Exhibit 10.1


 


	
   

  	
  *TEXT OMITTED AND FILED SEPARATELY

  
	
   

  	
  Confidential Treatment Requested

  
	
   

  	
  Under 17 C.F.R. Section 200.80(B)(4), 200.83 and

  240.24b-2

  



 


ASSET PURCHASE AGREEMENT


 


This Asset Purchase Agreement
(herein referred to as the “Agreement”),
dated the 12th day of April, 2006, is entered into by and between Unitime Systems, Inc., a Delaware
corporation (“Buyer”), and Time America, Inc., a Nevada corporation, (“Seller”).


 


RECITALS


 


Whereas, Seller desires to sell and deliver
to Buyer the Assets (as hereinafter defined) which are owned, held and used by
Seller in connection with the operation of Seller’s direct sales business (the “Business”); and


 


Whereas, Buyer desires to purchase the Assets
on the terms and subject to the conditions set forth in this Agreement.


 


Now, therefore, in consideration of the
mutual covenants set forth herein and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Seller and Buyer
hereby agree as follows:


 


1.             DEFINITIONS. For purposes of this Agreement,
including any exhibits hereto, the following terms shall have the corresponding
meanings thereto:


 


(a)           “Assets”
shall mean a copy of the Source Code, the ASP Customer Contracts, the
Maintenance Contracts, and the Direct Sales Unit Pipeline of the Business (as
such terms are hereinafter defined).


 


(b)           “ASP
Customer Contracts” shall mean the NETtime ASP customer contracts
generated through Seller’s direct sales channel and specifically identified in
the ASP Customer Contracts List attached hereto as Exhibit A.


 


(c)           “Direct
Sales Unit Pipeline” shall mean those potential customers identified
in the Direct Sales Unit Pipeline List attached hereto as Exhibit B,
which shall exclude potential customers that are in Buyer’s sales pipeline as
of the Closing.


 


(d)           “Excluded
Assets” shall mean all property of Seller other than the Assets. Buyer
agrees that Seller’s contracts with ARAMARK Corporation (“ARAMARK”) and any contracts Seller has
with ARAMARK’s clients are excluded from the Assets. Notwithstanding anything
in this Agreement to the contrary, all Excluded Assets shall be excluded from
the scope of this Agreement and shall remain the property of Seller and not
subject to the terms and conditions set forth herein.


 


(e)           “General
Intangibles” shall mean the intangible personal property of all
kinds used in connection with the operation of the Business and related to the
Assets, including without


 






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limitation (i) a
license granted by Seller to Buyer to use the trademarks, service marks, and
trade names set forth on Exhibit C attached hereto, as necessary to
conduct the Business after the Closing; (ii) the customer and transaction
databases used by Seller in connection with the operation of the Business as
more particularly set forth on Exhibit C attached hereto; (iii) the
account and customer records and other and intangible business records and
files used by Seller in or generated with respect to customers in connection
with the operation of the Business and the Assets; and (iv) the goodwill of the
Business. Buyer shall have the right, but not the obligation, to use any of
such General Intangibles in connection with Buyer’s operation of the Business
subsequent to the Closing.


 


(f)            “Intellectual Property”
shall mean the intellectual property used in connection with the operation of
the Business and related to the Assets, including without limitation all
copyrights and trade secret rights in the Source Code.


 


(g)           “Maintenance
Contracts” shall mean those hardware and software maintenance
contracts generated through Seller’s direct sales channel and identified in the
Maintenance Contracts List attached hereto as Exhibit D.


 


(h)           “Source
Code” shall mean a copy of the source code and all Intellectual
Property relating to Seller’s NETtime version 5 and version 6, HourTrack, and
GENESIS time and attendance software products, including all interfaces and
communications software used in connection with such products. Excluded from
the Source Code are Seller’s right, title and interest in and to its J2EE
version of NETtime.


 


2.             PURCHASE AND SALE;
CLOSING.


 


2.1          Purchase and Sale of
Assets. Subject to the
terms and conditions set forth herein, Seller hereby agrees to sell, transfer
and assign to Buyer, and Buyer hereby agrees to purchase from Seller, the
Assets in consideration of Buyer’s payment of the consideration set forth in
Section 2.2 hereof.


 


2.2          Purchase Consideration.


 


(a)           Source Code. Buyer will pay to Seller [*] in cash consideration
at Closing for a copy of the Source Code by wire transfer of immediately
available funds to an account or accounts designated in writing by Seller. For
a period of two years commencing after the Closing, Buyer agrees not to enter
into any agreements with a third party for the sale of Buyer’s copy of the
Source Code purchased hereunder if the express purpose of the sale is the
transfer of such Intellectual Property. In the event such a transaction occurs
during the two-year period, Buyer agrees to pay Seller an additional [*] in
consideration by wire transfer of immediately available funds to account or
accounts designated in writing by Seller within three business days following
the closing of such transaction. In the event that Buyer enters into a merger
or sale transaction involving all or substantially all of the business or
assets of Buyer during such two-year period Buyer shall not be obligated to pay
Seller the [*] payment set forth in the preceding sentence.


 


Buyer will
have the right to modify and customize the GENESIS source code as part of its
support obligations for those GENESIS customers assumed by Buyer and included
in


 






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Exhibit D.
In addition, Buyer will have the right to sell GENESIS software licences to
those customers included in Exhibit D, and their affiliated companies. Any
sales of GENESIS software licenses by Buyer to new customer prospects, except
as identified above, must have the prior written consent from Seller.


 


(b)           ASP Customer Contracts. Buyer will pay Seller consideration in
an amount equal to [*] times the annualized revenue of the ASP version 6 Customer Contracts. The annualized revenue for
each contract is included on Exhibit A attached hereto and determined
based on the March 2006 revenue for each such contract. Buyer will pay 100% of the consideration for the ASP Customer
Contracts at Closing. Buyer will have an option to purchase the Seller’s ASP
version 5 Customer Contracts over a period of 6 months from the date of closing.
Buyer will pay Seller consideration in an amount equal to [*] times the
annualized ASP version 5 contract revenues upon the successful conversion of
the version 5 customers to the version 6 ASP product and transfer to the Buyer’s
ASP infrastructure, which purchase price shall be determined by reference to
the contract revenues for the full month preceding each such transfer. Seller
agrees to cooperate in good faith with Buyer’s efforts to convert the version 5
customers in a timely manner. Seller also agrees to provide Buyer with access
to Seller’s Server Advantage Performance data files for a period of 6 months
following the close of the transaction. Such data files will be made available
on a weekly basis via a mutually acceptable data transfer methodology.


 


(c)           Maintenance Contracts. Buyer will provide Seller with a one
time payment in the amount of [*] times the annualized revenue of the
Maintenance Contracts included in Exhibit D attached hereto (“Maintenance  Contract Purchase Value”). Exhibit D shall consist of
the following categories of Maintenance Contracts.


 


(i)            Exhibit D(i) contains maintenance customers with
contract end dates after March 31, 2006. Buyer assumes maintenance
responsibility for these contracts at close and will be provided with any cash
from renewal payments from these customers.


 


If after 60 days, any of the customers on this list have not paid
Seller for an invoice prior to March 31, 2006, Seller will notify Buyer of
customer’s delinquency and such customer will be removed from Exhibit D(i)and the Q1 Earnout payment will be adjusted for their removal,
described below, accordingly.


 


(ii)           Exhibit D(ii) contains maintenance customers with
contract end dates between January 1, 2006 and March 31, 2006 that are past due
on renewal and have not been sent an invoice by Seller. Buyer does not assume
maintenance responsibility for these contracts at close. Seller will its best
efforts to obtain renewal from these customers and will receive any cash
received in the renewal. Seller will provide renewed contracts to Buyer at
which time Buyer can accept the contract as an addition to Exhibit D(i) at
which time Buyer will assume all customer maintenance obligations and pay
Seller an amount equal to [*]
times the annualized maintenance contract value, 40% of which will be paid by
the 5th of the month following the inclusion of the contract and 60%
payable upon the renewal of the maintenance contract. After 60 days, if Seller is not able to affect renewal of contracts in Exhibit
D(ii), such contracts will be assigned to Buyer with no further obligation
to Seller.


 






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Maintenance contracts that are due for renewal by January 1, 2006 but
have not been renewed as of March 31, 2006 (“Expired
Contracts”) will not be included in Exhibit D. Seller shall
use its best efforts to prepare this list and deliver it to Buyer within sixty
(60) days of the closing, with no further obligation to Seller.


 


The annualized revenue and the Maintenance Contract Purchase Value for
each Maintenance Contract are included on Exhibit D(i) attached hereto. Buyer
will pay 40% of the total consideration for the Maintenance Contracts on Exhibit
D(i) at Closing by wire transfer of immediately available funds to an
account or accounts designated in writing by Seller, with the remaining
consideration (“Earnout”) due and payable upon
the receipt by Buyer of revenues for the renewal of the Maintenance Contracts
included in Exhibit D(i).


 


Earnout Payments shall be made on a quarterly basis after Closing
within 45 days after the end of each quarter calculated as 54% of renewal
revenues received by Buyer from Maintenance Contracts during such quarter. The
Final Maintenance Contract Payment (“Final Maintenance Contract
Payment”) will cover months 10-14 of the Contract Renewal Period (“Contract Renewal Period”), and be equal to an amount such
that the total payment received by Seller over the 14-month Contract Renewal
Period will be equal to [*] times the total renewal revenues received by the
Buyer over the 14-month Contract Renewal Period from Maintenance Contracts. The
Earnout Payments shall be secured by a security interest in the Maintenance
Contracts, subordinated if required by the bank to Buyer’s bank financing.


 


Accounts that are still in the implementation and/or training phase (Exhibit
D(iii)) will not be added to the Maintenance Contracts list as included in Exhibit
D(i) until the outstanding implementations and/or trainings are completed. Upon
Seller receiving full payment from the customer, Buyer may accept these
customers to be added to the Exhibit D(i) list, at which time Buyer will
assume all customer maintenance obligations and pay Seller an amount equal to
[*] times the annualized maintenance contract value, 40% of which will be paid
by the 5th of the month following the inclusion of the contract and
60% payable upon the renewal of the maintenance contract.


 


Any cash payments received by Seller with respect to Maintenance
Contracts listed in Exhibit D(i) for maintenance commencing after April
1, 2006 that are invoiced after March 31, 2006 will be transferred to Buyer by
the end of each month.


 


(d)           Direct Sales Unit
Pipeline. Any revenues
received by Buyer from customers on Exhibit B attached hereto (including
sales of Unitime products and services) within one year after Closing shall
result in the payment by Buyer to Seller of a royalty equal to [*] on such
revenues. Such royalty payments will be made to Seller monthly within 30 days
after the end of each month for cash paid on applicable revenues received
during such month. For six months after the Closing, Seller may add additional
leads (“Subsequent Leads”) to the
Direct Sales Unit Pipeline List, and should those Subsequent Leads be accepted
by Buyer and are not already included in Buyer’s sales pipeline, Buyer agrees
to pay Seller the [*] royalty payment on any revenues generated from those
Subsequent Leads over the 12 months following their submission by Seller.


 






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2.3          Audit Rights. Solely for purposes of verifying the
amounts payable to Seller under Sections 2.2(c) and 2.2(d) above, Seller shall
have the right, during normal business hours, to audit the books and records of
Buyer relating to the Maintenance Contracts and the Direct Sales Unit Pipeline.
Such audit shall be at the sole cost and expense of Seller, shall not
unreasonably interfere with the operation of Buyer’s business, and shall be
conducted no more than once every six calendar months.


 


2.4          Liens. On or before Closing, Seller shall
satisfy in full and extinguish any liens, claims or encumbrances against the
Assets, specifically including but not limited to those resulting from Seller’s
existing financing arrangements.


 


2.5          Closing. The closing of the transactions
contemplated herein (the “Closing”)
shall occur on April 12, 2006, subject to the conditions to Closing as set
forth herein having been satisfied in full, or such other date as is mutually
agreed upon in writing between Buyer and Seller, at the offices of the Buyer’s
counsel or at such other location, date and time as may be agreed upon between
Buyer and the Seller (such date and time being called the “Closing Date”). The parties hereby agree
that the Closing shall be deemed effective March 31, 2006.


 


2.6          Seller’s Deliveries at
Closing. At Closing,
Seller shall deliver to Buyer the following:


 


(a)           A complete copy of the Source Code.


 


(b)           An assignment of all the other Assets to
Buyer.


 


(c)           Releases of all liens or encumbrances on
the Assets.


 


(d)           Such other documents, instruments and
certificates as Buyer shall reasonably request.


 


2.7          Buyer’s Deliveries at
Closing. At Closing,
Buyer shall deliver to Seller the Purchase Consideration and such other
documents, instruments and certificates, including without limitation,
Secretary’s Certificates and Incumbency Certificates, as Seller shall
reasonably request.


 


3.             CONDITIONS TO THE
OBLIGATIONS OF THE BUYER.
The obligation of Buyer to consummate the transactions contemplated in this
Agreement is subject to the satisfaction (or waiver by Buyer) of the following
conditions precedent to be satisfied prior to or at the time of the Closing:


 


3.1          No Default. The Seller shall not be in material
default under this Agreement, and there shall not exist any event or
circumstance which, with notice or lapse of time or both, would constitute such
a default.


 


3.2          Representations and
Warranties. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct on the date such representations and warranties were
made, and shall continue to be true and correct in all material respects at the
time of the Closing.


 






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3.3          Due Diligence. Buyer’s determination and satisfaction,
in its sole discretion, with the results of a due diligence investigation of
the Assets and Business, including without limitation, any and all records
related to the Assets. In particular, and not by way of limitation, Buyer must
be satisfied that it will be able to retain key Seller personnel necessary for
continuation of the Business after the Closing.


 


3.4          Seller’s Authority. Seller shall have adopted resolutions
authorizing Seller’s execution and delivery of this Agreement and the
consummation of the transactions contemplated herein and therein.


 


3.5          Seller’s Performance. The Seller shall have performed all
its pre-Closing covenants and agreements required to be performed by it as set
forth herein prior to Closing.


 


3.6          Sublease. Buyer and Seller shall have entered
into a mutually acceptable sublease of a portion of Seller’s premises for
operation of the Business after Closing.


 


3.7          Customer Consents. Seller agrees to provide all necessary
customer consents to the transfer of the ASP Customer Contracts and the
Maintenance Contracts prior to Closing.


 


4.             CONDITIONS TO THE
OBLIGATIONS OF SELLER. The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction (or waiver by Seller) of the following
conditions precedent to be satisfied prior to or at the time of the Closing:


 


4.1          No Default. Buyer shall not be in material default
under this Agreement, and there shall not exist any event or circumstance
which, with notice or lapse of time or both, would constitute such a default.


 


4.2          Representation of Buyer. The representations and warranties of
Buyer contained in this Agreement shall have been true and correct on the date
such representations and warranties were made, and shall continue to be true
and correct in all material respects at the time of the Closing.


 


4.3          Buyer’s Authority. Buyer’s Board of Directors shall have
adopted resolutions authorizing Buyer’s execution and delivery of this
Agreement and the consummation of the transactions contemplated herein and
therein.


 


4.4          Buyer’s Performance. Buyer shall have performed all its
pre-Closing covenants and agreements required to be performed by it as set
forth herein prior to Closing.


 


5.             PRE-CLOSING COVENANTS
OF SELLER. Prior to the
Closing, except as otherwise directed by Buyer in writing, Seller shall:


 


(a)           Continue to operate the Business in the
ordinary and usual course of business and use its best efforts to keep in full
force and effect all material rights and preserve the current business
relationships relating or pertaining to the Business; provided, however, that
Seller shall not enter into any new agreements, contracts or other
arrangements, or otherwise amend, modify or terminate any existing agreements,
contracts or other arrangements, with any suppliers or


 






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customers of the
Business without Buyer’s prior written consent, which consent shall not be
unreasonably conditioned, withheld or delayed.


 


(b)           Seller shall pay all salaries, wages,
payroll taxes, benefits, vacation pay, all other fringe benefit costs, and all
other costs of every nature whatsoever due or accrued at or prior to Closing to
or for the benefit of its employees, contractors and agents listed on Schedule
5(b), and Seller hereby acknowledges and agrees that Buyer shall assume no
responsibility for any of the foregoing. Effective as of the Closing Date,
Seller shall terminate the employment of the employees listed on Schedule
5(b), and any existing relationships with contractors and agents relating
specifically to the Business and will cooperate and use commercially reasonable
efforts to assist Buyer in consummating an employment or independent contractor
relationship with such individuals as Buyer and Seller may mutually agree.


 


(c)           Seller shall pay each and every one of
its accounts payable and other liabilities relating to the Business in the
ordinary course of business consistent with past practice.


 


(d)           Seller shall promptly file all tax
returns and pay all federal, state and local tax assessments and governmental
charges that are or may be lawfully levied or assessed against Seller, the
Business or the Assets that are due on or prior to the Closing Date, including
without limitation, ad valorem, sales, use, excise, franchise, income and
personal property taxes.


 


(e)           Seller shall maintain the Assets in
customary repair, order and condition, ordinary wear and tear excepted,
maintain all existing insurance coverages applicable to the Assets through the
Closing Date, and, in the event of a casualty, loss or damage to any of the
Assets prior to the Closing Date, either repair or replace the same or, if
applicable, at Buyer’s option, transfer the proceeds of any insurance coverage
payable in connection with such casualty, loss or damage to Buyer as of the
Closing. Seller shall be responsible for all risk of loss prior to the Closing
Date.


 


(f)            Seller shall maintain the books,
accounts and records relating to the Business through the Closing Date in
substantially the same manner as and on a basis consistent with the manner in
which such figures have been maintained prior to the date hereof.


 


(g)           Seller shall duly comply in all material
respects with all applicable laws, regulations and rules applicable to it and
the Business.


 


(h)           Seller shall promptly deliver to Buyer
written notice in the event any of the information set forth in the Schedules
or Exhibits attached hereto shall no longer be true and correct.


 


(i)            Unless and until this Agreement is
terminated by either party in accordance with the terms and conditions set
forth in Section 10 below, Seller shall not (and shall instruct its officers,
agents, representatives and affiliates not to) take or cause, directly or
indirectly, any of the following actions with any person other than Buyer and
its designees or agents: (i) solicit, encourage, initiate or participate in any
negotiations, inquiries or discussions with respect to any offer or proposal to
acquire all or any substantial part of the Assets or the Business (“Acquisition  Transaction”); (ii) disclose any information not customarily
disclosed to any person concerning the Assets or the Business, except in the
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and as may be required
in connection with any official governmental request for information; (iii)
enter into or execute any agreement relating to an Acquisition Transaction, or
other agreement calling for the sale, directly or indirectly, of all or any
significant part of the Assets or the Business; or (iv) make or authorize any
public statement, recommendation or solicitation with respect to any
Acquisition Transaction other than with respect to the transactions
contemplated hereby.


 


6.             MUTUAL REPRESENTATIONS
AND WARRANTIES OF THE PARTIES. Seller and Buyer each hereby represent and warrant to the other that:


 


6.1          Organization and
Authority. The party
making such representation and warranty is duly organized and existing and in
good standing under the laws of the jurisdiction of its incorporation, and has
the power and authority to enter into and perform its obligations under this
Agreement and the documents related hereto (collectively, the “Transaction Documents”).


 


6.2          Enforceable Obligations. The person executing and delivering
the Transaction Documents on behalf of such party is duly authorized to make
such execution and delivery and, upon the execution and delivery hereof, the
Transaction Documents will constitute valid obligations binding upon and
enforceable against the party so representing and warranting in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws now or hereafter in
effect, and as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).


 


6.3          No Conflicts. Neither the execution and delivery of
the Transaction Documents nor the due performance of the obligations set forth
therein will result in any breach of or constitute any default under the
organizational documents of the party making such representation or warranty,
or under any agreement to which such party is bound or by which any interest of
such party is affected or will violate any statute, law, regulation, or
judicial order or decree binding on or applicable to such party.


 


6.4          No Litigation. There are no suits or proceedings
pending or, to the knowledge of the party making such representation and
warranty, threatened in any court or before any regulatory commission, board or
other administrative agency against or affecting such party which, if adversely
determined, would have a material adverse effect on the ability of such party
to fulfill its obligations hereunder.


 


7.             REPRESENTATIONS AND
WARRANTIES OF SELLER. Seller
hereby represents and warrants to Buyer as of the date hereof and again as of
the Closing Date:


 






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7.1          Absence of Certain
Changes. Since January
1, 2006, Seller, the Business and the Assets have not:


 


(a)           incurred any obligations or liabilities
except current liabilities related to the Business in the ordinary course of
business and consistent with past practice, none of which obligations or
liabilities are being assumed by Buyer;


 


(b)           cancelled or waived any claim of right
of substantial value or sold, assigned, transferred or encumbered any of its
properties or assets, except for fair consideration and in the ordinary course
of business and consistent with past practice;


 


(c)           granted any increase in compensation,
rate of compensation or commission payable or to become payable, or made any
loan, advance or other extension of credit to any employees, contractors or
agents of the Business;


 


(d)           materially changed any methods of
operations or practices of the Business;


 


(e)           suffered any material damage,
destruction or loss (whether or not covered by insurance) materially and
adversely affecting the Assets or the operations of the Business;


 


(f)            lost any material or key employees of
the Business;


 


(g)           agreed either in writing or otherwise to
any material amendment, modification or termination of any contracts with
customers, service providers or other third parties relating to the Business;


 


(h)           been advised of the termination of its
relationship with any material customer listed on the ASP Customer Contract
List or the Maintenance Contract List;


 


(i)            changed in any material respect the
business policies or practices of Seller or failed to operate the Business in
good faith and in the ordinary course.


 


7.2          Title to Assets. Seller owns good and marketable title,
free and clear of all liens and encumbrances, to all of the Assets (including
the Intellectual Property, except for liens for taxes for the current year
which are not yet due and payable). The Assets constitute all of the material
assets used by Seller in the Business.


 


7.3          Taxes. All taxes, duties and assessments
payable or incurred by Seller prior to the Closing Date which might result in a
lien or encumbrance upon any of the Assets have been timely paid by Seller; all
state and local tax returns and tax reports required to be filed as of the
Closing by or with respect to Seller and relating to the Assets have been duly
filed.


 


7.4          Employee Matters. All of Seller’s employees that will be
employed by Buyer subsequent to the Closing are subject to “at will” employment
relationships, and there are no continuing contracts or employment with any
employees of Seller. Seller has complied with all applicable laws relative to
employee benefits, including COBRA and ERISA, and there are no unfunded
liabilities relating to any pension or welfare benefit plan for which Seller
could be liable. There is no existing dispute or controversy between Seller and
any Employee that would


 






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be affected by the sale
and purchase of the Assets. Seller does not maintain or contribute to and has
never maintained or contributed to, any employee benefit plan (as defined in
ERISA) that is either an employee pension benefit plan (as defined in ERISA) or
an employee welfare benefit plan (as defined in ERISA).


 


7.5          Intellectual Property. Seller has solely developed the
Intellectual Property or has contracted for the development of the same on a “work
for hire” basis such that no third parties have any valid claims to any right,
title or interest in or to any of the Intellectual Property. The software
comprising the Intellectual Property performs in accordance with its
specifications and is free from any material bugs, errors and defects. To our
knowledge, Seller has taken all necessary and desirable action to obtain,
perfect and maintain Seller’s right, title and interest in and to the
Intellectual Property. Seller has not interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of any
third parties. In particular, and not by way of limitation, the Source Code
does not infringe any intellectual property rights of any third parties. Seller
has not received any notice, complaint, demand, claims or charges in connection
with any such interference, infringement, misappropriation or other violation
of the intellectual property rights of a third party. No third parties have
interfered with, infringed upon, misappropriated or otherwise come into
conflict with Seller’s rights, title and interest in and to the Intellectual
Property. Seller is not a party to any licenses, sublicenses or other
agreements related to or used in connection with the Intellectual Property,
other than such customer licenses as are being transferred to Buyer.


 


7.6          Licenses; Permits. Seller has all necessary licenses,
permits and authorizations for the conduct of the Business and Seller is not
aware of any circumstances that indicate that any of such licenses, permits or
authorizations are likely to be revoked or not renewed in the ordinary course.


 


7.7          Litigation. There are no actions, suits,
proceedings, orders or investigations pending or, to Seller’s knowledge,
threatened, against or affecting Seller relating to the Assets.


 


7.8          Brokerage. There are no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Seller.


 


7.9          Absence of Undisclosed
Liabilities. As of the
Closing, Seller will not have any obligations or liabilities arising out of
transactions entered into at or prior to the Closing, which will adversely
affect Buyer’s ownership and use of the Assets.


 


7.10        Compliance with Laws. To Seller’s knowledge, Seller is not
in violation of any applicable law, rule, regulation, order or restriction of
any domestic or foreign government or any instrumentality or agency thereof
applicable to the operation of the Business or the ownership of the Assets
which violation would have a material adverse affect on the Buyer’s operation
of the Business or ownership or use of the Assets. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection
with the execution and delivery of the Transaction Documents.


 






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7.11        Contracts. Except as set forth on Schedule
7.11, Seller has fully performed all of its obligations relating to the ASP
Customer Contracts and the Maintenance Contracts, and is not in default under
any of such contracts. All such contracts are in full force and effect and are
accurately described on the exhibits to this Agreement, and Seller has
delivered true and correct copies of all such contracts and all invoice
documentation to Buyer.


 


8.             POST-CLOSING COVENANTS.


 


8.1          Contracts. Buyer shall assume and duly perform
Seller’s post-Closing performance obligations with respect to all the ASP
Customer Contracts and the Maintenance Contracts; provided, however, that Buyer
shall not assume or agree to pay, discharge, or perform any liabilities or
obligations arising out of any breach by Seller of any such contract arising
prior to the Closing.


 


8.2          Source Code Maintenance
and Upgrades. Seller
agrees to supply Buyer, without additional consideration, with all NETtime,
HourTrack, and GENESIS product upgrades, patches, bug fixes and other product
changes developed by Seller for the NETtime and HourTrack products in Seller’s
ordinary course of business for a period of one year after Closing. In
particular, and not by way of limitation, Seller shall provide Buyer with the
then-current version of the source code of such products on a monthly basis
during such one year period, and will also allow Buyer access to the Seller’s
Gemini system for tracking and monitoring software development and upgrades. After
one year, Buyer will have the option of subscribing to future NETtime and
HourTrack product upgrades and enhancements for an annualized cost of $80,000
per year. Notwithstanding the foregoing, if Seller elects at any time after the
initial one-year period to terminate the development of such product upgrades
and enhancements, Seller shall have no further obligation to Buyer with respect
to the same. Such payments will be made on a quarterly basis and Buyer will
provide Seller with 60 days notice if Buyer does not intend to continue to
subscribe to the upgrade services. The Software delivered by Seller pursuant to
this section will perform in accordance with its specifications and be free
from all material bugs, errors, and defects.


 


8.3          Software License. Seller hereby grants to Buyer,
effective as of the Closing, a nonexclusive, fully paid up perpetual license to
use, modify, incorporate in other products, and distribute the NETtime,
HourTrack, and GENESIS products, subject only to the restrictions set forth in
this Agreement.


 


8.4          Nonsolicitation. Seller will be prohibited from
soliciting or providing further products or services for customers on the ASP
Contracts Lists or the Maintenance Contracts List for a period of two years
after Closing, without the prior written consent of Buyer. Buyer shall refrain
from soliciting or providing products and services to ARAMARK or its clients
for a period of two years after Closing, without the prior written consent of
Seller. In the event of breach or threatened breach of this Section 8.4, the
nondefaulting party shall be entitled to specific performance and/or injunctive
relief against the defaulting party, in addition to any other remedies
available at law or in equity.


 


8.5          Obligations. Buyer is specifically not assuming any
obligations of Seller, including those obligations of the Business arising
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responsible for and
shall satisfy all such obligations, and shall hold Buyer, Buyer’s consultant,
Hereford Capital Advisors, and employees harmless from any loss, liability or
claim, including reasonable attorney’s fees and costs incurred by Buyer in
connection with any such claim, relating to any obligations of the Business
prior to the Closing. Buyer shall be fully responsible for and shall satisfy
all obligations of the Business arising after the Closing, and shall hold
Seller and Seller’s employees harmless from any loss, liability or claim,
including reasonable attorney’s fees and costs incurred by Seller in connection
with any such claim, relating to any obligations of the Business after the
Closing.


 


9.             DEFAULT; REMEDIES.


 


9.1          Events of Default. For purposes of this Agreement, the
term “Default” shall include any
of the following:


 


(a)           In the event that any party shall have
failed to perform or observe any other obligation, covenant or agreement set
forth in the Transaction Documents and such failure continues for a period of
ten (10) days after the date of written notice thereof from the other party;


 


(b)           If any representation or warranty made
herein or in any report, certificate, opinion, financial statement or other
document or statement delivered pursuant to the Transaction Documents, shall
prove to have been false or misleading in any material respect as of the date
on which the same was made;


 


(c)           In the event either party shall be in
default under any other agreement between Seller and Buyer and such default has
not been cured within any applicable cure period related thereto;


 


(d)           A material adverse change in the
financial condition of Seller or the Business has occurred which, in Buyer’s
reasonable judgment, will have an adverse effect on Seller’s ability to perform
its obligations as set forth in the Transaction Documents.


 


9.2          Remedies. If any Default shall occur and be
continuing, the non-defaulting party may, at its option, (a) terminate this
Agreement and any other agreement between Seller and Buyer; (b) enforce
specific performance of any of the Transaction Documents; (c) exercise anyone
or more of the rights and remedies granted to the non-defaulting party by law,
in equity or under this Agreement; and (d) collect from the defaulting party
all reasonable expenses, including legal fees and recordation fees, incurred by
the non-defaulting party in connection with its enforcement of any of its
rights and remedies set forth herein. All rights and remedies of the
non-defaulting party hereunder shall be cumulative and non-exclusive of any
rights or remedies which the non-defaulting party may have under any other
agreement, by operation of law, or otherwise. No failure to exercise and no
delay in exercising, on the part of the non-defaulting party, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.


 


10.          TERMINATION. This Agreement may be terminated at
any time prior to the Closing:


 






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(a)           By the mutual written consent of Seller
and Buyer;


 


(b)           By Buyer in accordance with the terms and
conditions set forth in Section 3 above;


 


(c)           By Seller in accordance with the terms
and conditions set forth in Section 4 above


 


(d)           By either Seller or Buyer upon the
occurrence of a Default as more particularly set forth in Section 9.1 above on
the part of the other party.


 


11.          INDEMNIFICATION.


 


11.1        Survival of
Representations, and Covenant. All of Seller’s representations, and covenants contained herein and
in any documents delivered pursuant to this Agreement and the Transaction
Documents shall survive the Closing for a period of one (1) year.


 


11.2        Indemnification by
Seller. Seller agrees
to indemnify and hold harmless Buyer, its employees, officers, directors,
shareholders, managers, advisors and partners from and against any loss,
liability, damage or expense (including reasonable legal fees and out-of-pocket
costs) that Buyer may suffer, sustain, or become subject to as a result of or
in connection with (a) the breach by Seller of any representation, covenant or
agreement set forth in the Transaction Documents; (b) any claim brought against
Buyer arising from or related to operation of the Business by Seller which
accrued on or prior to the Closing Date; (c) the ownership, maintenance or
operation of the Assets on or prior to the Closing Date; and (d) any payroll,
withholding and other employment tax liabilities and other liabilities related
to employee benefits related to or arising from the Business of the Seller
prior to the Closing Date. The indemnification granted by Seller to Buyer
hereunder shall apply to any claim by Buyer against Seller under this
Agreement, whether such claim is styled as one in contract or tort, in law or
in equity.


 


11.3        Indemnification by
Buyer. Buyer agrees to
indemnify and hold harmless Seller from and against any loss, liability, damage
or expense (including reasonable legal fees and out-of-pocket costs) that
Seller may suffer, sustain or become subject to as a result of or in connection
with (a) the breach by Buyer of any representation, warranty, covenant or agreement
of Buyer set forth in the Transaction Documents; (b) any claim brought against
Seller arising from or related to Buyer’s operation of the Business after the
Closing Date; and (c) the ownership, maintenance or operation of the Assets
after the Closing Date. The indemnification granted by Buyer to Seller
hereunder shall apply to any claim by Seller against Buyer under this
Agreement, whether such claim is styled as one in contract or tort, in law or
in equity.


 


11.4        Defense; Settlement. The indemnified party shall deliver to
the indemnifying party prompt notice of any claims of third parties that
require indemnification hereunder. The indemnifying party shall have the right
to assume the good faith defense, compromise or settlement of any such claim
(without prejudice to the right of the indemnified party to participate in such
defense) at its own expense through attorneys reasonably acceptable to the
indemnified party, but may not, without the prior written consent of the
indemnified party, agree or consent to (a) any injunctive relief or
restrictions affecting the indemnified party; or (b) any settlement that would
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indemnifying party does
not elect to defend such claim or suit within ten days after having received
notice thereof or fails to prosecute its defense diligently, the indemnified
party may in its sole discretion defend against such claim or suit at the
indemnifying party’s expense. The indemnified party may thereafter elect to
settle such claim or suit or otherwise enter into a compromise with the
claimant.


 


12.          MISCELLANEOUS.


 


12.1        Confidentiality. (a) The parties hereby agree that for
the purposes of the Transaction Documents, “Confidential
Information” shall mean and include all information provided by one
party (the “Disclosing Party”) to
the other (the “Receiving Party”),
whether in writing or otherwise embodied in a tangible medium of expression,
including any electronic, optical, or digitally-stored information, and deemed
proprietary or confidential by the Disclosing Party. Any Confidential
Information delivered pursuant to this Agreement is provided solely to assist
the Receiving Party in evaluating whether to consummate the transactions
contemplated in the Transaction Documents, in evaluating whether the conditions
precedent set forth herein have been satisfied and in the performance of its
obligations hereunder or thereunder, as applicable; and such Confidential
Information shall not be used for any other purpose. Each party shall maintain
all Confidential Information with at least the same degree of care that it uses
to protect its own confidential information, provided that in no event shall it
use less than reasonable care.


 


(b)           The parties to this Agreement agree that
the specific terms of the Transaction Documents constitute Confidential
Information and shall be held confidential in accordance with the terms of
Section 12.1, except that either party may disclose the existence of the
Transaction Documents and the general nature of the transactions contemplated
herein and make such other disclosures as is required by law.


 


(c)           Notwithstanding the foregoing, this
Agreement shall not be interpreted to prevent the use or disclosure of
Confidential Information that (i) is required to be disclosed pursuant to a
court order, a valid administrative agency subpoena, or a lawful request for
information by an administrative agency so long as the Receiving Party shall
(to the extent lawful) give the Disclosing Party prompt notice of any such
court order, subpoena, or request for information; (ii) becomes a part of the
public domain other than by a breach of an obligation of confidentiality; (iii)
is rightfully received from a third party not obligated to hold such
Confidential Information confidential; (iv) is disclosed to the Receiving Party’s
legal counsel or financial advisors; or (v) is disclosed by Buyer to any third
party in connection with any prospective financing of its acquisition of the
Assets, provided such parties are informed of the confidentiality obligations
under this Agreement and agree to be bound by the same.


 


12.2        Further Assurances. The parties agree to perform acts and
to execute and deliver any further documents as may be reasonably necessary to
carry out the intent and provisions of this Agreement.


 


12.3        Successors and Assigns. This Agreement and all of the
provisions hereof will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by either party without the prior written consent of the other party.


 






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12.4        Notices. All notices to be delivered in
connection with this Agreement shall be in writing and shall be deemed to have
been given when personally delivered, sent by overnight delivery service,
mailed by first class mail, return receipt requested, or delivered by
facsimile, when transmitted and the appropriate confirmation of delivery is
received. Notices, demands and communications shall, unless another address is
specified in writing, be sent to the addresses for the parties as set forth
above.


 


12.5        Entire Agreement;
Severability; Amendments.
This Agreement, including the Transaction Documents, constitutes the entire
understanding or agreement between the parties, and there is no understanding
or agreement, oral or written, which is not set forth herein or therein. In the
event any provision of the Transaction Documents shall be prohibited or
unenforceable in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law, or if for any
reason it is not deemed so modified, it shall be ineffective only to the extent
of such prohibition or unenforceability without affecting the remaining
provisions hereof, and any such prohibition or unenforceability shall not
invalidate or render unenforceable such provision in any other jurisdiction.
This Agreement may not be amended, modified, or changed, nor shall any waiver
of any provision of this Agreement be effective, except by written instrument
signed by the party against whom enforcement of such amendment, modification,
or waiver is sought.


 


12.6        Governing Law; Venue;
Jurisdiction. The
validity and interpretation of this Agreement shall be governed by the laws of
the State of Colorado. The parties agree that any action or proceeding
commenced under or with respect to this Agreement shall be brought only in the
county or district courts of Boulder County, Colorado, and the parties
irrevocably consent to the jurisdiction of such courts and waive any right to
alter or change venue, including by removal.


 


12.7        Legal Expenses. Each party shall be responsible for
its own costs and expenses (including legal fees) in connection with the
negotiation, preparation and execution of this Agreement. In the event either
party institutes any legal action to enforce or construe any provision of this
Agreement (including in any arbitration or mediation), the non-prevailing party
shall pay to the prevailing party the reasonable costs and expenses (including
legal fees) incurred by such prevailing party in connection therewith.


 


12.8        Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.


 


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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.


 


	
  Buyer:

  	
  Seller:

  
	
  UNITIME SYSTEMS, INC.

  	
  TIME AMERICA, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										



 






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EXHIBIT A


 


ASP ASSUMED CONTRACTS LIST


 






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EXHIBIT B


 


DIRECT SALES UNIT PIPELINE LIST


 






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EXHIBIT C


 


GENERAL INTANGIBLES


 






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EXHIBIT D


 


MAINTENANCE CONTRACTS LIST


 






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SCHEDULE 5(b)


 


EMPLOYEES


 






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SCHEDULE 7.11


 


CONTRACTS


 






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