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 (Date of earliest event
reported): September 30, 1997
ARI NETWORK SERVICES, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 0-19608 39-1388360
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
330 E. Kilbourn Avenue
Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(414) 278-7676
<PAGE>
Item 2. Acquisition or Disposition of Assets
On September 30, 1997, the Company acquired
substantially all of the assets of Empart Technologies,
Inc. ("Empart"), a Foster City, California based
developer of software for electronic parts catalogs,
and assumed approximately $400,000 of specified
liabilities of Empart. These liabilities are expected
to be paid by the cash flows generated from the
acquired business. The assets consisted primarily of
proprietary software and other intangible assets,
receivables, customer contracts, computers and other
office equipment. In connection with the acquisition,
the Company issued 653,957 shares of Common Stock to
Empart. The Common Stock is expected to be distributed
to Empart's shareholders upon the liquidation of
Empart. In addition, the Company retained Mr. Michael
Jarrett, Empart's president, who will serve in a senior
sales and marketing capacity with ARI and several of
Empart's technical staff, who will continue development
of the Company's electronic parts catalog software
applications.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
It is impracticable to provide the required
financial information at the time of the filing
of this report. The required financial
information will be filed by December 15, 1997.
(b) Pro Forma Financial Information.
It is impracticable to provide the required pro
forma financial information at the time of the
filing of this report. The required pro forma
financial information will be filed by December
15, 1997.
(c) Exhibits
2.1 Asset Purchase Agreement, dated September
25, 1997, by and among the Company, Empart
Technologies, Inc. and Michael S. Jarrett.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 10, 1997 ARI NETWORK SERVICES, INC.
By: /s/ Mark L. Koczela
--------------------------------
Mark L. Koczela, Executive Vice President of
Business Development and Administration
EXHIBITS
No. Description
2.1 Asset Purchase Agreement, dated September 25, 1997,
by and among the Company,
Empart Technologies, Inc. and Michael S. Jarrett.
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of
September 25, 1997 (the "Effective Date"), by and among
ARI NETWORK SERVICES, INC., a Wisconsin corporation
("Buyer") with a principal place of business at 330 E.
Kilbourn Avenue, Milwaukee, Wisconsin 53202-3166,
EMPART TECHNOLOGIES, INC., a California corporation
("Seller") with a principal place of business at 1065
E. Hillsdale Blvd., Foster City, California 94404, and
MICHAEL S. JARRETT ("Jarrett").
BACKGROUND:
A. Seller is engaged in the business of providing
electronic cataloging software products and related
information management services to vendors in various
industries (the "Subject Business").
B. Buyer desires to purchase from Seller all of
the Subject Assets (as hereafter defined) and to assume
the Assumed Liabilities (as hereafter defined), and
Seller desires to sell to Buyer the Subject Assets and
to have Buyer assume the Assumed Liabilities in
accordance with the terms and conditions set forth in
this Agreement.
C. Jarrett is the President and Chief Executive
Officer of Seller and owns forty-six percent (46%) of
the issued and outstanding common stock of the Seller
and will benefit financially from this transaction.
NOW, THEREFORE, the parties hereby agree as
follows:
ARTICLE I
Assets to Be Purchased
Subject to the terms and conditions set forth in
this Agreement, at the Closing (as defined in Paragraph
3.1, below), Seller will sell, transfer, convey, assign
and deliver to Buyer, and Buyer will acquire and
purchase from Seller all right, title and interest of
Seller in and to the properties, assets and rights of
every nature, kind and description, tangible and
intangible, whether accrued, contingent or otherwise
and whether now existing or after this date acquired
relating to, used or held for use in connection with
the operation of the Subject Business (the "Subject
Assets"), including, without limitation, those items in
the following categories, other than the Retained
Records (as defined below):
(a) all cash, cash equivalent assets and investments
of the Seller and all of Seller's bank accounts, lock
boxes, and post office boxes;
(b) the software programs identified in Schedule
1(b), including the source and object code thereof and
any and all existing documentation (regardless of
whether such documentation is provided on a commercial
basis) including flow charts, program descriptions,
program listings, layouts, schematics, engineering and
design drawings, technical support documentation,
diagrams and other documentation depicting or
specifying the designs and components of such software
programs, libraries, logs, reports, drafts, models,
prototypes, technical and other data, test and other
data and programs, any and all proceeding versions,
works in process, fixes, enhancements, future releases
or other developments by Seller which may be combined
or embodied in any medium or format whatsoever, and for
all language versions and hardware platforms, software
platforms and operating environments and whether sold
separately or bundled with other applications,
consisting of a set of logical instructions and
information which guide the functioning of a processor,
and which shall include all information, electronic
form content, so-called "look & feel", graphic design,
electronic form user methodologies, user interface
design, software tools related to the Subject Business
and owned or licensed by the Seller, know-how, systems,
and processes concerning such computer program but
excluding the Licensed Software (collectively, the
"Software").
(c) Seller's rights in the third party software
licensed by Seller and contained in or necessary for
the operation or development of the Software or
otherwise used in the Subject Business as listed in
Schedule 1(c) (the "Licensed Software"), which Schedule
sets out the payment terms and obligations thereunder.
(d) the fixed assets on hand as of Closing, including
without limitation, furniture, furnishings, fixtures,
machinery, computers, printers, copiers and other
equipment, wherever located ("Fixed Assets") described
on Schedule 1(d);
(e) all accounts receivable of the Seller outstanding
as of the Closing (the "Accounts Receivable");
(f) any and all tax refunds owed to the Seller
including without limitation whatever amount Seller is
entitled to receive as a result of that certain tax
refund application in the approximate aggregate amount
of Two Hundred Sixty Seven Thousand Dollars ($267,000)
to be filed by Seller with the United States Internal
Revenue Service prior to the Closing (the "Tax
Refund");
(g) all credits, prepaid expenses, advance payments
and deposits (the "Prepaids");
(h) all of the supplies, consumable materials and
other similar assets on hand as of Closing, wherever
located, including without limitation, supplies of
sales literature, catalogs and brochures ("Supplies");
(i) all of the following assets or rights to which
Seller or the Subject Business has any right of
ownership, use or otherwise:
(1) patents, patent applications, trade
names, trademarks, service marks,
trademark registrations and any
applications for trademark
registrations, copyrights, copyright
registrations and applications for
copyright registrations, whether issued
or pending, and whether registered or
unregistered;
(2) all inventions, improvements,
product specifications, secret
processes, formulas, technologies, trade
secrets, know-how, and technical
knowledge; and
(3) all other intellectual property and
other similar interests (collectively
the "Intangible Assets");
j) all sales, manufacturing, supplier and customer
lists and records, personnel and payroll records,
accounting records, purchasing and sales records, and
all other records, wherever located, except the
Seller's corporate minute and stock books (hereafter
collectively referred to as the "Retained Records");
k) the name "Empart Technologies, Inc.", "Empart
Viewer", "Empart Publisher" and "Empart Web" and all
names similar to such names used by Seller in the
Subject Business and all rights to Seller's World Wide
Web site with the URL, "empart.com";
l) all contracts, including without limitation,
software license and support agreements, purchase
orders, sales orders, service contracts, leases,
employee or contractor agreements, nondisclosure and
confidentiality agreements, and other agreements of
Seller (the "Contracts") as in effect as of Closing,
including without limitation, the contracts described
on the attached Schedule 1(l);
m) all causes of action, judgments, claims and
demands of whatever nature;
n) the goodwill, if any, including all rights to
phone numbers of the Subject Business; and
o) all other miscellaneous assets used in the
operation of the Subject Business.
ARTICLE II
Consideration
2.1. Consideration; Payment. As consideration for
the Subject Assets, Buyer will issue and deliver to
Seller Six Hundred Fifty Three Thousand, Nine Hundred
Fifty Seven (653,957) shares (the "Subject Shares") of
the $.001 par value common stock ("Common Stock") of
Buyer. At the Closing, Buyer will issue and deliver to
Seller a certificate or certificates representing the
Subject Shares and Buyer and Seller will agree upon the
allocation of the purchase price among all of the
Subject Assets.
2.2. Assumption of Liabilities. As of the
Closing Date, Buyer will assume and will pay and
perform when due (a) all liabilities and obligations
which accrue and which are based on performance
obligations remaining unpaid and unperformed on the
Closing Date and arising from and after the Closing
Date under the Contracts described in Schedule 1(l)
(the "Assumed Contracts"), and (b) the liabilities and
obligations of Seller reflected on attached Schedule
2.2 but only to the extent set forth on such schedule.
The liabilities assumed by Buyer in accordance with
this Paragraph 2.2 are referred to in this Agreement as
the "Assumed Liabilities." Except for the Assumed
Liabilities, Buyer will assume no obligations or
liabilities of Seller and Seller will pay, perform and
discharge all liabilities and obligations of Seller
which are not specifically assumed by Buyer under this
Agreement; including, without limitation, any
liabilities described in Paragraph 4.14, below.
2.3. Taxes. Buyer shall bear and pay, and
discharge promptly when due, all sales or other similar
taxes arising out of the sale and transfer of the
Subject Assets (collectively, the "Transfer Taxes").
Buyer shall pay all filing fees associated with
assignments or transfers of Intangible Assets. It is
intended by the parties that the transaction
contemplated by this Agreement constitute a
reorganization within the meaning of Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended (the "Code") and the parties hereby adopt this
Agreement as a "plan of reorganization" within the
meaning of the applicable United States Treasury
Regulations applicable to Section 368(a)(1)(C) of the
Code. Each of the parties agrees to report this
transaction for local, state and federal tax purposes
as such a reorganization. The parties further intend
and agree that, in pursuance of such plan of
reorganization, Seller will distribute the stock it
receives in this transaction to its shareholders in
liquidation of Seller.
2.4. Dissenting Shareholders. Shareholders (as
defined in Paragraph 4.13(c)) of Seller who do not vote
in favor of the transaction contemplated by this
Agreement and who otherwise comply with Chapter 13 of
the California General Corporation Law (the "California
Code") may exercise dissenters' rights under the
California Code by reason of the reorganization
contemplated by this Agreement. Seller and Jarrett
have represented to Buyer that none of the Shareholders
of Seller will exercise any such dissenter's rights.
Buyer's obligation to close the transactions described
herein is expressly contingent on the receipt by Buyer
at or before the Closing of valid and binding waivers
of such rights by the holders of all of Seller's common
stock. Jarrett hereby personally indemnifies Buyer and
holds Buyer harmless from all costs and damages
(including, without limitation, attorneys fees)
incurred by Buyer as a result of the exercise of
dissenter's rights by any of Seller's Shareholders.
ARTICLE III
Closing
3.1. Time And Place of Closing. The closing of the
purchase and sale contemplated in this Agreement (the
"Closing") will take place at 10:00 a.m. on September
30, 1997 (the "Closing Date") at the offices of Godfrey
& Kahn, S.C., 780 North Water Street, Milwaukee,
Wisconsin, 53202 or at such other time or place as
Seller and Buyer mutually agree. Notwithstanding the
foregoing, the parties agree to seek to have the
Closing occur as soon as commercially practicable.
3.2. Conditions Precedent to Buyer's Performance.
The obligations of Buyer to purchase the Subject Assets
and assume the Assumed Liabilities under this Agreement
are subject to the satisfaction, at or before the
Closing, of all the following conditions, any or all of
which may be waived by Buyer in whole or in part
without prior notice.
(a) All representations and warranties of
Seller hereunder and in all certificates delivered
by Seller to Buyer pursuant to this Agreement
shall be, in all material respects, true and
accurate on and as of the Closing Date as though
made at that time, except (i) to the extent that
such representations and warranties are made as of
a specified date and (ii) for changes resulting
from any action taken by Seller pursuant to and in
compliance with this Agreement.
(b) Seller shall have performed, satisfied
and complied with all covenants, agreements and
conditions required by this Agreement to be
performed, satisfied or complied with by Seller on
or before the Closing Date.
(c) The execution and delivery of this
Agreement by Seller, and the performance of
Seller's covenants and obligations under this
Agreement, shall have been duly authorized by all
necessary and required corporate action.
(d) No litigation or proceeding will be
threatened or pending against Seller or
Buyer (i) for the purpose or with the probable
effect of enjoining or preventing the consummation
of any of the transactions contemplated by this
Agreement or (ii) which would have a material
adverse effect on the Subject Assets or the
Subject Business as conducted by Seller as of the
Closing or as planned to be conducted by Buyer
after the Closing.
(e) Each of the Shareholders of Seller will
have consented in writing to the transaction
contemplated herein and the holders of all of
Seller's outstanding shares of Common Stock will
have waived any dissenters' rights such
Shareholder may have under Chapter 13 of the
California Code.
3.3. Conditions Precedent to Seller's
Performance. The obligations of Seller to sell and
transfer the Subject Assets and the Assumed Liabilities
under this Agreement are subject to the satisfaction,
at or before the Closing, of all the following
conditions, any or all of which may be waived by Seller
in whole or in part without prior notice:
(a) All representations and warranties of
Buyer hereunder and in all certificates delivered
by Buyer to Seller pursuant to this Agreement
shall be, in all material respects, true and
accurate on and as of the Closing Date as though
made at that time, except (i) to the extent that
such representations and warranties are made as of
a specified date and (ii) for changes resulting
from any action taken by Buyer pursuant to and in
compliance with this Agreement.
(b) Buyer shall have performed, satisfied
and complied with all covenants, agreements and
conditions required by this Agreement to be
performed, satisfied or complied with by Buyer on
or before the Closing Date; including without
limitation, the delivery of all items required
under Paragraph 3.5, below.
(c) The execution and delivery of this
Agreement by Buyer, and the performance of Buyer's
covenants and obligations under this Agreement,
shall have been duly authorized by all necessary
and required corporate action.
(d) No litigation or proceeding will be
threatened or pending against Buyer or Seller for
the purpose or with the probable effect of
enjoining or preventing the consummation of any of
the transactions contemplated by this Agreement.
3.4. Deliveries of Seller. At the Closing,
Seller will deliver or cause to be delivered to Buyer
the following:
(a) a bill of sale in the form attached hereto as
Schedule 3.4(a), and such other assignments,
certificates of title and instruments of conveyance as
Buyer may reasonably require, in a form reasonably
satisfactory to Buyer, duly executed by Seller;
(b) an Assignment and Assumption Agreement, in the
form attached hereto as Schedule 3.4 (b) (the
"Assignment and Assumption Agreement"), duly executed
by Seller, assigning to Buyer all of Seller's right,
title and interest in and to the Assumed Contracts,
together with consents satisfactory to Buyer from the
parties to the Assumed Contracts to the assignment of
such contracts to Buyer, or Seller will deliver to
Buyer such documentation Buyer reasonably requests to
assure Buyer that Buyer will receive the benefits of
any of the Assumed Contracts for which Seller has not
obtained appropriate consents to assignment;
(c) an Employment Agreement and Stock Option Agreement
with Jarrett, in the form attached as Schedule 3.4(c),
duly executed by Jarrett (the "Jarrett Agreements");
(d) an Employment Agreement and Stock Option Agreement
with Brad Jacobs ("Jacobs"), in the form attached as
Schedule 3.4(d), duly executed by Jacobs (the "Jacobs
Agreements");
(e) a certificate from the Secretary of Seller, in a
form reasonably satisfactory to Buyer, setting forth
the resolutions adopted by the Board of Directors and
the shareholders of Seller authorizing the execution
and delivery by Seller of this Agreement and all
documents to be executed in connection with this
Agreement and the taking by Seller of any and all
actions necessary or advisable to consummate the
transactions contemplated in this Agreement;
(f) a certificate dated the Closing Date signed by an
authorized officer of Seller certifying that the
conditions specified in Paragraphs 3.2(a), (b), (c) and
(e) have been fulfilled and that there is no litigation
under Paragraph 3.2(d) threatened or pending against
Seller;
(g) actual or constructive possession of the complete
books and records relating to the Subject Business,
except the Retained Records;
(h) such documents as are necessary to release any and
all liens, claims and encumbrances on the Subject
Assets;
(i) possession of the Subject Assets;
(j) an Investor Letter of each of Seller's
Shareholders in the form attached as Schedule 3.4(j),
duly executed by such shareholder (the "Investor
Letters"), each of which such letters will include a
release of all claims against Seller by the Shareholder
executing such Investor Letter; and
(k) UCC financing statements signed by Seller
evidencing a lien in favor of Buyer in all of Seller's
accounts receivable.
3.5. Deliveries of Buyer. At the Closing, Buyer
will deliver or cause to be delivered to Seller the
following:
(a) the Subject Shares as specified in Article II,
above;
(b) the Assignment and Assumption Agreement, duly
executed by Buyer;
(c) the Jarrett Agreements, duly executed by Buyer;
(d) the Jacobs Agreements, duly executed by Buyer;
(e) a certificate from the Secretary of Buyer, in a
form reasonably satisfactory to Seller, setting forth
the resolutions duly adopted by the Board of Directors
of Buyer authorizing the execution and delivery by
Buyer of this Agreement and all documents to be
executed in connection with this Agreement and the
taking by Buyer of any and all actions necessary or
advisable to consummate the transactions contemplated
in this Agreement; and
(f) a certificate dated the Closing Date
signed by an authorized officer of Buyer
certifying that the conditions specified in
Paragraphs 3.3(a), (b) and (c) have been fulfilled
and that there is no litigation under Paragraph
3.3(d) threatened or pending against Buyer.
ARTICLE IV
Warranties and Representations
of Seller and Jarrett
Except as set forth in the Schedule of Exceptions
attached to this Agreement (the "Schedule of
Exceptions"), Seller and Jarrett jointly and severally
represent and warrant to Buyer as follows as of the
Effective Date and as of the Closing Date:
4.1. Corporate Matters. Seller is a corporation
duly incorporated and validly existing under the laws
of the State of California and has the requisite
corporate authority and power to carry on all
activities related to the Subject Business as currently
conducted. Seller is duly qualified and in good
standing to do business in each jurisdiction in which
the nature of its business or the ownership, leasing or
holding of its properties makes such qualification
necessary unless the absence of qualification would not
have a material adverse effect on the Subject Business
or the Subject Assets. Seller has the corporate power
and authority to enter into this Agreement and to
consummate the transactions this Agreement
contemplates. As of the Closing, the Board of
Directors and shareholders of Seller shall have
approved the execution and delivery of this Agreement,
the agreements, documents and instruments relating to
this Agreement and the consummation of the transactions
this Agreement contemplates, and this Agreement and
such other agreements, documents and instruments will
constitute valid and legally binding obligations of
Seller, enforceable against it in accordance with their
respective terms. Subject to Paragraph 2.3 ("Taxes"),
Seller is acquiring the Subject Shares for its own
account and not with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
4.2. No Violation. The execution and delivery of
this Agreement does not, and the consummation of the
transactions this Agreement contemplates and compliance
with the terms of this Agreement will not (a) conflict
with, or result in any violation of, (i) any provision
of the Articles of Incorporation or By-Laws of Seller
or (ii) to the best knowledge of Seller, any judgment,
order or decree, or statute, law, ordinance, rule or
regulation applicable to Seller, the Subject Business
or the Subject Assets, or (b) violate, conflict with or
result in a breach or default under any agreement,
instrument or document to which Seller or Jarrett is a
party or which binds Seller, Jarrett, the Subject
Business or the Subject Assets.
4.3. No Consent. No consent, approval, order or
authorization of, or registration, declaration or
filing with, any court, administrative agency or
commission or other governmental authority or
instrumentality, domestic or foreign, is required to be
obtained or made by or with respect to Seller, the
Subject Business or the Subject Assets in connection
with the execution and delivery of this Agreement or
the consummation of the transactions this Agreement
contemplates.
4.4. Title to and Condition of Subject Assets.
Seller has, and will transfer to Buyer at Closing, good
and marketable title to all of the Subject Assets,
tangible and intangible, free and clear of all liens,
claims and encumbrances. The tangible Subject Assets
are in reasonably good operating condition and repair,
ordinary wear and tear and routine maintenance
excepted, and are maintained in accordance with
applicable industry maintenance practices but ARE
OTHERWISE PROVIDED AS IS WITHOUT ANY WARRANTY OF ANY
KIND, INCLUDING BUT NOT LIMITED TO ALL EXPRESS, IMPLIED
AND STATUTORY WARRANTIES, INCLUDING WITHOUT LIMITATION
ALL WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND
MERCHANTABILITY. All leased property is in the
condition required of such property by the lessor of
such property.
4.5. Software.
a) Schedule 1(b) contains a complete and accurate
description of all Software.
b) A consolidated copy of the current version of the
source code shall be provided to Buyer within 5
business days of the Effective Date on media free of
defects in workmanship and materials.
c) The Software is owned by Seller free and clear of
all liens, claims or encumbrances.
d) Except as listed on the Schedule of Exceptions,
Seller is not obligated to pay any compensation to any
person or entity with respect to use of the Software.
e) Upon execution of this Agreement, Buyer may use,
modify and/or distribute the Software without
restriction and, except as listed on the Schedule of
Exceptions, there are no fees, charges, licenses or
other costs payable by Buyer with respect to the
Software or the use or distribution of the Software.
f) On or before the Effective Date, Seller shall
provide Buyer with all fault logs and other logs and
other records relating to the Software and any defects
or deficiencies in the possession of Seller.
(g) Seller has not disclosed the source code for
any of the Software or other confidential or
proprietary information constituting, embodied
in or pertaining to the Software to any person
or entity other than employees or contractors
of Seller who are bound by confidentiality
agreements in the form disclosed to Buyer.
4.6. Accounts Receivable. The Accounts
Receivable arose from Seller's performance of services
or from a bona fide sale or license of software or
other goods or services for which Seller has invoices
that, to the best of its knowledge, reflect undisputed
obligations to pay the aggregate recorded amount of
such Accounts Receivable and Seller has received no
notice of any dispute regarding the payment of such
Accounts Receivable.
4.7. Litigation. There is no litigation,
proceeding or investigation or other legal or
administrative proceeding pending or, to the best of
Seller's or Jarrett's knowledge, (a) threatened against
or relating to Seller, the Subject Assets or the
Subject Business or (b) which questions or challenges
the validity of this Agreement or any action taken by
Seller pursuant to this Agreement or in connection with
the transactions contemplated hereby. To the best of
Seller's or Jarrett's knowledge, there is no basis for
any such litigation, proceeding or investigation.
4.8. Intangible Assets. Attached Schedule 1(l)
includes, among other things, a list of (a) all
licenses of any Intangible Assets used by Seller in the
Subject Business; and (b) the description of the nature
of any agreement relating to Seller's use of any of the
Intangible Assets. There are no claims, demands or
proceedings instituted, currently pending or, to the
best of Seller's knowledge, threatened by any other
person, firm or corporation pertaining to or
challenging the right of the Seller, to use any of the
Intangible Assets, alleging that any of them or any
other application by Seller infringes or otherwise
violates the patent, trade name, trademark, copyright
or other rights of any other person, and to the best
knowledge of Seller, there is no basis for any claim or
demand of such nature. The Intangible Assets are all
the intellectual property necessary for the conduct of
the Subject Business as currently conducted by Seller..
Any employee or independent contractor of Seller having
any interest in any of the Intangible Assets has
assigned such interest or interests to Seller prior to
the Closing. Except as set forth in the Schedule of
Exceptions, Seller has taken all commercially
reasonable steps to enforce its rights in the
Intangible Assets and has not granted any license or
other right under, or authorized or permitted anyone
else to use, any of the Intangible Assets, nor does any
other person have any right in the foregoing, nor to
the best knowledge of Seller, is any other person
making any unauthorized use of any of the foregoing.
Except as set forth in the Schedule of Exceptions, all
of Seller's rights in, to and under the Intangible
Assets and its other proprietary rights are
transferable by Seller in accordance with this
Agreement without the consent of any third party.
4.9. Financial Statements. The financial
statements of the Seller as at and for the fiscal years
ended June 30, 1995, June 30, 1996 and June 30, 1997
and the interim financial statements for the period
ended August 31, 1997 (collectively, the "Financial
Statements"), including the notes contained in such
Financial Statements, are attached hereto as Schedule
4.9 and accurately represent the financial condition of
Seller on the dates of such statements and the results
of operations for the periods in such Financial
Statements and were prepared in accordance with
generally accepted accounting principles, consistently
applied ("GAAP") except that they are (a) in the case
of interim financial statements, subject to audit and
appropriate year-end adjustments and do not contain
footnotes required by GAAP (b) were prepared on a cash
(and not an accrual) basis with respect to tax matters
and (c) are not audited except for the June 30, 1997
statements. There has been no change in the
capitalization, assets, liabilities, business prospects
or methods of doing business of the Subject Business
since June 30, 1997, other than changes in the ordinary
course of business (none of which have had a material
adverse effect on the business, prospects or condition,
financial or otherwise, of the Subject Business).
Neither Jarrett nor Seller makes any representation
regarding (a) the appropriateness of sufficiency of any
of the Financial Statements for purposes of filing with
or satisfying any requirements of the United States
Securities and Exchange Commission (the "SEC"), the
Securities Act, the Securities Exchange Act of 1934 or
the rules and regulations thereunder or (b) the
adequacy or sufficiency of any adjustments made in any
of the Financial Statements.
4.10. Taxes. All federal, state, county and
local tax returns, reports and forms of the Seller due
prior to the date of this Agreement have been filed and
properly reflect the tax liability of the Seller, and
all federal, state, county and local taxes due and
payable prior to the Closing (including applicable
payroll and sales taxes) will have been paid prior to
the Closing; no tax liens have been filed and no claims
are being asserted in writing with respect to any taxes
and there is no basis for any such lien or claim;
Seller is not a party to any agreement for the
extension of the time for the assessment and payment of
any tax and no restriction on assessment or collection
of taxes has been waived with respect to the Seller.
As of the Effective Date, the Tax Refund has not been
received by Seller and while Seller anticipates the
receipt of the Tax Refund, such expectation is based
solely on communications with the applicable taxing
authorities and neither Seller nor Jarrett make any
representations or warranties regarding the receipt,
amount or time of payment of such Tax Refund except
that Seller has been advised by its independent
accountants that the Tax Refund will be in an amount
equal to approximately $267,000 and that it will be
received approximately ninety (90) days after Seller
applies for such Tax Refund. The required application
for the Tax Refund, a copy of which was delivered to
Buyer, will be filed by Seller on before the Closing.
4.11. Contracts and Other Agreements. Seller has
delivered true and correct copies of each of the
Contracts, and all amendments and modifications of such
Contracts, to Buyer. Schedule 1(l) includes all
material contracts to which Seller is bound that relate
to the Subject Business. Each Assumed Contract is
valid, binding and in full force and effect in
accordance with its terms. Neither Seller nor, to the
best of Seller's knowledge, any other party to an
Assumed Contract is in breach or default under any
Assumed Contract (with or without the lapse of time, or
the giving of notice, or both). Seller has not
relinquished any rights it has under any of the
Contracts. Any and all contracts, licenses, agreements
and similar items held in the name of, or for the
benefit of, Seller and that are necessary to the
conduct of the Subject Business as currently conducted
by Seller, are included in Schedule 1(l).
4.12. Customer Commitments. Attached hereto as
Schedule 4.12 is a complete copy of all written
contracts between Seller and ADP, Coachmen, ABB and
Yamaha (the "Key Customers") and all amendments thereto
and a copy of any written correspondence between Seller
and any of the Key Customers relating to commitments
made by Seller to such customers that are unfulfilled
as of the date hereof. Schedule 4.12 also includes a
general summary of any outstanding commitments made to
any of the Key Customers.
4.13. Employees/Shareholders. Seller has
delivered to Buyer true and correct copies of the
following:
(a) all employee handbooks and personnel
manuals applicable to employees of Seller;
(b) a list of all of Seller's employees as
of the Effective Date together with their current
job descriptions, rates of salary or wages,
vacation benefits and each bonus, deferred
compensation, fringe benefit, stock option,
incentive compensation, severance or termination
pay, hospitalization or other medical, life or
other insurance, supplemental unemployment benefit
or program, profit sharing, pension or retirement
plan, program, agreement or arrangement currently
affecting such employees; and
(c) a list of all shareholders of Seller (as
of this date and as of the date for determining
the shareholders of Seller entitled to vote on the
transaction contemplated by this Agreement) (the
"Shareholders"), which such list is true, correct
and complete and is attached to this Agreement as
Schedule 4.13(c).
4.14. Labor Practices. Seller has not engaged in
any unfair labor practice or unlawful discriminatory
practice in the conduct of its business, and there is
no basis for any claim by any past or present employee
of Seller that such employee was subject to wrongful
discharge or any employment discrimination by Seller or
the management of the Seller arising out of or relating
to such employee's race, sex, color, religion, handicap
or other protected characteristic under applicable law.
Seller has complied with all applicable laws,
ordinances and governmental regulations relating to
employment practices, including, without limitation,
wage hour laws, equal pay laws and all laws relating to
employment discrimination, employee welfare,
immigration matters and labor standards.
4.15. ERISA. Seller has no employee pension
benefit plan other than a 401(k) Plan.
4.16. Conduct Out of Ordinary Course. Seller
has, since June 30, 1997, conducted the business of the
Subject Business in the normal and ordinary course and
has not, (a) incurred or agreed to incur any
obligations or liabilities, absolute, accrued,
contingent or otherwise, whether due or to become due,
except current liabilities accrued in the ordinary
course of business, none of which materially adversely
affects the Subject Business, the Subject Assets or the
obligations this Agreement contemplates; (b) mortgaged,
pledged or subjected to, or agreed to mortgage, pledge
or subject to, any lien, charge, security interest or
any other encumbrance or restriction, any of the
Subject Assets or the Subject Business, except for this
Agreement; (c) sold, transferred, leased to others or
otherwise disposed of or agreed to sell, transfer,
lease or otherwise dispose of any of the Subject Assets
(except sales of inventory in the ordinary course of
business), or canceled or compromised, or agreed to
cancel or compromise, any debt or claim or waived or
released, or agreed to waive or release, any right of
substantial value relating to the Subject Business or
the Subject Assets; (d) suffered any damage,
destruction or loss (whether or not covered by
insurance) materially affecting any of the Subject
Assets, or the business, condition or known prospects
(financial or otherwise) of the Subject Business; (e)
transferred or granted, or agreed to transfer or grant,
any rights under, or entered into or agreed to enter
into, any settlement regarding the breach or
infringement of any lease, license, patent, copyright,
trademark, trade name, invention or similar rights, or
modified or agreed to modify any existing rights with
respect to the foregoing; or (f) made, or agreed to
make, any direct or indirect change in the rate of
compensation, commission, bonus or other remuneration
payable, or paid or agreed to pay, conditionally or
otherwise, any bonus, extra compensation, pension or
severance pay, to any employee or agent of the Subject
Business out of the ordinary course of business.
4.17. No Transfer of Assets. None of the Fixed
Assets of Seller has, since such date, been stolen,
transferred or otherwise lost, except as contemplated
in this Agreement.
4.18. Insurance. Seller maintains policies of
fire and casualty, liability and other forms of
insurance in such amounts, with such deductibles and
against such risks and losses as are, in Seller's
judgment, reasonable for the Subject Business and the
Subject Assets and will continue such insurance in
effect through the date of Closing. A true and
complete list of such insurance policies is set forth
on attached Schedule 4.18
4.19. Brokers and Agents. Neither Seller nor, to
the best of Seller's and Jarrett's knowledge, any of
the Shareholders has dealt with any agent, finder,
broker or other representative in any manner which
could result in Buyer being liable for any fee or
commission in the nature of a finder's fee or
originator's fee in connection with the subject matter
of this Agreement.
4.20. Warranties True and Correct. No warranty
or representation by Seller or Jarrett contained in
this Agreement or in any writing to be furnished under
this Agreement or previously furnished to Buyer
contains or will contain any statement of fact known to
be untrue nor have Seller or Jarrett knowingly omitted
to state any material fact which results in the
statements contained in such warranty or representation
to be misleading.
4.21. Warranties Survive Closing.
Notwithstanding any investigation by or information
supplied to Buyer, the warranties and representations
of Seller and Jarrett contained in this Agreement will
be true and correct on the Closing Date and will
survive the Closing for three (3) years following the
Closing Date. Any claim for indemnification under
Article VIII below, made in writing prior to the
expiration of the three (3) year period specified in
Paragraph 8.1, and the rights of indemnity with respect
to such claim, will survive such expiration until
resolved or judicially determined and any such claim
not submitted in writing prior to the expiration of
such applicable survival period will be considered to
have been waived.
4.22. Knowledge of Seller or Jarrett. For those
warranties and representations set forth in this
Article IV which are subject to the qualification "to
the best of Seller's (or Jarrett's) knowledge," the
Seller or Jarrett, as the case may be, will be
considered to have knowledge of a matter if (i)
Jarrett, any current executive officer, or current
director or employee of Seller has knowledge of the
matter, or (ii) such matter has come, or should
reasonably be expected to have come, to the attention
of Jarrett, any current officer, or current director or
employee of Seller if such party had conducted a
reasonable due diligence review of Seller's assets,
operations and business, including, without limitation,
reasonable inquiries to personnel of Seller regarding
the business and operations of the Subject Business and
a review of, and discussion with executive personnel
regarding, pertinent books and records of the Subject
Business.
ARTICLE V
Warranties and Representations of Buyer
Buyer represents and warrants to Seller as
follows:
5.1. Corporate Matters. Buyer is a corporation
duly incorporated and validly existing under the laws
of the State of Wisconsin and has the requisite
corporate authority and power to carry on all business
activities Buyer currently conducts or previously
conducted. Buyer is duly qualified and in good
standing to do business in each jurisdiction in which
the nature of its business or the ownership, leasing or
holding of its properties makes such qualification
necessary unless the absence of qualification would not
have a material adverse effect on Buyer's business
activities. Buyer has the corporate power and
authority to enter into this Agreement and to
consummate the transactions this Agreement
contemplates. The Board of Directors of Buyer has
approved the execution and delivery of this Agreement,
the agreements, documents and instruments relating to
this Agreement and the consummation of the transactions
this Agreement contemplates, and this Agreement and
such other agreements, documents and instruments are
and will constitute valid and legally binding
obligations of Buyer, enforceable against it in
accordance with their respective terms.
5.2. No Violation. The execution and delivery of
this Agreement does not, and the consummation of the
transactions this Agreement contemplates and compliance
with the terms of this Agreement will not (a) conflict
with, or result in any violation of, (i) any provision
of the Articles of Incorporation or By-Laws of Buyer,
or (ii) any judgment, order or decree, or statute, law,
ordinance, rule or regulation applicable to Buyer, or
(b) to the best knowledge of Buyer, violate or conflict
with or result in a breach or default under any
agreement, instrument or document to which Buyer is a
party or which binds Buyer.
5.3. No Consent. No consent, approval, order or
authorization of, or registration, declaration or
filing with, any court, administrative agency or
commission or other governmental authority or
instrumentality, domestic or foreign, is required to be
obtained or made by or with respect to Buyer in
connection with the execution and delivery of this
Agreement or the consummation of the transactions this
Agreement contemplates.
5.4. No Litigation. There is no litigation,
proceeding or investigation or other legal or
administrative proceeding pending or, to the best of
Buyer's knowledge, (a) threatened against or relating
to Buyer or (b) which questions or challenges the
validity of this Agreement or any action taken by Buyer
pursuant to this Agreement or in connection with the
transactions contemplated hereby. To the best of
Buyer's knowledge, there is no basis for any such
litigation, proceeding or investigation.
5.5. Brokers and Agents. Buyer has not dealt
with any agent, finder, broker or other representative
in any manner which could result in Seller or any of
Seller's Shareholders being liable for any fee or
commission in the nature of a finder's fee or
originator's fee in connection with the subject matter
of this Agreement.
5.6. SEC Documents.
(a) Buyer has filed all forms, reports and
documents required to be filed with the SEC since
July 31, 1996, and as of the date of this
Agreement has delivered to Seller (for
distribution to each shareholder of Seller) in the
form filed with the SEC (i) its Annual Report on
Form 10-K for the fiscal year ended July 31,
1996,; (ii) its Quarterly Report on Form 10-Q for
the period ended April 30, 1997,; and (iii) the
definitive Proxy Statement for the meeting of
shareholders of Buyer held December 3, 1996
(collectively, the "Buyer SEC Reports").
(b) The Buyer SEC Reports (i) were prepared
in conformity in all material respects with the
applicable rules and regulations of the SEC, and
(ii) did not at the time they were filed contain
any untrue statement of a material fact or omit to
state a material fact required to be stated in
such reports or necessary in order to make the
statements in such reports, in light of the
circumstances under which they were made, not
misleading.
5.7. Subject Shares. The Subject Shares have
been duly and validly authorized, and when issued as
provided in Paragraph 2.1 ("Consideration; Payment"),
above, will be duly and validly issued, fully paid and
non-assessable (except for liability for certain
indebtedness to employees as provided in Section
180.0622 of the Wisconsin Business Corporation Law, or
any successor provision to such Section).
5.8. Tax-Related Representations and Warranties.
(a) Buyer has no plan or intention to reacquire any of
its stock issued in this transaction.
(b) Buyer has no plan or intention to sell or
otherwise dispose of any of the assets of Seller
acquired in this transaction, except for dispositions
made in the ordinary course of business or transfers
described in Section 368(a)(2)(C) of the Code.
(c) Following this transaction, Buyer will use a
significant portion of Seller's historic business
assets in a business.
(d) Buyer does not own, directly or indirectly, nor
has it owned during the past five years, directly or
indirectly, any stock of Seller.
5.9. Warranties True and Correct. No warranty
or representation by Buyer contained in this Agreement
or in any writing to be furnished under this Agreement
or previously furnished to Seller contains or will
contain any statement of fact known to be untrue nor
will Buyer knowingly omitted to state any material fact
which results in the statements contained in such
warranty or representation to be misleading.
5.10. Warranties Survive Closing.
Notwithstanding any investigation by or information
supplied to Seller, the warranties and representations
of Buyer contained in this Agreement will be true and
correct on the Closing Date and will survive the
Closing for three (3) years following the Closing Date.
Any claim for indemnification under Article VIII,
below, made in writing prior to the expiration of the
three (3) year period specified in Paragraph 8.2, and
the rights of indemnity with respect to such claim,
will survive such expiration until resolved or
judicially determined and any such claim not submitted
in writing prior to the expiration of such applicable
survival period will be considered to have been waived.
5.11. Knowledge of the Buyer. For those
warranties and representations set forth in this
Article V which are subject to the qualification "to
the best of Buyer's knowledge," Buyer will be
considered to have knowledge of a matter if (i) Buyer,
any current executive officer or current director of
Buyer has knowledge of the matter or (ii) such matter
has come, or should reasonably be expected to have
come, to the attention of Buyer, any current executive
officer or current director of Buyer if such party had
conducted a reasonable due diligence review of Buyer's
assets, operations and business, including, without
limitation, reasonable inquiries to executive personnel
of Buyer regarding the business and operations of
Buyer's business and a review of, and discussion with
executive personnel regarding, pertinent books and
records related to Buyer's business.
ARTICLE VI
Schedule of Exceptions
The information set forth in the Schedule of
Exceptions for any paragraph hereof is hereby
incorporated by reference in all other paragraphs
hereof and shall be considered disclosed with respect
to all such other paragraphs. All capitalized terms
used in the Schedule of Exceptions and not otherwise
defined in such Schedule of Exceptions will have the
meaning ascribed to such terms in this Agreement. The
Schedule of Exceptions will not vary, change or alter
the literal meaning of the representations and
warranties of Seller contained in this Agreement, other
than creating exceptions to such representations and
warranties which are directly responsive to the
language of the representations and warranties
contained in this Agreement. The inclusion herein of
any item shall not be deemed to be a determination, or
an admission, by Seller or Jarrett or any of its
officers, directors, employees, representatives or
agents that such item meets the relevant Agreement
definition of materiality or any other applicable
threshold for disclosure herein.
ARTICLE VII
Conduct Prior to and Subsequent to Closing
7.1. Execution and Delivery of Further
Instruments by Seller. Seller will at any time, and
from time to time after the Closing, upon the
reasonable request of Buyer or its successors or
assigns, execute, acknowledge and deliver to Buyer or
its successors or assigns such further instruments of
conveyance, assignment, transfer, powers of attorney,
consents and assurances and will take such other action
as Buyer or its successors or assigns may reasonably
request in order to more effectively convey, assign,
transfer and deliver any of the properties or assets
intended to be conveyed, assigned, transferred and
delivered under this Agreement, and assist in the
collection or reduction to possession of any and all
such properties or assets.
7.2. Access to Business Records. From and after
the Closing Date, Buyer will maintain the financial
books and business records of Seller acquired by Buyer
under this Agreement. Upon Seller's request and with
prior notice to Buyer, Buyer will afford Seller and its
accountants and counsel access to any such financial
books and business records during normal business hours
to the extent such access is required by Seller in
anticipation of, or preparation for, any legal
proceedings or financial, tax or audit matters
involving Seller. Damage by fire or other casualty or
accident excepted, Buyer will not for a period of three
(3) years after the Closing Date, destroy or dispose of
any such books or records unless Buyer first offers
Seller, at least sixty (60) days prior to such
destruction or disposition, an opportunity to take
possession of such books and records. Buyer further
agrees to make available to Seller at Buyer's offices
in Milwaukee, Wisconsin, from time to time upon request
by Seller, the appropriate personnel of Buyer whose
assistance or participation is reasonably required by
Seller in anticipation of, or preparation for, any
legal proceedings or tax or audit matters, provided,
that any such access to personnel shall be had in such
a manner so as to not interfere with normal conduct of
the business of Buyer. Without limiting the generality
of the foregoing, Buyer agrees to use all commercially
reasonable efforts to assist Seller in closing its
books with respect to the Subject Business for all
periods ending on or prior to the Closing Date as
promptly as possible. Such efforts shall in no event
require any of Buyer's employees or representatives to
leave Buyer's headquarters in Milwaukee, Wisconsin
without the mutual agreement of the parties.
7.3. Seller's Customers. Seller hereby confirms
that it has granted Buyer permission to contact any of
Seller's customers, vendors or suppliers and to discuss
the fact that Buyer is purchasing the Subject Business
from Seller with such customers, vendors and/or
suppliers.
ARTICLE VIII
Indemnification
8.1. Indemnification of Buyer. For a period of
three (3) years after the Closing Date, Seller and
Jarrett will jointly and severally indemnify Buyer and
hold it harmless from and against any and all damages,
losses, deficiencies, actions, demands, judgments,
costs and expenses (including without limitation,
reasonable attorneys' and accountants' fees)
(collectively, "Damages") of or against Buyer resulting
from or arising out of (a) any misrepresentation or
breach of any warranty or representation of Seller or
Jarrett contained in this Agreement, or in any
agreement, document or instrument delivered by or on
behalf of Seller pursuant to or in connection with this
Agreement; (b) the breach or nonfulfillment of any
covenant or agreement of Seller contained in this
Agreement or in any agreement, document or instrument
delivered by or on behalf of Seller pursuant to or in
connection with this Agreement; (c) except for the
Assumed Liabilities, any liabilities or obligations of
Seller, including, without limitation, any assessments,
claims or liabilities (including interest and
penalties) for federal, state or local income, sales,
use, franchise or other taxes relating to, imposed upon
or assessed against the Subject Assets or the Subject
Business for all periods prior to the Closing Date; or
(d) except for the Assumed Liabilities, any act or
omission of Seller or any occurrence or matter with
respect to the Subject Assets or the Subject Business
on or before the Closing Date, including, without
limitation, any claim for nonperformance or breach of
contract, any claim for worker's compensation or
unemployment compensation, and/or claims for personal
injury or property damage. Buyer acknowledges and
agrees that in pursuance of the plan of reorganization
contemplated by this Agreement, Seller will liquidate
any remaining assets and dissolve and Buyer hereby
forever releases all Shareholders (other than Jarrett)
and agrees not to allege or commence any claims, suits
or proceedings of any manner, type or basis against any
Shareholder other than Jarrett.
8.2. Indemnification of Seller. For a period of
three (3) years after the Closing Date, Buyer will
indemnify Seller and hold it harmless from and against
any and all Damages of or against Seller resulting from
or arising out of (a) any misrepresentation or breach
of any warranty or representation of Buyer contained in
this Agreement, or in any agreement, document or
instrument delivered by or on behalf of Buyer pursuant
to or in connection with this Agreement; (b) the breach
or nonfulfillment of any covenant or agreement of Buyer
contained in this Agreement or in any agreement,
document or instrument delivered by or on behalf of
Buyer pursuant to or in connection with this Agreement;
(c) the Assumed Liabilities; (d) any liabilities or
obligations of Seller, including, without limitation,
any assessments, claims or liabilities (including
interest and penalties) for federal, state or local
income, sales, use, franchise or other taxes relating
to, imposed upon or assessed against the Subject Assets
or the Subject Business for all periods after the
Closing Date; or (e) subject to Paragraph 2.3, any act
or omission of Buyer or any occurrence or matter with
respect to the Subject Assets or the Subject Business
on or after the Closing Date, including, without
limitation, any claim for nonperformance or breach of
contract, any claim for worker's compensation or
unemployment compensation, and/or claims for personal
injury or property damage.
8.3. Procedure Relative to Indemnification.
(a) In the event that any party to this
Agreement claims that it is entitled to be
indemnified under the terms of this Article VIII,
it (the "Claiming Party") will notify the party
against which the claim is made (the "Indemnifying
Party") in writing of such claim promptly after
discovery of the facts supporting the claim or
receipt of a notice of any claim of a third party
(a "Third Party Claim") that may reasonably be
expected to result in a claim by such party
against the party to which such notice is given,
as the case may be; provided, however, that
failure to give such notification will not affect
the indemnification provided under this Agreement
except to the extent the Indemnifying Party is
actually prejudiced as a result of such failure.
Such notice will specify the breach of
representation, warranty, covenant or agreement
claimed by the Claiming Party and the liability,
loss, cost or expense incurred by or imposed upon
the Claiming Party on account of such breach and
will include, if applicable, a copy of any
summons, complaint or other court pleading which
evidences any Third Party Claim. If such
liability, loss, cost or expense is liquidated in
amount, the notice will state such amount and such
amount will be considered the amount of the claim
of the Claiming Party. If the amount is not
liquidated, the notice will so state and in such
event a claim will be considered asserted against
the Indemnifying Party on behalf of the Claiming
Party.
(b) The Indemnifying Party may, upon receipt
of written notice of a Third Party Claim and at
its expense, defend such Third Party Claim in its
own name or, if necessary, in the name of the
Claiming Party. The Claiming Party will cooperate
with and make available to the Indemnifying Party
such assistance and materials as may be reasonably
requested of it, at the Indemnifying Party's
expense, and the Claiming Party will have the
right, at its expense, to participate in the
defense. The Claiming Party will not have the
right to settle and compromise any Third Party
Claim without the prior written consent of the
Indemnifying Party, which consent will not be
unreasonably withheld.
(c) In the event the Indemnifying Party
notifies the Claiming Party that it refuses to
conduct a defense against a Third Party Claim,
then the Claiming Party will have the right to
conduct a defense against such Third Party Claim
and will have the right to settle and compromise
such Third Party Claim without the consent of the
Indemnifying Party. Once the amount of such Third
Party Claim is liquidated and the Third Party
Claim is finally determined, the Claiming Party
will be entitled to pursue each and every remedy
available to it at law or in equity to enforce the
indemnification provisions of this Article VIII
and, in the event it is determined, or the
Indemnifying Party agrees, that it is obligated to
indemnify the Claiming Party for such Third Party
Claim, the Indemnifying Party will pay all costs,
expenses and fees, including all reasonable
attorneys' fees which may be incurred by the
Claiming Party in attempting to enforce
indemnification under this Article VIII, whether
enforced by suit or otherwise.
8.4. Attorneys Fees. If a court or public or
private tribunal or panel determines, resolves or
adjudicates any dispute between Seller and Buyer under
this Agreement or with respect to the transactions this
Agreement contemplates, the party prevailing in such
dispute will be entitled to recover from the other its
reasonable attorneys' fees and other professional fees
and costs incurred in such dispute.
ARTICLE IX
Bulk Sales
Seller and Buyer waive compliance by Buyer and
Seller with the provisions of the California Statutes
relating to bulk sales and Seller agrees to pay and
discharge when due all claims of creditors which could
be asserted against Buyer by reason of such
noncompliance to the extent that Buyer does not
specifically assume such liabilities under this
Agreement.
ARTICLE X
Termination
This Agreement may be terminated only upon the
mutual written consent of Buyer and Seller; provided,
however, that if the transactions described herein do
not close on or before October 31, 1997, this Agreement
shall terminate. In the event of termination of this
Agreement, this Agreement shall thereupon become void
and have no effect, with no liability on the part of
any party or its affiliates in respect thereof. Each
party will return to the other party any confidential
information furnished pursuant to this Agreement or the
Nondisclosure Agreement between Seller and Buyer dated
as of April 10, 1997 (the "Nondisclosure Agreement");
provided, however, that each party's attorney may
retain one copy of such confidential information for
archival purposes. Notwithstanding the foregoing,
nothing herein shall relieve any party hereto from any
liability incurred for any breach of this Agreement
prior to such termination and the provisions of this
Paragraph and Paragraphs 4.19 ("Brokers and Agents"),
5.5 ("Brokers and Agents"), 7.3 ("Seller's Customers"),
8.4 ("Attorneys' Fees") and 11.1 ("Expenses") shall
survive any termination of this Agreement.
ARTICLE XI
Miscellaneous
11.1. Expenses. The parties to this Agreement
will pay their own expenses, including without
limitation, accountants' and attorneys' fees incurred
in connection with the negotiation and consummation of
the transactions the Agreement contemplates.
11.2. Notices. All notices or other
communications required or permitted to be given under
this Agreement to a party under this Agreement will be
in writing and will be considered to be given and
received in all respects when (a) personally delivered;
(b) upon confirmation of transmission if sent by
facsimile; (c) one (1) day after being sent by
reputable overnight courier service; or (d) three (3)
days after being deposited in the United States mail,
certified mail, postage prepaid, return receipt
requested, addressed as follows, or to such other
address as will be designated by notice duly given:
IF TO BUYER: ARI Network Services, Inc.
330 East Kilbourn Avenue
Milwaukee, Wisconsin 53202-3166
Attention: President
With a Copy To: Larry D. Lieberman
Godfrey & Kahn, S. C.
780 North Water Street
Milwaukee, Wisconsin 53202
IF TO SELLER: Empart Technologies, Inc.
1065 East Hillsdale Boulevard
Foster City, California 94409
Attention: President
With a Copy To: Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
Attention: Margaret H. Kavalaris
IF TO JARRETT: Michael Jarrett
874 Balboa Lane
Foster City, CA 94404
11.3. Public Announcements. No party will make
any public announcement except with the approval of the
other party to this Agreement; provided, however, that
after the transaction is consummated, Buyer will have
the sole authority as to what, if any, public
announcements are to be made. Except as may be
required by law, no party will make any announcement of
the purchase price.
11.4. Entire Agreement. This Agreement, the
Nondisclosure Agreement, the attached exhibits, the
Schedule of Exceptions and the agreements executed and
delivered simultaneously with this Agreement constitute
the entire agreement between the parties relating to
the subject matter of this Agreement, and all prior
agreements, correspondence, discussions and
understandings of the parties (whether oral or written)
are superseded, it being the intention of the parties
that this Agreement will serve as the complete and
exclusive statement of the terms of their agreement
together. No amendment, waiver or modification to or
under this Agreement will be valid unless in writing
signed by an authorized signatory of the party or
parties affected by such amendment, waiver of
modification.
11.5. Legends. The certificate representing the
Subject Shares shall be endorsed with a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT COVERING SUCH
SECURITIES, THE SALE IS MADE IN ACCORDANCE
WITH RULE 144 OR ITS SUCCESSOR RULE UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT AN
EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
Buyer and its transfer agent need not register a
transfer of Subject Shares, unless the conditions
specified in the foregoing legend are satisfied.
11.6. Binding Effect. This Agreement will be
binding upon the parties to this Agreement and their
respective legal representatives, successors and
assigns.
11.7. Paragraph Headings. The headings in this
Agreement are for convenience and ease of reference
only and will not be construed to limit or otherwise
affect the meaning of any part of this Agreement.
11.8. Severability. The parties agree that if
any provision of this Agreement is under any
circumstances considered invalid or inoperative, this
Agreement will be construed with the invalid or
inoperative provision deleted, and the remaining rights
and obligations of the parties will be construed and
enforced in accordance with the remaining provisions of
the Agreement.
11.9. Applicable Law. This Agreement and all
questions arising in connection with it will be
governed and construed in accordance with the internal
laws of the State of Wisconsin; provided, however, that
with respect to matters of law concerning the internal
corporate affairs of either Buyer or Seller, the laws
of the jurisdiction of formation of such party shall
govern with respect to such party.
IN WITNESS WHEREOF, the parties have caused their
names to be subscribed on one or more counterparts of
this Agreement, all of which such counterparts will be
read together and construed as but one and the same
instrument as of the day, month and year first above
written.
SELLER:
EMPART TECHNOLOGIES, INC.
By:/s/ Michael S. Jarrett
--------------------------
Michael S. Jarrett
President
JARRETT:
/s/ Michael S. Jarrett
-----------------------------
Michael S. Jarrett
BUYER:
ARI NETWORK SERVICES, INC.
By:/s/ Brian E. Dearing
-----------------------------
Brian E. Dearing
President and CEO
List of Schedules
The following sets forth the Schedules to the
Asset Purchase Agreement. The Schedules are omitted in
accordance with Item 601 of Regulation S-K. The
Company agrees to furnish supplementally to the
Commission upon request a copy of any omitted Schedule.
1(b) Software
1(c) Third Party Software
1(d) Fixed Assets
1(l) Contracts
2.2 Seller Liabilities
3.4(a) Bill of Sale
3.4(b) Assignment and Assumption Agreement
3.4(c) Jarrett Agreements
3.4(d) Jacobs Agreements
3.4(j) Form of Investor Letter
4.9 Financial Statements
4.12 Key Customer Contracts and Commitments
4.13(c) Shareholder List
4.18 Insurance
Schedule of Exceptions
