10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

Commission File No. 1-9158

MAI SYSTEMS CORPORATION

(Exact name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 22-2554549
(I.R.S. Employer
Identification No.)

9601 Jeronimo Road
Irvine, California
92618
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (949) 598-6000

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.
Yes      No  
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes      No  
As of August 14, 2002, 14,568,585 shares of the registrant’s Common Stock, $0.01 par value, were outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
	Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Notes to Condensed Consolidated Financial Statements
	Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
	Item 3. Quantitative And Qualitative Disclosures About Market Risk
PART II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Exhibit Index
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 10.6
EXHIBIT 10.7
EXHIBIT 10.8
EXHIBIT 99.1
EXHIBIT 99.2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MAI SYSTEMS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

			(in thousands, except share data)
			As of December			As of June
			31, 2001			30, 2002
ASSETS
Current assets:
Cash			$	1,224		$	1,238
Receivables, less allowance for doubtful accounts of $1,023 in 2001 and $553 in 2002				2,396			2,410
Inventories				90			99
Note receivable				500			750
Prepaids and other assets				918			978
Current assets held for sale				204			435
		Total current assets		5,332			5,910
Furniture, fixtures and equipment, net				1,221			1,043
Notes receivable				250			—
Intangibles, net				799			1,300
Assets held for sale				613			581
Other assets				73			207
		Total assets	$	8,288		$	9,041
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
	Current portion of long-term debt		$	112		$	5,774
	Line of credit			—			2,039
	Accounts payable			1,903			1,507
	Customer deposits			1,164			964
	Accrued liabilities			2,402			2,340
	Income taxes payable			235			140
	Unearned revenue			1,743			3,027
	Current liabilities held for sale			1,560			1,421
		Total current liabilities		9,119			17,212
Line of credit				2,424			—
Long-term debt				8,542			2,904
Other liabilities				1,195			1,258
		Total liabilities		21,280			21,374
Stockholders’ deficiency:
	Preferred Stock, par value $0.01 per share; 1,000,000 shares authorized, none issued and outstanding			—			—
	Common Stock, par value $0.01 per share; authorized 24,000,000 shares; 13,656,085 and 14,368,585 shares issued and outstanding at December 31, 2001 and June 30, 2002, respectively			140			147
	Additional paid-in capital			218,022			218,200
	Accumulated other comprehensive loss			(361	)		(451	)
	Unearned compensation			—			(109	)
	Accumulated deficit			(230,793	)		(230,120	)
		Total stockholders’ deficiency		(12,992	)		(12,333	)
Commitments and contingencies
Total liabilities and stockholders’ deficiency			$	8,288		$	9,041

The accompanying notes are an integral part of these condensed consolidated financial statements.

-2-

MAI SYSTEMS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

					(Unaudited)						(Unaudited)
					For the Three Months Ended June 30,						For the Six Months Ended June 30,
					(in thousands, except per share data)						(in thousands, except per share data)
					2001			2002			2001			2002
Revenue:
		Software			$	1,519		$	1,124		$	3,211		$	2,391
		Network and computer equipment				221			134			444			404
		Services				4,532			4,230			9,115			8,425
				Total revenue		6,272			5,488			12,770			11,220
Direct costs:
		Software				142			192			205			349
		Network and computer equipment				84			90			288			292
		Services				1,690			1,499			3,591			3,119
				Total direct costs		1,916			1,781			4,084			3,760
				Gross profit		4,356			3,707			8,686			7,460
Selling, general and administrative expenses						1,834			2,336			3,916			4,409
Research and development costs						1,100			656			2,175			1,664
Amortization of intangibles						183			45			367			109
Other operating (income) loss						8			6			(1,349	)		5
				Operating income		1,231			664			3,577			1,273
Interest income						2			1			49			3
Interest expense						(408	)		(388	)		(863	)		(775	)
Income from continuing operations before income taxes						825			277			2,763			501
Income taxes						(2	)		(5	)		(79	)		(8	)
Income from continuing operations						823			272			2,684			493
Income (loss) from discontinued operations						(530	)		74			(996	)		180
				Net income	$	293		$	346		$	1,688		$	673
Income (loss) per share:
	Continuing Operations:
			Basic income per share		$	0.06		$	0.02		$	0.21		$	0.04
			Diluted income per share		$	0.06		$	0.02		$	0.21		$	0.04
	Discontinued Operations:
			Basic income (loss) per share		$	(0.04	)	$	0.00		$	(0.08	)	$	0.01
			Diluted income (loss) per share		$	(0.04	)	$	0.00		$	(0.08	)	$	0.01
	Net income per share:
			Basic income per share		$	0.02		$	0.02		$	0.13		$	0.05
			Diluted income per share		$	0.02		$	0.02		$	0.13		$	0.05
		Weighted average common shares used in determining income (loss) per share:
Basic						13,679			14,302			12,537			13,979
Diluted						13,847			14,361			12,705			13,999

The accompanying notes are an integral part of these condensed consolidated financial statements.

-3-

MAI Systems Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		For the Six Months Ended
		June 30,
		(in thousands)
		2001			2002
Net cash provided by operating activities		$	487		$	1,229
Cash flows used in investing activities -
	Capital expenditures		(40	)		(117	)
	Software development costs		—			(359	)
Net cash used in investing activities			(40	)		(476	)
Cash flows from financing activities:
	Net increase (decrease) in line of credit		19			(385	)
	Repayments of long-term debt		(159	)		(75	)
	Repayments of bridge loan		(220	)		—
Net cash used in financing activities			(360	)		(460	)
Net cash provided by continuing operations			87			293
Net cash used in discontinued operations			(432	)		(264	)
Effect of exchange rate changes on cash			12			(15	)
Net change in cash			(333	)		14
Cash at beginning of period			1,019			1,224
Cash at end of period		$	686		$	1,238

Supplemental disclosure of non-cash investing and financing activities (see notes 4 and 8)

The accompanying notes are an integral part of these condensed consolidated financial statements.

-4-

MAI Systems Corporation

Notes to Condensed Consolidated Financial Statements

Six Months ended June, 2002

(Unaudited)

1.	Basis of Presentation
	Companies for which this report is filed are MAI Systems Corporation and its wholly-owned subsidiaries (the “Company”). The information contained herein is unaudited, but gives effect to all adjustments (which are normal recurring accruals) necessary, in the opinion of Company management, to present fairly the condensed consolidated financial statements for the interim period. All significant intercompany transactions and accounts have been eliminated in consolidation.
	Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and these financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, which is on file with the SEC.
2.	Inventories
	Inventories are summarized as follows:

	(dollars in thousands)
	December 31,		June 30,
	2001		2002
Finished goods	$	75	$	83
Replacement parts		15		16
	$	90	$	99

3.	Plan of Reorganization
	In 1993, the Company emerged from a voluntary proceeding under the bankruptcy protection laws. Notwithstanding the confirmation and effectiveness of its Plan of Reorganization (the “Plan”), the Bankruptcy Court continues to have jurisdiction to resolve disputed pre-petition claims against the Company to resolve matters related to the assumptions, assignment or rejection of executory contracts pursuant to the Plan and to resolve other matters that may arise in connection with the implementation of the Plan.
	Shares of common stock may be distributed by the Company to its former creditors. As of June 30, 2002, 6,758,251 shares of Common Stock had been issued pursuant to the Plan and were outstanding.
4.	Business Acquisitions
	HOTEL INFORMATION SYSTEMS, INC. (“HIS”): During 1996, the Company entered into arbitration proceedings regarding the purchase price of HIS. The Company placed approximately 1,100,000 shares of Common Stock issued in connection with the acquisition of HIS in an escrow account to be released in whole, or in part, upon final resolution of post closing adjustments.
	In November 1997, the purchase price for the acquisition of HIS was reduced by $931,000 pursuant to arbitration proceedings. As a result, goodwill was reduced by $931,000 and approximately 100,650 shares will be released from the escrow account and returned to the Company. In addition, further claims by the Company against HIS relating to legal costs and certain disbursements currently estimated at $650,000 are presently pending. Resolution of such claims may result in release of additional escrow shares to the Company. Upon settlement, the Company may, as needed, pursuant to the asset purchase agreement and related documents, issue additional shares of Common Stock in order that the recipients

-5-

	ultimately receive shares worth a fair value of $9.25 per share. This adjustment applies to a maximum of 73,466 shares of Common Stock. As of June 30, 2002, the fair market value of the Company’s common stock was $0.33 per share, which would result in approximately 2,495,451 additional shares being issued. Also, included in the escrow account at June 30, 2002 is 200,000 shares of Common Stock which do not have a guarantee of value. The amount and number of shares will be determined based on the final resolution of such claims. Accordingly, as of June 30, 2002, the final purchase price has not been determined.
	HOSPITALITY SERVICES & SOLUTIONS (“HSS”): On June 23, 2002, the Company acquired substantially all of the assets and assumed certain liabilities of Hospitality Services & Solutions pursuant to a stock purchase agreement for 100,000 shares of common stock valued at $32,000, and $75,000 in cash. Additionally, the shareholders of HSS received a 20% minority interest in the Company’s combined operations in Asia. The net assets acquired from HSS are used in the business of software design, engineering and service relating to hotel information systems. The net assets also include subsidiaries of HSS in Malaysia, Singapore and Thailand.
5.	Business Divestitures
	On June 19, 1999, the Company sold GSI for an amount in excess of the book value of net assets sold. Assets sold of approximately $3,749,000 consisted of accounts receivable of $1,514,000, inventories of $364,000, furniture, fixtures and equipment of $218,000, intangible assets of $1,573,000 and prepaid expenses of $80,000. Liabilities assumed by the buyer consisted of accounts payable and accrued liabilities of $197,000, deposits of $100,000, unearned revenue of $351,000 and long-term debt of $446,000. The Company received three promissory notes totaling $4,925,000 with face values of $1,100,000, $1,500,000 and $2,325,000, respectively. Interest was paid monthly at the rate of 10% per annum on both the $1,100,000 and $1,500,000 notes, with the principal due and payable on June 19, 2001 and June 19, 2003, respectively. The $1,100,000 promissory note was guaranteed by a third party. Principal payments and interest, at prime plus 1%, was to commence for the $2,325,000 promissory note on October 1, 2002 in 48 monthly installments of approximately $48,000 of principal, plus accrued interest.
	Imputing interest at a rate of 10%, the present value of the $2,325,000 promissory note at the date of sale was $1,682,000 which resulted in a combined carrying value of $4,282,000 for all three promissory notes. The gain on sale of $1,227,000 had been deferred until collection of the proceeds representing the gain can be assured. As of December 31, 2000, the Notes were held for sale and were written down to an amount which approximated their estimated net realizable value of $2,700,000.
	On April 6, 2001 the Company entered into an agreement with the maker of the Notes whereby the maker reconveyed 100% of the Common Stock of GSI to the Company for the purpose of selling GSI to a third party. In connection with the agreement, the Company canceled the Notes and entered into a new $1.1 million secured promissory note with the same party. The maker will be paid a commission of 30% of cash receipts from the third party, which will be first applied to the $1.1 million note and paid in cash to the maker thereafter. On July 27, 2001, the Company entered into an Asset Purchase Agreement (“Agreement”) with the third party for approximately $3.2 million whereby all of the assets of GSI were acquired and all of the liabilities assumed, except for approximately $300,000 of obligations, which will remain with GSI. The payment terms under the Agreement required a $1 million non-refundable cash payment to the Company, which was received on July 27, 2001 and a $1.5 million payment which was received in December 2001. The Company also received a secured promissory note in the amount of $750,000. Under the terms of the secured promissory note, the third party was required to pay $500,000 in May 2002 (See Note 12) and the remaining $250,000 in January 2003. The third party is also required to pay an additional $250,000 in January 2003 subject to a maximum $250,000 reduction pursuant to the resolution of certain uncertainties as of the date of the Agreement.
	Due to the uncertainty of collecting the unsecured amount of $250,000, gain recognition on that part of the proceeds has been deferred until collection can be assured. The Company recorded a gain on the sale of GSI of $245,000 in the fourth quarter of 2001.
	On October 9, 2001, the Company sold certain rights under customer contracts together with the related assets and liabilities of its domestic Legacy hardware maintenance division to the third party which currently provides the on-site repair and warranty service to the Company’s Legacy hardware maintenance customers. Pursuant to the agreement, the Company retained the software maintenance component of the customer contracts and will continue to provide the software support services directly to the domestic Legacy customer base. Additionally, the third party will be required to pay the Company approximately 15% of the third party’s hardware maintenance revenue stream relating to the hardware maintenance customer contracts subsequent to October 31, 2003. In connection with the sale, the Company received $328,000 in cash and sold approximately $157,000 of assets consisting of inventory, spare parts, fixed assets and certain

-6-

	accounts receivable. The third party also assumed approximately $1,091,000 of liabilities consisting of accrued liabilities of approximately $366,000 and deferred revenue of approximately $725,000. The sale resulted in a gain of approximately $1,262,000 in October 2001.
6.	Businesses Held For Sale
	In the fourth quarter of 2001, the Company’s Board of Directors adopted a plan to sell its Process manufacturing and Legacy divisions. The Process manufacturing business division designs, sells, installs and supports total technology solutions featuring complex wide and local area networks to the process manufacturing industry. The Legacy business provides a wide array of products and services to its customers who continue to use its proprietary host-based computer systems, including field engineering services, new and replacement equipment, operating systems and software application products. These products and services upgrade, enhance and integrate the legacy systems with currently available computer technologies.
	The Company is actively seeking buyers for its Process Manufacturing and Legacy divisions and expects to consummate the sale of these divisions during 2002. The divisions are available for immediate sale subject only to customary terms for such sales.
	In accordance with SFAS No. 144, the Company has reflected all of the assets and liabilities of Process Manufacturing and Legacy in the consolidated balance sheets as held for sale and the operating results of these businesses have been reflected as discontinued operations in the consolidated statements of operations for all periods presented.
	Summarized below is historical financial information about Process Manufacturing and Legacy (in thousands):

	For The Three Months Ended					For The Six Months Ended
	June 30,					June 30,
	2001			2002		2001			2002
Revenue	$	1,475		$	773	$	3,108		$	1,487
Income (loss) before income tax		(530	)		74		(996	)		180

7.	Line of Credit and Bridge Loan and Long Term Debt
	Line of Credit & Bridge Loan
	On July 28, 1999, the Company obtained a Bridge Loan from Coast Business Credit (“Coast”) in the amount of $2,000,000. The Bridge Loan originally bore interest at prime plus 5% (prime plus 8% when default interest rates apply) and was payable interest only on a monthly basis with all accrued and unpaid principal and interest due on the earlier of June 30, 2000 or the date the Company receives a debt or equity infusion of at least $10,000,000. Loan origination fees of $75,000 paid to Coast in connection with the Bridge Loan were amortized to interest expense over the term of the loan. Due to a temporary event of default on the Bridge Loan and the secured revolving credit facility and pursuant to a forbearance agreement with Coast, the Company began making weekly principal payments of $25,000 on the Bridge Loan commencing in September 1999. During the default period, the Company also paid and expensed $40,000 in default fees to Coast in 1999 and $30,000 in 2000.
	In April 1998, the Company negotiated a $5,000,000 secured revolving credit facility with Coast. The availability of this facility is based on a calculation using a rolling average of certain cash collections. The facility was amended on July 28, 1999 to allow for aggregate borrowings on an interest only basis under the credit facility and Bridge Loan not to exceed $6,000,000. The facility is secured by all assets, including intellectual property of the Company, and bore interest at prime plus 2.25% (prime plus 5.25% when default interest rates apply) and expires on April 30, 2003. The facility was again amended on April 13, 2000 and September 12, 2000. In accordance with the amendments, the Bridge Loan and the credit facility bear interest at prime plus 4.5% and required $35,000 weekly principal payments on the Bridge Loan, except for the period from September 12, 2000 through December 8, 2000, which required monthly payments of $35,000, until it was paid in full. During the first quarter of 2001, the remaining balance of the Bridge Loan was repaid in full. Additionally, the credit facility was amended to allow for aggregate borrowings on an interest only basis under the credit facility not to exceed $3,360,000. In connection with the amendment on April 13, 2000, Coast waived all existing defaults. Additionally, the Company agreed to pay Coast a fee of $300,000 (“Loan Fee”) in weekly installments of $35,000 commencing after the Bridge Loan is paid in full. The Loan Fee was fully paid by April 23, 2001. The facility

-7-

	contains various restrictions and covenants, including a minimum consolidated net worth, debt coverage ratio and minimum quarterly profitability. The Company was in compliance with covenants as of June 30, 2002.
	At December 31, 2001 and June 30, 2002, approximately $2,424,400 and $2,039,000, respectively, was available and drawn down under the credit facility.
	Loan restructuring fees of $300,000 were incurred in connection with the line of credit and Bridge Loan and are classified in prepaids and other current assets and are being amortized to interest expense over the term of the facility.
	The Company is currently in negotiations with Coast to restructure the terms of the facility including extending its maturity date.
	Long-Term Debt
	In March 1997, the Company issued $6,000,000 of 11% subordinated notes payable due in 2004 to an investment fund managed by Canyon Capital Management LP (“Canyon”). In September 1997, this indebtedness was reduced to $5,250,000 through application of a portion of the proceeds realized from the exercise of warrants by Canyon. The notes call for semi-annual interest payments. On September 3, 1999, the Company failed to make the semi-annual interest payment due on that date in the amount of $289,000.
	The Company and Canyon subsequently entered into a forbearance agreement which provided that the Company pay Canyon weekly interest payments of $12,500 effective January 1, 2000. In addition, the Company executed a security agreement, which provided Canyon with a lien on all of the Company’s tangible and intangible property, which lien is junior to the lien granted to Coast.
	On April 13, 2000, the Company entered into an agreement with Canyon which waived all existing events of default, accelerated the maturity date to March 3, 2003 and provided for continued weekly interest payments of $12,500. On January 31, 2001, the Company entered into an agreement with Canyon whereby the specified accrued interest of $431,000 was added to the principal balance of the subordinated notes payable. As part of this agreement, the Company also agreed to pay Canyon an additional $79,000 loan fee, of which $29,000 was added to principal. The balance outstanding on the subordinate notes payable to Canyon was $5,490,000 and $5,563,000 at December 31, 2001 and June 30, 2002, respectively.
	The Company is currently in negotiations with Canyon to restructure the terms of the subordinated notes including extending its maturity date.
	In connection with a settlement agreement with CSA (see Note 12), the Company issued $2.8 million of subordinated debt to CSA. The $2.8 million of debt is secured by all of the Company’s assets which is subordinate to Coast and Canyon, accrues interest at 10% per annum and requires payments of $37,500 from March 1, 2002 through September 1, 2002 and monthly payments of $107,500 commencing on October 1, 2002 until October 2003 when all remaining unpaid principal and accrued interest is to be paid in full. The balance outstanding on the subordinate debt and accrued interest to CSA was $3,103,000 and $3,115,000 at December 31, 2001 and June 30, 2002, respectively.
	The agreement with CSA was revised whereby the Company shall be required to pay the required payments under the subordinated note unless and until it pays $1 million by December 31, 2002. Upon payment of the $1 million, contractual payments under the subordinated note will cease until a final payment in the amount of $400,000 is paid by February 28, 2003. If the Company does not make all of the modified payments to CSA, the subordinated note will revert back to its original terms.
8.	Common Stock
	In January and February of 2001, the Company entered into agreements with several creditors to retire approximately $2.1 million of Company obligations in exchange for 798,000 shares of Common Stock and $470,000 of cash. This resulted in a gain of $1,377,000. To fulfill its performance under the agreement, the Company issued the 798,000 shares of its Common Stock and registered the shares with the SEC. The Company was also required to pay the $470,000 to the creditors as prescribed in the respective agreements. All payments required under the agreements were made in 2001 and the first quarter of 2002.
	In May 2002, the Company issued 612,500 shares of restricted common stock to its members of the board of directors and certain of its corporate officers. Recipients are not required to provided consideration to the Company other than rendering the service and have the right to vote the shares.
	Under SFAS No. 123, compensation cost is recognized for the fair value of the restricted stock awarded, which is its fair market value without restrictions at the date of grant, which was $0.25 per share. The total market value of the shares of

-8-

	$153,125 was treated as unearned compensation and is being amortized to expense in proportion to the vesting schedule through March 2005. The unamortized balance as of June 30, 2002 is $109,000.
9.	Accounting Changes
	Effective January 1, 2002, the Company adopted SFAS 141 and SFAS 142. SFAS 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. It also specifies the types of acquired intangible assets that are required to be recognized and reported separate from goodwill. SFAS 142 requires that goodwill and certain intangibles no longer be amortized, but instead tested for impairment at least annually. There was no impairment of goodwill upon adoption of SFAS 142.
	Net income and earnings per share for the first and second quarter of fiscal 2001 adjusted to exclude amortization expense (net of taxes) is as follows:

			For the Three Months Ended		For the Six Months Ended
			June 30, 2001		June 30, 2001
Net income:
	Reported net income		$	293	$	1,688
	Goodwill amortization			105		210
		Adjusted net income	$	398	$	1,898
Basic earnings per share:
	Reported basic earnings per share		$	0.02	$	0.13
	Goodwill amortization			0.01		0.02
		Adjusted basic earnings per share	$	0.03	$	0.15
Diluted earnings per share:
	Reported diluted earnings per share		$	0.02	$	0.13
	Goodwill amortization			0.01		0.02
		Adjusted diluted earnings per share	$	0.03	$	0.15

	As of June 30, 2002, intangible assets consisted of $1,190,000 of goodwill and $383,000 of capitalized software. Capitalized software amortization was $64,000 and $45,000 during the first and second quarters of 2002, respectively.
10.	Income Per Share of Common Stock
	Basic and diluted income per share is computed using the weighted average shares of common stock outstanding during the period. Consideration is also given in the diluted income per share calculation for the dilutive effect of stock options and warrants.
	The following table illustrates the computation of basic and diluted earnings per share under the provisions of SFAS 128:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2001		2002		2001		2002
	(in thousands except per share data)				(in thousands except per share data)
Numerator:
Numerator for basic and diluted earnings per share – net income	$	293	$	346	$	1,688	$	673
Denominator:
Denominator for basic earnings per share- weighted average number of Common shares outstanding during the period		13,679		14,302		12,537		13,979
Incremental common shares attributable to exercise of outstanding shares		168		59		168		20
Denominator for diluted earnings per share		13,847		14,361		12,705		13,999
Basic earnings per share	$	0.02	$	0.02	$	0.13	$	0.05
Diluted earnings per share	$	0.02	$	0.02	$	0.13	$	0.05

The computation does not consider the additional shares of common stock which may be issued in connection with past acquisitions. The number of antidilutive options and warrants that were excluded from the computation of incremental common shares were 1,702,939 and 1,975,772 in 2001 and 2002, respectively

-9-

11.	Accounting Pronouncements
	On October 3, 2001, the Financial Accounting Standards Board issued FASB Statement No. 144, Accounting for the Impairment or Disposal of Long –Lived Assets, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. While Statement No. 144 supersedes FASB Statement No. 121, Accounting for the Impairment of Long –Lived Assets and for Long-Lived Assets for Be Disposed Of, it retains many of the fundamental provisions of that Statement.
	Statement No. 144 also supersedes the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business. However, it retains the requirement in Opinion 30 to report separately discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale.
	Statement No. 144 is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. The Company elected to adopt Statement No. 144 as of December 31, 2001.
12.	Legal Proceedings
	Chapter 11 Bankruptcy Proceedings
	At June 30, 2002, there was only one material claim to be settled before the Company’s Chapter 11 proceeding could be formally closed, a tax claim with the United States Internal Revenue Service (the “Service”). The amount of this claim is in dispute. The Company has reserved $712,000 for settlement of this claim, which it is anticipated would be payable to the Service in equal monthly installments over a period of six (6) years from the settlement date at an interest rate of 6%.
	CSA Private Limited
	CSA is a MAI shareholder. On August 9, 1996, MAI acquired from Hotel Information Systems, Inc. (“HIS”) substantially all their assets and certain of their liabilities (the “HIS Acquisition”). At the time of MAI’s acquisition of HIS in 1996, CSA was a shareholder of HIS and, in connection with the purchase, MAI agreed to issue to CSA shares of its Common Stock worth approximately $4.8 million in August 1996, which amount had increased to approximately $6.8 million as of December 31, 2000, pursuant to the agreement. MAI also granted CSA demand registration rights with respect to such stock. CSA requested registration of their shares, but MAI delayed registration based upon its good faith exercise of its rights under its agreement with CSA. On October 5, 1998, CSA filed a lawsuit against MAI in the U.S. District Court for the Central District of California. Pursuant to a settlement agreement entered into as of May 13, 1999 MAI agreed by November 1, 1999 to file, or at a minimum to commence the process to file, a registration statement with the Securities and Exchange Commission (“SEC”) for the purpose of registering CSA’s shares. CSA initiated another lawsuit in December 1999 in the above-referenced court (a) seeking damages in excess of $5 million; (b) enforcement of the settlement agreement; and (c) and injunctive relief through court order to cause MAI to file with the SEC. On March 6, 2000, the Company answered the complaint. Because the Company did not conclude the S-1 registration statement filing by November 1, 1999, CSA initiated another lawsuit in January 2000 to enforce the settlement agreement and secure injunctive relief through court order to cause us to file a registration statement.
	The Company entered into a second settlement agreement with CSA in February, 2001 whereby it (i) issued CSA 1,916,014 additional shares of our Common Stock to bring CSA’s total share ownership to 2,433,333 shares; (ii) filed a registration statement for all of CSA’s shares of our Common Stock which has been declared effective by the SEC so that such shares are now freely tradable; and (iii) executed a secured debt instrument in favor of CSA in the principal sum of $2,800,000 which is subordinate only to the Company’s present group of two (2) senior secured leaders and required cash installment payments to commence in March 2002.
	In connection with the second settlement agreement with CSA, the Company recorded the $2.8 million debt issuance as a reduction in paid in capital and the 1,916,014 additional shares at par as an addition to Common Stock and a reduction to additional paid in capital. The $2.8 million of debt accrues interest at 10% per annum and requires payments of $37,500

-10-

	from March 1, 2002 through September 1, 2002 and monthly payments of $107,500 commencing on October 1, 2002 until October 2003 when all remaining unpaid principal and accrued interest is to be paid in full (see note 7).
	Cher-Ae Heights Indian Community
	A lawsuit has been filed by Cher-Ae Heights Indian Community (“Cher-Ae Heights”) against Logix Development Corporation, now known as MAI Development Corporation, as a co-defendant for a breach of contract by the Company’s formerly owned gaming subsidiary along with the new owners, Monaco Informatiques Systemes (“MIS”), who acquired the assets and certain liabilities of the gaming subsidiary on July 27, 2001. However, the Company has not yet been formerly served with the lawsuit. Based upon this suit, MIS has informed the Company that it does not intend to pay the next $500,000 due to the Company under a promissory note and security agreement (see Note 5). The Company believes that the promissory note will be recoverable through payment from MIS or through the sale of the underlying collateral, if ultimately foreclosed upon.
	Other Litigation
	The Company is also involved in various other legal proceedings that are incident to its business. Management believes the ultimate outcome of these matters will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.
13.	Comprehensive Income
	The following table summarizes components of comprehensive income:

	For The Three Months Ended					For The Six Months Ended
	June 30,					June 30,
	2001		2002			2001		2002
Net income	$	293	$	346		$	1,688	$	673
Change in cumulative translation Adjustments		7		(92	)		10		(90	)
Comprehensive income	$	300	$	254		$	1,698	$	583

Accumulated other comprehensive income in the accompanying consolidated balance sheets consists of cumulative translation adjustments.

-11-

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect our reported assets, liabilities, revenues and expenses. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, accounts receivable and intangible assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. This forms the basis of judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies and the related judgments and estimates affect the preparation of our consolidated financial statements:

Revenue Recognition

We record revenue in accordance with Statement of Position (SOP) 97-2, Software Revenue Recognition, as amended. We license our products through our direct sales force and indirectly through resellers. We recognize revenue from sales of hardware, software and professional services and from arrangements involving multiple elements of each of the above. Revenue for multiple element arrangements are recorded by allocating revenue to the various elements based on their respective fair values as evidenced by vendor specific objective evidence. The fair value in multi-element arrangements is determined based upon the price charged when sold separately. Revenue is not recognized until persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectibility is probable. Sales of network and computer equipment are recorded when title and risk of loss transfers. Software revenues are recorded when application software programs are shipped to end users, resellers and distributors, provided the Company is not required to provide services essential to the functionality of the software and/or significantly modify, customize or produce the software. Professional services fees for software development, training and installation are recognized as the services are provided. Maintenance revenues are recorded evenly over the related contract period.

Accounts Receivable

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The amount of our reserves is based on historical experience and our analysis of the accounts receivable balances outstanding. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required which would result in an additional general and administrative expense in the period such determination was made. While such credit losses have historically been within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past.

Intangible Assets

We record goodwill arising from acquisitions as the excess of the purchase price over the fair value of assets acquired and such goodwill was being amortized over a useful life of five to seven years. In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 141 requires that all business combinations initiated after June 30, 2001 be accounted for using the purchase method and provides new criteria for recording intangible assets separately from goodwill. Existing goodwill and intangible assets will be evaluated against these new criteria, which may result in certain intangible assets being subsumed into goodwill. SFAS 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. Goodwill and intangible assets that have indefinite useful lives will not be amortized into results of operations, but instead will be evaluated at least annually for impairment and written down when the recorded value exceeds the estimated fair value. The Company adopted the provisions of SFAS No. 142 on January 1, 2002. As a result, the Company has ceased amortization of goodwill, reducing annual amortization expense. In addition, impairment reviews may result in charges against earnings to write down the value of goodwill.

We currently do not expect to record an impairment charge upon completion of the initial impairment review. However, there can be no assurance that at the time the review is completed a material impairment charge will not be recorded.

-12-

Liquidity and Capital Resources

At June 30, 2002, working capital decreased from a working capital deficiency of $3,787,000 at December 31, 2001 to a working capital deficiency of $11,302,000. Excluding unearned revenue of $3,027,000, the Company’s working capital deficiency at June 30, 2002 would be $8,275,000 or a ratio of current assets to current liabilities of 0.42 to 1.0. Excluding unearned revenue, working capital deficiency at December 31, 2001 was $2,044,000 with a current ratio of 0.72 to 1.0. Excluding unearned revenue, the increase in the working capital deficiency of $6,231,000 was primarily attributable to an increase in current portion of long-term debt and line of credit of $7,701,000 offset by increases in note receivable of $250,000, prepaids and other assets of $60,000, current assets held for sale of $231,000 and decreases in accounts payable of $396,000, customer deposits of $200,000, accrued liabilities of $62,000, income taxes payable of $95,000 and current liabilities held for sale of $139,000.

Cash was $1,238,000 at June 30, 2002, as compared to $1,224,000 at December 31, 2001. Availability under the Company’s secured revolving credit facility is based on a calculation using a rolling average of certain cash collections. At June 30, 2002, approximately $2,039,000 was available and drawn down under this facility. The facility expires on April 30, 2003.

Net cash used in investing activities for the six months ended June 30, 2002, totaled $476,000 which represented capital expenditures of $117,000 and capitalized software of $359,000.

Net cash used in financing activities for the six months ended June 30, 2002 totaled $460,000, which is comprised of a $385,000 decrease in the secured revolving credit facility and $75,000 in repayments of long-term debt. The revolving credit facility requires monthly interest only payments on the average outstanding balance for the period. The Company is required to make weekly payments of $12,500 on the subordinated debt. The facility, and subordinated debt pursuant to an intercreditor agreement between Canyon Capital and Coast Business Credit, contains various restrictions and covenants, including an adjusted minimum consolidated net worth of ($4,628,000) as of June 30, 2002, minimum quarterly debt coverage ratio of 1.1:1 and minimum quarterly profitability of $250,000. We were in compliance with these covenants as of June 30, 2002. In the event that we are not in compliance with the various restrictions and covenants and were unable to receive waivers for non-compliance, the facility and subordinated debt would become immediately due and payable. The restrictions and covenants are assessed quarterly.

Stockholders’ deficiency decreased from $12,992,000 at December 31, 2001 to $12,333,000 at June 30, 2002, mainly as a result of net income of $673,000 and the issuance of common stock of $185,000 offset by an increase in the accumulated other comprehensive loss of $90,000 and unearned compensation of $109,000.

Net cash provided by operating activities for the six months ended June 30, 2002 totaled $1,229,000 and mainly related to an increase in unearned revenue of $1,034,000, net income for the period of $673,000, non-cash charges for depreciation and amortization of tangible and intangible assets of $582,000 and a decrease in accounts receivable of $94,000 offset by a decrease in accounts payable of $542,000, customer deposits of $200,000, accrued liabilities of $189,000, income taxes payable of $100,000 and discontinued operations of $74,000. The Company expects that it will generate cash from its operating activities during the next twelve months.

Although the Company has a net stockholders’ deficiency of $12,333,000 at June 30, 2002, the Company believes it will continue to generate sufficient funds from operations and obtain additional financing or restructure its subordinated notes with Canyon and its facility with Coast, as needed, in 2002 to meet its operating and capital requirements. The Company expects to generate positive cashflow during 2002 from shipping out products and services from its $3.3 million backlog as of June 30, 2002 as well as new orders. Also, in July 2001, the Company entered into an agreement for the sale of its investment in GSI and has received $2.5 million in 2001. The Company expects to receive an additional $500,000 in 2002 and an additional $250,000 to $500,000 in January 2003.

-13-

Contractual Obligations and Commercial Commitments

         The following table summarizes the Company’s obligations and commitments as of June 30, 2002:

	Payments Due by Period (in thousands)
Contractual Cash Obligations	Total		Less Than 1 Year		1-3 Years		4-5 Years		After 5 Years
Long-Term Debt	$	8,792	$	5,889	$	2,651	$	—	$	252
Line of Credit		2,039		2,039		—		—		—
Operating Leases		1,686		918		613		155		—
	$	12,517	$	8,846	$	3,264	$	155	$	252

-14-

Results of Operations

Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2002

				Percentage of					Percentage of
	June 30, 2001			Revenue			June 30, 2002		Revenue
	(in thousands)						(in thousands)
Revenue	$	6,272			100.0	%	$	5,488		100.0	%
Gross profit		4,356			69.5	%		3,707		67.5	%
Selling, general and administrative expenses		1,834			29.3	%		2,336		42.6	%
Research and development costs		1,100			17.5	%		656		12.0	%
Amortization of intangibles		183			2.9	%		45		0.8	%
Other operating income		8			0.1	%		6		0.1	%
Interest expense, net		406			6.5	%		387		7.1	%
Income taxes		2			0.0	%		5		0.1	%
Income (loss) from discontinued operations		(530	)		(8.5	)%		74		1.3	%
Net income	$	293			4.7	%	$	346		6.3	%

Revenue for 2002 was $5,488,000 compared to $6,272,000 in 2001 or a 12.5% decrease. Revenue decreased $784,000 in 2002, as a result of decreased software sales and professional services mainly due to decreased market spending on information technology in 2002 due to the effects of the September 11, 2001 terrorist attacks on the hospitality industry.

The decrease in revenue in 2002 was mainly attributable to a decrease in the volume of sales. Our respective business units continue to generate sufficient cash from operations to adequately fund the respective ongoing operating activities.

Revenue in our Asian operations increased from $497,000 in 2001 to $541,000 in 2002. The increase in revenue from 2001 to 2002 is due to an increase in professional services, mainly maintenance services.

Gross profit for 2002 decreased to $3,707,000 (67.5%) from $4,356,000 (69.5%) in 2001. The decrease in gross profit is due to the decrease in software sales, which generate higher gross margins. Revenue on lower gross margin functions such as professional services also declined.

Selling, general and administrative expenses (“SG&A”) increased from $1,835,000 in 2001 to $2,336,000 in 2002. The increase is mainly due to an increase in selling & marketing, expenses for trade shows, advertisements and additional head count and other employee related expenses.

The decrease in research and development costs in 2002 was due to the capitalization of approximately $359,000 of software development costs mainly associated with the Company’s new product development for hospitality. There were no such costs capitalized in 2001.

The decrease in amortization of intangibles in 2002 versus the comparable period of 2001 is due to the fact that goodwill is no longer amortized to expense commencing January 1, 2002. Goodwill amortization was $105,000 for the three months ended June 30, 2001.

Net interest expense was $406,000 in 2001 compared to $387,000 in 2002. The decrease is mainly due to the Company not incurring interest expense for the Bridge Loan in 2002. The Bridge loan was paid in full in 2001.

The income tax provision only reflects a tax provision for our foreign operations and alternative minimum taxes for domestic operations due to the utilization for net operating loss carry forward in 2001 and 2002.

Results from discontinued operations improved from a loss of $530,000 in 2001 to income of $74,000 in 2002 as a result of decreased Process Manufacturing operating expenses from $989,000 in 2001 to $340,000 in 2002. Revenue from discontinued operations decreased from $1,475,000 in 2001 to $773,000 in 2002. Revenue from Process Manufacturing decreased from $478,000 in 2001 to $413,000 in 2002 as the process business unit continued its transition from a direct selling model to a reseller model and completed development of new products. During 2000, we focused on developing enhancements to our CIMPRO V and CIMPRO classic process manufacturing products which were released in late 2001 and early 2002. Additionally, consistent with our strategy to focus on providing software and services to our vertical markets, our legacy revenue (traditional hardware contract service revenues and proprietary add-on sales) declined $637,000 (63.9%) year over year, largely due to the sale of its domestic legacy hardware business in October 2001 and expected decreased volume and customers replacing their legacy systems.

-15-

Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2002

				Percentage of					Percentage of
	June 30, 2001			Revenue			June 30, 2002		Revenue
	(in thousands)						(in thousands)
Revenue	$	12,770			100.0	%	$	11,220		100.0	%
Gross profit		8,686			68.0	%		7,460		66.5	%
Selling, general and administrative expenses		3,916			30.7	%		4,409		39.3	%
Research and development costs		2,175			17.0	%		1,664		14.8	%
Amortization of intangibles		367			2.8	%		109		1.0	%
Other operating income		(1,349	)		(10.6	)%		5		0.1	%
Interest expense, net		814			6.4	%		772		6.9	%
Income taxes		79			0.6	%		8		0.1	%
Income (loss) from discontinued operations		(996	)		(7.8	)%		180		1.6	%
Net income	$	1,688			13.2	%	$	673		6.0	%

Revenue for 2002 was $11,220,000 compared to $12,770,000 in 2001 or a 12.1% decrease. Revenue decreased $1,550,000 in 2002, as a result of decreased software sales and professional services mainly due to decreased market spending on information technology in 2002 due to the effects of the September 11, 2001 terrorist attacks on the hospitality industry.

The decrease in revenue in 2002 was mainly attributable to a decrease in the volume of sales. Our respective business units continue to generate sufficient cash from operations to adequately fund the respective ongoing operating activities.

Revenue in our Asian operations decreased from $1,071,000 in 2001 to $1,031,000 in 2002. The deterioration of revenue from 2001 to 2002 is mainly due to the continued generally depressed condition of the Asian economies through the first quarter of 2002 resulting in a decrease in sales in the region, for the six months ended June 30, 2002.

Gross profit for 2002 decreased to $7,460,000 (66.5%) from $8,686,000 (68.0%) in 2001. The decrease in gross profit is due to the decrease in software sales which generate higher gross margins. Revenue on lower gross margin functions such as professional services also declined.

Selling, general and administrative expenses (“SG&A”) increased from $3,916,000 in 2001 to $4,409,000 in 2002. The increase is mainly due to an increase in selling & marketing, expenses for trade shows, advertisements and additional head count and other employee related expenses.

The decrease in research and development costs in 2002 was due to the capitalization of approximately $359,000 of software development costs mainly associated with the Company’s new product development for hospitality. There were no such costs capitalized in 2001.

The decrease in amortization of intangibles in 2002 versus the comparable period of 2001 is due to the fact that goodwill is no longer amortized to expense commencing January 1, 2002. Goodwill amortization was $210,000 for the six months ended June 30, 2001.

Other operating (income) expense was ($1,349,000) in 2001 and $5,000 in 2002. The decrease in other operating income in 2002 is mainly due to the Company issuing Common Stock to certain creditors to satisfy its obligations, which resulted in a gain of $1,377,000 in the first quarter of 2001. There were no such transactions in 2002.

Net interest expense was $814,000 in 2001 compared to $772,000 in 2002. The decrease is mainly due to the Company not incurring interest expense for the Bridge Loan in 2002. The Bridge loan was paid in full in 2001.

The income tax provision only reflects a tax provision for our foreign operations and alternative minimum taxes for domestic operations due to the utilization for net operating loss carry forward in 2001 and 2002.

Results from discontinued operations improved from a loss of $996,000 in 2001 to income of $180,000 in 2002 as a result of decreased Process Manufacturing operating expenses from $1,953,000 in 2001 to $637,000 in 2002. Revenue from discontinued operations decreased from $3,108,000 in 2001 to $1,487,000 in 2002. Revenue from Process Manufacturing decreased from $1,084,000 in 2001 to $833,000 in 2002 as the process business unit continued its transition from a direct selling model to a reseller model and completed development of new products. During 2000, we focused on developing enhancements to our CIMPRO V and CIMPRO classic process manufacturing products which were released in late 2001 and early 2002. Additionally, consistent with our strategy to focus on providing software and services to our vertical markets, our legacy revenue (traditional hardware contract service revenues and proprietary add-on sales) declined $1,370,000 (67.7%) year over year, largely due to the sale of its domestic legacy hardware business in October 2001 and expected decreased volume and customers replacing their legacy systems.

-16-

Item 3. Quantitative And Qualitative Disclosures About Market Risk

Market Risk Disclosures

The following discussion about the Company’s market risk disclosures contains forward-looking statements. Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements. The Company is exposed to market risk related to changes in interest rates and foreign currency exchange rates. The Company does not have derivative financial instruments for hedging, speculative, or trading purposes.

Interest Rate Sensitivity

Of the Company’s approximate $11 million principal amount of indebtedness at June 30, 2002, approximately $2.0 million bears interest at a rate that fluctuates based on changes in prime rate. A one percentage point change in the underlying prime rate would result in an approximately $20,000 change in the annual amount of interest payable on such debt. Of the remaining amount of approximately $9 million, $5.7 million bears interest at a fixed rate of 11%, $2.8 million bears interest at a fixed rate of 10% and $0.3 bears fixed interest rates ranging from 6% to 17.5%.

Foreign Currency Risk

The Company believes that its exposure to currency exchange fluctuation risk is insignificant because the Company’s transactions with international vendors are generally denominated in US dollars. The currency exchange impact on intercompany transactions was immaterial for the quarter ended June 30, 2002.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Chapter 11 Bankruptcy Proceedings

At June 30, 2002, there was only one material claim to be settled before the Company’s Chapter 11 proceeding could be formally closed, a tax claim with the United States Internal Revenue Service (the “Service”). The amount of this claim is in dispute. The Company has reserved $712,000 for settlement of this claim, which it is anticipated would be payable to the Service in equal monthly installments over a period of six (6) years from the settlement date at an interest rate of 6%.

CSA Private Limited

CSA is a MAI shareholder. On August 9, 1996, MAI acquired from Hotel Information Systems, Inc. (“HIS”) substantially all their assets and certain of their liabilities (the “HIS Acquisition”). At the time of MAI’s acquisition of HIS in 1996, CSA was a shareholder of HIS and, in connection with the purchase, MAI agreed to issue to CSA shares of its Common Stock worth approximately $4.8 million in August 1996, which amount had increased to approximately $6.8 million as of December 31, 2000, pursuant to the agreement. MAI also granted CSA demand registration rights with respect to such stock. CSA requested registration of their shares, but MAI delayed registration based upon its good faith exercise of its rights under its agreement with CSA. On October 5, 1998, CSA filed a lawsuit against MAI in the U.S. District Court for the Central District of California. Pursuant to a settlement agreement entered into as of May 13, 1999 MAI agreed by November 1, 1999 to file, or at a minimum to commence the process to file, a registration statement with the Securities and Exchange Commission (“SEC”) for the purpose of registering CSA’s shares. CSA initiated another lawsuit in December 1999 in the above-referenced court (a) seeking damages in excess of $5 million; (b) enforcement of the settlement agreement; and (c) and injunctive relief through court order to cause MAI to file with the SEC. On March 6, 2000, the Company answered the complaint. Because the Company did not conclude the S-1 registration statement filing by November 1, 1999, CSA initiated another lawsuit in January 2000 to enforce the settlement agreement and secure injunctive relief through court order to cause us to file a registration statement.

The Company entered into a second settlement agreement with CSA in February, 2001 whereby it (i) issued CSA 1,916,014 additional shares of our Common Stock to bring CSA’s total share ownership to 2,433,333 shares; (ii) filed a registration statement for all of CSA’s shares of our Common Stock which has been declared effective by the SEC so that

-17-

such shares are now freely tradable; and (iii) executed a secured debt instrument in favor of CSA in the principal sum of $2,800,000 which is subordinate only to the Company’s present group of two (2) senior secured leaders and required cash installment payments to commence in March 2002.

In connection with the second settlement agreement with CSA, the Company recorded the $2.8 million debt issuance as a reduction in paid in capital and the 1,916,014 additional shares at par as an addition to Common Stock and a reduction to additional paid in capital. The $2.8 million of debt accrues interest at 10% per annum and requires payments of $37,500 commencing on March 1, 2002 through September 1, 2002 and monthly payments of $107,500 commencing on October 1, 2002 until October 2003 when all remaining unpaid principal and accrued interest is to be paid in full.

The agreement with CSA was revised whereby the Company shall be required to pay the required payments under the subordinated note unless and until it pays $1,000,000 by December 31, 2002. Upon payment of the $1 million, contractual payments under the subordinated note will cease until a final payment in the amount of $400,000 by February 28, 2003. If the Company does not make all of the modified payments to CSA, the subordinated note will revert back to its original terms.

Cher-Ae Heights Indian Community

A lawsuit has been filed by Cher-Ae Heights Indian Community (“Cher-Ae Heights”) against Logix Development Corporation, now known as MAI Development Corporation, as a co-defendant for a breach of contract by the Company’s formerly owned gaming subsidiary along with the new owners, Monaco Informatiques Systemes (“MIS”), who acquired the gaming subsidiary on July 27, 2001. However, the Company has not yet been formerly served with the lawsuit. Based upon this suit, MIS has informed the Company that it does not intend to pay the next $500,000 due to the Company under a promissory note and security agreement (see Note 5 to the condensed consolidated financial statements). The Company believes that the promissory note will be recoverable through payment from MIS or through the sale of the underlying collateral, if ultimately foreclosed upon.

Other Litigation

The Company is also involved in various other legal proceedings that are incident to its business. Management believes the ultimate outcome of these matters will not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.

Item 2. Changes in Securities and Use of Proceeds

(a)	None.
(b)	None.
(c)	None
(d)	None.

Item 3. Defaults Upon Senior Securities

(a) None

Item 4. Submission of Matters to a Vote of Security Holders

(a)	Annual Meeting of Stockholders.
	The Company held its Annual Meeting of Stockholders on June 3, 2002 at the Hollywood Roosevelt Hotel, 7000 Hollywood Boulevard, Hollywood, California.

-18-

(b)	Elected Directors of Registrant.
	The following persons were elected to serve as directors of the Company.

Richard S. Ressler
Zohar Loshitzer
Stephen Ross
Steven F. Mayer

(c)	Items Voted Upon by Stockholders of the Registrant.
	The following matters were voted upon by the stockholders of the Company. The number of votes cast for and against are set forth below (as well as the applicable number of abstentions and broker non-votes):

			Votes Against Or
Subject	Votes For		Withheld		Abstentions		Broker Non-Votes
Election of Directors:
Richard S. Ressler		10,758,067		71,472		0		0
Zohar Loshitzer		10,734,047		95,492		0		0
Stephen Ross		10,743,477		86,062		0		0
Steven F. Mayer		10,743,477		86,062		0		0
Ratification of the Company’s Selection of KPMG LLP act as Independent Auditors for the Company		10,747,865		55,442		26,232		0

(d) None.

Item 5. Other Information

(a) None.

Item 6. Exhibits and Reports on Form 8-K

(a)	Exhibits
10.1	Stock Purchase Agreement dated June 23, 2002 between MAI Systems Corporation and Hospitality Services and Solutions, Pte. Ltd., a Singapore limited liability company
10.2	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Richard S. Ressler
10.3	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Richard S. Zohar Loshitzer
10.4	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Morton O. Schapiro

-19-

10.5	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Stephen Ross
10.6	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Steven F. Mayer
10.7	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and W. Brian Kretzmer
10.8	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and James W. Dolan
99.1	Certification of Chief Executive Officer, W. Brian Kretzmer, as required by Section 9.06 of Sarbane-Oxley Act of 2002
99.2	Certification of Chief Financial Officer, James W. Dolan, as required by Section 9.06 of Sarbane-Oxley Act of 2002
(b)	Reports on Form 8-K: None.

-20-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MAI SYSTEMS CORPORATION (Registrant)
Date: August 14, 2002	/s/ James W. Dolan James W. Dolan Chief Financial and Operating Officer (Chief Financial and Accounting Officer)

-21-

Exhibit Index

10.1	Stock Purchase Agreement dated June 23, 2002 between MAI Systems Corporation and Hospitality Services and Solutions, Pte. Ltd., a Singapore limited liability company
10.2	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Richard S. Ressler
10.3	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Richard S. Zohar Loshitzer
10.4	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Morton O. Schapiro
10.5	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Stephen Ross
10.6	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and Steven F. Mayer
10.7	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and W. Brian Kretzmer
10.8	Restricted Stock Agreement Dated April 16, 2002 between MAI Systems Corporation and James W. Dolan
99.1	Certification of Chief Executive Officer, W. Brian Kretzmer, as required by Section 9.06 of Sarbane-Oxley Act of 2002
99.2	Certification of Chief Financial Officer, James W. Dolan, as required by Section 9.06 of Sarbane-Oxley Act of 2002

EX-10.1 3 a83810exv10w1.txt EXHIBIT 10.1 Exhibit 10.1 STOCK PURCHASE AGREEMENT by and between HIS ASIA, PTE. LIMITED, HOTEL INFORMATION SYSTEMS, INC. and HOSPITALITY SERVICES & SOLUTIONS PTE LTD. AND ITS SUBSIDIARIES AND SHAREHOLDERS Dated as of June 23, 2002 TABLE OF CONTENTS ARTICLE I Purchase and Sale 1.1 Purchase and Sale............................................................... 6 1.2 Purchase Price.................................................................. 6 1.3 Payment of Purchase Price and Other Obligations................................. 6 1.4 Closing......................................................................... 6 ARTICLE II Representations and Warranties of HSS, the HSS Subsidiaries and the HSS Shareholders 2.1 Organization and Authority...................................................... 7 2.2 Noncontravention................................................................ 8 2.3 No Governmental Consent or Approval Required.................................... 8 2.4 Subsidiaries of the HSS Subsidiaries............................................ 8 2.5 Capitalization of HSS........................................................... 8 2.6 Financial Statements............................................................ 8 2.7 Undisclosed Liabilities......................................................... 9 2.8 Absence of Certain Developments................................................. 9 2.9 Title to Properties............................................................. 9 2.10 Contracts...................................................................... 10 2.11 Litigation..................................................................... 10 2.12 Compliance with Law; Governmental Permits...................................... 10 2.13 Employee Benefit Plans......................................................... 11 2.14 Certain Interests.............................................................. 11 2.15 Intercompany and Related Party Transactions.................................... 12 2.16 No Brokers or Finders.......................................................... 12 2.17 Environmental Matters.......................................................... 12 2.18 HSS Shareholder's Breach of Representations and Warranties - Post Closing...... 12 ARTICLE III Representations and Warranties of HIS Asia and HIS 3.1 Organization and Authority...................................................... 13 3.2 Noncontravention................................................................ 13 3.3 No Governmental Consent or Approval Required.................................... 13 3.4 Financial Capability............................................................ 14 ARTICLE IV Covenants 4.1 Due Diligence and Access........................................................ 14 4.2 Conduct of Business............................................................. 14 4.3 Commercially Reasonable Efforts; Government Approvals........................... 15 4.4 Confidentiality................................................................. 16 4.5 Employee Benefits; Employees.................................................... 16 4.6 Insurance ...................................................................... 17 4.7 Local Laws Relating to Corporate Changes in Control and Personnel............... 17 ARTICLE V Tax Matters 5.1 Definitions..................................................................... 17 5.2 Tax-Related Representations and Warranties...................................... 17 5.3 Liability for Taxes and Related Matters......................................... 18 5.4 Tax Returns..................................................................... 19 5.5 Transfer Taxes.................................................................. 19 5.6 Information to be Provided by the Purchaser..................................... 19 5.7 Tax Proceedings................................................................. 19 5.8 Assistance and Cooperation...................................................... 20 5.9 Survival, Etc................................................................... 20 ARTICLE VI Conditions to Closing 6.1 Conditions to the Obligations of the Purchaser.................................. 20 6.2 Conditions to the Obligations of HSS............................................ 21 ARTICLE VII Investment Representations and Shareholder Rights 7.1 Shareholder's Investment Representations ....................................... 22 7.2 Accredited Investor............................................................. 23 7.3 Purchaser Information........................................................... 23 7.4 HIS Asia and MAI Shares Legend.................................................. 23 7.5 Purchaser's Investment Representations.......................................... 23 7.6 Shareholder's Agreement......................................................... 24 7.7 Registration of MAI Common Stock................................................ 24 ARTICLE VIII Indemnification 8.1 Survival of Representations, Warranties, Covenants and Agreements............... 24 ARTICLE IX Certain Definitions 9.1 Certain Definitions............................................................. 24 ARTICLE X Miscellaneous 10.1 Amendments..................................................................... 27 10.2 Assignment..................................................................... 27 10.3 Notices........................................................................ 28 10.4 Severability................................................................... 29 10.5 Governing Law.................................................................. 29 10.6 Interpretation................................................................. 29 10.7 Entire Agreement............................................................... 30 10.8 Publicity and Confidentiality.................................................. 30 10.9 Expenses....................................................................... 30 10.10 No Third Party Beneficiaries.................................................. 30 10.11 Jurisdiction; Arbitration; Waivers............................................ 30 10.12 Counterparts.................................................................. 31 EXHIBITS A. Opinion of HSS' Counsel B. HSS Closing Certificate C. Opinion of Purchaser's Counsel D. Purchaser's Closing Certificate E. Shareholder's Agreement SCHEDULES 0.1 HSS Subsidiaries 2.4(a) Exceptions to Qualification to do Business 2.4(b) Directors and Executive Officers of HSS 2.4(c) List of Subsidiaries of HSS Subsidiaries 2.9(a) Personal Property 2.9(b) Real Property (Including Premises Lease) 2.10(a) Agreements 2.10(b) Consents, Approvals and Waivers Relating to Material Contracts 2.11 Litigation 2.12 Compliance with Law 2.13 Employee plan exceptions 2.13(a) List of Employee Benefit Plans 2.14 Certain Interests 2.15 Intercompany and Related Party Transactions 2.17 Environmental Matters 5.2(a) Tax sharing agreements, etc. 5.2(b) Tax Returns, etc. STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT dated as of June ___, 2002, is made by and between HIS Asia, Pte. Limited, a Singapore Corporation ("HIS ASIA") and Hotel Information Systems, Inc., a Delaware corporation ("HIS"), MAI Systems Corporation, a Delaware corporation ("MAI")(HIS Asia and HIS are referred to collectively herein as the "Purchaser"), and Hospitality Services & Solutions, Pte Ltd., a Singapore limited liability company ("HSS") and its subsidiaries, Hospitality Solutions (Malaysia) Sdn Bhd, a Malaysian company; HSI (Thailand) Ltd., a Thai company; and Marlin Business Systems Pte Ltd, a Singapore company (collectively, "HSS Subsidiaries") and the shareholders of HSS, Harbans Singh and Regional Investment Co. Ltd., a Singapore company (collectively, "HSS Shareholders"). RECITALS A. Harbans Singh, an Individual residing in Singapore (the "Individual Shareholder") and Regional Investment Co. Ltd., a Singapore company (the "Corporate Shareholder")(the Individual Shareholder and the Corporate Shareholder are referred to collectively herein as the "HSS Shareholders") own 200,000 shares representing 100% of the issued and outstanding capital stock of HSS (the "Stock"). HSS owns the percentage interests in the HSS Subsidiaries as set forth on Schedule 0.1 attached hereto. B. For purposes of this Agreement, the Stock shall also include HSS' ownership interest in each of HSS's subsidiaries existing on the Closing Date as set forth on Schedule 0.1 attached hereto, through which a significant portion of the Business is conducted. As used herein the term "Business" shall include the business and operations of HSS and the HSS Subsidiaries. HSS and the HSS Subsidiaries are engaged in the Business of developing, selling and supporting products that serve the hospitality and lodging industry (this and other capitalized terms shall have the meanings assigned to such terms in Article IX). C. The Purchasers desires to purchase the Stock, and HSS Shareholders desire to sell the Stock to the Purchaser, all on the terms and conditions set forth herein. D. HIS Asia, the successor to Purchasers' hospitality businesses servicing Asia and Australia, including Hotel Information Systems Pte Ltd., a Singapore Company; HIS Solutions Malaysia Sdn Bhd, a Malaysian company; Hotel Information Systems, Ltd., a Hong Kong company; and Boss Solutions Limited, a Hong Kong company, has been formed to continue the Business on and after the Closing hereinafter described. 5 NOW THEREFORE, in consideration of the premises and of the respective representations, warranties, covenants and conditions contained herein, the parties hereto agree as follows: ARTICLE I Purchase and Sale I.1 Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, the HSS Shareholders shall sell to the Purchaser, and the Purchaser shall purchase from the HSS Shareholders, all of their right, title and interest in and to the Stock, free and clear of all Liens (as defined in Article IX.1). Any reference herein to the transfer of the Stock or similar reference shall be deemed to include the transfer of the shares of each of the HSS Subsidiaries owned by HSS and their ownership interest in their own subsidiaries as listed on Schedule 2.4(c). The HSS Shareholders shall deliver at the Closing the certificate(s) evidencing the Stock, properly endorsed, or accompanied by a duly executed stock power duly endorsed, in blank. I.2 Purchase Price. In consideration for the Stock and as payment in full therefor, the Purchaser shall pay the Purchase Price as follows: (a) the HSS Shareholders shall receive (in such proportions as they shall agree among themselves and advise Purchaser of on or prior to the Closing) (i) 20% of the outstanding stock of HIS Asia, which the parties agree shall consist of 200 shares of HIS Asia's common stock to be delivered within ten (10) business days after Closing; (ii) US$75,000 in cash payable US$50,000 within 30 days of Closing and US$25,000 payable in eleven payments of US$2,000 and a final payment of US$3,000, with the initial monthly payment commencing 60 days from Closing and continuing monthly thereafter until paid; and (iii) 100,000 shares of MAI restricted (Rule 144) common stock to be delivered to the HSS Shareholders (in such proportions as they shall agree among themselves and advise Purchaser of on or prior to the Closing) within ten (10) business days after Closing. I.3 Payment of Purchase Price and Other Obligations. If the obligations of the parties to proceed with the Closing set forth in Article VI are satisfied or waived, at the Closing, the Purchaser shall pay the Purchase Price as described in Section I.2 above. The Purchaser shall pay the liabilities of HSS and the HSS Subsidiaries to their officers and directors as set forth in Schedule 2.14 as of May 31, 2002 and excluding accrued interest, in twelve (12) monthly installments commencing twelve (12) months after the Closing described in Section I.4 . I.4 Closing. The closing (the "Closing") of the purchase and sale of the Stock shall take place no later than June 30, 2002 at the offices of MAI Systems Corporation, 9601 Jeronimo Road, Irvine, CA 92618 as soon as practicable after the 6 satisfaction or waiver of the conditions set forth in Article VI, or at such other time and place as the parties shall mutually agree. The date on which the Closing actually occurs is herein referred to as the "Closing." ARTICLE II Representations and Warranties of HSS, the HSS Subsidiaries and the HSS Shareholders HSS, the HSS Subsidiaries and the HSS Shareholders (as the case may be) represent and warrant to the Purchaser as of the Closing that: II.1 Organization and Authority. HSS and the HSS Subsidiaries are companies duly organized, validly existing and in good standing under the laws of the jurisdiction of their formation and have full corporate power and authority to conduct the Business as it was conducted prior to Closing and to own or lease all of their properties and assets. HSS and each of the HSS Subsidiaries is duly qualified or licensed to do business as a foreign corporation, and is in good standing as a foreign corporation, in every jurisdiction in which the ownership of its property or assets or the conduct or nature of the Business requires such qualification or license, and Schedule 0.1 sets forth a true and complete list of all such jurisdictions. HSS and each of the HSS Subsidiaries has previously delivered to the Purchaser true and complete copies of their Certificates of Incorporation and Bylaws (or their equivalents) as in effect on Closing. The Corporate Shareholder is a company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. HSS and the Corporate Shareholder have the requisite corporate power and authority to execute, deliver and perform this Agreement and such other documents as are contemplated hereunder to be executed and delivered at or prior to the Closing. The execution, delivery and performance by HSS and the Corporate Shareholder of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of HSS and the Corporate Shareholder. This Agreement constitutes a valid and, assuming due execution and delivery by the Purchaser, binding obligation of HSS and the Corporate Shareholder, enforceable against HSS and the Corporate Shareholder in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally, and to general equitable principles. Upon execution and delivery of the Ancillary Agreements by the parties thereto, such Ancillary Agreements will constitute valid and binding obligations of HSS and the Corporate Shareholder, enforceable against HSS and the Corporate Shareholder in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally, and to general equitable principles. 7 II.2 Noncontravention. The execution, delivery and performance of this Agreement by HSS and the Corporate Shareholder, the performance of this Agreement by HSS and the Corporate Shareholder and the consummation of the transactions contemplated hereby will not violate or conflict with, or constitute a breach or default under (a) the certificate of incorporation or bylaws (or equivalents) of HSS, the HSS Subsidiaries and the Corporate Shareholder or (b) any law, regulation, order, judgment or decree applicable to HSS, the HSS Subsidiaries or the Corporate Shareholder. II.3 No Governmental Consent or Approval Required. No authorization, consent, Permit, approval or other order of, declaration to, or registration, qualification, designation or filing with, any Governmental Entity is required for or in connection with the execution, delivery and performance of this Agreement by HSS and the Corporate Shareholder, the performance of this Agreement by HSS and and the Corporate Shareholder and the consummation of the transactions contemplated hereby, other than (a) the filing of notification under any applicable laws and the expiration or early termination of the waiting period thereunder, and (b) any consents, the failure to obtain would not prohibit the transfer of the Stock or the consummation of any of the transactions contemplated hereby or create a Lien on the Stock. II.4 Subsidiaries of the HSS Subsidiaries. The HSS Subsidiaries have no subsidiaries except as listed on Schedule 2.4(c). References herein to the HSS Subsidiaries include their subsidiaries, except as the context may otherwise require. II.5 Capitalization of HSS. The entire authorized capital stock of HSS consists of 200,000 shares of Common Stock of which 200,000 shares are issued and outstanding. All of the Stock has been duly authorized and validly issued and is fully paid and non-assessable. There are no outstanding warrants, options, subscription, conversion, pre-emptive or other rights entitling any other Person to purchase or otherwise acquire any capital stock of HSS or the HSS Subsidiaries . The HSS Shareholders have good and valid title to all of the Stock, free and clear of all Liens and, subject to applicable securities laws and competition laws, free of any restriction on their right to transfer or exercise any voting or other right with respect thereto. At the Closing, good and valid title to the Stock, free and clear of all Liens, encumbrances, equities or claims shall be transferred from the HSS Shareholders to the Purchaser who has purchased such Stock without notice of an adverse claim thereto (within the meaning of applicable foreign laws and the Uniform Commercial Code). II.6 Financial Statements. HSS will, prior to closing, have delivered to the Purchaser the consolidated balance sheets of HSS and the HSS Subsidiaries as of May 31, 2002 (the "Balance Sheet") and its consolidated statements of operations and cash flows for the years ended December 31, 2000 and 2001 (together with the Balance Sheet, the "Financial Statements"). HSS will also, within ten (10) days after Closing, deliver a final 8 Balance Sheet dated as of the Closing Date. The Financial Statements were prepared in accordance with GAAP or its local equivalent, consistently applied, and, fairly and accurately present the financial position of HSS and the HSS Subsidiaries as of the respective dates thereof and the results of operations, changes in financial position and cash flow of HSS and the HSS Subsidiaries for the respective periods covered thereby. II.7 Undisclosed Liabilities. HSS, the HSS Subsidiaries and the HSS Shareholders have no Knowledge of any liabilities required to be set forth on the Balance Sheet in accordance with GAAP or its local equivalent, except for (a) liabilities incurred in the ordinary course of business since the date of the Balance Sheet and (b) liabilities that would not reasonably be expected to have a Material Adverse Effect. II.8 Absence of Certain Developments. Since the date of the Balance Sheet, there has not been, , (a) any change or event that has had or would reasonably be expected to have a Material Adverse Effect on the Business, other than (x) changes relating to or arising from general economic, market or financial conditions or generally affecting the industries or markets in which HSS or the HSS Subsidiaries operate or (y) changes relating to or arising from the consummation or disclosure of this Agreement or any transaction contemplated by this Agreement, (b) any declaration, setting aside or payment of any dividend or other distribution with respect to the capital stock of HSS or the HSS Subsidiaries, (c) any loss, destruction or damage to any property of HSS or the HSS Subsidiaries, whether or not insured, that has had or would reasonably be expected to have a Material Adverse Effect on the Business, or (d) any material change in any of the significant accounting policies, practices or procedures of HSS or the HSS Subsidiaries with respect to the Business. II.9 Title to Properties. (a) Personal Property. Schedule II.9(a) sets forth the list of personal property of HSS and the HSS Subsidiaries being transferred to Purchaser at Closing. Except as disclosed in the Financial Statements, HSS and the HSS Subsidiaries have, good and marketable title to, or a valid leasehold interest in, all of the personal properties and assets held, occupied or used primarily in the Business, free and clear of all Liens other than (a) the lien of current taxes not yet due and payable, (b) Permitted Liens or (c) such other Liens which do not materially detract from the use of the property. (b) Real Property. Schedule 2.9(b) lists all real properties currently owned or leased by HSS and the HSS Subsidiaries, including all premises leases (collectively, the "Real Property"). HSS or the HSS Subsidiaries have good and marketable title to (or a leasehold interest in) all Real Property shown as owned or leased, if applicable, by it on Schedule 2.9(b), free and clear of all Liens other than Permitted Liens or such other Liens which do not materially detract from the value of such property. 9 II.10 Contracts. Attached as Schedule 2.10(a) is a true and complete list of all debt instruments, contracts, leases, license agreements, employment and labor agreements, and other agreements to which HSS or the HSS Subsidiaries or any of their respective properties is subject or by which any thereof is bound which is either (a) material to the continued conduct of the Business as currently conducted or (b) which pursuant to its terms imposes payment obligations on HSS or the HSS Subsidiaries in excess of $50,000 annually or $300,000 in the aggregate ("Material Contracts"). Except as disclosed in Schedule 2.10(b), each Material Contract is in full force and effect; and no breach or default or event which would (with the passage of time, notice or both) constitute a breach or default thereunder by HSS or the HSS Subsidiaries or, to the Knowledge of HSS, any other party or obligor with respect thereto, exists and is continuing which in each case would reasonably be expected to materially impair the benefits expected to be derived therefrom. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach of or default under any Material Contract, will not (and will not give any Person a right to) terminate or modify any rights of, or accelerate or augment any material obligation of, HSS or the HSS Subsidiaries, and do not require any consent, approval, waiver or other action by any party to any such Material Contract, other than the matters identified in Schedule 2.10(b). II.11 Litigation. To the Knowledge of HSS, the HSS Subsidiaries and the HSS Shareholders and except as disclosed in Schedule 2.11, there is no written claim, filed complaint, arbitration, action, suit, proceeding or investigation pending or threatened, against or affecting the Business, (a) which if resolved adversely to would reasonably be expected to result in a Material Adverse Effect on the Business, or (b) seeking to prevent or challenge in any other manner the consummation of the transactions contemplated hereby. There is no organized labor strike, dispute, slowdown or stoppage, or collective bargaining or unfair labor practice claim pending, or to the Knowledge of HSS, threatened, against or affecting the Company, nor are there, to the Knowledge of HSS, any union organizing efforts with respect to employees of HSS or the HSS Subsidiaries.. II.12 Compliance with Law; Governmental Permits. To the Knowledge of HSS, the HSS Subsidiaries and the HSS Shareholders and except as set forth in Schedule 2.12, HSS or the HSS Subsidiaries are in compliance with all laws, regulations, orders, judgments and decrees of any Governmental Entity which are applicable to the Business, except such noncompliance as would not reasonably be expected to have a Material Adverse Effect on the Business and HSS holds and will transfer to the Purchaser at Closing, all Permits that are required by any Governmental Entity to permit the Purchaser to conduct the Business as now conducted, except for such Permits the absence of which would not reasonably be expected to have a Material Adverse Effect on the Business. To the Knowledge of HSS, each such material Permit is in full force and effect, except for any such Permit the absence of which would not reasonably be expected to have a Material 10 Adverse Effect on the Business. To the Knowledge of HSS, no suspension, cancellation or termination of any of such material Permits is threatened or imminent. II.13 Employee Benefit Plans. Except as disclosed in Schedule 2.13: (a) All benefit and compensation plans and agreements maintained by HSS or the HSS Subsidiaries which cover current employees of HSS or the HSS Subsidiaries (the "Employees"), including, but not limited to, employee benefit plans, deferred compensation, stock option, stock purchase, stock appreciation rights, stock based, incentive and bonus plans and severance plans (the "Benefit Plans"), are listed in Schedule 2.13(a). True and complete copies of all Benefit Plans, including, but not limited to, any trust instruments and insurance contracts forming a part of any Benefit Plans, and all amendments thereto have been provided or made available to Purchaser. (b) To the Knowledge of HSS, the HSS Subsidiaries and the HSS Shareholders, all Benefit Plans maintained by HSS or the HSS Subsidiaries which cover Employees (the "Plans"), are in substantial compliance with any applicable local laws and there is no material pending or, to the Knowledge of HSS, threatened, litigation relating to the Plans. HSS or the HSS Subsidiaries have not engaged in a transaction with respect to any Plan that, assuming the taxable period of such transaction expired as of the date hereof, could subject them to a tax or penalty imposed by local laws in an amount which would be material. (c) To the Knowledge of HSS, the HSS Subsidiaries and the HSS Shareholders, all contributions required to be made under the terms of any Benefit Plan have been timely made or have been reflected on the Financial Statements. (d) The consummation of the transactions contemplated by this Agreement will not (i) entitle any employees of HSS or the HSS Subsidiaries to severance pay, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any of the Benefit Plans or (iii) result in any breach or violation of, or a default under, any of the Benefit Plans. II.14 Certain Interests. Except as set forth on Schedule 2.14 hereto, no officer or director of HSS or the HSS Subsidiaries is indebted or otherwise obligated to HSS or the HSS Subsidiaries, and HSS or the HSS Subsidiaries are not indebted or otherwise obligated to any such officer or director, except for amounts due under normal arrangements applicable to all employees generally as to salary or reimbursement of ordinary business expenses or as set forth on Schedule 2.14. 11 II.15 Intercompany Transactions. To the Knowledge of HSS, the HSS Subsidiaries and the HSS Shareholders and except as described in the financial statements or Schedule 2.15, incurred in the ordinary course of business since the date of the Balance Sheet or that is contemplated by, or will be discharged or terminated pursuant to this Agreement, HSS has no liabilities or obligations to the HSS Subsidiaries or related parties and none of the HSS Subsidiaries has any obligations to HSS. II.16 No Brokers or Finders. No agent, broker, finder, or investment or commercial banker or other Person or firm engaged by or acting on behalf of HSS or any of the HSS Subsidiaries in connection with the negotiation, execution or performance of this Agreement or the transactions contemplated by this Agreement, is or will be entitled to any brokerage or finder's or similar fee or other commission as a result of this Agreement or such transaction. II.17 Environmental Matters. To the Knowledge of HSS, the HSS Subsidiaries and the HSS Shareholders and except as set forth in Schedule 2.17, or as would not be expected to have a Material Adverse Effect on the Business: (i) HSS and the HSS Subsidiaries are in substantial compliance with all applicable Environmental Laws; (ii) HSS or the HSS Subsidiaries have not received any written notices from any Governmental Entity alleging the violation of any applicable Environmental Laws other than for matters that have been fully resolved; (iii) HSS or the HSS Subsidiaries are not subject to any court order, administrative order or decree arising under any Environmental Law; and (iv) HSS or the HSS Subsidiaries have not disposed of any Hazardous Substance on any property owned or operated by them or had any emissions or discharges of any Hazardous Substances except as permitted under applicable Environmental Laws. II. 18 HSS Shareholder's Breach of Representations and Warranties - -- Post Closing. In the event that any representation and warranty made by the HSS Shareholders in this Agreement is determined after closing to have been false when made, and HIS Asia sustains money damages as result thereof, Purchaser, may for twelve (12) months following the Closing, pursue the HSS Shareholders for its actual damages, subject to the limitations contained in this section, incurred by HIS Asia solely as the result of such misrepresentation. Notwithstanding anything to the contrary contained in this Agreement, in no event whatsoever shall HIS Asia have the right to seek or recover its first One Hundred Thousand ($100,000) Dollars of its money damages from the HSS Shareholders nor shall it have the right to seek any sum in excess of Two Hundred Thousand ($200,000.00) Dollars from the HSS Shareholders. The foregoing states the HSS Shareholders' sole liability to Purchaser after the Closing. Purchaser shall have no right to deduct or set off sums claimed under this Section from any money or other consideration owed to Harbans Singh pursuant to his employment with HIS Asia. 12 ARTICLE III Representations and Warranties of HIS Asia and HIS The Purchaser, HIS Asia and HIS hereby represent and warrant to HSS and the HSS Shareholders that: III.1 Organization and Authority. HIS Asia and HIS are companies or corporations duly organized, validly existing and in good standing under the laws of Singapore and the state of Delaware, respectively, and HIS Asia is the successor to Purchasers' hospitality businesses servicing Asia and Australia, including Hotel Information Systems Pte Ltd., a a Singapore Company, HIS Solutions Malaysia Sdn Bhd, a Malaysian company, Hotel Information Systems, Ltd., a Hong Kong company, and Boss Solutions Limited, a Hong Kong company . The Purchaser has full power and authority to execute, deliver and perform this Agreement. The execution, delivery and performance by the Purchaser of this Agreement and any Ancillary Agreement to which the Purchaser is to be a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement constitutes a valid and, assuming due execution by HSS and the HSS Shareholders, binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally and to general equitable principles. Upon execution and delivery of the Ancillary Agreements to which the Purchaser is to be a party by the parties thereto, such Ancillary Agreements will constitute valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally, and to general equitable principles. III.2 Noncontravention. The execution, delivery and performance of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby will not violate or conflict with, or constitute a breach or default (whether upon lapse of time and/or the occurrence of any act or event or otherwise) under (a) the charter documents of the Purchaser or (b) any law, regulation, order, judgment, or decree applicable to the Purchaser. III.3 No Governmental Consent or Approval Required. To the best of its knowledge no authorization, consent, Permit, approval or other order of, declaration to, or 13 registration, qualification, designation or filing with, any Governmental Entity or any other Person is required for or in connection with the execution, delivery and performance of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby, other than (a) the filing of notification under appropriate local laws and the expiration or early termination of the waiting period thereunder and (b) any consents, the failure to obtain would not prohibit the transfer of the Stock or the consummation of any of the transactions contemplated hereby. III.4 Financial Capability. The Purchaser has, or has access to, sufficient funds to make the payment of the Purchase Price on the terms and conditions contemplated by this Agreement. ARTICLE IV Covenants IV.1 Due Diligence and Access. HSS has permitted the Purchaser and its representatives to have access, during regular business hours, to the assets, employees, books and records of HSS or the HSS Subsidiaries relating to the Business, and has furnished, or caused to be furnished, to the Purchaser and its representatives such financial, tax and operating data and other available information with respect to the Business as the Purchaser. IV.2 Conduct of Business. Since the review by Purchasers, HSS has conducted the Business in the ordinary and usual course consistent with past practice, and use its commercially reasonable efforts to preserve intact the Business and related relationships with customers, service providers and other third parties and has not: (a) issued or transferred any capital stock of HSS or the HSS Subsidiaries or any security convertible into or exchangeable for any such capital stock or any right to acquire any such capital stock; (b) made any change in their respective certificates of incorporation or bylaws; (c) disposed of any material part of their assets or property; (d) incurred or assumed any indebtedness for borrowed money or guarantee any such indebtedness other than in the ordinary course of business consistent with past practice; (e) liquidated, dissolved or otherwise reorganized or sought protection from creditors; 14 (f) adopted or amended in any respect any Benefit Plan if such will increase the obligation of Purchaser; (g) entered into any lease for real property, except renewals of existing leases in the ordinary course of business; (h) entered into any contract or agreement or engage in any other type of transaction with between HSS and the HSS Subsidiaries other than in the normal course of business consistent with past practice; or (i) agreed or committed itself to do any of the foregoing. IV.3 Commercially Reasonable Efforts; Government Approvals. (a) Upon the terms and subject to the conditions herein provided, each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary for it to do under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, (i) to comply promptly with all legal requirements which may be imposed on it with respect to this Agreement and the transactions contemplated hereby (which actions shall include, without limitation, furnishing all information required by applicable laws and regulations in connection with approvals of or filings with any Governmental Entity), (ii) to satisfy the conditions precedent to the obligations of the parties hereto and (iii) to obtain any consent, authorization, order or approval of, or any exemption by, any Governmental Entity or other public or private third party required to be obtained or made by the Purchaser, HSS or the HSS Subsidiaries in connection with the acquisition of the Stock or the taking of any action contemplated by this Agreement. (b) Subject to appropriate confidentiality protections, each of the parties hereto shall furnish to the other party such necessary information and reasonable assistance as such other party may reasonably request in connection with the foregoing and shall provide the other party with copies of all filings made by such party with any Governmental Entity and, upon request, any other information supplied by such party to a Governmental Entity in connection with this Agreement and the transactions contemplated hereby. (c) Without limiting the generality of the foregoing, the Purchaser and HSS agree to take or cause to be taken the following actions where required by any appropriate local laws: (i) provide promptly to Governmental Entities with regulatory jurisdiction over enforcement of any applicable Competition Laws ("Governmental Antitrust Entity") information and documents requested by any Governmental Antitrust Entity or 15 necessary, proper or advisable to permit consummation of the acquisition of the Stock and the transactions contemplated by this Agreement and (ii) without in any way limiting the other provisions of this Section 4.3, file any notification and report form and related material required under applicable local laws as soon as practicable and in any event not later than 10 Business Days after the date hereof, and thereafter use its reasonable best efforts to certify as soon as practicable its substantial compliance with any requests for additional information or documentary material that may be made under local laws Each party hereto shall provide to the other copies of all correspondence between it (or its advisor) and any Governmental Antitrust Entity relating to the acquisition of the Stock or any matters described in this Section 4.3. Each party hereto agrees that the other party shall have the right to participate in any meeting between the first party and any Governmental Antitrust Entity relating to the acquisition of the Stock or any matters described in this Section 4.3. IV.4 Confidentiality. Each party hereto, will hold all confidential information provided to such party by or on behalf of the other party hereto in confidence pursuant to the terms of the Confidentiality Agreement. Upon any termination of this Agreement, each party hereto will promptly return to the other party such information provided to the first party, including any copies of such information. Each party hereto acknowledges that the other party would be irreparably harmed by a breach of this Section 4.4 and that there would be no adequate remedy at law or in damages to compensate the other party for any such breach and agrees that, in addition to any other remedy, the other party shall be entitled to one or more injunctions requiring specific performance by the first party of this Section 4.4, and the first party consents to the entry thereof. IV.5 Employee Benefits; Employees. The Purchaser shall, on and for at least one year after the Closing, provide the employees of HIS Asia with employee benefit and compensation plans, programs, policies and arrangements which are (i) no less favorable in the aggregate than the benefit and compensation plans, programs, policies and arrangements currently being provided by MAI's wholly owned Singapore subsidiary, Hotel Information Systems, Pte. Limited, to their employees prior to the Closing. Each such employee benefit and compensation plan, program, policy or arrangement shall give full credit for each participant's period of service with HSS or the HSS Subsidiaries prior to the Closing for purposes of determining eligibility, vesting and the amount of benefits (including subsidies relating to such benefits). Each employee welfare benefit plan provided to the employees of HIS Asia from and after the Closing shall (i) give full credit for co-payments, deductibles and out-of-pocket expenses under HSS or the HSS Subsidiaries' Benefit Plans with respect to the current plan year toward any deductibles for the remainder of the plan year during which the Closing occurs, and (ii) shall waive any pre-existing condition limitation for any employee covered under a Benefit Plan (which is a group health plan) immediately prior to the Closing. 16 IV.6 Insurance. (a) Prior to the Closing, HSS shall have taken such action as may have been required to ensure that any insurance coverage for any claims that have been filed with the applicable insurers prior to the Closing relating to HSS or the HSS Subsidiaries will continue with respect to such claims following the Closing, and HSS agrees to pay insurance proceeds (net of any out-of-pocket unreimbursed costs or expenses of HSS or the HSS Subsidiaries incurred in defense of such claim) resulting from such coverage promptly after receipt thereof. From and after the date hereof, HSS shall diligently pursue insurance coverage for any claims filed with third party insurers prior to the Closing relating to HSS or the HSS Subsidiaries. Following the Closing, HIS Asia shall be responsible for the control of all claims filed with third party insurers, subject to the control exercised by any insurers in accordance with the applicable insurance policies. (b) As of the Closing, the coverage under all insurance policies related to HSS or the HSS Subsidiaries may be continued in force for the benefit of HIS Asia at the expense of HIS Asia. HIS Asia agrees to arrange for its own insurance policies with respect to its operations, within thirty (30) days after Closing. IV.7 Local Laws Relating to Corporate Changes in Control and Personnel. The Purchaser shall comply with any local laws relating to corporate changes in control or personnel. ARTICLE V Tax Matters V.1 Definitions. For purposes of this Agreement, "Taxes" shall mean all federal, state, local and foreign income, property, sales and use, excise, withholding, franchise, transfer, gross receipt, capital stock, production, business and occupation, disability, employment, payroll, severance or similar taxes imposed on the income, properties or operations of HSS or the HSS Subsidiaries, together with any penalties, additions or interest relating thereto and any interest in respect of such additions or penalties; "Tax Return" shall mean all reports and returns required to be filed with respect to Taxes including, without limitation, combined or consolidated returns for HSS or the HSS Subsidiaries. 17 V.2 Tax-Related Representations and Warranties. (a) Tax Allocation Agreements. HSS represents and warrants to the Purchaser that, except as disclosed in Schedule 5.2(a), HSS or the HSS Subsidiaries are not a party to any agreement, contract or understanding relating to any sharing by HSS or the HSS Subsidiaries of any Tax liability of any other Person. (b) Tax Returns and Reports. HSS represents and warrants to the Purchaser that except as set forth in Schedule 5.2(b), (i) all Tax Returns that are required to be filed by or with respect to HSS or the HSS Subsidiaries, have been or will be duly filed, (ii) all Taxes shown to be due on the Tax Returns referred to in clause (i) have been or will be paid in full, (iii) all deficiencies asserted or assessments made on or before closing as a result of any tax examinations have been settled or paid in full, (iv) no issues that have been raised in writing on or before Closing by the relevant taxing authority in connection with the examination of any of the Tax Returns referred to in clause (i) are currently pending and (v) no waivers of statutes of limitation have been given by or requested with respect to any Taxes of HSS or the HSS Subsidiaries. (c) No Withholding. HSS represents and warrants to the Purchaser that no tax is required to be withheld pursuant to such local laws as are applicable as a result of the transfer contemplated by this Agreement. V.3 Liability for Taxes and Related Matters. (a) Liability of HSS for Taxes. HSS and the HSS Subsidiaries shall be liable for and indemnify Purchaser for all Taxes including, without limitation, any obligation to contribute to the payment of a tax determined on a consolidated, combined or unitary basis with respect to a group of corporations that includes or included HSS or the HSS Subsidiaries and Taxes resulting from HSS or the HSS Subsidiaries ceasing to be an affiliate, (i) imposed on HSS or the HSS Subsidiaries for any taxable year, (ii) imposed on HIS Asia or for which HIS Asia may otherwise be liable for any taxable year or period that ends on or before the Closing and, with respect to any taxable year or period beginning before and ending after the Closing Date, the portion of such taxable year ending on and including the Closing Date. HSS shall be entitled to any refund of Taxes of HIS Asia receives for such periods. (b) Liability of Purchaser for Taxes. The Purchaser shall be liable for and shall indemnify HSS, the HSS Subsidiaries and HSS Shareholders for the Taxes of HIS Asia for any taxable year or period that begins after Closing and, with respect to any taxable year or period beginning before and ending after the Closing, the portion of such taxable year beginning after the Closing. The Purchaser shall be entitled to any refund of Taxes of HIS Asia received for such periods. 18 (c) Tax Periods. With respect to any Taxes for any taxable period that includes but does not end as of the Closing, the amount of Taxes subject to indemnification hereunder shall be calculated as if such taxable period ended as of the close of business on the Closing, except that property Taxes and exemptions, allowances or deductions that are calculated on an annual basis shall be prorated based on the number of days in the annual period elapsed through the Closing compared to the number of days in the annual period elapsing after the Closing. V.4 Tax Returns. HSS shall file or cause to be filed when due all Tax Returns that are required to be filed by or with respect to HSS or the HSS Subsidiaries for taxable years or periods ending on or before the Closing and shall pay any Taxes due in respect of such Tax Returns, and Purchaser shall prepare in accordance with past practice and shall file or cause to be filed when due all Tax Returns that are required to be filed by or with respect to HIS Asia for taxable years or periods ending after the Closing (and its predecessors for periods ending after the Closing) and shall remit any Taxes due in respect of such Tax Returns. V.5 Transfer Taxes. Notwithstanding anything to the contrary in this Article, the parties shall equally bear all transfer taxes arising in connection with the transactions under this Agreement. V.6 Information to be Provided by the Purchaser. With respect to the period prior to the Closing, the Purchaser shall promptly cause HIS Asia to prepare and provide to HSS a package of tax information materials (the "Tax Package"), which shall be completed in accordance with past practice including past practice as to providing the information, schedules and work papers and as to the method of computation of separate taxable income or other relevant measure of taxation of HIS Asia. The Purchaser shall cause the Tax Package for the portion of the taxable period ending on the Closing to be delivered to HSS within one hundred twenty (120) days after the Closing. The Tax Package shall also include the reports prepared by MAI's auditors for each of the current Asian subsidiaries of HIS or MAI. V.7 Tax Proceedings. (a) Right to Control Proceedings. HSS shall have the responsibility for, and the right to control, at HSS's expense, the audit (and disposition thereof) of any Tax Return relating to periods ending on or prior to the Closing and to participate in the disposition of the audit of any Tax Return relating to the periods ending after the Closing if such audit or disposition thereof could give rise to a claim for indemnification hereunder (any such audit or disposition, a "Tax Proceeding"). 19 (b) Notice; Reports. HSS's right to control a Tax Proceeding shall commence upon the receipt by the Purchaser or any of its Affiliates (including, after the Closing, HIS Asia) of a proposed adjustment to Tax for the period under audit or examination communicated in writing. The Purchaser shall promptly notify HSS in writing upon their learning of the pendency of a Tax Proceeding and shall fully cooperate with HSS in the conduct of such Tax Proceeding. The failure on the part of the Purchaser to promptly notify HSS of the pendency of a Tax Proceeding shall not in any way discharge HSS's indemnity obligations hereunder, except that the Purchaser shall be liable for any increase in penalties, interest, other assessments or fees and expenses which are due to any delay in promptly notifying HSS of the pendency of any Tax Proceeding and shall be responsible for any indemnity obligations to the extent that HSS is prejudiced as a result of such delay. Without the prior written consent of HSS (which consent shall not be unreasonably withheld), neither the Purchaser nor any of its Affiliates shall settle or compromise any claim for Taxes that might result in HSS's being required to make an indemnity payment pursuant to Section 5.4(a). The Purchaser shall, and shall cause HIS Asia to, cooperate with HSS including providing reasonable access to records, returns and supporting information, in connection with any Tax Proceeding or matter as to which the Purchaser may seek indemnity or other relief for HSS under this Article V. The Purchaser promptly shall pay HSS any refunds, rebates or other recoveries received by HIS Asia to which HSS is entitled pursuant to Section 5.3(a). V.8 Assistance and Cooperation. After the Closing, each of HSS and the Purchaser shall (i) assist (and cause their respective affiliates to assist) the other party in preparing any Tax Returns or reports which such other party is responsible for preparing and filing in accordance with this Article V, (ii) cooperate fully in preparing for any audits of, or disputes with taxing authorities regarding, any Tax Returns of HIS Asia, (iii) make available to the other and to any taxing authority as reasonably requested all information, records, and documents relating to Taxes of HIS Asia, (iv) provide timely notice to the other in writing of any pending or threatened tax audits or assessments of HIS Asia for taxable periods for which the other may have a liability under this Article V and (v) furnish the other with copies of all correspondence received from any taxing authority in connection with any tax audit or information request with respect to any such taxable period. V.9 Survival, Etc. Notwithstanding anything to the contrary contained in this Agreement, the representations and warranties and the indemnification obligations set forth in this Article V shall survive the Closing and shall remain in effect until the expiration of the applicable statute of limitations. ARTICLE VI Conditions to Closing 20 VI.1 Conditions to the Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of the conditions set forth in this Section 6.1, any one or more of which may be waived, in whole or in part, by the Purchaser: (a) Approvals. With respect to any applicable local laws, the parties shall have procured such approvals, if applicable, or there shall have occurred the expiration or early termination of the applicable waiting periods, if any, with respect thereto without there being any continuing objection thereto. (b) Orders. No party hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction which enjoins or prohibits the consummation of the sale of the Stock or the transactions contemplated by the Ancillary Agreements. (c) Accuracy of Representations. The representations and warranties of HSS and the HSS Shareholders in this Agreement shall be true and correct at the Closing , except where the failure of the representations and warranties to be true and correct would not reasonably be expected to have a Material Adverse Effect on the Business, or Purchaser has knowledge of the inaccuracy of such representations and warranties based up its due diligence investigation of HSS and the HSS Shareholders, and the Purchaser shall have received a certificate, dated the Closing, of the executive officer of HSS and from HSS Shareholders to that effect in the form set forth as Exhibit B hereto. (d) Performance of Covenants. HSS and the HSS Shareholders shall have performed and complied in all material respects with all covenants and agreements contained in this Agreement that are required to be performed or complied with by it at or prior to the Closing, and the Purchaser shall have received a certificate, dated as of the Closing, of the executive officer of HSS to that effect. (e) Resignation of Directors. The directors of HSS and the HSS Subsidiaries shall have submitted their resignations in writing, effective as of the Closing, to HIS Asia. (f) Ancillary Agreements. The Ancillary Agreements shall have been executed and delivered by the parties thereto and be in full force and effect. (g) Opinion of Counsel. Purchaser shall have received the opinion of counsel for HSS in the form set forth as Exhibit A hereto. (h) Closing Balance Sheet. HSS commits to use best efforts to provide to Purchaser a Balance Sheet dated as of the Closing within ten (10) days after Closing. 21 VI.2 Conditions to the Obligations of HSS. The obligations of HSS and the HSS Shareholders to consummate the transactions contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of the conditions set forth in this Section 6.2, any one or more of which may be waived, in whole or in part, by the Purchaser. (a) Approvals. With respect to applicable local laws , the parties shall have procured such approvals, if applicable, or there shall have occurred the expiration or early termination of the applicable waiting periods, if any, with respect thereto without there being any continuing objection thereto. (b) Orders. No party hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction which enjoins or prohibits the consummation of the sale of the Stock or the transactions contemplated by the Ancillary Agreements. (c) Accuracy of Representations. The representations and warranties of the Purchaser in this Agreement shall be true and correct in all material respects at the Closing, . HSS shall have received a certificate, dated the Closing, of an executive officer of the Purchaser to that effect, in the form set forth as Exhibit D hereto. (d) Performance of Covenants. The Purchaser shall have performed and complied in all material respects with all covenants and agreements contained in this Agreement that are required to be performed or complied with by it at Closing, and HSS and the HSS Shareholders shall have received a certificate, dated the Closing, of an executive officer of the Purchaser to that effect. (e) Ancillary Agreements. The Ancillary Agreements shall have been executed and delivered by the parties thereto and be in full force and effect. (f) Opinion of Counsel. HSS shall have received the opinion of counsel for Purchaser in the form set forth as Exhibit C hereto. (g) Formation of HIS Asia. HIS Asia shall be formed within ten (10) business days after Closing. ARTICLE VII Investment Representations and Shareholder Rights VII.1 Shareholders' Investment Representations. Shareholders understand that the shares to be issued to them in HIS Asia and MAI have not been registered under any foreign 22 securities laws or the Securities Act of 1933, as amended (the "Securities Act") and applicable state securities laws. HSS Shareholders also understand that the shares of HIS Asia and MAI are being offered and sold pursuant to an exemption from registration contained in applicable foreign securities laws and the Securities Act and state securities laws based in part upon HSS Shareholders' representations contained in this Agreement. Seller hereby represents and warrants to the Purchaser as follows: (a) Shareholders' Risk. HSS Shareholders must bear the economic risk of this investment and understand that HIS Asia and MAI have no present intention of registering the HIS Asia and MAI shares. HSS Shareholders also understand that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow HSS Shareholders to transfer all or any portion of the HIS Asia or MAI shares under the circumstances, in the amounts or at the times HSS Shareholders might propose. (b) Acquisition for Shareholders' Own Account. HSS Shareholders are acquiring the HIS Asia and MAI shares for theirs own account for investment only, and not with a view towards their distribution. VII.2 Accredited Investor. HSS Shareholders represent that they are "accredited investors" within the meaning of Regulation D under the Securities Act. VII.3 Purchaser Information. HSS Shareholders have read the information concerning MAI contained in its public reports as filed with the Securities and Exchange Commission and has had an opportunity to discuss MAI's business, management and financial affairs with directors, officers and management of the Purchaser. HSS Shareholders have also had the opportunity to ask questions of and receive answers from, MAI and its management regarding the terms and conditions of this investment in MAI and HIS Asia. VII.4 HIS Asia and MAI Shares Legend. Certificates evidencing the HIS Asia and MAI shares shall bear appropriate legends concerning the restrictions on transferability imposed by applicable foreign, Federal and state securities laws including, without limitation, the following: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. 23 VII.5 Purchaser's Investment Representations. Purchaser understands that the HSS shares have not been registered under the Securities Act or applicable foreign securities laws. Purchaser also understands that the HSS shares are being offered and sold pursuant to an exemption from registration contained in foreign securities laws and the Securities Act based in part upon Purchaser's representations contained in this Agreement. Purchaser hereby represents and warrants to HSS and the HSS Shareholders that it is an accredited investor and as follows: (a) Purchaser Bears Economic Risk. Purchaser must bear the economic risk of this investment. Purchaser also understands that there is no assurance that any exemption from registration under applicable foreign securities laws and/or the Securities Act will be available and that, even if available, such exemption may not allow Purchaser to transfer all or any portion of the HSS Shares under the circumstances, in the amounts or at the times Purchaser might propose. (b) Acquisition for Purchaser's Own Account. Purchaser is acquiring the HSS Shares for Purchaser's own account for investment only, and not with a view towards their distribution. (c). HSS Shares Legend. Certificates evidencing the HSS shares shall bear appropriate legends concerning the restrictions on transferability imposed by applicable foreign, Federal and state securities laws. VII.6 Shareholder's Agreement. The parties agree to execute the Shareholders' Agreement in substantially the form set forth as Exhibit E hereto. VII.7 Registration of MAI Common Stock. In the event that MAI undertakes a registration of its common stock after the the Closing, MAI hereby grants "piggyback" registration rights to the HSS Shareholders, such that MAI will use its best efforts to include in such registration, any unregistered MAI common stock in the hands of HSS Shareholders at no expense to the HSS Shareholders. The HSS Shareholders agree to reasonably cooperate with MAI as required to ensure the successful registration of their shares. ARTICLE VIII Indemnification VIII.1 Survival of Representations, Warranties, Covenants and Agreements. Except as provided in Section II.18, the representations and warranties included or provided for herein shall not survive the Closing. 24 ARTICLE IX Certain Definitions IX.1 Certain Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Affiliate" means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. "Agreement" means this Agreement by and between HSS, the HSS Shareholders and the Purchaser, as amended or supplemented together with all Exhibits and Schedules attached or incorporated by reference. "Ancillary Agreements" shall mean the Shareholders' Agreement. "Balance Sheet" has the meaning set forth in Section 2.6. "Benefit Plans" has the meaning set forth in Section 2.13(a). "Business" shall mean the hospitality software systems business of HSS and the HSS Subsidiaries. "Business Days" shall mean any day other than a Saturday, a Sunday or a day on which banks in New York are authorized or obligated by law or executive order to close. "Closing" has the meaning set forth in Section 1.4. "Code" shall mean the United States Internal Revenue Code of 1986, as amended. "Confidentiality Agreement" shall mean the Confidentiality Agreement, dated January, 2000, between HSS and the Purchaser. "Employees" has the meaning set forth in Section 2.13(a). "Environmental Law" shall mean any applicable law, regulation, code, license, permit, order, judgment, decree or injunction promulgated by any Governmental 25 Entity (i) for the protection of the environment, (including air, water, soil and natural resources) or (ii) regulating the use, storage, handling, release or disposal of Hazardous Substances, in each case as presently in effect. "Financial Statements" has the meaning set forth in Section 2.6. "GAAP" shall mean generally accepted accounting principles in the United States, or its local equivalent, as in effect from time to time. "Governmental Antitrust Entity" has the meaning set forth in Section 4.3(c). "Governmental Entity" shall mean any court, administrative agency or commission or other national, federal, state or local governmental authority or instrumentality. "HSS" has the meaning set forth in the first paragraph hereof. "HSS Subsidiaries" has the meaning set forth in the first paragraph hereof. "Knowledge" shall mean, with respect to any Person, the actual Knowledge of any officer with a rank of vice president or higher of such Person, the law department of such Person or any other employee of such Person with responsibility for the particular subject area or subject matter. "Lien" shall mean any mortgage, pledge, security interest, lien, charge, encumbrance, equity, claim, option, tenancy, right or restriction on transfer of any nature whatsoever. "Losses" means any and all fines, liabilities, judgments, losses, costs, expenses, or actual damages, including in each case, interest, penalties, reasonable attorneys' fees and reasonable costs of investigations and litigation. "Material Adverse Effect" shall mean any material adverse effect on the assets or properties used in, or the condition (financial or otherwise) or results of operations with respect to, the Business taken as a whole. "Material Contracts" has the meaning set forth in Section 2.10. "Permit" shall mean any license, permit, franchise, certificate of authority, or order, or any waiver of the foregoing, required to be issued by any Governmental Entity. 26 "Permitted Liens" shall mean the following types of Liens: (a) statutory Liens of landlords, statutory Liens of banks and rights of set-off, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law, in each case incurred in the ordinary course of business (i) for amounts not yet overdue or (ii) for amounts that are overdue and that (in the case of such amounts overdue for a period in excess of 30 days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts; (b) easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the Business; and (c) any zoning or similar law or right reserved to or vested in any Governmental Entity to control or regulate the use of any real property. "Person" shall mean an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization, a Governmental Entity or any other entity. "Plans" has the meaning set forth in Section 2.13(b). "Purchase Price" shall have the meaning as set forth in Section I.2 herein. "Real Property" has the meaning set forth in Section 2.9(b). "Schedule" shall mean a disclosure schedule delivered by HSS to the Purchaser on or prior to the date of this Agreement. "Shareholders' Agreement" shall mean the Shareholders' Agreement substantially in the form attached hereto as Exhibit E. "Stock" has the meaning set forth in Recitals of this Agreement. "Taxes" has the meaning set forth in Section 5.1. "Tax Package" has the meaning set forth in Section 5.6. "Tax Proceeding" has the meaning set forth in Section 5.7(a). "Tax Return" has the meaning set forth in Section 5.1. ARTICLE X Miscellaneous 27 X.1 Amendments. This Agreement may not be amended or modified except by the express written consent of the parties hereto. X.2 Assignment. Neither party may assign this Agreement or its rights or obligations hereunder, whether by operation of law or otherwise, to any third party without the prior written consent of the other party. X.3 Notices. All notices or communications hereunder shall be in writing and shall be sent by personal service, by facsimile transmission or by overnight mail by courier of internationally recognized standing addressed as follows (or such other address as such party may designate in writing): To the Purchaser: MAI Systems Corporation 9601 Jeronimo Road Irvine, California 92618 Attention: W. Brian Kretzmer Facsimile: (949) 598-6606 With a copy to: David Griffith, General Counsel MAI Systems Corporation 9601 Jeronimo Road Irvine, California 92618 Facsimile: (949) 598-6333 28 To HSS and the HSS Subsidiaries: Hospitality Services and Solutions -------------------------------- -------------------------------- Attention: Harban Singh Facsimile: ( ) - To the Corporate Shareholder: -------------------------------- -------------------------------- -------------------------------- Attention: Facsimile: ( ) - With a copy to: Elliott Stein Stevens & Lee 190 Brodhead Road, Suite 200 Lehigh Valley, PA 18002 Facsimile: (610) 371-8506 Any notice hereunder shall be effective upon receipt by the intended recipient. X.4 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. X.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Singapore. X.6 Interpretation. When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an 29 Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" and "including" are used in this Agreement, they are deemed to be followed by the words "without limitation." For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (a) the terms defined include the plural as well as the singular, (b) all accounting terms not otherwise defined herein have the meanings assigned under GAAP or local equivalent, and (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. X.7 Entire Agreement. This Agreement, together with any agreement executed and delivered by the parties concurrently herewith and the Schedules and Exhibits attached hereto and together with the Confidentiality Agreement, constitutes the entire agreement between the Purchaser and HSS with respect to the subject matter hereof. There are no representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein. This Agreement supersedes all prior agreements between the parties with respect to the Stock purchased hereunder and the subject matter hereof, other than the Confidentiality Agreement. X.8 Publicity and Confidentiality. Concurrent with the Closing or thereafter, the parties may jointly prepare a news release or other announcement regarding this Agreement and, subject to their respective legal obligations or stock exchange requirements, thereafter will consult with each other regarding the text of any press release or other public statement relating to the transaction contemplated by this Agreement prior to any release or filing thereof. The Confidentiality Agreement shall survive the Closing, however, the Purchaser may disclose such terms of the Agreement as are mandated by its reporting requirements under the 1934 Securities Exchange Act, including filing the Agreement as an exhibit to such reports. X.9 Expenses. HSS, the HSS Subsidiaries, the HSS Shareholders, and the Purchaser each shall pay their own expenses incident to the negotiation, preparation and performance of this Agreement and the transactions contemplated hereby, including but not limited to the fees, expenses and disbursements of their respective investment bankers, accountants and counsel. X.10 No Third Party Beneficiaries. Except for Section 4.5, nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement. X.11 Jurisdiction; Arbitration; Waivers. Any controversy arising out of or 30 relating to this Agreement shall be submitted to arbitration in Singapore before a panel of three (3) arbitrators selected in accordance with the Commercial Arbitration Rules of the International Chamber of Commerce, and shall be conducted in accordance with its Commercial Arbitration Rules; provided, however, that provisional injunctive relief may, but need not, be sought by any party in a court of law in Singapore while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the Arbitrators. Final resolution of any dispute through arbitration may include any remedy or relief which the Arbitrators deem just and equitable, including any and all remedies provided by Singapore law. At the conclusion of the arbitration, the Arbitrators shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrators' award or decision is based. Any award or relief granted by the Arbitrators hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction in Singapore. All parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement. The parties agree that in any proceeding to enforce the terms of this Agreement, the prevailing party shall be entitled to its or his or her reasonable attorneys' fees and costs incurred by it or him or her in connection with resolution of the dispute in addition to any other relief granted. X.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first above written, by the duly authorized representatives of the parties hereto. [SIGNATURE BLOCKS ON NEXT PAGE] 31 HOTEL INFORMATION SYSTEMS, INC. By: -------------------------------- Name: W. Brian Kretzmer Title: President MAI SYSTEMS CORPORATION (as to the obligations created by Sections I.2 (iii) and VII.7 only) By: -------------------------------- Name: W. Brian Kretzmer Title: President HIS ASIA, PTE. LIMITED By: -------------------------------- Its: -------------------------------- HOSPITALITY SERVICES & SOLUTIONS By: -------------------------------- Name: Harbans Singh Title: President INDIVIDUAL SHAREHOLDER: ------------------------------- Harbans Singh CORPORATE SHAREHOLDER: By: -------------------------------- Name: Title: 32 EX-10.2 4 a83810exv10w2.txt EXHIBIT 10.2 Exhibit 10.2 April 16, 2002 Mr. Richard S. Ressler Orchard Capital Corporation 6922 Hollywood Boulevard, Suite 900 Hollywood, CA 90028 Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation Dear Richard: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 50,000 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire separately with respect to the number of shares of Restricted Stock awarded to you below on each of the following dates:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 12,500 May 21, 2002 12,500 May 21, 2003 12,500 May 21, 2004 12,500 May 21, 2005

3. Shares of Common Stock awarded to you subject to a Restricted Period may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered during such Restricted Period except as hereinafter provided. Except for such restrictions, you shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares. 4. If you cease to be a director or an employee of the Company for any reason, the number of shares of Common Stock awarded to you for which the Restricted Period shall not have expired shall upon such termination of your directorship be forfeited and returned to the Company. The forfeiture provisions will cease to apply if the Company consummates either a sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company with any other corporation (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation). 5. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in your name and deposited by you, together with a stock power in the form set forth in Exhibit A hereto, with the Company and shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI Systems Corporation and Subsidiaries and an Agreement entered into between the registered owner and MAI Systems Corporation. A copy of such Plan is on file in the office of the Company, 9601 Jeronimo Road, Irvine, California (attn: Finance Department)." At the expiration of the Restricted Period for a given number of shares, the Company shall redeliver to you (or your legal representatives, beneficiaries or heirs) from the shares of Common Stock deposited with it the number of shares which have then ceased to be Restricted Stock. At this time, it is the Company's intention that all shares of Common Stock delivered to you will be registered under the Securities Act of 1933 (the "Act"). If the shares are not so registered, or have ceased to be so registered at delivery, the Company will notify you. You agree that if you are notified that shares of Common Stock delivered to you are not registered under the Act, prior to making any sale, assignment, transfer, pledge or other disposition (after expiration of the Restricted Period) of any shares of Common Stock awarded to you under the Plan, you will give written notice to the Company describing the manner of such proposed disposition and containing such other information as shall be necessary to enable counsel for the Company to determine whether registration of such shares under the Act is required in connection with such proposed disposition. You further agree that you will not effect such proposed disposition until either (i) the Company has notified you that in the opinion of its counsel registration of such shares under the Act is not required in respect of such proposed disposition, or (ii) a registration statement under the Act covering such shares has been filed by the Company with the Securities and Exchange Commission and is effective under the Act as to such proposed disposition. 6. The Company has the right to withhold all applicable income and employment taxes due and owning at the time a given number of shares of Registered Stock become taxable, and/or to delay delivery of Registered Stock until appropriate arrangements have been made for payment of such withholding. 7. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares as to which awards may be granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received by a Participant with respect to a number of shares of Restricted Stock for which the Restricted Period shall not have expired will be subject to the same restrictions with respect to an equivalent number of shares and shall be deposited with the Company. 8. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence stated above or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 9. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- W. Brian Kretzmer, Chief Executive Officer, President and Secretary Accepted and agreed to as of the date first above written: - -------------------------------- Richard S. Ressler STOCK POWER FOR VALUE RECEIVED, The undersigned hereby sells, assigns and transfers unto: MAI SYSTEMS CORPORATION 50,000 Shares of the Common Stock of MAI Systems Corporation standing in his name on the books of said Corporation represented by Certificate No. ____ herewith and do hereby irrevocably constitute and appoint William Brian Kretzmer and/or James W. Dolan attorney to transfer the said stock on the books of the within named Corporation with full power of substitution. DATED: April __, 2002 BY: -------------------------------- PRINTED NAME: -------------------------------- The signature(s) on this Assignment must correspond with the name(s) on the face of the certificate in every particular, without alteration or enlargement, or any change. EX-10.3 5 a83810exv10w3.txt EXHIBIT 10.3 Exhibit 10.3 April 16, 2002 Mr. Zohar Loshitzer 9551 Lime Orchard Road Beverly Hills, CA 90210 Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation Dear Zohar: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 50,000 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire separately with respect to the number of shares of Restricted Stock awarded to you below on each of the following dates:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 12,500 May 21, 2002 12,500 May 21, 2003 12,500 May 21, 2004 12,500 May 21, 2005

3. Shares of Common Stock awarded to you subject to a Restricted Period may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered during such Restricted Period except as hereinafter provided. Except for such restrictions, you shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares. 4. If you cease to be a director or an employee of the Company for any reason, the number of shares of Common Stock awarded to you for which the Restricted Period shall not have expired shall upon such termination of your directorship be forfeited and returned to the Company. The forfeiture provisions will cease to apply if the Company consummates either a sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company with any other corporation (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation). 5. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in your name and deposited by you, together with a stock power in the form set forth in Exhibit A hereto, with the Company and shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI Systems Corporation and Subsidiaries and an Agreement entered into between the registered owner and MAI Systems Corporation. A copy of such Plan is on file in the office of the Company, 9601 Jeronimo Road, Irvine, California (attn: Finance Department)." At the expiration of the Restricted Period for a given number of shares, the Company shall redeliver to you (or your legal representatives, beneficiaries or heirs) from the shares of Common Stock deposited with it the number of shares which have then ceased to be Restricted Stock. At this time, it is the Company's intention that all shares of Common Stock delivered to you will be registered under the Securities Act of 1933 (the "Act"). If the shares are not so registered, or have ceased to be so registered at delivery, the Company will notify you. You agree that if you are notified that shares of Common Stock delivered to you are not registered under the Act, prior to making any sale, assignment, transfer, pledge or other disposition (after expiration of the Restricted Period) of any shares of Common Stock awarded to you under the Plan, you will give written notice to the Company describing the manner of such proposed disposition and containing such other information as shall be necessary to enable counsel for the Company to determine whether registration of such shares under the Act is required in connection with such proposed disposition. You further agree that you will not effect such proposed disposition until either (i) the Company has notified you that in the opinion of its counsel registration of such shares under the Act is not required in respect of such proposed disposition, or (ii) a registration statement under the Act covering such shares has been filed by the Company with the Securities and Exchange Commission and is effective under the Act as to such proposed disposition. 6. The Company has the right to withhold all applicable income and employment taxes due and owning at the time a given number of shares of Registered Stock become taxable, and/or to delay delivery of Registered Stock until appropriate arrangements have been made for payment of such withholding. 7. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares as to which awards may be granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received by a Participant with respect to a number of shares of Restricted Stock for which the Restricted Period shall not have expired will be subject to the same restrictions with respect to an equivalent number of shares and shall be deposited with the Company. 8. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence stated above or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 2 9. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- W. Brian Kretzmer, Chief Executive Officer, President and Secretary Accepted and agreed to as of the date first above written: - ---------------------------- Zohar Loshitzer 3 STOCK POWER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems Corporation standing in my name on the books of said Corporation represented by Certificate No. ___ herewith and do hereby irrevocably constitute and appoint William Brian Kretzmer, or his nominee, attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. DATED: April ___, 2002 BY: -------------------------------- PRINT NAME: Zohar Loshitzer The signature(s) on this Assignment must correspond with the name(s) on the face of the certificate in every particular, without alteration or enlargement, or any change. IN THE PRESENCE OF: ----------------------------------- EX-10.4 6 a83810exv10w4.txt EXHIBIT 10.4 Exhibit 10.4 April 16, 2002 Mr. Morton O. Schapiro, President Williams College 880 Main Street Hopkins Hall, 3rd Floor Williamstown, MA 01267 Re: Issuance of 12,500 Shares of Restricted Stock of MAI Systems Corporation Dear Mort: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 12,500 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire with respect to the number of shares of Restricted Stock awarded to you below on the following date:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 12,500 April 19, 2002

3. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence stated above or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 4. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- W. Brian Kretzmer, Chief Executive Officer, President and Secretary Accepted and agreed to as of the date first above written: - -------------------------------- Morton O. Schapiro EX-10.5 7 a83810exv10w5.txt EXHIBIT 10.5 Exhibit 10.5 April 16, 2002 Mr. Stephen Ross 5036 Veloz Avenue Tarzana, CA 91356 Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation Dear Steve: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 50,000 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire separately with respect to the number of shares of Restricted Stock awarded to you below on each of the following dates:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 12,500 May 21, 2002 12,500 May 21, 2003 12,500 May 21, 2004 12,500 May 21, 2005

3. Shares of Common Stock awarded to you subject to a Restricted Period may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered during such Restricted Period except as hereinafter provided. Except for such restrictions, you shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares. 4. If you cease to be a director or an employee of the Company for any reason, the number of shares of Common Stock awarded to you for which the Restricted Period shall not have expired shall upon such termination of your directorship be forfeited and returned to the Company. The forfeiture provisions will cease to apply if the Company consummates either a sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company with any other corporation (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation). 5. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in your name and deposited by you, together with a stock power in the form set forth in Exhibit A hereto, with the Company and shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI Systems Corporation and Subsidiaries and an Agreement entered into between the registered owner and MAI Systems Corporation. A copy of such Plan is on file in the office of the Company, 9601 Jeronimo Road, Irvine, California (attn: Finance Department)." At the expiration of the Restricted Period for a given number of shares, the Company shall redeliver to you (or your legal representatives, beneficiaries or heirs) from the shares of Common Stock deposited with it the number of shares which have then ceased to be Restricted Stock. At this time, it is the Company's intention that all shares of Common Stock delivered to you will be registered under the Securities Act of 1933 (the "Act"). If the shares are not so registered, or have ceased to be so registered at delivery, the Company will notify you. You agree that if you are notified that shares of Common Stock delivered to you are not registered under the Act, prior to making any sale, assignment, transfer, pledge or other disposition (after expiration of the Restricted Period) of any shares of Common Stock awarded to you under the Plan, you will give written notice to the Company describing the manner of such proposed disposition and containing such other information as shall be necessary to enable counsel for the Company to determine whether registration of such shares under the Act is required in connection with such proposed disposition. You further agree that you will not effect such proposed disposition until either (i) the Company has notified you that in the opinion of its counsel registration of such shares under the Act is not required in respect of such proposed disposition, or (ii) a registration statement under the Act covering such shares has been filed by the Company with the Securities and Exchange Commission and is effective under the Act as to such proposed disposition. 6. The Company has the right to withhold all applicable income and employment taxes due and owning at the time a given number of shares of Registered Stock become taxable, and/or to delay delivery of Registered Stock until appropriate arrangements have been made for payment of such withholding. 7. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares as to which awards may be granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received by a Participant with respect to a number of shares of Restricted Stock for which the Restricted Period shall not have expired will be subject to the same restrictions with respect to an equivalent number of shares and shall be deposited with the Company. 8. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence stated above or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 9. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- W. Brian Kretzmer, Chief Executive Officer, President and Secretary Accepted and agreed to as of the date first above written: - ---------------------------- Stephen Ross STOCK POWER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems Corporation standing in my name on the books of said Corporation represented by Certificate No. ___ herewith and do hereby irrevocably constitute and appoint William Brian Kretzmer, or his nominee, attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. DATED: April ___, 2002 BY: -------------------------------- PRINT NAME: Stephen Ross The signature(s) on this Assignment must correspond with the name(s) on the face of the certificate in every particular, without alteration or enlargement, or any change. IN THE PRESENCE OF: ------------------------------------ EX-10.6 8 a83810exv10w6.txt EXHIBIT 10.6 Exhibit 10.6 April 16, 2002 Mr. Steven F. Mayer, Managing Director US Bancorp Libra 11766 Wilshire Boulevard, Suite 870 Los Angeles, CA 90025 Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation Dear Steve: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 50,000 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire separately with respect to the number of shares of Restricted Stock awarded to you below on each of the following dates:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 12,500 May 21, 2002 12,500 May 21, 2003 12,500 May 21, 2004 12,500 May 21, 2005

3. Shares of Common Stock awarded to you subject to a Restricted Period may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered during such Restricted Period except as hereinafter provided. Except for such restrictions, you shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares. 4. If you cease to be a director or an employee of the Company for any reason, the number of shares of Common Stock awarded to you for which the Restricted Period shall not have expired shall upon such termination of your directorship be forfeited and returned to the Company. The forfeiture provisions will cease to apply if the Company consummates either a sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company with any other corporation (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation). 5. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in your name and deposited by you, together with a stock power in the form set forth in Exhibit A hereto, with the Company and shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI Systems Corporation and Subsidiaries and an Agreement entered into between the registered owner and MAI Systems Corporation. A copy of such Plan is on file in the office of the Company, 9601 Jeronimo Road, Irvine, California (attn: Finance Department)." At the expiration of the Restricted Period for a given number of shares, the Company shall redeliver to you (or your legal representatives, beneficiaries or heirs) from the shares of Common Stock deposited with it the number of shares which have then ceased to be Restricted Stock. At this time, it is the Company's intention that all shares of Common Stock delivered to you will be registered under the Securities Act of 1933 (the "Act"). If the shares are not so registered, or have ceased to be so registered at delivery, the Company will notify you. You agree that if you are notified that shares of Common Stock delivered to you are not registered under the Act, prior to making any sale, assignment, transfer, pledge or other disposition (after expiration of the Restricted Period) of any shares of Common Stock awarded to you under the Plan, you will give written notice to the Company describing the manner of such proposed disposition and containing such other information as shall be necessary to enable counsel for the Company to determine whether registration of such shares under the Act is required in connection with such proposed disposition. You further agree that you will not effect such proposed disposition until either (i) the Company has notified you that in the opinion of its counsel registration of such shares under the Act is not required in respect of such proposed disposition, or (ii) a registration statement under the Act covering such shares has been filed by the Company with the Securities and Exchange Commission and is effective under the Act as to such proposed disposition. 6. The Company has the right to withhold all applicable income and employment taxes due and owning at the time a given number of shares of Registered Stock become taxable, and/or to delay delivery of Registered Stock until appropriate arrangements have been made for payment of such withholding. 7. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares as to which awards may be granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received by a Participant with respect to a number of shares of Restricted Stock for which the Restricted Period shall not have expired will be subject to the same restrictions with respect to an equivalent number of shares and shall be deposited with the Company. 8. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence stated above or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 9. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- W. Brian Kretzmer, Chief Executive Officer, President and Secretary Accepted and agreed to as of the date first above written: - ---------------------------- Steven F. Mayer STOCK POWER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems Corporation standing in my name on the books of said Corporation represented by Certificate No. ___ herewith and do hereby irrevocably constitute and appoint William Brian Kretzmer, or his nominee, attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. DATED: April ___, 2002 BY: -------------------------------- PRINT NAME: Steven F. Mayer The signature(s) on this Assignment must correspond with the name(s) on the face of the certificate in every particular, without alteration or enlargement, or any change. IN THE PRESENCE OF: ------------------------------------ EX-10.7 9 a83810exv10w7.txt EXHIBIT 10.7 Exhibit 10.7 April 16, 2002 Mr. W. Brian Kretzmer MAI Systems Corporation 9601 Jeronimo Road Irvine, CA 92618 Re: Issuance of 250,000 Shares of Restricted Stock of MAI Systems Corporation Dear Brian: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 250,000 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire separately with respect to the number of shares of Restricted Stock awarded to you below on each of the following dates:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 62,500 May 21, 2002 62,500 May 21, 2003 62,500 May 21, 2004 62,500 May 21, 2005

3. Shares of Common Stock awarded to you subject to the same Restricted Period may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered during such Restricted Period except as hereinafter provided. Except for such restrictions, you shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares. 4. If you cease to be a an employee of the Company for any reason, the number of shares of Common Stock awarded to you for which the Restricted Period shall not have expired shall upon such termination of your employment be forfeited and returned to the Company. The forfeiture provisions will cease to apply if: (a) the Company consummates either a sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company with any other corporation (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation); or (b) Richard S. Ressler is no longer the Chairman of the Board of Directors of the Company. 5. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in your name and deposited by you, together with a stock power in the form set forth in Exhibit A hereto, with the Company and shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI Systems Corporation and an Agreement entered into between the registered owner and MAI Systems Corporation. A copy of such Plan is on file in the office of the Company, 9601 Jeronimo Road, Irvine, California (attn: Finance Department)." At the expiration of the Restricted Period for a given number of shares, the Company shall redeliver to you (or your legal representatives, beneficiaries or heirs) from the shares of Common Stock deposited with it the number of shares which have then ceased to be Restricted Stock. At this time, it is the Company's intention that all shares of Common Stock delivered to you will be registered under the Securities Act of 1933 (the "Act"). If the shares are not so registered, or have ceased to be so registered at delivery, the Company will notify you. You agree that if you are notified that shares of Common Stock delivered to you are not registered under the Act, prior to making any sale, assignment, transfer, pledge or other disposition (after expiration of the Restricted Period) of any shares of Common Stock awarded to you under the Plan, you will give written notice to the Company describing the manner of such proposed disposition and containing such other information as shall be necessary to enable counsel for the Company to determine whether registration of such shares under the Act is required in connection with such proposed disposition. You further agree that you will not effect such proposed disposition until either (i) the Company has notified you that in the opinion of its counsel registration of such shares under the Act is not required in respect of such proposed disposition, or (ii) a registration statement under the Act covering such shares has been filed by the Company with the Securities and Exchange Commission and is effective under the Act as to such proposed disposition. 6. The Company has the right to withhold all applicable income and employment taxes due and owning at the time a given number of shares of Registered Stock become taxable, and/or to delay delivery of Registered Stock until appropriate arrangements have been made for payment of such withholding. 7. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares as to which awards may be granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received by a Participant with respect to a number of shares of Restricted Stock for which the Restricted Period shall not have expired will be subject to the same restrictions with respect to an equivalent number of shares and shall be deposited with the Company. 8. Nothing herein contained shall affect the right of the Company to terminate your services, responsibilities and duties any time for any reason whatsoever. 9. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 10. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- James W. Dolan, Chief Financial and Operating Officer Accepted and agreed to as of the date first above written: - ---------------------------- W. Brian Kretzmer Exhibit A STOCK POWER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems Corporation standing in my name on the books of said Corporation represented by Certificate No. ___ herewith and do hereby irrevocably constitute and appoint James W. Dolan, or his nominee, attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. DATED: April ___, 2002 BY: -------------------------------- PRINT NAME: W. Brian Kretzmer The signature(s) on this Assignment must correspond with the name(s) on the face of the certificate in every particular, without alteration or enlargement, or any change. IN THE PRESENCE OF: ------------------------------------- EX-10.8 10 a83810exv10w8.txt EXHIBIT 10.8 Exhibit 10.8 April 16, 2002 Mr. James W. Dolan MAI Systems Corporation 9601 Jeronimo Road Irvine, CA 92618 Re: Issuance of 150,000 Shares of Restricted Stock of MAI Systems Corporation Dear Jim: I am pleased to inform you that the Committee appointed by the Board of Directors of MAI Systems Corporation (the "Company") to administer the Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you 150,000 shares of Restricted Stock, subject to your acceptance of the terms, conditions and restrictions of the award set forth in this letter agreement. Please indicate your acceptance by signing and returning the enclosed copy of this letter agreement. 1. A copy of the Plan is attached hereto, and in all cases the terms of the Plan govern the conditions under which the shares of Restricted Stock are awarded to you, except to the extent different terms are set forth herein. Terms used in this agreement have the same meaning as in section 2 of the Plan. 2. The Restricted Period shall expire separately with respect to the number of shares of Restricted Stock awarded to you below on each of the following dates:

Number of Shares Expiration of Restricted Period ---------------- ------------------------------- 37,500 May 21, 2002 37,500 May 21, 2003 37,500 May 21, 2004 37,500 May 21, 2005

3. Shares of Common Stock awarded to you subject to a Restricted Period may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered during such Restricted Period except as hereinafter provided. Except for such restrictions, you shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares. 4. If you cease to be a an employee of the Company for any reason, the number of shares of Common Stock awarded to you for which the Restricted Period shall not have expired shall upon such termination of your employment be forfeited and returned to the Company. The forfeiture provisions will cease to apply if: (a) the Company consummates either a sale of all or substantially all of the assets of the Company or a consolidation or merger of the Company with any other corporation (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation); or (b) Richard S. Ressler is no longer the Chairman of the Board of Directors of the Company. 5. Each certificate issued in respect of shares of Restricted Stock awarded under the Plan shall be registered in your name and deposited by you, together with a stock power in the form set forth in Exhibit A hereto, with the Company and shall bear the following (or a similar) legend: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI Systems Corporation and an Agreement entered into between the registered owner and MAI Systems Corporation. A copy of such Plan is on file in the office of the Company, 9601 Jeronimo Road, Irvine, California (attn: Finance Department)." At the expiration of the Restricted Period for a given number of shares, the Company shall redeliver to you (or your legal representatives, beneficiaries or heirs) from the shares of Common Stock deposited with it the number of shares which have then ceased to be Restricted Stock. At this time, it is the Company's intention that all shares of Common Stock delivered to you will be registered under the Securities Act of 1933 (the "Act"). If the shares are not so registered, or have ceased to be so registered at delivery, the Company will notify you. You agree that if you are notified that shares of Common Stock delivered to you are not registered under the Act, prior to making any sale, assignment, transfer, pledge or other disposition (after expiration of the Restricted Period) of any shares of Common Stock awarded to you under the Plan, you will give written notice to the Company describing the manner of such proposed disposition and containing such other information as shall be necessary to enable counsel for the Company to determine whether registration of such shares under the Act is required in connection with such proposed disposition. You further agree that you will not effect such proposed disposition until either (i) the Company has notified you that in the opinion of its counsel registration of such shares under the Act is not required in respect of such proposed disposition, or (ii) a registration statement under the Act covering such shares has been filed by the Company with the Securities and Exchange Commission and is effective under the Act as to such proposed disposition. delivered to the Company by you at the same time as the delivery of the Repurchase Price to you. The Company shall have the right to assign the Company's Share Repurchase Option at any time, whether or not such option is then exercisable, to one or more entities or persons as may be selected by the Company. 6. The Company has the right to withhold all applicable income and employment taxes due and owning at the time a given number of shares of Registered Stock become taxable, and/or to delay delivery of Registered Stock until appropriate arrangements have been made for payment of such withholding. 7. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares as to which awards may be granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities received by a Participant with respect to a number of shares of Restricted Stock for which the Restricted Period shall not have expired will be subject to the same restrictions with respect to an equivalent number of shares and shall be deposited with the Company. 2 8. Nothing herein contained shall affect the right of the Company to terminate your services, responsibilities and duties any time for any reason whatsoever. 9. Any notice to be given to the Company shall be addressed to the Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice to be given you shall be addressed to you at your residence or as it may hereafter appear on the employment records of the Company, or at such other address as may hereafter be designated in writing. 10. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. Sincerely, MAI SYSTEMS CORPORATION By: -------------------------------- W. Brian Kretzmer, Chief Executive Officer, President and Secretary Accepted and agreed to as of the date first above written: - ---------------------------- James W. Dolan 3 Exhibit A STOCK POWER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems Corporation standing in my name on the books of said Corporation represented by Certificate No. ___ herewith and do hereby irrevocably constitute and appoint William Brian Kretzmer, or his nominee, attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. DATED: April ___, 2002 BY: -------------------------------- PRINT NAME: James W. Dolan The signature(s) on this Assignment must correspond with the name(s) on the face of the certificate in every particular, without alteration or enlargement, or any change. IN THE PRESENCE OF: ----------------------------------- 4 EX-99.1 11 a83810exv99w1.htm EXHIBIT 99.1

Exhibit 99.1

MAI SYSTEMS CORPORATION

CERTIFICATION

In connection with the periodic report of MAI Systems Corporation (the “Company”) on Form 10Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission (the “Report”), I, William Brian Kretzmer, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for the purpose of Title 18, Chapter 18, Section 1350 of the United States Code, that to the best of my knowledge:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Date: August 14, 2002 /s/William Brian Kretzmer
William Brian Kretzmer
Chief Executive Officer

EX-99.2 12 a83810exv99w2.htm EXHIBIT 99.2

Exhibit 99.2

MAI SYSTEMS CORPORATION

CERTIFICATION

In connection with the periodic report of MAI Systems Corporation (the “Company”) on Form 10Q for the period ended June 30, 2002 as filed with the Securities and Exchange Commission (the “Report”), I, James W. Dolan, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for the purpose of Title 18, Chapter 18, Section 1350 of the United States Code, that to the best of my knowledge:

(3)	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
(4)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Date: August 14, 2020 /s/James W. Dolan
James W. Dolan
Chief Financial Officer

GRAPHIC 13 a83810xbox.gif GRAPHIC begin 644 a83810xbox.gif M1TE&.#EA#``,`/?^``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H* M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9 M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*" M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1 MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYRGI^?GZ"@ MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^ MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)RWM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ M^OO[^_S\_/W]_?[^_O___R'Y!`$``/X`+``````,``P`!PA>`/]%8T:PH,%_ M&0`H7,@0(3UF_R)&C*8N`T)P"O1(1"4@F$6+UB@0^H=*P2V$*/]94\!$P$F4 J%B/^`1!%XL>('#-EC'BSY,F0(S]& GRAPHIC 14 a83810box.gif GRAPHIC begin 644 a83810box.gif M1TE&.#EA#``,`/?^``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H* M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9 M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*" M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1 MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYRGI^?GZ"@ MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^ MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)RWM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ M^OO[^_S\_/W]_?[^_O___R'Y!`$``/X`+``````,``P`!P@Z`/\)'$APX)L? M"!,J_/<#F;B'$!\:8"BNX,`#%"T*Q/BCHD:.'BV"U/AOY,>,)SN2Y&C@@,N7 &+@$$!``[ ` end -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                            Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

                                 by and between

             HIS ASIA, PTE. LIMITED, HOTEL INFORMATION SYSTEMS, INC.

                                       and

                    HOSPITALITY SERVICES & SOLUTIONS PTE LTD.
                              AND ITS SUBSIDIARIES
                                AND SHAREHOLDERS

                           Dated as of June 23, 2002



                                TABLE OF CONTENTS


                                                                                          
                                    ARTICLE I
                                Purchase and Sale

1.1  Purchase and Sale...............................................................         6
1.2  Purchase Price..................................................................         6
1.3  Payment of Purchase Price and Other Obligations.................................         6
1.4  Closing.........................................................................         6

                                   ARTICLE II

           Representations and Warranties of HSS, the HSS Subsidiaries
                            and the HSS Shareholders

2.1  Organization and Authority......................................................         7
2.2  Noncontravention................................................................         8
2.3  No Governmental Consent or Approval Required....................................         8
2.4  Subsidiaries of the HSS Subsidiaries............................................         8
2.5  Capitalization of HSS...........................................................         8
2.6  Financial Statements............................................................         8
2.7  Undisclosed Liabilities.........................................................         9
2.8  Absence of Certain Developments.................................................         9
2.9  Title to Properties.............................................................         9
2.10  Contracts......................................................................        10
2.11  Litigation.....................................................................        10
2.12  Compliance with Law; Governmental Permits......................................        10
2.13  Employee Benefit Plans.........................................................        11
2.14  Certain Interests..............................................................        11
2.15  Intercompany and Related Party Transactions....................................        12
2.16  No Brokers or Finders..........................................................        12
2.17  Environmental Matters..........................................................        12
2.18  HSS Shareholder's Breach of Representations and Warranties - Post Closing......        12

                                   ARTICLE III

                     Representations and Warranties of HIS Asia and HIS

3.1  Organization and Authority......................................................        13
3.2  Noncontravention................................................................        13
3.3  No Governmental Consent or Approval Required....................................        13
3.4  Financial Capability............................................................        14






                                                                                          
                                   ARTICLE IV
                                    Covenants

4.1  Due Diligence and Access........................................................        14
4.2  Conduct of Business.............................................................        14
4.3  Commercially Reasonable Efforts; Government Approvals...........................        15
4.4  Confidentiality.................................................................        16
4.5  Employee Benefits; Employees....................................................        16
4.6  Insurance ......................................................................        17
4.7  Local Laws Relating to Corporate Changes in Control and Personnel...............        17

                                    ARTICLE V
                                   Tax Matters

5.1  Definitions.....................................................................        17
5.2  Tax-Related Representations and Warranties......................................        17
5.3  Liability for Taxes and Related Matters.........................................        18
5.4  Tax Returns.....................................................................        19
5.5  Transfer Taxes..................................................................        19
5.6  Information to be Provided by the Purchaser.....................................        19
5.7  Tax Proceedings.................................................................        19
5.8  Assistance and Cooperation......................................................        20
5.9  Survival, Etc...................................................................        20

                                   ARTICLE VI
                              Conditions to Closing

6.1  Conditions to the Obligations of the Purchaser..................................        20
6.2  Conditions to the Obligations of HSS............................................        21

                                   ARTICLE VII
               Investment Representations and Shareholder Rights

7.1  Shareholder's Investment Representations .......................................        22
7.2  Accredited Investor.............................................................        23
7.3  Purchaser Information...........................................................        23
7.4  HIS Asia and MAI Shares Legend..................................................        23
7.5  Purchaser's Investment Representations..........................................        23
7.6  Shareholder's Agreement.........................................................        24






                                                                                          
7.7  Registration of MAI Common Stock................................................        24

                                  ARTICLE VIII

                                 Indemnification

8.1  Survival of Representations, Warranties, Covenants and Agreements...............        24

                                   ARTICLE IX

                               Certain Definitions

9.1  Certain Definitions.............................................................        24

                                    ARTICLE X

                                  Miscellaneous

10.1  Amendments.....................................................................        27
10.2  Assignment.....................................................................        27
10.3  Notices........................................................................        28
10.4  Severability...................................................................        29
10.5  Governing Law..................................................................        29
10.6  Interpretation.................................................................        29
10.7  Entire Agreement...............................................................        30
10.8  Publicity and Confidentiality..................................................        30
10.9  Expenses.......................................................................        30
10.10  No Third Party Beneficiaries..................................................        30
10.11  Jurisdiction; Arbitration; Waivers............................................        30
10.12  Counterparts..................................................................        31





                                    EXHIBITS

A.             Opinion of HSS' Counsel
B.             HSS Closing Certificate
C.             Opinion of Purchaser's Counsel
D.             Purchaser's Closing Certificate
E.             Shareholder's Agreement

                                    SCHEDULES

0.1            HSS Subsidiaries
2.4(a)         Exceptions to Qualification to do Business
2.4(b)         Directors and Executive Officers of HSS
2.4(c)         List of Subsidiaries of HSS Subsidiaries
2.9(a)         Personal Property
2.9(b)         Real Property (Including Premises Lease)
2.10(a)        Agreements
2.10(b)        Consents, Approvals and Waivers Relating to Material Contracts
2.11           Litigation
2.12           Compliance with Law
2.13           Employee plan exceptions
2.13(a)        List of Employee Benefit Plans
2.14           Certain Interests
2.15           Intercompany and Related Party Transactions
2.17           Environmental Matters
5.2(a)         Tax sharing agreements, etc.
5.2(b)         Tax Returns, etc.



                            STOCK PURCHASE AGREEMENT

        THIS STOCK PURCHASE AGREEMENT dated as of June ___, 2002, is made by and
between HIS Asia, Pte. Limited, a Singapore Corporation ("HIS ASIA") and Hotel
Information Systems, Inc., a Delaware corporation ("HIS"), MAI Systems
Corporation, a Delaware corporation ("MAI")(HIS Asia and HIS are referred to
collectively herein as the "Purchaser"), and Hospitality Services & Solutions,
Pte Ltd., a Singapore limited liability company ("HSS") and its subsidiaries,
Hospitality Solutions (Malaysia) Sdn Bhd, a Malaysian company; HSI (Thailand)
Ltd., a Thai company; and Marlin Business Systems Pte Ltd, a Singapore company
(collectively, "HSS Subsidiaries") and the shareholders of HSS, Harbans Singh
and Regional Investment Co. Ltd., a Singapore company (collectively, "HSS
Shareholders").

                                    RECITALS

               A. Harbans Singh, an Individual residing in Singapore (the
"Individual Shareholder") and Regional Investment Co. Ltd., a Singapore company
(the "Corporate Shareholder")(the Individual Shareholder and the Corporate
Shareholder are referred to collectively herein as the "HSS Shareholders") own
200,000 shares representing 100% of the issued and outstanding capital stock of
HSS (the "Stock"). HSS owns the percentage interests in the HSS Subsidiaries as
set forth on Schedule 0.1 attached hereto.

               B. For purposes of this Agreement, the Stock shall also include
HSS' ownership interest in each of HSS's subsidiaries existing on the Closing
Date as set forth on Schedule 0.1 attached hereto, through which a significant
portion of the Business is conducted. As used herein the term "Business" shall
include the business and operations of HSS and the HSS Subsidiaries. HSS and the
HSS Subsidiaries are engaged in the Business of developing, selling and
supporting products that serve the hospitality and lodging industry (this and
other capitalized terms shall have the meanings assigned to such terms in
Article IX).

               C. The Purchasers desires to purchase the Stock, and HSS
Shareholders desire to sell the Stock to the Purchaser, all on the terms and
conditions set forth herein.

               D. HIS Asia, the successor to Purchasers' hospitality businesses
servicing Asia and Australia, including Hotel Information Systems Pte Ltd., a
Singapore Company; HIS Solutions Malaysia Sdn Bhd, a Malaysian company; Hotel
Information Systems, Ltd., a Hong Kong company; and Boss Solutions Limited, a
Hong Kong company, has been formed to continue the Business on and after the
Closing hereinafter described.


                                       5



               NOW THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants and conditions contained
herein, the parties hereto agree as follows:

                                    ARTICLE I

                                Purchase and Sale

               I.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, the HSS Shareholders shall sell to the Purchaser,
and the Purchaser shall purchase from the HSS Shareholders, all of their right,
title and interest in and to the Stock, free and clear of all Liens (as defined
in Article IX.1). Any reference herein to the transfer of the Stock or similar
reference shall be deemed to include the transfer of the shares of each of the
HSS Subsidiaries owned by HSS and their ownership interest in their own
subsidiaries as listed on Schedule 2.4(c). The HSS Shareholders shall deliver at
the Closing the certificate(s) evidencing the Stock, properly endorsed, or
accompanied by a duly executed stock power duly endorsed, in blank.

               I.2 Purchase Price. In consideration for the Stock and as payment
in full therefor, the Purchaser shall pay the Purchase Price as follows: (a) the
HSS Shareholders shall receive (in such proportions as they shall agree among
themselves and advise Purchaser of on or prior to the Closing) (i) 20% of the
outstanding stock of HIS Asia, which the parties agree shall consist of 200
shares of HIS Asia's common stock to be delivered within ten (10) business days
after Closing; (ii) US$75,000 in cash payable US$50,000 within 30 days of
Closing and US$25,000 payable in eleven payments of US$2,000 and a final payment
of US$3,000, with the initial monthly payment commencing 60 days from Closing
and continuing monthly thereafter until paid; and (iii) 100,000 shares of MAI
restricted (Rule 144) common stock to be delivered to the HSS Shareholders (in
such proportions as they shall agree among themselves and advise Purchaser of on
or prior to the Closing) within ten (10) business days after Closing.

               I.3 Payment of Purchase Price and Other Obligations. If the
obligations of the parties to proceed with the Closing set forth in Article VI
are satisfied or waived, at the Closing, the Purchaser shall pay the Purchase
Price as described in Section I.2 above. The Purchaser shall pay the liabilities
of HSS and the HSS Subsidiaries to their officers and directors as set forth in
Schedule 2.14 as of May 31, 2002 and excluding accrued interest, in twelve (12)
monthly installments commencing twelve (12) months after the Closing described
in Section I.4 .

               I.4 Closing. The closing (the "Closing") of the purchase and sale
of the Stock shall take place no later than June 30, 2002 at the offices of MAI
Systems Corporation, 9601 Jeronimo Road, Irvine, CA 92618 as soon as practicable
after the


                                       6



satisfaction or waiver of the conditions set forth in Article VI, or at such
other time and place as the parties shall mutually agree. The date on which the
Closing actually occurs is herein referred to as the "Closing."

                                   ARTICLE II

         Representations and Warranties of HSS, the HSS Subsidiaries and
                              the HSS Shareholders

               HSS, the HSS Subsidiaries and the HSS Shareholders (as the case
may be) represent and warrant to the Purchaser as of the Closing that:

               II.1 Organization and Authority. HSS and the HSS Subsidiaries are
companies duly organized, validly existing and in good standing under the laws
of the jurisdiction of their formation and have full corporate power and
authority to conduct the Business as it was conducted prior to Closing and to
own or lease all of their properties and assets. HSS and each of the HSS
Subsidiaries is duly qualified or licensed to do business as a foreign
corporation, and is in good standing as a foreign corporation, in every
jurisdiction in which the ownership of its property or assets or the conduct or
nature of the Business requires such qualification or license, and Schedule 0.1
sets forth a true and complete list of all such jurisdictions. HSS and each of
the HSS Subsidiaries has previously delivered to the Purchaser true and complete
copies of their Certificates of Incorporation and Bylaws (or their equivalents)
as in effect on Closing. The Corporate Shareholder is a company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation. HSS and the Corporate Shareholder have the requisite corporate power
and authority to execute, deliver and perform this Agreement and such other
documents as are contemplated hereunder to be executed and delivered at or prior
to the Closing. The execution, delivery and performance by HSS and the Corporate
Shareholder of this Agreement and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of HSS and the Corporate Shareholder.
This Agreement constitutes a valid and, assuming due execution and delivery by
the Purchaser, binding obligation of HSS and the Corporate Shareholder,
enforceable against HSS and the Corporate Shareholder in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting creditors' rights generally, and to general equitable
principles. Upon execution and delivery of the Ancillary Agreements by the
parties thereto, such Ancillary Agreements will constitute valid and binding
obligations of HSS and the Corporate Shareholder, enforceable against HSS and
the Corporate Shareholder in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally, and to general equitable principles.


                                       7



               II.2 Noncontravention. The execution, delivery and performance of
this Agreement by HSS and the Corporate Shareholder, the performance of this
Agreement by HSS and the Corporate Shareholder and the consummation of the
transactions contemplated hereby will not violate or conflict with, or
constitute a breach or default under (a) the certificate of incorporation or
bylaws (or equivalents) of HSS, the HSS Subsidiaries and the Corporate
Shareholder or (b) any law, regulation, order, judgment or decree applicable to
HSS, the HSS Subsidiaries or the Corporate Shareholder.

               II.3 No Governmental Consent or Approval Required. No
authorization, consent, Permit, approval or other order of, declaration to, or
registration, qualification, designation or filing with, any Governmental Entity
is required for or in connection with the execution, delivery and performance of
this Agreement by HSS and the Corporate Shareholder, the performance of this
Agreement by HSS and and the Corporate Shareholder and the consummation of the
transactions contemplated hereby, other than (a) the filing of notification
under any applicable laws and the expiration or early termination of the waiting
period thereunder, and (b) any consents, the failure to obtain would not
prohibit the transfer of the Stock or the consummation of any of the
transactions contemplated hereby or create a Lien on the Stock.

               II.4 Subsidiaries of the HSS Subsidiaries. The HSS Subsidiaries
have no subsidiaries except as listed on Schedule 2.4(c). References herein to
the HSS Subsidiaries include their subsidiaries, except as the context may
otherwise require.

               II.5 Capitalization of HSS. The entire authorized capital stock
of HSS consists of 200,000 shares of Common Stock of which 200,000 shares are
issued and outstanding. All of the Stock has been duly authorized and validly
issued and is fully paid and non-assessable. There are no outstanding warrants,
options, subscription, conversion, pre-emptive or other rights entitling any
other Person to purchase or otherwise acquire any capital stock of HSS or the
HSS Subsidiaries . The HSS Shareholders have good and valid title to all of the
Stock, free and clear of all Liens and, subject to applicable securities laws
and competition laws, free of any restriction on their right to transfer or
exercise any voting or other right with respect thereto. At the Closing, good
and valid title to the Stock, free and clear of all Liens, encumbrances,
equities or claims shall be transferred from the HSS Shareholders to the
Purchaser who has purchased such Stock without notice of an adverse claim
thereto (within the meaning of applicable foreign laws and the Uniform
Commercial Code).

               II.6 Financial Statements. HSS will, prior to closing, have
delivered to the Purchaser the consolidated balance sheets of HSS and the HSS
Subsidiaries as of May 31, 2002 (the "Balance Sheet") and its consolidated
statements of operations and cash flows for the years ended December 31, 2000
and 2001 (together with the Balance Sheet, the "Financial Statements"). HSS will
also, within ten (10) days after Closing, deliver a final


                                       8



Balance Sheet dated as of the Closing Date. The Financial Statements were
prepared in accordance with GAAP or its local equivalent, consistently applied,
and, fairly and accurately present the financial position of HSS and the HSS
Subsidiaries as of the respective dates thereof and the results of operations,
changes in financial position and cash flow of HSS and the HSS Subsidiaries for
the respective periods covered thereby.

               II.7 Undisclosed Liabilities. HSS, the HSS Subsidiaries and the
HSS Shareholders have no Knowledge of any liabilities required to be set forth
on the Balance Sheet in accordance with GAAP or its local equivalent, except for
(a) liabilities incurred in the ordinary course of business since the date of
the Balance Sheet and (b) liabilities that would not reasonably be expected to
have a Material Adverse Effect.

               II.8 Absence of Certain Developments. Since the date of the
Balance Sheet, there has not been, , (a) any change or event that has had or
would reasonably be expected to have a Material Adverse Effect on the Business,
other than (x) changes relating to or arising from general economic, market or
financial conditions or generally affecting the industries or markets in which
HSS or the HSS Subsidiaries operate or (y) changes relating to or arising from
the consummation or disclosure of this Agreement or any transaction contemplated
by this Agreement, (b) any declaration, setting aside or payment of any dividend
or other distribution with respect to the capital stock of HSS or the HSS
Subsidiaries, (c) any loss, destruction or damage to any property of HSS or the
HSS Subsidiaries, whether or not insured, that has had or would reasonably be
expected to have a Material Adverse Effect on the Business, or (d) any material
change in any of the significant accounting policies, practices or procedures of
HSS or the HSS Subsidiaries with respect to the Business.

               II.9 Title to Properties.

               (a) Personal Property. Schedule II.9(a) sets forth the list of
personal property of HSS and the HSS Subsidiaries being transferred to Purchaser
at Closing. Except as disclosed in the Financial Statements, HSS and the HSS
Subsidiaries have, good and marketable title to, or a valid leasehold interest
in, all of the personal properties and assets held, occupied or used primarily
in the Business, free and clear of all Liens other than (a) the lien of current
taxes not yet due and payable, (b) Permitted Liens or (c) such other Liens which
do not materially detract from the use of the property.

               (b) Real Property. Schedule 2.9(b) lists all real properties
currently owned or leased by HSS and the HSS Subsidiaries, including all
premises leases (collectively, the "Real Property"). HSS or the HSS Subsidiaries
have good and marketable title to (or a leasehold interest in) all Real Property
shown as owned or leased, if applicable, by it on Schedule 2.9(b), free and
clear of all Liens other than Permitted Liens or such other Liens which do not
materially detract from the value of such property.


                                       9



               II.10 Contracts. Attached as Schedule 2.10(a) is a true and
complete list of all debt instruments, contracts, leases, license agreements,
employment and labor agreements, and other agreements to which HSS or the HSS
Subsidiaries or any of their respective properties is subject or by which any
thereof is bound which is either (a) material to the continued conduct of the
Business as currently conducted or (b) which pursuant to its terms imposes
payment obligations on HSS or the HSS Subsidiaries in excess of $50,000 annually
or $300,000 in the aggregate ("Material Contracts"). Except as disclosed in
Schedule 2.10(b), each Material Contract is in full force and effect; and no
breach or default or event which would (with the passage of time, notice or
both) constitute a breach or default thereunder by HSS or the HSS Subsidiaries
or, to the Knowledge of HSS, any other party or obligor with respect thereto,
exists and is continuing which in each case would reasonably be expected to
materially impair the benefits expected to be derived therefrom. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in a breach of or default under
any Material Contract, will not (and will not give any Person a right to)
terminate or modify any rights of, or accelerate or augment any material
obligation of, HSS or the HSS Subsidiaries, and do not require any consent,
approval, waiver or other action by any party to any such Material Contract,
other than the matters identified in Schedule 2.10(b).

               II.11 Litigation. To the Knowledge of HSS, the HSS Subsidiaries
and the HSS Shareholders and except as disclosed in Schedule 2.11, there is no
written claim, filed complaint, arbitration, action, suit, proceeding or
investigation pending or threatened, against or affecting the Business, (a)
which if resolved adversely to would reasonably be expected to result in a
Material Adverse Effect on the Business, or (b) seeking to prevent or challenge
in any other manner the consummation of the transactions contemplated hereby.
There is no organized labor strike, dispute, slowdown or stoppage, or collective
bargaining or unfair labor practice claim pending, or to the Knowledge of HSS,
threatened, against or affecting the Company, nor are there, to the Knowledge of
HSS, any union organizing efforts with respect to employees of HSS or the HSS
Subsidiaries..

               II.12 Compliance with Law; Governmental Permits. To the Knowledge
of HSS, the HSS Subsidiaries and the HSS Shareholders and except as set forth in
Schedule 2.12, HSS or the HSS Subsidiaries are in compliance with all laws,
regulations, orders, judgments and decrees of any Governmental Entity which are
applicable to the Business, except such noncompliance as would not reasonably be
expected to have a Material Adverse Effect on the Business and HSS holds and
will transfer to the Purchaser at Closing, all Permits that are required by any
Governmental Entity to permit the Purchaser to conduct the Business as now
conducted, except for such Permits the absence of which would not reasonably be
expected to have a Material Adverse Effect on the Business. To the Knowledge of
HSS, each such material Permit is in full force and effect, except for any such
Permit the absence of which would not reasonably be expected to have a Material


                                       10



Adverse Effect on the Business. To the Knowledge of HSS, no suspension,
cancellation or termination of any of such material Permits is threatened or
imminent.

               II.13 Employee Benefit Plans. Except as disclosed in Schedule
2.13:

               (a) All benefit and compensation plans and agreements maintained
by HSS or the HSS Subsidiaries which cover current employees of HSS or the HSS
Subsidiaries (the "Employees"), including, but not limited to, employee benefit
plans, deferred compensation, stock option, stock purchase, stock appreciation
rights, stock based, incentive and bonus plans and severance plans (the "Benefit
Plans"), are listed in Schedule 2.13(a). True and complete copies of all Benefit
Plans, including, but not limited to, any trust instruments and insurance
contracts forming a part of any Benefit Plans, and all amendments thereto have
been provided or made available to Purchaser.

               (b) To the Knowledge of HSS, the HSS Subsidiaries and the HSS
Shareholders, all Benefit Plans maintained by HSS or the HSS Subsidiaries which
cover Employees (the "Plans"), are in substantial compliance with any applicable
local laws and there is no material pending or, to the Knowledge of HSS,
threatened, litigation relating to the Plans. HSS or the HSS Subsidiaries have
not engaged in a transaction with respect to any Plan that, assuming the taxable
period of such transaction expired as of the date hereof, could subject them to
a tax or penalty imposed by local laws in an amount which would be material.

               (c) To the Knowledge of HSS, the HSS Subsidiaries and the HSS
Shareholders, all contributions required to be made under the terms of any
Benefit Plan have been timely made or have been reflected on the Financial
Statements.

               (d) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any employees of HSS or the HSS Subsidiaries to
severance pay, (ii) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Benefit Plans or (iii) result in any breach
or violation of, or a default under, any of the Benefit Plans.

               II.14 Certain Interests. Except as set forth on Schedule 2.14
hereto, no officer or director of HSS or the HSS Subsidiaries is indebted or
otherwise obligated to HSS or the HSS Subsidiaries, and HSS or the HSS
Subsidiaries are not indebted or otherwise obligated to any such officer or
director, except for amounts due under normal arrangements applicable to all
employees generally as to salary or reimbursement of ordinary business expenses
or as set forth on Schedule 2.14.


                                       11



               II.15 Intercompany Transactions. To the Knowledge of HSS, the HSS
Subsidiaries and the HSS Shareholders and except as described in the financial
statements or Schedule 2.15, incurred in the ordinary course of business since
the date of the Balance Sheet or that is contemplated by, or will be discharged
or terminated pursuant to this Agreement, HSS has no liabilities or obligations
to the HSS Subsidiaries or related parties and none of the HSS Subsidiaries has
any obligations to HSS.

               II.16 No Brokers or Finders. No agent, broker, finder, or
investment or commercial banker or other Person or firm engaged by or acting on
behalf of HSS or any of the HSS Subsidiaries in connection with the negotiation,
execution or performance of this Agreement or the transactions contemplated by
this Agreement, is or will be entitled to any brokerage or finder's or similar
fee or other commission as a result of this Agreement or such transaction.

               II.17 Environmental Matters. To the Knowledge of HSS, the HSS
Subsidiaries and the HSS Shareholders and except as set forth in Schedule 2.17,
or as would not be expected to have a Material Adverse Effect on the Business:
(i) HSS and the HSS Subsidiaries are in substantial compliance with all
applicable Environmental Laws; (ii) HSS or the HSS Subsidiaries have not
received any written notices from any Governmental Entity alleging the violation
of any applicable Environmental Laws other than for matters that have been fully
resolved; (iii) HSS or the HSS Subsidiaries are not subject to any court order,
administrative order or decree arising under any Environmental Law; and (iv) HSS
or the HSS Subsidiaries have not disposed of any Hazardous Substance on any
property owned or operated by them or had any emissions or discharges of any
Hazardous Substances except as permitted under applicable Environmental Laws.

               II. 18 HSS Shareholder's Breach of Representations and Warranties
- -- Post Closing. In the event that any representation and warranty made by the
HSS Shareholders in this Agreement is determined after closing to have been
false when made, and HIS Asia sustains money damages as result thereof,
Purchaser, may for twelve (12) months following the Closing, pursue the HSS
Shareholders for its actual damages, subject to the limitations contained in
this section, incurred by HIS Asia solely as the result of such
misrepresentation. Notwithstanding anything to the contrary contained in this
Agreement, in no event whatsoever shall HIS Asia have the right to seek or
recover its first One Hundred Thousand ($100,000) Dollars of its money damages
from the HSS Shareholders nor shall it have the right to seek any sum in excess
of Two Hundred Thousand ($200,000.00) Dollars from the HSS Shareholders. The
foregoing states the HSS Shareholders' sole liability to Purchaser after the
Closing. Purchaser shall have no right to deduct or set off sums claimed under
this Section from any money or other consideration owed to Harbans Singh
pursuant to his employment with HIS Asia.


                                       12



                                   ARTICLE III

               Representations and Warranties of HIS Asia and HIS

               The Purchaser, HIS Asia and HIS hereby represent and warrant to
HSS and the HSS Shareholders that:

               III.1 Organization and Authority. HIS Asia and HIS are companies
or corporations duly organized, validly existing and in good standing under the
laws of Singapore and the state of Delaware, respectively, and HIS Asia is the
successor to Purchasers' hospitality businesses servicing Asia and Australia,
including Hotel Information Systems Pte Ltd., a a Singapore Company, HIS
Solutions Malaysia Sdn Bhd, a Malaysian company, Hotel Information Systems,
Ltd., a Hong Kong company, and Boss Solutions Limited, a Hong Kong company . The
Purchaser has full power and authority to execute, deliver and perform this
Agreement. The execution, delivery and performance by the Purchaser of this
Agreement and any Ancillary Agreement to which the Purchaser is to be a party
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement constitutes a valid and, assuming due execution by HSS
and the HSS Shareholders, binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles. Upon execution
and delivery of the Ancillary Agreements to which the Purchaser is to be a party
by the parties thereto, such Ancillary Agreements will constitute valid and
binding obligations of the Purchaser, enforceable against the Purchaser in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally, and to general equitable principles.

               III.2 Noncontravention. The execution, delivery and performance
of this Agreement by the Purchaser and the consummation of the transactions
contemplated hereby will not violate or conflict with, or constitute a breach or
default (whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under (a) the charter documents of the Purchaser or (b) any law,
regulation, order, judgment, or decree applicable to the Purchaser.

               III.3 No Governmental Consent or Approval Required. To the best
of its knowledge no authorization, consent, Permit, approval or other order of,
declaration to, or


                                       13



registration, qualification, designation or filing with, any Governmental Entity
or any other Person is required for or in connection with the execution,
delivery and performance of this Agreement by the Purchaser and the consummation
of the transactions contemplated hereby, other than (a) the filing of
notification under appropriate local laws and the expiration or early
termination of the waiting period thereunder and (b) any consents, the failure
to obtain would not prohibit the transfer of the Stock or the consummation of
any of the transactions contemplated hereby.

               III.4 Financial Capability. The Purchaser has, or has access to,
sufficient funds to make the payment of the Purchase Price on the terms and
conditions contemplated by this Agreement.

                                   ARTICLE IV

                                    Covenants

               IV.1 Due Diligence and Access. HSS has permitted the Purchaser
and its representatives to have access, during regular business hours, to the
assets, employees, books and records of HSS or the HSS Subsidiaries relating to
the Business, and has furnished, or caused to be furnished, to the Purchaser and
its representatives such financial, tax and operating data and other available
information with respect to the Business as the Purchaser.

               IV.2 Conduct of Business. Since the review by Purchasers, HSS has
conducted the Business in the ordinary and usual course consistent with past
practice, and use its commercially reasonable efforts to preserve intact the
Business and related relationships with customers, service providers and other
third parties and has not:

                       (a) issued or transferred any capital stock of HSS or the
        HSS Subsidiaries or any security convertible into or exchangeable for
        any such capital stock or any right to acquire any such capital stock;

                       (b) made any change in their respective certificates of
        incorporation or bylaws;

                       (c) disposed of any material part of their assets or
        property;

                       (d) incurred or assumed any indebtedness for borrowed
        money or guarantee any such indebtedness other than in the ordinary
        course of business consistent with past practice;

                       (e) liquidated, dissolved or otherwise reorganized or
        sought protection from creditors;


                                       14



                       (f) adopted or amended in any respect any Benefit Plan if
        such will increase the obligation of Purchaser;

                       (g) entered into any lease for real property, except
        renewals of existing leases in the ordinary course of business;

                       (h) entered into any contract or agreement or engage in
        any other type of transaction with between HSS and the HSS Subsidiaries
        other than in the normal course of business consistent with past
        practice; or

                       (i) agreed or committed itself to do any of the
        foregoing.

               IV.3 Commercially Reasonable Efforts; Government Approvals.

               (a) Upon the terms and subject to the conditions herein provided,
each of the parties hereto agrees to use its commercially reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary for it to do under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, (i) to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and the
transactions contemplated hereby (which actions shall include, without
limitation, furnishing all information required by applicable laws and
regulations in connection with approvals of or filings with any Governmental
Entity), (ii) to satisfy the conditions precedent to the obligations of the
parties hereto and (iii) to obtain any consent, authorization, order or approval
of, or any exemption by, any Governmental Entity or other public or private
third party required to be obtained or made by the Purchaser, HSS or the HSS
Subsidiaries in connection with the acquisition of the Stock or the taking of
any action contemplated by this Agreement.

               (b) Subject to appropriate confidentiality protections, each of
the parties hereto shall furnish to the other party such necessary information
and reasonable assistance as such other party may reasonably request in
connection with the foregoing and shall provide the other party with copies of
all filings made by such party with any Governmental Entity and, upon request,
any other information supplied by such party to a Governmental Entity in
connection with this Agreement and the transactions contemplated hereby.

               (c) Without limiting the generality of the foregoing, the
Purchaser and HSS agree to take or cause to be taken the following actions where
required by any appropriate local laws: (i) provide promptly to Governmental
Entities with regulatory jurisdiction over enforcement of any applicable
Competition Laws ("Governmental Antitrust Entity") information and documents
requested by any Governmental Antitrust Entity or


                                       15



necessary, proper or advisable to permit consummation of the acquisition of the
Stock and the transactions contemplated by this Agreement and (ii) without in
any way limiting the other provisions of this Section 4.3, file any notification
and report form and related material required under applicable local laws as
soon as practicable and in any event not later than 10 Business Days after the
date hereof, and thereafter use its reasonable best efforts to certify as soon
as practicable its substantial compliance with any requests for additional
information or documentary material that may be made under local laws Each party
hereto shall provide to the other copies of all correspondence between it (or
its advisor) and any Governmental Antitrust Entity relating to the acquisition
of the Stock or any matters described in this Section 4.3. Each party hereto
agrees that the other party shall have the right to participate in any meeting
between the first party and any Governmental Antitrust Entity relating to the
acquisition of the Stock or any matters described in this Section 4.3.

               IV.4 Confidentiality. Each party hereto, will hold all
confidential information provided to such party by or on behalf of the other
party hereto in confidence pursuant to the terms of the Confidentiality
Agreement. Upon any termination of this Agreement, each party hereto will
promptly return to the other party such information provided to the first party,
including any copies of such information. Each party hereto acknowledges that
the other party would be irreparably harmed by a breach of this Section 4.4 and
that there would be no adequate remedy at law or in damages to compensate the
other party for any such breach and agrees that, in addition to any other
remedy, the other party shall be entitled to one or more injunctions requiring
specific performance by the first party of this Section 4.4, and the first party
consents to the entry thereof.

               IV.5 Employee Benefits; Employees. The Purchaser shall, on and
for at least one year after the Closing, provide the employees of HIS Asia with
employee benefit and compensation plans, programs, policies and arrangements
which are (i) no less favorable in the aggregate than the benefit and
compensation plans, programs, policies and arrangements currently being provided
by MAI's wholly owned Singapore subsidiary, Hotel Information Systems, Pte.
Limited, to their employees prior to the Closing. Each such employee benefit and
compensation plan, program, policy or arrangement shall give full credit for
each participant's period of service with HSS or the HSS Subsidiaries prior to
the Closing for purposes of determining eligibility, vesting and the amount of
benefits (including subsidies relating to such benefits). Each employee welfare
benefit plan provided to the employees of HIS Asia from and after the Closing
shall (i) give full credit for co-payments, deductibles and out-of-pocket
expenses under HSS or the HSS Subsidiaries' Benefit Plans with respect to the
current plan year toward any deductibles for the remainder of the plan year
during which the Closing occurs, and (ii) shall waive any pre-existing condition
limitation for any employee covered under a Benefit Plan (which is a group
health plan) immediately prior to the Closing.


                                       16



               IV.6 Insurance.

               (a) Prior to the Closing, HSS shall have taken such action as may
have been required to ensure that any insurance coverage for any claims that
have been filed with the applicable insurers prior to the Closing relating to
HSS or the HSS Subsidiaries will continue with respect to such claims following
the Closing, and HSS agrees to pay insurance proceeds (net of any out-of-pocket
unreimbursed costs or expenses of HSS or the HSS Subsidiaries incurred in
defense of such claim) resulting from such coverage promptly after receipt
thereof. From and after the date hereof, HSS shall diligently pursue insurance
coverage for any claims filed with third party insurers prior to the Closing
relating to HSS or the HSS Subsidiaries. Following the Closing, HIS Asia shall
be responsible for the control of all claims filed with third party insurers,
subject to the control exercised by any insurers in accordance with the
applicable insurance policies.

               (b) As of the Closing, the coverage under all insurance policies
related to HSS or the HSS Subsidiaries may be continued in force for the benefit
of HIS Asia at the expense of HIS Asia. HIS Asia agrees to arrange for its own
insurance policies with respect to its operations, within thirty (30) days after
Closing.

               IV.7 Local Laws Relating to Corporate Changes in Control and
Personnel. The Purchaser shall comply with any local laws relating to corporate
changes in control or personnel.

                                    ARTICLE V

                                   Tax Matters

               V.1 Definitions. For purposes of this Agreement, "Taxes" shall
mean all federal, state, local and foreign income, property, sales and use,
excise, withholding, franchise, transfer, gross receipt, capital stock,
production, business and occupation, disability, employment, payroll, severance
or similar taxes imposed on the income, properties or operations of HSS or the
HSS Subsidiaries, together with any penalties, additions or interest relating
thereto and any interest in respect of such additions or penalties; "Tax Return"
shall mean all reports and returns required to be filed with respect to Taxes
including, without limitation, combined or consolidated returns for HSS or the
HSS Subsidiaries.


                                       17



               V.2 Tax-Related Representations and Warranties.

               (a) Tax Allocation Agreements. HSS represents and warrants to the
Purchaser that, except as disclosed in Schedule 5.2(a), HSS or the HSS
Subsidiaries are not a party to any agreement, contract or understanding
relating to any sharing by HSS or the HSS Subsidiaries of any Tax liability of
any other Person.

               (b) Tax Returns and Reports. HSS represents and warrants to the
Purchaser that except as set forth in Schedule 5.2(b), (i) all Tax Returns that
are required to be filed by or with respect to HSS or the HSS Subsidiaries, have
been or will be duly filed, (ii) all Taxes shown to be due on the Tax Returns
referred to in clause (i) have been or will be paid in full, (iii) all
deficiencies asserted or assessments made on or before closing as a result of
any tax examinations have been settled or paid in full, (iv) no issues that have
been raised in writing on or before Closing by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred to in clause
(i) are currently pending and (v) no waivers of statutes of limitation have been
given by or requested with respect to any Taxes of HSS or the HSS Subsidiaries.

               (c) No Withholding. HSS represents and warrants to the Purchaser
that no tax is required to be withheld pursuant to such local laws as are
applicable as a result of the transfer contemplated by this Agreement.

               V.3 Liability for Taxes and Related Matters.

               (a) Liability of HSS for Taxes. HSS and the HSS Subsidiaries
shall be liable for and indemnify Purchaser for all Taxes including, without
limitation, any obligation to contribute to the payment of a tax determined on a
consolidated, combined or unitary basis with respect to a group of corporations
that includes or included HSS or the HSS Subsidiaries and Taxes resulting from
HSS or the HSS Subsidiaries ceasing to be an affiliate, (i) imposed on HSS or
the HSS Subsidiaries for any taxable year, (ii) imposed on HIS Asia or for which
HIS Asia may otherwise be liable for any taxable year or period that ends on or
before the Closing and, with respect to any taxable year or period beginning
before and ending after the Closing Date, the portion of such taxable year
ending on and including the Closing Date. HSS shall be entitled to any refund of
Taxes of HIS Asia receives for such periods.

               (b) Liability of Purchaser for Taxes. The Purchaser shall be
liable for and shall indemnify HSS, the HSS Subsidiaries and HSS Shareholders
for the Taxes of HIS Asia for any taxable year or period that begins after
Closing and, with respect to any taxable year or period beginning before and
ending after the Closing, the portion of such taxable year beginning after the
Closing. The Purchaser shall be entitled to any refund of Taxes of HIS Asia
received for such periods.


                                       18



               (c) Tax Periods. With respect to any Taxes for any taxable period
that includes but does not end as of the Closing, the amount of Taxes subject to
indemnification hereunder shall be calculated as if such taxable period ended as
of the close of business on the Closing, except that property Taxes and
exemptions, allowances or deductions that are calculated on an annual basis
shall be prorated based on the number of days in the annual period elapsed
through the Closing compared to the number of days in the annual period elapsing
after the Closing.

               V.4 Tax Returns. HSS shall file or cause to be filed when due all
Tax Returns that are required to be filed by or with respect to HSS or the HSS
Subsidiaries for taxable years or periods ending on or before the Closing and
shall pay any Taxes due in respect of such Tax Returns, and Purchaser shall
prepare in accordance with past practice and shall file or cause to be filed
when due all Tax Returns that are required to be filed by or with respect to HIS
Asia for taxable years or periods ending after the Closing (and its predecessors
for periods ending after the Closing) and shall remit any Taxes due in respect
of such Tax Returns.

               V.5 Transfer Taxes. Notwithstanding anything to the contrary in
this Article, the parties shall equally bear all transfer taxes arising in
connection with the transactions under this Agreement.

               V.6 Information to be Provided by the Purchaser. With respect to
the period prior to the Closing, the Purchaser shall promptly cause HIS Asia to
prepare and provide to HSS a package of tax information materials (the "Tax
Package"), which shall be completed in accordance with past practice including
past practice as to providing the information, schedules and work papers and as
to the method of computation of separate taxable income or other relevant
measure of taxation of HIS Asia. The Purchaser shall cause the Tax Package for
the portion of the taxable period ending on the Closing to be delivered to HSS
within one hundred twenty (120) days after the Closing. The Tax Package shall
also include the reports prepared by MAI's auditors for each of the current
Asian subsidiaries of HIS or MAI.

               V.7 Tax Proceedings.

               (a) Right to Control Proceedings. HSS shall have the
responsibility for, and the right to control, at HSS's expense, the audit (and
disposition thereof) of any Tax Return relating to periods ending on or prior to
the Closing and to participate in the disposition of the audit of any Tax Return
relating to the periods ending after the Closing if such audit or disposition
thereof could give rise to a claim for indemnification hereunder (any such audit
or disposition, a "Tax Proceeding").


                                       19



               (b) Notice; Reports. HSS's right to control a Tax Proceeding
shall commence upon the receipt by the Purchaser or any of its Affiliates
(including, after the Closing, HIS Asia) of a proposed adjustment to Tax for the
period under audit or examination communicated in writing. The Purchaser shall
promptly notify HSS in writing upon their learning of the pendency of a Tax
Proceeding and shall fully cooperate with HSS in the conduct of such Tax
Proceeding. The failure on the part of the Purchaser to promptly notify HSS of
the pendency of a Tax Proceeding shall not in any way discharge HSS's indemnity
obligations hereunder, except that the Purchaser shall be liable for any
increase in penalties, interest, other assessments or fees and expenses which
are due to any delay in promptly notifying HSS of the pendency of any Tax
Proceeding and shall be responsible for any indemnity obligations to the extent
that HSS is prejudiced as a result of such delay. Without the prior written
consent of HSS (which consent shall not be unreasonably withheld), neither the
Purchaser nor any of its Affiliates shall settle or compromise any claim for
Taxes that might result in HSS's being required to make an indemnity payment
pursuant to Section 5.4(a). The Purchaser shall, and shall cause HIS Asia to,
cooperate with HSS including providing reasonable access to records, returns and
supporting information, in connection with any Tax Proceeding or matter as to
which the Purchaser may seek indemnity or other relief for HSS under this
Article V. The Purchaser promptly shall pay HSS any refunds, rebates or other
recoveries received by HIS Asia to which HSS is entitled pursuant to Section
5.3(a).

               V.8 Assistance and Cooperation. After the Closing, each of HSS
and the Purchaser shall (i) assist (and cause their respective affiliates to
assist) the other party in preparing any Tax Returns or reports which such other
party is responsible for preparing and filing in accordance with this Article V,
(ii) cooperate fully in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns of HIS Asia, (iii) make available to the
other and to any taxing authority as reasonably requested all information,
records, and documents relating to Taxes of HIS Asia, (iv) provide timely notice
to the other in writing of any pending or threatened tax audits or assessments
of HIS Asia for taxable periods for which the other may have a liability under
this Article V and (v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any tax audit or
information request with respect to any such taxable period.

               V.9 Survival, Etc. Notwithstanding anything to the contrary
contained in this Agreement, the representations and warranties and the
indemnification obligations set forth in this Article V shall survive the
Closing and shall remain in effect until the expiration of the applicable
statute of limitations.

                                   ARTICLE VI

                              Conditions to Closing


                                       20



               VI.1 Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of the
conditions set forth in this Section 6.1, any one or more of which may be
waived, in whole or in part, by the Purchaser:

               (a) Approvals. With respect to any applicable local laws, the
parties shall have procured such approvals, if applicable, or there shall have
occurred the expiration or early termination of the applicable waiting periods,
if any, with respect thereto without there being any continuing objection
thereto.

               (b) Orders. No party hereto shall be subject to any order, decree
or injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the sale of the Stock or the transactions
contemplated by the Ancillary Agreements.

               (c) Accuracy of Representations. The representations and
warranties of HSS and the HSS Shareholders in this Agreement shall be true and
correct at the Closing , except where the failure of the representations and
warranties to be true and correct would not reasonably be expected to have a
Material Adverse Effect on the Business, or Purchaser has knowledge of the
inaccuracy of such representations and warranties based up its due diligence
investigation of HSS and the HSS Shareholders, and the Purchaser shall have
received a certificate, dated the Closing, of the executive officer of HSS and
from HSS Shareholders to that effect in the form set forth as Exhibit B hereto.

               (d) Performance of Covenants. HSS and the HSS Shareholders shall
have performed and complied in all material respects with all covenants and
agreements contained in this Agreement that are required to be performed or
complied with by it at or prior to the Closing, and the Purchaser shall have
received a certificate, dated as of the Closing, of the executive officer of HSS
to that effect.

               (e) Resignation of Directors. The directors of HSS and the HSS
Subsidiaries shall have submitted their resignations in writing, effective as of
the Closing, to HIS Asia.

               (f) Ancillary Agreements. The Ancillary Agreements shall have
been executed and delivered by the parties thereto and be in full force and
effect.

               (g) Opinion of Counsel. Purchaser shall have received the opinion
of counsel for HSS in the form set forth as Exhibit A hereto.

               (h) Closing Balance Sheet. HSS commits to use best efforts to
provide to Purchaser a Balance Sheet dated as of the Closing within ten (10)
days after Closing.


                                       21



               VI.2 Conditions to the Obligations of HSS. The obligations of HSS
and the HSS Shareholders to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of the
conditions set forth in this Section 6.2, any one or more of which may be
waived, in whole or in part, by the Purchaser.

               (a) Approvals. With respect to applicable local laws , the
parties shall have procured such approvals, if applicable, or there shall have
occurred the expiration or early termination of the applicable waiting periods,
if any, with respect thereto without there being any continuing objection
thereto.

               (b) Orders. No party hereto shall be subject to any order, decree
or injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the sale of the Stock or the transactions
contemplated by the Ancillary Agreements.

               (c) Accuracy of Representations. The representations and
warranties of the Purchaser in this Agreement shall be true and correct in all
material respects at the Closing, . HSS shall have received a certificate, dated
the Closing, of an executive officer of the Purchaser to that effect, in the
form set forth as Exhibit D hereto.

               (d) Performance of Covenants. The Purchaser shall have performed
and complied in all material respects with all covenants and agreements
contained in this Agreement that are required to be performed or complied with
by it at Closing, and HSS and the HSS Shareholders shall have received a
certificate, dated the Closing, of an executive officer of the Purchaser to that
effect.

               (e) Ancillary Agreements. The Ancillary Agreements shall have
been executed and delivered by the parties thereto and be in full force and
effect.

               (f) Opinion of Counsel. HSS shall have received the opinion of
counsel for Purchaser in the form set forth as Exhibit C hereto.

               (g) Formation of HIS Asia. HIS Asia shall be formed within ten
(10) business days after Closing.

                                   ARTICLE VII

                Investment Representations and Shareholder Rights

               VII.1 Shareholders' Investment Representations. Shareholders
understand that the shares to be issued to them in HIS Asia and MAI have not
been registered under any foreign


                                       22



securities laws or the Securities Act of 1933, as amended (the "Securities Act")
and applicable state securities laws. HSS Shareholders also understand that the
shares of HIS Asia and MAI are being offered and sold pursuant to an exemption
from registration contained in applicable foreign securities laws and the
Securities Act and state securities laws based in part upon HSS Shareholders'
representations contained in this Agreement. Seller hereby represents and
warrants to the Purchaser as follows:

               (a) Shareholders' Risk. HSS Shareholders must bear the economic
risk of this investment and understand that HIS Asia and MAI have no present
intention of registering the HIS Asia and MAI shares. HSS Shareholders also
understand that there is no assurance that any exemption from registration under
the Securities Act will be available and that, even if available, such exemption
may not allow HSS Shareholders to transfer all or any portion of the HIS Asia or
MAI shares under the circumstances, in the amounts or at the times HSS
Shareholders might propose.

               (b) Acquisition for Shareholders' Own Account. HSS Shareholders
are acquiring the HIS Asia and MAI shares for theirs own account for investment
only, and not with a view towards their distribution.

               VII.2 Accredited Investor. HSS Shareholders represent that they
are "accredited investors" within the meaning of Regulation D under the
Securities Act.

               VII.3 Purchaser Information. HSS Shareholders have read the
information concerning MAI contained in its public reports as filed with the
Securities and Exchange Commission and has had an opportunity to discuss MAI's
business, management and financial affairs with directors, officers and
management of the Purchaser. HSS Shareholders have also had the opportunity to
ask questions of and receive answers from, MAI and its management regarding the
terms and conditions of this investment in MAI and HIS Asia.

               VII.4 HIS Asia and MAI Shares Legend. Certificates evidencing the
HIS Asia and MAI shares shall bear appropriate legends concerning the
restrictions on transferability imposed by applicable foreign, Federal and state
securities laws including, without limitation, the following:

               THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
               REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
               SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
               TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
               STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF
               COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
               REQUIRED UNDER SUCH ACT.


                                       23



               VII.5 Purchaser's Investment Representations. Purchaser
understands that the HSS shares have not been registered under the Securities
Act or applicable foreign securities laws. Purchaser also understands that the
HSS shares are being offered and sold pursuant to an exemption from registration
contained in foreign securities laws and the Securities Act based in part upon
Purchaser's representations contained in this Agreement. Purchaser hereby
represents and warrants to HSS and the HSS Shareholders that it is an accredited
investor and as follows:

               (a) Purchaser Bears Economic Risk. Purchaser must bear the
economic risk of this investment. Purchaser also understands that there is no
assurance that any exemption from registration under applicable foreign
securities laws and/or the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the HSS Shares under the circumstances, in the amounts or at the times
Purchaser might propose.

               (b) Acquisition for Purchaser's Own Account. Purchaser is
acquiring the HSS Shares for Purchaser's own account for investment only, and
not with a view towards their distribution.

               (c). HSS Shares Legend. Certificates evidencing the HSS shares
shall bear appropriate legends concerning the restrictions on transferability
imposed by applicable foreign, Federal and state securities laws.

               VII.6 Shareholder's Agreement. The parties agree to execute the
Shareholders' Agreement in substantially the form set forth as Exhibit E hereto.

               VII.7 Registration of MAI Common Stock. In the event that MAI
undertakes a registration of its common stock after the the Closing, MAI hereby
grants "piggyback" registration rights to the HSS Shareholders, such that MAI
will use its best efforts to include in such registration, any unregistered MAI
common stock in the hands of HSS Shareholders at no expense to the HSS
Shareholders. The HSS Shareholders agree to reasonably cooperate with MAI as
required to ensure the successful registration of their shares.

                                  ARTICLE VIII

                                 Indemnification

               VIII.1 Survival of Representations, Warranties, Covenants and
Agreements. Except as provided in Section II.18, the representations and
warranties included or provided for herein shall not survive the Closing.


                                       24



                                   ARTICLE IX

                               Certain Definitions

               IX.1 Certain Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:

               "Affiliate" means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.

               "Agreement" means this Agreement by and between HSS, the HSS
Shareholders and the Purchaser, as amended or supplemented together with all
Exhibits and Schedules attached or incorporated by reference.

               "Ancillary Agreements" shall mean the Shareholders' Agreement.

               "Balance Sheet" has the meaning set forth in Section 2.6.

               "Benefit Plans" has the meaning set forth in Section 2.13(a).

               "Business" shall mean the hospitality software systems business
of HSS and the HSS Subsidiaries.

               "Business Days" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York are authorized or obligated by law or
executive order to close.

               "Closing" has the meaning set forth in Section 1.4.

               "Code" shall mean the United States Internal Revenue Code of
1986, as amended.

               "Confidentiality Agreement" shall mean the Confidentiality
Agreement, dated January, 2000, between HSS and the Purchaser.

               "Employees" has the meaning set forth in Section 2.13(a).

               "Environmental Law" shall mean any applicable law, regulation,
code, license, permit, order, judgment, decree or injunction promulgated by any
Governmental


                                       25



Entity (i) for the protection of the environment, (including air, water, soil
and natural resources) or (ii) regulating the use, storage, handling, release or
disposal of Hazardous Substances, in each case as presently in effect.

               "Financial Statements" has the meaning set forth in Section 2.6.

               "GAAP" shall mean generally accepted accounting principles in the
United States, or its local equivalent, as in effect from time to time.

               "Governmental Antitrust Entity" has the meaning set forth in
Section 4.3(c).

               "Governmental Entity" shall mean any court, administrative agency
or commission or other national, federal, state or local governmental authority
or instrumentality.

               "HSS" has the meaning set forth in the first paragraph hereof.

               "HSS Subsidiaries" has the meaning set forth in the first
paragraph hereof.

               "Knowledge" shall mean, with respect to any Person, the actual
Knowledge of any officer with a rank of vice president or higher of such Person,
the law department of such Person or any other employee of such Person with
responsibility for the particular subject area or subject matter.

               "Lien" shall mean any mortgage, pledge, security interest, lien,
charge, encumbrance, equity, claim, option, tenancy, right or restriction on
transfer of any nature whatsoever.

               "Losses" means any and all fines, liabilities, judgments, losses,
costs, expenses, or actual damages, including in each case, interest, penalties,
reasonable attorneys' fees and reasonable costs of investigations and
litigation.

               "Material Adverse Effect" shall mean any material adverse effect
on the assets or properties used in, or the condition (financial or otherwise)
or results of operations with respect to, the Business taken as a whole.

               "Material Contracts" has the meaning set forth in Section 2.10.

               "Permit" shall mean any license, permit, franchise, certificate
of authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.


                                       26



               "Permitted Liens" shall mean the following types of Liens: (a)
statutory Liens of landlords, statutory Liens of banks and rights of set-off,
statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, and other Liens imposed by law, in each case incurred in the
ordinary course of business (i) for amounts not yet overdue or (ii) for amounts
that are overdue and that (in the case of such amounts overdue for a period in
excess of 30 days) are being contested in good faith by appropriate proceedings,
so long as such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts; (b)
easements, rights-of-way, restrictions, encroachments, and other minor defects
or irregularities in title, in each case which do not and will not interfere in
any material respect with the ordinary conduct of the Business; and (c) any
zoning or similar law or right reserved to or vested in any Governmental Entity
to control or regulate the use of any real property.

               "Person" shall mean an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization, a Governmental Entity or any other entity.

               "Plans" has the meaning set forth in Section 2.13(b).

               "Purchase Price" shall have the meaning as set forth in Section
I.2 herein.

               "Real Property" has the meaning set forth in Section 2.9(b).

               "Schedule" shall mean a disclosure schedule delivered by HSS to
the Purchaser on or prior to the date of this Agreement.

               "Shareholders' Agreement" shall mean the Shareholders' Agreement
substantially in the form attached hereto as Exhibit E.

               "Stock" has the meaning set forth in Recitals of this Agreement.

               "Taxes" has the meaning set forth in Section 5.1.

               "Tax Package" has the meaning set forth in Section 5.6.

               "Tax Proceeding" has the meaning set forth in Section 5.7(a).

               "Tax Return" has the meaning set forth in Section 5.1.

                                    ARTICLE X

                                  Miscellaneous


                                       27



               X.1 Amendments. This Agreement may not be amended or modified
except by the express written consent of the parties hereto.

               X.2 Assignment. Neither party may assign this Agreement or its
rights or obligations hereunder, whether by operation of law or otherwise, to
any third party without the prior written consent of the other party.

               X.3 Notices. All notices or communications hereunder shall be in
writing and shall be sent by personal service, by facsimile transmission or by
overnight mail by courier of internationally recognized standing addressed as
follows (or such other address as such party may designate in writing):

               To the Purchaser:

               MAI Systems Corporation
               9601 Jeronimo Road
               Irvine, California 92618
               Attention:  W. Brian Kretzmer
               Facsimile:  (949) 598-6606

               With a copy to:

               David Griffith, General Counsel
               MAI Systems Corporation
               9601 Jeronimo Road
               Irvine, California 92618
               Facsimile:  (949) 598-6333


                                       28



               To HSS and the HSS Subsidiaries:

               Hospitality Services and Solutions

               --------------------------------

               --------------------------------

               Attention:  Harban Singh
               Facsimile:  (     )     -

               To the Corporate Shareholder:

               --------------------------------

               --------------------------------

               --------------------------------

               Attention:
               Facsimile: (     )     -

               With a copy to:

               Elliott Stein
               Stevens & Lee
               190 Brodhead Road, Suite 200
               Lehigh Valley, PA  18002
               Facsimile: (610) 371-8506

Any notice hereunder shall be effective upon receipt by the intended recipient.

               X.4 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

               X.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Singapore.

               X.6 Interpretation. When a reference is made in this Agreement to
an Article, Section, Exhibit or Schedule, such reference is to an Article or
Section of, or an


                                       29



Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" and "including" are used in
this Agreement, they are deemed to be followed by the words "without
limitation." For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (a) the terms defined include
the plural as well as the singular, (b) all accounting terms not otherwise
defined herein have the meanings assigned under GAAP or local equivalent, and
(c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.

               X.7 Entire Agreement. This Agreement, together with any agreement
executed and delivered by the parties concurrently herewith and the Schedules
and Exhibits attached hereto and together with the Confidentiality Agreement,
constitutes the entire agreement between the Purchaser and HSS with respect to
the subject matter hereof. There are no representations, warranties, covenants
or undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements
between the parties with respect to the Stock purchased hereunder and the
subject matter hereof, other than the Confidentiality Agreement.

               X.8 Publicity and Confidentiality. Concurrent with the Closing or
thereafter, the parties may jointly prepare a news release or other announcement
regarding this Agreement and, subject to their respective legal obligations or
stock exchange requirements, thereafter will consult with each other regarding
the text of any press release or other public statement relating to the
transaction contemplated by this Agreement prior to any release or filing
thereof. The Confidentiality Agreement shall survive the Closing, however, the
Purchaser may disclose such terms of the Agreement as are mandated by its
reporting requirements under the 1934 Securities Exchange Act, including filing
the Agreement as an exhibit to such reports.

               X.9 Expenses. HSS, the HSS Subsidiaries, the HSS Shareholders,
and the Purchaser each shall pay their own expenses incident to the negotiation,
preparation and performance of this Agreement and the transactions contemplated
hereby, including but not limited to the fees, expenses and disbursements of
their respective investment bankers, accountants and counsel.

               X.10 No Third Party Beneficiaries. Except for Section 4.5,
nothing in this Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto or their respective successors, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.

               X.11 Jurisdiction; Arbitration; Waivers. Any controversy arising
out of or


                                       30



relating to this Agreement shall be submitted to arbitration in Singapore before
a panel of three (3) arbitrators selected in accordance with the Commercial
Arbitration Rules of the International Chamber of Commerce, and shall be
conducted in accordance with its Commercial Arbitration Rules; provided,
however, that provisional injunctive relief may, but need not, be sought by any
party in a court of law in Singapore while arbitration proceedings are pending,
and any provisional injunctive relief granted by such court shall remain
effective until the matter is finally determined by the Arbitrators. Final
resolution of any dispute through arbitration may include any remedy or relief
which the Arbitrators deem just and equitable, including any and all remedies
provided by Singapore law. At the conclusion of the arbitration, the Arbitrators
shall issue a written decision that sets forth the essential findings and
conclusions upon which the Arbitrators' award or decision is based. Any award or
relief granted by the Arbitrators hereunder shall be final and binding on the
parties hereto and may be enforced by any court of competent jurisdiction in
Singapore. All parties acknowledge and agree that they are hereby waiving any
rights to trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other in connection with any matter whatsoever
arising out of or in any way connected with this Agreement. The parties agree
that in any proceeding to enforce the terms of this Agreement, the prevailing
party shall be entitled to its or his or her reasonable attorneys' fees and
costs incurred by it or him or her in connection with resolution of the dispute
in addition to any other relief granted.

               X.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

               IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first above written, by the duly authorized
representatives of the parties hereto.

[SIGNATURE BLOCKS ON NEXT PAGE]


                                       31



                                    HOTEL INFORMATION SYSTEMS, INC.


                                    By:
                                            --------------------------------
                                            Name: W. Brian Kretzmer
                                            Title: President

                                    MAI SYSTEMS CORPORATION (as to the
                                    obligations created by Sections I.2 (iii)
                                    and VII.7 only)

                                    By:
                                            --------------------------------
                                            Name: W. Brian Kretzmer
                                            Title: President

                                    HIS ASIA, PTE. LIMITED


                                    By:
                                            --------------------------------
                                    Its:
                                            --------------------------------
                                    HOSPITALITY SERVICES & SOLUTIONS


                                    By:
                                            --------------------------------
                                            Name: Harbans Singh
                                            Title: President

                                    INDIVIDUAL SHAREHOLDER:


                                    -------------------------------
                                    Harbans Singh

                                    CORPORATE SHAREHOLDER:


                                    By:
                                            --------------------------------
                                            Name:
                                            Title:



                                       32

EX-10.2

                                                            Exhibit 10.2

April 16, 2002


Mr. Richard S. Ressler
Orchard Capital Corporation
6922 Hollywood Boulevard, Suite 900
Hollywood, CA  90028

Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation

Dear Richard:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
50,000 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire separately with respect to the
number of shares of Restricted Stock awarded to you below on each of the
following dates:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     12,500                        May 21, 2002
                     12,500                        May 21, 2003
                     12,500                        May 21, 2004
                     12,500                        May 21, 2005



        3. Shares of Common Stock awarded to you subject to a Restricted Period
may not be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered during such Restricted Period except as hereinafter provided. Except
for such restrictions, you shall have all the rights of a stockholder including
but not limited to the right to receive all dividends paid on such shares and
the right to vote such shares.

        4. If you cease to be a director or an employee of the Company for any
reason, the number of shares of Common Stock awarded to you for which the
Restricted Period shall not have expired shall upon such termination of your
directorship be forfeited and returned to the Company. The forfeiture provisions
will cease to apply if the Company consummates either a sale of all or
substantially all of the assets of the Company or a consolidation or merger of
the Company with any other corporation (other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation).



        5. Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in your name and deposited by you,
together with a stock power in the form set forth in Exhibit A hereto, with the
Company and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI
        Systems Corporation and Subsidiaries and an Agreement entered into
        between the registered owner and MAI Systems Corporation. A copy of such
        Plan is on file in the office of the Company, 9601 Jeronimo Road,
        Irvine, California (attn: Finance Department)."

        At the expiration of the Restricted Period for a given number of shares,
the Company shall redeliver to you (or your legal representatives, beneficiaries
or heirs) from the shares of Common Stock deposited with it the number of shares
which have then ceased to be Restricted Stock. At this time, it is the Company's
intention that all shares of Common Stock delivered to you will be registered
under the Securities Act of 1933 (the "Act"). If the shares are not so
registered, or have ceased to be so registered at delivery, the Company will
notify you. You agree that if you are notified that shares of Common Stock
delivered to you are not registered under the Act, prior to making any sale,
assignment, transfer, pledge or other disposition (after expiration of the
Restricted Period) of any shares of Common Stock awarded to you under the Plan,
you will give written notice to the Company describing the manner of such
proposed disposition and containing such other information as shall be necessary
to enable counsel for the Company to determine whether registration of such
shares under the Act is required in connection with such proposed disposition.
You further agree that you will not effect such proposed disposition until
either (i) the Company has notified you that in the opinion of its counsel
registration of such shares under the Act is not required in respect of such
proposed disposition, or (ii) a registration statement under the Act covering
such shares has been filed by the Company with the Securities and Exchange
Commission and is effective under the Act as to such proposed disposition.

        6. The Company has the right to withhold all applicable income and
employment taxes due and owning at the time a given number of shares of
Registered Stock become taxable, and/or to delay delivery of Registered Stock
until appropriate arrangements have been made for payment of such withholding.

        7. In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares as to which awards may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other securities
received by a Participant with respect to a number of shares of Restricted Stock
for which the Restricted Period shall not have expired will be subject to the
same restrictions with respect to an equivalent number of shares and shall be
deposited with the Company.

        8. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be addressed to you at your residence stated above or as
it may hereafter appear on the employment records of the Company, or at such
other address as may hereafter be designated in writing.



        9. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.

                                  Sincerely,

                                  MAI SYSTEMS CORPORATION



                                  By:
                                     --------------------------------
                                         W. Brian Kretzmer,
                                         Chief Executive Officer, President
                                         and Secretary


Accepted and agreed to as of the date
first above written:


- --------------------------------
Richard S. Ressler



                                   STOCK POWER

FOR VALUE RECEIVED, The undersigned hereby sells, assigns and transfers unto:
MAI SYSTEMS CORPORATION 50,000 Shares of the Common Stock of MAI Systems
Corporation standing in his name on the books of said Corporation represented by
Certificate No. ____ herewith and do hereby irrevocably constitute and appoint
William Brian Kretzmer and/or James W. Dolan attorney to transfer the said stock
on the books of the within named Corporation with full power of substitution.

DATED:  April __, 2002

BY:
    --------------------------------

PRINTED NAME:
             --------------------------------

The signature(s) on this Assignment must correspond with the name(s) on the face
of the certificate in every particular, without alteration or enlargement, or
any change.

EX-10.3

                                                                  Exhibit 10.3


                                                                  April 16, 2002


Mr. Zohar Loshitzer
9551 Lime Orchard Road
Beverly Hills, CA  90210

Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation

Dear Zohar:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
50,000 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire separately with respect to the
number of shares of Restricted Stock awarded to you below on each of the
following dates:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     12,500                        May 21, 2002
                     12,500                        May 21, 2003
                     12,500                        May 21, 2004
                     12,500                        May 21, 2005



        3. Shares of Common Stock awarded to you subject to a Restricted Period
may not be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered during such Restricted Period except as hereinafter provided. Except
for such restrictions, you shall have all the rights of a stockholder including
but not limited to the right to receive all dividends paid on such shares and
the right to vote such shares.

        4. If you cease to be a director or an employee of the Company for any
reason, the number of shares of Common Stock awarded to you for which the
Restricted Period shall not have expired shall upon such termination of your
directorship be forfeited and returned to the Company. The forfeiture provisions
will cease to apply if the Company consummates either a sale of all or
substantially all of the assets of the Company or a consolidation or merger of
the Company with any other corporation (other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation).



        5. Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in your name and deposited by you,
together with a stock power in the form set forth in Exhibit A hereto, with the
Company and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI
        Systems Corporation and Subsidiaries and an Agreement entered into
        between the registered owner and MAI Systems Corporation. A copy of such
        Plan is on file in the office of the Company, 9601 Jeronimo Road,
        Irvine, California (attn: Finance Department)."

               At the expiration of the Restricted Period for a given number of
shares, the Company shall redeliver to you (or your legal representatives,
beneficiaries or heirs) from the shares of Common Stock deposited with it the
number of shares which have then ceased to be Restricted Stock. At this time, it
is the Company's intention that all shares of Common Stock delivered to you will
be registered under the Securities Act of 1933 (the "Act"). If the shares are
not so registered, or have ceased to be so registered at delivery, the Company
will notify you. You agree that if you are notified that shares of Common Stock
delivered to you are not registered under the Act, prior to making any sale,
assignment, transfer, pledge or other disposition (after expiration of the
Restricted Period) of any shares of Common Stock awarded to you under the Plan,
you will give written notice to the Company describing the manner of such
proposed disposition and containing such other information as shall be necessary
to enable counsel for the Company to determine whether registration of such
shares under the Act is required in connection with such proposed disposition.
You further agree that you will not effect such proposed disposition until
either (i) the Company has notified you that in the opinion of its counsel
registration of such shares under the Act is not required in respect of such
proposed disposition, or (ii) a registration statement under the Act covering
such shares has been filed by the Company with the Securities and Exchange
Commission and is effective under the Act as to such proposed disposition.

        6. The Company has the right to withhold all applicable income and
employment taxes due and owning at the time a given number of shares of
Registered Stock become taxable, and/or to delay delivery of Registered Stock
until appropriate arrangements have been made for payment of such withholding.

        7. In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares as to which awards may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other securities
received by a Participant with respect to a number of shares of Restricted Stock
for which the Restricted Period shall not have expired will be subject to the
same restrictions with respect to an equivalent number of shares and shall be
deposited with the Company.

        8. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be addressed to you at your residence stated above or as
it may hereafter appear on the employment records of the Company, or at such
other address as may hereafter be designated in writing.


                                       2



        9. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.


                                    Sincerely,

                                    MAI SYSTEMS CORPORATION



                                    By:
                                        --------------------------------
                                           W. Brian Kretzmer,
                                           Chief Executive Officer, President
                                           and Secretary


Accepted and agreed to as of the date
first above written:


- ----------------------------
Zohar Loshitzer


                                       3



                                   STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems
Corporation standing in my name on the books of said Corporation represented by
Certificate No. ___ herewith and do hereby irrevocably constitute and appoint
William Brian Kretzmer, or his nominee, attorney to transfer the said stock on
the books of the within named Corporation with full power of substitution in the
premises.

DATED:  April ___, 2002             BY:
                                       --------------------------------

                                    PRINT NAME:  Zohar Loshitzer

                                    The signature(s) on this Assignment must
                                    correspond with the name(s) on the face of
                                    the certificate in every particular, without
                                    alteration or enlargement, or any change.

                                    IN THE PRESENCE OF:

                                    -----------------------------------

EX-10.4

                                                                  Exhibit 10.4



                                                                  April 16, 2002


Mr. Morton O. Schapiro, President
Williams College
880 Main Street
Hopkins Hall, 3rd Floor

Williamstown, MA  01267

Re: Issuance of 12,500 Shares of Restricted Stock of MAI Systems Corporation

Dear Mort:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
12,500 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire with respect to the number of
shares of Restricted Stock awarded to you below on the following date:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     12,500                        April 19, 2002



        3. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be addressed to you at your residence stated above or as
it may hereafter appear on the employment records of the Company, or at such
other address as may hereafter be designated in writing.

        4. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.

                                  Sincerely,

                                  MAI SYSTEMS CORPORATION



                                  By:
                                      --------------------------------
                                         W. Brian Kretzmer,
                                         Chief Executive Officer, President
                                         and Secretary


Accepted and agreed to as of the date
first above written:


- --------------------------------
Morton O. Schapiro

EX-10.5

                                                                  Exhibit 10.5


                                                                  April 16, 2002


Mr. Stephen Ross
5036 Veloz Avenue
Tarzana, CA  91356

Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation

Dear Steve:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
50,000 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire separately with respect to the
number of shares of Restricted Stock awarded to you below on each of the
following dates:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     12,500                        May 21, 2002
                     12,500                        May 21, 2003
                     12,500                        May 21, 2004
                     12,500                        May 21, 2005



        3. Shares of Common Stock awarded to you subject to a Restricted Period
may not be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered during such Restricted Period except as hereinafter provided. Except
for such restrictions, you shall have all the rights of a stockholder including
but not limited to the right to receive all dividends paid on such shares and
the right to vote such shares.

        4. If you cease to be a director or an employee of the Company for any
reason, the number of shares of Common Stock awarded to you for which the
Restricted Period shall not have expired shall upon such termination of your
directorship be forfeited and returned to the Company. The forfeiture provisions
will cease to apply if the Company consummates either a sale of all or
substantially all of the assets of the Company or a consolidation or merger of
the Company with any other corporation (other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity)



more than 50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation).

        5. Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in your name and deposited by you,
together with a stock power in the form set forth in Exhibit A hereto, with the
Company and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI
        Systems Corporation and Subsidiaries and an Agreement entered into
        between the registered owner and MAI Systems Corporation. A copy of such
        Plan is on file in the office of the Company, 9601 Jeronimo Road,
        Irvine, California (attn: Finance Department)."

               At the expiration of the Restricted Period for a given number of
shares, the Company shall redeliver to you (or your legal representatives,
beneficiaries or heirs) from the shares of Common Stock deposited with it the
number of shares which have then ceased to be Restricted Stock. At this time, it
is the Company's intention that all shares of Common Stock delivered to you will
be registered under the Securities Act of 1933 (the "Act"). If the shares are
not so registered, or have ceased to be so registered at delivery, the Company
will notify you. You agree that if you are notified that shares of Common Stock
delivered to you are not registered under the Act, prior to making any sale,
assignment, transfer, pledge or other disposition (after expiration of the
Restricted Period) of any shares of Common Stock awarded to you under the Plan,
you will give written notice to the Company describing the manner of such
proposed disposition and containing such other information as shall be necessary
to enable counsel for the Company to determine whether registration of such
shares under the Act is required in connection with such proposed disposition.
You further agree that you will not effect such proposed disposition until
either (i) the Company has notified you that in the opinion of its counsel
registration of such shares under the Act is not required in respect of such
proposed disposition, or (ii) a registration statement under the Act covering
such shares has been filed by the Company with the Securities and Exchange
Commission and is effective under the Act as to such proposed disposition.

        6. The Company has the right to withhold all applicable income and
employment taxes due and owning at the time a given number of shares of
Registered Stock become taxable, and/or to delay delivery of Registered Stock
until appropriate arrangements have been made for payment of such withholding.

        7. In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares as to which awards may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other securities
received by a Participant with respect to a number of shares of Restricted Stock
for which the Restricted Period shall not have expired will be subject to the
same restrictions with respect to an equivalent number of shares and shall be
deposited with the Company.

        8. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be



addressed to you at your residence stated above or as it may hereafter appear on
the employment records of the Company, or at such other address as may hereafter
be designated in writing.

        9. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.


                                      Sincerely,

                                      MAI SYSTEMS CORPORATION



                                      By:
                                          --------------------------------
                                             W. Brian Kretzmer,
                                             Chief Executive Officer, President
                                             and Secretary


Accepted and agreed to as of the date
first above written:


- ----------------------------
Stephen Ross



                                   STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems
Corporation standing in my name on the books of said Corporation represented by
Certificate No. ___ herewith and do hereby irrevocably constitute and appoint
William Brian Kretzmer, or his nominee, attorney to transfer the said stock on
the books of the within named Corporation with full power of substitution in the
premises.

DATED:  April ___, 2002             BY:
                                        --------------------------------

                                    PRINT NAME: Stephen Ross

                                    The signature(s) on this Assignment must
                                    correspond with the name(s) on the face of
                                    the certificate in every particular, without
                                    alteration or enlargement, or any change.

                                    IN THE PRESENCE OF:

                                    ------------------------------------

EX-10.6

                                                                  Exhibit 10.6


                                                                  April 16, 2002


Mr. Steven F. Mayer, Managing Director
US Bancorp Libra
11766 Wilshire Boulevard, Suite 870
Los Angeles, CA  90025

Re: Issuance of 50,000 Shares of Restricted Stock of MAI Systems Corporation

Dear Steve:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
50,000 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire separately with respect to the
number of shares of Restricted Stock awarded to you below on each of the
following dates:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     12,500                        May 21, 2002
                     12,500                        May 21, 2003
                     12,500                        May 21, 2004
                     12,500                        May 21, 2005



        3. Shares of Common Stock awarded to you subject to a Restricted Period
may not be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered during such Restricted Period except as hereinafter provided. Except
for such restrictions, you shall have all the rights of a stockholder including
but not limited to the right to receive all dividends paid on such shares and
the right to vote such shares.

        4. If you cease to be a director or an employee of the Company for any
reason, the number of shares of Common Stock awarded to you for which the
Restricted Period shall not have expired shall upon such termination of your
directorship be forfeited and returned to the Company. The forfeiture provisions
will cease to apply if the Company consummates either a sale of all or
substantially all of the assets of the Company or a consolidation or merger of
the Company with any other corporation (other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation).



        5. Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in your name and deposited by you,
together with a stock power in the form set forth in Exhibit A hereto, with the
Company and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI
        Systems Corporation and Subsidiaries and an Agreement entered into
        between the registered owner and MAI Systems Corporation. A copy of such
        Plan is on file in the office of the Company, 9601 Jeronimo Road,
        Irvine, California (attn: Finance Department)."

               At the expiration of the Restricted Period for a given number of
shares, the Company shall redeliver to you (or your legal representatives,
beneficiaries or heirs) from the shares of Common Stock deposited with it the
number of shares which have then ceased to be Restricted Stock. At this time, it
is the Company's intention that all shares of Common Stock delivered to you will
be registered under the Securities Act of 1933 (the "Act"). If the shares are
not so registered, or have ceased to be so registered at delivery, the Company
will notify you. You agree that if you are notified that shares of Common Stock
delivered to you are not registered under the Act, prior to making any sale,
assignment, transfer, pledge or other disposition (after expiration of the
Restricted Period) of any shares of Common Stock awarded to you under the Plan,
you will give written notice to the Company describing the manner of such
proposed disposition and containing such other information as shall be necessary
to enable counsel for the Company to determine whether registration of such
shares under the Act is required in connection with such proposed disposition.
You further agree that you will not effect such proposed disposition until
either (i) the Company has notified you that in the opinion of its counsel
registration of such shares under the Act is not required in respect of such
proposed disposition, or (ii) a registration statement under the Act covering
such shares has been filed by the Company with the Securities and Exchange
Commission and is effective under the Act as to such proposed disposition.

        6. The Company has the right to withhold all applicable income and
employment taxes due and owning at the time a given number of shares of
Registered Stock become taxable, and/or to delay delivery of Registered Stock
until appropriate arrangements have been made for payment of such withholding.

        7. In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares as to which awards may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other securities
received by a Participant with respect to a number of shares of Restricted Stock
for which the Restricted Period shall not have expired will be subject to the
same restrictions with respect to an equivalent number of shares and shall be
deposited with the Company.

        8. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be addressed to you at your residence stated above or as
it may hereafter appear on the employment records of the Company, or at such
other address as may hereafter be designated in writing.



        9. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware.


                                  Sincerely,

                                  MAI SYSTEMS CORPORATION



                                  By:
                                      --------------------------------
                                         W. Brian Kretzmer,
                                         Chief Executive Officer, President
                                         and Secretary



Accepted and agreed to as of the date
first above written:


- ----------------------------
Steven F. Mayer



                                   STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems
Corporation standing in my name on the books of said Corporation represented by
Certificate No. ___ herewith and do hereby irrevocably constitute and appoint
William Brian Kretzmer, or his nominee, attorney to transfer the said stock on
the books of the within named Corporation with full power of substitution in the
premises.

DATED:  April ___, 2002             BY:
                                        --------------------------------

                                    PRINT NAME:  Steven F. Mayer

                                    The signature(s) on this Assignment must
                                    correspond with the name(s) on the face of
                                    the certificate in every particular, without
                                    alteration or enlargement, or any change.

                                    IN THE PRESENCE OF:

                                    ------------------------------------

EX-10.7

                                                                  Exhibit 10.7


                                                                  April 16, 2002


Mr. W. Brian Kretzmer
MAI Systems Corporation
9601 Jeronimo Road
Irvine, CA  92618

Re: Issuance of 250,000 Shares of Restricted Stock of MAI Systems Corporation

Dear Brian:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
250,000 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire separately with respect to the
number of shares of Restricted Stock awarded to you below on each of the
following dates:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     62,500                        May 21, 2002
                     62,500                        May 21, 2003
                     62,500                        May 21, 2004
                     62,500                        May 21, 2005



        3. Shares of Common Stock awarded to you subject to the same Restricted
Period may not be sold, assigned, transferred, pledged or otherwise disposed of
or encumbered during such Restricted Period except as hereinafter provided.
Except for such restrictions, you shall have all the rights of a stockholder
including but not limited to the right to receive all dividends paid on such
shares and the right to vote such shares.

        4. If you cease to be a an employee of the Company for any reason, the
number of shares of Common Stock awarded to you for which the Restricted Period
shall not have expired shall upon such termination of your employment be
forfeited and returned to the Company. The forfeiture provisions will cease to
apply if: (a) the Company consummates either a sale of all or substantially all
of the assets of the Company or a consolidation or merger of the Company with
any other corporation (other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving



entity outstanding immediately after such merger or consolidation); or (b)
Richard S. Ressler is no longer the Chairman of the Board of Directors of the
Company.

        5. Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in your name and deposited by you,
together with a stock power in the form set forth in Exhibit A hereto, with the
Company and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI
        Systems Corporation and an Agreement entered into between the registered
        owner and MAI Systems Corporation. A copy of such Plan is on file in the
        office of the Company, 9601 Jeronimo Road, Irvine, California (attn:
        Finance Department)."

               At the expiration of the Restricted Period for a given number of
shares, the Company shall redeliver to you (or your legal representatives,
beneficiaries or heirs) from the shares of Common Stock deposited with it the
number of shares which have then ceased to be Restricted Stock. At this time, it
is the Company's intention that all shares of Common Stock delivered to you will
be registered under the Securities Act of 1933 (the "Act"). If the shares are
not so registered, or have ceased to be so registered at delivery, the Company
will notify you. You agree that if you are notified that shares of Common Stock
delivered to you are not registered under the Act, prior to making any sale,
assignment, transfer, pledge or other disposition (after expiration of the
Restricted Period) of any shares of Common Stock awarded to you under the Plan,
you will give written notice to the Company describing the manner of such
proposed disposition and containing such other information as shall be necessary
to enable counsel for the Company to determine whether registration of such
shares under the Act is required in connection with such proposed disposition.
You further agree that you will not effect such proposed disposition until
either (i) the Company has notified you that in the opinion of its counsel
registration of such shares under the Act is not required in respect of such
proposed disposition, or (ii) a registration statement under the Act covering
such shares has been filed by the Company with the Securities and Exchange
Commission and is effective under the Act as to such proposed disposition.

        6. The Company has the right to withhold all applicable income and
employment taxes due and owning at the time a given number of shares of
Registered Stock become taxable, and/or to delay delivery of Registered Stock
until appropriate arrangements have been made for payment of such withholding.

        7. In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares as to which awards may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other securities
received by a Participant with respect to a number of shares of Restricted Stock
for which the Restricted Period shall not have expired will be subject to the
same restrictions with respect to an equivalent number of shares and shall be
deposited with the Company.

        8. Nothing herein contained shall affect the right of the Company to
terminate your services, responsibilities and duties any time for any reason
whatsoever.



        9. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be addressed to you at your residence or as it may
hereafter appear on the employment records of the Company, or at such other
address as may hereafter be designated in writing.

        10. This letter agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.


                                           Sincerely,

                                           MAI SYSTEMS CORPORATION



                                           By:
                                              --------------------------------
                                               James W. Dolan,
                                               Chief Financial and Operating
                                               Officer


Accepted and agreed to as of the date
first above written:


- ----------------------------
W. Brian Kretzmer



                                    Exhibit A

                                   STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems
Corporation standing in my name on the books of said Corporation represented by
Certificate No. ___ herewith and do hereby irrevocably constitute and appoint
James W. Dolan, or his nominee, attorney to transfer the said stock on the books
of the within named Corporation with full power of substitution in the premises.

DATED:  April ___, 2002             BY:
                                        --------------------------------

                                    PRINT NAME:  W. Brian Kretzmer

                                    The signature(s) on this Assignment must
                                    correspond with the name(s) on the face of
                                    the certificate in every particular, without
                                    alteration or enlargement, or any change.

                                    IN THE PRESENCE OF:

                                    -------------------------------------

EX-10.8

                                                                  Exhibit 10.8


                                                                  April 16, 2002


Mr. James W. Dolan
MAI Systems Corporation
9601 Jeronimo Road
Irvine, CA  92618

Re: Issuance of 150,000 Shares of Restricted Stock of MAI Systems Corporation

Dear Jim:

        I am pleased to inform you that the Committee appointed by the Board of
Directors of MAI Systems Corporation (the "Company") to administer the
Restricted Stock Plan of MAI Systems Corporation (the "Plan") has awarded you
150,000 shares of Restricted Stock, subject to your acceptance of the terms,
conditions and restrictions of the award set forth in this letter agreement.
Please indicate your acceptance by signing and returning the enclosed copy of
this letter agreement.

        1. A copy of the Plan is attached hereto, and in all cases the terms of
the Plan govern the conditions under which the shares of Restricted Stock are
awarded to you, except to the extent different terms are set forth herein. Terms
used in this agreement have the same meaning as in section 2 of the Plan.

        2. The Restricted Period shall expire separately with respect to the
number of shares of Restricted Stock awarded to you below on each of the
following dates:




               Number of Shares             Expiration of Restricted Period
               ----------------             -------------------------------
                                         
                     37,500                        May 21, 2002
                     37,500                        May 21, 2003
                     37,500                        May 21, 2004
                     37,500                        May 21, 2005



        3. Shares of Common Stock awarded to you subject to a Restricted Period
may not be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered during such Restricted Period except as hereinafter provided. Except
for such restrictions, you shall have all the rights of a stockholder including
but not limited to the right to receive all dividends paid on such shares and
the right to vote such shares.

        4. If you cease to be a an employee of the Company for any reason, the
number of shares of Common Stock awarded to you for which the Restricted Period
shall not have expired shall upon such termination of your employment be
forfeited and returned to the Company. The forfeiture provisions will cease to
apply if: (a) the Company consummates either a sale of all or substantially all
of the assets of the Company or a consolidation or merger of the Company with
any other corporation (other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving



entity outstanding immediately after such merger or consolidation); or (b)
Richard S. Ressler is no longer the Chairman of the Board of Directors of the
Company.

        5. Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in your name and deposited by you,
together with a stock power in the form set forth in Exhibit A hereto, with the
Company and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
        represented hereby are subject to the terms and conditions (including
        forfeiture) contained in Section 5 of the Restricted Stock Plan of MAI
        Systems Corporation and an Agreement entered into between the registered
        owner and MAI Systems Corporation. A copy of such Plan is on file in the
        office of the Company, 9601 Jeronimo Road, Irvine, California (attn:
        Finance Department)."

               At the expiration of the Restricted Period for a given number of
shares, the Company shall redeliver to you (or your legal representatives,
beneficiaries or heirs) from the shares of Common Stock deposited with it the
number of shares which have then ceased to be Restricted Stock. At this time, it
is the Company's intention that all shares of Common Stock delivered to you will
be registered under the Securities Act of 1933 (the "Act"). If the shares are
not so registered, or have ceased to be so registered at delivery, the Company
will notify you. You agree that if you are notified that shares of Common Stock
delivered to you are not registered under the Act, prior to making any sale,
assignment, transfer, pledge or other disposition (after expiration of the
Restricted Period) of any shares of Common Stock awarded to you under the Plan,
you will give written notice to the Company describing the manner of such
proposed disposition and containing such other information as shall be necessary
to enable counsel for the Company to determine whether registration of such
shares under the Act is required in connection with such proposed disposition.
You further agree that you will not effect such proposed disposition until
either (i) the Company has notified you that in the opinion of its counsel
registration of such shares under the Act is not required in respect of such
proposed disposition, or (ii) a registration statement under the Act covering
such shares has been filed by the Company with the Securities and Exchange
Commission and is effective under the Act as to such proposed disposition.
delivered to the Company by you at the same time as the delivery of the
Repurchase Price to you.

        The Company shall have the right to assign the Company's Share
Repurchase Option at any time, whether or not such option is then exercisable,
to one or more entities or persons as may be selected by the Company.

        6. The Company has the right to withhold all applicable income and
employment taxes due and owning at the time a given number of shares of
Registered Stock become taxable, and/or to delay delivery of Registered Stock
until appropriate arrangements have been made for payment of such withholding.

        7. In the event of any change in the outstanding shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the maximum aggregate number and class of shares as to which awards may
be granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any shares of stock or other securities
received by a Participant with respect to a number of shares of Restricted Stock
for which the Restricted Period shall not have expired will be subject to the
same restrictions with respect to an equivalent number of shares and shall be
deposited with the Company.


                                       2



        8. Nothing herein contained shall affect the right of the Company to
terminate your services, responsibilities and duties any time for any reason
whatsoever.

        9. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at 9601 Jeronimo Road, Irvine, CA 92618 and any notice
to be given you shall be addressed to you at your residence or as it may
hereafter appear on the employment records of the Company, or at such other
address as may hereafter be designated in writing.

        10. This letter agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.


                                   Sincerely,

                                   MAI SYSTEMS CORPORATION



                                   By:
                                       --------------------------------
                                          W. Brian Kretzmer,
                                          Chief Executive Officer, President
                                          and Secretary


Accepted and agreed to as of the date first above written:


- ----------------------------
James W. Dolan


                                       3



                                    Exhibit A

                                   STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
MAI SYSTEMS CORPORATION, his Shares of the Common Stock of MAI Systems
Corporation standing in my name on the books of said Corporation represented by
Certificate No. ___ herewith and do hereby irrevocably constitute and appoint
William Brian Kretzmer, or his nominee, attorney to transfer the said stock on
the books of the within named Corporation with full power of substitution in the
premises.

DATED:  April ___, 2002             BY:
                                       --------------------------------

                                    PRINT NAME:  James W. Dolan

                                    The signature(s) on this Assignment must
                                    correspond with the name(s) on the face of
                                    the certificate in every particular, without
                                    alteration or enlargement, or any change.

                                    IN THE PRESENCE OF:

                                    -----------------------------------


                                        4

EX-99.1

MAI Systems Corporation

EX-99.2

MAI Systems Corporation