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EXHIBIT 2.1
ACQUISITION AND EXCHANGE AGREEMENT
DATED AS OF AUGUST 15, 1996
BY AND AMONG
JDA SOFTWARE GROUP, INC.
AND
THE SHAREHOLDERS OF
JDA SOFTWARE SERVICES LTD.
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TABLE OF CONTENTS
1. Definitions....................................................... 1
1.1 "Acquisition"............................................ 1
1.2 "Acquisition Consideration".............................. 1
1.3 "Affiliate".............................................. 1
1.4 "Business Day"........................................... 1
1.5 "Buyer Common Stock"..................................... 1
1.6 "Buyer Schedule of Exceptions"........................... 2
1.7 "Closing" and "Closing Date"............................. 2
1.8 "Closing Holdback"....................................... 2
1.9 "Closing Time" .......................................... 2
1.10 "Commission"............................................. 2
1.11 "Confidential Information"............................... 2
1.12 "Escrow Agent"........................................... 2
1.13 "Escrow Agreement" ...................................... 2
1.14 "JDA Canada"............................................. 2
1.15 "JDA Canada Schedule of Exceptions"...................... 2
1.16 "JDA Canada Products".................................... 2
1.17 "JDA Canada Stock"....................................... 2
1.18 "Exchange Act"........................................... 3
1.19 "Restricted Period"...................................... 3
1.20 "Securities"............................................. 3
1.21 "Securities Act"......................................... 3
1.22 "Transaction Documents".................................. 3
2. Acquisition and Exchange.......................................... 3
2.1 Acquisition and Aggregate Purchase Price................. 3
2.2 Exchange Ratio........................................... 3
2.3 The Closing.............................................. 3
2.4 Specific Performance. .................................. 4
2.5 Closing Holdback. ....................................... 4
3. Representations and Warranties of Sellers......................... 4
3.2 Capitalization........................................... 4
3.3 Power, Authority and Validity............................ 5
3.4 Financial Statements..................................... 5
3.5 Tax Matters.............................................. 6
3.6 Absence of Certain Changes or Events..................... 7
3.7 Title and Related Matters................................ 8
3.8 Patents, Trademarks, etc................................. 9
3.9 Bank Accounts............................................ 9
3.10 Contracts................................................ 9
3.11 Orders, Commitments and Returns.......................... 11
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3.12 Compliance With Other Instruments and Laws............... 11
3.13 Labor Difficulties; No Discrimination.................... 11
3.14 Trade Regulation......................................... 12
3.15 Insider Transactions..................................... 13
3.16 Employees, Independent Contractors and Consultants....... 13
3.17 Insurance................................................ 13
3.18 Litigation............................................... 13
3.19 Governmental Authorizations and Regulations.............. 13
3.20 Subsidiaries............................................. 13
3.21 Compliance with Environmental Requirements............... 13
3.22 Corporate Documents...................................... 14
3.23 No Brokers............................................... 14
3.24 Regulation S............................................. 14
3.25 Employee Confidentiality Agreements...................... 16
4. Representations and Warranties of Buyer........................... 16
4.1 Organization and Good Standing........................... 16
4.2 SEC Documents............................................ 16
4.3 Power, Authorization and Validity........................ 17
4.4 No Material Adverse Changes.............................. 17
4.5 Buyer Common Stock....................................... 17
5. Buyer's Conditions to Closing..................................... 18
5.1 Representations and Warranties Correct................... 18
5.2 Board Approval........................................... 18
5.3 Covenants Not To Compete................................. 18
5.4 Closing.................................................. 18
5.5 Dividends and Bonuses.................................... 18
5.6 Opinion.................................................. 18
5.7 Canadian Law............................................. 18
5.8 Due Diligence............................................ 18
5.9 Securities Laws.......................................... 18
5.10 Covenants................................................ 18
5.11 Access to Information.................................... 18
6. Sellers' Conditions to Closing.................................... 19
6.1 Representations and Warranties Correct................... 19
6.2 Closing.................................................. 19
6.3 Securities Laws.......................................... 19
6.4 Covenants. ............................................. 19
7. Mutual Covenants.................................................. 19
7.1 Confidentiality.......................................... 19
7.2 No Public Announcement................................... 20
7.3 Further Assurances....................................... 20
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8. Agreement to Indemnify............................................ 20
8.1 Sellers' Indemnity....................................... 20
8.2 Procedures Regarding Indemnity Party Claims.............. 21
8.3 Limitation on Claims..................................... 22
8.4 Closing Holdback. ....................................... 22
8.5 Limitation of Remedies. ................................. 23
9. Covenant of Sellers............................................... 23
10. Miscellaneous..................................................... 24
10.1 Governing Law............................................ 24
10.2 Legend. ................................................ 24
10.3 Binding upon Successors.................................. 24
10.4 Severability............................................. 25
10.5 Entire Agreement......................................... 25
10.6 Counterparts............................................. 25
10.7 Expenses................................................. 25
10.8 Amendment and Waivers.................................... 25
10.9 Survival of Agreements................................... 25
10.10 No Waiver................................................ 26
10.11 Notices.................................................. 26
10.12 Time..................................................... 26
10.13 Construction of Agreement................................ 26
10.14 No Joint Venture......................................... 26
10.15 Pronouns................................................. 27
10.16 Absence of Third Party Beneficiary Rights................ 27
EXHIBIT A
LIST OF SELLERS............................................................ 30
EXHIBIT B
JDA CANADA SCHEDULE OF EXCEPTIONS
EXHIBIT C
BUYER SCHEDULE OF EXCEPTIONS
EXHIBIT D
CONSULTING AGREEMENT
EXHIBIT E
ESCROW AGREEMENT
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ACQUISITION AND EXCHANGE AGREEMENT
THIS ACQUISITION AND EXCHANGE AGREEMENT (the "Agreement") is entered
into as of August 15, 1996, by and among JDA Software Group, Inc., a Delaware
corporation ("Buyer"), and each of the persons whose names are set out in
EXHIBIT A attached hereto (individually a "Shareholder" or collectively
"Shareholders", and also referred to as "Seller" or "Sellers") being the holders
of all the issued and outstanding stock of JDA Software Services Ltd., a
corporation amalgamated under the laws of Canada ("JDA Canada" or "Company").
RECITALS
A. The Shareholders are the owners of all of the outstanding equity
securities of JDA Canada (the "JDA Canada Stock").
B. Buyer wishes to acquire JDA Canada (the "Acquisition") by acquiring
all of the JDA Canada Stock in exchange for Common Stock of Buyer (the "Buyer
Common Stock") pursuant to the terms of this Agreement, and each of the
Shareholders wishes to sell all the JDA Canada Stock he or she will hold at
Closing to Buyer pursuant to the terms of this Agreement.
C. Following the Acquisition, JDA Canada will be a wholly owned
subsidiary of Buyer and each of the Shareholders will be a shareholder of Buyer.
D. The parties hereto desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
consummation of the Acquisition.
AGREEMENT
NOW, THEREFORE, in and for the consideration and mutual covenants set
forth herein, the parties agree as follows:
1. Definitions.
1.1 "Acquisition" shall have the meaning set forth in the
Recitals.
1.2 "Acquisition Consideration" shall have the meaning set
forth in Section 2.1.
1.3 "Affiliate" shall have the meaning set forth in the rules
and regulations promulgated by the Commission pursuant to the Securities Act.
1.4 "Business Day" means a day (other than a Saturday or
Sunday) on which banks are open for business in both the Province of Alberta,
Canada and the State of Arizona, U.S.A.
1.5 "Buyer Common Stock" shall have the meaning set forth in
the Recitals.
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1.6 "Buyer Schedule of Exceptions" means the schedule of
exceptions referred to in Section (Representations and Warranties of Buyer).
1.7 "Closing" and "Closing Date" shall have the meanings set
forth in Section ("The Closing").
1.8 "Closing Holdback" shall mean an aggregate of 14,393
shares of Buyer Common Stock, which number of shares shall be equal to ten
percent (10%) of the Acquisition Consideration and which shall be deposited with
the Escrow Agent by Buyer on the Closing Date pursuant to Section 2.5 and
administered and disbursed by the Escrow Agent as provided in the Escrow
Agreement.
1.9 "Closing Time" shall have the meaning set forth in Section
("The Closing").
1.10 "Commission" shall mean the United States Securities and
Exchange Commission.
1.11 "Confidential Information" shall mean any information not
in the public domain and relating to JDA Canada or Buyer or to a party to this
Agreement ("Disclosing Party") and which is disclosed to another party to this
Agreement ("Receiving Party") and shall include, but not be limited to, trade
secrets, know-how, inventions, techniques, processes, algorithms, software
programs, schematics, designs, contracts, customer lists, financial information,
sales and marketing plans and business information.
1.12 "Escrow Agent" shall mean Chicago Title Company, a
California corporation.
1.13 "Escrow Agreement" shall mean the Escrow Agreement by and
among the Escrow Agent, Sellers and Buyer in the form attached hereto as Exhibit
E.
1.14 "JDA Canada" shall mean JDA Software Services Ltd., a
corporation amalgamated under the laws of the Canada, whose registered office is
at 4500, 855-2nd Street S.W., Calgary, Alberta, Canada T2P 4K7.
1.15 "JDA Canada Schedule of Exceptions" means the schedule of
exceptions referred to in Section ("Representations and Warranties of Sellers").
1.16 "JDA Canada Products" shall mean all versions and
implementations of any product which has been or is being manufactured, sold,
distributed or marketed by JDA Canada or currently is under development, and all
patents and patent applications, if any, design rights, trade secrets,
copyrights, trademarks, trade names and other proprietary rights related
thereto.
1.17 "JDA Canada Stock" shall have the meaning set forth in
the Recitals.
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1.18 "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as amended.
1.19 "Restricted Period" shall mean that period of time
beginning upon the Closing Date and ending forty (40) days following the Closing
Date.
1.20 "Securities" shall mean the JDA Canada Stock comprising
all issued and outstanding Class A Common Shares, Class B Common Shares, Class C
Common Shares and Class A Preferred Shares of JDA Canada.
1.21 "Securities Act" shall mean the United States Securities
Act of 1933, as amended.
1.22 "Transaction Documents" shall mean all documents or
agreements required to be delivered by any party hereunder.
2. Acquisition and Exchange.
2.1 Acquisition and Aggregate Purchase Price.
(a) Upon the terms and subject to the conditions of
this Agreement, at the Closing each of the Shareholders shall sell, transfer and
assign, as a beneficial owner or otherwise, as set forth in EXHIBIT A attached
hereto, the number and class of shares of JDA Canada Stock set out opposite each
Shareholder's name in columns (C), (D), (E) and (F) of EXHIBIT A (which number
of shares shall be all of the securities of JDA Canada beneficially owned by
each such Shareholder).
(b) Buyer shall not be obligated to complete the
purchase of any of the JDA Canada Stock hereunder unless the sale of all of the
JDA Canada Stock is completed simultaneously.
(c) The JDA Canada Stock shall be sold with the
benefit of all rights which are attached thereto at the Closing Time.
(d) The aggregate consideration for the purchase of
the JDA Canada Stock by Buyer shall consist of 143,926 shares of Buyer Common
Stock which shall, subject to the Closing Holdback described in Section 2.5
below, be issued and paid to the Sellers at the Closing. (The aggregate number
of shares of Buyer Common Stock issued or issuable to the Shareholders pursuant
hereto shall also be referred to as the "Acquisition Consideration").
2.2 Exchange Ratio. Upon the Closing, Buyer shall deliver to
each Shareholder such number of fully paid and nonassessable shares of Buyer
Common Stock as are set forth in column (G) of Exhibit A opposite each such
Shareholder's respective name.
2.3 The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Bennett
Jones Verchere, 4500 Bankers Hill East, 855 2nd Street S.W., Calgary, Alberta
T2P 4K7 at 1:30 p.m. (Calgary time)
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on August 15, 1996, or such other time and place upon which the Buyer and
Sellers shall agree. The date of the Closing is hereinafter referred to as the
"Closing Date."
2.4 Specific Performance. In the event that any party fails to
comply in all respects with its obligations under this Agreement, such party
hereby agrees and acknowledges that indemnification and damages will not be an
adequate remedy for any such breach and, accordingly, in the event that there is
any breach by a party of its obligations under this Agreement, any other party
shall be entitled to apply to the appropriate courts for an order for specific
performance and the breaching party shall not be entitled to and shall not
oppose any such action in such circumstances.
2.5 Closing Holdback. On the Closing Date, Buyer shall deliver
the Closing Holdback to the Escrow Agent, as escrow agent for the benefit of
Sellers and Buyer. The Closing Holdback shall be administered and disbursed by
the Escrow Agent as provided in the Escrow Agreement.
3. Representations and Warranties of Sellers. Except as otherwise set
forth in the schedule of exceptions ("JDA Canada Schedule of Exceptions"),
attached hereto as EXHIBIT B, Douglas G. Marlin, Elaine Marlin and the Marlin
Family Trust (collectively, the "Marlin Group") jointly and severally represent
and warrant, and the other Sellers severally represent and warrant, to Buyer at
the date hereof as set forth below (the "Warranties"). No fact or circumstance
disclosed to Buyer shall constitute an exception to these representations and
warranties unless such fact or circumstance is fairly disclosed in the JDA
Canada Schedule of Exceptions. In this Section , whenever the term "enforceable
in accordance with its terms" or like expression is used, it is understood that
excepted therefrom are any limitations on enforceability under applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting the enforcement of creditor's rights and under general
principles of equity (regardless or whether enforcement is sought in a
proceeding in equity or in law).
3.1 Organization. JDA Canada is a corporation duly amalgamated
under the laws of Canada and has the right, power and authority to carry on its
business as it is now being conducted. The JDA Canada Schedule of Exceptions
contains a true and complete listing of the locations of all sales offices,
manufacturing facilities, and any other offices or facilities owned or occupied
by JDA Canada.
3.2 Capitalization.
(a) The authorized capital of JDA Canada consists of:
an unlimited number of Class A Common Shares, one thousand (1,000) of which are
issued and outstanding; one (1) Class B Common Share, which is issued and
outstanding; one (1) Class C Common Share, which is issued and outstanding; an
unlimited number of Class A Preferred Shares, one hundred and seventy thousand
(170,000) of which are issued and outstanding; and fifteen thousand (15,000)
Preferred Shares with a non-cumulative dividend of 10%, none of which are issued
and outstanding.
(b) All of the outstanding JDA Canada Stock has been
duly authorized and validly issued, is fully paid and nonassessable, and when
sold by JDA Canada was issued
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in compliance with all applicable laws and regulations concerning the issuance
of securities. None of the outstanding shares was issued in consideration in
whole or in part for any contribution, transfer or assignment of the JDA Canada
Products or any proprietary rights incorporated therein or otherwise related
thereto. JDA Canada does not have any other shares of its capital stock issued
or outstanding and there are no other options, warrants, conversion privileges
or other rights presently outstanding to purchase or otherwise acquire any
authorized but unissued shares of capital stock or other securities of JDA
Canada.
3.3 Power, Authority and Validity.
(a) None of the Sellers nor JDA Canada is subject to
or obligated under any charter, article of incorporation, bylaw or contract
provision or any license, franchise or permit, or subject to any order or
decree, which would be breached or violated by or in conflict with the execution
and carrying out of this Agreement and the transactions contemplated hereunder
and under the Transaction Documents. No consent of any person who is a party to
a contract, nor consent of any governmental authority, is required to be
obtained on the part of JDA Canada or any Seller to permit the transactions
contemplated herein and continue the business activities of JDA Canada, except
for those consents already obtained by JDA Canada.
(b) Each Seller is, and will at Closing be, the
lawful owner and registered holder of the number of shares of JDA Canada Stock
listed opposite the name of such Seller in EXHIBIT A, free and clear of all
liens, encumbrances, restrictions and claims of every kind. Each Seller has, and
will at Closing have, full and legal right, power, authority and capacity to
sell, assign, transfer and convey the shares of JDA Canada Stock so owned by the
Seller pursuant to this Agreement and the delivery to Buyer of such JDA Canada
Stock held by the Seller pursuant to the provisions of this Agreement will
transfer to Buyer valid title thereto, free and clear of all liens,
encumbrances, restrictions and claims of every kind.
(c) Each Seller has full and legal right, power,
authority and capacity to execute and deliver this Agreement and the Transaction
Documents (to the extent any such Seller is required by the terms and conditions
hereof to execute and deliver any such Transaction Document) and to carry out
the sale of the JDA Canada Stock held by the Seller and carry out the other
transactions contemplated hereby without the need to obtain the consent or
approval of any other party, except for those consents and approvals already
obtained by each Seller. Following the execution of this Agreement, this
Agreement and each of the Transaction Documents (to the extent any such Seller
is required by the terms and conditions hereof to execute and deliver any such
Transaction Document) will constitute the legal, valid and binding obligations
of each Seller, enforceable against such Seller in accordance with its terms.
(d) the Sellers own one hundred percent (100%) of the
outstanding stock of JDA Canada and, pursuant to the Acquisition, Sellers shall
convey valid title to such stock to Buyer free and clear of any liens, claims or
encumbrances.
3.4 Financial Statements.
(a) The Company has delivered to Buyer at or prior to
the Closing the Company's audited financial statements for the fiscal year ended
November 30, 1995 ("JDA
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Canada Reviewed Financials") and unaudited financial statements for the fiscal
year ended November 30, 1994 and the period ended June 30, 1996 ("JDA Canada
Unaudited Financials") (collectively, the "Financial Statements"). The Financial
Statements are complete and correct in all material respects and have been
prepared in accordance with the then applicable law and standards, principles
and practices (Canadian GAAP) applied on a basis consistent with prior
accounting periods except as noted therein. The Financial Statements present
fairly (subject, in the case of the unaudited financial statements for the
period ended June 30, 1996, to normal year-end audit adjustments) the financial
condition and operating results of the Company as of the dates and during the
periods indicated therein. Except to the extent reflected or reserved against or
disclosed in the Financial Statements, the Company as of the date of the
Financial Statements had no liabilities or obligations of any kind, whether
accrued, absolute, contingent or otherwise, which, in accordance with Canadian
GAAP, should have been reflected or reserved against or disclosed.
(b) No part of any debt or other amount shown or
reflected in the JDA Canada Financial Statements as being due to JDA Canada has
been written off, written down, waived or released for an amount less than the
book value thereof for the purposes of the JDA Canada Financial Statements,
except as reflected in the JDA Canada Financial Statements.
(c) Since June 30, 1996, JDA Canada's business has
not been materially affected by the loss of any customer, or of any source of
supply or by the cancellation or loss of any order or contract nor, so far as
the Sellers are aware, are there any circumstances likely to lead thereto.
3.5 Tax Matters.
(a) JDA Canada has filed all tax returns required to
be filed by it. All such returns were prepared and filed in the manner required
by applicable law. All income, corporation or other taxes, as well as any Canada
Pension Plan or Unemployment Insurance contributions or premiums ("Taxation"),
due from JDA Canada have been paid. There are no pending assessments, or claims
for additional taxes that have not been paid. The provisions for Taxation, if
any, reflected on the JDA Canada Financial Statements, so far as Sellers are
aware, are adequate and there are no tax liens on any property or assets of JDA
Canada. Since incorporation of the Company there have been no audits or
examinations of any tax returns by any applicable governmental agency which are
ongoing. No state of facts exists which would constitute grounds for the
assessment of any penalty or of any further Taxation liability beyond that shown
on the tax returns that have been filed, except as indicated in the Financial
Statements. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return for any period.
(b) All taxes which JDA Canada has been required to
collect or withhold have been duly withheld or collected and, to the extent
required, have been paid to the proper taxing authority.
(c) JDA Canada is not a party to any tax-sharing
agreement or similar arrangement with any other party.
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(d) JDA Canada is not currently under any
contractual, or legal obligation to pay any tax obligations of, or with respect
to any transaction relating to, any other person or to indemnify any other
person with respect to any tax.
3.6 Absence of Certain Changes or Events. Since June 30, 1996,
JDA Canada has not:
(a) suffered any material adverse change in its
financial condition or in the operations of its business or suffered any
inadequacy of working capital;
(b) suffered any damage, destruction or loss, whether
covered by insurance or not, materially and adversely affecting its properties
or business;
(c) granted or agreed to make any increase in the
compensation or benefits payable or to become payable by JDA Canada to its
officers or employees, except those occurring in the ordinary course of
business;
(d) declared, or paid any dividend or made any other
distribution on or in respect of its shares or redeemed or purchased any of such
shares;
(e) issued any shares or any warrants, rights,
options or entered into any commitment relating to the shares of JDA Canada;
(f) made any change in the accounting methods or
practices it follows, whether for general financial or tax purposes, or any
change in depreciation or amortization policies or rates adopted therein;
(g) sold, leased or otherwise disposed of any real
property or any material machinery, equipment or other operating property other
than in the ordinary course of business;
(h) sold, assigned, transferred, licensed or
otherwise disposed of any patent, trademark, trade name, brand name, copyright,
design right (or pending application for any patent, trademark, design right or
copyright) invention, work of authorship, process, know-how, formula or trade
secret or interest thereunder or other intangible asset except in the ordinary
course of its business;
(i) engaged in any material activity or entered into
any material commitment or transaction (including without limitation any
borrowing or capital expenditure) other than in the ordinary course of business;
(j) incurred any material liabilities except in the
ordinary course of business which would be required to be disclosed or
reflected, by way of reserves or otherwise, in financial statements prepared in
accordance with Canadian GAAP;
(k) charged or otherwise encumbered any of its
property or assets;
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(l) made any capital expenditure or commitment for
additions to property, plant or equipment individually in excess of Twenty
Thousand Dollars ($20,000) (Cdn), or, in the aggregate, in excess of Fifty
Thousand Dollars ($50,000) (Cdn);
(m) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets to, or entered into any agreement
or arrangement with, any of its Affiliates, officers, directors or shareholder
or any Affiliate or associate of any of the foregoing, except in the ordinary
course of business, salaries, commissions, and expense reimbursements; provided,
however that no such expense reimbursement exceeded Two Thousand Dollars
($2,000) (Cdn) in any individual case or, in the aggregate, Fifteen Thousand
Dollars ($15,000) (Cdn);
(n) agreed to take any action described in this
Section or outside of its ordinary course of business which so far as Sellers
are aware would constitute a breach of any of the Warranties;
(o) No order has been made nor has any resolution
been passed for the winding up of JDA Canada and nor is there outstanding any
petition for the administration or the winding up of JDA Canada or any
receivership of the whole or any part of the undertaking or assets of JDA
Canada. There are no circumstances which would entitle any person to present a
petition for the administration or the winding up of JDA Canada or to appoint a
receiver or administrator of the whole or any part of its undertaking or assets.
JDA Canada is not insolvent and has not entered into any scheme of arrangement
or voluntary or other arrangement with any of its creditors.
3.7 Title and Related Matters.
(a) Other than in relation to leased assets each
material asset included in the JDA Canada Unaudited Financials and each material
asset acquired by the Company since that date:
(i) is legally and beneficially owned by JDA
Canada free from any charges or encumbrances; and
(ii) is, where capable of possession, in the
possession or under the control of JDA Canada.
(b) All material real or personal property leases to
which JDA Canada is a party are valid, binding, enforceable and effective in
accordance with their respective terms. So far as Sellers are aware, there is
not under any of such leases any existing material default of JDA Canada, any
material default of the other parties to such leases or any other event of
default or event which, with notice or lapse of time or both, would constitute a
material default.
(c) The JDA Canada Schedule of Exceptions lists all
real property leased or owned by JDA Canada. True and correct copies of all of
JDA Canada's leases have been provided to Buyer or its representatives.
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3.8 Patents, Trademarks, etc. The JDA Canada Schedule of
Exceptions correctly sets forth a list and summary description of all patents,
copyright registrations and applications, trademark registrations and
applications, trade names or commercial names, service marks or service names,
computer software programs, inventions, designs, know-how and other technical
data presently owned, licensed, possessed, used or held by JDA Canada. All of
such patents, copyrights, trademarks, trade names, service marks and service
names are valid and in full force and effect, and no claim has been made that
the conduct of the business of JDA Canada infringes any patent, patent right,
copyright, computer software right, trademark, trade secret, trade right, trade
name or commercial name, service mark or service name, registered or
unregistered. Copyright notices have been placed on all copies of JDA Canada's
software programs which have been distributed to the public. JDA Canada has not
agreed to indemnify any person for or against any infringement of any patent,
trademark, computer program, or copyright.
3.9 Bank Accounts. The JDA Canada Schedule of Exceptions sets
forth the names and locations of all banks, trusts, companies, savings and loan
associations, and other financial institutions at which JDA Canada maintains
accounts of any nature and the names of all persons authorized to draw thereon
or make withdrawals therefrom. No overdraft or other financial facilities
available to or drawn by JDA Canada are or will at the Closing be secured by, or
dependent on, any guarantee or security provided by any Seller or any other
third party, nor is there anything known to the Sellers (not having made any
specific enquiry) which would suggest that any financial facility available to
JDA Canada is likely to be withdrawn or its terms adversely affected, whether as
a result of the Closing of this Agreement or otherwise.
3.10 Contracts.
(a) JDA Canada has no agreements, contracts or
commitments that provide for the sale, licensing or distribution by JDA Canada
of any of its products, inventions, technology, know-how, trademarks or trade
names except in the ordinary course of its business.
(b) JDA Canada has no agreements, contracts or
commitments that call for fixed and/or contingent payments or expenditures by or
to JDA Canada of more than $10,000 (Cdn). True and correct copies of each
document or instrument set forth in the JDA Canada Schedule of Exceptions
pursuant to this Section 3.10(b) have been made available to Buyer or its
representatives.
(c) JDA Canada has no purchase agreement, contract or
commitment that calls for fixed and/or contingent payments by JDA Canada that
are in excess of the normal, ordinary and usual requirements of JDA Canada's
business.
(d) There is no outstanding sales contract,
commitment or proposal (including, without limitation, porting and development
projects) of JDA Canada that is currently expected to result in any material
loss to JDA Canada (before allocation of overhead and administrative costs) upon
completion or performance thereof.
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(e) Subject to compliance with applicable statutory
provisions or other legislation, JDA Canada has no outstanding agreements,
contracts or commitments with officers, employees, agents, consultants,
advisors, salesmen, sales representatives, distributors, dealers or other
contractors that are not terminable by JDA Canada at its option on notice of not
longer than thirty (30) days and without liability, penalty or premium.
(f) JDA Canada is not a party to any collective
bargaining or other agreements, contracts, arrangements or commitments with any
trade union or employees' organization.
(g) JDA Canada is not restricted by agreement from
competing with any person or from carrying on its business anywhere in the
world, except for any outstanding agreements between JDA Canada and Buyer.
(h) JDA Canada is under no liability or obligation,
and no such outstanding claim has been threatened or made, with respect to the
return to JDA Canada of inventory or merchandise in the possession of
wholesalers, distributors, retailers, or other customers, except such
liabilities, obligations and claims as, in the aggregate, do not exceed $5,000
(Cdn).
(i) JDA Canada has not guaranteed any obligations of
other persons or made any agreements to acquire or guarantee any obligations of
other persons.
(j) JDA Canada has no outstanding loan or advance to
any person; nor is it party to any line of credit, standby financing, revolving
credit or other similar financing arrangement of any sort which would permit the
borrowing by JDA Canada of any sum not reflected in the JDA Canada Financial
Statements.
(k) All material contracts, agreements and
instruments to which JDA Canada is a party are valid, binding, in full force and
effect and enforceable by JDA Canada in accordance with their respective terms.
No such material contract, agreement or instrument contains any material
liquidated-damages, penalty or similar provision. No party to any such material
contract, agreement or instrument has communicated to JDA Canada its intention
to cancel, withdraw, modify or amend such contract, agreement or arrangement.
(l) The JDA Canada Schedule of Exceptions lists all
material agreements pursuant to which JDA Canada has agreed to manufacture for
or supply to any third party any JDA Canada Products or components thereto. True
and correct copies of each document or instrument listed on the JDA Canada
Schedule of Exceptions pursuant to this Section have been attached thereto or
have been provided to Buyer or its representatives. The JDA Canada Schedule of
Exceptions also lists each person who manufactures for or supplies to JDA Canada
any material product or component included in the JDA Canada Products or is the
sole source for any product or component included in the JDA Canada Products.
(m) JDA Canada is not in default under or in breach
or violation of, nor, as far as Sellers are aware, is there any valid basis for
any claim of default by JDA Canada under, or such breach or violation by JDA
Canada of, any contract, commitment or restriction
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to which JDA Canada is a party in all such cases where such defaults, breaches,
or violations would, in the aggregate, have a material adverse effect on the
operations, assets, financial condition or prospects of JDA Canada. So far as
Sellers are aware, no other party is in default under or in breach or violation
of, nor is there any valid basis for any claim of default by any other party
under or any breach or violation by any other party of, any material contract,
commitment, or restriction to which JDA Canada is bound in all such cases where
such defaults, breaches, or violations would, in the aggregate, have a material
adverse effect on the operations, assets, financial condition or prospects of
JDA Canada.
(n) All agreements, contracts and commitments (the
"Material Contracts") listed or described in the JDA Canada Schedule of
Exceptions pursuant to this Section do not contain provisions which would
require consent of third parties to the Acquisition or which would give a
contractual or legal right to alter the current terms thereof as a result of the
Acquisition.
(o) JDA Canada has no agreements, contracts or
commitments that restrict its ability to sell, license or market its products,
or to otherwise carry on its business as such business is now currently
conducted, in any way, including, but not limited to, with respect to specific
industries, geographic areas, or customers or potential customers.
3.11 Orders, Commitments and Returns. All accepted and
unfilled orders entered into by JDA Canada for the sale or license of any JDA
Canada Products, and all agreements, contracts, or commitments for the purchase
of supplies by JDA Canada, were made in the ordinary course of business. No
outstanding purchase or outstanding lease commitment of JDA Canada is in excess
of the normal, ordinary and usual requirements of its business.
3.12 Compliance With Other Instruments and Laws. JDA Canada is
(a) not in violation of any provisions of its Certificate and Articles of
Amalgamation or its Bylaws as currently in effect or in effect at the Closing
and (b) so far as Sellers are aware, is in compliance with all applicable laws
and regulations in all material respects (meaning, for the purposes of this
paragraph 3.12, there has been no non-compliance the consequences of which would
have a material adverse effect on the operations, assets or financial condition
of JDA Canada). So far as Sellers are aware, neither JDA Canada nor any of its
employees has directly or indirectly paid or delivered any fee, commission or
other sum of money or item of property, however characterized, to any finder,
agent, government official or other party in the United States, Canada, or any
other country, that was or is in violation of any federal, state, or local
statute or law or of any statute or law of any other country having
jurisdiction. JDA Canada has not participated directly or indirectly in any
boycotts or other similar practices affecting any of its customers. JDA Canada
has complied at all times with any and all applicable laws and regulations
including, without limitation, those relating to the importation or exportation
of its products.
3.13 Labor Difficulties; No Discrimination.
(a) So far as Sellers are aware, JDA Canada is not in
material violation of any applicable laws respecting employment and employment
practices, terms and conditions of employment, and wages and hours.
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(b) There is no strike, labor dispute, slowdown, or
stoppage actually pending or threatened against JDA Canada.
(c) JDA Canada has not experienced any labor disputes
or industrial action.
(d) There is, and since 1988 there has been no, claim
against JDA Canada based on actual or alleged race, age, sex, disability,
harassment or discrimination, or similar tortious conduct, nor, so far as
Sellers are aware, is there any basis for any such claim.
(e) There is no unfunded prior service cost with
respect to any bonus, deferred compensation, pension, profit-sharing,
retirement, stock purchase, stock option, or other employee benefit or fringe
benefit plans, whether formal or informal, maintained by JDA Canada.
(f) No circumstances have arisen under which JDA
Canada is likely to be required to pay damages for wrongful dismissal, to make
any statutory redundancy payment or any payment in respect of unfair dismissal,
to make any other payment or to reinstate or re-engage any former employees.
There are no pending or threatened claims of any type against JDA Canada by any
existing or former employees.
(g) The JDA Canada Schedule of Exceptions contains
details of:
(i) the total number of JDA Canada's
employees (including any such on maternity leave or absent because of disability
or other long-term leave of absence and who have or may have a right to return
to work with JDA Canada);
(ii) the name, date of start of employment,
period of continuous employment (if different), salary and other benefits of
each such employee; and
(iii) the terms of the contract of each
director, other officer and employee of JDA Canada.
(h) JDA Canada does not have and is not proposing to
introduce a share incentive, option, profit sharing, bonus or other incentive
scheme for or any unfunded obligations accruing for the benefit of any of its
directors, other officers or employees.
3.14 Trade Regulation. So far as Sellers are aware, all of the
prices charged by JDA Canada in connection with the marketing or sale of any
products or services have been in compliance with all applicable laws and
regulations. No claims have been communicated or threatened against JDA Canada
with respect to wrongful termination of any dealer, distributor or any other
marketing entity, discriminatory pricing, price fixing, unfair competition,
false advertising, or any other violation of any laws or regulations relating to
anti-competitive practices or unfair trade practices of any kind, and, so far as
Sellers are aware, there are no specific facts likely to provide any basis for
any such claim.
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3.15 Insider Transactions. No Affiliate of JDA Canada has any
interest in (i) any material equipment or other property, real or personal,
tangible or intangible, including, without limitation, any item of intellectual
property, used in connection with or pertaining to the business of JDA Canada,
or (ii) any creditor, supplier, customer, manufacturer, agent, representative,
or distributor of products of JDA Canada; provided, however, that no such
Affiliate or other person shall be deemed to have such an interest solely by
virtue of the ownership of less than 1% of the outstanding stock or debt
securities of any publicly-held company, the stock or debt securities of which
are traded on a recognized stock exchange or quoted on the National Association
of Securities Dealers Automated Quotation System.
3.16 Employees, Independent Contractors and Consultants. The
JDA Canada Schedule of Exceptions lists and describes all agreements concluded
with independent contractors or consultants to which JDA Canada is a party
relating to JDA Canada Products. True and correct copies of all such written
agreements have been provided to Buyer or its representatives.
3.17 Insurance. The JDA Canada Schedule of Exceptions contains
a list of the principal policies of fire, liability and other forms of insurance
held by JDA Canada. JDA Canada has complied with all recommendations and notices
made in respect of the maintenance of such policies. JDA Canada has not done
anything, either by way of action or inaction, that might invalidate such
policies in whole or in part.
3.18 Litigation. There are no existing suits, actions or
proceedings or, any pending or threatened against or affecting JDA Canada or
which questions or challenges the validity of this Agreement or the Transaction
Documents nor, to Sellers' knowledge, is there any basis for the foregoing.
There is no judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator
outstanding against JDA Canada.
3.19 Governmental Authorizations and Regulations. All
licenses, franchises, permits and other governmental authorizations held by JDA
Canada and material to its business are valid and sufficient for the business
presently carried on by JDA Canada.
3.20 Subsidiaries. JDA Canada currently has no subsidiaries.
JDA Canada currently does not own or control (directly or indirectly) any
capital stock, bonds or other securities of, and currently does not have any
proprietary interest in, any other corporation, general or limited partnership,
firm, association or business organization, and JDA Canada currently does not
control (directly or indirectly) the management or policies of any other
corporation, partnership, firm, association or business organization.
3.21 Compliance with Environmental Requirements. JDA Canada
has obtained all material permits, licenses and other authorizations which are
required to be obtained by it under applicable laws relating to pollution or
protection of the environment, including laws or provisions relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials, substances, or wastes into air,
surface water, groundwater, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic materials,
substances, or wastes. JDA Canada is in material compliance with all terms and
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conditions of such permits, licenses and authorizations. JDA Canada is not aware
of, nor has JDA Canada received notice of, any conditions, circumstances,
activities, practices, incidents, or actions which may form the basis of any
claim, action, suit, proceeding, hearing, or investigation of, by, against or
relating to JDA Canada, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
pollutant, contaminant, or hazardous or toxic substance, material or waste.
3.22 Corporate Documents. JDA Canada has furnished to Buyer
for its examination: (i) copies of its Certificate and Articles of Amalgamation
and its Bylaws; (ii) its Minute Book containing all records required to be set
forth of all proceedings, consents, actions, and meetings of the shareholders,
the board of directors and any committees thereof; (iii) all material permits,
orders, and consents issued by any regulatory agency with respect to JDA Canada,
or any securities of JDA Canada, and all applications for such permits, orders,
and consents; and (iv) the stock ledger of JDA Canada setting forth, inter alia,
all transfers of its shares since incorporation. All such books and registers
and other corporate records of JDA Canada are complete and accurate in all
material respects, and the signatures appearing on all documents contained
therein are the true signatures of the persons purporting to have signed the
same. All actions reflected in such books and records were duly and validly
taken in compliance with the laws of the applicable jurisdiction.
3.23 No Brokers. Neither JDA Canada nor any Shareholder is
obligated for the payment of fees, commissions or expenses of any broker or
finder in connection with the origin, negotiation or execution of this Agreement
or in connection with any transaction contemplated hereby or thereby.
3.24 Regulation S.
(a) The Buyer Common Stock will be acquired for each
Shareholder's own account, for investment and not with a view to, or for resale
in connection with, any distribution or public offering thereof.
(b) Each Shareholder is not a "U.S. Person" as that
term is defined in Rule 901 of Regulation S including but not limited to: (i) a
natural person resident in the United States (which term includes the United
States of America, its territories and possessions, any State of the United
States, and the District of Columbia); (ii) a partnership or corporation
organized or incorporated under the laws of the United States; (iii) the estate
of which any executor or administrator is a U.S. Person; or (iv) any trust of
which any trustee is a U.S. Person.
(c) Each Shareholder understands that the Buyer
Common Stock has not been registered under the Securities Act and is being
issued in reliance upon a "safe harbor" transaction from the registration and
prospectus delivery requirements of the Securities Act pursuant to Regulation S,
that Buyer has no present intention of registering the Buyer Common Stock, and
that each Shareholder must therefore bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from registration.
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(d) Each Shareholder has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Buyer Common Stock or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of
the Buyer Common Stock, (ii) any foreign exchange restrictions applicable to
such purchase, (iii) any governmental or other consents that may need to be
obtained and (iv) the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale, or transfer of the Buyer
Common Stock. Each Shareholder's subscription and payment for, and its continued
beneficial ownership of the Buyer Common Stock, will not violate any applicable
securities or other laws of its jurisdiction.
(e) Each Shareholder was outside of the United States
at the time the buy order for the Buyer Common Stock was originated and no offer
to purchase the Buyer Common Stock was made in the United States.
(f) All subsequent offers and sales of the Buyer
Common Stock will be made outside of the United States in compliance with
Regulation S, pursuant to registration of the Buyer Common Stock under the
Securities Act or pursuant to an exemption from such registration. In any event,
each Shareholder will not resell the Buyer Common Stock to U.S. Persons or
within the United States within the Restricted Period.
(g) During the negotiation of the transactions
contemplated herein, each Shareholder and its representatives (i) have been
offered access to all publicly available reports, proxy statements and other
information concerning Buyer filed by Buyer with the Securities and Exchange
Commission, (ii) have been afforded sufficient access to other information
concerning Buyer to which a reasonable investor would attach significance in
making investment decisions and (iii) have been afforded an opportunity to ask
questions, and receive answers from knowledgeable persons concerning Buyer's
business, operations, financial condition, assets, liabilities and other matters
to the extent relevant to a reasonable investor, in order to evaluate the merits
and risks of the prospective investment contemplated herein.
(h) Each Shareholder and its representatives have
been solely responsible for each Shareholder's own "due diligence" investigation
of Buyer and its management and business, for its own analysis of the merits and
risks of this investment, and for its own analysis of the fairness and
desirability of the terms of the investment. In taking any action or performing
any role relative to the arranging of the proposed investment, each Shareholder
has acted solely in its own interest.
(i) Each Shareholder has such knowledge and
experience in financial and business matters so that it is capable of evaluating
the risks and merits of purchasing the Buyer Common Stock and protecting its
interests therewith. Each Shareholder is able to bear the economic risk of the
purchase of the Buyer Common Stock pursuant to the terms of this Agreement,
including a complete loss of each Shareholder's investment in the Buyer Common
Stock.
(j) Each Shareholder has the full right, power and
authority to enter into and perform each Shareholder's obligations under this
Agreement, and this Agreement constitutes a valid and binding obligation of each
Shareholder enforceable in accordance with its terms
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except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to or affecting
enforcement of creditors rights and rules or laws concerning equitable remedies.
(k) No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of any Shareholder is required in connection with the valid execution and
delivery of this Agreement.
(l) Each Shareholder hereby acknowledges and agrees
that the offer and sale of the Buyer Common Stock is intended to comply with
Regulation S and that the representations, warranties and agreements it makes
herein will be relied by the Company in order to comply with Regulation S.
3.25 Employee Confidentiality Agreements. All current
employees and consultants of JDA Canada have executed JDA Canada's standard
Employee Confidentiality Agreement, a copy of which has been previously provided
to Buyer.
4. Representations and Warranties of Buyer. Except as otherwise set
forth in the schedule of exceptions ("Buyer Schedule of Exceptions") attached
hereto as EXHIBIT C, Buyer represents and warrants to Sellers at the date hereof
as set forth below. No fact or circumstance disclosed to the Sellers shall
constitute an exception to these representations and warranties unless such fact
or circumstance is fairly disclosed in the Buyer Schedule of Exceptions. In this
Section 4, whenever the term "enforceable in accordance with its terms" or like
expression is used, it is understood that excepted therefrom are any limitations
or enforceability under applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting the enforcement of
creditor's rights and under general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or in law).
4.1 Organization and Good Standing. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the right, power and authority to carry on its
business as now conducted.
4.2 SEC Documents. Buyer has furnished the Company and the
Shareholders with a correct and complete copy of each report, schedule, and
registration statement filed by Buyer with the Securities and Exchange
Commission (the "SEC") on or after January 1, 1996 (the "Buyer SEC Documents"),
which are all the documents (other than preliminary material) that Buyer was
required to file with the SEC on or after January 1, 1996. As of their
respective dates or, in the case of registration statements, their effective
date none of the Buyer SEC Documents (including all schedules thereto and
documents incorporated by reference therein) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Buyer SEC
Documents complied when filed in all material respects with the then applicable
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
promulgated by the SEC thereunder. The financial statements of Buyer included in
the Buyer SEC Documents are complete and correct in all material respects,
complied as to form in all material respects with the then applicable
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accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may have been indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-Q promulgated by the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, year-end audit
adjustments) the consolidated financial position of Buyer and its consolidated
subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Except to the extent
reflected or reserved against or disclosed in the financial statements of Buyer
included in the Buyer SEC Documents, Buyer, as of the date of such financial
statements, had no liabilities or obligations of any kind, whether accrued,
absolute, contingent or otherwise, which should have been reflected or reserved
against or disclosed. Buyer has filed all documents and agreements which were
required to be filed as exhibits to the Buyer SEC Documents. The Buyer Schedule
of Exceptions sets forth a correct and complete list of all documents or
agreements, if any, which would be included as exhibits to an Annual Report on
Form 10-K and which have not heretofore been filed as an exhibit to any of the
Buyer SEC Documents, if Buyer were required to file such Form 10-K for the
period ended on the date immediately preceding the date of this Agreement and
long-term debt agreements which are not required to be filed pursuant to Item
601(b)(4)(iii)(A) of Regulations S-K promulgated by the SEC. There have been no
material changes in Buyer's affairs that are not disclosed in the Buyer SEC
Documents.
4.3 Power, Authorization and Validity. Buyer has the right,
power, legal capacity and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents to which it is a party.
The execution and delivery of this Agreement and the other Transaction Documents
have been, or will have been prior to the Closing, duly and validly approved and
authorized by the Board of Directors of Buyer. No authorization or approval,
governmental or otherwise, is necessary in order to enable Buyer to enter into
and to perform the terms of this Agreement or the other Transaction Documents on
its part to be performed. This Agreement is, and the other Transaction Documents
when executed and delivered by Buyer shall be, the valid and binding obligations
of Buyer enforceable in accordance with their respective terms. Buyer is not
subject to or obligated under any charter, article of incorporation, bylaw or
contract provision, or any license, franchise or permit, or subject to any order
or decree, which would be breached or violated by or in conflict with the
execution and carrying out of this Agreement and the transactions contemplated
hereunder and under the Transaction Documents.
4.4 No Material Adverse Changes. Since June 30, 1996 no
material adverse change in the business or prospects of Buyer has occurred.
4.5 Buyer Common Stock. The Buyer Common Stock, when issued to
the Sellers at Closing in compliance with the provisions of this Acquisition
Agreement, will be duly authorized, validly issued, fully paid and nonassessable
and will be free of any liens, encumbrances or restrictions on transfer, other
than as set forth in or contemplated by this Acquisition Agreement, or the
exhibits attached hereto.
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5. Buyer's Conditions to Closing.
Buyer's obligations under this Agreement are subject to the
fulfillment or waiver on or before the Closing of the following conditions:
5.1 Representations and Warranties Correct. The
representations and warranties made by the Sellers in Section hereof shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects on the Closing date with the same force and
effect as if they had been made on and as of said date.
5.2 Board Approval. Buyer's Board of Directors shall have
approved this Agreement and the Transaction Documents.
5.3 Covenants Not To Compete. Douglas Marlin shall execute a
Consulting Agreement, in substantially the form attached hereto as EXHIBIT D,
with Buyer or JDA Canada.
5.4 Closing. The Closing shall have occurred on or before
August 15, 1996.
5.5 Dividends and Bonuses. During the period beginning
November 30, 1995 and ending on the Closing, JDA Canada shall not have (a)
declared or distributed any cash dividends to the holders of JDA Canada Stock or
(b) paid bonuses to its employees in excess of what was reflected as accrued in
the JDA Canada Reviewed Financials.
5.6 Opinion. Buyer shall have received an opinion from Bennett
Jones Verchere, counsel for the Sellers, satisfactory to Buyer, as to matters
customary in an acquisition transaction.
5.7 Canadian Law. Buyer shall have received all required
approvals for the Acquisition under the Investment Canada Act and any other
applicable Canadian rules and regulations.
5.8 Due Diligence. Buyer's representatives shall have
completed a "due diligence" investigation, the results of which being
satisfactory to Buyer in Buyer's sole discretion.
5.9 Securities Laws. All the transactions contemplated under
this Agreement and the Transaction Documents shall comply with applicable U.S.
and Canadian securities laws.
5.10 Covenants. All covenants, agreements and conditions
contained in this Agreement to be performed by JDA Canada and/or the Sellers on
or prior to the Closing Date shall have been performed or complied with in all
material respects.
5.11 Access to Information. Until the Closing, the Sellers
shall, so far as they are able as shareholders and, if relevant, directors of
JDA Canada, procure that JDA Canada allows Buyer and its agents free access upon
reasonable notice and during normal working hours to its files, books, records,
and offices, including, without limitation, any and all information
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relating to taxes, commitments, contracts, leases, licenses, and personal
property and financial condition. Until the Closing, the Sellers shall, so far
as they are able as shareholders and, if relevant, directors of JDA Canada,
ensure that JDA Canada causes its accountants to cooperate with Buyer and its
agents in making available all financial information requested, including
without limitation the right to examine all working papers pertaining to all
financial statements prepared or audited by such accountants subject to the
agreement between such accountants of the basis upon which such access will be
given.
6. Sellers' Conditions to Closing.
Sellers' obligations under this Agreement are subject to the
fulfillment or waiver as of the Closing of the following conditions:
6.1 Representations and Warranties Correct. The
representations and warranties made by Buyer in Section hereof shall be true and
correct in all material respects when made, and shall be true and correct in all
material respects on the Closing date with the same force and effect as if they
had been made on and as of said date.
6.2 Closing. The Closing shall have occurred on or before
August 15, 1996.
6.3 Securities Laws. All of the transactions contemplated
under this Agreement and the Transaction Documents shall comply with applicable
U.S. and Canadian securities laws.
6.4 Covenants. All covenants, agreements and conditions
contained in this Agreement to be performed by Buyer on or prior to the Closing
Date shall have been performed or complied with in all material respects.
7. Mutual Covenants.
7.1 Confidentiality. Each party acknowledges that in the
course of the performance of this Agreement, it may obtain Confidential
Information relating to another party to this Agreement. The party receiving
such Confidential Information (the "Receiving Party") shall, at all times, both
during the term of this Agreement and thereafter, keep in confidence and trust
all of the Confidential Information of the party disclosing such Confidential
Information (the "Disclosing Party") received by it. The Receiving Party shall
not use the Confidential Information of the Disclosing Party other than as
expressly permitted under the terms of this Agreement or by a separate written
agreement between the parties hereto. The Receiving Party shall take all
reasonable steps to prevent unauthorized disclosure or use of the Disclosing
Party's Confidential Information and to prevent it from falling into the public
domain or into the possession of unauthorized persons. The Receiving Party shall
not disclose Confidential Information of the Disclosing Party to any person or
entity other than its officers or employees (or outside legal or accounting
advisors) who need access to such Confidential Information in order to effect
the intent of this Agreement and who have entered into confidentiality
agreements with such person's employer or who are subject to ethical
restrictions on disclosure which protects the Confidential Information of the
Disclosing Party. The Receiving Party shall immediately give notice to the
Disclosing Party of any unauthorized use or disclosure of the
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Disclosing Party's Confidential Information. The Receiving Party agrees to
assist the Disclosing Party to remedy such unauthorized use or disclosure of its
Confidential Information.
These obligations shall not apply to the extent that
Confidential Information includes information which:
(a) is already known to the Receiving Party at the
time of disclosure, which knowledge the Receiving Party shall have the burden of
proving;
(b) is, or, through no act or failure to act of the
Receiving Party, becomes publicly known;
(c) is received by the Receiving Party from a third
party without restriction on disclosure (although this exception shall not apply
if such third party is itself violating a confidentially obligation by making
such disclosure);
(d) is independently developed by the Receiving Party
without reference to the Confidential Information of the Disclosing Party, which
independent development the Receiving Party will have the burden of proving;
(e) is approved for release by written authorization
of the Disclosing Party; or
(f) is required to be disclosed by a government
agency to further the objectives of this Agreement or by a proper order of a
court of competent jurisdiction; provided, however that the Receiving Party will
use its best efforts to minimize such disclosure and will consult with and
assist the Disclosing Party in obtaining a protective order prior to such
disclosure.
7.2 No Public Announcement. The parties shall make no further
public announcement concerning this Agreement or the transactions contemplated
hereby, their discussions or any other memos, letters or agreements between the
parties relating to the Acquisition until such time as they agree as to the
contents of a press release in an agreed form. A party, but only after
reasonable consultation with the other, may make disclosure if required or, in
the reasonable judgment of such party or its counsel, advisable under applicable
laws or regulations.
7.3 Further Assurances. Prior to and following the Closing,
each party agrees to cooperate fully with the other parties and to execute such
further instruments, documents and agreements and to give such further written
assurances, as may be reasonably requested by any other party at that other
party's cost to give effect to the transactions described herein and
contemplated hereby.
8. Agreement to Indemnify.
8.1 Sellers' Indemnity. For a period ending twelve (12) months
after the Closing, each of the Sellers will jointly and severally indemnify and
hold harmless Buyer
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against, and reimburse Buyer on demand for, any liability, damage, loss,
obligation, demand, judgment, fine, penalty, cost or expense (including
reasonable attorneys' fees and expenses, and the costs of investigation incurred
in defending against or settling such liability, damage, loss, cost or expense
or claim therefor and any amounts paid in settlement thereof) imposed on or
reasonably incurred by Buyer because of any misrepresentation or breach of any
representation, warranty, agreement, obligation or covenant on the part of JDA
Canada or any of the Sellers under this Agreement (collectively, the "Buyer
Damages"). "Buyer Damages" as used herein is not limited to matters asserted by
third parties, but includes damages incurred or sustained by Buyer in the
absence of claims by a third party. Sellers' obligations hereunder shall include
any Buyer Damages incurred or potentially arising for which the notice described
in Section 8.2(a) hereof is sent by Buyer within the aforementioned twelve (12)
month period. Notwithstanding the foregoing, the liability of each Seller other
than the Marlin Group for Buyer Damages shall be limited to such Seller's
proportionate share of such Buyer Damages and shall, in any event, not exceed
the fair market value as of the Closing Date of such Seller's proportionate
share of the Acquisition Consideration, with the exception of the Marlin Group,
each of whom shall be liable for one hundred percent (100%) of such Buyer
Damages in an amount which shall, in any event, not exceed the fair market value
as of the Closing Date of the Acquisition Consideration. Notwithstanding the
Marlin Group's direct liability to Buyer for 100% of Buyer Damages as set forth
above, the Marlin Group shall be entitled to claim over or seek indemnification
from the other Sellers to the extent of their proportionate share of Buyer
Damages. Solely as it relates to such claims between Sellers, Buyer Damages
caused by a misrepresentation or breach of representation, warranty, agreement,
obligation or covenant on the part of an individual Seller, such as failure to
convey good title to the JDA Canada Stock owned by such Seller to Buyer, shall
be the sole responsibility of such Seller.
8.2 Procedures Regarding Indemnity Party Claims. The
procedures to be followed by Buyer and Sellers with respect to indemnification
claims shall be as follows:
(a) Notices. Whenever any claim shall arise or any
proceeding shall be instituted by Buyer pursuant to this Section , (the
"Indemnified Party") shall promptly notify the person(s) against whom such
indemnity may be sought (the "Indemnifying Party") in writing and, when known,
the facts constituting the basis for such claim or proceeding and the amount or
an estimate of the amount of the indemnified liability arising therefrom, if
known. In addition, each party hereto hereby agrees to provide to the other
party written notification and copies of communication from third parties
received or made by such parties relating to any matter subject to any
indemnification hereunder. The failure by an Indemnified Party to timely furnish
to the Indemnifying Party any notice or copy required to be furnished under this
Section 8.2(a) shall not relieve the Indemnifying Party from any responsibility
for the matters relating to such notice or copy, unless such failure materially
adversely prejudices the ability of the Indemnifying Party to defend such
matter.
(b) Defense of Claims. In connection with any claim
giving rise to indemnity hereunder arising out of any claim or legal proceeding
by any person who is not an Indemnified Party, the Indemnifying Party at its
sole cost and expense may, upon written notice to the Indemnified Party, elect
to assume the defense of any such claim or legal proceeding. If the Indemnifying
Party has so elected to assume the defense of any such claim or legal
proceeding, such defense shall be conducted by counsel chosen by the
Indemnifying Party,
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provided that such counsel is reasonably satisfactory to the Indemnified Party.
The Indemnified Party shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense. If the
Indemnifying Party has elected to assume the defense of any claim or legal
proceeding as provided herein, the Indemnified Party shall not be entitled to
indemnification as to fees and expenses of any counsel retained by the
Indemnified Party after the time at which the Indemnifying Party has so elected
unless the Indemnifying Party consents thereto in writing.
(c) Settlement or Compromise of Indemnified
Liability. The Indemnified Party shall not settle or compromise any indemnified
liability without the prior written consent of the Indemnifying Party, which
shall not be unreasonably withheld. In the event that the Indemnifying Party
shall so assume such defense, it shall not compromise or settle any such claim,
action, or suit unless:
(1) the Indemnified Party gives its prior
written consent, which shall not be unreasonably withheld; or
(2) (A) the terms of the compromise or
settlement of such claim, action, or suit provide that the Indemnified Party
shall have no responsibility for the discharge of the settlement amount and
impose no other obligations or duties on the Indemnified Party, (B) the
compromise or settlement discharges all rights against the Indemnified Party
with respect to such claim, action, or suit, and (C) in the event of a
settlement or compromise pursuant to an agreed judgment, the Indemnified Party
has not, within twenty (20) days after having received notice of the proposed
compromise or settlement from the Indemnifying Party, given the Indemnifying
Party notice that it reasonably believes the settlement or compromise will
jeopardize its ability to prevail on issues similar to the issues that are the
subject of such claim, action, or suit.
8.3 Limitation on Claims. Notwithstanding any other provision
of this Section , the Buyer shall not be entitled to make a claim under this
Section until the aggregate of all Buyer Damages incurred by Buyer exceeds Fifty
Thousand Dollars ($50,000) (Cdn). However, if and when the aggregate of all
Buyer Damages incurred by Buyer exceeds Fifty Thousand Dollars ($50,000) (Cdn),
the Indemnifying Party shall be required to pay all Buyer Damages to the extent
of the limits contained in this Section , including the first Fifty Thousand
Dollars ($50,000) (Cdn) thereof. Notwithstanding the other provisions of this
Section 8.3, the parties agree that nothing herein limits any potential remedies
and liabilities of Buyer arising under applicable state and federal laws with
respect to any fraudulent act committed by any Seller or any option holder,
director, officer, employee or agent of JDA Canada.
8.4 Closing Holdback. Buyer shall have the right, subject to
the limitations set forth in this Section 8 to set-off against the Closing
Holdback, the entire amount of any Buyer Damages for which the Buyer determines
in good faith that the Buyer is entitled to indemnification from Sellers under
this Section 8. The right to set-off described in this Section shall be
exercised as follows:
(a) Buyer shall deliver written notice to the Sellers
of each claim for indemnification for which the Buyer desires to exercise its
right to set-off.
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(b) Sellers shall then have fifteen (15) days (which
period may be extended by mutual consent in writing) following receipt of such
notice in which to accept or dispute each such claim, in whole or in part. To
the extent that any such claim is not disputed in writing by Sellers within such
fifteen (15) day period, such claim shall be deemed to have been accepted by
Sellers, and Buyer shall be entitled to set-off the entire amount of such claim
against the Closing Holdback.
(c) In the event that Sellers shall dispute any claim
of Buyer, in whole or in part (hereafter a "Contested Claim"), the Escrow Agent
shall be instructed to hold such amount in escrow until the Contested Claim has
been resolved by agreement of the parties or until otherwise ordered by a court
of competent jurisdiction in the manner contemplated by this Agreement. Upon
resolution of the Contested Claim, the Escrow Agent shall be instructed to
promptly disburse the amount of the Contested Claim to the party entitled
thereto (as determined by agreement of the parties or by order of Court) upon
receipt of joint, written instructions from Buyer and Sellers to that effect or
upon presentation of a certified copy of an order of a court of competent
jurisdiction by either party.
8.5 Limitation of Remedies. With the exception of any Buyer
Damages incurred as a result of the breach or alleged breach of Sections 3.2
(Capitalization), 3.3 (Power, Authority and Validity), 3.4 (Financial
Statements), 3.5 (Tax Matters), 3.6 (Absence of Certain Changes or Events), 3.8
(Patents, Trademarks, etc.), 3.18 (Litigation), and 3.21 (Compliance with
Environmental Requirements), Buyer's exclusive remedy relating to Buyer Damages
shall be the rights set forth in this Section 8.4 (Holdback). In no event shall
Sellers' aggregate liability under this Agreement exceed the fair market value
of the Acquisition Consideration as of the Closing Date. Buyer hereby agrees
that it shall not have an independent right to commence legal action against
Sellers with respect to any misrepresentation or breach of representation,
warranty, agreement, obligation or covenant on the part of JDA Canada or any of
the Sellers under this Agreement and that any such claims, if made, shall be
made pursuant to and in accordance with the terms and conditions and subject to
the limitations and restrictions contained in this Section 8.
9. Covenant of Sellers. Each Seller covenants and agrees that in the
event any of the shares of Buyer Common Stock acquired hereunder is transferred
or sold by a Seller, such transfer or sale will be conducted either: (a) on the
Nasdaq National Market System, or through such other securities exchange upon
which the common stock of Buyer may be listed and traded; or (b) in compliance
with all applicable securities laws or regulations, or orders of any securities
regulators or commissions, whether federal, state or provincial.
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10. Miscellaneous.
10.1 Governing Law.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
(b) The courts of the State of Arizona have exclusive
jurisdiction to hear and decide any suit, action or proceedings, and to settle
any disputes, which may arise out of or in connection with this Agreement
(respectively "Proceedings" and "Disputes") and, for these purposes, the Buyer
irrevocably submits for the benefit of the Sellers, and the Sellers irrevocably
submit for the benefit of the Buyer, to the jurisdiction of the courts of the
State of Arizona.
(c) The Buyer and the Sellers irrevocably waive any
objection which they might at any time have to the courts of the State of
Arizona being nominated as the forum to hear and decide any proceedings and to
settle disputes relating to this Agreement or the Transaction Documents, and
agree not to claim that the courts of the State of Arizona are not a convenient
or appropriate forum.
10.2 Legend. Each certificate or instrument representing the
Buyer Common Stock may be endorsed with a legend (the "Legend") in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISTRIBUTED, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES, ITS TERRITORIES, POSSESSIONS, OR
AREAS SUBJECT TO ITS JURISDICTION, OR TO OR FOR THE ACCOUNT OR BENEFIT
OF A "U.S. PERSON" AS THAT TERM IS DEFINED IN RULE 901 OF REGULATION S
OF THE ACT, AT ANY TIME PRIOR TO FORTY (40) DAYS AFTER THE ISSUANCE OF
THIS CERTIFICATE, EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER SUCH ACT, OR (II) IN
COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. ANY
SALES, TRANSFERS OR DISTRIBUTIONS OF THE SECURITIES MUST BE MADE IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S OF THE ACT. THIS LEGEND
SHALL BECOME VOID AFTER FORTY DAYS FOLLOWING THE ISSUANCE OF THIS
CERTIFICATE."
Following the expiration of the Restricted Period, Buyer
covenants and agrees to take all action, as may be reasonably requested by the
Sellers, reasonably necessary to effectuate the removal of the Legend from the
shares of Buyer Common Stock.
10.3 Binding upon Successors. Subject to, and unless otherwise
provided in, this Agreement each and all of the covenants, terms, provisions and
agreements contained herein
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shall be binding upon, and inure to the benefit of, the successors, executors
and heirs of the parties. Except as contemplated herein, none of the parties may
assign the benefit of any of its rights under this Agreement to any other
person.
10.4 Severability. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall be interpreted so as best to reasonably
effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision which will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision.
10.5 Entire Agreement. This Agreement, the exhibits hereto,
the documents referenced herein, and the exhibits thereto, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or
oral, between the parties with respect hereto and thereto. The express terms
hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
10.6 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against any party
whose signature appears thereon and all of which together shall constitute one
and the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories.
10.7 Expenses. Except as provided to the contrary herein, each
party shall pay all of its own costs and expenses incurred in connection with
the Acquisition, including all legal and accounting fees and expenses, with
respect to the negotiation, execution and delivery of this Agreement, the
Transaction Documents and the exhibits hereto and thereto whether or not the
Acquisition is consummated. In the event the Acquisition is consummated, legal,
accounting and other fees incurred by JDA Canada and/or its Shareholders in
connection with the Acquisition shall be deemed to be expenses of JDA Canada,
shall be borne by JDA Canada and shall become obligations of Buyer, subject to a
cap on such fees of Fifty Thousand Dollars $50,000 (CDN). Notwithstanding the
foregoing, such expenses and fees shall be borne by the JDA Canada Shareholders
in the event the Acquisition is not consummated.
10.8 Amendment and Waivers. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed to constitute
a waiver of any other default or any succeeding breach or default.
10.9 Survival of Agreements. All covenants, agreements,
representations and warranties made herein shall survive the Closing for a
period of one (1) year; provided,
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however, that the representations and warranties regarding environmental hazards
and taxes will survive for three (3) years following the Closing.
10.10 No Waiver. The failure of any party to enforce any of
the provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
10.11 Notices. Any notice provided for or permitted under this
Agreement will be treated as having been given when (a) delivered personally,
(b) sent by confirmed telex or telecopy, (c) sent by commercial overnight
courier with written verification of receipt, or (d) mailed postage prepaid by
certified or registered mail, return receipt requested, to the party to be
notified, at the address set forth below, or (e) at such other place of which
the other party has been notified in accordance with the provisions of this
Section 10.11.
To: Douglas Marlin
Box 40, Site 21, S.S.1
Calgary, Alberta T2M 4N3
With copy to: Bennett Jones Verchere
4500 Bankers Hall East
855 2nd Street
Calgary, Alberta T2P 4K7
Attention: Martin A. Lambert, Esq.
Buyer: JDA Software Group, Inc.
11811 North Tatum Blvd., Suite 2000
Phoenix, AZ 85028
Attention: Thomas M. Proud and
James D. Armstrong
With copy to: Gray Cary Ware & Freidenrich
4365 Executive Drive, Suite 1600
San Diego, CA 92121
Attention: Paul E. Hurdlow, Esq.
Such notice will be treated as having been received upon actual receipt.
10.12 Time. Time is of the essence of this Agreement.
10.13 Construction of Agreement. The titles and headings
herein are for reference purposes only and shall not in any manner limit the
construction of this Agreement which shall be considered as a whole. This
Agreement has been reviewed and negotiated by the parties and their respective
counsel, and the parties desire that this Agreement be interpreted without
reference to any principle of construction based upon conclusions regarding
responsibility for drafting.
10.14 No Joint Venture. Nothing contained in this Agreement
shall be deemed or construed as creating a joint venture or partnership between
any of the parties hereto. No
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party is by virtue of this Agreement authorized as an agent, employee or legal
representative of any other party. No party shall have the power to control the
activities and operations of any other and their status is, and at all times,
will continue to be, that of independent contractors with respect to each other.
No party shall have any power or authority to bind or commit any other. No party
shall hold itself out as having any authority or relationship in contravention
of this Section 10.14.
10.15 Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the person, persons, entity or entities may require.
10.16 Absence of Third Party Beneficiary Rights. No provisions
of this Agreement are intended, nor shall be interpreted, to provide or create
any third party beneficiary rights or any other rights of any kind in any
client, customer, affiliate, shareholder, partner of any party hereto or any
other person or entity unless specifically provided otherwise herein, and,
except as so provided, all provisions hereof shall be personal solely between
the parties to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
JDA SOFTWARE GROUP, INC.
By: /s/ James D. Armstrong
-----------------------------------
James D. Armstrong
-----------------------------------
(Print Name)
Its: Chief Executive Officer
-----------------------------------
JDA CANADA SHAREHOLDERS
/s/ Douglas G. Marlin
----------------------------------------
Douglas G. Marlin
/s/ John Leduc
----------------------------------------
John Leduc
/s/ Donald W. Thompson
----------------------------------------
Donald W. Thompson
/s/ Laurie Bullock
----------------------------------------
Laurie Bullock
/s/ Yuey Low
----------------------------------------
Yuey Low
/s/ Elaine Marlin
----------------------------------------
Elaine Marlin
/s/ Laurie Ellen Thompson
----------------------------------------
Laurie Ellen Thompson
Marlin Family Trust:
By: /s/ Martin A. Lambert
-----------------------------------
Martin A. Lambert, Sole Trustee
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LIST OF EXHIBITS
EXHIBIT A: LIST OF SELLERS
EXHIBIT B: JDA CANADA SCHEDULE OF EXCEPTIONS
EXHIBIT C: BUYER SCHEDULE OF EXCEPTIONS
EXHIBIT D: CONSULTING AGREEMENT
EXHIBIT E: ESCROW AGREEMENT
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EXHIBIT A
LIST OF SELLERS
(COL A) (COL B) (COL C) (COL D) (COL E) (COL F) (COL G)
ITEM NAME CLASS A CLASS B CLASS C CLASS A BUYER
NO. COMMON COMMON COMMON PREFERRED COMMON
SHARES SHARES NON-VOTING SHARES STOCK
SHARES
1. Douglas G. Marlin 130 1 -- 141,100 58,024
2. John Leduc 30 -- -- 5,100 3,886
3. Donald W. Thompson
55 -- 1 17,850 10,067
4. Laurie Bullock 10 -- -- 1,700 1,295
5. Yuey Low 25 -- -- 4,250 3,238
6. Elaine Marlin 300 -- -- -- 21,209
7. Laurie Ellen Thompson 50 -- -- -- 3,535
8. Marlin Family Trust 400 -- -- -- 28,279
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