLC.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of
the date first written above.
ASA INTERNATIONAL LTD.
By: /S/ ALFRED C. ANGELONE
--------------------------------
Title: CEO
-----------------------------
