Exhibit 10.5
LETTER OF AGREEMENT
This Letter of Agreement is entered into as of January 23, 1995 between and
among Mr. Tony Martins, Ms. Anna Marra, Ms. Claude Gareau, Mr. Ronald Bastien
(collectively the TMAI group), Tony Martins & Associes, Inc. ("TMAI"), Claremont
Technology Group, Inc. (Claremont) and 9014-2191 Quebec Inc. (Claremont Canada).
The TMAI Group, TMAI and Claremont wish to join forces, through the
transactions described in this Letter of Agreement.
1. EMPLOYMENT.
1.1 WHEN. The members of the TMAI Group will be employed effective as of
January 23, 1995.
1.2 BY WHOM. The members of the TMAI Group will be employed by Claremont
Canada.
1.3 TERMS. Each member of the TMAI Group will sign employment agreements
with Claremont Canada, in form separately agreed with each.
1.4 COMPENSATION -- TEAM. Each member of the TMAI Group will receive
salaries, and as a condition of their continued employment by and with Claremont
Canada, options to purchase stock in Claremont, on terms to which each has
agreed. Each member of the TMAI group will also receive benefits and paid time
off, as standard for the individual's position (or comparable positions) within
Claremont.
2. TECHNOLOGY.
2.1 TECHNOLOGY AND DELIVERY. Immediately following execution of this
letter, the TMAI Group will deliver, or cause TMAI to deliver, copies of all
intellectual property shown on Exhibit 2.1, in the form in which it exists on
the date of this agreement, to Claremont following execution of this letter.
The material described on Exhibit 2.1 is referred to herein collectively as the
"Technology."
2.2 REPRESENTATION. TMAI and the TMAI Group collectively represent and
warrant that TMAI is the sole and exclusive owner of the Technology, that said
TMAI holds all rights, title and interest in and to the Technology, and that
Claremont's ownership and use of the Technology will not infringe the rights of
any third party. The TMAI Group will defend and indemnify Claremont from all
judgments against Claremont, and all reasonable attorneys' fees incurred by
Claremont in the course of defending against claims that result in judgment
against Claremont, to the extent that the judgment is based on a determination
that the representations of this paragraph are inaccurate, but only as to
judgments based on claims presented in writing within two years of the date of
this agreement. Claremont shall inform the TMAI Group of any such claim
promptly, and the members of the TMAI Group shall be entitled to participate in
the defense of any such claim against Claremont, at their own expense.
(Claremont will pay the expenses associated with any participation requested by
Claremont.)
Page 1 -- Letter of Agreement
3. PURCHASE OF TONY MARTINS & ASSOCIES, INC.
3.1 AGREEMENT. The TMAI Group agrees to sell, and Claremont Canada agrees
to purchase, all of the capital stock of TMAI for an aggregate purchase price
equal to the total of the amounts set forth in Sections 3.2.1 and 3.2.4, which
purchase price shall be payable at the times set out therein, on the following
terms and conditions.
3.2 CLOSING. Closing will take place on March 3, 1995, with effect as of
January 23, 1995. Closing will take place at the offices of Claremont's
corporate counsel, Ater Wynne Hewitt Dodson & Skerritt, in Portland, Oregon,
provided that individuals may participate in the close through facsimile
documents and conference telephone from wherever they happen to be. All parties
will accept facsimile signatures for purposes of close, and facsimile
transmission of signed copies as proof of delivery at close, with hard copy to
be delivered by courier. For convenience, some deliveries of required closing
materials may be made to Claremont's Montreal counsel, Ogilvy Renault, in
Montreal, as described below.
3.2.1 CLAREMONT'S DELIVERIES AT CLOSE. Claremont will deliver to
closing, made out in the name of each of the four shareholders of TMAI,
checks in the total amounts shown here. Any reduction will be allocated in
proportion to the amounts shown below, among the four people shown below.
Tony Martins US$ 159,298
Anna Marra US$ 43,445
Claude Gareau US$ 43,445
Ronald Bastien US$ 43,445
3.2.2 OPINION OF ATER WYNNE HEWITT DODSON & SKERRITT, AND OLGILVY
RENAULT, COUNSEL TO CLAREMONT AND CLAREMONT CANADA.
3.2.3 TMAI GROUP DELIVERY AT CLOSING: Each of the four
shareholders of TMAI will deliver at close these things.
(a) STOCK. All of his or her shares in TMAI, endorsed over to
Claremont Canada. These shall be delivered to Claremont's Montreal,
Canada law firm, Ogilvy Renault.
(b) REPRESENTATION. A written representation confirming the
effectiveness, as of closing, of all representations and warranties
described in this agreement, and noting with particularity any adverse
change in the net cash balance shown on Exhibit 3.3.1.
(c) CORPORATE OFFICES. A written certification, signed by the
Secretary of TMAI, of the identity of each of the officers and
directors of TMAI holding office on the closing date. The
certification shall also contain and certify as genuine the signature
of each such officer and director.
(d) RESIGNATIONS. The written resignation of each officer and
director of TMAI, effective as of the date of close.
Page 2 -- Letter of Agreement
(e) MINUTE BOOKS AND CORPORATE RECORDS. The original minute
books and corporate records of TMAI. These shall be delivered to
Claremont's Montreal, Canada law firm, Ogilvy Renault.
(f) OPINION OF MARTINEAU WALKER, COUNSEL TO TMAI AND THE MEMBERS
OF THE TMAI GROUP.
3.2.4 MECHANICS OF CLOSE. Closing shall be deemed completed when
Ater Wynne holds original copies of the share certificates described in
Section 3.2.2(a). The parties will instruct Ater Wynne, as holder of the
closing escrow, that upon its confirmation of the satisfaction of the
closing conditions, it shall release the checks Claremont has delivered to
the TMAI Group members, and the materials the TMAI group has delivered to
Claremont.
3.2.5 POST CLOSING. On January 31, 1996, Claremont will deliver,
made out in the name of each of the four shareholders of TMAI, checks in
the amounts shown here:
Tony Martins US$ 72,023
Anna Marra US$ 19,643
Claude Gareau US$ 19,643
Ronald Bastien US$ 19,643
3.3 REPRESENTATIONS AND WARRANTIES: Each of the four shareholders of TMAI
warrants and represents these things, as of the date of this letter and at close
of the purchase of TMAI stock. Each of these warranties survives the close, for
a period of one year. Any exceptions to these warranties are listed on the
attached Exhibit 3.3.
3.3.1 FINANCIAL STATUS. TMAI's financial status is accurately and
completely represented by the financial statements shown on Exhibit 3.3.1.
TMAI's financial status has undergone no material adverse change from that
shown on Exhibit 3.3.1, and as of closing, will have undergone no adverse
undisclosed change of any kind as to the net cash balance (cash in excess
of liabilities) shown on that Exhibit.
3.3.2 CONTRACTS AND LIABILITIES. TMAI has no contracts or
liabilities of any kind except as reflected on the December 31, 1994
financial sttements. Each material contract by which TMAI is bound (that
is, having a potential financial impact exceeding Can$ 5,000 over the
contract life) is listed on the attached Exhibit 3.3.2, and copies of them
have been or as of closing will have been provided to Claremont or its
counsel. All contracts are in good standing and no reservations have been
expressed by any customer concerning any aspect of past, present, or
anticipated future performance called for under the contracts. Neither
this transaction nor any other contemplated by this letter will cause any
default in or breach of any term of any of TMAI's contracts.
3.3.3 CAPITAL STRUCTURE. The individuals listed below are the
only stockholders in TMAI, and own the percentages of the total issued and
outstanding stock shown by their names, all of which will have been
delivered to Claremont Canada at the close. No person owns any rights to
cause stock to issue from TMAI, such as but not
Page 3 -- Letter of Agreement
limited to warrants, options, convertible debt or other similar instruments
which could or may be convertible into stock. TMAI has no subsidiaries.
Each of the individuals listed below for himself or herself further
represents that he or she owns the TMAI stock listed free and clear of all
claims by or encumbrances in favor of any third party with full power and
authority to sell, assign and transfer the purchased shares.
Tony Martins 550 Class A shares
Anna Marra 150 Class A shares
Claude Gareau 150 Class A shares
Ronald Bastien 150 Class A shares
3.3.4 FORMALITIES. All corporate formalities have been observed
that are conditions precedent to the sale of all TMAI stock to Claremont
Canada, including without limitation all consents of TMAI's board of
directors or shareholders pursuant to the provisions of TMAI's charter
documents or shareholder agreements, if any. Minutes of all required board
of directors meetings and shareholders meetings have been prepared and
approved, and are included in TMAI's minute books. Except for filings
required as a result of or in connection with the transactions contemplated
herein, all required filings with the agencies of the Province of Quebec or
Canada have been made, or will by the date of closing have been made, and
any necessary government or regulatory approvals have been obtained or will
by the date of closing have been obtained.
3.3.5 EMPLOYEES. TMAI employs, as of the date of close, only
those individuals listed on the attached Exhibit 3.3.5. Any written
employment agreement has been listed on Exhibit 3.3.2.
4. OTHER MATTERS.
4.1 NON-WAIVER. A waiver of one or more breaches of any clause of this
agreement shall not act to waive any other breach, whether of the same or
different clauses.
4.2 ASSIGNMENT. This agreement may not be assigned without the express
written consent of each party, which consent will not be unreasonably withheld.
4.3 GOVERNING LAW, JURISDICTION. This agreement is governed by the laws
of the Province of Quebec. Any action brought between the parties may be
brought only in the provincial or federal courts located in Montreal, Quebec,
and in no other place unless the parties expressly agree in writing to waive
this requirement. Each party consents to jurisdiction in that location. Each
party consents to service of process through the method prescribed for notice in
this agreement.
4.4 ATTORNEYS' FEES. The prevailing party in any suit, action,
arbitration, or appeal filed or held concerning this agreement shall be entitled
to reasonable attorneys' fees.
4.5 LANGUAGE. The parties hereto confirm that it is their wish that this
agreement as well as any other documents relating hereto, including
communications, be drawn up in English. Les parties aux presentes confirment
leur volonte que cette convention de meme que tous les documents, y compris les
avis, s'y rattachant soient rediges en anglais.
Page 4 -- Letter of Agreement
4.6 NOTICE. Any notice, request, instruction or other document to be
given hereunder by any party hereto shall be in writing and shall be delivered
personally or sent by registered or certified mail, postage prepaid; at the
following addresses:
If to TMAI Group: c/o Antonio Martins
405 Louise Lamy
Dorval, Quebec
Canada H9S 5V7
with a copy to: Claude Desy
Martineau Walker
Stock Exchange Tower
Suite 3400, P.O. Box 242
800 Place-Victoria
Montreal, Quebec
Canada H4Z 1E9
If to Claremont: Paul G. Mardesich
Vice President
Claremont Technology Group, Inc.
1600 N.W. Compton Drive
Beaverton, OR 97006
with copies to: William C. Campbell, Esq.
Ater Wynne Hewitt Dodson & Skerritt
Portland, OR 97201
or such other addresses as either party may designate by written notice to
the other.
4.7 INTEGRATION. This agreement, including the Exhibits attached hereto,
is the complete agreement with respect to the subject matter hereof between the
parties as of its date, and supersedes all prior agreements, written or oral.
It may be modified only in writing signed by the original parties hereto, or by
their successors or assigns.
Claremont Technology Group, Inc. TMAI Group:
By:
-------------------------------- ---------------------------------------
Antonio Martins
Print:
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Anna Marra
Title:
----------------------------- ---------------------------------------
Claude Gareau
Date:
----------------------------- ---------------------------------------
Ronald Bastien
Page 5 -- Letter of Agreement
9014-2191 Quebec Inc. (Claremont Canada) Tony Martins & Associes, Inc.
By: By:
-------------------------------- ------------------------------------
Print: Print:
----------------------------- ---------------------------------
Title: Title:
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EXHIBIT LIST:
2.1: Definition of Technology
3.3: Disclosure Schedule (Exceptions to Closing Warranties and
Representations.)
3.3.1: 12/31/94 TMAI financials.
3.3.2: Material Contracts.
3.3.5: List of Employees.
Page 6 -- Letter of Agreement
Exhibit 2.1
TECHNOLOGY
1. Custom enhancements to Sterling Software's "Answer Architect" CASE tool to
support preparation of unique "Value Software" charts and diagrams.
2. "Organizational Impact Assessment" document/template (Microsoft Word).
3. Technical Specifications for the construction of "Standard Parts" (DMOs,
Engines, Presentation Objects, and Interpreters).
4. Training materials for courses in:
- Project Planning
- Project Tracking
- Software Engineering:
- Concepting
- Concepting Workshop
- Software Manufacturing:
- Classes of Objects
- Operational Interface Design
- Physical Object Networks
- Object Coding, Testing and Subassembly
- Final Assembly, Integration Testing, and User Acceptance Testing.
5. Any other knowhow and intellectual property possessed by TMAI, Tony Martins
or any member of the TMAI Group concerning or illustrating the "Value Software"
methodology or its application.
Page 7 -- Letter of Agreement
Exhibit 3.3
Disclosure Schedule
(Exceptions to Representations and
Warranties Contained in Section 3.3)
None
Page 8 -- Letter of Agreement
Exhibit 3.3.1
December 31, 1994 Financials
Page 9 -- Letter of Agreement
Exhibit 3.3.2
Material Contracts
1. Software Development Services Agreement dated July 1, 1994 (the
"Development Services Agreement") between Software Design Associates
Limited and Tony Martins & Assoc., Inc.
2. Schedule 2 to the Development Services Agreement dated December 1, 1994.
3. Commercial Lending Architectural Design Proposal Presented to Bank of
Boston by Tony Martins & Assoc., Inc. dated January 3, 1995. (This
proposal has not been accepted by Bank of Boston.)
4. Letter of Offer of Employment to Cindy Bouchard
5. Letter of Offer of Employment to Andre Champagne
6. Letter of Offer of Employment to Dominic Polletta
7. Letter of Offer of Employment to Ghislain Preseau
Page 10 -- Letter of Agreement
Exhibit 3.3.5
List of Employees
1. Tony Martins
2. Anna Marra
3. Claude Gareau
4. Ronald Bastien
5. Cindy Bouchard
6. Andre Champagne
7. Dominic Polletta
8. Ghislain Preseau
Page 11 -- Letter of Agreement