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EXHIBIT 10.41
AGREEMENT OF PURCHASE AND SALE OF ASSETS
THIS AGREEMENT OF PURCHASE AND SALE OF ASSETS (the "Agreement") is
made effective as of September 30, 1995 by and between PLATINUM TREASURY
SYSTEMS, PLC, (the "Buyer"), and PLATINUM SOFTWARE CORPORATION, a Delaware
corporation, ("Platinum" or the "Seller") on behalf of itself and the following
majority owned subsidiaries: Platinum Software Canada Ltd., Platinum Software
(Ireland) Limited, and Platinum Software (Aust.) Pty, Limited (collectively, the
"Subsidiaries").
W I T N E S S E T H
WHEREAS, Seller is engaged in the business of developing, marketing
and distributing a variety of financial and accounting software products; and
WHEREAS, Seller and the Subsidiaries desire to divest certain assets,
operations and business associated with its Treasury software product line,
which consists of the assets described in Section 1 of this Agreement,
including, without limiting the generality of the foregoing, the DOS and Windows
versions of the Treasury software designed to provide a comprehensive and
integrated means of monitoring and managing the corporate treasury environment
(collectively, the "Treasury Product");
WHEREAS, subject to the terms and conditions of this Agreement, Buyer
desires to purchase and Seller and the Subsidiaries desire to sell and transfer
to Buyer, their assets, operations and business related to the Treasury Product
(the "Business") as described herein; and
WHEREAS, some of the assets being transferred under this Agreement and
liabilities being assumed reside within the Subsidiaries and the term Seller in
this Agreement shall be construed to include the Subsidiaries of Seller, as the
context requires.
NOW, THEREFORE, in consideration of the terms, covenants, and
conditions hereinafter set forth, the parties hereto hereby agree as follows:
1. Purchase and Sale of Assets.
1.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell, convey, assign, transfer, set over and
deliver to Buyer, and Buyer agrees to purchase and accept from Seller the
assets, properties and business of Seller related to the Business, whether
tangible, intangible, real, personal or mixed, and wherever located (hereinafter
sometimes collectively referred to as the "Purchased Assets"), which are more
particularly described as set forth below and in the schedules to this
Agreement. The Purchased Assets shall be free and clear of all liens,
encumbrances, liabilities, obligations, claims, security
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interests or rights of third parties except as otherwise specifically provided
herein and shall consist of the following:
(a) All of Seller's accounts receivable, including all license
fees, maintenance fees and professional services fees and charges owing or to
become owing under Software Contracts (as defined below) as of the Closing Date
as specified on Schedule 1.1(a).
(b) All of Seller's rights and benefits relating to contractual
rights, sales representative agreements, distributor agreements, OEM agreements,
license agreements, lease agreements, vendor's warranties on the Inventory and
other assets and properties relating to the Business (the "General Contracts"),
which are listed on Schedule 1.1(b) hereto.
(c) All of Seller's rights and benefits under the contracts,
agreements, licenses and other commitments or arrangements, oral or written,
with any person or entity respecting the ownership, license, acquisition,
design, development, distribution, marketing, use or maintenance of computer
program code, related technical or user documentation, and data bases relating
to the Business (the "Software Contracts"), which are listed on Schedule 1.1(c)
hereto.
(d) The inventory and stock in trade owned by Seller on the
Closing Date related to the Business, as listed on Schedule 1.1(d) hereto.
(e) The trade names, trademarks, service marks and copyrights
(including registrations, licenses and applications pertaining thereto)
identified on Schedule 1.1(e) hereto, together with all goodwill associated
therewith (the "Trademarks and Copyrights").
(f) The customer and client lists, parts lists, vendor lists,
catalogues, promotion lists and marketing data and other compilations of names
and requirements, and trade secrets and other material information related to
the Business, consisting of those items set forth on Schedule 1.1(f) hereto.
(g) The computer programs, designs, processes, drawings,
schematics, blueprints, copyrights, copyright applications, know-how, or trade
secrets or proprietary information, patents, and patent applications relating to
Treasury Product as detailed on Schedule 1.1(g).
(h) All technical and descriptive materials (other than
Inventory) relating to the acquisition, design, development, use, or maintenance
of computer code and program documentation and materials in any and all
languages related to the Business as listed on Schedule 1.1(h) (the "Technical
Documentation");
1.2 Excluded Assets. Anything herein to the contrary
notwithstanding, the Purchased Assets shall include, without limitation, all
assets of the Business including specifically the assets set forth on the
Schedules referred to in Section 1.1 above, and the assets listed on Schedule
1.2 attached hereto shall be retained by Seller.
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2. Purchase Price and Payment of Purchase Price.
2.1 Purchase Price; Payment. As consideration for the sale and
transfer of the Purchased Assets (exclusive of the accounts receivable specified
on Schedule 1.1(a)) to Buyer, Buyer shall pay to Seller the sum of One Million
Five Hundred Thousand United States Dollars (US$1,500,000) (the "Purchase
Price"). In payment of the Purchase Price, Buyer shall deliver to Seller at the
Physical Closing (defined below) a promissory note in the principal amount of
US$1,500,000 (the "Royalty Payment"). The principal under the Royalty Payment
shall be due and payable from time to time pursuant to Section 2.2 below and
shall be evidenced by a promissory note ("Royalty Note") in the form attached
hereto as Exhibit A. The obligation of Buyer under the Royalty Note shall be
secured by a charge on the assets of Buyer as set forth in the debenture
attached hereto as Exhibit A-1.
2.2 Payment of Royalties.
(a) Buyer shall pay the principal amount due under the Royalty
Note as set forth herein. Buyer shall pay to Seller a percentage of Buyer's Net
Revenues (as defined below) from the licensing of the Treasury Product (or
future versions, updates, improvements and enhancements, including versions
using different databases) as follows: (i) Five percent (5.0%) of Buyer's Net
Revenues from the licensing of the Treasury Product from the date of Physical
Closing until the second anniversary thereof, and (ii) Ten percent (10%) of
Buyer's Net Revenues from the licensing of the Treasury Product from the second
anniversary of the Physical Closing through the seventh (7th) anniversary of the
Physical Closing. Royalty payments are to be made until either the aggregate
amount of the royalties paid by Buyer to Seller under this subsection (a) of
Section 2.2 shall equal the Royalty Payment or the seventh (7th) anniversary of
the Physical Closing, whichever occurs first. In the event the aggregate amount
of all payments under the Royalty Note do not equal the Royalty Payment as of
the seventh (7th) anniversary of the Physical Closing, the difference between
the amount paid and the Royalty Payment shall be due sixty (60) days following
the seventh (7th) anniversary of the Physical Closing.
(b) Following the Closing, Buyer shall use its reasonable best
efforts to sell, license or otherwise commercially exploit the Treasury Product.
Buyer agrees that such transactions entered into by Buyer following the Closing
will be in good faith and will not be structured for the purpose of minimizing
or avoiding the payment of royalties to Seller hereunder.
(c) "Net Revenues" shall mean, for any calendar quarter, all
revenues from the licensing by Buyer of the Treasury Product and future versions
thereof, updates, improvements or enhancements, (including versions using
different databases), including license fees, but excluding the accounts
receivable specified on Schedule 1.1(a), maintenance fees, support,
customization, consulting and training. In the event the Treasury Product is
licensed by Buyer as part of a larger software license, Net Revenues shall be
allocated on the relationship the license revenues specifically attributable to
the Treasury Product bears to the overall license revenues, and if such larger
software license includes unallocated product discounts or unallocated license
fees, such discounts and license fees shall be allocated on the relationship the
suggested retail price of the Treasury Product bears to the overall suggested
retail price of all
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licensed software, unless an alternative allocation of Net Revenues shall have
been agreed to in advance of such third-party transaction by Buyer and Seller.
Net Revenues shall be calculated each month and royalties shall be payable to
Seller on a quarterly basis as described below.
(d) So long as Buyer is required to pay royalties hereunder,
Buyer shall cause separate records to be maintained for the licensing of the
Treasury Product. The royalties shall be paid within thirty (30) days following
the end of each calendar quarter. The first payment under the Royalty Note shall
not be due until six (6) months following the Physical Closing, and such payment
shall cover the six (6) month period following the Physical Closing. Within
fifteen (15) days following the end of each calendar quarter, Buyer shall
deliver to Seller a written computation of Net Revenues in accordance with this
Section 2.2, which shall set forth the method by which Net Revenues were
computed and shall be certified as true and correct in all material respects by
the principal financial officer of Buyer. If Seller does not agree with the
determination of Net Revenues shown in Buyer's computation, then Seller shall
notify Buyer in writing within ten (10) days after the receipt thereof,
specifying with sufficient specificity the objections thereto, and the parties
shall in good faith attempt to reach agreement thereon. If Buyer and Seller are
unable to reach an agreement within twenty (20) days after Seller's notice, the
determination of the proper amount of Net Revenues shall be submitted to an
independent "big six" accounting firm, or such other accounting firm mutually
agreed to by Buyer and Seller. Seller and Buyer shall split the costs of the
accounting firm and if either party disagrees with the determination of the
independent accounting firm the matter shall be submitted to arbitration in
accordance with the arbitration provisions set forth in Section 29 hereof;
provided, however, that in the event that the amount of Net Revenues determined
by the independent accounting firm exceeds by ten percent (10%) or more the
amount of Net Revenues as calculated by Buyer, or is at least ten percent (10%)
less than the amount of Net Revenues calculated by Seller, then the party whose
calculation differs shall pay the full cost of the accounting firm making such
determination. At the end of each calendar quarter, Buyer shall provide to
Seller a forecast of revenues from the licensing of the Treasury Product for the
subsequent quarter.
2.4 Accounts Receivable Payment. As consideration for the sale and
transfer of the Accounts Receivable described on Schedule 1.1(a) to Buyer, Buyer
shall pay to Seller the sum of $259,545 (the "Accounts Receivable Purchase
Price"). In payment of the Accounts Receivable Purchase Price, Buyer shall
deliver to Seller a promissory note in the principal amount of $259,545 in the
form attached hereto as Exhibit B (the "Accounts Receivable Note"). The Accounts
Receivable Note shall bear eight percent (8%) simple interest and shall be
payable in ten (10) equal consecutive monthly installments of principal and
accrued interest on the first day of each calendar month commencing on the first
day of the month following the three (3) month anniversary of the Physical
Closing. The payment of the Accounts Receivable Note shall be secured by a
charge on the assets of Buyer as set forth in the debenture attached hereto as
Exhibit A-1.
2.5 Allocation of Purchase Price. The Purchase Price of the
Purchased Assets shall be allocated as set forth on Schedule 2.5 attached
hereto. Buyer and Seller agree to execute any forms or notices required to
effect such allocation pursuant to the Internal Revenue Code of 1986, as amended
(the "Code"), including but not limited to Form 8594 under the Code. Buyer and
Seller acknowledge that the principal amount of the Accounts Receivable Note has
been
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reduced in the amount of $17,138 to reflect the assumption by Buyer of certain
referral fees listed on Schedule 3.1.
2.6 Rights of Offset. Each of Seller and Buyer shall have the
right, in its reasonable discretion, to offset from time to time the amount of
any payment due to the other party against the reciprocal obligation to receive
any payment from such party which is past due and remains unpaid for a period of
thirty (30) days following receipt of written notice thereof.
3. Assumption Only of Specified Liabilities, Obligations, Contracts
and Agreements.
3.1 No Assumption of Liabilities Unless Expressly Assumed. Unless
otherwise specifically provided in Section 3.2 below, Buyer shall not assume or
have any duty or obligation with respect to any liability, duty, obligation,
contract or agreement of Seller.
3.2 Specification of Liabilities Assumed. Buyer agrees to assume
the liabilities, obligations, contracts, leases and agreements of Seller
relating to the Business existing as of the Closing Date as specifically set
forth on Schedule 3.2 hereto (the "Assumed Liabilities"), and to hold Seller
harmless therefrom in accordance with Section 3.3 and Section 13.2 below. It is
expressly understood and agreed that, except for the Assumed Liabilities, Buyer
shall not be liable for any of the obligations, liabilities, contracts or
agreements of Seller.
3.3 Payment of Liabilities Not Assumed. Seller shall indemnify,
defend and hold Buyer harmless from, in accordance with Section 13 below, all of
the liabilities, claims and obligations of Seller not expressly assumed by
Buyer.
3.4 Taxes. Buyer shall not be responsible for any "Taxes" related
to any period before the Closing Date or arising from the purchase f the
Purchased Assets except those set forth in Schedule 3.2, if any, which Buyer is
expressly assuming pursuant to this Agreement. "Taxes" for purposes of this
Agreement means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxed under Code Section59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kinds whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
4. Closing.
4.1 Provided that all conditions precedent set forth in this
Agreement have been satisfied or waived, the closing of the transactions
contemplated hereby (the "Closing") shall occur effective as of the close of
business on September 30, 1995 (the "Closing Date"). The actual physical closing
(the "Physical Closing") and the Closing deliveries specified below shall occur
as soon as practicable thereafter, but in no event later than January 15, 1996,
provided that all of the conditions set forth in this Agreement have been
satisfied or waived. The Physical Closing shall be held at the offices of
Seller, unless another place is mutually agreed upon by the parties.
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4.2 Buyer shall be responsible for all obligations, trade payables,
taxes and liabilities, including employee wages (including the wages of J.
Townsend, A. Tuddenham, B. Lotz and D. Webb, who were hired between Closing and
Physical Closing), taxes and benefits related to the operation of the Business
during the period between the Closing Date and the Physical Closing, except as
provided in Section 8.6 below. Seller shall be responsible for all employee
expense reports related to the Business, unless otherwise expressly assumed by
Buyer, outstanding or accrued as of the Closing, including without limitation,
royalties accrued to John Morgan and Richard Franklin under agreements with
Seller. Such amounts referenced in the previous sentence shall be paid at the
Physical Closing. Notwithstanding the above: (i) Seller shall continue general
liability insurance coverage on the Purchased Assets for a period of thirty (30)
days following the Physical Closing. Seller shall invoice Buyer for the
insurance premiums related to this transition period and payment shall be due
net thirty (30) days from receipt of an invoice. If there is a claim for a loss
under the liability policy during the thirty (30) day transition period, Buyer
shall pay to Seller all deductibles, co-payments and/or non-covered amounts
relating to any such loss. In addition, certain employees of Buyer have Seller
company credit cards or credit cards guaranteed by Seller. Seller agrees to not
cancel such credit cards for a period of thirty (30) days following the Physical
Closing, and Buyer agrees to indemnify Seller for any liability which it may
incur if the employees do not pay their credit card bills. Buyer shall be
responsible for expenses incurred by Seller in connection with continuation of
employee benefits with respect to the Retained Employees (as defined herein)
pursuant to the Consolidated Omnibus Budget Reconciliation Act, as codified in
the Code at Section 4980B, and as Part 6 of Title I of the Employee Retirement
Income Security Act of 1974. At the Physical Closing, Seller shall provide Buyer
with a list of the amount of funds that were advanced on behalf of Buyer for
trade payables, taxes, wages and other similar items described above relating to
the Business between Closing and Physical Closing and Buyer shall reimburse
Seller within thirty (30) days thereafter. Upon mutual agreement of the parties
hereto, Seller may offset the amount of accounts receivable collected pursuant
to Section 4.3 below against Buyer's obligation to reimburse Seller for advances
made under this Section 4.2.
4.3 Seller shall act as a fiduciary agent of Buyer for the period
from the Closing Date to Physical Closing for all accounts receivable and cash
related to the operation of the Business during such period. Within thirty (30)
days following the Physical Closing, Seller shall provide to Buyer a list of all
sales of the Products between the Closing and the Physical Closing together with
payments received by Seller as of such date with respect to such sales.
Thereafter, on a monthly basis thirty (30) days following the end of each month,
Seller shall remit to Buyer the collection of any of such accounts receivable
that are collected. If any accounts receivable are paid by third parties to
Seller following the Physical Closing, Seller shall remit these funds to Buyer
on a monthly basis thirty (30) days following the end of each month.
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5. Representations and Warranties of Seller.
As a material inducement to Buyer to enter into this Agreement,
Seller represents and warrants the following, the truth and accuracy of each of
which shall also constitute a condition precedent to the obligations of Buyer
hereunder:
5.1 Organization and Good Standing. Seller is duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Seller has full corporate power and authority to carry on its business as it is
now conducted. Seller is not in violation of its Certificate of Incorporation or
Bylaws in any manner which would adversely affect the validity, binding nature
or enforceability of its obligations under this Agreement or, following the
Physical Closing, Buyer's title to the Purchased Assets or right to operate the
Business.
5.2 Authority. Seller has all the necessary corporate power and
authority to enter into this Agreement and the related documentation, to perform
the obligations to be performed by it hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized and
approved by all necessary action on the part of the Board of Directors of
Seller. This Agreement has been duly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms, subject as to enforceability to any applicable
bankruptcy, insolvency, moratorium or other laws affecting creditors' rights
generally or such principles of equity as a court of competent jurisdiction
might apply.
5.3 Approvals. No consent, approval or agreement of any person,
entity, party, court or government is required to be obtained by Seller in
connection with the execution and delivery of this Agreement or the performance
of the terms hereof or the consummation of the transactions provided for herein
except as specifically set forth in Schedule 5.3.
5.4 Property of Seller. Seller owns and has the full and complete
right to use all of the Purchased Assets, real and personal, tangible and
intangible. Except as disclosed on Schedule 5.4, Seller has, and at the Physical
Closing will convey and transfer to Buyer, good, complete and marketable title
to all of the Purchased Assets, free and clear of restrictions or conditions to
transfer or assignment, and free and clear of all defects of title, mortgages,
liens, encumbrances, pledges, leases, equities, claims, charges, easements,
rights of way, covenants, conditions, conditional sale contracts, security
interests and restrictions, except for the lien of current taxes not yet due and
payable. Other than the warranties, conditions, terms or representations
specified in this Agreement and the related documents delivered pursuant to this
Agreement, Seller makes no express or implied warranty, term, condition or
representation regarding the Purchased Assets. THE PURCHASED ASSETS, INCLUDING
THE TREASURY PRODUCT AND THE SOURCE CODE THEREOF, ARE BEING PURCHASED BY BUYER
"AS IS" AND SELLER EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, CONDITIONS, TERMS
OR REPRESENTATIONS OF MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A
PARTICULAR PURPOSE.
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5.5 No Conflict. Neither the execution and delivery of, nor the
consummation of the transactions contemplated by, this Agreement will conflict
with or result in the breach of the terms, conditions and provisions of, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or result in the creation of a lien or
encumbrance on any of the Purchased Assets pursuant to (1) the Certificate of
Incorporation or Bylaws of Seller, (2) any agreement, document or instrument to
which Seller is a party or by which Seller is bound or (3) any judgment, decree,
order, statute, rule or regulation applicable to Seller, the Purchased Assets or
the Business.
5.6 Litigation. Except as set forth in Schedule 5.6 hereto, there
are (i) no actions, suits or proceedings pending or threatened against Seller,
the Purchased Assets or the Business which, individually or in the aggregate,
would have an adverse effect on any of the Purchased Assets or the transactions
contemplated herein, whether at law or in equity, or before or by any court or
governmental agency, authority or body or before any arbitrator of any kind, and
(ii) to the best knowledge of Seller, no investigations are being conducted
which could lead to any such action, suit or proceeding.
5.7 Finder's Fees. Seller has not incurred any liability to any
broker, finder or agent for any brokerage fees, finder's fees or commissions
with respect to the transactions contemplated by this Agreement.
5.8 Inventories. All of the items comprising the inventory listed
on Schedule 1.1(d) are, and on the date of the Physical Closing will be, usable
and saleable in the ordinary course of business by Seller. No items included in
the inventory have been pledged as collateral or are held by Seller on
consignment from others.
5.9 Accounts Receivable. The accounts receivable listed on
Schedule 1.1(a) arose from valid sales in the ordinary course of the business
of Seller.
5.10 Material Misstatements or Omissions. No representations or
warranties of Seller contained in this Agreement or the schedules and exhibits
hereto or in any document, statement or certificate furnished or to be furnished
pursuant to this Agreement, contain or on the date of the Physical Closing will
contain an untrue statement of a material fact, or omit or on the date of the
Physical Closing will omit to state a material fact necessary to make the
statements of fact herein or therein not misleading.
5.11 Trademarks, Patents, etc.
(a) Schedule 1.1(e) contains a complete list of the Trademarks
and Copyrights and Schedule 1.1(g) contains a complete list of patents and
patent applications applicable to the Purchased Assets (collectively, the
"Intellectual Property"), including the jurisdictions in which each such
Intellectual Property right has been issued or registered or in which any
application for such issuance and/or registration has been filed. Except as set
forth therein, Seller owns and possesses or is licensed under the Intellectual
Property with no known or suspected infringement of or conflict with the rights
of others. Such ownership, possession or license is exclusive and not subject to
termination without Seller's consent where the failure to be
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exclusive or not subject to termination without Seller's consent would have a
material adverse effect on the rights of Seller applicable to the Purchased
Assets. Seller is not aware of any third party that is infringing or violating
any of the Intellectual Property.
(b) Schedules 1.1(b) and 1.1(c) set forth all licenses,
sublicenses and other agreements as to which Seller is a party and pursuant to
which any person is authorized to use any Intellectual Property, and all
material licenses, sublicenses and other agreements as to which Seller is a
party and pursuant to which Seller is authorized to use any third party patents,
trademarks or copyrights, including software ("Third Party Intellectual Property
Rights") which are incorporated in, are, or form a part of the Treasury Product
or the Business.
(c) Seller is not aware of any unauthorized use, disclosure,
infringement or misappropriation of any Intellectual Property rights of Seller,
any trade secret material to Seller related to the Business, or any Intellectual
Property right of any third party to the extent licensed by or through Seller,
by any third party, including any employee or former employee of Seller. Seller
has not entered into any agreement to indemnify any other person against any
charge of infringement of any Intellectual Property, other than indemnification
provisions contained in purchase orders and customer licenses and support
agreements arising in the ordinary course of business.
(d) Seller is not, nor will it be as a result of the execution
and delivery of this Agreement or the performance of its obligations under this
Agreement, in breach of any license, sublicense or other agreement relating to
the Intellectual Property or Third Party Intellectual Property Rights.
(e) All registered trademarks held by Seller are valid and
subsisting. Seller has no patents or registered copyrights with respect to the
Treasury Product. Seller (i) has not been sued in any suit, action or proceeding
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right of
any third party with respect to the Treasury Product or the Business and (ii)
has not brought any action, suit or proceeding for infringement of Intellectual
Property or breach of any license or agreement involving Intellectual Property
with respect to the Treasury Product or the Business against any third party.
The manufacture, marketing, licensing or sales of the Treasury Product does not
infringe any patent, trademark, service mark, copyright, trade secret or other
proprietary right of any third party.
(f) Seller has secured valid written assignments from all
consultants and employees who contributed to the creation or development of
Intellectual Property of the rights to such contributions that Seller does not
already own by operation of law.
(g) Seller believes that it has taken all reasonable and
appropriate steps to protect and preserve the confidentiality of all
Intellectual Property not otherwise protected by patents or patent applications
or copyright ("Confidential Information").
5.12 Taxes. Seller has no material liability for any Taxes with
respect to the Purchased Assets, except for taxes which have accrued and are not
yet payable. Seller has not
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elected pursuant to the Code to be treated as a Subchapter S corporation or a
collapsible corporation pursuant to Section 341(f) or Section 1362(a) of the
Code.
5.13 Compliance with Laws. Seller is not in violation of any law,
ordinance, order, decree, rule or regulation of any governmental agency, the
violation of which could have a material adverse effect on the Purchased Assets.
5.14 Employees. Except for those certain employment agreements, in
each case dated as of July 14, 1993 (collectively the "Employment Agreements")
and those certain Non-Competition Agreements of even date therewith
(collectively, the "Non-Competition Agreements") in each case between Seller and
John Morgan and Richard Franklin, as applicable, none of the Employees as
defined in Section 8.3 is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency that would
conflict with such employee's obligation to use his best efforts to promote the
Business or that would have a material adverse effect on the Purchased Assets or
the Business. None of the Employees is in violation of any term of any
employment contract, proprietary information and inventions agreement,
non-competition agreement or any other contract or agreement relating to the
relationship of any such employee with Seller or any previous employer which
would have a material adverse effect on the Business. Seller has no collective
bargaining agreements with any of the Employees, including "employee pension
benefit plans" as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended. Each of the Employment Agreements and
Non-Competition Agreements shall be terminated at the Physical Closing pursuant
to Termination Agreements in the form of Exhibits C-1 and C-2.
5.15 Reliance.
(a) Buyer acknowledges that Seller has relied upon Mr. Morgan
and Mr. Franklin with respect to the furnishing of a portion of the information
used by Seller in the making of Seller's representations and warranties
contained in Sections 5.8, 5.9 and 5.11(b), (c), (f) and (g) of this Agreement
and as to the accuracy and completeness of the information set forth on
Schedules 1.1(a), 1.1(b), 1.1(c), 1.1(f), 1.1(g) and 1.1(h) hereto. Buyer
further acknowledges that Messrs. Franklin and Morgan have assisted in the
management of the Business for Seller and are associated with Buyer and now have
or will have an equity interest in Buyer and/or the business to be acquired from
Seller by Buyer, and that each of Messrs. Franklin and Morgan will continue to
have a senior management position with respect to such business operations
subsequent to the Physical Closing Date with Buyer. Seller acknowledges that the
input and information provided by Messrs. Morgan and Franklin as described above
was based on their actual knowledge at the time the information was supplied.
(b) Seller shall not be deemed in breach of any of Seller's
representations or warranties set forth in this Agreement to the extent that
such breach is a direct result of the furnishing by Messrs. Morgan or Franklin
of inaccurate or false information to Seller or by the omission or failure of
Messrs. Morgan or Franklin to disclose and furnish to Seller requisite
information actually known to Messrs. Morgan or Franklin whether any such acts
or omissions are done intentionally or unintentionally. Buyer shall cause
Messrs. Morgan and
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Franklin to deliver a certificate at the Physical Closing to
Seller wherein they will certify to their best knowledge that they have provided
complete and accurate information to Seller for its reliance in connection with
the above, and that they have reviewed the Schedules to this Agreement and, to
the best of their knowledge, such Schedules are correct and complete.
6. Representations and Warranties of Buyer.
As a material inducement to Seller to enter into this Agreement,
Buyer represents and warrants the following, the truth and accuracy of each of
which shall also constitute a condition precedent to the obligations of Seller
hereunder:
6.1 Organization and Good Standing. Buyer is a company duly
incorporated and validly existing under the laws of England and Wales. Buyer was
incorporated on August 2, 1995, and prior to the date hereof had no business,
operations, assets or liabilities, other than for nominal capital received upon
its initial capitalization and for the obligations and liabilities related to
this Agreement and the transactions contemplated hereby. Buyer represents and
warrants to Seller that it has sufficient capital and funding to operate the
Business following the Physical Closing as contemplated by this Agreement.
6.2 Authority. Buyer has all the necessary corporate power and
authority to enter into this Agreement, and the other documents and agreements
contemplated to be entered into in connection herewith, and to perform the
obligations to be performed by it hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. This Agreement and the other
documents and agreements contemplated to be entered into in connection herewith
have been duly authorized and approved by all necessary action on the part of
the Board of Directors and shareholders of Buyer. This Agreement and the other
documents and agreements contemplated to be entered into in connection herewith
have been duly executed and delivered by Buyer and constitute valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms, subject as to enforceability to any applicable bankruptcy,
insolvency, moratorium or other laws affecting creditors' rights generally or
such principles of equity as a court of competent jurisdiction might apply.
6.3 Finder's Fees. Buyer has not incurred any liability to any
broker, finder or agent for any brokerage fees, finder's fees or commissions
with respect to the transactions contemplated by this Agreement.
6.4 Agreement Will Not Cause Breach. Consummation of the
transactions contemplated by this Agreement will not cause a default or an event
that, with notice or the lapse of time or both, would constitute a default,
breach or violation of Buyer's Certificate of Incorporation or Memorandum of
Articles of Association or any agreement to which Buyer is a party or by which
it or its property is bound.
6.5 Approvals. No consent, approval or agreement of any person,
entity, party, court or government is required to be obtained by Buyer in
connection with the execution and delivery of this Agreement or any of the
documents and agreements contemplated to be
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entered into in connection herewith, or the performance of the terms hereof or
thereof or the consummation of the transactions provided for herein or therein.
6.6 Material Misstatements or Omissions. No representations or
warranties of Buyer contained in this Agreement or the schedules and exhibits
hereto or in any document, statement or certificate furnished or to be furnished
pursuant to this Agreement, contain or on the date of the Physical Closing will
contain an untrue statement of a material fact, or omit or on the date of the
Physical Closing will omit to state a material fact necessary to make the
statements of fact herein or therein not misleading.
6.7 Acknowledgment of Disclosure by Seller. Buyer has received a
copy of the most recent Annual Report on Form 10-K for the fiscal year ended
June 30, 1995, prepared by Seller pursuant to the Securities Exchange Act of
1934, as amended, and Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995, and has had sufficient opportunity to review and discuss
with Seller the contents thereof.
7. Covenants and Agreements of Seller.
Seller covenants and agrees to the following, the fulfillment of
each of which shall also constitute a condition precedent to the obligations of
Buyer hereunder:
7.1 Conduct of Business Before the Physical Closing. Between the
date hereof and the date of the Physical Closing, Seller will not, without the
prior written consent of Buyer, enter into any transaction (other than as
contemplated by this Agreement) relating to the Business which is not at
arm's-length or which is inconsistent with Seller's past practice in conducting
the Business.
7.2 Consents. As soon as reasonably practicable after the date
hereof, Seller shall use its reasonable best efforts, and Buyer will cooperate
with Seller, to obtain all of the necessary consents to the transactions
contemplated hereby.
8. Additional Covenants.
8.1 Access and Information. Between the date hereof and the date of
the Physical Closing, Seller will afford to Buyer and its counsel, accountants
and other representatives, reasonable access to all of Seller's properties,
books, contracts and records related to the Business, and will furnish Buyer
with all the information, including copies of books, contracts and records,
concerning Seller's affairs which Buyer may reasonably request. Buyer will
advise Seller of any result of such investigation which leads Buyer to believe
that any representation or warranty of Seller contained herein may not be true
and accurate.
8.2 Cooperation. Seller and Buyer will use their reasonable best
efforts to cause all of their respective representations and warranties
contained in this Agreement to be true and correct on and as of the date of the
Physical Closing and to cause all of the conditions
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precedent disclosed in Sections 10 and 11 to be satisfied on or prior to the
date of the Physical Closing.
8.3 Retained Employees. Seller shall notify all employees of Seller
engaged in the conduct and operation of the Business (the "Employees") that
their employment by Seller will be terminated effective as of September 30, 1995
by reason of the transactions contemplated by this Agreement, and Buyer shall
notify the Employees designated on Schedule 8.3 hereto (the "Retained
Employees") that Buyer desires to hire them. On the date of the Physical
Closing, Seller shall (i) notify the Employees of their termination, and (ii)
waive any rights it may have to prohibit the Retained Employees from being
employed by the Buyer.
8.4 Termination of Employment Agreements. The Employees include,
among others, Messrs. Morgan and Franklin, who are employed by Seller pursuant
to the Employment Agreements. The Employment Agreements and the Non-Competition
Agreements shall be terminated by Seller as of the Physical Closing date
pursuant to the Termination Agreements and Buyer shall procure the consent of
Messrs. Morgan and Franklin to such termination and shall indemnify, defend and
hold harmless Seller against and in respect of any and all liabilities relating
to the Employment Agreements and Non-Competition Agreements from and after the
Physical Closing date, in accordance with Section 13.2 below. Seller shall
indemnify, defend and hold harmless Buyer against and in respect of any and all
liabilities relating to the termination of the Employment Agreements in
accordance with Section 13.1 below.
8.5 Adverse Changes. Seller shall promptly notify Buyer in writing
of any material adverse facts or developments affecting or which may affect the
Business which become known to Seller, including, without limitation, (i) any
damage, destruction or loss (whether or not covered by insurance) materially and
adversely affecting any of the Purchased Assets or the Business, or (ii)
anything which, if not corrected prior to the date of the Physical Closing,
could prevent Seller from fulfilling any condition precedent described in
Section 11 below.
8.6 Use of Office Space. Seller, and its subsidiaries have
conducted the Business in Seller's Sydney, Australia and Oakbrook, Illinois
office. Following the Physical Closing, Seller agrees to allow Buyer to continue
to use Seller's office facilities in Sydney, Australia on a rent-free basis,
consistent with the use of such facilities prior to the Physical Closing for a
period of fifteen (15) days, or such longer period, as mutually agreed upon.
Seller agrees to allow Buyer to continue to use Seller's office facilities in
Oakbrook, Illinois on a rent free basis, consistent with the use of such
facilities prior to physical Closing for a period of three (3) months. Buyer
shall be responsible though for all variable costs associated with the use of
these facilities during this period, including, but not limited to, supplies and
telecommunications charges which will be billed at a variable cost. Seller will
pay all telephone expenses associated with the facilities during the transition
period and Buyer agrees to reimburse Seller for twenty percent (20%) of the
telephone expenses within ten (10) days following receipt by Buyer of an invoice
from Seller.
8.7 Non-Solicitation of Employees. For a period of two (2) years
following the Physical Closing, Buyer and Seller agree that they shall not
solicit the employment of any of each company's respective employees, including
specifically the Retained Employees, including
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without limitation the offer to any such Retained Employee or other employee of
a salary increase or bonus in excess of usual and customary increases in salary
or bonuses commonly offered by Seller in the conduct of its business.
8.8 Software Product License. Within ten (10) days following the
Physical Closing, Seller shall provide to Buyer, at no charge, a 1-5 user
license for the following modules of Sellers Platinum(R) SQL NT accounting
software: General Ledger, Accounts Payable, Accounts Receivable, Inventory,
Asset Management, Cash Management, Purchase Order, Order Entry and Tools.
8.9 Subordination of Debenture. Seller undertakes with Buyer that
if so requested by Buyer after completion it will execute a Deed of
Subordination in respect of Seller's debenture dated January 11, 1996, whereby
Seller will agree to subordinate the security created by its debenture so that
it ranks behind any security created in favor of a clearing bank providing
working capital facilities to Buyer, provided that it will be a term of any such
subordination that the interest of such bank will only rank in priority to that
of Seller up to a maximum total sum (including interest and costs) of $US500,000
and that thereafter the security of Seller shall rank in priority to the
interests of such bank as a first fixed and floating security. Seller and Buyer
agree to use the standard form of deed of priority provided by the bank,
provided the terms and conditions are reasonably acceptable to Buyer and Seller,
with such changes as either party may reasonably request.
9. Survival of Covenants, Representations and Warranties.
All of the covenants, representations and warranties set forth in
this Agreement shall remain in full force and effect regardless of any
investigation, verification or approval by any party hereto or by anyone on
behalf of any party hereto, and shall survive the date of the Physical Closing
for a period of two (2) years. All representations and warranties shall be true
at and as of the date of the Physical Closing, as though said representations
and warranties were made at and as of that time. Termination of this Agreement
shall not relieve any party hereto of its liability for any breach by such party
of this Agreement or any representation or warranty contained in or made
pursuant hereto.
10. Conditions Precedent to the Obligations of Seller.
The obligations of Seller to consummate this Agreement are subject
to the following express conditions precedent, each of which shall be deemed
independent, severable and waivable in whole or in part at the option of Seller.
10.1 Correctness of Representations and Warranties. All
representations and warranties of Buyer contained herein shall be true and
accurate in all material respects at and as of the date of the Physical Closing,
as though said representations and warranties were made at and as of that time;
and Buyer shall have performed all covenants and agreements on its part required
to be performed prior to the date of the Physical Closing and shall not be in
default of its material obligations or representations or warranties under this
Agreement at the date of the Physical Closing.
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10.2 Delivery of Instruments. Buyer shall have delivered all
instruments, documents and other matters to be delivered to Seller by Buyer in
accordance with the terms of this Agreement.
10.3 Officer's Certificate. Seller shall have received a
certificate, dated as of the date of the Physical Closing and executed by the
Chairman of the Board of Buyer or any other Director, to the effect that (i) all
of the representations and warranties of Buyer contained in this Agreement are
true and accurate in all material respects at the date of the Physical Closing;
and (ii) all of the covenants and agreements of Buyer contained in this
Agreement and required to be performed before the Physical Closing have been
performed and Buyer is not in default of any of its obligations or
representations or warranties under this Agreement.
10.4 Approvals, etc. All required regulatory approvals shall have
been received with respect to the transactions contemplated under this
Agreement. No action or proceeding shall be completed or pending against Buyer
that has resulted or is likely to result in a judgment, decree or order that
would prevent or make unlawful the consummation of the transactions under this
Agreement, and there shall be in effect no order restraining or prohibiting the
consummation of the transactions contemplated by this Agreement, nor any
proceedings pending with respect thereto.
10.5 Opinion of Buyer's Counsel. Seller shall have received an
opinion, dated the date of the Physical Closing, of Garrett & Co., counsel for
Buyer, substantially in the form of Exhibit D hereto.
10.6 Assignment and Assumption Agreement. Buyer shall have executed
and delivered Assignment and Assumption Agreements in the form attached hereto
as Exhibit E (the "Assumption Agreement").
10.7 Trademark License. Buyer shall have entered into the Trademark
License Agreement in the form of Exhibit F attached hereto.
10.8 Debenture. Buyer shall have entered into the agreement in the
form attached hereto as Exhibit A-1.
10.9 Termination of Employment Agreements. Each of Messrs. Franklin
and Morgan shall have executed a Termination Agreement in the form attached
hereto as Exhibit C-1 and C-2, respectively.
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11. Conditions Precedent to the Obligations of Buyer.
The obligations of Buyer to consummate this Agreement are subject
to the following express conditions precedent, each of which shall be deemed
independent, severable and waivable in whole or in part at the option of Buyer.
11.1 No Adverse Change. There shall not have occurred any material
adverse change in the financial condition, properties or assets, business,
prospects or operations of the Business, or any other event or condition or
state of facts of any character affecting Seller which would materially and
adversely affect the Business or the Purchased Assets.
11.2 Litigation. As of the date of the Physical Closing, no
material litigation, governmental action or other proceeding shall be threatened
or commenced against Seller with respect to any matter or against any person
with respect to any transactions contemplated herein, or which could adversely
affect any of the Purchased Assets or the Business.
11.3 Consents, etc. Buyer shall have received from all governmental
agencies, licensees, lenders, creditors, lessors and other persons such
consents, releases and permissions, as are necessary for the sale and transfer
of the Purchased Assets and the consummation of the transactions contemplated in
this Agreement, including, without limitation, those consents and approvals
listed on Schedule 5.3 attached hereto. Buyer waives the requirement obtaining
the consents listed on Schedule 5.3 prior to the Physical Closing. Following the
Physical Closing, Seller shall use its reasonable best efforts to assist Buyer
in obtaining the consents listed on Schedule 5.3.
11.4 Delivery of Documents. On or before the date of the Physical
Closing, Buyer shall have received from Seller, and the Subsidiaries, as
applicable, all instruments, consents, approvals, deeds, assignments, policies
and other documents called for in this Agreement, including, without limitation,
good and sufficient bills of sale in the form attached hereto as Exhibit G,
assignments of copyrights and other assignments of title, in duly recordable
form where applicable, and all other instruments and legal opinions necessary to
effectuate the transfer of the Purchased Assets as provided for herein.
11.5 Correctness of Representations and Warranties. All of the
representations and warranties of Seller contained in this Agreement shall be
true and accurate in all material respects at the date of the Physical Closing
as though also made at and as of such date.
11.6 Performance of Covenants and Agreements. All of the covenants
and agreements of Seller contained in this Agreement and required to be
performed before the Physical Closing shall have been performed and Seller shall
not be in default under any provisions of this Agreement.
11.7 Officer's Certificate. Buyer shall have received a
certificate, dated the date of the Physical Closing and executed by an officer
of Seller, to the effect that to the best of his knowledge (i) all of the
representations and warranties of Seller contained in this Agreement are true
and accurate in all material respects at the date of the Physical Closing; and
(ii) all of the
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covenants and agreements of Seller contained in this Agreement and required to
be performed before the Physical Closing have been performed and Seller is not
in default of any of its obligations or representations or warranties under this
Agreement.
11.8 Approvals, etc. All required regulatory approvals shall have
been received with respect to the transactions contemplated under this
Agreement. No action or proceeding shall be completed or pending against Seller
that has resulted or is likely to result in a judgment, decree or order that
would prevent or make unlawful the consummation of the transactions under this
Agreement, and there shall be in effect no order restraining or prohibiting the
consummation of the transactions contemplated by this Agreement, nor any
proceedings pending with respect thereto.
11.9 Opinion of Seller's Counsel. Buyer shall have received an
opinion, dated the date of the Physical Closing, of Stradling, Yocca, Carlson &
Rauth, counsel for Seller, substantially in the form of Exhibit H hereto.
11.10 Assumption Agreement. Seller shall have executed and
delivered Assumption Agreements in the form of Exhibit E hereto.
11.11 Trademark License. Seller shall have entered into the
Trademark License Agreement in the form of Exhibit F attached hereto.
11.12 Termination of Employment Agreements. Seller shall have
entered into Termination Agreements with each of Messrs. Franklin and Morgan in
the form attached hereto as Exhibit C-1 and C-2.
11.13 Transition Letter. Seller shall have delivered to Buyer the
form of a letter to existing users of the Treasury Product informing such users
of the sale contemplated by this Agreement.
12. Closing Deliveries.
12.1 Seller's Deliveries. In connection with and at the time of
the Physical Closing, Seller shall deliver to Buyer the following:
(a) Bills of Sale. A bill of sale in the form attached hereto
as Exhibit G from each of the applicable Subsidiaries and from Seller and all
other instruments and documents of transfer necessary to transfer and vest in
Buyer good title to the Purchased Assets, free and clear of any liabilities,
liens, encumbrances or restrictions whatsoever, in the form and substance
satisfactory to Buyer's counsel.
(b) Other Documents. Each of the certificates and other
documents and instruments required to be delivered by Seller to Buyer pursuant
to Section 11 above, together with such additional documents or instruments as
Buyer's counsel reasonably may request to give effect to the transactions
contemplated herein.
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12.2 Buyer's Deliveries. In connection with and at the time of the
Physical Closing, Buyer shall deliver to Seller the following:
(a) Purchase Price. The Royalty Note and the Accounts
Receivable Note.
(b) Other Documents. Each of the certificates and other
documents and instruments required to be delivered by Buyer pursuant to Section
10 above, together with such additional documents or instruments as Seller's
counsel reasonably may request to give effect to the transactions contemplated
herein.
13. Indemnification.
13.1 Indemnification of Buyer. Seller shall indemnify, defend and
hold harmless Buyer against and in respect of any and all claims, demands,
losses, liabilities, costs, expenses, obligations and damages, including,
without limitation, interest, penalties and reasonable attorneys' fees, suffered
or incurred by Buyer which arise, result from or relate to any breach of or
failure by Seller to perform any of its respective representations, warranties,
covenants or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished or to be furnished under this Agreement or
which arise, result from or relate to any liability or obligation of Seller not
specifically assumed by Buyer or otherwise provided for hereunder, or any
matter, liability (contingent or otherwise), obligation, occurrence or
transaction which relates to the Business occurring or arising prior to the
Closing Date, except for the Assumed Liabilities. Nothing herein shall, however,
prevent Seller from contesting, in good faith, its liability therefor and no
right to indemnity shall accrue hereunder in respect of any such liability which
Seller is contesting diligently and in good faith until final resolution of such
contest.
13.2 Indemnification of Seller. Buyer shall indemnify, defend and
hold harmless Seller (and its subsidiaries) against and in respect of any and
all claims, demands, losses, liabilities, costs, expenses, obligations and
damages, including, without limitation, interest, penalties and reasonable
attorneys' fees, suffered or incurred by Seller (and its subsidiaries) as a
result of any breach of or failure by Buyer to perform any of its
representations, warranties, covenants or agreements in this Agreement or in any
schedule, certificate, exhibit or other instrument furnished or to be furnished
under this Agreement or which arise or result from Buyer's failure to satisfy or
otherwise discharge any of the Assumed Liabilities as, when and to the extent
they become due and payable. Nothing herein shall, however, prevent Buyer from
contesting, in good faith, its liability therefor and no right to indemnity
shall accrue hereunder in respect of any such liability which Buyer is
contesting diligently and in good faith until final resolution of such contest.
13.3 Procedures for Establishment of Right to Indemnity and Right
to Defend Third Party Claims. In the event that any party hereto asserts the
existence of any right to indemnity under Sections 13.1 or 13.2 ("Indemnifiable
Damages"), such party (the "Indemnitee") shall give written notice to the other
party or parties (the "Indemnitors") of the nature and amount of the Indemnity
asserted promptly, and, in the case of any claim relating to a third party
action, within ten (10) days prior to the date a response or answer thereto is
due, in writing, thereof. The failure, refusal or neglect of such Indemnitee to
notify the Indemnitors within the time period
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specified above of any such claim or action shall not relieve such Indemnitors
from any liability which they may have to such Indemnitee in connection
therewith, unless the Indemnitors were prejudiced by such a delay, and then only
to the extent of the harm suffered by such delay. In case any claim, demand or
assessment shall be asserted or suit, action or proceeding commenced against an
Indemnitee and such Indemnitee shall have notified the Indemnitor of the
commencement thereof, the Indemnitor may, to the extent that such claim, demand
or assessment includes or may include Indemnifiable Damages, assume the defense,
conduct or settlement thereof, in which event, Indemnitor shall be responsible
for all Indemnifiable Damages which may be suffered or incurred by the
Indemnitee in connection therewith, as set forth in Sections 13.1 and 13.2, and
the defense thereof, with the assistance of counsel selected by Indemnitor and
approved by Indemnitee, which approval shall not be unreasonably withheld. After
notice from the Indemnitor to the Indemnitee that it will so assume the defense
thereof, the Indemnitors will not be liable to the Indemnitee for expenses
incurred in connection with the defense, conduct or settlement thereof, except
for such expenses as may be reasonably required to enable the Indemnitors to
take over such defense, conduct or settlement. The Indemnitee will, at its own
expense, cooperate with the Indemnitors in connection with any such claim, make
personnel, witnesses, books and records relevant to the claim available to the
Indemnitors at no cost, and grant such authorizations or powers of attorney to
the agents, representatives and counsel of the Indemnitors as the Indemnitors
may reasonably request in connection with the defense or settlement of any such
claim. In the event that the Indemnitors do not so assume the defense, conduct
or settlement of any claim, demand or assessment within thirty (30) days after
receiving notice of any claim relating to a third party action as set forth
above, the Indemnitee shall be entitled to defend, conduct or settle such claim,
demand or assessment without the written consent of the Indemnitors and without
relieving the Indemnitors from any of the obligations to indemnify the
Indemnitee under Sections 13.1 or 13.2.
(c) The Indemnitee and the Indemnitors may agree in writing, at
any time, as to the existence and amount of an Indemnity, and, upon the
execution of such agreement, such Indemnity shall be deemed established.
13.4 Limitations.
(a) Except with respect to claims (i) relating to covenants or
agreements by either party, or (ii) based upon fraud, neither party shall have
any obligation to indemnify the other party under Sections 13.1 or 13.2 above in
respect to any Indemnifiable Damages unless the aggregate cumulative total of
all Indemnifiable Damages incurred by the Indemnitee exceeds Fifty Thousand
United States Dollars (US$50,000), which amount shall be deemed to be "material"
as such term is used in the representations and warranties of Seller and Buyer
set forth in Sections 5 and 6 hereof, respectively. In such event, the
Indemnitees shall be entitled to indemnification for the entire aggregate
cumulative amount of such Indemnifiable Damages in excess of such amount.
(b) In no event shall the liability or obligation of Seller
exceed that portion of the Purchase Price paid as of the date a claim for
Indemnifiable Damages is brought by Buyer. Notwithstanding the previous
sentence, if a claim for Indemnifiable Damages is brought by Buyer for breach of
the representations contained in Section 5.11: (I) the out-of-pocket
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liability of Seller shall not exceed the greater of (i) $100,000 or (ii) that
portion of the Purchase Price paid as of the date a claim for Indemnifiable
Damages is brought; and (II) Buyer shall have the additional right to offset
against the Purchase Price, payable under the Royalty Note, the amount of the
actual Indemnifiable Damages incurred by Buyer, (less the amount recovered in
clause (I) above), up to the amount of the Purchase Price, provided that Seller
has not disputed in good faith the Indemnifiable Damages within five (5)
business days following written notice by Buyer of its desire to offset. By way
of illustration, Buyer and Seller intend this section to apply as follows:
Facts: (a) One (1) year after execution of this Agreement, Buyer has paid Seller
$150,000 of the Purchase Price under the Royalty Note; and (b) Seller breaches
the representation in Section 5.11 of the Agreement and Buyer incurs $500,000 in
actual Indemnifiable Damages which it has paid to a third party. Result: Buyer
could recover $150,000 from Seller, subject to the "basket" described in Section
13.4(a) and could offset $350,000 against amounts payable under the Royalty
Note.
13.5 Payment of Indemnity. The Indemnitors shall pay the amount of
each established Indemnity to the Indemnitee promptly after it has been properly
established. Subject to the limitations herein contained, the Indemnitee shall
have all rights and remedies available at law or equity for enforcement of its
rights hereunder.
14. Affirmative Covenants of Buyer.
Buyer covenants and agrees with Seller, for as long as any amounts
are due hereunder or under the Royalty Note or the Accounts Receivable Note, as
follows:
14.1 Financial Statements. Buyer will furnish to Seller as soon as
practicable, and in any event within ninety (90) days after the end of each
fiscal year of Buyer, the compiled financial statements of Buyer or audited
financial statements if Buyer has its financial statements audited, including a
consolidated balance sheet as at the end of such fiscal year and a consolidated
statement of operations and a consolidated statement of cash flows for such
fiscal year, setting forth in each case in comparative form corresponding
figures for the preceding fiscal year, all of which will be correct and complete
and will present fairly the financial condition of Buyer on a consolidated basis
at the date shown and the consolidated results of its operations for the period
then ended. Seller shall be permitted access to work papers as they relate to
the calculation of Net Revenues.
14.2 Budgets. Buyer will furnish to Seller as soon as practicable,
and in any event not less than thirty (30) days prior to the end of each fiscal
quarter and fiscal year of Seller, a quarterly or annual revenue forecast with
respect to the Treasury Product for the succeeding fiscal quarter or fiscal
year, respectively. Buyer will furnish promptly to Seller any revisions of such
forecasts previously furnished to Seller.
14.3 Reports and Inspection. Buyer will furnish promptly to Seller
such documents, reports and financial data as Seller may reasonably request in
order to determine Buyer's Net Revenues and the amounts payable by Buyer in
accordance with this Agreement and the Royalty Note, and will, upon reasonable
prior notice, make available to Seller and its representatives during normal
business hours (a) all business records of Buyer relating to
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determination of Net Revenues for inspection and (b) the directors, officers and
employees of Buyer for interviews concerning the determination of Net Revenues
by Buyer. Seller agrees to execute in favor of Buyer the standard form of
Buyer's nondisclosure and confidentiality agreement with respect to the
information disclosed to Seller pursuant to this Section 14.3.
14.4 Business Insurance. Buyer will at all times maintain and keep
in full force and effect valid fire and theft insurance policies with
financially sound insurers with respect to its properties, assets and business
of the kinds and in amounts not less than is customarily obtained by
corporations engaged in the same or similar businesses and similarly located.
15. Negative Covenants of Buyer.
Buyer covenants and agrees with Seller, for as long as any amounts
are due hereunder or under the Royalty Note or the Accounts Receivable Note,
that Buyer will not take any of the following actions without the prior approval
of Seller:
15.1 Merger; Sale of Assets. Buyer will not become a party to any
merger or consolidation, or sell, lease or otherwise dispose of any of its
properties or assets, other than sales or leases of properties or assets in the
ordinary course of business or the replacement of outmoded or damaged equipment
with other equipment (a "Reorganization"); provided, however, that Seller's
approval shall not be unreasonably withheld or delayed, and provided further
that no prior approval of Seller shall be required for any Reorganization in
connection with which all obligations of Buyer to Seller hereunder and under the
Royalty Note are accelerated and paid in full by Buyer on or prior to the
closing or effectiveness of such Reorganization.
15.2 Transactions with Management Stockholders. Buyer will not
engage in any transaction, enter into any contract, agreement or other
arrangement providing for the employment of, furnishing of services by, rental
of real or personal property from, or otherwise requiring payments to, any
"affiliates" or "associates" of Buyer (as such terms are defined under the rules
and regulations of the Securities Exchange Act of 1934), except transactions
which are on terms and conditions substantially similar to those which would be
available to Buyer in an arms'-length transaction with an unaffiliated third
party.
15.3 Dissolution or Liquidation. Buyer will not voluntarily
dissolve, wind up or carry out any partial liquidation or enter into a members
voluntary liquidation.
15.4 Assignment of Accounts Receivable. Buyer will not assign,
pledge, mortgage or transfer to any third party any of the accounts receivable
specified on Schedule 1.1(a); provided however that Seller's approval shall not
be unreasonably withheld or delayed, and provided further that no prior approval
of Seller shall be required in connection with such assignment if the Accounts
Receivable Note is paid in full by Buyer on or prior to the closing of the
effectiveness of such assignment.
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16. Further Acts.
After the Closing Date, Seller and Buyer shall execute and deliver
all instruments and documents and shall perform all other acts which the other
may reasonably request in order to further effect or perfect the sale and
transfer of the Purchased Assets to Buyer and the other transactions
contemplated in this Agreement. Certain of the Purchased Assets are owned by the
Subsidiaries, and Seller shall cause the Subsidiaries, as applicable, to execute
all bills of sale and other documents necessary to convey and transfer to Buyer
of any of the Purchased Assets owned by such subsidiaries.
17. Sales Tax.
Seller shall pay all sales, use and transfer taxes, if any, arising
out of the transfer of the Purchased Assets and Tangible Assets and Seller shall
pay its portion, prorated as of the Closing Date, of state and local real and
personal property taxes of the Business. Buyer shall not be responsible for any
business, occupation, withholding or similar tax, or any Taxes of any kind
related to any period before the Closing Date, except to the extent listed on
Schedule 3.2 hereto.
18. Expenses.
Each of the parties shall pay all costs and expenses incurred or to
be incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
19. Notices.
Any notices and other communications required or permitted in this
Agreement shall be effective if in writing and delivered personally or sent by
telecopier, Federal Express, or registered or certified air mail, postage
prepaid, addressed as follows:
(a) If to Buyer, addressed to:
Platinum Treasury Systems, plc
32 Peascod Street
Windsor, Berkshire SL4 1EA
United Kingdom
Telecopier: 44 0 753 852224
Attention: Richard Franklin
with copies to:
Brobeck, Phleger & Harrison
2200 Geng Road
Palo Alto, CA 94303
Telecopier: (415) 496-2921
Attention: Ed Lennard, Esq.
22
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(b) If to Seller, addressed to:
Platinum Software Corporation
195 Technology Drive
Irvine, California, 92718 Telecopier:
(714) 727-1255
Attention: Michael Simmons, Chief Financial Officer
with copies to:
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California, 92660
Telecopier: (714) 725-4100
Attention: K.C. Schaaf, Esq.
Unless otherwise specified herein, such notices or other
communications shall be deemed effective (a) on the date delivered, if delivered
personally, (b) two (2) business days after being sent by Federal Express, if
sent by Federal Express, (c) one (1) business day after being delivered, if
delivered by telecopier, and (d) seven (7) business days after being sent, if
sent by registered or certified air mail. Each of the parties hereto shall be
entitled to specify a different address by giving notice as aforesaid to each of
the other parties hereto.
20. Attorneys' Fees.
In the event of any controversy, claim or dispute between the
parties hereto arising out of or relating to this Agreement or any of the
documents provided for herein, or the breach thereof, the prevailing party shall
be entitled to recover from the losing party reasonable attorneys' fees,
expenses and costs.
21. Assignment.
Neither party may assign, without the prior written consent of the
other, its rights, duties or obligations under this Agreement to any person or
entity, in whole or in party; provided, however, that this Agreement may be
assigned by Seller without the consent of Buyer (i) to a purchaser or all or
substantially all of the assets or outstanding capital stock of Seller, or its
parent corporation or other corporation controlled by its parent corporation,
whether by merger, consolidation to otherwise, or (ii) to a subsidiary all of
whose stock is owned by Seller.
22. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the respective parties hereto.
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23. Parties in Interest.
Nothing in this Agreement, whether express or implied, is intended
to confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
shall any provision give any third persons any right of subrogation over or
action against any party to this Agreement.
24. Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instruments. Facsimile signatures shall be
effective for purposes of execution hereunder. However, this Agreement shall be
ineffective for any purposes whatsoever unless or until executed by all parties
hereto.
25. Headings.
The subject headings of the paragraphs and subparagraphs of this
Agreement are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
26. Integration.
This Agreement (together with its schedules, exhibits and other
attachments) sets forth all the promises, covenants, agreements, conditions and
understandings between the parties hereto, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, with respect to the subject matter hereof
except as herein contained.
27. Amendment; Waiver.
This Agreement may be amended, modified, extended or terminated,
either retroactively or prospectively, and the provisions hereof may be waived,
only by an instrument in writing signed by the parties hereto. In addition, each
party hereto may waive any right hereunder by an instrument in writing signed by
such party.
28. Governing Law; Interpretation.
This Agreement shall be governed by, construed in accordance with
and enforced under the laws of the State of California applicable to contracts
made and to be performed in California, without regard to choice of law
principles. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires.
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29. Arbitration.
29.1 Generally. Except for collection actions for non-payment of
amounts due under this Agreement or documents delivered pursuant to this
Agreement or the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction or
other equitable relief to preserve the status quo or prevent irreparable harm,
each dispute, difference, controversy or claim arising in connection with or
related or incidental to, or question occurring under, this Agreement or the
subject matter hereof shall be finally settled under the Commercial Arbitration
Rules of the American Arbitration Association by an arbitral tribunal composed
of three arbitrators, at least one of whom shall be an attorney experienced in
corporate transactions, appointed by agreement of the parties in accordance with
said Rules. Such arbitration shall take place in Orange County, California. If,
at the time of the arbitration, the parties agree in writing to submit the
dispute to a single arbitrator, said single arbitrator shall be appointed by
agreement of the parties in accordance with said Rules. The foregoing
arbitration proceedings may be commenced by any party by notice to the other
parties. Buyer and Seller shall each pay their own fees and expenses therein and
one-half of the cost and charges of arbitration and the American Arbitration
Association, except as otherwise provided herein. Buyer and Seller agree that
there shall be discovery in the arbitration and such discovery shall be governed
by rules contained in the California Code of Civil Procedure.
29.2 Recourse to Courts. The parties hereby exclude any right of
appeal to any court on the merits of the dispute. The provisions of this Section
29 may be enforced in any court having jurisdiction over the award or any of the
parties or any of their respective assets, and judgment on the award (including
without limitation equitable remedies) granted in any arbitration hereunder may
be entered in any such court. Nothing contained in this Section 29 shall prevent
any party from seeking interim measures of protection in the form of pre-award
attachment of assets or preliminary or temporary equitable relief.
30. RTPA Registration.
Any provision of this Agreement by virtue of which it (or any
agreement or arrangement of which it forms part) is subject to registration
under the U.K. Restrictive Trade Practices Acts 1976 and 1977 shall not take
effect until the day after the required particulars of it have been submitted to
the Director General of Fair Trading in accordance with the requirements of
those Acts. The parties undertake to procure that the required particulars are
submitted within thirty (30) days from the date of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BUYER:
PLATINUM TREASURY SYSTEMS, PLC
By: /s/ Arthur Diggle
-------------------------------------------
Its: Arthur Diggle
SELLER:
PLATINUM SOFTWARE CORPORATION,
a Delaware corporation
By: /s/ Michael J. Simmons
-------------------------------------------
Michael J. Simmons, Chief Financial Officer
26
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INDEX OF SCHEDULES
Schedule Description
- -------- -----------
1.1(a) Accounts Receivable of Seller and Subsidiaries
1.1(b) General Contracts
1.1(c) Software Contracts
1.1(d) Inventory
1.1(e) Trade Names, Trademarks and Service Marks
1.1(f) Customer and Client Lists
1.1(g) Computer Programs
1.1(h) Technical Documentation
1.2 Excluded Assets
2.5 Allocation of Purchase Price
3.2 Assumed Liabilities
5.3 Required Third Party Consents
5.4 Exceptions to Title
5.6 Litigation
8.3 Retained Employees
27
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INDEX OF EXHIBITS
Exhibit Description
- ------- -----------
A Promissory Note (Royalty Note)
A-1 Debenture
B Accounts Receivable Promissory Note
C-1 Franklin Termination of Employment Agreement
C-2 Morgan Termination of Employment Agreement
D Form of Opinion of Counsel for Buyer
E Assignment and Assumption Agreement
F Trademark License Agreement
G Bill of Sale, General Conveyance and Assignment
H Form of Opinion of Counsel for Seller
28
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EXHIBIT A
PROMISSORY NOTE
US$1,500,000 January 11, 1996
FOR VALUE RECEIVED, PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. 3086549), (registered office -32
Peascod Street, Windsor, Berkshire, SL4 1EA United Kingdom), (the "Maker")
promises to pay to the order of PLATINUM SOFTWARE CORPORATION, a Delaware
corporation ("Platinum"), at 195 Technology Drive, Irvine, California 92718, or
such other place as the holder (the "Holder") of this Promissory Note (this
"Note") may from time to time in writing direct, the principal sum of One
Million Five Hundred Thousand United States Dollars (US$1,500,000), payable in
full as set forth below. The principal amount of this Note shall not bear
interest.
This Note is the Royalty Note referred to in that certain Agreement of
Purchase and Sale of Assets, dated as of September 30, 1995, between the Maker
and Platinum (the "Purchase Agreement") and is secured by a debenture created
under that agreement of even date (the "Debenture") between Maker and Platinum
and Platinum is entitled to all of the benefits and security of the collateral
as set forth in the Debenture. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Purchase Agreement.
If any principal payable hereunder is not paid when due, such overdue
principal shall bear interest at a rate per annum equal to twelve percent (12%)
from the due date until paid. Prepayment of principal hereunder may be made at
any time without penalty.
All amounts due hereunder shall be payable in lawful money of the
United States of America. Maker shall pay to Platinum the principal amount of
One Million Five Hundred Thousand Dollars ($1,500,000) as set forth herein.
Maker shall pay to Platinum a percentage of Maker's Net Revenues from the
licensing of the Treasury Product as follows: (i) Five percent (5%) of
Maker's Net Revenues from the licensing of the Treasury Product from the date
hereof until the second anniversary hereof, and (ii) Ten percent (10%) of
Maker's Net Revenues from the licensing of the Treasury Product from the second
anniversary of the date hereof through the seventh anniversary of the date
hereof. Royalty payments are to be made until either the aggregate amount of
the royalties paid by Maker to Platinum under Section 2.2(a) of the Purchase
Agreement shall equal One Million Five Hundred Thousand United States Dollars
(US$1,500,000) or the seventh anniversary of the date hereof, whichever first
occurs. In the event the seventh anniversary of the date hereof occurs first,
any amount by which the Royalty Payment (US$1,500,000) exceeds the aggregate
amount paid by Maker to Platinum under Section 2.2(a) of the Purchase Agreement
and this Note shall be paid in full by Maker within sixty
30
(60) days following such seventh anniversary of the date hereof (the "Royalty
Deficit Payment"). The royalties shall be paid in the manner set forth in the
purchase Agreement.
The principal amount of this Note and all accrued but unpaid interest
thereon, if any, shall become immediately due and payable, at the option of
Platinum, upon the occurrence of any of the following (an "Event of Default"):
(a) Any payment due under this Note shall have been in
default for at least fifteen (15) days following the receipt of a notice of
default in payment;
(b) The Maker shall fail or neglect to perform, keep or
observe any covenant or obligation of Maker set forth in the Purchase
Agreement, which breach is not cured within twenty (20) days following receipt
by Maker of written notice thereof; or
(c) The Maker fails or neglects to comply with any
covenant or obligation of Maker set forth in the Debenture which breach is not
cured within the cure period provided in the Debenture; or
(d) The Maker defaults in the performance of any other
agreement for borrowed monies or such borrowed monies are not repaid in full on
the due date or repayment of any such borrowed monies is due on demand and is
not paid in full forthwith on such demand being made;
(e) The Maker is unable to pay its debts within the
meaning of section 123 of the UK Insolvency Act 1986 or the Maker otherwise
becomes insolvent or suspends making payments to all or any class of its
creditors or announces an intention to do so; or
(f) Any distress, execution, attachment or other similar
legal process which affects the whole or a material part of the assets of the
Maker; or
(g) An Administrative or other Receiver or similar
officer is appointed over the whole or any part of the assets of the Maker or
the Maker requests any person to appoint such a Receiver or similar officer or
any other steps are taken to enforce any charge or other security over any of
the property of the Maker; or
(h) An order is made or any effective resolution is
passed or a petition is presented or other steps are taken for:
(i) the winding up, dissolution or liquidation of
the Maker other than for the purpose of a
reconstruction or amalgamation, the terms of
which have previously been approved by
Platinum in writing; or
(ii) the making of an Administration Order against
the Maker or;
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(i) Control of the Maker passes without the consent of
Platinum to any person, firm or company acting either individually or in
concert, provided that transfers of shares between the shareholders of Maker on
the date hereof will not be considered a change of control.
The Maker hereby waives presentment for payment, protest and notice of
nonpayment and dishonor. If the Holder takes any action to collect this Note,
then the Maker shall be obligated to pay, in addition to all other amounts due
under this Note, all costs of collection and reasonable attorneys' fees and
other legal costs and expenses.
No delay or failure on the part of the Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by the
Holder of any right or remedy preclude any other right or remedy. The Holder,
at its option, may enforce its rights against any collateral securing this Note
without enforcing its rights against the Maker or any other indebtedness due or
to become due to the Maker. The Maker agrees that, without releasing or
impairing the Maker's liability hereunder, the Holder may at any time release,
surrender, substitute or exchange any collateral securing this Note and may
release any party secondarily liable for the indebtedness evidenced by this
Note.
This Note shall be governed by and construed in accordance with the
internal laws of the State of California of the United States. Platinum and
Maker each irrevocably agree that all actions arising directly or indirectly as
a result or in consequence of this Note shall be instituted and litigated only
in courts having situs in the State of California, and Platinum and Maker each
hereby consent to the exclusive jurisdiction and venue of any state or federal
court located and having its situs in the State of California provided always,
that Platinum may, at its sole option, enforce the Debenture in the United
Kingdom or other appropriate jurisdiction.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed and
delivered as its deed on the day and year first above written.
Executed and delivered as a deed by )
Platinum Treasury Systems, plc by the signatures )
)
of [____________________________], Director ) ___________________________
) Director
and )
)
[______________________________], Director ) ___________________________
) Director
in the presence of: ________________________ )
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EXHIBIT A-1
(1) PLATINUM TREASURY SYSTEMS PLC
- and -
(2) PLATINUM SOFTWARE CORPORATION
---------
DEBENTURE
---------
HOPKINS & WOOD
2-3 CURSITOR STREET
LONDON EC4A 1NE
TEL: 0171-404 0475
FAX: 0171 831 2190
REF: AJS/126/P/16:653
33
THIS DEBENTURE is dated 1995
and made BETWEEN:
(1) PLATINUM TREASURY SYSTEMS PLC (registered in England and Wales
number _______) whose registered office is at ___________________ (the
"Borrower"); and
(2) PLATINUM SOFTWARE CORPORATION whose registered office is at 195
Technology Drive, Irvine, California 92718, USA (the "Debenture Holder")
In this Debenture the following words shall have the following meanings:
"Accounts Receivable Debt" all sums which are or may become owing by the
Borrower to the Debenture Holder under the
Accounts Receivable Note (as that phrase is
defined in Agreement of Purchase and Sale of
Assets of even date herewith between the
Borrower and the Debenture Holder);
"Royalty Debt" all sums which are or may become owing by the
Borrower to the Debenture Holder under the
Royalty Note (as that phrase is defined in the
said Agreement of Purchase and Sale of Assets).
WITNESSES as follows:
1 COVENANT TO PAY
1.1 The Borrower covenants to pay and discharge to the Debenture Holder the
Royalty Debt and the Accounts Receivable Debt in accordance with the
provisions of the Royalty Note and the Accounts Receivable Note as the
case may be (together "the Debt") together with interest to date of
payment as set out in the said Royalty Note and Accounts Receivable Note
and all commission, fees and other charges and all legal and other costs
and expenses properly and reasonably incurred by the Debenture Holder in
relation to the enforcement of the security hereby granted.
2 CHARGE
2.1 The Borrower as owner with full title guarantee and as a continuing
security charges with the payment or discharge of the Debt:
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34
(a) by way of first fixed charge;
(i) any freehold leasehold and other immovable property now
or in the future belonging to the Borrower together
with all buildings, trade and other fixtures, fixed
plant and machinery of the Borrower from time to time
thereon;
(ii) all plant and machinery now or in the future belonging
to the Borrower other than fixed plant and machinery;
(iii) all book debts and other debts now or in the future due
or owing to the Borrower;
(iv) all stocks shares and other securities now or in the
future belonging to the Borrower together with all
dividends and other rights deriving therefrom;
(v) the goodwill of the Borrower and its uncalled capital
for the time being;
(vi) all patents trade marks service marks designs and other
intellectual property rights choses in action and
claims and all fees, royalties and other rights of
every kind deriving therefrom now or in the future
belonging to the Borrower;
(b) by way of first floating charge the whole of the Borrower's
undertaking and all its property and assets whatsoever and
wheresoever present and future other than the property and
assets from time to time effectively charged to the Debenture
Holder by way of legal mortgage or fixed charge by this
Debenture.
2.2 The Debenture Holder may after failure by the Borrower to pay any sums
due under the Accounts Receivable Note and/or the Royalty Note convert
the floating charge by notice in writing to the Borrower into a fixed
charge as regards all the property and assets which for the time being
are the subject of such floating charge or, as the case may be, such of
the said property and assets as are specified by such notice.
2.3 Continuing Security
This security shall be a continuing security notwithstanding any
settlement of account or other matter whatsoever and is in addition to
and shall not merge with or otherwise prejudice or affect any
contractual or other right or remedy or any guarantee indemnity lien
pledge bill note mortgage charge or other security (whether
-2-
35
created by the deposit of documents of otherwise) now or hereafter held
by or available to the Debenture Holder and shall not be in any way
prejudiced or affected thereby or by the invalidity thereof or by the
Debenture Holder now or hereafter dealing with exchanging releasing
varying or abstaining from perfecting or enforcing any of the same or
any rights which it may now or hereafter have or giving time for payment
or indulgence or compounding with any other person liable. Without
prejudice to the generality of the foregoing, this security shall
continue in full force and effect until the proper discharge by the
Borrower of all sums which may now or hereafter be owing pursuant to the
Accounts Receivable Note and/or the Royalty Note but thereafter shall
cease.
3. RESTRICTIONS ON DEALING
3.1 The Borrower shall not without the prior written consent of the
Debenture Holder (which consent in the case of sub-clauses 3.1(e) and
(d) only shall not be unreasonably withheld or delayed):
(a) create or permit to subsist any mortgage charge pledge
hypothecation lien (other than a lien arising by operation of
law) or other security interest on any of its assets ranking in
priority or pari passu with the fixed and floating charges
hereby created other than this Debenture (save as set out in
Clause 8.9 of the Agreement of Purchase and Sale of Assets);
(b) sell transfer lease lend or otherwise dispose of the whole or
any part of its undertaking or (save in the normal course of
trading at not less than market value) of its assets or enter
into any agreement or grant any option for any such sale
transfer lease loan or other disposal;
(c) part with possession of any freehold or leasehold property grant
or agree to grant any option or any licence tenancy or other
right of occupation to any person or exercise the powers of
leasing or agreeing to lease or of accepting or agreeing to
accept surrenders conferred by Sections 99 and 100 of the Law of
Property Act 1925 provided that such restrictions shall not be
construed as a limitation on the powers of any receiver
appointed under this Debenture and being an agent of the
Borrower and the Debenture Holder may grant or accept surrenders
of leases without restriction at any time after the Debenture
Holder shall have demanded the payment or discharge of any of
the monies obligations and liabilities hereby secured;
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36
(d) pull down or remove or redevelop or make any material alteration
to the whole or any part of any buildings or sever unfix or
remove any fixtures or remove any plant or machinery belonging
to or in use by the Borrower except for the purpose of effecting
repairs or replacing the same.
4 COVENANTS BY THE BORROWER
4.1 Until this security is discharged the Borrower shall:
(a) keep all buildings and all plant machinery fixtures and fittings
in good repair and condition and permit any person or persons
nominated by the Debenture Holder access by and on 24 hours
written notice to view the state and condition thereof;
(b) insure and keep insured such of its property as is properly
insurable with such insurer and against such risks and in such
amounts and otherwise in such terms as the Debenture Holder may
require and will maintain such other insurances as are normally
maintained by prudent companies carrying on similar businesses
with the interest of the Debenture Holder noted upon all
policies of such insurance or, if the Debenture Holder shall
require, in the joint names of the Borrower and the Debenture
Holder and will (if required) produce or deposit with the
Debenture Holder all such policies and receipts for all premium
and other payments necessary for effecting and maintaining such
insurances;
(c) apply any insurance proceeds in making good the loss or damage
or at the Debenture Holder's option in or towards the discharge
of the monies obligations and liabilities secured by this
Debenture;
(d) punctually pay all rents taxes duties assessments and other
outgoings properly payable and observe and perform all
restrictive and other covenants under which any of the property
subject to this Debenture is held;
(e) pay into its account or accounts all monies which it may receive
in respect of its book or other debts and all licence fees,
royalties and other monies deriving from its intellectual
property and until such payment will hold all such monies on
trust for the Debenture Holder and shall not without the prior
written consent of the Debenture Holder release factor sell at
discount charge or otherwise deal with such debts
-4-
37
license fees royalties or other monies otherwise than by getting
in and paying the same into such account;
(f) subject to the rights of any prior mortgagee deposit with the
Debenture Holder all deeds certificates and documents
constituting or evidencing title to the property or any part
thereof charged by this Debenture and all insurance policies;
(g) comply with the provisions of all present or future statutes and
directives and every notice order or direction made under any of
the foregoing;
(h) provide the Debenture Holder with such financial and other
information with respect to the assets, liabilities and affairs
of the Borrower and its subsidiaries and associated companies
(if any) that the Debenture Holder may from time to time
reasonably require in order to determine the net revenues of the
Borrower and the amount of any royalty payments due to the
Debenture Holder under the Royalty Note.
4.2 If the Borrower shall fail to satisfy the Debenture Holder that it has
performed any of its obligations under clause 4.1 then the Debenture
Holder may take such reasonable steps as it considers appropriate to
procure the performance of such obligation and shall not thereby be
deemed to be a mortgagee in possession and the monies reasonably
expended by the Debenture Holder shall be reimbursed by the Borrower on
demand.
5 ENFORCEMENT
5.1 This Debenture shall become enforceable:
(a) if any of the Debt shall not be paid or discharged by the
Borrower in accordance with the terms of the Accounts Receivable
Note or the Royalty Note, as the case may be; or
(b) if the Borrower shall be in material breach of any provision of
this Debenture or of any agreement containing any terms and
conditions of or applicable to the monies obligations and
liabilities secured by this Debenture and such breach (if
capable of remedy) has not been remedied to the satisfaction of
the Debenture Holder before the expiry of 14 days after notice
calling upon the Borrower to do so has been given by the
Debenture Holder; or
-5-
38
(c) upon the presentation of a petition for the winding-up of the
Borrower which is not discharged within 21 days of the making of
an order for the winding-up of the Borrower or the passing by
the Borrower of a resolution for voluntary winding-up; or
(d) if an encumbrancer shall take possession of or a receiver or
administrative receiver shall be appointed over or any secured
creditor of the Borrower shall seek to enforce his security in
respect of all or any material part of the property or assets
charged by this Debenture; or
(e) if a petition shall be presented for an administration order in
relation to the Borrower; or
(f) if the Borrower shall enter into any composition or arrangement
for the benefit of its creditors under section 1 of the
Insolvency Act 1986; or
5.2 Section 103 of the Law of Property Act 1925 shall not apply and the
statutory power of sale and all other powers under that or any other Act
as varied or extended by this Debenture shall arise on and be
exercisable at any time after the Debenture Holder shall properly have
demanded the payment or discharge by the Borrower of any of the monies,
obligations and liabilities secured by this Debenture.
5.3 Section 93 of the Law of Property Act 1925 dealing with the
consolidation of mortgages shall not apply to this Debenture.
6 RECEIVER
6.1 At any time after this Debenture has become enforceable or if the
Borrower so requests in writing the Debenture Holder may without further
notice to the Borrower appoint by writing under hand or under seal any
one or more persons either singly jointly severally or jointly and
severally to be a receiver, receiver and manager or administrative
receiver (each a "Receiver") of all or any part of the property charged
by this Debenture and either at the time of appointment or any time
thereafter may fix his or their remuneration and except as otherwise
required by statute may remove any such Receiver and appoint another or
others in his or their place.
6.2 Any Receiver shall be the agent of the Borrower which shall be solely
responsible for his acts and defaults and the payment of his
remuneration.
-6-
39
6.3 Any Receiver shall subject to any liabilities or restriction expressed
in the deed or instrument appointing him have all the powers conferred
by the Law of Property Act 1925 and the Insolvency Act 1986 on
mortgagees in possession (but without liability as such) receivers
administrative receivers and administrators appointed under those Acts
which in the case of joint receivers may be exercised either jointly or
severally. In addition, but without prejudice to the generality of the
foregoing the Receiver shall have power (in the name of the Borrower or
otherwise and in such manner and on such terms and conditions as he
shall think fit) to:
(a) take possession of collect and get in all or any part of the
property in respect of which he is appointed and for that
purpose to take any proceedings;
(b) carry on or concur in carrying on the business of the Borrower;
(c) purchase or acquire any land and purchase, acquire and grant any
interest in or right over land;
(d) sell or concur in selling lot or concur in letting and terminate
or accept surrenders of leases or tenancies of any of the
property charged by this Debenture and to carry any such
transactions into effect;
(e) sell, assign let or otherwise dispose of or concur in selling,
assigning, letting or otherwise disposing of all or any of the
debts and any other property in respect of which he is
appointed;
(f) make any arrangement or compromise between the Borrower and any
other person which he may think expedient;
(g) make and effect all repairs improvement and insurances;
(h) purchase materials tools equipment goods or supplies;
(i) call up any uncalled capital of the Borrower with all the powers
conferred by the Articles of Association of the Borrower in
relation to calls;
(j) employ engage and appoint managers and other employees and
professional advisers;
-7-
40
(k) do all such other acts and things as may be considered to be
incidental or conducive to any other matters or powers aforesaid
or to the realization of the security constituted by this
Debenture and which he lawfully may or can do.
7 Application of Proceeds
7.1 Any monies received by the Debenture Holder or any Receiver shall
subject to the repayment of any claims having priority to the charges
created by this Debenture be applied in the following order but without
prejudice to the right of the Debenture Holder to recover any shortfall
from the Borrower:
(a) in the payment of all costs charges and expenses of and
incidental to the proper appointment of the Receiver and the
exercise of all or any of his powers and of all outgoings paid
by him;
(b) in the payment of the Receiver's proper and reasonable
remuneration;
(c) in or towards the satisfaction of the monies obligations and
liabilities secured by this Debenture in such order as the
Debenture Holder in its absolute discretion thinks fit;
(d) in payment of the surplus (if any) to the person or persons
entitled to it.
8 Protection of Third Parties
8.1 No person dealing with a Receiver or the Debenture Holder shall be
concerned to enquire whether any power which he or it is purporting to
exercise has become exercisable or whether any money is due under this
Debenture or as to the application of any money paid raised or borrowed
or as to the propriety or regularity of any sale be or other dealing
with such Receiver or the Debenture Holder. All the protection to
purchasers contained in Sections 104 and 107 of the Law of Property Act
1925 shall apply to any person purchasing from or dealing with a
Receiver or the Debenture Holder.
9 Entry into Possession
9.1 If the Debenture Holder or any Receiver shall enter into possession of
the property hereby charged or any part thereof it or he may from time
to time and at any time go out of such possession.
-8-
41
10 Power of Attorney
10.1 The Borrower irrevocably appoints the Debenture Holder any Receiver and
any person nominated by the Debenture Holder jointly and also severally
to be the attorney of the Borrower with the power of substitution and
in its name and otherwise on its behalf and as its act and deed to sign
or execute all deeds instruments and documents which the Debenture
Holder or any Receiver may require or deem proper for any of the
purposes of or which the Borrower ought to do under this Debenture. The
Borrower agrees to ratify and confirm anything such attorney shall
lawfully and properly do.
11 Currency Indemnity
11.1 For the purpose of or pending the discharge of any of the monies
obligations and liabilities secured by this Debenture the Debenture
Holder may convert any monies received or realised by the Debenture
Holder under this Debenture (including the proceeds of any previous
conversion) from their existing currency into such other currency as the
Debenture Holder may think fit and any such conversion shall be effected
at the Barclays Bank plc's then prevailing spot selling rate of exchange
for such other currency against the existing currency. As a separate
and independent obligation the Borrower agrees to indemnify and hold
harmless the Debenture Holder against any shortfall between any amount
received or recovered by it in respect of any payment due under this
Debenture and converted in accordance with the clause into the currency
in which such amount was payable ("the converted amount") and the amount
in such currency which was due and payable to the Debenture Holder under
this Debenture ("the due amount"). If the converted amount exceeds the
due amount, the Debenture Holder shall repay to the Borrower an amount
equal to the excess.
12 Prior Charges
12.1 If there is any encumbrance over any of the property charged by this
Debenture which ranks in priority to this Debenture and any proceedings
or steps are taken to exercise or enforce any powers or remedies
conferred by such prior encumbrance the Debenture Holder or any Receiver
appointed under this Debenture in respect of such property may (but
without prejudice to any rights the Receiver may have under Section 43
or the Insolvency Act 1936) redeem such prior encumbrance or procure its
transfer to itself and may settle and pass the accounts of any prior
mortgagee charges or encumbrancer. Any account so settled and passed
shall be conclusive and binding on the Borrower and all the
-9-
42
principal interest costs charges and expenses of and incidental to such
redemption or transfer shall be secured on the property charged by this
Debenture and all the powers conferred by any prior encumbrance upon the
encumbrancer or any receiver thereunder shall be exercisable by the
Debenture Holder or a Receiver included in this Debenture.
13 FURTHER ASSURANCE
13.1 The Borrower shall whenever requested by the Debenture Holder by notice
in writing immediately execute and sign all such deeds and documents and
do all such things as the Debenture Holder may require at the Borrower's
cost over any property or assets properly specified by the Debenture
Holder for the purpose of perfecting or more effectively providing
security to the Debenture Holder for the payment and discharge of the
monies obligations and liabilities secured by this Debenture.
14 SET-OFF
14.1 The Debenture Holder may at any time after this Debenture has become
enforceable and without notice to the Borrower combine or consolidate
all or any of the Borrower's then existing liabilities to the Debenture
Holder and set off or transfer any sum or sums standing to the credit of
any one or more of such accounts in or towards satisfaction of any of
the liabilities of the Borrower to the Debenture Holder on any other
account or in any other respects. The Debenture Holder shall notify the
Borrower that such a transfer has been made.
15 COSTS AND INDEMNITY
15.1 All reasonable and proper costs charges and expenses incurred by the
Debenture Holder in relation to this Debenture or the monies and
liabilities hereby secured shall be reimbursed by the Borrower to the
Debenture Holder on demand on a full indemnity basis.
15.2 The Debenture Holder and every Receiver attorney or other person
appointed by the Debenture Holder under this Debenture and their
respective employees shall be entitled to be indemnified on a full
indemnity basis out of the property charged by this Debenture in respect
of all liabilities and expenses properly incurred by any of them in or
directly or indirectly as a result of the exercise or purported exercise
of any of the powers authorities or discretions vested in them under
this Debenture and against all actions proceedings losses costs claims
and demands in respect of any matter or thing properly done or properly
-10-
43
omitted in any way relating to the property charged by this Debenture
and the Debenture Holder and any such Receiver may retain and pay all
sums in respect of the same out of the monies received under the powers
conferred by this Debenture.
16 Miscellaneous
16.1 The Debenture Holder may without discharging or in any way affecting the
security created by this Debenture or any remedy of the Debenture Holder
grant time or other indulgence or abstain from exercising or enforcing
any remedies securities guarantees or other rights which it may now or
in the future have from or against the Borrower and may make any
arrangement variation or release with any person or persons without
prejudice either to this Debenture or the liability of the Borrower for
the monies obligations and liabilities secured by this Debenture.
16.2 The Debenture Holder shall have a full and unfettered right to assign
the whole or any part of the benefit of this Debenture to any person or
company who acquires a material part of the assets or undertaking of the
Debenture Holder, or who acquires the majority of the Debenture Holder's
issued share capital, or with whom the Debenture Holder merges. Save as
aforesaid the Debenture Holder may not assign the benefit of this
Debenture without the prior written consent of the Borrower. The
expression "the Debenture Holder" shall include its proper successors
and assigns and the Debenture Holder shall be entitled to disclose any
information to any actual or prospective assignee successor or
participant.
16.3 The provisions of this Debenture shall be severable and if at any time
any one or more such provisions is or becomes invalid illegal or
unenforceable the validity legality and enforceability of the remaining
provisions shall not in any way be impaired.
16.4 The rights and remedies of the Debenture Holder provided by this
Debenture are cumulative and are not exclusive of any rights powers or
remedies provided by law and may be exercised from time to time and as
often as the Debenture Holder may deem expedient.
16.5 Any reference in this Debenture to any statute or any section of any
statute shall be deemed to include reference to any statutory
modification or re-enactment thereof for the time being in force.
17 Notices
-11-
44
17.1 Any demand or notice under this Debenture shall be in writing signed by
any director or officer of the Debenture Holder and may be served
personally on any director or the secretary of the Borrower or may be
sent by post telex or facsimile or may be delivered to the registered
office of the Borrower or its last known place of business. If such
demand or notice is sent by post it shall be deemed to have been
received on the day following the fifth day on which it was posted and
shall be effective notwithstanding that it was not in fact delivered
or was returned undelivered. If sent by telex or facsimile it shall be
deemed to have been received (whether or not actually received) at the
time of dispatch, PROVIDED THAT, in the case of facsimile transmission
the sender's machine shall have indicated due transmission to the
relevant facsimile number shown below (or such other number or shall be
notified by the relevant party for this purpose):
The Debenture Holder No. (001) (714) 450 4447
The Borrower No.
18 Governing Law and Jurisdiction
18.1 This Debenture shall be governed by and construed in accordance with the
laws of England and the Borrower irrevocably submits to the
non-exclusive jurisdiction of the English Courts.
19 Land Registry
19.1 The Borrower certifies that this Debenture does not contravene its
Memorandum and Articles of Association and has been executed in
accordance therewith and hereby applies to the Chief Land Registrar for
a restriction to be entered on the register of its title to registered
properties charged by this Debenture that: "Except under an Order of the
Registrar no disposition or dealing by the proprietor of the land is to
be registered or noted without the consent of the proprietor for the
time being of Charge No. ______".
IN WITNESS whereof the Borrower has executed and delivered this Debenture as a
Deed and the Debenture Holder has executed this Debenture the day and year
first above written.
Executed as a deed by )
PLATINUM TREASURY SYSTEMS )
PLC by the signatures of ) _______________________________
_____________ (Director) ) Director
and ____________ (Director) )
and duly delivered ) _______________________________
Director
-12-
45
Executed as a deed by )
PLATINUM SOFTWARE )
CORPORATION the signature )
of _____________ (Director) ) _______________________________
-13-
46
EXHIBIT B
ACCOUNTS RECEIVABLE PROMISSORY NOTE
$259,545 January 11, 1996
FOR VALUE RECEIVED, PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. 3086549), (registered office -32
Peascod Street, Windsor, Berkshire, SL4 1EA United Kingdom), (the "Maker"),
promises to pay to the order of PLATINUM SOFTWARE CORPORATION, a Delaware
corporation ("Platinum"), at 195 Technology Drive, Irvine, California 92718, or
such other place as the holder (the "Holder") of this Promissory Note (this
"Note") may from time to time in writing direct, the principal sum of Two
Hundred Fifty-Nine Thousand Five Hundred Forty-Five United States Dollars
(US$259,545), payable in ten (10) consecutive equal monthly installments of
principal, together with accrued interest at the rate of eight percent (8%) per
annum on the unpaid principal balance from September 30, 1995, until such
principal balance and accrued interest are paid in full. Payments shall
commence on the first day of May 1996 and shall be due on the first day of the
nine (9) consecutive calendar months thereafter. Interest shall begin accruing
as of September 30, 1995.
This Note is the Accounts Receivable Promissory Note referred to in
that certain Agreement of Purchase and Sale of Assets, dated as of September
30, 1995, between the Maker and Platinum (the "Purchase Agreement"). This Note
is secured by a debenture created under that certain Agreement of even date
(the "Debenture"), between the Maker and Platinum and is entitled to all of the
benefits and security of the collateral as set forth in the Debenture.
All amounts due hereunder shall be payable in lawful money of the
United States of America. If any principal or interest payable hereunder is
not paid when due, such overdue amount shall bear interest at a rate per annum
equal to twelve percent (12%) from the due date until paid. Prepayment of
principal hereunder may be made at any time without penalty.
The principal amount of this Note and all accrued but unpaid interest
thereon, if any, shall become immediately due and payable, at the option of the
Holder, upon the occurrence of any of the following (an "Event of Default"):
(a) Any payment due under this Note shall have been in
default for at least fifteen (15) days following the receipt of a notice of
default in payment;
(b) The Maker shall fail or neglect to perform, keep or
observe any covenant or obligation of Maker set forth in the Purchase
Agreement, which breach is not cured within twenty (20) days following receipt
by Maker of written notice thereof; or
47
(c) The Maker fails or neglects to comply with any
covenant or obligation of Maker set forth in the Debenture, which breach is not
cured within the cure period set forth in the Debenture; or
(d) The Maker defaults in the performance of any other
agreement for borrowed monies or such borrowed monies are not repaid in full on
the due date or repayment of any such borrowed monies is due on demand and is
not paid in full forthwith on such demand being made;
(e) The Maker is unable to pay its debts within the
meaning of section 123 of the UK Insolvency Act 1986 or the Maker otherwise
becomes insolvent or suspends making payments to all or any class of its
creditors or announces an intention to do so; or
(f) Any distress, execution, attachment or other similar
legal process which affects the whole or a material part of the assets of the
Maker; or
(g) An Administrative or other Receiver or similar
officer is appointed over the whole or any part of the assets of the Maker or
the Maker requests any person to appoint such a Receiver or similar officer or
any other steps are taken to enforce any charge or other security over any of
the property of the Maker; or
(h) An order is made or any effective resolution is
passed or a petition is presented or other steps are taken for:
(i) the winding up, dissolution or liquidation of
the Maker other than for the purpose of a
reconstruction or amalgamation, the terms of
which have previously been approved by
Platinum in writing; or
(ii) the making of an Administration Order against
the Maker or;
(i) Control of the Maker passes without the consent of
Platinum to any person, firm or company acting either individually or in
concert, provided that transfers of shares between the shareholders of Maker on
the date hereof will not be considered a change of control.
The Maker hereby waives presentment for payment, protest and notice of
nonpayment and dishonor. If the Holder takes any action to collect this Note,
then the Maker shall be obligated to pay, in addition to all other amounts due
under this Note, all costs of collection and reasonable attorneys' fees and
other legal costs and expenses.
No delay or failure on the part of the Holder in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by the
Holder of any right or remedy preclude any other right or remedy. The Holder,
at its option, may enforce its rights against any collateral securing this Note
without enforcing its rights against the Maker or any other indebtedness due or
to become due to the Maker. The Maker agrees that, without releasing or
impairing the Maker's liability hereunder, the Holder may at any time release,
surrender, substitute or exchange any collateral securing this Note and may
release any party secondarily liable for the indebtedness evidenced by this
Note.
2
48
This Note shall be governed by and construed in accordance with the
internal laws of the State of California. Platinum and Maker each irrevocably
agree that all actions arising directly or indirectly as a result or in
consequence of this Note shall be instituted and litigation only in courts
having situs in the State of California, and Platinum and Maker hereby consent
to the exclusive jurisdiction and venue of any state or federal court located
and having its situs in the State of California provided always, that Platinum
may at its option enforce the Debenture in the United Kingdom.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed and
delivered as its deed on the day and year first above written.
Executed and delivered as a deed by )
Platinum Treasury Systems, plc by the signatures )
)
of [____________________________], Director ) _________________________
) Director
and )
)
[______________________________], Director ) _________________________
) Director
in the presence of: ________________________ )
3
49
EXHIBIT C-1
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this "Agreement") is made effective as of
the 30th day of September, 1995, by and between PLATINUM SOFTWARE CORPORATION,
a Delaware corporation (the "Company") and RICHARD FRANKLIN ("Franklin").
WHEREAS, the Company and Franklin are parties to that certain
Employment Agreement (the "Employment Agreement") and that certain Non-
Competition Agreement (the "Non-Competition Agreement"), each dated as of July
14, 1993;
WHEREAS, concurrently with the execution and delivery of this
Agreement, pursuant to that certain Agreement of Purchase and Sale of Assets of
even date herewith (the "Purchase Agreement") between the Company and Platinum
Treasury Systems, plc, ("Buyer"), of which Franklin is a shareholder, the
Company is selling to Buyer and Buyer is acquiring from the Company
substantially all of the assets related to the Company's Treasury Product, as
described more particularly therein;
WHEREAS, pursuant to the Purchase Agreement, the Company has agreed
that it shall terminate the employment of Franklin in order that he may be
employed by Buyer following the consummation of the sale of assets to Buyer,
and Franklin desires that such employment be terminated;
NOW, THEREFORE, in consideration of the terms, covenants and
conditions hereinafter set forth, the parties hereto hereby agree as follows:
1. Termination. Subject to the terms and conditions hereinafter
set forth, the Company and Franklin mutually agree that the Employment
Agreement and the Non-Competition Agreement and any continuing obligations
thereunder, except as provided below, are terminated effective as of the date
hereof. The Company and Franklin acknowledge that, with respect to the
Employment Agreement, such termination is in advance of the term set forth
therein, and further agree that no liability for such early termination under
the Employment Agreement shall be imposed upon the Company or Franklin as a
result thereof. Without limiting the generality of the foregoing, the Company
acknowledges that it is intended by the Company and Buyer pursuant to the
Purchase Agreement that Franklin be employed by Buyer concurrently with the
effectiveness of this Agreement, and the Company hereby waives any right which
it may have pursuant to the Employment Agreement or the Non-Competition
Agreement to prevent Franklin from being employed by Buyer as contemplated by
the terms of the Purchase Agreement.
2. Continuing Obligations Not Affected. Notwithstanding the
above, the following continuing obligations of Franklin as set forth in the
Employment Agreement and the Non-Competition Agreement, shall remain in full
force and effect for the period set forth in the Employment Agreement or the
Non-Competition Agreement, as applicable: (i) nonsolicitation of Company
personnel as set forth in Section 6 of the
50
Employment Agreement (excluding the Retained Employees as defined in the
Purchase Agreement); and (ii) the maintenance of the confidentiality of
proprietary information of the Company as set forth in Section 3 of the
Non-Competition Agreement and 5 of the Employment Agreement except that
Proprietary Information shall not include Proprietary Information (as such term
is defined in the Non-Competition Agreement) relating to the Treasury Product
or the Business (as such term is defined in the Purchase Agreement). The
obligations of Franklin pursuant to the Employee Proprietary Information
Agreement, dated as of July 14, 1993, shall not in any way be affected by this
Agreement except that the confidentiality restrictions shall not apply
confidential information relating to the Treasury Product or the Business (as
such term is defined in the Purchase Agreement).
3. Acknowledgment of Payment by the Company. Franklin
acknowledges and agrees that the Company has paid to Franklin, and Franklin is
in receipt of, all amounts payable to Franklin in full satisfaction of the
Company's obligations under both the Employment Agreement and the
Non-Competition Agreement.
4. Stock Option. Effective upon the Physical Closing of the
purchase described in the Purchase Agreement, the Company hereby accelerates
the vesting of Franklin under that certain Nonqualified Stock Option Agreement
dated June 30, 1993 so that the option may be immediately exercised by Franklin
for all 9,375 shares.
5. Miscellaneous. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the parties hereto. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California applicable to contracts made and to be
performed in California, without regard to choice of law principles. The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
instrument. Any controversy or claim arising out of or relating to this
Agreement or the making, performance or interpretation thereof shall be settled
by arbitration in accordance with the rules of the American Arbitration
Association then existing, and judgment on the arbitration award may be entered
in any court having jurisdiction over the subject matter of the controversy.
2
51
IN WITNESS WHEREOF, the parties hereto have executed this Termination
Agreement as of the date first above written.
PLATINUM SOFTWARE CORPORATION
By:
--------------------------------
Michael J. Simmons
Chief Financial Officer
-----------------------------------
Richard Franklin
3
52
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this "Agreement") is made effective as of
the 30th day of September, 1995, by and between PLATINUM SOFTWARE CORPORATION,
a Delaware corporation (the "Company") and JOHN MORGAN ("Morgan").
WHEREAS, the Company and Morgan are parties to that certain Employment
Agreement (the "Employment Agreement") and that certain Non-Competition
Agreement (the "Non-Competition Agreement"), each dated as of July 14, 1993;
WHEREAS, concurrently with the execution and delivery of this
Agreement, pursuant to that certain Agreement of Purchase and Sale of Assets of
even date herewith (the "Purchase Agreement") between the Company and Platinum
Treasury Systems, plc, ("Buyer"), of which Morgan is a shareholder, the Company
is selling to Buyer and Buyer is acquiring from the Company substantially all
of the assets related to the Company's Treasury Product, as described more
particularly therein;
WHEREAS, pursuant to the Purchase Agreement, the Company has agreed
that it shall terminate the employment of Morgan in order that he may be
employed by Buyer following the consummation of the sale of assets to Buyer,
and Morgan desires that such employment be terminated;
NOW, THEREFORE, in consideration of the terms, covenants and
conditions hereinafter set forth, the parties hereto hereby agree as follows:
1. Termination. Subject to the terms and conditions hereinafter
set forth, the Company and Morgan mutually agree that the Employment Agreement
and the Non-Competition Agreement and any continuing obligations thereunder,
except as provided below, are terminated effective as of the date hereof. The
Company and Morgan acknowledge that, with respect to the Employment Agreement,
such termination is in advance of the term set forth therein, and further agree
that no liability for such early termination under the Employment Agreement
shall be imposed upon the Company or Morgan as a result thereof. Without
limiting the generality of the foregoing, the Company acknowledges that it is
intended by the Company and Buyer pursuant to the Purchase Agreement that
Morgan be employed by Buyer concurrently with the effectiveness of this
Agreement, and the Company hereby waives any right which it may have pursuant
to the Employment Agreement or the Non-Competition Agreement to prevent Morgan
from being employed by Buyer as contemplated by the terms of the Purchase
Agreement.
2. Continuing Obligations Not Affected. Notwithstanding the
above, the following continuing obligations of Morgan as set forth in the
Employment Agreement and the Non-Competition Agreement, shall remain in full
force and effect for the period
53
set forth in the Employment Agreement or the Non-Competition Agreement, as
applicable: (i) nonsolicitation of Company personnel as set forth in Section 6
of the Employment Agreement (excluding the Retained Employees as defined in the
Purchase Agreement); and (ii) the maintenance of the confidentiality of
proprietary information of the Company as set forth in Section 3 of the
Non-Competition Agreement and 5 of the Employment Agreement except that
Proprietary Information shall not include Proprietary Information (as such term
is defined in the Non-Competition Agreement) relating to the Treasury Product
or the Business (as such term is defined in the Purchase Agreement). The
obligations of Morgan pursuant to the Employee Proprietary Information
Agreement, dated as of July 14, 1993, shall not in any way be affected by this
Agreement except that the confidentiality restrictions shall not apply
confidential information relating to the Treasury Product or the Business (as
such term is defined in the Purchase Agreement).
3. Acknowledgment of Payment by the Company. Morgan acknowledges
and agrees that the Company has paid to Morgan, and Morgan is in receipt of,
all amounts payable to Morgan in full satisfaction of the Company's obligations
under both the Employment Agreement and the Non- Competition Agreement.
4. Stock Option. Effective upon the Physical Closing of the
purchase described in the Purchase Agreement, the Company hereby accelerates
the vesting of Morgan under that certain Nonqualified Stock Option Agreement
dated June 30, 1993 so that the option may be immediately exercised by Morgan
for all 9,375 shares.
5. Miscellaneous. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the parties hereto. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California applicable to contracts made and to be
performed in California, without regard to choice of law principles. The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
instrument. Any controversy or claim arising out of or relating to this
Agreement or the making, performance or interpretation thereof shall be settled
by arbitration in accordance with the rules of the American Arbitration
Association then existing, and judgment on the arbitration award may be entered
in any court having jurisdiction over the subject matter of the controversy.
2
54
IN WITNESS WHEREOF, the parties hereto have executed this Termination
Agreement as of the date first above written.
PLATINUM SOFTWARE CORPORATION
By:
--------------------------------
Michael J. Simmons
Chief Financial Officer
-----------------------------------
John Morgan
3
55
EXHIBIT D
FORM OF OPINION OF BUYER'S COUNSEL
The Buyer is a company duly incorporated, validly existing and in good
standing under the laws of England and Wales. The Buyer has the corporate
power and authority to own its properties and assets, to carry on its business
as presently conducted and to enter into the Purchase Agreement, the Royalty
Note, the Accounts Receivable Note, the Trademark License, the Assignment and
Assumption Agreement, and the Debenture (the "Transaction Documents"), and to
perform its obligations under the Transaction Documents.
Each of the Transaction Documents has been duly authorized by all
necessary corporate action on the part of the Buyer and has been duly executed
and delivered by the Buyer. Each of the Transaction Documents is a legal,
valid and binding obligation of the Buyer enforceable against it in accordance
with its respective terms, except as the enforceability thereof may be subject
to or limited by (a) bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting rights of creditors,
and (b) general equitable principles, regardless of whether the issue of
enforceability is considered in a proceeding in equity or law.
The execution and delivery of the Transaction Documents and the
performance by the Buyer of their respective terms (a) will not breach or
result in a violation of the Buyer's Certificate of Incorporation or Memorandum
and Articles of Association, or any judgment, order or decree of any court or
arbitrator, known to us, to which the Buyer is a party or is subject, and (b)
will not constitute a material breach of the terms, conditions or provisions
of, or constitute a default under, any material contract, undertaking,
indenture or other agreement or instrument known to us to which the Buyer is a
party or by which it is bound.
No consent, approval or authorization of, or designation, declaration
or filing with, any governmental authority is required in connection with the
valid execution, delivery and performance by the Buyer of the Transaction
Documents, other than such consents, approvals, authorizations, designations,
declarations or filings as have been made or obtained on or before the date
hereof or which are not required to be made or obtained until after the date
hereof.
Except as disclosed in the Purchase Agreement or the Exhibits and
Schedules delivered by the Buyer in connection therewith, there is, to our
current actual knowledge, no action, suit or proceeding pending against the
Buyer or its properties in any court or before any governmental authority or
agency, or arbitration board or tribunal, (a) which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the Agreement or any of the
transactions contemplated thereby, or (b) which, if adversely determined, could
have a material adverse effect on the Buyer or its business or properties.
6. The choice of the law of the State of California to govern
each of the transaction documents other than the Debenture is a valid choice of
law.
56
7. No winding up petitions have been presented against the Buyer
and the Buyer is not subject to any winding up or administration order nor has
any liquidator or receiver or administrative receiver been appointed in respect
of the Buyer.
57
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ___ day
of January, 1996, by and between PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. ________), (registered office
_______________), (the "Assignee"), and PLATINUM SOFTWARE CORPORATION, a
Delaware corporation (the "Assignor").
R E C I T A L S
Assignor and Assignee are parties to an Agreement of Purchase and Sale
of Assets made as of September 30, 1995 (the "Agreement"), in which Assignor
has agreed to sell and Assignee has agreed to purchase certain assets,
operations and business of the Assignor as more particularly described in the
Agreement. The Agreement provides for, among other things, the assumption by
Assignee of specific liabilities, obligations, contracts and agreements of
Assignor.
NOW, THEREFORE, for and in consideration of the above recitals, the
parties entering into the transaction contemplated by the Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The above recitals are incorporated in and form an integral
part of this Assignment and Assumption Agreement.
2. The Assignor hereby assigns to the Assignee all of its right,
title, interest, obligations and liabilities under the liabilities,
obligations, contracts and agreements listed on Schedule 3.2 attached to the
Agreement. All rights and benefits under such contracts and agreements are
being transferred pursuant to a bill of sale of even date herewith.
3. The Assignee accepts such assignment and assumes all of such
right, title, interest, obligations and liabilities, and agrees to indemnify,
defend and hold harmless Assignor as set forth in Section 13 of the Agreement
with respect to such assumed liabilities.
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption Agreement as of the date first above written.
ASSIGNEE: ASSIGNOR:
PLATINUM TREASURY SYSTEMS, plc PLATINUM SOFTWARE CORPORATION,
a Delaware corporation
By: By:
------------------------------- ---------------------------------
Michael J. Simmons
Chief Financial Officer
Its:
------------------------------
58
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ___ day
of January, 1996, by and between PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. ________), (registered office
_______________), (the "Assignee"), and PLATINUM SOFTWARE CANADA LIMITED, an
Ontario corporation (the "Assignor").
R E C I T A L S
Platinum Software Corporation ("Platinum") and Assignee are parties to
an Agreement of Purchase and Sale of Assets made as of September 30, 1995 (the
"Agreement"), in which Platinum has agreed to sell and Assignee has agreed to
purchase certain assets, operations and business of Platinum and certain of its
subsidiaries as more particularly described in the Agreement. The Agreement
provides for, among other things, the assumption by Assignee of specific
liabilities, obligations, contracts and agreements of Assignor.
NOW, THEREFORE, for and in consideration of the above recitals, the
parties entering into the transaction contemplated by the Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The above recitals are incorporated in and form an integral
part of this Assignment and Assumption Agreement.
2. The Assignor hereby assigns to the Assignee all of its right,
title, interest, obligations and liabilities under the liabilities,
obligations, contracts and agreements listed on Schedule 3.2 attached to the
Agreement. All rights and benefits under such contracts and agreements are
being transferred pursuant to a bill of sale of even date herewith.
3. The Assignee accepts such assignment and assumes all of such
right, title, interest, obligations and liabilities, and agrees to indemnify,
defend and hold harmless Assignor as set forth in Section 13 of the Agreement
with respect to such assumed liabilities.
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption Agreement as of the date first above written.
ASSIGNEE: ASSIGNOR:
PLATINUM TREASURY SYSTEMS, plc PLATINUM SOFTWARE CANADA LIMITED,
an Ontario corporation
By: By:
------------------------------- ---------------------------------
Its: Its:
------------------------------ --------------------------------
59
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ___ day
of January, 1996, by and between PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. ________), (registered office
_______________), (the "Assignee"), and PLATINUM SOFTWARE (IRELAND) LTD., (the
"Assignor").
R E C I T A L S
Platinum Software Corporation ("Platinum") and Assignee are parties to
an Agreement of Purchase and Sale of Assets made as of September 30, 1995 (the
"Agreement"), in which Platinum, and certain of its subsidiaries have agreed to
sell and Assignee has agreed to purchase certain assets, operations and
business of the Assignor as more particularly described in the Agreement. The
Agreement provides for, among other things, the assumption by Assignee of
specific liabilities, obligations, contracts and agreements of Assignor.
NOW, THEREFORE, for and in consideration of the above recitals, the
parties entering into the transaction contemplated by the Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The above recitals are incorporated in and form an integral
part of this Assignment and Assumption Agreement.
2. The Assignor hereby assigns to the Assignee all of its right,
title, interest, obligations and liabilities under the liabilities,
obligations, contracts and agreements listed on Schedule 3.2 attached to the
Agreement. All rights and benefits under such contracts and agreements are
being transferred pursuant to a bill of sale of even date herewith.
3. The Assignee accepts such assignment and assumes all of such
right, title, interest, obligations and liabilities, and agrees to indemnify,
defend and hold harmless Assignor as set forth in Section 13 of the Agreement
with respect to such assumed liabilities.
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption Agreement as of the date first above written.
ASSIGNEE: ASSIGNOR:
PLATINUM TREASURY SYSTEMS, plc PLATINUM SOFTWARE (IRELAND) LTD.,
By: By:
------------------------------- ---------------------------------
Its: Its:
------------------------------ --------------------------------
60
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ___ day
of January, 1996, by and between PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. ________), (registered office
_______________), (the "Assignee"), and PLATINUM SOFTWARE (AUST) PTY, LTD.,
(the "Assignor").
R E C I T A L S
Platinum Software Corporation ("Platinum") and Assignee are parties to
an Agreement of Purchase and Sale of Assets made as of September 30, 1995 (the
"Agreement"), in which Platinum, and certain of its subsidiaries have agreed to
sell and Assignee has agreed to purchase certain assets, operations and
business of the Assignor as more particularly described in the Agreement. The
Agreement provides for, among other things, the assumption by Assignee of
specific liabilities, obligations, contracts and agreements of Assignor.
NOW, THEREFORE, for and in consideration of the above recitals, the
parties entering into the transaction contemplated by the Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The above recitals are incorporated in and form an integral
part of this Assignment and Assumption Agreement.
2. The Assignor hereby assigns to the Assignee all of its right,
title, interest, obligations and liabilities under the liabilities,
obligations, contracts and agreements listed on Schedule 3.2 attached to the
Agreement. All rights and benefits under such contracts and agreements are
being transferred pursuant to a bill of sale of even date herewith.
3. The Assignee accepts such assignment and assumes all of such
right, title, interest, obligations and liabilities, and agrees to indemnify,
defend and hold harmless Assignor as set forth in Section 13 of the Agreement
with respect to such assumed liabilities.
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption Agreement as of the date first above written.
ASSIGNEE: ASSIGNOR:
PLATINUM TREASURY SYSTEMS, plc PLATINUM SOFTWARE (AUST) PTY, LTD.,
By: By:
------------------------------- ---------------------------------
Its: Its:
------------------------------ --------------------------------
61
EXHIBIT F
TRADEMARK LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made as of January ____,
1996, by and between PLATINUM SOFTWARE CORPORATION, a Delaware corporation
("Platinum"), and PLATINUM TREASURY SYSTEMS, plc, a company formed under the
laws of England and Wales ("Treasury").
R E C I T A L S
A. Platinum is in the business of developing, producing,
distributing and licensing the use of certain computer software programs and
related documentation for financial, management information and distribution
software applications.
B. Platinum and Treasury have entered into that certain Agreement
of Purchase and Sale of Assets (the "Purchase Agreement") dated as of September
30, 1995 pursuant to which Treasury has agreed to purchase, and Platinum has
agreed to sell, certain assets of Platinum related to its Treasury software
product line, DOS and Windows versions (collectively the "Product").
C. Platinum and Treasury desire to enter into this Agreement
whereby Platinum shall grant a non-exclusive license to use the Platinum(R)
trademark in connection with the licensing of the Product subject to the terms
and conditions contained below. The Platinum(R) mark is registered in the
United States, England and certain other countries, but not registered in all
countries.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, terms and conditions hereinafter contained the parties hereto agree
as follows:
1. TRADEMARK LICENSE.
1.1 Platinum(R). Platinum hereby grants to Treasury and
Treasury hereby acknowledges the grant of a fully paid revocable non-exclusive
license to use the Platinum(R) trademark ("Trademark") solely to identify
the Product and in connection with the advertising, promotion, distribution and
sublicensing of the Product and as part of its corporate name. The Trademark
may not be sublicensed by Treasury to any third party. The parties acknowledge
that Treasury's distributors may distribute the Product in packaging produced
by or for Treasury which contains the Trademark and may use marketing materials
produced by or for Treasury which contains the Trademark. Platinum shall
retain exclusive title and ownership of the Trademark. Except for the rights
granted herein, Treasury shall not have any right, title or interest, express
or implied, in the
62
Trademark. The Trademark shall be used only in accordance with generally
accepted practices, and the parties shall consult regularly and execute such
agreements or documents, or such amendments to this Agreement as are reasonably
necessary to ensure proper maintenance and use of the Trademark. All use of
the Trademark by Treasury and goodwill associated with the Trademark shall
inure to the sole benefit of Platinum in any and all jurisdictions.
1.2 Display of Trademarks. Platinum shall have the right of
approval of any usage of the Trademark in connection with any advertising,
product packaging and other promotional materials utilizing the Trademark
prepared by Treasury or its agents (the "Advertising Materials") prior to their
final production and use. Upon receipt of the Advertising Materials, Platinum
shall have thirty (30) days, or other such period as the parties may from time
to time agree, to review the Advertising Materials and to issue its approval or
disapproval. Any of the Advertising Materials not expressly approved on or
before said thirtieth (30th) day shall be deemed approved as of the
thirty-first (31st) day after receipt. In the event of disapproval, Platinum
will provide suggestions, objections or corrections concerning Advertising
Materials within the time period specified above.
1.3 Modification of Advertising Materials. Platinum may direct
Treasury (by notice hereunder) to modify subsequently produced copies of
Advertising Materials as appropriate to reflect changes in Platinum's own use
of the Trademark and changes in the registration status of the Trademark.
However, Treasury may exhaust its supplies on hand or those ordered which
display a Trademark upon Platinum notifying Treasury of a change in the
Trademark.
1.4 Use of Other Marks; Conflicting Use. Treasury may use its own
trademarks in conjunction with the Trademark provided that appropriate
footnotes or other notations are displayed to indicate Platinum's ownership of
the Trademark. Treasury agrees to notify Platinum in writing of any
conflicting uses of and applications for registration of the Trademark or of
any acts of infringement or of unfair competition involving the Trademark
promptly after such matters are brought to its attention or it has knowledge
thereof. Treasury shall not use or adapt, during the term of this Agreement
nor at any time thereafter, except as expressly permitted by this Agreement, in
its business, in its business name, in its trading style or in any of its
services or on any of its products any trademark, service mark, name, style or
dress which is so similar to, or so nearly resembles the Trademark or any other
trademark, service mark, trade name, trade dress or label of Platinum as to be
likely to cause or as to be calculated to cause deception or confusion, or
which is graphically or phonetically similar to or is derived from or based
upon any of Platinum's trademarks.
1.5 Registered User. In any jurisdiction where Treasury must be
recorded as a registered user of the Trademark in order for use by Treasury to
inure to the benefit of or be beneficial to Platinum, Treasury shall cooperate
with Platinum to execute such a registered user agreement in a form reasonably
requested by Platinum and to have it so recorded for the term of this Agreement
only.
(a) Treasury hereby irrevocably appoints Platinum its
attorney in fact (such appointment to be coupled with an interest) to act for
it and represent it in initiating any registered
2
63
user recordation or canceling any registered user recordation in the event of
termination of this Agreement.
(b) Apart from such registered-user recordation, Treasury
shall not otherwise apply anywhere or at any time for any registration as owner
of the Trademark or any mark confusingly similar to the Trademark.
1.6 Jeopardy to the Trademark. If in the reasonable business
judgment of Platinum any act or failure to act by Treasury constitutes a danger
to the value or validity or ownership of the Trademark, then Platinum may, in
lieu of or in addition to any other remedy available to it, give notice to
Treasury describing the material danger and may suspend in whole or in part
Treasury's right to use the Trademark in the specific manner viewed as
materially dangerous, effective on Treasury's receipt of the notice. The
suspension shall continue until Platinum, reasonably determines that the danger
no longer exists or Treasury has eliminated the danger.
1.7 General. To the fullest extent permitted by the law of the
applicable jurisdiction, at no time during or after the term of this Agreement
shall Treasury challenge or assist others in challenging Platinum's rights in
the Trademark, contest the validity of any registration thereon or use or aid
in the use of the Trademark other than as licensed herein.
2. TERM.
This Agreement shall be effective as of the date hereof and shall
continue in full force and effect for a period of two (2) years unless sooner
terminated pursuant to the provisions of this Agreement. After the initial
term of two (2) years, this Agreement shall be extended automatically from year
to year unless either party has provided the other party with written notice at
least ninety (90) days prior to any expiration date that it intends to
terminate such agreement.
3. TERMINATION.
3.1 Treasury Default. Platinum may, at its option, terminate this
Agreement: (1) in the event that Treasury materially defaults on its
obligations hereunder and fails to cure its default within thirty (30) days
after having been given notice of such default; and (2) effective immediately
and without any requirement of notice, in the event that (a) Treasury is unable
to pay its debts within the meaning of section 123 of the UK Insolvency Act
1986 or Treasury otherwise becomes insolvent or suspends making payments to all
or any class of its creditors or announces an intention to do so; or (b) any
distress, execution, attachment or other legal process affects the whole or a
material part of the assets of Treasury; or (c) an Administrative or other
Receiver or similar officer is appointed over the whole or any part of the
assets of Treasury or Treasury requests any person to appoint such a Receiver
or similar officer or any other steps are taken to enforce any charge or other
security over any of the property of Treasury; or (d) an order is made or any
effective resolution is passed or a petition is presented or other steps are
taken for (i) the winding up, dissolution or liquidation of Treasury other than
for the purpose of a reconstruction or amalgamation, the terms of which have
previously been approved by Platinum in writing; or (ii) the making of an
Administration Order against Treasury.
3
64
3.2 Effect of Termination. Upon termination, Treasury shall
immediately cease use of the Trademark in all documents, advertising,
collateral materials and other printed materials, and shall change its
corporate name to exclude the Trademark. Any termination of this Agreement
shall be without prejudice to any other rights or remedies available under this
Agreement or at law.
4. ARBITRATION.
Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction or
other equitable relief to preserve the status quo or prevent irreparable harm,
any controversy or claim arising out of or relating to this Agreement or to its
breach shall be settled by arbitration by a single arbitrator in accordance
with Rules of the American Arbitration Association, pursuant to an arbitration
held in Orange County, California, and judgment upon the award rendered by the
arbitrator may be entered in any court of competent jurisdiction. The
prevailing party shall be entitled to receive from the other party its
reasonable attorneys' fees and costs incurred in connection with any action,
proceeding or arbitration hereunder.
5. MISCELLANEOUS; JURISDICTION AND VENUE.
5.1 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California in the United
States of America.
5.2 Notices. Any notice or other communication required or
permitted in this Agreement shall be in writing and shall be deemed to have
been duly given on the day of service if served personally or by facsimile
transmission with confirmation, or seven (7) business days after mailing if
mailed by First Class mail, registered or certified, postage prepaid, and
addressed to the respective parties at the addresses set forth below, or at
such other addresses as may be specified by either party pursuant to the terms
and provisions of this paragraph. If notice is sent by overnight courier, such
as Federal Express or DHL, it shall be deemed to have been duly given two (2)
business days after being sent by such overnight courier.
If to Platinum:
Platinum Software Corporation
195 Technology Drive
Irvine, California 92718
(714) 453-4000
Attention: Michael J. Simmons
Chief Financial Officer
4
65
If to Treasury:
Platinum Treasury Systems, plc
32 Peascod Street
Windsor, Berkshire
SL4 1EA United Kingdom
Attention: Managing Director
5.3 Assignment. Neither party may assign, without the prior
written consent of the other, its rights, duties or obligations under this
Agreement to any person or entity, in whole or in part; provided, however, that
this Agreement may be assigned by Platinum without the consent of Treasury (i)
to a purchaser of all or substantially all of the assets or outstanding capital
stock of Platinum, or its parent corporation or other corporation controlled by
its parent corporation, whether by merger, consolidation to otherwise, or (ii)
to a subsidiary all of whose stock is owned by Platinum provided any transferee
agrees to be bound by the terms of this Agreement. Subject to the foregoing
limitations, this Agreement shall inure to the benefit of and be binding upon
the parties hereto, their successors, and assigns.
5.4 Force Majeure. Neither party shall be responsible for failure
to perform in a timely manner under this Agreement when its failure results
from any of the following causes: Acts of God or public enemies, civil war,
insurrection or riot, fire, flood, explosion, earthquake or serious accident,
strike, labor trouble or work interruption or any cause beyond its reasonable
control.
5.5 Severability. If any provision of this Agreement is invalid
under any applicable statute or rule of law, it is to that extent to be deemed
omitted. The remainder of the Agreement shall be valid and enforceable to the
maximum extent possible.
5.6 Entire Agreement. This Agreement (together with all
attachments and exhibits hereto) constitutes the entire agreement between the
parties and supersedes any and all prior agreements between them, whether
written or oral, with respect to the subject matter hereof, and may not be
amended or modified except in a writing signed by the parties hereto. No
waiver by either party, whether express or implied, of any provision of this
Agreement, or of any breach thereof, shall constitute a continuing waiver of
such provision or a breach or waiver of any other provision of this Agreement.
5.7 Independent Contractor. Each party hereto shall be and remain
in independent contractor and nothing herein shall be deemed to constitute the
parties as partners. Further, neither party shall have any authority to act,
or attempt to act, or represent itself, directly or by implication, as an agent
of the other or in any manner assume or create, or attempt to assume or create,
any obligation on behalf of or in the name of the other, nor shall either be
deemed the agent or employee of the other.
5.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and each of which
together shall constitute a single instrument.
5
66
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date shown below.
"PLATINUM" "TREASURY"
PLATINUM SOFTWARE CORPORATION PLATINUM TREASURY SYSTEMS, plc
By: By:
------------------------------- ---------------------------------
Title: Title:
---------------------------- ------------------------------
6
67
EXHIBIT G
BILL OF SALE, GENERAL CONVEYANCE AND ASSIGNMENT
This Bill of Sale, General Conveyance and Assignment, dated as of
January _____, 1996, between PLATINUM SOFTWARE CORPORATION, a Delaware
corporation (the "Seller"),and PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. ________), (registered office
_______________), (the "Buyer"), is executed pursuant to that certain Agreement
of Purchase and Sale of Assets dated as of September 30, 1995 (the
"Agreement"), between the Seller and the Buyer. Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them in the
Agreement.
W I T N E S S E T H
That for consideration set forth in the Agreement to be delivered to
Seller, the receipt and sufficiency of which is hereby acknowledged by Seller,
Seller hereby sells, conveys, assigns, transfers, sets over and delivers to and
vests in Buyer, its successors and assigns forever, the Purchased Assets as
described in the Agreement, free and clear of all liens, liabilities,
obligations, claims, security interests or rights of third parties, except as
otherwise specifically provided for in the Agreement.
Seller shall from time to time after the Physical Closing, at the
Buyer's request and without further consideration, execute and deliver such
other instruments of transfer, conveyance and assignment, and take such other
action as the Buyer may require more effectively to transfer, convey and assign
to and vest in Buyer, and to put Buyer into possession of any property
untransferred, conveyed, assigned and delivered hereunder.
This Bill of Sale, General Conveyance and Assignment is
executed by and shall be binding upon Seller and its successors and assigns,
and for the purposes and use as set forth and referred to above, effective as
of the date and year first above written.
PLATINUM SOFTWARE CORPORATION,
a Delaware corporation
By:
--------------------------------
Michael J. Simmons
Chief Financial Officer
68
BILL OF SALE, GENERAL CONVEYANCE AND ASSIGNMENT
This Bill of Sale, General Conveyance and Assignment, dated as of
January _____, 1996, between PLATINUM SOFTWARE CANADA, LTD., an Ontario
corporation (the "Assignor"), and PLATINUM TREASURY SYSTEMS, plc, a company
registered in England and Wales (Company No. ________), (registered office
_______________), (the "Buyer"), is executed pursuant to that certain Agreement
of Purchase and Sale of Assets dated as of September 30, 1995 (the
"Agreement"), between Platinum Software Corporation ("Seller") and the Buyer.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Agreement.
W I T N E S S E T H
That for consideration set forth in the Agreement to be delivered to
Seller, the receipt and sufficiency of which is hereby acknowledged by Seller,
Assignor hereby sells, conveys, assigns, transfers, sets over and delivers to
and vests in Buyer, its successors and assigns forever, those Purchased Assets
as described in the Agreement and the schedules thereto, free and clear of all
liens, liabilities, obligations, claims, security interests or rights of third
parties, except as otherwise specifically provided for in the Agreement.
Assignor shall from time to time after the Physical Closing, at the
Buyer's request and without further consideration, execute and deliver such
other instruments of transfer, conveyance and assignment, and take such other
action as the Buyer may require more effectively to transfer, convey and assign
to and vest in Buyer, and to put Buyer into possession of any property
untransferred, conveyed, assigned and delivered hereunder.
This Bill of Sale, General Conveyance and Assignment is executed by
and shall be binding upon Assignor and its successors and assigns, and for the
purposes and use as set forth and referred to above, effective as of the date
and year first above written.
PLATINUM SOFTWARE CANADA, LTD.,
an Ontario corporation
By:
------------------------------------
Its:
-----------------------------------
69
BILL OF SALE, GENERAL CONVEYANCE AND ASSIGNMENT
This Bill of Sale, General Conveyance and Assignment, dated as of
January _____, 1996, between PLATINUM SOFTWARE (AUST) PTY, LIMITED, an
Australian corporation (the "Assignor"), and PLATINUM TREASURY SYSTEMS, plc, a
company registered in England and Wales (Company No. ________), (registered
office _______________), (the "Buyer"), is executed pursuant to that certain
Agreement of Purchase and Sale of Assets dated as of September 30, 1995 (the
"Agreement"), between Platinum Software Corporation ("Seller") and the Buyer.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Agreement.
W I T N E S S E T H
That for consideration set forth in the Agreement to be delivered to
Seller, the receipt and sufficiency of which is hereby acknowledged by Seller,
Assignor hereby sells, conveys, assigns, transfers, sets over and delivers to
and vests in Buyer, its successors and assigns forever, those Purchased Assets
as described in the Agreement and the schedules thereto, free and clear of all
liens, liabilities, obligations, claims, security interests or rights of third
parties, except as otherwise specifically provided for in the Agreement.
Assignor shall from time to time after the Physical Closing, at the
Buyer's request and without further consideration, execute and deliver such
other instruments of transfer, conveyance and assignment, and take such other
action as the Buyer may require more effectively to transfer, convey and assign
to and vest in Buyer, and to put Buyer into possession of any property
untransferred, conveyed, assigned and delivered hereunder.
This Bill of Sale, General Conveyance and Assignment is executed by
and shall be binding upon Assignor and its successors and assigns, and for the
purposes and use as set forth and referred to above, effective as of the date
and year first above written.
PLATINUM SOFTWARE (AUST) PTY, LIMITED,
an Australian corporation
By:
------------------------------------
Its:
-----------------------------------
70
BILL OF SALE, GENERAL CONVEYANCE AND ASSIGNMENT
This Bill of Sale, General Conveyance and Assignment, dated as of
January _____, 1996, between PLATINUM SOFTWARE (IRELAND) LIMITED, a corporation
formed under the laws of Ireland (the "Assignor"), and PLATINUM TREASURY
SYSTEMS, plc, a company registered in England and Wales (Company No.
________), (registered office _______________), (the "Buyer"), is executed
pursuant to that certain Agreement of Purchase and Sale of Assets dated as of
September 30, 1995 (the "Agreement"), between Platinum Software Corporation
("Seller") and the Buyer. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Agreement.
W I T N E S S E T H
That for consideration set forth in the Agreement to be delivered to
Seller, the receipt and sufficiency of which is hereby acknowledged by Seller,
Assignor hereby sells, conveys, assigns, transfers, sets over and delivers to
and vests in Buyer, its successors and assigns forever, those Purchased Assets
as described in the Agreement and the schedules thereto, free and clear of all
liens, liabilities, obligations, claims, security interests or rights of third
parties, except as otherwise specifically provided for in the Agreement.
Assignor shall from time to time after the Physical Closing, at the
Buyer's request and without further consideration, execute and deliver such
other instruments of transfer, conveyance and assignment, and take such other
action as the Buyer may require more effectively to transfer, convey and assign
to and vest in Buyer, and to put Buyer into possession of any property
untransferred, conveyed, assigned and delivered hereunder.
This Bill of Sale, General Conveyance and Assignment is executed by
and shall be binding upon Assignor and its successors and assigns, and for the
purposes and use as set forth and referred to above, effective as of the date
and year first above written.
PLATINUM SOFTWARE (IRELAND) LIMITED,
By:
--------------------------------
Its:
-------------------------------
71
EXHIBIT H
FORM OF OPINION OF STRADLING, YOCCA, CARLSON & RAUTH
(714) 725-4000
December ___, 1995
Platinum Treasury Systems, plc.
- -------------------------------
- -------------------------------
RE: Platinum Software Corporation
-----------------------------
Ladies and Gentlemen:
We have acted as counsel to Platinum Software Corporation, a Delaware
corporation (the "Company"), in connection with the execution and delivery by
the Company of that certain Agreement of Purchase and Sale of Assets, dated as
of September 30, 1995 (the "Agreement") between the Company and Platinum
Treasury Systems, plc, a company formed under the laws of England and Wales
(the "Buyer"). This opinion is being delivered pursuant to Section 11.9 of the
Agreement. Unless specifically defined herein or the context requires
otherwise, capitalized terms used herein shall have the meanings assigned to
them in the Agreement.
In connection with the preparation of this opinion, we have examined
such documents and considered such questions of law as we have deemed necessary
or appropriate. We have assumed that, except for the Agreement and the
documents required or contemplated thereby, there are no other documents or
agreements between the Company and Buyer which would expand or otherwise modify
the respective rights and obligations of the Company or Buyer as set forth in
the Agreement and the documents required or contemplated thereby.
We have assumed the authenticity of all documents submitted to us as
originals, the conformity with originals of all documents submitted to us as
copies, and the genuineness of all signatures. We have also assumed that, with
respect to all parties to agreements or instruments relevant hereto other than
the Company, such parties had the requisite power and authority to execute,
deliver and perform such agreements or instruments, that such agreements or
instruments have been duly authorized by all requisite action, executed and
delivered by such parties and that such agreements or instruments are the
valid, binding and enforceable obligations of such parties.
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As to questions of fact material to our opinions, we have relied upon
the representations of each party made in the Agreement and other documents and
certificates delivered in connection therewith, certificates of officers of the
Company, and certificates and advices of public officials and we have made no
independent investigation of such matters.
Whenever a statement herein is qualified by "known to us," "to our
current actual knowledge," or similar phrase, it is intended to indicate that,
during the course of our representation of the Company, no information that
would give us current actual knowledge of the inaccuracy of such statement has
come to the attention of those attorneys in this firm who have rendered legal
services in connection with the transaction described in the introductory
paragraph hereof. However, except as otherwise expressly indicated, we have
not undertaken any independent investigation to determine the accuracy of such
statement, and any limited inquiry undertaken by us during the preparation of
this opinion letter should not be regarded as such an investigation; no
inference as to our knowledge of any matters bearing on the accuracy of any
such statement should be drawn from the fact of our representation of the
Company.
Based upon the foregoing, and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has
the corporate power and authority to own its properties and assets, to carry on
its business as presently conducted and to enter into the Agreement, the
Trademark License Agreement, the Morgan and Franklin Termination Agreements,
the Bill of Sale, General Conveyance and Assignment, the Debenture, and the
Assignment and Assumption Agreement (the "Transaction Documents"), and to
perform its obligations under the Transaction Documents.
2. Each of the Transaction Documents has been duly authorized by
all necessary corporate action on the part of the Company and has been duly
executed and delivered by the Company. Each of the Transaction Documents is a
legal, valid and binding obligation of the Company enforceable against it in
accordance with its respective terms, except as the enforceability thereof may
be subject to or limited by (a) bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws relating to or affecting rights
of creditors, and (b) general equitable principles, regardless of whether the
issue of enforceability is considered in a proceeding in equity or law.
3. The execution and delivery of the Transaction Documents and
the performance by the Company of their respective terms (a) will not breach or
result in a violation of the Company's Certificate of Incorporation or Bylaws,
or any judgment, order or decree of any court or arbitrator, known to us, to
which the Company is a party or is subject, and (b) will not constitute a
material breach of the terms, conditions or provisions of, or constitute a
default under, any
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Platinum Treasury Systems, plc.
December ___, 1995
Page 3
material contract, undertaking, indenture or other agreement or instrument
filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1995.
4. No consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority is required in
connection with the valid execution, delivery and performance by the Company of
the Transaction Documents, other than such consents, approvals, authorizations,
designations, declarations or filings listed in the Agreement and Schedule 5.3
thereto or as have been made or obtained on or before the date hereof or which
are not required to be made or obtained until after the date hereof.
5. Except as disclosed in the Agreement or the Exhibits and
Schedules delivered by the Company in connection therewith, there is, to our
current actual knowledge, no action, suit or proceeding pending against the
Company or its properties in any court or before any governmental authority or
agency, or arbitration board or tribunal, which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the Agreement or any of the
transactions contemplated thereby.
We expressly do not comment upon or render any opinion with respect to
any documents referenced in the Transaction Documents.
We are members of the Bar of the State of California and, accordingly,
do not purport to be experts on or to be qualified to express any opinion
herein concerning, nor do we express any opinion herein concerning, any laws
other than the laws of the State of California, the General Corporation Law of
Delaware and federal law.
The foregoing opinions are being furnished to you solely for your
benefit and may not be relied upon by any other person without our prior
written consent.
Very truly yours,
STRADLING, YOCCA, CARLSON & RAUTH
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