<PAGE>
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):
January 14, 2000
LANGUAGEWARE.NET (COMPANY) LTD.
(Exact name of registrant as specified in its charter)
Israel
(State or other jurisdiction of incorporation or organization)
0-26349
(Commission File Number)
N/A
(IRS Employer Identification No.)
C/O Yigal Arnon & Co.
22 Rivlin Street
Jerusalem 91000 Israel
(Address of principal executive offices)
011-972-2-623-9200
(Registrant's telephone number, including area code)
With Copy To:
Mr. Todd Oseth, CEO
2864 South Circle Drive, Suite 500
Colorado Springs, CO 80906
(Address of principal operating offices)
719-955-3400
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 14, 2000, LanguageWare.net (Company) Ltd., ("LanguageWare.net")
acquired all of the capital stock of Star+Globe Technologies Pte. Ltd.
("Star+Globe"), a privately-held Singapore company which provides proprietary
Asian character processing technology for the internet. The acquisition was
effected pursuant to (i) a Stock Purchase Agreement, dated as of January 14,
2000 (the "Agreement"), by and among LanguageWare.net, Star+Globe, and
Star+Globe shareholders, which were Technology Fund Pte Ltd., KRDL Holdings Pte
Ltd., Technology Fund II Pte Ltd., Seed Ventures II Limited, Info Tech Ventures
Limited, Vertex Technology Fund Pte Ltd., NIF Asian Pre-IPO Fund Limited, Asia-
Pacific Ventures II Ltd., Virginia Cha, James L. Kelly, Lernout & Hauspie
Investment Co. N.V. and WIIG Global Ventures Pte Ltd. As a result of the
acquisition, Star+Globe will operate as a wholly owned subsidiary of
LanguageWare.net. The acquisition will be accounted for under the purchase
method of accounting.
In consideration for the Star+Globe stock, LanguageWare.net is required to
issue up to 33,673,361 of its ordinary shares. At the closing LanguageWare.net
issued an aggregate of 30,306,025 of its ordinary shares (the "Closing
Consideration"), and is required to issue up to 3,367,336 additional ordinary
shares (the "Holdback Shares") within ninety (90) days of January 14, 2000. The
Holdback Shares may be reduced by any indemnification claims pursuant to the
provisions of the Agreement. LanguageWare.net has agreed to use its best efforts
to register, in calendar year 2000, all the ordinary shares issued as
consideration.
In connection with the transaction, LanguageWare.net also has agreed to
provide a non-qualified share option plan for prior employees and a director of
Star+Globe wherein options have been granted to such prior employees and
director to purchase an aggregate of 2,266,639 LanguageWare.net ordinary shares
at an exercise price of $0.093 per share.
The terms of the acquisition were determined on the basis of arm's length
negotiations. Prior to the execution of the Agreement, neither LanguageWare.net
nor any of its affiliates, officers or directors had any material relationship
with Star+Globe or its stockholders.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
The financial statements required by this item are not included with this
initial report. The required financial statements will be filed by amendment not
later than March 29, 2000.
(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information required by this item is not included
with this initial report. The required pro forma financial information will be
filed by amendment not later than March 29, 2000.
<PAGE>
(c) EXHIBITS.
See Exhibit Index attached hereto.
SIGNATURE
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.
Date: January 28, 2000 LanguageWare.net (Company) Ltd.
------------------------------
(Registrant)
By: /s/ Thomas B. Foster
---------------------------
Thomas B. Foster
Chief Financial Officer
EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION
- ------- -----------
2 Stock Purchase Agreement, dated as of January 14, 2000, by and
among LanguageWare.net (Company) Ltd., Star+Globe Technologies
Pte. Ltd., Technology Fund Pte Ltd., KRDL Holdings Pte Ltd.,
Technology Fund II Pte Ltd., Seed Ventures II Limited, Info Tech
Ventures Limited, Vertex Technology Fund Pte Ltd., NIF Asian Pre-
IPO Fund Limited, Asia-Pacific Ventures II Ltd., Virginia Cha,
James L. Kelly, Lernout & Hauspie Investment Co. N.V. and WIIG
Global Ventures Pte Ltd.
<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
by and among
LANGUAGEWARE.NET (COMPANY) LTD.
an Israeli corporation,
as
Purchaser
and
STAR+GLOBE TECHNOLOGIES PTE LTD.
a Singapore corporation
and the
SHAREHOLDERS
of
Star+Globe Technologies Pte Ltd.
as
Sellers
January 14, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE 1 Purchase and Sale
1.1 Purchase of Shares 1
1.2 Purchase Price 1
1.3 Star+Globe Holdback and Purchaser Reservation 1
1.4 Star+Globe Share Option Plan 2
1.5 The Closing 2
1.6 Release of Star+Globe Holdback Shares and Purchaser
Reserve Shares 3
1.7 Transfer Taxes 3
1.8 Purchaser Common Stock 3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF STAR+GLOBE
2.1 Organization, Standing; Subsidiaries 3
2.2 Authorization
2.3 Memorandum of Association, Articles of Association;
Certain Records 4
2.4 Capitalization 4
2.5 Compliance with Other Instruments and Laws 5
2.6 Governmental and Third Party Authorizations; Consents 5
2.7 Litigation 5
2.8 Financial Statements; Conduct of Business; No Undisclosed Liabilities 6
2.9 Title to Assets, Absence of Liens and Encumbrances 6
2.10 Full Authority; Compliance with Laws 7
2.11 Claims 7
2.12 Contracts 8
2.13 Intellectual Property 9
2.14 Taxes 9
2.15 Benefit Plans 10
2.16 Labor Matters 10
2.17 Transactions with Management 11
2.18 Customers and Vendors 11
2.19 Accounts Receivable 11
2.20 Year 2000 Compliance 11
2.21 Compliance with Other Domestic and Foreign Laws 12
2.22 Accuracy 12
2.23 Brokers and Finders 12
2.24 Knowledge of Star+Globe 12
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1 Organization and Standing of Purchaser 12
3.2 Authorization 12
3.3 Memorandum of Association, Articles of Association 13
3.4 Capitalization 13
3.5 Compliance with Other Instruments and Laws 13
3.6 Governmental and Third Party Authorizations; Consents 13
3.7 Litigation 13
3.8 Financial Statements; Conduct of Business; No Undisclosed Liabilities 13
3.9 Full Authority; Compliance with Laws 14
3.10 Claims 14
3.11 Intellectual Property 14
</TABLE>
<PAGE>
<TABLE>
<S> <C>
3.12 Taxes 14
3.13 Benefit Plans 15
3.14 Labor Matters 15
3.15 Transactions with Management 15
3.16 Year 2000 Compliance 15
3.17 Compliance with Other Domestic and Foreign Laws 15
3.18 Accuracy of SEC Reports 16
3.19 Brokers and Finders 16
3.20 Accuracy 16
3.24 Purchaser's Knowledge 16
ARTICLE 4 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDERS
4.1 Ownership of Shares 16
4.2 Title to Shares 16
4.3 Enforceability 17
4.4 Compliance with Shareholders Agreement and Articles of Association 17
4.5 Investment Representations 17
4.6 Covenants Regarding Purchaser Common Stock 17
ARTICLE 5 COVENANTS OF PURCHASER
5.1 Redomestication; Registration of Purchaser Common Stock 18
5.2 Board Representation 19
ARTICLE 6 CERTAIN REMEDIES AND LIMITATIONS
6.1 Survival of Representations and Warranties 19
6.2 Indemnification of Purchaser 19
6.3 Limitations on Liability of Star+Globe to Purchaser 19
6.4 Indemnification of Star+Globe and Shareholders 19
6.5 Limitations on Liabilities of Purchaser to Star+Globe and Shareholders 20
6.6 Indemnification Claims 20
6.7 Retention of Records 20
ARTICLE 7 MISCELLANEOUS
7.1 Materiality 21
7.2 Notices 21
7.3 Assignment 22
7.4 Entire Agreement; Amendment; Governing Law; Etc. 22
7.5 Counterparts 22
7.6 Third-Party Rights 22
7.7 Recitals and Exhibits 22
7.8 Pronouns 22
7.9 Authority and Execution 22
7.10 Severability 22
7.11 Time of Essence 22
7.12 Interpretation 22
7.13 Knowledge 23
7.14 Legal Fees 23
7.15 No Modification or Amendment 23
</TABLE>
<PAGE>
EXHIBITS
Exhibit A Star+Globe Shareholder List and Purchase Price Allocation
Exhibit B Star+Globe Share Option Plan (2000)
Exhibit C Schedule of Option Grants to Star+Globe Shareholders
Exhibit D Form of Opinion of Star+Globe's Counsel
SCHEDULES
Disclosure Schedule (including Appendix)
Schedule 3.4
Schedule 3.8(c)
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
Terms Page
- ----- ----
<S> <C>
Agreement 1
Annual Financial Statements 6
Business 1
Claim 6
Claim Notice 20
Claimants 20
Closing 2
Closing Consideration 2
Closing Date 2
Contracts 8
Damages 19
Disclosure Schedules 3
Employees 10
Employee Plans 10
Equity Rights 4
Financial Statements 6
GAAP 20
Intellectual Property 9
Indemnification Claim 20
Indemnified Parties 20
Indemnifying Parties 20
Interim Financial Statements 6
Leased Property 7
Legal Requirement 5
Material 21
Permits 7
Permitted Liens 7
Purchase Price 1
Purchaser 1
Purchaser Capital Stock 13
Purchaser Common Stock 1
Purchaser Indemnified Obligation 19
Purchaser Indemnified Parties 19
Purchaser Intellectual Property 14
Purchaser Reserve Shares 1
Real Property 7
Redomestication 18
Registration Statement 18
Rule 144 17
SEC 16
SEC Filings 14
Securities Act 17
Shareholder(s) 1
Shares 1
Shareholder Indemnified Obligation 19
Shareholder Indemnified Parties 19
Shareholders' Representative 2
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Singapore GAAP 12
Star+Globe 1
Star+Globe Holdback Shares 1
Star+Globe Share Capital 4
Subsidiary 4
Title Notice 7
Tax 10
Tax Returns 10
Taxes 10
</TABLE>
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of January 14, 2000, by and among LANGUAGEWARE.NET (COMPANY) LTD., an Israeli
corporation ("Purchaser"), STAR+GLOBE TECHNOLOGIES PTE LTD., a Singapore
corporation ("Star+Globe"), and the shareholders of Star+Globe listed on the
signature page hereto (each a "Shareholder" and collectively, the
"Shareholders").
WITNESSETH:
WHEREAS, Star+Globe is in the business of providing of multilingual
software and solutions to customers worldwide, serving their multilingual
information authoring, retrieval, and processing needs (the "Business");
WHEREAS, Shareholders own 100% of the issued and outstanding share capital
of Star+Globe (the "Shares") in the classes and amounts as set forth on Exhibit
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A;
- -
WHEREAS, Shareholders desire to sell to Purchaser and Purchaser desires to
purchase from Shareholders the Shares, upon and subject to the terms,
conditions, representations and warranties set forth herein; and
WHEREAS, this Agreement is being signed contemporaneously with and is
conditioned upon that certain Redemption Agreement among Star+Globe and certain
of the Shareholders.
NOW, THEREFORE, in consideration of the mutual covenants, representations
and warranties made herein and of the mutual benefits to be derived herefrom,
Shareholders, Star+Globe and Purchaser agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase of Shares. At the Closing (as defined below), Shareholders
shall sell to Purchaser, and Purchaser shall purchase from Shareholders, the
Shares for the Purchase Price (as defined below).
1.2 Purchase Price. The aggregate "Purchase Price" to be paid for the
Shares at Closing shall be Seven Million Seventy One Thousand Four Hundred Five
United States dollars and 80/100 ($7,071,405.80) payable by the issuance of
33,673,361 of Purchaser's ordinary shares, nominal value NIS 0.01 ("Purchaser
Common Stock").
1.3 Star+Globe Holdback and Purchaser Reservation. At the Closing, from
the Purchaser Common Stock representing the Purchase Price, Purchaser shall
deduct and hold back 3,367,336 shares of Purchaser Common Stock which represents
ten percent (10%) of the aggregate Purchase Price (such shares being referred to
herein as the "Star+Globe Holdback Shares"). Purchaser shall also reserve and
set aside additional shares of Purchaser Common Stock equal in number to the
Star+Globe Holdback Shares (such shares being referred to herein as the
"Purchaser Reserve Shares"). Purchaser shall reserve and set aside the
Star+Globe Holdback Shares and the Purchaser Reserve Shares exclusively for
issuance pursuant to Section 1.6 and to Article 6 hereof.
<PAGE>
1.4 Star+Globe Share Option Plan (2000). Attached hereto as Exhibit B is
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the Star+Globe Share Option Plan (2000) duly adopted by all necessary corporate
action on behalf of the Purchaser, which plan is in full force and effect on the
date hereof. Pursuant to and under the terms of the Star+Globe Share Option Plan
(2000), the Purchaser hereby grants to those persons listed on Exhibit C
---------
attached hereto, an aggregate of 2,041,639 options to purchase Purchaser Common
Stock, in the respective amounts set forth on Exhibit C.
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1.5 The Closing. The closing of the transactions contemplated by this
Article I (the "Closing") shall be held contemporaneously with the execution of
this Agreement at the offices of Thelen Reid & Priest in San Francisco, CA at
5:00 p.m. PST (the "Closing Date"). Contemporaneously with the execution of this
Agreement:
(a) Certificate of Secretary. Star+Globe shall deliver to Purchaser a
------------------------
certificate signed by the secretary of Star+Globe, certifying copies of the
resolutions of the Board of Directors of Star+Globe authorizing and approving
this Agreement and the transactions contemplated, including but not limited to
approval of the transfer of the Shares;
(b) Legal Opinion. Star+Globe shall deliver to Purchaser an
-------------
opinion from counsel to Star+Globe in the form attached as Exhibit D;
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(c) Shareholder Delivery of Certificates and Compliance with Laws.
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Shareholders shall deliver to Purchaser certificates representing the Shares,
with share transfer forms endorsed in blank to Purchaser in compliance with all
Legal Requirements with respect to transfer of ownership of the Shares;
(d) Termination of Equity Rights and Employee Share Option Scheme.
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Star+Globe shall deliver to Purchaser a copy of the fully executed Option
Agreement among Star+Globe, Purchaser and of those persons listed on Exhibit C
---------
evidencing the termination or cancellation of all Equity Rights (as defined
below) including the Star+Globe Employee Share Option Scheme and all Equity
Rights granted or existing thereunder;
(e) Resignation of Directors of Star+Globe. Star+Globe shall
--------------------------------------
deliver to Purchaser written resignations of the Board of Directors of
Star+Globe excepting for Virginia Cha and Fred Snow who shall continue to serve
in such director positions currently held.
(f) Closing Consideration. Purchaser shall deliver to the
---------------------
Shareholders, in the respective amounts set forth in Exhibit A under the
---------
column entitled "Closing Consideration," certificates representing 30,306,025
shares of Purchaser Common Stock ("Closing Consideration") in compliance with
all Legal Requirements with respect to the valid issuance of such shares of
Purchaser Common Stock;
(g) Shareholders' Representative. At the Closing, Virginia Cha
----------------------------
shall, without further action on his part or on the part of the Shareholders,
become the "Shareholders' Representative" hereunder. As Shareholders'
Representative, Virginia Cha shall have full power and authority to act for the
Shareholders and the Shareholder Indemnified Parties (as defined in Section 6.4
hereof), on their behalf, and in their names, places and steads, in taking all
actions, fulfilling all duties and executing all documents as may be required in
connection with the Star+Globe Holdback Shares, the Purchaser Reserve Shares and
any indemnification claims under Article 6 hereof.
1.6 Release of Star+Globe Holdback Shares and Purchaser Reserve Shares.
Subject to the other terms of this Agreement, on the ninetieth (90th) day
following the Closing
<PAGE>
Date (i) any remaining Star+Globe Holdback Shares in excess of the amount of any
Indemnification Claims (as defined in Section 6.6) of Purchaser will be issued
by Purchaser to the Shareholders in pro rata proportion to the number of shares
set forth on Exhibit A under the column entitled "Release Shares"; and (ii) any
---------
remaining Purchaser Reserve Shares in excess of the amount of any
Indemnification Claims of the Shareholders will remain authorized but unissued
shares of Purchaser Common Stock, and will no longer be reserved and set aside
pursuant hereto.
1.7 Transfer Taxes. Any costs imposed by any governmental authority
necessary to be paid in order to consummate the transactions contemplated
hereby, such as sales, use or other transfer taxes, incurred by any party in
connection with the transfer of the Shares to Purchaser or in connection with
any of the other transactions contemplated by this Agreement shall be borne and
paid by Purchaser.
1.8 Purchaser Common Stock. The Purchaser Common Stock to be delivered to
Shareholders hereunder will not be registered under United States federal or
state securities laws, but rather, issued pursuant to an exemption therefrom. As
a result, Shareholders acknowledge and agree that such Purchaser Common Stock is
"restricted" stock as such term is defined under such securities laws and the
Purchaser Common Stock cannot be sold, pledged or transferred unless
subsequently registered or unless an exemption is available allowing its resale.
Purchaser shall undertake to have the Purchaser Common Stock registered in
accordance with Section 5.1.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF STAR+GLOBE
The Schedules attached to this Agreement are sometimes referred to herein
as the "Disclosure Schedules." Star+Globe represents and warrants to Purchaser
that the following statements are true as of the date of this Agreement:
2.1 Organization and Standing; Subsidiaries. Star+Globe is a corporation
duly organized and validly existing under the laws of the jurisdiction of
Singapore, has full requisite corporate power and authority to carry on its
business as currently conducted, and to own and operate the properties owned and
operated by it and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all jurisdictions
in which the character of the properties owned or the nature of the business
conducted by it would make such qualification or licensing necessary. Except for
the ownership of all of the outstanding capital stock of Star+Globe
Technologies, Inc., a California corporation (the "Subsidiary"), Star+Globe does
not own, directly or indirectly, the capital stock (or other similar equity
interests) of any other corporation, joint venture, partnership, limited
liability company or other similar entity.
2.2 Authorization. The execution and delivery of this Agreement has
been authorized by the board of directors and all of the shareholders of the
Star+Globe, and the consummation of the transactions contemplated hereby has
been duly and validly authorized by all necessary corporate or shareholder
action on the part of the Star+Globe, and this Agreement is a valid and binding
obligation of the Star+Globe, enforceable (subject to normal equitable
principles) in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally.
2.3 Memorandum of Association and Articles of Association; Certain
Records. Copies of the Memorandum of Association and Articles of Association,
minute books and share register of Star+Globe have been made available to
Purchaser, and each such copy is true, correct and complete. All material
records of any type and description in whatever form or medium that
<PAGE>
presently exist and that relate to the business or properties of Star+Globe are
in the possession or control of Star+Globe and are located at the offices of
Star+Globe or of its counsel, independent auditors, consultants, or other
advisors, and Star+Globe will have the right to possession of all such records
upon the consummation of the transactions contemplated by this Agreement.
2.4 Capitalization. As of the date of this Agreement and subject to the
redemption in accordance with the Redemption Agreement, the authorized share
capital of Star+Globe is S$7,000,000 comprised of (i) S$25,000 divided into
2,500,000 redeemable convertible preference shares of nominal value S$0.01 each
of which 1,933,250 are issued and outstanding, and (ii) S$6,975,000 divided into
6,975,000 ordinary shares of nominal value S$1.00 each of which 3,311,618 are
issued and outstanding (collectively the "Star+Globe Share Capital"). All of the
outstanding share capital of Star+Globe is owned by the Shareholders on the date
hereof. All prior issuance of securities by Star+Globe and all prior
repurchases, redemptions or exchanges affecting the outstanding securities of
Star+Globe have complied with all applicable Legal Requirements (as defined
below) (including federal and state securities laws), preemptive rights and
contractual restrictions. Set forth on Schedule 2.4 is a list of all prior
------------
issuances of Star+Globe Share Capital, and the status of each certificate
representing such shares. The Shares have been duly authorized and validly
issued and are fully paid and nonassessable. Except as described above,
Star+Globe does not have shares of its capital stock authorized, issued or
outstanding. Except as set forth on Schedule 2.4, there are no outstanding
------------
convertible or exchangeable securities, subscriptions, calls, options, warrants,
rights (contractual or arising by operation of law, including, without
limitation, rights of first refusal and preemptive rights), or other agreements
or commitments of any character to which Star+Globe is a party or by which it is
bound, relating to the issuance, purchase, other acquisition or voting of any
shares of the capital stock of, or other equity or ownership interest in
(collectively, "Equity Rights") Star+Globe or the Subsidiary. All Equity Rights
listed on Schedule 2.4 will expire at Closing unless sooner exercised. No
------------
bonds, debentures, notes or other indebtedness having the right to vote under
any circumstances (or convertible into securities having such right to vote) of
Star+Globe are issued and outstanding. There are no agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to which any
person or entity is or may be entitled to receive any payment based on the
revenues or earnings, or calculated in accordance therewith, of Star+Globe.
There are no voting trusts, proxies or other agreements or understandings to
which Star+Globe or any Shareholder is a party or by which Star+Globe or any
Shareholder is bound with respect to the voting of any shares of capital stock
or other Equity Rights of Star+Globe.
2.5 Compliance with Other Instruments and Laws. Except as disclosed on
Schedule 2.5, the execution and delivery of this Agreement and the consummation
- ------------
of Agreement and the consummation of the transactions contemplated hereby will
not conflict with or result in any violation of or default under any provision
of the Memorandum of Association or Articles of Association of Star+Globe or any
material mortgage, indenture, trust, lease, partnership or other agreement,
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, or, Legal Requirement applicable to Star+Globe or any of the properties
of Star+Globe.
For purposes of this Agreement, the term "Legal Requirement" shall mean any
foreign government, federal, state or local law, statute, legislation,
ordinance, code, rule, regulation, decree, award, order, permit, franchise,
consent or authorization of, any federal, state, local or other governmental
body or agency, department, commission, bureau, board, council, court,
magistrate, panel or instrumentality of the United States or any foreign
country, any political subdivision thereof or any state or local governmental
authority
<PAGE>
2.6 Governmental and Third Party Authorizations; Consents. Except as
disclosed on Schedule 2.6, no consents, licenses, approvals or authorizations
------------
of, or registrations or declarations with, any governmental authority, agency,
bureau or commission, or any third party, are required to be obtained or made by
Star+Globe or the Subsidiary in connection with the execution, delivery,
performance, validity and enforceability of this Agreement or the sale or
transfer of the Shares.
2.7 Litigation. Except as shown on Schedule 2.7, there are no claims,
------------
actions or proceedings or investigations pending, or to the knowledge of
Star+Globe, threatened against Star+Globe, the Subsidiary or their properties
which could be reasonably be expected to have a material adverse effect on the
Business, at law or in equity or before any court, governmental department,
commission, board, agency, authority or instrumentality, domestic or foreign.
Neither Star+Globe nor the Subsidiary is subject to any judgment, stipulation,
order or decree arising from any action, suit, proceeding or investigation which
could be reasonably expected to have, individually or in the aggregate, a
material adverse effect on Star+Globe or the Subsidiary after the Closing Date.
No action, suit, proceeding or governmental investigation is pending or, to the
knowledge of Star+Globe, threatened against Star+Globe which seeks to question,
delay or prevent the consummation of the transactions contemplated hereby. To
the knowledge of Star+Globe, no action, suit, proceeding or governmental
investigation is pending or threatened against any Shareholder which seeks to
question, delay or prevent the consummation of the transactions contemplated
hereby
2.8 Financial Statements; Conduct of Business; No Undisclosed Liabilities.
Except as set forth on Schedule 2.8:
------------
(a) Star+Globe has delivered to Purchaser (i) the consolidated
audited balance sheets of Star+Globe as of December 31, 1998, 1997 and 1996 and
the related consolidated audited statements of income, retained earnings and
cash flows for the fiscal years then ended, accompanied in each case by a
certification of PriceWaterhouseCoopers (formerly Coopers & Lybrand),
independent certified public accountants (such financial statements, including
the notes thereto, hereinafter being referred to as the "Annual Financial
Statements"), and (ii) the unaudited consolidated balance sheet of Star+Globe as
of September 30, 1999, and the related unaudited consolidated statements of
income, stockholders' equity and cash flows for the nine (9) months ended
September 30, 1999 (the "Interim Financial Statements") (the Annual Financial
Statements and the Interim Financial Statements hereinafter being referred to as
the "Financial Statements"). All of the Financial Statements have been prepared
in accordance with Singapore GAAP (as defined below) consistently applied for
all relevant periods (except as indicated therein) and present fairly in all
material respects the financial position of Star+Globe as of the dates thereof
and the results of its operations for the periods then ended, subject, in the
case of the Interim Financial Statements, to normal recurring year-end
adjustments and the absence of notes.
(b) Neither Star+Globe nor the Subsidiary has any Claims, debts,
obligations, guaranties of the obligations of others or liabilities (whether
absolute or contingent, liquidated or unliquidated, due or to become due),
except for (i) Claims, debts, obligations, guaranties and liabilities to the
extent reflected or reserved against in the Financial Statements, (ii) debts,
obligations, guaranties and liabilities incurred or entered into subsequent to
September 30, 1999, in the ordinary course of business and otherwise not in
contravention of this Agreement, or (iii) debts, obligations, guaranties and
liabilities otherwise disclosed in this Agreement.
(c) The consolidated Net Working Capital position of Star+Globe on
the date hereof is at least US$1,500,000 based upon an exchange rate of 1.667:1.
Attached hereto as
<PAGE>
Schedule 2.8(c) is a detailed statement of the consolidated Net Working Capital
- ---------------
position of Star+Globe as of January 11, 2000. For purposes of this Section
2.8(c), Net Working Capital shall be equal to the sum of (i) the book value of
accounts receivable after the allowance for doubtful accounts, plus (ii) cash,
cash equivalents and marketable securities; less the sum of (a) the book value
of all accounts payable. The book value of all amounts shall be calculated in
conformity with the corresponding amounts as shown on Star+Globe's financial
statements prepared in accordance with Singapore Statement on Accounting
Standards, applied on a basis consistent with Star+Globe's consolidated audited
financial statements ("Singapore GAAP").
(d) As used in this Agreement, "Claim" means any and all claims,
liabilities, causes of action, arbitrations, audits, hearings, investigations,
litigation or suits, whether in contract, tort or otherwise, whether statutory
or common law, whether civil, criminal, administrative, investigative, formal or
informal, whether known or unknown, fixed or contingent.
2.9 Title to Assets, Absence of Liens and Encumbrances.
(a) Star+Globe and the Subsidiary have good title to their owned
material assets, including the tangible assets reflected on the balance sheet
included in Star+Globe's most recent consolidated Financial Statements, other
than assets disposed of or used after the date thereof in the ordinary course of
business for fair value. Except as disclosed in Schedule 2.9(a), the tangible
---------------
assets owned by Star+Globe and the Subsidiary are owned free and clear of all
liens, mortgages, pledges, charges, security interests or encumbrances, except
for Permitted Liens (as defined below). Star+Globe and the Subsidiary own, lease
or license and have adequate rights to use all material real and personal
property and other material assets necessary to conduct a going concern on a
basis consistent with past practices. The owned and leased assets of Star+Globe
and the Subsidiary are in good operating condition and repair (subject to normal
wear and tear). Neither the whole nor any part of the real property used in the
Business ("Real Property") has been condemned by any public authority, nor, to
the knowledge of Star+Globe, is any such condemnation or taking threatened or
contemplated.
For the purposes of this Agreement, the term "Permitted Liens" shall mean
liens for current taxes not yet due and imperfections of title, liens and
encumbrances, if any, which are described on Schedule 2.9 hereto or which do not
materially and adversely affect the use, value or marketability of the property
affected thereby.
(b) Star+Globe and the Subsidiary validly hold the leaseholds created
by the leases (true, complete and correct copies of which have been provided to
Purchaser) as described on Schedule 2.9(b) (the "Leased Property") and such
---------------
leases are enforceable by Star+Globe or the Subsidiary, as applicable, as the
lessee thereunder. Except as set forth on Schedule 2.9(b), neither
---------------
Star+Globe nor the Subsidiary is a party to any leases of real property.
(c) Neither Star+Globe nor the Subsidiary is a party to any agreement
granting any third party the right or an option to purchase or lease all or any
portion of the Real Property or any personal property of Star+Globe.
(d) There is not pending nor has Star+Globe or the Subsidiary
received any written notice of (i) any Claim or proceeding asserting or seeking
to establish a title interest in the Real Property or Leased Property, or any
Claim of default under any of the leases under which leaseholds have been
created ("Title Notice"), or (ii) the existence of any facts or proceedings
which may result in the issuance of such a Title Notice.
<PAGE>
2.10 Full Authority; Compliance with Laws. Except as set forth on Schedule
--------
2.10, Star+Globe and the Subsidiary are in compliance with all applicable Legal
- ----
Requirements. Set forth on Schedule 2.10 is a list of any and all permits,
-------------
licenses, consents, orders, approvals, franchises, certificates or other
authorizations under any applicable Legal Requirement (collectively the
"Permits"), issued to Star+Globe or the Subsidiary in connection with the
ownership, operation and maintenance of its businesses or assets. Star+Globe and
the Subsidiary have obtained and maintained all Permits. Each of the Permits is
in full force and effect, and Star+Globe and the Subsidiary are in compliance in
all respects with all the provisions of such Permits.
2.11 Claims. Except as set forth on Schedule 2.11, there are no Claims
-------------
pending or, to the knowledge of Star+Globe, threatened against Star+Globe, the
Subsidiary or their properties, at law or in equity or before any court,
governmental department, commission, board, agency, authority, instrumentality,
domestic or foreign, which have had or could be reasonably expected to have
individually or in the aggregate a material adverse effect on Star+Globe or its
Business before, on or after the Closing Date.
2.12 Contracts. Except as set on Schedule 2.12 (the agreements listed
-------------
thereon being referred to as the "Contracts"), neither Star+Globe nor the
Subsidiary is a party to, bound by or obligated under any currently subsisting:
(a) mortgage, indenture, note or installment obligation or other
instrument or contract for or relating to any borrowing of an amount in excess
of $10,000 by Star+Globe or the Subsidiary;
(b) guaranty by Star+Globe or the Subsidiary of any obligation in
excess of $10,000 (excluding any endorsement made in the ordinary course of
business for collection);
(c) license agreement involving the payment or receipt by Star+Globe
or the Subsidiary of $10,000 or more during any 12-month period during the term
thereof;
(d) lease of real or personal property under which Star+Globe or the
Subsidiary is a lessor or lessee involving annual rentals in excess of $10,000;
(e) agreement for the purchase by Star+Globe or the Subsidiary of
equipment involving outstanding commitments in excess of $10,000;
(f) agreement purporting to limit the right of Star+Globe or the
Subsidiary to compete in any line of business, with any person or other entity
or in any geographic area;
(g) agreement for the purchase or sale of raw materials, products or
goods or the provision of services involving payments in excess of $10,000 at
prices that vary from the prices therefor generally prevailing in customary,
arms-length transactions or that may not be terminated by Star+Globe or the
Subsidiary on not more than thirty (30) days' notice without penalty;
(h) contract with any governmental or quasi-governmental authority
involving payments in excess of $10,000;
(i) bond, deposit, financial assurance requirement or insurance
coverage in excess of $10,000 individually required to be submitted to customers
of Star+Globe or the Subsidiary, under any sale, lease or service arrangement or
to any governmental authority under any Permit or Legal Requirement;
<PAGE>
(j) agreement or instrument relating to the acquisition by Star+Globe
or the Subsidiary of any entity or all or substantially all of the assets of any
person or entity;
(k) other agreement, contract or obligation of Star+Globe or the
Subsidiary calling for or involving the payment, potential payment or accrued
obligation by or to Star+Globe or the Subsidiary of an amount in excess of
$10,000 from the date hereof through the earliest date such agreement, contract
or obligation can be terminated unilaterally without material penalty by
Star+Globe or the Subsidiary;
(l) agreement or commitment relating to the borrowing of money or the
guaranty or indemnity (direct or indirect) in respect of or the granting of
security for any obligation for the borrowing of money, by Star+Globe or the
Subsidiary or any other person or entity, in excess of $10,000, including,
without limitation, guarantees, accommodation collateral, letters of credit,
mortgages, deeds of trust, indentures, loan agreements and credit agreements;
(m) agreement that creates an encumbrance or any restriction on the
ability of Star+Globe to (i) pay dividends or make similar distributions; (ii)
make loans or advances to any person or entity, or (iii) sell, lease or transfer
any of its properties or assets;
(n) indemnification obligations in favor of any person or entity, and
any escrow agreements related to any indemnification or obligation;
(o) confidentiality, secrecy, screening, development or settlement
agreement pertaining to any Intellectual Property; or
(p) contract with any customer of Star+Globe or the Subsidiary
involving revenues in excess of $10,000.
All of the Contracts are legal, valid, binding and in full force and effect and
the consummation of the transactions contemplated by this Agreement will not
cause any default or condition in respect of any such Contracts, the effect of
which is to cause, permit, create or perfect the right in any party (a) to
repudiate or disavow its obligations to Star+Globe or the Subsidiary, or (b) to
require or have the right to require Star+Globe or the Subsidiary to perform its
obligations thereunder (including obligations to pay indebtedness) prior to such
time on which, or on terms and conditions otherwise different from those that,
are provided therein. To the knowledge of Star+Globe, no party to any such
Contract is in default thereunder. True, correct and complete copies of all the
Contracts have been delivered to the Purchaser.
2.13 Intellectual Property. Star+Globe and the Subsidiary either own or
have the right to use by license, sublicense, or other written agreement, all of
the inventions, improvements, domestic and foreign patents and applications
therefor, customer lists, copyrights, copyright registrations and applications
therefor, trademarks, trade names, service marks, trade dress, logos, rights in
computer software, and all rights granted or retained in licenses under any of
the foregoing which are used in connection with the conduct of Star+Globe's and
the Subsidiary's business as presently conducted (collectively the "Intellectual
Property"). Except as disclosed on Schedule 2.13, none of the Intellectual
-------------
Property used in connection with the conduct of Star+Globe's and the
Subsidiary's business is, or has been in the past five years, involved in, or
the subject of, any pending or, to the knowledge of Star+Globe, threatened
infringement, interference, opposition or similar action, suit or proceeding.
The material license fees, royalties and other amounts payable by Star+Globe and
the Subsidiary in connection with the use of the Intellectual Property, together
with the terms and conditions on which, and periods for which such amounts are
payable, are set forth in Schedule 2.13.
-------------
<PAGE>
2.14 Taxes.
(a) For purposes of this Agreement, "Taxes" in the plural and "Tax"
in the singular shall refer to any and all taxes, charges, fees, levies, or
other assessments of whatever kind or nature, including, but not limited to, any
federal, state, local or foreign net income, gross income, gross receipts,
unitary, license, payroll, unemployment, excise, severance, stamp, occupation,
premium, windfall profits, occupational, leasing, lease, fuel, customs, duties,
capital stock, franchise, profits, withholding, Social Security, unemployment,
disability, ad valorem, real property, personal property (tangible and
intangible), sales, use, transfer, registration, value added, alternative or
minimum, estimated, or any other kind of tax whatsoever, and including any
interest, addition, penalty or other associated charge thereto, whether disputed
or not. For purposes of this Agreement, "Tax Returns" shall mean any returns,
reports or statements with respect to Taxes which are required to be filed with
any taxing authority;
(b) Star+Globe and the Subsidiary have filed with the appropriate
foreign, federal, state and local governmental agencies all Tax Returns and
reports in respect of all Taxes required to be filed (subject to permitted
extensions applicable to such filings), and all such Tax Returns are true,
complete and correct in all material respects. Star+Globe and the Subsidiary
have paid, or made the provision for payment of, all Taxes shown on such Tax
Returns. Neither Star+Globe nor the Subsidiary is a party to any pending action
or proceeding or, to the best of its knowledge, threatened in writing by any
governmental authority for the assessment or collection of Taxes. There are no
Liens for Taxes on the assets of Star+Globe or the Subsidiary that arose in
connection with any failure (or alleged failure) to pay any such Taxes. Neither
Star+Globe nor the Subsidiary is a party to any tax sharing, tax allocation, tax
indemnity or statute of limitations extension or waiver agreement. Star+Globe
and the Subsidiary have withheld from each payment made to any of its past or
present employees, officers or directors, the amount of all Taxes required to be
withheld therefrom, and has paid the same to the proper tax or other receiving
officers within the time required under any applicable law or regulation.
2.15 Benefit Plans. Schedule 2.15 sets forth a list of all material
-------------
employee benefit plans and all material bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance and other
material fringe or employee benefit plans, programs or arrangements, and any
material employment or compensation agreements, for the benefit of, or relating
to, persons currently or formerly employed by Star+Globe or the Subsidiary in
the Business (the "Employees"), as currently in effect (the "Employee Plans").
Star+Globe has provided the Purchaser with full and complete copies of all
Employee Plans, summary plan descriptions and material written employee
communications with respect to the Employee Plans.
2.16 Labor Matters. Except as set forth on Schedule 2.16, there are no
-------------
labor or employment disputes or controversies pending or, to the knowledge of
Star+Globe, threatened against Star+Globe or the Subsidiary or any of the
employees of Star+Globe or the Subsidiary, and neither Star+Globe nor the
Subsidiary has taken or failed to take any action which action or omission would
provide a reasonable basis for any such controversy. Except as set forth on
Schedule 2.16, to the knowledge of Star+Globe, after due inquiry, there are no
- -------------
organizational efforts presently being made or threatened by or on behalf of any
labor union with respect to any employees of Star+Globe or the Subsidiary.
Except as set forth on Schedule 2.16, Star+Globe and the Subsidiary have
-------------
complied with all laws, rules and regulations with respect to worker's
compensation insurance or, if applicable, all requirements relating to obtaining
an exemption thereunder, and all other laws relating to the employment of labor,
including, without limitation, laws relating to equal employment opportunity and
employment discrimination, employment of illegal aliens or undocumented or
ineligible workers, wages, hours, collective bargaining and the
<PAGE>
collection or payment of social security compulsory provident funds and
withholding taxes, or both, and similar taxes. Except as set forth on Schedule
--------
2.16, neither Star+Globe nor the Subsidiary is liable for any arrearage of wages
- ----
or any taxes or penalties for failure to comply with any of the foregoing.
2.17 Transactions with Management. Except as set forth on Schedule 2.17,
-------------
neither Star+Globe nor the Subsidiary is a party to any contract, lease or
agreement with any of the officers or directors of Star+Globe or any Shareholder
or any member of the family of any such persons.
2.18 Customers and Vendors. Schedule 2.18 hereto contains true and correct
-------------
lists of the 10 largest customers and the 10 largest vendors of Star+Globe on a
consolidated basis during the 12-month period ended December 31, 1998, and the
nine-month period ended September 30, 1999, with the amount of sales made to
each such customer or by each such vendor, as the case may be, during such
period as reasonably ascertained from readily available information, such
amounts being estimated in good faith as being within five percent (5%) of the
actual sales made to or by such customer or vendor, as the case may be.
Star+Globe has no information indicating that any of these customers or vendors
intends to cease or continue doing business with Star+Globe or the Subsidiary or
materially alter the amount of the business that it is presently doing with
Star+Globe or the Subsidiary.
2.19 Accounts Receivable. Except as disclosed on Schedule 2.19, all
-------------
Accounts Receivable of Star+Globe and the Subsidiary are due to Star+Globe and
the Subsidiary and are collectible in due course, and there are no rights of set
off, Claims or counterclaims against Star+Globe or the Subsidiary in favor of
the parties from whom such receivables are due and owing.
2.20 Year 2000 Compliance. Except as disclosed on Schedule 2.20, all of
-------------
the computer hardware, software and information systems, including without
limitation the financial, operational and manufacturing systems, owned or used
by Star+Globe (i) are prior to, during and after calendar year 2000 A.D. capable
of operating without errors relating to date data, including errors relating to
date data which represents or references different calendar centuries or more
than one century, and of providing all date related functionalities, interfaces
and data fields, including the indication of century; (ii) are able to
accurately manage and process data and date-related data (including, but not
limited to, calculating, comparing, sequencing and sorting) from, into and
between the twentieth and twenty-first centuries, including single and multiple
centuries and leap years; and (iii) shall not abnormally terminate or provide
invalid or incorrect results due to date or date-related data, specifically
including date data which represents or references different centuries or more
than one century.
2.21 Compliance with Other Domestic and Foreign Laws. Except as disclosed
on Schedule 2.21, neither Star+Globe, the Subsidiary nor any of Star+Globe's or
-------------
the Subsidiary's Intellectual Property, products or services is in violation of
or in default with respect to, or in alleged violation of or alleged default
with respect to, any domestic or foreign applicable law or any applicable rule,
regulation, or any writ or decree of any court or any domestic or foreign
governmental commission, board, bureau, agency, or instrumentality, including,
but not limited to, all domestic and foreign customs, import, export or similar
laws or regulations which relate to international trade, and Star+Globe is not
delinquent with respect to any report required to be filed with any domestic or
foreign governmental commission, board, bureau, agency or instrumentality.
2.22 Accuracy. The representations and warranties made by Star+Globe to
Purchaser set forth in this Agreement, the Schedules to this Agreement,
delivered to Purchaser prior to
<PAGE>
Closing, and the written agreements, instruments and documents delivered and to
be delivered pursuant to or in connection with this Agreement and to which the
Purchaser has been afforded access, do not include an untrue statement of
material fact or omit to state any material fact necessary to make them, when
taken together and in light of the circumstances in which they were or are made,
not misleading in any material respect.
2.23 Brokers and Finders. No person or entity is entitled to any brokerage
commission, finder's fee or like payment from Star+Globe or the Subsidiary in
connection with the transactions contemplated in this Agreement.
2.24 Knowledge of Star+Globe. No officer or director of Star+Globe has
actual knowledge, as of the date hereof, of any state of facts which will have a
material adverse effect on Star+Globe, except for such matters as have been
disclosed to Purchaser or its representatives and are contained in the
Disclosure Schedule.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Star+Globe and Shareholders as
follows:
3.1 Organization and Standing of Purchaser. Purchaser is a corporation
duly organized and validly existing under the laws of the jurisdiction of
Israel, has full requisite corporate power and authority to carry on its
business as currently conducted, and to own and operate the properties owned and
operated by it and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all jurisdictions
in which the character of the properties owned or the nature of the business
conducted by it would make such qualification or licensing necessary.
3.2 Authorization. The execution and delivery of this Agreement has been
authorized by the board of directors of the Purchaser, and the consummation of
the transactions contemplated hereby has been duly and validly authorized by all
necessary action on the part of the Purchaser, and this Agreement is a valid and
binding obligation of the Purchaser, enforceable (subject to normal equitable
principles) in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally. The Purchaser Common Stock to be
issued to Shareholders hereunder when issued will be validly issued, fully paid
and nonassessable. The options granted to those persons listed on Exhibit C
---------
hereto pursuant to the Star+Globe Share Option Plan (2000) are authorized by all
necessary corporate action on behalf of the Purchaser.
3.3 Articles of Association and Memorandum of Association. Copies of the
Articles of Association and Memorandum of Association, as amended have been
filed as exhibits to the Purchaser's SEC Filings and are true, correct and
complete. All material records of any type and description in whatever form or
medium that presently exist and that relate to the business or properties of
Purchaser are in the possession or control of Purchaser and are located at the
offices of Purchaser or of its counsel, independent auditors, consultants, or
other advisors, and Purchaser will have the right to possession of all such
records upon the consummation of the transactions contemplated by this
Agreement.
3.4 Capitalization. As of the date of this Agreement, the authorized
capital stock of Purchaser consists only of 130,000,000 ordinary shares, NIS
0.01 par value, and 10,000,000 shares of Preferred Stock, NIS 0.01 par value,
("Purchaser Capital Stock") of which 32,640,748 ordinary
<PAGE>
shares and 2,888,874 shares of Preferred Stock are issued and outstanding.
Except as described above, Purchaser does not have shares of its capital stock
authorized, issued or outstanding. Except as set forth on Schedule 3.4, there
------------
are no outstanding convertible or exchangeable securities, subscriptions, calls,
options, warrants, rights (contractual or arising by operation of law,
including, without limitation, rights of first refusal and preemptive rights),
or other agreements or commitments of any character to which Purchaser is a
party or by which it is bound, relating to the issuance, purchase, other
acquisition or voting of any shares of the capital stock of, or other equity or
ownership interest in Purchaser. Any references made to "Purchaser" in Sections
3.5 to 3.21 herein shall include all subsidiary entities of LanguageWare.net
(Company) Ltd.
3.5 Compliance with Other Instruments and Laws. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
will not conflict with or result in any violation of or default under any
provision of the Articles of Association or Memorandum of Association of
Purchaser or any material mortgage, indenture, trust, lease, partnership or
other agreement, instrument, permit, concession, grant, franchise, license,
judgment, order, decree, or, Legal Requirement applicable to Purchaser or any of
the properties of Purchaser.
3.6 Governmental and Third Party Authorizations, Consents. No consents,
licenses, approvals or authorizations of, and registrations or declarations
with, any governmental authority, bureau, agency or commission, or any third
party, are required to be obtained or made by Purchaser in connection with the
execution, delivery, performance, validity and enforceability of this Agreement.
3.7 Litigation. No action, suit, proceeding or governmental investigation
is pending or to the knowledge of Purchaser threatened, at law or in equity,
which seeks to question, delay or prevent the consummation of all or any portion
of the transactions contemplated hereby.
3.8 Financial Statements.
(a) Purchaser has delivered to Star+Globe Purchaser's Form 10-K for
the year ended December 31, 1998, Proxy Statement dated May 13, 1999 relating to
Purchaser's Annual Meeting of Shareholders held June 25, 1999, Form 10-Q for the
fiscal quarters ended March 31, 1999, June 30, 1999 and September 30, 1999, and
Form 8-K dated October 18, 1999 (collectively referred to as the "SEC Filings").
To the extent applicable, all of the SEC Filings have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied for all relevant periods (except as indicated therein) and present
fairly the financial position of Purchaser as of the dates thereof and the
results of its operations for the periods then ended, subject, as applicable, to
normal recurring year-end adjustments and the absence of notes.
(b) Purchaser has no Claims, debts, obligations, guaranties of the
obligations of others or liabilities (whether absolute or contingent, liquidated
or unliquidated, due or to become due), except for (i) Claims, debts,
obligations, guaranties and liabilities to the extent reflected or reserved
against in the financial statements included in its SEC Fillings, (ii) debts,
obligations, guaranties and liabilities incurred or entered into subsequent to
September 30, 1999, in the ordinary course of business and otherwise not in
contravention of this Agreement (iii) or debts, obligations, guaranties and
liabilities otherwise disclosed in this Agreement.
(c) Attached hereto as Schedule 3.8(c) is a detailed statement of the
---------------
consolidated Net Working Capital position of Purchaser as of the date hereof.
For purposes of this Section 3.8(c), Net Working Capital shall be equal to the
sum of (i) the book value of accounts receivable after the allowance for
doubtful accounts, plus (ii) cash, cash equivalents and marketable securities;
less the sum of (a) the book value of all accounts payable. The book value of
all amounts shall be
<PAGE>
calculated in conformity with the corresponding amounts as shown on Purchaser's
financial statements prepared in accordance GAAP.
3.9 Full Authority; Compliance with Laws. Purchaser is in compliance with
all applicable Legal Requirements.
3.10 Claims. Except as set forth in its SEC Filings, there are no Claims
pending or, to the knowledge of Purchaser, threatened against Purchaser or its
properties, at law or in equity or before any court, governmental department,
commission, board, agency, authority, instrumentality, domestic or foreign,
which have had or could be reasonably expected to have individually or in the
aggregate a material adverse effect on Purchaser or its business before, on or
after the Closing Date.
3.11 Intellectual Property. Purchaser either owns or has the right to use
by license, sublicense, or other written agreement, all of the inventions,
improvements, domestic and foreign patents and applications therefor, customer
lists, copyrights, copyright registrations and applications therefor,
trademarks, trade names, service marks, trade dress, logos, rights in computer
software, and all rights granted or retained in licenses under any of the
foregoing which are used in connection with the conduct of Purchaser's business
as presently conducted (collectively the "Purchaser Intellectual Property").
None of the Purchaser Intellectual Property used in connection with the conduct
of Purchaser's business is, or has been in the past five years, involved in, or
the subject of, any pending or, to the knowledge of Purchaser, threatened
infringement, interference, opposition or similar action, suit or proceeding.
3.12 Taxes. Purchaser has filed with the appropriate foreign, federal,
state and local governmental agencies all Tax Returns and reports in respect of
all Taxes required to be filed (subject to permitted extensions applicable to
such filings), and all such Tax Returns are true, complete and correct in all
material respects. Purchaser has paid, or made the provision for payment of, all
Taxes shown on such Tax Returns. Purchaser is not a party to any pending action
or proceeding or, to the best of its knowledge, threatened in writing by any
governmental authority for the assessment or collection of Taxes. There are no
Liens for Taxes on the assets of Purchaser that arose in connection with any
failure (or alleged failure) to pay any such Taxes. Purchaser is not a party to
any tax sharing, tax allocation, tax indemnity or statute of limitations
extension or waiver agreement. Purchaser has withheld from each payment made to
any of its past or present employees, officers or directors, the amount of all
Taxes required to be withheld therefrom, and has paid the same to the proper tax
or other receiving officers within the time required under any applicable law or
regulation.
3.13 Benefit Plans. Except as set forth in its SEC Filings, Purchaser does
not maintain any material employee benefit plan or material bonus, stock option,
stock purchase, incentive, deferred compensation, supplemental retirement,
severance or other material fringe or employee benefit plan, program or
arrangement, or any material employment or compensation agreement, for the
benefit of, or relating to, persons currently or formerly employed by Purchaser.
3.14 Labor Matters. There are no labor or employment disputes or
controversies pending or, to the knowledge of Purchaser, threatened against
Purchaser or any of the employees of Purchaser, and Purchaser has not taken or
failed to take any action which action or omission would provide a reasonable
basis for any such controversy. To the knowledge of Purchaser, after due
inquiry, there are no organizational efforts presently being made or threatened
by or on behalf of any labor union with respect to any employees of Purchaser.
Purchaser has complied with all laws, rules and regulations with respect to
worker's compensation insurance or, if applicable, all
<PAGE>
requirements relating to obtaining "non-subscriber status" thereunder, and all
other laws relating to the employment of labor, including, without limitation,
laws relating to equal employment opportunity and employment discrimination,
employment of illegal aliens or undocumented or ineligible workers, wages,
hours, collective bargaining and the collection or payment of social security
and withholding taxes, or both, and similar taxes. Purchaser is not liable for
any arrearage of wages or any taxes or penalties for failure to comply with any
of the foregoing.
3.15 Transactions with Management. Except as set forth in its SEC Filings,
Purchaser is not a party to any contract, lease or agreement with any of the
officers or directors of Purchaser or any member of the family of any such
persons.
3.16 Year 2000 Compliance. All of the computer hardware, software and
information systems, including without limitation the financial, operational and
manufacturing systems, owned or used by Purchaser (i) are prior to, during and
after calendar year 2000 A.D. capable of operating without errors relating to
date data, including errors relating to date data which represents or references
different calendar centuries or more than one century, and of providing all date
related functionalities, interfaces and data fields, including the indication of
century; (ii) are able to accurately manage and process data and date-related
data (including, but not limited to, calculating, comparing, sequencing and
sorting) from, into and between the twentieth and twenty-first centuries,
including single and multiple centuries and leap years; and (iii) shall not
abnormally terminate or provide invalid or incorrect results due to date or
date-related data, specifically including date data which represents or
references different centuries or more than one century.
3.17 Compliance with Other Domestic and Foreign Laws. Neither Purchaser nor
any of Purchaser's Intellectual Property, products or services is in violation
of or in default with respect to, or in alleged violation of or alleged default
with respect to, any domestic or foreign applicable law or any applicable rule,
regulation, or any writ or decree of any court or any domestic or foreign
governmental commission, board, bureau, agency, or instrumentality, including,
but not limited to, all domestic and foreign customs, import, export or similar
laws or regulations which relate to international trade, and Purchaser is not
delinquent with respect to any report required to be filed with any domestic or
foreign governmental commission, board, bureau, agency or instrumentality.
3.18 Accuracy of SEC Reports. The reports filed by Purchaser with the
United States Securities and Exchange Commission ("SEC") do not include an
untrue statement of material fact or omit to state any material fact necessary
to make them, when taken together and in light of the circumstances in which
they were or are made, not misleading in any material respect. All necessary and
appropriate reports required to be filed by Purchaser with the SEC have been
filed in a timely manner.
3.19 Brokers and Finders. No person or entity is entitled to any brokerage
commission, finder's fee or like payment from Purchaser in connection with the
transactions contemplated in this Agreement.
3.20 Accuracy. The representations and warranties made by Purchaser to
Star+Globe and the Shareholders set forth in this Agreement, the Schedules to
this Agreement delivered to Star+Globe prior to Closing, and the written
agreements, instruments and documents delivered and to be delivered pursuant to
or in connection with this Agreement and to which Star+Globe has been afforded
access, do not include an untrue statement of material fact or omit to state any
material fact necessary to make them, when taken together and in light of the
circumstances in which they were or are made, not misleading in any material
respect.
<PAGE>
3.21 Purchasers Knowledge. No officer or director of Purchaser has actual
knowledge, as of the date hereof, of any state of facts which will have a
material adverse effect on Purchaser, except for such matters as have been
disclosed to Star+Globe or its representatives and are contained in the
Disclosure Schedules.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDERS
4.1 Ownership of Shares. Shareholders are now, and immediately prior to
the Closing Shareholders will be, the owners of 100% of the Shares of
Star+Globe. Each of the Shares to be sold by Shareholders to Purchaser is now,
and at the Closing will be, owned by Shareholders free and clear of any lien,
pledge, charge, adverse claim, security interest, encumbrance (including any
imposed by law in any jurisdiction), title retention agreement, option or right
to purchase of any kind.
4.2 Title to Shares. Upon delivery of the certificates representing the
Shares and executed share transfer forms to Purchaser hereunder and payment and
delivery to Shareholders of the consideration specified herein, Purchaser will
(provided that the share transfer forms are completed, stamped and registered by
Star+Globe's company Secretary) acquire valid title thereto, free and clear of
any lien, pledge, charge, adverse claim, security interest, encumbrance
(including any imposed by law in any jurisdiction), title retention agreement,
option or right to purchase of any kind, other than (a) any restrictions imposed
by applicable securities laws, (b) any liens, pledges, charges, adverse claims,
security interests, encumbrances, title retention agreements, options, equities
or rights to purchase created by or through Purchaser or any of Purchaser's
Affiliates.
4.3 Enforceability. This Agreement constitutes the valid and legally
binding obligation of Shareholders, enforceable in accordance with its terms,
except as such enforceability may be limited by equitable principles and by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
similar laws relating to or affecting the rights of creditors generally.
4.4 Compliance with Shareholders Agreement and Articles of Association.
(a) Each Shareholder covenants and agrees to the sale of the Shares
to the Purchaser in accordance with this Agreement and waives any preemptive or
other rights that they may have under the Articles of Association, the
Shareholders' Agreement dated 10 September 1998 (as amended and ratified on 12
November 1998), or otherwise.
(b) Each Shareholder covenants and agrees that upon the execution of
this Agreement that the Shareholders' Agreement dated 10 September 1998 (as
amended and ratified on 12 November 1998) among Star+Globe and the Shareholders
be and hereby is terminated.
(c) Each Shareholder who owns preference shares of Star+Globe
covenants and agrees that the sale of the Shares to the Purchaser pursuant to
this Agreement shall not be considered to be a liquidation, dissolution or
winding-up of Star+Globe under Article 6(b) of Star+Globe's Articles of
Association, and waives any liquidation rights any such Shareholder may have
pursuant to said Article 6(b).
4.5 Investment Representations. Each Shareholder is an "accredited
investor" as defined under Rule 501 of Regulation D under the Securities Act of
1933, as amended (the "Securities Act"), and is acquiring the Purchaser Common
Stock solely for the purpose of
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investment and not with a view to, or for sale in connection with, any
distribution thereof. Shareholders acknowledge that the Purchaser Common Stock
to be issued to Shareholders will not be registered under the Securities Act as
of the Closing and that such Purchaser Common Stock may not be transferred or
sold except pursuant to the registration provisions of the Securities Act or
pursuant to an applicable exemption therefrom and pursuant to state securities
laws and regulations, as applicable. Shareholders agree that the certificate or
certificates evidencing the Purchaser Common Stock will bear a legend or legends
referring to the restrictions on the transferability thereof and any other
legends required by applicable law
4.6 Covenants Regarding Purchaser Common Stock.
(a) Each Shareholder acknowledges that the Purchaser Common Stock to
be issued to such Shareholder upon consummation of the transactions herein will
not be registered under the Securities Act as of its date of issue. Each
Shareholder hereby covenants and agrees with Purchaser that such Shareholder
will not sell, assign or transfer any of the shares of Purchaser Common Stock
received by such Shareholder under the terms of this Agreement except (i)
pursuant to an effective registration statement under the Securities Act, (ii)
in conformity with the volume and other limitations of Rule 144 ("Rule 144")
promulgated pursuant to the Securities Act, or (iii) in a transaction which, in
the opinion of the general counsel of Purchaser or other counsel reasonably
satisfactory to Purchaser or as described in a "no-action" or interpretive
letter from the Staff of the SEC specifically issued with respect to a
transaction to be engaged in by the undersigned, is not required to be
registered under the Securities Act.
(b) In the event of a sale or other disposition by such Shareholder
of shares of Purchaser Common Stock pursuant to Rule 144 or other exempt
transaction, the such Shareholder will supply Purchaser with evidence of
compliance with such Rule, in a form reasonably acceptable to Purchaser,
including by the opinion of counsel or no-action letter referred to above, as
the case may be. Each Shareholder understands that Purchaser may instruct its
transfer agent to withhold the transfer of any shares of Purchaser Common Stock
disposed of by the undersigned, but that (provided such transfer is not
prohibited by any other provision of this letter agreement) upon receipt of such
evidence of compliance, Purchaser shall cause the transfer agent to effectuate
the transfer of the shares of Purchaser Common Stock sold as indicated in such
letter;
(c) Each Shareholder acknowledges and agrees that the legend set
forth below will be placed on certificates representing the Purchaser Common
Stock received by the undersigned under the terms of this Agreement, which
legend will be removed by delivery of substitute certificates upon receipt of an
opinion in form and substance reasonably satisfactory to Purchaser from counsel
reasonably satisfactory to Purchaser to the effect that such legend is no longer
required for purposes of the Securities Act:
The shares represented by this certificate were issued
in a transaction to which Rule 144 promulgated under
the Securities Act of 1933 applies. The shares have not
been acquired by the holder with a view to, or for
resale in connection with, any distribution thereof
within the meaning of the Securities Act of 1933. The
shares may not be sold, pledged or otherwise
transferred except in accordance with an exemption from
the registration requirements of the Securities Act of
1933 or pursuant to an effective registration statement
under the Securities Act of 1933.
<PAGE>
ARTICLE 5
COVENANTS OF PURCHASER
5.1 Redomestication; Registration of Purchaser Common Stock. Immediately
after the Closing, Purchaser shall commence procedures to redomesticate
Purchaser's current domicile as an Israeli corporation to a new domicile as a
Delaware, United States corporation ("Redomestication"). The target date for
completing the Redomestication shall be May 2000, however, Purchaser shall only
undertake to consummate the Redomestication as quickly as is commercially
reasonable. As part of the Redomestication, the Purchaser Common Stock issued to
Shareholders hereunder, or any shares of common stock issued in exchange for
such shares of Purchaser Common Stock issued as part of the Redomestication,
shall be registered under the Act pursuant to a registration statement on Form
S-4 to be filed with the SEC ("Registration Statement"). Purchaser shall use its
best commercial efforts to file the Registration Statement with the SEC within
thirty (30) days following the completion of the fiscal year 1999 audits of
Star+Globe and Purchaser. Purchaser shall use its best commercial efforts to
cause the Registration Statement to be effective under the Act as soon as is
reasonably practicable after filing.
5.2 Board Representation. Upon closing of the transactions contemplated to
be consummated on the Closing Date, the Purchaser will take all steps necessary
and appropriate under its Articles of Association and Memorandum of Association,
including the calling of a special meeting of the Board of Directors of the
Purchaser, to appoint Fred Snow and Virginia Cha to the Purchaser's Board of
Directors to serve in accordance with Articles of Association and Memorandum of
Association.
ARTICLE 6
CERTAIN REMEDIES AND LIMITATIONS
6.1 Survival of Representations and Warranties. The representations and
warranties made by Star+Globe, Purchaser and the Shareholders respectively
contained in Sections 2.1, 2.2, 2.8, 3.1, 3.2, 3.8, 4.1 and 4.2 shall survive
the execution and delivery of this Agreement and the Closing for a period of
ninety (90) days notwithstanding any investigation or due diligence theretofore
made by or on behalf of any party hereto; provided, however, that all such
representations and warranties shall terminate on the ninetieth (90th) day
following the Closing Date. All claims for indemnification by any party hereto
with respect to a breach of a representation or warranty must be asserted prior
to the expiration of the survival period.
6.2 Indemnification of Purchaser. Subject to the limitations of Section
6.3, Shareholders shall indemnify, defend and hold harmless the Purchaser and
its officers, directors, employees, agents and shareholders (collectively,
"Purchaser Indemnified Parties"), against and with respect to any and all
claims, costs, damages, losses, expenses, obligations, liabilities, recoveries,
suits, causes of action and deficiencies, including interest, penalties and
reasonable attorneys' fees and expenses (collectively, the "Damages") that such
indemnitees shall incur or suffer, which arise, result from or relate to any
breach of the representations and warranties set forth in Section 2.1, 2.2, 2.8,
4.1 or 4.2. Any indemnification obligation pursuant to this Section 6.2 is for
purposes of this Agreement defined as a "Purchaser Indemnified Obligation."
6.3 Limitations on Liability of Shareholders to Purchaser. The total
amount of indemnification payments that Shareholders shall be required to make
hereunder shall be limited in the aggregate to the Star+Globe Holdback Shares
which shall be the sole source of the Purchaser's indemnification and the
Shareholders' cumulative liability shall in no event exceed the Star+Globe
Holdback Shares.
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6.4 Indemnification of Shareholders. Subject to the limitations of Section
6.5, the Purchaser shall indemnify, defend and hold harmless the Shareholders
and their officers, directors, employees and agents (collectively, "Shareholder
Indemnified Parties") against and with respect to any and all Damages that such
indemnitees shall incur or suffer, which arise, result from or relate to any
breach of that such indemnitees shall incur or suffer, which arise, result from
or relate to any breach of the representations and warranties set forth in
Section 3.1, 3.2 and 3.8. Any indemnification obligation pursuant to this
Section 6.4 is for purposes of this Agreement defined as a "Shareholder
Indemnified Obligation."
6.5 Limitations on Liability of Purchaser to Shareholders. The total
amount of indemnification payments that Purchaser may be required to make
hereunder shall be limited in the aggregate to the Purchaser Reserve Shares
which shall be the sole source of the Shareholders' indemnification and
Purchaser's cumulative liability shall in no event exceed the Purchaser Reserve
Shares.
6.6 Indemnification Claims.
(a) If either a Purchaser Indemnified Party, on the one hand, or the
Shareholders' Representative on behalf of a Shareholder Indemnified Party, on
the other hand, (the "Claimants") wishes to assert an indemnification claim
hereunder (an "Indemnification Claim"), the Claimant shall deliver to the
Shareholders' Representative, if a Purchaser Indemnified Party, or to the
Purchaser, if the Claimant is the Shareholders' Representative on behalf of a
Shareholder Indemnified Party, a written notice (a "Claim Notice") setting forth
(i) the matter giving rise to the Indemnification Claim, (ii) a detailed
description of all of the facts and circumstances known to Claimant giving rise
to the Indemnification Claim, and (iii) a detailed description of, and a
reasonable estimate of the total amount of, the monetary amounts actually
incurred or expected to be incurred for which indemnification is sought.
(b) Purchaser Indemnified Parties and Shareholder Indemnified Parties
are referred to herein as "Indemnified Parties," and the persons from whom
indemnification may be sought pursuant to this Section 6.6 are referred to as
the "Indemnifying Parties." Where the Indemnified Parties or the Indemnifying
Parties are, or are related to, Star+Globe or the Shareholders, the actions
described herein shall be taken on their behalf by the Shareholders'
Representative. Within twenty (20) days after receipt of any Claim Notice, the
Indemnifying Parties will (i) acknowledge in writing their responsibility for
all or part of such matter for which indemnification is sought under this
Article 6, and will either (x) pay or otherwise satisfy the portion of such
matter as to which responsibility is acknowledged, or (y) take such other action
as is reasonably satisfactory to the Indemnified Party to provide reasonable
security or other assurances for the performance of their obligations hereunder,
and/or (ii) give written notice to the Indemnified Party of their intention to
dispute or contest all or part of such responsibility. Upon delivery of such
notice of intention to contest, the parties will negotiate in good faith to
resolve as promptly as possible any dispute as to responsibility for, or the
amount of, any such matter. The Purchaser Reserve Shares or the Star+Globe
Holdback Shares, as the case may be, shall be valued for the purpose of any
Indemnification Claim at US$0.21 per share.
6.7 Retention of Records. From and after the date of this Agreement,
Purchaser and Star+Globe shall preserve all books, records and other documents,
materials and information relevant to the representations, warranties and
covenants set forth in this Agreement until the later of two (2) years following
the Closing Date or for such longer period as the rights of the parties
hereunder may exist. At all times after the Closing Date, Purchaser and
Star+Globe shall give the
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other's representative reasonable access to such books, records and other
documents, materials and information relating to the Assets.
ARTICLE 7
MISCELLANEOUS
7.1 Materiality. For purposes of Articles 2, 3 and 4 of this Agreement, a
contract, obligation, liability, transaction, change, breach, encumbrance,
proceeding or other matter or event shall not be deemed "material" if the
monetary amount involved is less than $75,000, or, if no such matter or event
exceeds $75,000, $250,000 in the aggregate.
7.2 Notices. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) via a reputable
nationwide overnight courier service, in each case to the address set forth
below. Any such notice, instruction or communication shall be deemed to have
been delivered upon receipt.
If to Purchaser, to:
LanguageWare.net (Company) Ltd.
2864 South Circle Drive, Suite 500
Colorado Springs, CO 80906
Attention: Todd Oseth, President
Tel: (719) 955-3400
Fax: (719) 955-0282
with a copy to:
Rothgerber Johnson & Lyons LLP
1200 17th Street, Suite 3000
Denver, CO 80202
Attention: Herbert H. Davis III, Esq.
Tel: (303) 623-9000
Fax: (303) 623-9222
If to Star+Globe, to:
Virginia Cha
1 International Business Park, #09-02
Singapore 609917
Tel: (65) 665-6969
Fax: (65) 665-7912
with a copy to:
Tan Rajah & Cheah
The Straits Building, 9 Battery Road #15-00
Singapore 049910
Attention: Suresan Sachi
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Tel: (65) 532-2271
Fax: (65) 532-2475
with a copy to:
Thelen Reid & Preist LLP
101 Second Street, Suite 1800
San Francisco, CA 94105-3601
Attention: Jay Margulies, Esq./Paul Carlson, Esq.
Tel: (415) 371-1200
Fax: (415) 371-1211
or, in each case, to such other address as may be specified in writing to the
other parties.
Any party may give any notice, instruction or communication in connection
with this Agreement using any other means (including personal delivery, telecopy
or ordinary mail), but no such notice, instruction or communication shall be
deemed to have been delivered unless and until it is actually received by the
party to whom it was sent. Any party may change the address to which notices,
instructions or communications are to be delivered by giving the other parties
to this Agreement notice thereof in the manner set forth in this Section 7.2.
7.3 Assignment. This Agreement shall be binding upon Purchaser,
Star+Globe, Shareholders and their respective permitted successors and assigns.
7.4 Entire Agreement; Amendment; Governing Law; Etc. This Agreement
(together with the Disclosure Schedules) embody the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended, modified, waived, discharged or
terminated only by (and any consent hereunder shall be effective only if
contained in) an instrument in writing signed by the party against which
enforcement of such amendment, modification, waiver, discharge, termination or
consent is sought. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, United States as it applies to
contracts to be performed entirely within the State of Delaware, United States.
No representation or warranty (either express, implied or otherwise) is being
made by any party with respect to the subject matter hereof other than as
expressly set forth herein. Each party hereto consents to jurisdiction in United
States District Court, District of Delaware for any action, proceeding or claim
arising out of this Agreement.
7.5 Counterparts. This Agreement may be executed in several counterparts,
each of which is an original, but all of which shall constitute one instrument.
7.6 Third Party Rights. The parties do not intend to confer any benefit
hereunder on any person or entity other than the parties hereto, the Indemnified
Parties and their respective successors in interest.
7.7 Appendices and Schedules. Each of the Appendices and Schedules
referred to herein and attached hereto is an integral part of this Agreement and
is incorporated herein by this reference.
7.8 Pronouns. All pronouns and any variations thereof used in this
Agreement shall be deemed to refer to the masculine, feminine or neuter,
singular or plural, as appropriate.
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7.9 Authority and Execution. Each person executing this Agreement on
behalf of a party hereto represents and warrants that he is duly and validly
authorized to do so on behalf of such party, with full right and authority to
execute this Agreement and to bind such party with respect to all of its
obligations hereunder.
7.10 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction, as to such jurisdiction, shall be
ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
7.11 Public Announcement. The parties shall mutually prepare a press
release regarding this Agreement and the transactions contemplated hereby.
7.12 Interpretation. Each party acknowledges that such party, either
directly or through such party's representatives, has participated in the
drafting of this Agreement, and any applicable rule of constructions that
ambiguities are to be resolved against the drafting party should not be applied
in connection with the construction or interpretation of this Agreement.
7.13 Knowledge. For purposes of this Agreement, references to "knowledge,"
"to the knowledge of," or similar phrases shall mean the actual knowledge of the
executive officers or directors of Star+Globe or Purchaser as applicable.
7.14 Legal Fees. Purchaser and Star+Globe shall be responsible for their
own legal fees and expenses incurred in connection with this transaction and the
negotiation and documentation of this Agreement.
7.15 No Modification or Amendment. This Agreement may not be amended,
supplemented or otherwise modified except by an agreement in writing signed by
the parties.
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be
executed as of the date first above written.
PURCHASER:
LanguageWare.net (Company) Ltd.
________________________________
By: Todd Oseth, President/CEO
STAR+GLOBE:
Star+Globe Technologies Pte Ltd.
________________________________
By: Virginia Cha, CEO
SHAREHOLDERS:
Technology Fund Pte Ltd.
________________________________
By:
Technology Fund II Pte Ltd.
________________________________
By:
Seed Ventures II Ltd.
________________________________
By:
InfoTech Ventures Ltd.
________________________________
By:
Vertex Technology Fund Ltd.
<PAGE>
________________________________
By:
NIF Asian Pre-IPO Fund Ltd.
________________________________
By:
Asia Pacific Ventures II Ltd.
________________________________
By:
James L. Kelly
________________________________
By:
WIIG Global Ventures Pte Ltd
________________________________
By:
Virginia Cha
________________________________
By:
Lernout & Hauspie Investment Company, N.V.
________________________________
By:
KRDL Holdings Pte Ltd.
________________________________
By:
