AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
By and Between
TTECH ACQUISITION CORP.
(Purchaser)
FIND/SVP, INC.
(Purchaser Parent),
SOPHEON CORPORATION
(Company)
And
SOPHEON PLC
(Company Parent)
JUNE 25, 2003
ARTICLE 1
DEFINITIONS
ARTICLE 2
PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchase
of Assets and Assumption of Liabilities. . . . . 11
2.2 Purchase
Price. . . . . . . 15
2.3 Closing
and Closing Deliveries. . . . . . .21
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1
Organization. . . . . .25
3.2
Capitalization. . . . . . . 25
3.3 Due
Authorization . . . . . 25
3.4 No
Breach . . . . . . .25
3.5 Clear
Title . . . . . .26
3.6
Condition and Sufficiency of Assets . . . . . . 26
3.7
Litigation. . . . . . .26
3.8 Labor
Matters . . . . .26
3.9 Tax
Matters . . . . . .27
3.10 Employee
Benefits . . . . . 27
3.11 No
Guaranties . . . . .28
3.12
Financial Statements. . . . . . .28
3.13 Absence
of Certain Developments . . . . . .29
3.14
Intellectual Property . . . . . .29
3.15
Compliance with Laws. . . . . . .30
3.16
Operating Contracts . . . . . . .30
3.17 Real
Estate . . . . . .31
3.18 Accounts
Receivable . . . . . . .31
3.19 Books
and Records; Bank Accounts. . . . . .31
3.20
Employees and Employee Related Commitments. . . . . .31
3.21 Permits
.. . . . . 31
3.22 Other
Material Contracts and Obligations. . . . . . .32
3.23
Subsidiaries. . . . . .32
3.24
Insurance . . . . . . .32
3.25 Brokers
.. . . . . 33
3.26
Relationship with Related Persons . . . . .33
3.27 Debt
Instruments. . . . . . 33
3.28
Customers and Suppliers . . . . .34
3.29
Affiliate Loans . . . . . . 34
3.30 Absence
of Certain Business Practices . . . . . 34
3.31
Insolvency. . . . . . .34
3.32
Representations and Warranties Regarding the Company Parent . . . .
.. . .35
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE
PURCHASER PARENT
4.1
Organization. . . . . .36
4.2 Due
Authorization . . . . . 36
4.3 No
Breach . . . . . . .36
4.4 Brokers
.. . . . . 37
4.5 Articles
of Incorporation and Bylaws. . . . . . 37
4.6
Capitalization. . . . . . . 37
4.7 SEC
Reports . . . . . .37
4.8
Stockholders' Consent . . . . . .38
ARTICLE 5
PERFORMANCE AND COVENANTS PENDING CLOSING
5.1 Access
to Information . . . . . .38
5.2 Conduct
of Business . . . . . . .38
5.3
Encumbrances. . . . . .39
5.4 Pay
Increases . . . . .39
5.5
Restrictions on New Contracts . . . . . . .39
5.6
Preservation of Business. . . . . . . 39
5.7 Payment
and Performance of Obligations. . . . . 39
5.8
Restrictions on Sale of Assets. . . . . . .40
5.9 Prompt
Notice . . . . .40
5.10
Consents. . . . . 40
5.11 Copies
of Documents . . . . . . .40
5.12 No
Solicitation of Other Offers . . . . . .40
5.13 Accounts
Receivable and Payable . . . . . .41
5.14
Inventory . . . . . . .41
5.15
Insurance . . . . . . .41
5.16 Filing
Reports and Making Payments. . . . . . . 41
5.17 Capital
Expenditures. . . . . . .41
5.18 Lien
Search . . . . . .41
5.19
Transition Services Agreement . . . . . . .41
5.20 [THIS
SECTION INTENTIONALLY OMITTED.] . . . . . 42
5.21
Commercial Agreement. . . . . . .42
5.22
Employment Agreements . . . . . .42
ARTICLE 6
MUTUAL CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS
6.1
Proceedings . . . . . .42
6.2 Consents
and Approvals. . . . . .42
ARTICLE 7
ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PURCHASER AND THE PURCHASER PARENT
7.1 Accuracy
of Representations and Warranties. . . . . .43
7.2
Compliance with Covenants and Agreements. . . . . . .43
7.3 No
Material Adverse Change. . . . . . 43
7.4 Legal
Opinion . . . . .43
7.5
Corporate Action. . . . . . 43
7.6
Employment Agreements . . . . . .43
7.7
Confidentiality Agreements and Non-Competition. . . . . . 43
ARTICLE 8
ADDITIONAL CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
8.1 Accuracy
of Representations and Warranties. . . . . .44
8.2
Compliance with Covenants and Agreements. . . . . . .44
8.3 Legal
Opinion . . . . .44
8.4 Delivery
of Receipt for Purchase Price and the Shares . . . . .44
ARTICLE 9
INDEMNIFICATION
9.1
Indemnification by the Company. . . . . . .44
9.2
Indemnification by the Purchaser. . . . . .46
9.3
Procedure for Indemnification . . . . . . .47
9.4 Dispute
Resolution. . . . . 49
9.5 Effect
of Insurance . . . . . . .50
ARTICLE 10
EMPLOYEE MATTERS
10.1
Information on Active Employees . . . . . .51
10.2
Employment of Active Employees by the Purchaser . . . . . 51
10.3 Terms
and Conditions of Offers of Employment. . . . . . . 52
10.4 Salaries
and Benefits Prior to Closing. . . . . 52
10.5 Benefits
and Benefit Plans. . . . . . 52
10.6
Company's Retirement and Savings Plans. . . . . 52
10.7 Further
Actions . . . . . . 53
10.8 Forms .
.. . . . . 53
10.9 WARN
Act. . . . . 53
10.10 COBRA .
.. . . . . 54
10.11 No
Intended or Incidental Third Party Beneficiary. . . . . . .54
ARTICLE 11
PERFORMANCE FOLLOWING THE CLOSING DATE
11.1 Further
Acts and Assurances . . . . . 54
11.2
Confidential Information and Non-Competition Agreements . . . . . . 54
11.3
Injunctive Relief . . . . . 58
11.4 Blue
Pencil Doctrine. . . . . . .58
11.5 Company
Parent Indemnification Shares . . . . . 58
11.6
Consents. . . . . 58
11.7 Certain
Tax Matters . . . . . . .59
11.8 Covenant
Regarding Active Hired Employee Non-Compete. . . . . .60
ARTICLE 12
TERMINATION
12.1
Termination . . . . . .60
12.2 Return
of Documents and Nondisclosure . . . . . 60
ARTICLE 13
MISCELLANEOUS
13.1 Survival
of Representations and Warranties, Covenants and Agreements. . . . . 61
13.2
Preservation of and Access to Records . . . . . 61
13.3
Cooperation . . . . . .61
13.4 Public
Announcements. . . . . . .61
13.5 Notices
.. . . . . 62
13.6 Entire
Agreement. . . . . . 62
13.7
Remedies. . . . . 63
13.8
Amendments. . . . . . .63
13.9
Successors and Assigns. . . . . .63
13.10 Fees and
Expenses . . . . . 63
13.11
Governing Law and Jurisdiction. . . . . . .63
13.12
Counterparts and Facsimile Signatures . . . . . 64
13.13
Headings. . . . . 64
13.14 [THIS
SECTION INTENTIONALLY OMITTED]. . . . . . 64
13.15 Number
and Gender . . . . . 64
13.16
Severability. . . . . .64
13.17 Parties
in Interest . . . . . . .64
13.18 Waiver.
.. . . . . 65
13.19
Construction. . . . . .65
13.20 Specific
Performance. . . . . . .65
13.21
Supplementation of Schedules. . . . . 65
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this
"Agreement") is made, entered into and effective as of the 25th day
of June, 2003, by and
between TTECH ACQUISITION CORP., a Delaware corporation (the
"Purchaser"),
FIND/SVP, INC., a New York corporation (the "Purchaser Parent"),
SOPHEON
CORPORATION, a Minnesota corporation (the "Company") and SOPHEON
PLC, a
registered corporation in the United Kingdom (the "Company Parent").
RECITALS
A. The Company is a knowledge services company that provides
information
management services and management of client intellectual property,
through the use of the
Company's proprietary software, methods and processes.
B. The Company operates two distinct business divisions: (i) the
IM Division,
which provides research, services and tools that improve and
optimize corporate information
delivery, analysis, application and use by conducting primary and
secondary research for
information and knowledge involving market factors that affect the
success or failure of a client's
business, including competitive intelligence, market intelligence
and technology intelligence,
which has, as its core, the aggregation, interpretation, and
assimilation capabilities conducted by
human researchers (versus machine-generated data and information)
and does not offer or
provide, other than portal technology, software development,
installation or integration services
(the "IM Division"), and (ii) business process solutions improvement
and consultation focused
on business processes, including innovation and product development,
through the use of, among
other things, proprietary software solutions that do not involve
human-based primary and
secondary research, involving consultation with respect to business
process improvement and
which includes reselling and enhancements made to best practices
content in the business
process industry, reselling best practices content to the product
development process market
(where content is sold alone or imbedded in software), software
development, installation and
integrator services (the "BPS Division").
C. The Purchaser desires to purchase and assume, as applicable,
and the Company
desires to sell, transfer, convey, assign and deliver, as
applicable, (i) substantially all of the
assets of the IM Division pursuant to this Agreement, and (ii)
certain specified liabilities and
obligations of the IM Division in connection with the purchase of
such assets.
D. It is the intention of the parties hereto that, upon
consummation of the
transactions contemplated by and pursuant to this Agreement, the
Purchaser shall own
substantially all of the assets of the IM Division other than the
Excluded Assets.
E. The Purchaser Parent and the Company Parent will materially
benefit from the
transactions contemplated hereby.
F. The parties originally entered into that certain Asset Purchase
Agreement as the
predecessor to this Agreement (the "Asset Purchase Agreement"), on
June 5, 2003. Pursuant
to that certain First Amendment to Asset Purchase Agreement dated
concurrently herewith, the
parties amended and restated the Asset Purchase Agreement in
accordance with the terms of
such amendment.
AGREEMENT
In consideration of the foregoing Recitals and the mutual promises
contained in this
Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified:
"AAA Rules" has the meaning set forth in Section 9.4(b) of this
Agreement.
"Active Employees" has the meaning set forth in Section 10.1 of this
Agreement.
"Acquisition Proposal" means any proposal relating to the possible
acquisition of the
Company whether by way of merger, purchase of capital stock of the
Company representing
fifty percent (50%) or more of the voting power or equity of the
Company, purchase or license
of all or substantially all of the assets of the Business, or
otherwise. The foregoing shall not
apply to transactions which affect only the BPS Division, or a sale
or exchange (or similar
transaction) if the buyer will honor this Agreement.
"Affiliate" when used in reference to a specified Person, means any
Person that, directly
or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under
common control with the specified Person.
"Agreement" has the meaning set forth in the introductory paragraph
hereof.
"Ancillary Documents" means the documents, instruments and
agreements to be executed
and/or delivered by the parties pursuant to this Agreement or any
Ancillary Document.
"Applicable Laws" means any and all laws, ordinances, constitutions,
regulations,
statutes, treaties, rules, codes, and Injunctions adopted, enacted,
implemented, promulgated,
issued, entered or deemed applicable by or under the authority of
any Governmental Body
having jurisdiction over (i) a specified Person or any of such
Person's properties or assets, or
(ii) any of such Person's officers, directors, employees,
consultants or agents in connection with
their activities on behalf of such Person. Applicable Laws include,
without limitation,
Environmental Laws, state and local zoning laws and ordinances, land
use and building laws,
laws respecting sale of services, laws respecting employment and
labor, and laws respecting
bidding on certain contracts.
"Asset Purchase Agreement" has the meaning set forth in Recitals to
this Agreement.
"Assets" has the meaning set forth in Section 2.1(a)(i) of this
Agreement.
"Assumed Liabilities" has the meaning set forth in Section 2.1(b)(i)
of this Agreement.
"Auditor" has the meaning set forth in Section 2.2(b)(i) of this
Agreement.
"Average Closing Price" has the meaning set forth in Section
2.2(a)(ii) of this
Agreement.
"BPS Division" has the meaning set forth in the Recitals of this
Agreement.
"Balance Sheet" has the meaning set forth in Section 3.12 of this
Agreement.
"Balance Sheet Date" has the meaning set forth in Section 3.12 of
this Agreement.
"Basket Amount" has the meaning set forth in Section 9.1 of this
Agreement.
"Benefit Plan" means any and all bonus, deferred compensation,
incentive compensation,
severance pay, pension, profit sharing, retirement, group or
individual insurance, welfare benefit,
stock option, restricted stock, stock purchase, stock appreciation,
phantom stock, any other
fringe benefit plan, arrangement or practice, written or otherwise,
whether formal or informal,
maintained, sponsored or participated in by the Company or any other
"employee benefit plan"
(within the meaning of Section 3(3) of ERISA).
"Business" means the business of the Company's IM Division.
"Business Intellectual Property" has the meaning set forth in
Section 3.14 of this
Agreement.
"Capital Reorganization" has the meaning set forth in Section
11.2(b)(v) of this
Agreement.
"Closing" has the meaning set forth in Section 2.3(a) of this
Agreement.
"Closing Balance Sheet" has the meaning set forth in Section
2.2(b)(i)(A) of this
Agreement.
"Closing Balance Sheet Date" has the meaning set forth in Section
2.2(b)(3) of this
Agreement.
"Closing Cash Payment" has the meaning set forth in Section
2.2(a)(i) of this Agreement.
"Closing Certificate" has the meaning set forth in Section 2.2(b)(i)
of this Agreement.
"Closing Date" has the meaning set forth in Section 2.3(a) of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and
regulations issued by the IRS pursuant to the Internal Revenue Code
or any successor law.
"Commercial Agreement" has the meaning set forth in Section 5.21 of
this Agreement.
"Company" has the meaning set forth in the introductory paragraph
hereof.
"Company Competitive Business" has the meaning set forth in Section
11.2(b)(ii) of this
Agreement.
"Company Indemnified Parties" has the meaning set forth in Section
9.2 of this
Agreement.
"Company Non-Compete Parties" has the meaning set forth in Section
11.2(b)(ii) of this
Agreement.
"Company Parent" has the meaning set forth in the introductory
paragraph hereof.
"Company Parent Stock" has the meaning set forth in Section 11.5 of
this Agreement.
"Competing Business" has the meaning set forth in Section 3.26 of
this Agreement.
"Confidential Information" means any information or compilation of
information not
generally known to the public or the industry or which the Company
has not disclosed to third
parties without a written obligation of confidentiality, which is
proprietary to the Company,
relating to the Company's procedures, techniques, methods, concepts,
ideas, affairs, products,
processes and services, including, but not limited to, information
relating to marketing,
merchandising, selling, research, development, manufacturing,
purchasing, accounting,
engineering, financing, costs, pricing and pricing methods,
customers, suppliers, creditors,
employees, contractors, agents, consultants, customers, plans,
pricing, billing, needs of
customers and products and services used by customers, all lists of
customers and their
addresses, prospects, sales calls, products, services, prices and
the like as well as any
specifications, formulas, plans, drawings, accounts or sales
records, sales brochures, code books,
manuals, trade secrets, knowledge, know-how, pricing strategies,
operating costs, sales margins,
methods of operations, invoices or statements and the like;
provided, however, that the term
"Confidential Information" shall not be deemed to include (i)
information which becomes
generally available to the public without any fault of the Company,
or (ii) becomes available to
the applicable party on a non-confidential basis and without any
breach of an agreement of
confidentiality from a source other than the Company or the
Purchaser, or (iii) information that
is disclosed to a Governmental Body pursuant to Applicable Law, and
therefore publicly
available, which is not granted, or otherwise subject to, a
confidentiality and/or non-disclosure
order(s) or status.
"Contract" means any agreement, lease of non-real estate, license
agreement (other than
a license granted by a Governmental Body), contract, consensual
obligation, promise,
commitment, arrangement, understanding or undertaking, (whether
written or oral and whether
express or implied) of any type, nature or description that is
legally binding but excluding leases
of Leased Real Estate. As used herein, the word "Contract" shall be
limited in scope if modified
by an adjective specifying the type of contract to which this
Agreement or a Section hereof
refers.
"Controlled Group" has the meaning set forth in Section 3.10(a) of
this Agreement.
"Controlled Person" when used in reference to a specified Person,
means any Person that
is directly or indirectly, through one or more intermediaries,
controlled by a specified Person.
"Debt Instruments" has the meaning set forth in Section 3.27 of this
Agreement.
"Disclose" means to reveal, deliver, divulge, disclose, publish,
communicate, show or
otherwise make known or available to any other Person, or in any way
to copy, any of the
Company's Confidential Information.
"Earn Out" shall have the meaning set forth in Section 2.2(a)(iii)
of this Agreement.
"Earn Out Amount" or "Earn Out Amounts" respectively have the
meanings set forth in
Section 2.2(a)(iii) of this Agreement.
"Employment Agreements" has the meaning set forth in Section 7.6 of
this Agreement.
"Encumbrance" means and includes:
(i) with respect to any personal property, any intangible
property or any
property other than real property, any security or other
property interest or right, claim,
lien, restriction, pledge, option, charge, security interest,
contingent or conditional sale,
or other title claim or retention agreement or lease or use
agreement in the nature thereof,
whether voluntarily incurred or arising by operation of law,
and including any agreement
to grant or submit to any of the foregoing in the future; and
(ii) with respect to any real property, any mortgage, lien,
easement, interest,
right-of-way, condemnation or eminent domain proceeding,
encroachment, any building,
use or other form of restriction, encumbrance or other claim
(including adverse or
prescriptive) or right of third parties (including Governmental
Bodies), any lease or
sublease, boundary dispute, and agreements with respect to any
real property including:
purchase, sale, right of first refusal, option, construction,
building or property service,
maintenance, property management, conditional or contingent
sale, use or occupancy,
franchise or concession, whether voluntarily incurred or
arising by operation of law, and
including any agreement to grant or submit to any of the
foregoing in the future.
"Environmental Laws" means any and all Applicable Laws (i)
regulating the use,
treatment, generation, transportation, storage, control or disposal
of any Hazardous Material,
including, but not limited to, the Comprehensive Environmental
Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the
Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section
1251 et seq.), the Clean Water Act
(33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), and all state laws
corollary thereto, and/or (ii) relating to
the protection of the environment and public or worker health and
safety, all as existing, defined
or interpreted as of the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Agent" has the meaning set forth in Section 2.2(a)(ii) of
this Agreement.
"Escrow Agreement" has the meaning set forth in Section 2.2(a)(ii)of
this Agreement.
"Escrow Fund" has the meaning set forth in Section 2.2(a)(ii) of
this Agreement.
"Estimated Net Current Liabilities" has the meaning set forth in
Section 2.2(b) of this
Agreement.
"Estimated Purchase Price Adjustment" has the meaning set forth in
Section 2.2(b) of
this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to
time, or any successor statute, and the rules and regulations of the
Commission promulgated
thereunder.
"Excluded Assets" has the meaning set forth in Section 2.1(a)(ii) of
this Agreement.
"Excluded Liabilities" has the meaning set forth in Section
2.1(b)(ii) of this Agreement.
"Expiring Contract Revenue" has the meaning set forth in Section
2.2(a)(iii)(B) of this
Agreement.
"Expiring Subscription Contracts" has the meaning set forth in
Section 2.2(a)(iii)(B) of
this Agreement.
"Final Order" has the meaning set forth in Section 6.2 of this
Agreement.
"Financial Statements" has the meaning set forth in Section 3.12 of
this Agreement.
"GAAP" means generally accepted accounting principles in the United
States.
"Governmental Body" means any:
(i) nation, state, county, city, town, village, district or
other jurisdiction of
any nature;
(ii) federal, state, local, municipal, foreign or other
government;
(iii) governmental or quasi-governmental authority of any
nature (including
any governmental agency, branch, board, commission, department,
instrumentality,
office or other entity, and any court or other tribunal);
(iv) multi-national organization or body; and/or
(v) body exercising, or entitled or purporting to exercise,
any administrative,
executive, judicial, legislative, police, regulatory or taxing
authority or power of any
nature.
"Guaranteed Net Current Liabilities" has the meaning set forth in
Section 2.2(b) of this
Agreement.
"Guaranty" means, as to any Person, all liabilities or obligations
of such Person, with
respect to any indebtedness or other obligations of any other
Person, which have been
guaranteed, directly or indirectly, in any manner by such Person,
through an agreement,
contingent or otherwise, primarily for the purpose of enabling the
debtor to make payment of
such indebtedness or obligation or to guarantee the payment to the
owner of such indebtedness
or obligation against loss, or to supply funds to or in any manner
invest in the debtor, or
otherwise.
"Hazardous Materials" means any and all (i) toxic or hazardous
pollutants, contaminants,
chemicals, wastes, materials or substances listed or identified in,
or regulated by, any
Environmental Law, and (ii) any of the following, whether or not
included in the foregoing:
polychlorinated biphenyls, asbestos in any form or condition,
urea-formaldehyde, petroleum,
including crude oil or any fraction thereof, natural gas, natural
gas liquids, liquified natural gas,
synthetic gas usable for fuel or mixtures thereof, nuclear fuels or
materials, chemical wastes,
radioactive materials and explosives.
"Hired Active Employees" has the meaning set forth in Section 10.2
of this Agreement.
"Hit Cap" has the meaning set forth in Section 2.2(a)(iii)(A) of
this Agreement.
"IM Division" has the meaning set forth in the Recitals of this
Agreement.
"IRS" means the United States Internal Revenue Service.
"Indemnified Party" has the meaning set forth in Section 9.3 of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 9.3 of
this Agreement.
"Independent Accountants" has the meaning set forth in Section
2.2(b)(v) of this
Agreement.
"Injunction" means any and all writs, rulings, awards, directives,
injunctions (whether
temporary, preliminary or permanent), judgments, decrees or orders
(whether executive, judicial
or otherwise) adopted, enacted, implemented, promulgated, issued,
entered or deemed applicable
by or under the authority of any Governmental Body.
"Intellectual Property" means any and all (i) inventions (whether
patentable or
unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents,
patent applications and patent disclosures, together with all
reissuances, continuations,
continuations in part, revisions, extensions and reexaminations
thereof; (ii) trademarks, service
marks, trade dress, logos, trade names, assumed names and corporate
names, together with all
translations, adaptations, derivations and combinations thereof and
including all goodwill
associated therewith, and all applications, registrations and
renewals in connection therewith;
(iii) copyrightable works, all copyrights and all applications,
registrations and renewals in
connection therewith; (iv) mask works and all applications,
registrations and renewals in
connection therewith; (v) trade secrets and confidential business
information (including ideas,
research and development, know-how, technology, formulas,
compositions, processes and
techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing
and cost information and business and marketing plans and
proposals); (vi) computer software
(including data and related software program documentation in
computer-readable and
hard-copy forms); (vii) other intellectual property and proprietary
rights of any kind, nature or
description, including web sites, web site domain names and other
e-commerce assets and
resources of any kind or nature; and (viii) copies of tangible
embodiments thereof (in whatever
form or medium).
"Investor Letter" has the meaning set forth in Section 4.2(b) of
this Agreement.
"Knowledge" means that an individual will be deemed to have
"Knowledge" or
"knowledge" (whether or not capitalized) of a particular fact or
other matter if such individual
(i) has or at any time had actual (and not constructive or imputed)
awareness of such fact or
other matter, or (ii) should have reasonably been expected to have
had known in the Ordinary
Course of Business; provided, however, that Knowledge by the Company
of a particular fact or
other matter shall mean the actual (and not constructive or imputed)
awareness at any time at or
prior to Closing of Andrew Michuda, Robert Specht, David Magnani,
Arif Karimjee, and the
specific employees of the Company who are assigned to such
particular fact or other matter.
"Knowledge Intensive Business Processes" are those which require
access to, and
management of: (a) unstructured and dynamic knowledge and
information, in addition to static,
structured data; and (b) tacit information sources, which relate to
unpublished information and
knowledge such as that available only through human-to-human
interaction. Examples of
Knowledge Intensive Business Processes include those relating to
innovation, product
development, six-sigma, clinical trials, and mergers and
acquisitions.
"Leased Real Estate" has the meaning set forth in Section 3.17 of
this Agreement.
"Liability" or "Liabilities" means any and all debts, liabilities
and/or obligations of any
type, nature or description (whether known or unknown, asserted or
unasserted, secured or
unsecured, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated and whether
due or to become due).
"Loss" or "Losses" has the meaning set forth in Section 9.1 of this
Agreement.
"Material Adverse Effect" or "Material Adverse Change" means, in
connection with any
Person, any event, change, condition or effect that is, or could
with reasonable certainty be
expected to be, materially adverse, individually or in the
aggregate, to the condition (financial or
otherwise), properties, Assets, Liabilities, revenues, income,
business, operations, or results of
operations of such Person, taken as a whole; provided, however, the
foregoing shall not be
deemed to include any event, change or effect which arises with
respect to (i) conditions of
change that are primarily the result of the national economy whereby
the effect or change is
generally universal upon businesses as a whole or within an industry
as a whole, or
(ii) uniformly applied legislative or judicial Applicable Laws or
Final Orders that have
applicability to consulting businesses generally.
"Monthly Earn Out Report(s)" has the meaning set forth in Section
2.2(a)(iii)(D) of this
Agreement.
"Net Current Liabilities" has the meaning set forth in Section
2.2(b) of this Agreement.
"Operating Contracts" has the meaning set forth in Section 3.16(b)
of this Agreement.
"Ordinary Course of Business" means an action taken by a Person only
if such action is
consistent with the past practices of such Person and is taken in
the ordinary course of the
normal day-to-day operations of such Person (including with respect
to quantity and frequency).
"Permits" means all right, title and interest in and to any permits,
licenses, certificates,
filings, authorizations, approvals, or other indicia of authority
(and any pending applications for
approval or renewal of a Permit), to own, construct, operate, sell,
inventory, disburse or maintain
any asset or conduct any business as issued by any Governmental Body.
"Permitted Encumbrances" means minor Encumbrances, charges and
imperfections
which do not and would not reasonably be expected to, individually
or in the aggregate detract
from or affect, in any material way, the value, transfer or use of
any Asset, or otherwise interfere
with, in any material way, the quiet enjoyment of any Asset under
any lease or leasehold interest.
"Person" means any individual, corporation (including any non-profit
corporation),
general, limited or limited liability partnership, limited liability
company, joint venture, estate,
trust, association, organization, or other entity or Governmental Body.
"Pre-Closing Period" has the meaning set forth in Section 3.9(b) of
this Agreement.
"Proceeding" means any claim, suit, litigation, mediation,
arbitration, hearing, audit,
investigation or other action (whether civil, criminal,
administrative or investigative)
commenced, brought, conducted, or heard by or before, or otherwise
involving, any
Governmental Body or arbitrator.
"Purchase Price" has the meaning set forth in Section 2.2(a) of this
Agreement.
"Purchase Price Adjustment" has the meaning set forth in Section
2.2(b) of this
Agreement.
"Purchaser" has the meaning set forth in the introductory paragraph
hereof.
"Purchaser Competitive Business" has the meaning set forth in
Section 11.2(b)(i) of this
Agreement.
"Purchaser Indemnified Parties" has the meaning set forth in Section
9.1 of this
Agreement.
"Purchaser Non-Compete Parties" has the meaning set forth in Section
11.2(b)(i) of this
Agreement.
"Purchaser Parent" has the meaning set forth in the introductory
paragraph hereof.
"Purchaser Parent Stock" has the meaning set forth in Section
2.2(a)(ii) of this
Agreement.
"Purchaser Parent SEC Reports" has the meaning set forth in Section
4.7 of this
Agreement.
"Purchaser Stock Assignment" has the meaning set forth in Section
11.5 of this
Agreement.
"Registration Statement" means any registration statement of the
Purchaser that covers
any registered or registrable securities and all amendments and
supplements to any such
registration statement, including post effective amendments, in each
case including the
prospectus, all exhibits, and all material incorporated by reference
or deemed to be incorporated
by reference in such registration statement.
"Related Person" or "Related Persons" means, with respect to a
particular individual:
(i) each other member of such individual's Family (as
hereafter defined); and
(ii) any Controlled Person of one or more members of such
individual's
Family.
With respect to a specified Person other than an individual:
(i) any Controlled Person of such specified Person (together
with the
"Family" of such Person, if an individual); and
(ii) each Person that serves as a director, governor, officer,
manager, general
partner, executor or trustee (together with the "Family" of
such Person, if an individual)
of such specified Person (or in a similar capacity). For
purposes of this definition, the
"Family" of an individual includes (A) such individual, (B) the
individual's spouse,
(C) any lineal ancestor or lineal descendant of the individual,
or (D) a trust for the benefit
of any of the foregoing.
"Renewal Percentage" has the meaning set forth in Section
2.2(a)(iii)(B) of this
Agreement.
"Renewal Revenue" has the meaning set forth in Section
2.2(a)(iii)(B) of this Agreement.
"Renewal Subscription Contracts" has the meaning set forth in
Section 2.2(a)(iii)(B) of
this Agreement.
"Response Period" has the meaning set forth in Section 2.2(b)(iv) of
this Agreement.
"Schedules" has the meaning set forth in the introductory paragraph
to Article 3 of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any
successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Supplement" has the meaning set forth in Section 13.21 of this
Agreement.
"Tax" or "Taxes" means any and all net income, gross income, gross
revenue, gross
receipts, net receipts, ad valorem, franchise, profits, transfer,
sales, use, social security,
employment, unemployment, disability, license, withholding, payroll,
privilege, excise,
value-added, severance, stamp, occupation, property, customs,
duties, real estate and/or other
taxes, assessments, levies, fees or charges of any kind whatsoever
imposed by any Governmental
Body, together with any interest or penalty relating thereto.
"Tax Return" or "Tax Returns" means any return, declaration, report,
claim for refund or
information return or statement relating to Taxes, including,
without limitation, any schedule or
attachment thereto, any amendment thereof, and any estimated report
or statement.
"Third Party" means a person not a party to this Agreement,
excluding any Related
Person.
"Threatened" means that a claim, Proceeding, dispute, action, or
other matter will be
deemed to have been "Threatened" if any demand or statement has been
made in writing, or any
notice has been given orally that would lead a reasonably prudent
Person to conclude that such a
claim, Proceeding, dispute, action, or other matter will, with
substantial certainty, be asserted,
commenced, taken or otherwise pursued in the future; provided,
however, that the foregoing
shall not include customer billing disputes in the Ordinary Course
of Business.
"Transactional Expenses" has the meaning set forth in Section 13.10
of this Agreement.
"Transition Services Agreement" has the meaning set forth in Section
5.19 of this
Agreement.
"Use" means to appropriate any of the Company's Confidential
Information for the
benefit of oneself or any other Person other than the Company.
"WARN Act" has the meaning set forth in Section 10.9 of this Agreement.
ARTICLE 2
PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets and Assumption of Liabilities. In
reliance upon the
representations, warranties and covenants contained in this
Agreement as of the date hereof and
on the Closing Date, (i) the Purchaser agrees to purchase, and the
Company agrees to sell, the
Assets (as defined below) of the IM Division from the Company, and
(ii) the Purchaser agrees to
assume the Assumed Liabilities of the IM Division (as defined
below), in each case on the terms
and conditions set forth in this Agreement. The sale, transfer,
conveyance, assignment and
delivery of the Assets by the Company shall convey (x) good and
valid title to the Assets that are
tangible assets, (y) all of the Company's interests in and to the
Assets that are intangible assets,
and (z) good and valid title to the Assets that are, and all of the
Company's interests in and to the
Assets that are, mixed assets, free and clear of any and all
Encumbrances, except for the
Assumed Liabilities and the Permitted Encumbrances.
(a) Assets.
(i) Assets. On the Closing Date, and subject to the
provisions of
Section 2.1(c) below, the Purchaser will purchase or
assume, as applicable, all
right, title and interest in and to all of the assets of
the Company, other than the
Excluded Assets, which are related to, used, necessary or
useful in the conduct of
the Business as the same shall exist on the Closing Date,
including but not limited
to (A) the accounts receivable set forth on Schedule
2.1(a)(i)(A), (B) the prepaid
assets (excluding prepaid insurance) and expenses set
forth on
Schedule 2.1(a)(i)(B), (C) the property, equipment and
other tangible personal
property of the IM Division set forth on Schedule
2.1(a)(i)(C), (D) the Business
Intellectual Property and other intangible assets
necessary or useful in the
operation of the Business set forth on Schedule
2.1(a)(i)(D) (which excludes the
Intellectual Property of the BPS Division), (E) the
Permits relating to the
Business to the extent transferable set forth on Schedule
2.1(a)(i)(E), (F) the
rights and benefits of and under all of the Company's
Operating Contracts of or
for the IM Division, including work-in-process and sales
pipeline, set forth on
Schedule 2.1(a)(i)(F), (G) the documents, books and
records (financial or
otherwise) which are not Excluded Assets and which relate
to the Business,
whether in tangible or intangible form, including ledgers,
files, correspondence,
lists, human resource policies, procedures manuals and the
like, creative
materials, advertising and promotional materials, studies,
reports and other
printed, written or electronic materials, (H) all sales,
promotion, advertising, and
marketing materials of whatever form or nature owned or
licensed by the
Company relating to the Business or the Assets, (I) all
goodwill associated with
the IM Division of the Company and all other rights,
properties, and assets of any
kind or character whatsoever which are owned by the
Company which are not
"Excluded Assets," (J) the corporate names "Teltech,"
"Teltech Resources" or a
similar interaction of the use of the word "Teltech," (K)
the internet names and
addresses "Teltech.com" and "Intota.com," and (L) employee
records of the Hired
Active Employees, if such employees provide written
consent for the transfer of
such records in accordance with Applicable Law
(collectively, the "Assets"),
together with all of the Company's rights, claims or
causes of action of the
Company of whatever nature, contingent, or otherwise
against Third Parties
specifically and solely relating to the Assets or the
Business arising out of
transactions occurring prior to the Closing Date. The
foregoing Schedules shall
be delivered as of the date of this Agreement and shall be
updated (but not subject
to the Supplementation provisions of Section 13.21 hereof)
to and delivered by
the Company on the Closing Date.
(ii) Excluded Assets. Notwithstanding anything to
the contrary
contained in Section 2.1(a) of this Agreement, the
following assets of the
Company are not part of the sale and purchase contemplated
hereunder, are
excluded from the Assets, shall remain the property of the
Company after the
Closing and shall not be purchased or assumed by the
Purchaser (collectively, the
"Excluded Assets"): (A) cash and cash equivalents, (B)
all property and assets of
the BPS Division that were not historically used or
required, in any material
respect, for the Business, including (aa) accounts
receivable of the BPS Division
and accounts receivable of the Company not associated with
the IM Division,
(bb) property, plant and equipment and other tangible
personal property,
(cc) Intellectual Property and other intangible assets
necessary or useful in the
operation of the Company or the BPS Division, (dd) Permits
of the Company,
excluding those of the IM Division, (ee) the rights and
benefits of and under all
Operating Contracts, (ff) the documents, books and records
of the Company and
the BPS Division in any form and which are not wholly
associated with the IM
Division, (C) deferred income Taxes and credits of the
Company, (D) prepaid
assets associated with the BPS Division, including
insurance and all rights in and
ownership of insurance policies of the Company, (E) any
claims and actions by
the Company against the officers and directors of the
Company, (F) any non-
transferable Permits and Permits associated with the BPS
Division that were not
historically used or required (excluding general business
licenses of the
Company), in any material respect, for the Business, (G)
all Benefit Plans of the
Company, (H) the Company's Tax returns and financial
statements, and
associated workpapers, and all claims for refunds of Taxes
and other fees and
charges of a Governmental Body, (I) any shares of capital
stock of the Company,
(J) the corporate charter and other similar records of the
Company, (K) the
Company's qualifications to conduct business, arrangements
with registered
agents, taxpayer and other identification numbers, seals,
minute books, stock
transfer books, and other documents relating to the
organization, maintenance and
existence of the Company, (L) all corporate names of the
Company (other than
the corporate names "Teltech," "Teltech Resources" or a
similar iteration of the
use of the name "Teltech"), telephone, telex and telephone
facsimile numbers and
other directory listings and internet and other electronic
addresses (other than
"Teltech.com" and "Intota.com"), (M) all sales, promotion,
advertising, and
marketing materials of whatever form or nature owned or
licensed by or to the
Company relating to the BPS Division or the Company
generally, but excluding
such that relates to the Business, (N) all goodwill of the
Company, including the
BPS Division, that is not the goodwill of the IM Division,
(O) those other assets
listed on Schedule 2.1(a)(ii), and (P) any rights of the
Company under this
Agreement and the Ancillary Documents.
(b) Liabilities.
(i) Assumed Liabilities. On the Closing Date,
subject to the terms
and conditions hereof, the Purchaser will assume, be
obligated to pay, perform
and/or discharge only the following Liabilities of the IM
Division of the
Company arising or accruing on or prior to the Closing
Date: (A) trade accounts
payable incurred in the Ordinary Course of Business and
accrued and other
current operating Liabilities reflected on the Closing
Balance Sheet, (B) the
obligations of the Company arising from the IM Division
under the Operating
Contracts in the Ordinary Course of Business, except for
any breach, defaults or
non-current amounts owing under or arising or occurring
from, in connection
with, or pursuant to such Operating Contracts on or prior
to the Closing Date,
(C) the obligations of the Company under any Permit
relating to the Business
transferred to the Purchaser as set forth on Schedule
2.1(a)(i)(E), (D) obligations
associated with the amount of deferred revenue of the
Business reflected on
Schedule 2.1(b)(i)(D) that were incurred in the Ordinary
Course of Business, and
(E) obligations associated with employees of the Company
who will be hired by
the Purchaser, including vacation and personal time off
accrued to and through
the date of Closing to the extent reflected on Schedule
2.1(b)(i)(E) and the
Closing Balance Sheet; provided, however, that the Assumed
Liabilities shall not
include the Excluded Liabilities (collectively, the
"Assumed Liabilities"). The
Closing Balance Sheet shall be prepared in accordance with
Section 2.2(b) below.
(ii) Excluded Liabilities. The Purchaser expressly
does not, and shall
not, assume, be deemed to assume, or be obligated to pay,
perform or otherwise
discharge any Liabilities of the Company other than the
Assumed Liabilities
which shall be set forth on the Closing Balance Sheet,
including any Liability
arising from, in connection with or incident to (A) any
Liability of the
BPS Division, (B) any Transactional Expenses paid by or
relating to the
Company or the Company Parent, including those set forth
in Section 13.10
hereof, (C) any income Tax Liability of the Company or any
former shareholder
of the Company, (D) any Tax Liability of or incurred by
the Company, any
Related Person or Third Party, or the Assets which has as
its basis any event, act,
occurrence or omission on or before the Closing Date
unless related to the IM
Division and reflected on the Closing Balance Sheet, (E)
any Taxes, fees or
penalties as described in Section 11.7(a) of this
Agreement, (F) any Liability
arising from, incident to or in connection with an
Excluded Asset, (G) any
Liability owed to any Related Person or Affiliate of the
Company, whether or not
arising in the Ordinary Course of Business, except for the
amounts owed for
goods or services to Sopheon GmbH (which amounts shall for
all purposes be
considered to be incurred in the Ordinary Course of
Business) which shall be
reflected by the Auditor on the Closing Balance Sheet, (H)
any breach, defaults,
or violations of Applicable Law which has as its basis any
event, act, occurrence
or omission prior to the Closing Date or non-current
amounts owing under the
Operating Contracts, (I) other than salary, wages,
vacation, personal time off and
the associated employment related Taxes thereto which
shall be set forth on the
Closing Balance Sheet, claims by current or former
employees of the Company
which arise prior to the Closing, (J) any Proceeding
having as its basis any event,
act, occurrence or omission prior to the Closing Date and
which is not disclosed
in Schedule 3.7 of this Agreement, (K) any Liability for
any Benefit Plan
contribution, including 401(k) matching contributions, (L)
bonus payments due to
the Company employees of the IM Division, and (M) final
salary and wage
payments, and associated withholdings and Tax obligations
to and through the
date of Closing (collectively, the "Excluded Liabilities").
(c) Equitable Principles for Allocation of Shared Assets
and Corresponding
Licenses. The parties acknowledge and agree that (i) each will
make a good faith effort
to properly allocate the properties and assets of the Company
between the Company and
the Business in order to provide the benefits and conform to
the intent of the
transaction(s) described in this Agreement, and (ii) there are
certain properties and assets
of the Company that are utilized both by the IM Division and
the BPS Division which
must be equitably allocated to the Purchaser or the Company and
licensed to the other
non-owner party (either the Purchaser or the Company). The
basis of allocation of
ownership shall be determined primarily by the frequency,
volume and necessity of use
to either the Company or the Business. Generally, the greater
necessity of ownership
when considered in combination of these factors will determine
the ownership allocation
of the asset, and therefore, also, the party to be licensed.
2.2 Purchase Price.
(a) Purchase Price. The purchase price for the Assets
(the "Purchase Price")
shall be a maximum of Three Million Four Hundred Fifty Thousand
Dollars
($3,450,000), which shall be remitted, or payable in the case
of the Earn Out, as follows:
(i) $3,000,000, less the amount of any advance
payment previously
remitted to the Company by the Purchaser or the Purchaser
Parent, shall paid to
the Company in cash by wire transfer of immediately
available funds at and upon
the Closing by the Purchaser (the "Closing Cash Payment");
(ii) Duly authorized and non-assessable unregistered
shares of
common stock of the Purchaser Parent (the "Purchaser
Parent Stock") with a
value of $50,000 (as determined in accordance with the
following paragraph)
shall be delivered to the escrow agent ("Escrow Agent") at
and upon the Closing
by the Purchaser Parent and shall be held and distributed
pursuant to the
provisions of the escrow agreement set forth as Exhibit A
to this Agreement (the
"Escrow Agreement"). The Purchaser Parent Stock held by
the Escrow Agent,
together with the Company Parent Shares, described in
Section 11.5 of this
Agreement, may be referred to herein as the "Escrow Fund."
The Purchaser Parent Stock shall be delivered to the
Escrow Agent, and
shall be held and distributed pursuant to the provisions
of the Escrow Agreement.
The number of shares of the Purchaser Parent Stock to be
issued to the Company
shall be determined by the following formula: Dollar
amount of the Purchase
Price to be paid in the Purchaser Parent Stock divided by
the "Average Closing
Price." The "Average Closing Price" shall be determined
by the volume
weighted average reported closing price of the Purchaser
Parent Stock for the ten
(10) trading days immediately preceding the third (3rd)
day prior to the Closing
Date; and
(iii) an amount of up to a maximum of $400,000 may
become payable
by the Purchaser to the Company if certain customer
subscription renewal goals,
as set forth below, are attained (the "Earn Out" and, with
respect to any amounts
to be paid under the Earn Out, collectively, the "Earn Out
Amounts" or
individually an "Earn Out Amount"):
(A) The Earn Out, or a portion thereof, may be
earned in
accordance with this Section 2.2(a)(iii) by the
Company in the event that
(i) during the period from July 1, 2003 through and
including June 30,
2004, customers of the Company with subscription
contracts for the
Company's services renew a subscription contract that
has an end date
between July 1, 2003, through and including December
31, 2003,
provided that any subscription renewal contracts to
be considered as a
renewal for purposes of the Earn Out must have a
subscription period start
date within ninety (90) days after the expiration
date of the applicable
subscription contracts, and/or (ii) subscription
customers of the Company
with a subscription contract expiring at any time
after December 31, 2003,
fully utilize or "Hit Cap" the value of the services
allowed under the
subscription contract before the expiration of such
subscription contract
during the period between July 1, 2003, and December
31, 2003, and
renew such subscription contract during the period
between July 1, 2003,
and June 30, 2004; provided, however, that the
original subscription value
of such renewed "Hit Cap" contracts (prior to
renewal) is added to the
denominator for purposes of calculating the Renewal
Percentage described
in Section 2.2(a)(iii)(B) below.
(B) Schedule 2.2(a)(iii)(B) sets forth a
complete and accurate a
list of customer subscription contracts that are due
to expire during the
period commencing on July 1, 2003, and ending at the
close of business
on December 31, 2003, (the "Expiring Subscription
Contracts") and the
aggregate dollar amount of the services under the
Expiring Subscription
Contract(s) (the "Expiring Contract Revenue"). The
Expiring
Subscription Contracts exclude contracts that were
originally due to expire
between July 1, 2003 and December 31, 2003, but which
Hit-Cap prior to
June 30, 2003 and were therefore considered part of
renewals for prior
periods. The denominator used to determine the
"Renewal Revenue" (as
defined below) as a percentage of revenue arising
from renewed Expiring
Subscription Contracts and renewed Hit-Cap
subscription contracts (the
"Renewal Percentage") shall be the Expiring Contract
Revenue plus the
original subscription value of any contracts
originally scheduled to expire
subsequent to December 31, 2003, that Hit-Cap and are
renewed between
July 1, 2003 and December 31, 2003. The numerator
used to determine
the Renewal Percentage shall be the aggregate of the
face amounts of the
contract values set forth in all such renewed
customer subscription
contracts (whether such renewal arises from an
Expiring Subscription
Contract or from a "Hit Cap" subscription contract),
(collectively, the
"Renewal Subscription Contracts", and the aggregate
revenue therefrom
the "Renewal Revenue").
(C) All Renewal Subscription Contracts shall be
valued
hereunder by the dollar amount set forth in the
applicable Renewal
Subscription Contract. In the event that as of, or
at any time after,
December 31, 2003, the Renewal Percentage reaches the
required
Renewal Percentage, in the aggregate, as set forth
below, all or a portion
of the Earn Out will be owed by the Purchaser and
remitted to the
Company in accordance with Section 2.2(a)(iii)(E) below:
Renewal Percentage
Cumulative Earn Out
Amount
80% or more, but less than 90%
$200,000
90% or more, but less than 100%
$300,000
100% or more
$400,000
(D) Within thirty (30) days after the end of
each month after
the Closing, through June 30, 2004, commencing with
July 31, 2003, the
Purchaser shall provide to the Company a monthly
report (the "Monthly
Earn Out Report(s)") of Renewal Subscription
Contracts which shall, at
a minimum, contain (i) the customer identity of each
Expiring
Subscription Contract and the date of expiration,
(ii) the dollar value of
each Expiring Subscription Contract, and a total
amount of the dollar
values of the Expiring Subscription Contracts, (iii)
a corresponding dollar
value of each Renewal Subscription Contract and the
date, or if not yet
renewed the anticipated date, of such renewal, if
any, (iv) the dollar value
of each renewal of any "Hit Cap" subscription
contract together with the
original subscription value of that contract, (v) an
aggregate running total
of the dollar value of the Renewal Revenue, and (vi)
a calculation of the
Renewal Percentage for each subject month and,
cumulatively, for all
months to date.
(E) In the event that as of, or at any time
after, December 31,
2003 the aggregate Renewal Percentage equals or
exceeds (i) 80% but less
than 90%, the Purchaser shall concurrently remit with
the delivery of that
month's monthly report an amount of $200,000, (ii)
90% but less than
100%, the Purchaser shall concurrently remit with the
delivery of that
month's monthly report an amount of $300,000, less
any Earn Out
Amount(s) previously paid to the Company, or (iii)
100% or more, the
Purchaser shall concurrently remit with the delivery
of that month's
monthly report an amount of $400,000, less any Earn
Out Amount(s)
previously paid to the Company.
(F) Upon and after receipt of any Monthly Earn
Out Report by
the Company, the Company shall have the right to
review the Purchaser's
books and records that it reasonably deems necessary
to (x) document and
prove the accuracy, completeness and proper
calculation of the Monthly
Earn Out Report(s) on both a monthly and cumulative
basis, and/or
(y) dispute the accuracy of any Monthly Earn Out
Report and the data
underlying such report (including cumulative figures).
(G) The Purchaser shall make good faith efforts
to renew the
customer subscription contracts as "subscription"
arrangements, as
opposed to "transactional" arrangements. In the
event, however, that
some of the customer subscription contracts are
converted to transactional
arrangements, the parties shall equitably determine
how such continuing
business with the subject customer will be accounted
for in calculation of
the Earn Out. In addition, the Purchaser shall not
be obligated to renew
any customer subscription contract if the Purchaser,
in good faith,
determines such customer represents a material credit
risk. In such cases,
if any, such customer subscription contracts shall be
removed from both
the numerator and denominator for purposes of
determining the Renewal
Percentage.
(b) Purchase Price Adjustment. The Purchase Price will
be adjusted (the
"Purchase Price Adjustment"), if at all, for the amount by
which the Net Current
Liabilities (as defined below) of the Business are not equal to
$2.125 million (the
"Guaranteed Net Current Liabilities"). For example, if (x) the
Net Current Liabilities
are $2.5 million, then the Net Current Liabilities are deemed
greater than the Guaranteed
Net Current Liabilities, and (y) conversely, if the Net Current
Liabilities are $1.5 million,
then the Net Current Liabilities are less than the Guaranteed
Net Current Liabilities.
An estimated amount of the Purchase Price Adjustment (the
"Estimated
Purchase Price Adjustment") will be determined by the mutual
agreement of the parties
on the Closing Date and shall be a Closing document to this
transaction. If the Estimated
Purchase Price Adjustment shows a calculation that the estimated
Net Current Liabilities
of the Business (the "Estimated Net Current Liabilities") on the
Closing Date to be
greater than the Guaranteed Net Current Liabilities, then the
Closing Cash Payment and
the Purchase Price will be reduced by the amount of the
difference. The Estimated
Purchase Price Adjustment will be reconciled to the Purchase
Price Adjustment after the
Closing Date in accordance with the further provisions of this
Section 2.2(b).
"Net Current Liabilities" shall mean the difference between the
current Assets
of the Business and the current Assumed Liabilities of the
Business computed in
accordance with GAAP consistently applied by the Company in the
Financial Statements.
(i) Promptly following the Closing Date, but in any
event not later
than the one-hundred five (105) days after the Closing
Date, the Company shall
cause to be prepared and delivered to the Purchaser a
certification (the "Closing
Certificate") prepared by Ernst & Young, LLP or such other
independent
certified public accountant selected by the Company (the
"Auditor"). The
Closing Certificate shall include:
(A) A closing balance sheet of the Business on
the Closing
Date (the "Closing Balance Sheet") prepared in
accordance with
Section 2.2(b)(iii);
(B) A calculation and comparison of the (x) the
Estimated
Purchase Price Adjustment, and (y) the Purchase Price
Adjustment. In the
event that:
(x) the Estimated Purchase Price Adjustment is a
greater number than the Purchase Price
Adjustment, the Purchaser
shall pay the difference to the Company; and
(y) the Estimated Purchase Price Adjustment is
of a
smaller magnitude than the Purchase Price
Adjustment, the
difference shall be paid by the Company to the
Purchaser;
provided, however, that the Purchaser shall first
make a claim
against the Escrow Fund for the amount due to the
Purchaser to the
extent of fifty percent (50%) of the original
amount of the Escrow
Fund and, if that amount is not sufficient to
satisfy the Purchaser's
claim, the Purchaser shall have the right to have
the remainder paid
directly by the Company and the Company Parent or
through a
claim by the Purchaser against the remainder of
the Escrow Fund.
In illustration of the foregoing, in the event
the Estimated Purchase Price
Adjustment reduced the Purchase Price paid at the
Closing in the amount
of $100,000, and the Purchase Price Adjustment shows
Net Current
Liabilities of less than the Guaranteed Net Current
Liabilities in the
amount of $200,000, then the Company would be paid an
additional
$300,000 ($100,000 deducted plus $200,000 for the
savings of Net
Current Liabilities).
The amount referenced in Section 2.2(b)(i)(B)(x)
above, if any, shall be
summarized and computed as an amount due to the
Company, with
interest thereon. The amount referenced in Section
2.2(b)(i)(B)(y) above,
if any, shall be summarized and computed as an amount
due to the
Purchaser, with interest thereon. Interest shall be
computed in accordance
with Section 2.2(b)(vi) below.
(C) Copies of all supplementary documents, work
papers, and
other data relating to the Closing Certificate; and
(D) Such other supplementary evidence as the
Purchaser may
require either prior to or after delivery of the
Closing Certificate.
(ii) In connection with the preparation of the
Closing Balance Sheet
and all other matters arising under the Closing
Certificate, each of the Purchaser
and the Company shall afford the other and their
respective representatives
complete access to the books, records, personnel and
facilities of or pertaining to
the Business to permit the Auditor to review such
information as is necessary or
desirable to prepare the Closing Balance Sheet and all
other statements and
documentation arising under the Closing Certificate.
(iii) The Closing Balance Sheet shall consist of a
special procedures
report of the Auditor, based on the balance sheet of the
Business as of the close of
business on the Closing Date (the "Closing Balance Sheet
Date") in accordance
with the accounting principles and methods consistently
applied by the Company
in connection with the Business (including any change in
accounting methods or
principles disclosed in any Schedule or Supplement) as set
forth in the Financial
Statements, whether or not such accounting principles are
in conformity with
GAAP, and without giving effect to the consummation of the
transactions
contemplated hereby; provided, however, that the Closing
Balance Sheet shall be
subject to and prepared in strict conformity with year-end
accrual and estimation
practices of the Company used for the Financial
Statements, such that all pro-rata
adjustments, accruals, reserves, allowances and similar
year-end adjustments are
prepared for and included in the Closing Balance Sheet,
treating the Closing
Balance Sheet as the Company's year-end statement for the
Business. The
expense of the preparation of the Closing Balance Sheet by
the Auditor shall be
borne by the Company. The parties hereby acknowledge and
agree, and the
Auditor is directed to act in accordance with the parties'
agreement, that
regardless of whether it is otherwise required by GAAP, or
whether it is
inconsistent with the past accounting practices of the
Company, the Closing
Balance Sheet shall not contain payments or accruals for
(i) the fees, costs and/or
expenses associated with any Transactional Expenses
arising from, incident to or
in connection with the transactions contemplated by this
Agreement, (ii) any
Excluded Assets, and/or (iii) any Excluded Liabilities.
(iv) If the Purchaser concludes that any matter
reported in the Closing
Certificate is not accurate, the Purchaser shall, within
forty (40) days after its
receipt of the Closing Certificate (the "Response
Period"), deliver to the
Company a written statement setting forth a specific
description of each of its
objections and each of any discrepancies believed to
exist. The Company shall
deliver any further supplemental documentation upon
written request by the
Purchaser within five (5) business days of receipt of the
Purchaser's written
request. If no notice of any objections or discrepancies
is given within the
Response Period, then the calculations set forth in the
Closing Certificate shall be
controlling for all purposes of this Agreement, and the
Purchaser shall remit the
amount to be paid in accordance with the Closing
Certificate and pursuant to
Section 2.2(vi) below.
(v) The Purchaser and the Company shall use good
faith efforts to
jointly resolve the properly noticed objections and
discrepancies within fifteen
(15) days of the receipt of the written statement of
objections and discrepancies,
which resolution, if achieved, shall be fully and
completely binding upon all
parties to this Agreement and not subject to further
review, appeal or dispute. If
the Purchaser and the Company are unable to resolve the
objections and
discrepancies to their mutual satisfaction within such
fifteen (15) day period, then
the matter shall be submitted to a mutually acceptable
accounting firm of national
reputation (the "Independent Accountants"). In submitting
a dispute to the
Independent Accountants, each of the parties shall
concurrently furnish, at its own
expense to the Independent Accountants and the other party
such documents and
information as the Independent Accountants may request.
Each party may also
furnish to the Independent Accountants such other
information and documents as
it deems relevant, with the appropriate copies and
notification being concurrently
given to the other party. Neither party shall have or
conduct any communication,
either written or oral, with the Independent Accountants
without the other party
either being present or receiving a concurrent copy of any
written communication.
The Independent Accountants may conduct a conference
concerning the
objections and discrepancies between the Company and the
Purchaser, at which
conference each party shall have the right to (i) present
its documents, materials
and other evidence (previously provided to the Independent
Accountants and the
other party), and (ii) to have present its or their
advisors, accountants and/or
counsel. The Independent Accountants shall promptly (but
no later than thirty
(30) days from the date of engagement of the Independent
Accountants) render a
decision on the issues presented, which decision shall be
final and binding on the
parties.
(vi) Within five (5) days of the earlier to occur of
(i) any failure to
object to the Closing Certificate within the Response
Period, or (ii) receipt of the
Independent Accountants' decision with respect to such
dispute, if the Purchaser
is determined to owe an amount to the Company, the
Purchaser shall pay such
amount to the Company, and if the Company is determined to
owe an amount to
the Purchaser, such amount shall be paid to the Purchaser.
All amounts owed by
the Purchaser or the Company to the other in accordance
with this Section 2.2(b)
shall be paid by certified or bank cashier's check or by
wire transfer of
immediately available funds with interest computed thereon
from the Closing
Date at the prime rate charged on the date the payment
becomes due by U.S.
Bank National Association, Minneapolis, Minnesota.
2.3 Closing and Closing Deliveries.
(a) Closing and Closing Date. Subject to the
satisfaction or waiver of the
conditions precedent contained in Articles 6, 7 and 8 hereof,
the closing of the
transactions contemplated by this Agreement (the "Closing")
shall be simultaneously
held via facsimile transmission of the document signature pages
at 10:00 a.m. on July 1,
2003 at the offices of Briggs and Morgan, Professional
Association, Minneapolis,
Minnesota, and counsel to the Purchaser and the Purchaser
Parent, Kane, Kessler, P.C. or
such other date, location or time as is mutually agreeable to
the parties. The Closing will
be effective as of the close of business on such day. Such
date is referred to in this
Agreement as the "Closing Date."
(b) Documents to be Delivered by the Company. At the
Closing, the
Company shall execute, where necessary or appropriate, and
deliver to the Purchaser
each and all of the following:
(i) A certificate in the form of Exhibit B hereto
signed by the
Company and the Company Parent dated as of the Closing
Date, to the effect that
the representations and warranties made by the Company and
the Company
Parent in this Agreement (as modified by the Schedules and
any Supplement(s))
and in any document, instrument and/or agreement to be
executed and delivered
by the Company or the Company Parent pursuant to this
Agreement or the
Ancillary Documents are true and correct at and as of the
Closing and each of the
Company and the Company Parent has respectively performed
and complied with
all of its respective covenants, agreements and
obligations under this Agreement
or the Ancillary Documents which are to be performed and
complied with by the
Company or the Company Parent at or prior to the Closing;
(ii) An Assignment and Assumption Agreement in the
form of
Exhibit C hereto executed by the Company;
(iii) A Bill of Sale in the form of Exhibit D hereto
executed by the
Company;
(iv) Assignments for the transfer of the Business
Intellectual Property,
including recordable trademark assignments suitable for
filing with the United
States Patent and Trademark Office;
(v) A copy of the duly adopted resolutions of the
Board of Directors of
the Company certified by an officer of the Company
approving this Agreement
and authorizing the execution and delivery of this
Agreement by the Company,
including the documents, instruments and agreements to be
executed and/or
delivered by the Company pursuant hereto, and the
consummation of the
transactions contemplated hereby and thereby;
(vi) A certificate of an officer of the Company
Parent that the
transactions contemplated hereby have been duly authorized
for execution and
delivery by the Company Parent by all appropriate
corporate or other actions;
(vii) Delivery and assignment of any and all documents
relating to
Permits of the Business which by their terms are assignable;
(viii) A duly executed written opinion letter by
counsel for the Company
dated as of the Closing Date, addressed to the Purchaser,
as contemplated by
Section 7.4 of this Agreement;
(ix) The Company shall execute and deliver to the
Purchaser in blank
(without completing the buyer insert) the assignment
provision of all vehicle,
equipment and other personal property title certificates
(or reasonably acceptable
transfer documentation which will be accepted by
applicable Governmental
Bodies and Third Parties, where applicable) with a
detailed list thereto (organized
by the Company site location) describing (A) the vehicle,
equipment or personal
property, (B) the vehicle, equipment or personal property
identification number,
and (C) the state issuing the title certificate;
(x) Certificate of good standing for the Company
dated within five (5)
days prior to the Closing Date issued by the Secretary of
State of Minnesota and
foreign qualification good standing certificates for the
Company in each state set
forth in Schedule 3.1;
(xi) All consents approving the transfer of any Asset
or the assumption
of any Assumed Liability set forth on Schedule 5.10
(without charge to the
Purchaser or material change to the terms of the Contract
or Permit);
(xii) An Investor Letter in the form of Exhibit E
relating to the
Purchaser Parent Stock;
(xiii) The Escrow Agreement;
(xiv) The Transition Services Agreement;
(xv) The Commercial Agreement;
(xvi) UCC-3 partial releases executed by (i) Silicon
Valley Bank, the
Company's secured lender, and (ii) the Company Parent,
releasing the Assets
from the blanket security agreements covering the assets
of the Company;
(xvii) The Estimated Purchase Price Adjustment (to be
agreed upon by
the parties hereto pursuant to Section 2.2(b)); and
(xviii) Such other documents and items as are reasonably
necessary or
appropriate to effect the consummation of the transactions
contemplated hereby
or which may be customary under local law.
(c) Documents to be Delivered by the Purchaser. At the
Closing, the
Purchaser shall execute, where necessary or appropriate, and
deliver each and all of the
following:
(i) Remittance of the Purchase Price (excluding the
Earn Out
Amounts) pursuant to Section 2.2 hereof;
(ii) A certificate in the form of Exhibit F hereto
signed by duly
authorized officers of the Purchaser and the Purchaser
Parent, dated as of the
Closing Date, to the effect that (x) the representations
and warranties made by the
Purchaser and the Purchaser Parent in this Agreement and
in the Ancillary
Documents to be executed and delivered by the Purchaser
and the Purchaser
Parent pursuant to this Agreement and the Ancillary
Documents are true and
correct at and as of the Closing, and (y) each of the
Purchaser and the Purchaser
Parent has respectively performed and complied, in all
material respects, with all
of its covenants, agreements and obligations under this
Agreement and the
Ancillary Documents which are to be performed and complied
with by the
Purchaser or the Purchaser Parent on or prior to the Closing;
(iii) A copy of the duly adopted resolutions of the
Board of Directors of
the Purchaser certified by an officer of the Purchaser
approving this Agreement
and the Ancillary Documents and authorizing the execution
and delivery of this
Agreement and the Ancillary Documents to be executed
and/or delivered by the
Purchaser pursuant hereto, and the consummation of the
transactions
contemplated hereby and thereby;
(iv) A certificate of an officer of the Purchaser
Parent that the
transactions contemplated hereby have been duly authorized
for execution and
delivery by the Purchaser Parent by all appropriate
corporate and other actions.
(v) The Assignment and Assumption Agreement executed
by the
Purchaser;
(vi) A duly executed written opinion letter by
counsel for the
Purchaser, dated as of the Closing Date, addressed to the
Company, as
contemplated by Section 8.3 of this Agreement;
(vii) The Escrow Agreement;
(viii) The Transition Services Agreement;
(ix) The Commercial Agreement;
(x) Estimated Purchase Price Adjustment (to be
agreed upon by the
parties hereto pursuant to Section 2.2(b)); and
(xi) Such other documents and items as are reasonably
necessary or
appropriate to effect the consummation of the transactions
contemplated hereby
or which may be customary under local law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to the Purchaser and the Purchaser Parent to enter
into this Agreement
and to consummate the transactions contemplated hereby, the Company
hereby represents and
warrants to the Purchaser and the Purchaser Parent that each and all
of the following
representations and warranties (as modified by the Schedules to this
Agreement (the
"Schedules") and any Supplement delivered by the Company or the
Company Parent pursuant to
Section 13.21 of this Agreement) are true and correct as of the date
of this Agreement and will
be true and correct as of the Closing Date. The Schedules are
arranged in numbered paragraphs
generally corresponding to the sections and subsections contained in
this Article 3. Any
disclosure as to one schedule, section or subsection shall not be
deemed to be a disclosure on any
other schedule, section or subsection unless such disclosure
specifically cross-references such
other schedule, section or subsection.
3.1 Organization. The Company is a corporation duly
organized, legally existing
and in good standing under the laws of the state of Minnesota. The
Company has all requisite
power and authority, corporate and otherwise, to own, operate and
lease its properties and assets
and to conduct the Business as it is now being conducted. As set
forth in Schedule 3.1, the
Company is duly qualified to transact business as a foreign
corporation and is in good standing
under the laws of every state or jurisdiction in which the nature of
their activities or of their
properties owned, leased or operated makes such qualification
necessary and in which the failure
to be so qualified could reasonably be expected to have a Material
Adverse Effect on the
Company.
3.2 Capitalization. The authorized capital stock of the
Company consists solely of
ten thousand (10,000) shares of common voting stock, par value
$0.0001, of which one (1) share
is issued and outstanding on the date hereof and owned beneficially
and of record by the
Company Parent.
3.3 Due Authorization. The execution, delivery and
performance of this Agreement
and the Ancillary Documents to be executed and/or delivered by the
Company pursuant to this
Agreement, and the consummation of the transactions contemplated
hereby and thereby have
been duly and validly authorized by all necessary action, corporate
or otherwise, including,
without limit, the approval of the Company Parent. This Agreement
and the Ancillary
Documents to be executed and/or delivered by the Company pursuant to
this Agreement have
been or will be on or before the Closing Date duly and validly
authorized, executed and
delivered by such party and the obligations of such party hereunder
and thereunder are or will be
upon such execution and delivery valid, legally binding and
enforceable against such party in
accordance with their respective terms.
3.4 No Breach. Except as set forth on Schedule 3.4, the
Company has full power
and authority to sell, assign, transfer, convey and deliver to the
Purchaser the Assets and the
Company has full power and authority to otherwise perform its
obligations under this Agreement
and the Ancillary Documents. Except as set forth on Schedule 3.4,
the execution and delivery of
this Agreement and the Ancillary Documents to be executed and
delivered by the Company
pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and
thereby will not: (i) violate any provision of the Articles of
Incorporation or Bylaws of the
Company, (ii) violate any Applicable Laws or Injunction applicable
to the Company, (iii) other
than any filing with, Permit from, authorization, consent or
approval of, or the giving of any
notice to, any Person, (iv) result in a violation or breach of, or
constitute (with or without due
notice or lapse of time or both) a default (or give another party
any rights of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond,
mortgage, indenture, license, franchise, Permit (including, but not
limited to, any Permits,
approvals or authorizations of any Governmental Body), Benefit Plan
or other Contract to which
the Company is a party, or by which it or any of its properties or
assets may be bound, or
(v) result in the creation or imposition of any Encumbrance on any
of the Assets.
3.5 Clear Title. Except as otherwise set forth on Schedule
3.5 hereto, (i) the
Company holds good and valid title to all of the Assets set forth on
Schedule 2.1(a)(i)(C), (ii) all
of the Company's interests in and to the Assets that are intangible
assets set forth on Schedules
2.1(a)(i)(A), 2.1(a)(i)(B), 2.1(a)(i)(D), 2.1(a)(i)(F), 3.14 and
3.16(b) are valid and enforceable,
(iii) the Company holds valid and enforceable interests in the
leased personal property Assets set
forth on Schedules 3.16(a)(19), 3.16(b)(7), and 3.17(1), and (iv)
except for Permitted
Encumbrances and the Assumed Liabilities, the Assets are free and
clear of any and all
Encumbrances of any kind, nature and description whatsoever. Upon
the sale, assignment,
transfer and delivery of the Assets to the Purchaser hereunder, all
right, title and interest, as
applicable, thereto shall be vested in the Purchaser, free and clear
of all Encumbrances, except
for Permitted Encumbrances and the Assumed Liabilities, including
the obligations (excluding
the Excluded Liabilities) under the Operating Contracts.
3.6 Condition and Sufficiency of Assets. Except as set forth
in Schedule 3.6 hereto,
the Assets constituting property, plant, equipment and other
personal property (i) have in all
material respects been properly maintained, and (ii) are in all
material respects in good operating
condition and repair, subject only to ordinary wear and tear.
Except as set forth in Schedules 3.6
or 3.16, upon transfer of the Assets to the Purchaser, there will be
no other assets owned by any
Third Party which are used in the operation of the Business as
presently conducted or proposed
to be conducted by the Company.
3.7 Litigation. Except as described in Schedule 3.7 hereto,
there is no pending
Proceeding, and there has not been a Proceeding with respect to the
Company since January 1,
1998:
(a) that has been commenced by or served upon the
Company, or of which the
Company has Knowledge (other than any Proceeding which
generally affects the
business of all Persons conducting business similar to the
Company and in which the
Company is not a named defendant) in each case relating to the
Business; or
(b) to the Company's Knowledge, that, as of the date of
execution of this
Agreement and the Closing Date, challenges, or that will have
the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of
the transactions
contemplated hereby.
To the Knowledge of the Company, no such Proceeding has been
Threatened and no
circumstances are known by the Company that would reasonably be
expected to result in a
Proceeding against the Company relating to the Business. Except as
provided in Schedule 3.7
hereto, to the Knowledge of the Company, the Company is not a party
to or subject to the
provisions of any Injunction which could, individually or in the
aggregate, reasonably be
expected to have a Material Adverse Effect on the transactions
contemplated hereby. The
foregoing shall not include disputed claims between the Company and
account vendors for
amounts due to such vendors arising from goods and/or services
arising prior to or on the
Closing Date if and to the extent such Liability is included in the
Closing Balance Sheet.
3.8 Labor Matters. Except as set forth on Schedule 3.8, the
Company has never
been a party to any collective bargaining agreement or other labor
Contract. There has never
been, and there is not presently pending or existing, and to the
Knowledge of the Company there
is not Threatened, (i) any strike, slowdown, walkout, picketing,
work stoppage, labor arbitration
or other Proceeding in respect of the grievance of any Company
employee, (ii) any application
or complaint filed by any Company employee or union with the
National Labor Relations Board,
or any comparable Governmental Body, (iii) any organizational
activity or other labor dispute
against or affecting the Company, and no application for
certification of a collective bargaining
agreement is pending or, to the Knowledge of the Company, is
Threatened. There is no lockout
of any employees by the Company and no such action is contemplated
by the Company. Except
as set forth in Schedule 3.8 hereto, there is no allegation, charge,
complaint or Proceeding
pending or, to the Knowledge of the Company, Threatened by any
Person against the Company
or any of its current or former officers, directors or employees
relating to employment, equal
employment opportunity, discrimination, harassment, wrongful
discharge, unfair labor practices,
immigration, wages, hours, benefits, collective bargaining, the
payment of social security or
similar Taxes, occupational safety and health or plant closing.
3.9 Tax Matters.
(a) Tax Returns. The Company has timely filed or caused
to be timely filed
or will timely file or cause to be timely filed with the
appropriate taxing authorities all
Tax Returns that are required to be filed by, or with respect
to, the Company on or prior
to the Closing Date. The Returns have accurately reflected and
will, to the Company's
Knowledge, accurately reflect all Liability for Taxes of the
Company for the periods
covered thereby. Schedule 3.9(a) lists all income Tax Returns
filed with any
Governmental Body with respect to the Company for the taxable
periods ended on or
after December 31, 1998. Except as set forth on Schedule
3.9(a), no claim has ever been
made by an authority in a jurisdiction where the Company does
not file Tax Returns that
it is or may be subject to taxation.
(b) Payment of Taxes. All Taxes and Tax Liabilities of
the Company for all
taxable years or periods that end on or before the Closing Date
and, with respect to any
taxable year or period beginning before and ending after the
Closing Date, the portion of
such taxable year or period ending on the day immediately
preceding the Closing Date
("Pre-Closing Period") have been timely paid or accrued and
adequately disclosed and
fully provided for on the books and records of the Company in
accordance with GAAP.
The Company has withheld and paid all Taxes required to have
been withheld and paid in
connection with amounts paid or owing to any employee,
creditor, independent
contractor or other Third Party. There is not now and there
will not be, any Liability for
Taxes, assessments, fees, charges or additions to Tax arising
out of, or attributable to, or
affecting the Assets or the conduct of the Business through the
Closing Date for which
the Purchaser will have any Liability, except to the extent
such Liability is an Assumed
Liability.
3.10 Employee Benefits.
(a) Benefit Plans. Except as described in Schedule 3.10
hereto, the Company
does not maintain or contribute to any Benefit Plans. Without
limiting the generality of
the foregoing provision of this Section, except as described in
Schedule 3.10(a) hereto,
there are no pension plans, welfare plans or employee benefit
plans qualified under
Section 401(a) of the Code to which the Company is required to
contribute. Except as
described in Schedule 3.10(a) hereto, the Company does not and
will not have any
unfunded Liability for services rendered prior to the Closing
Date under any Benefit
Plans. The Company is not in any material default under any
Benefit Plan. Except as set
forth in Schedule 3.10(a), neither the Company, nor any Person
now or formerly part of
a controlled group with the Company, within the meaning of
Section 412(c)(11)(B)(ii) of
the Code (the "Controlled Group"), maintains or has ever
maintained a "defined benefit
plan," as defined in Section 3(35) of ERISA, that is subject to
Section 412 of the Code
and Section 302 of ERISA. Except as set forth in Schedule
3.10(a) hereto, neither the
Company nor any other member of its Controlled Group
contributes to or has, or could
reasonably be expected to have, any Liability (including but
not limited to withdrawal
Liability) with respect to any multi-employer plan (as defined
in Section 4064(a) of
ERISA or Section 4001(a)(3) of ERISA). Other than claims for
benefits in the Ordinary
Course of Business (which are set forth on Schedule 3.10(a)),
there are no actions, suits,
disputes, arbitrations or other material claims pending or, to
the Knowledge of the
Company, Threatened with respect to any Benefit Plan.
(b) Other Plans. None of the Benefit Plans maintained by
the Company
provides health care or any other non-pension benefits to any
employees after their
employment is terminated (other than as required by part six of
subtitle B of title I of
ERISA).
(c) COBRA. The Company has complied with the coverage
continuation
requirements of all Applicable Laws, including Sections 601
through 609 of ERISA,
Section 4980B of the Code, and the requirements of any similar
state law regarding
continued insurance coverage, and the Company has incurred no
material Liability with
respect to its failure to offer or provide continued coverage
in accordance with the
foregoing requirements, nor is there any suit pending, or to
the Knowledge of the
Company, Threatened, with respect to such requirements.
3.11 No Guaranties. Except as set forth on Schedule 3.11, (i)
the Company is not a
party to any Guaranty and is not otherwise liable for any Liability
or obligation (including
indebtedness) of any other Person, and (ii) no Person is a party to
a Guaranty that benefits the
Business.
3.12 Financial Statements. The Company has furnished true and
correct copies of the
financial statements of the Business dated December 31, 2002, and
March 31, 2003, as identified
in Schedule 3.12 hereto (the "Financial Statements"), to the
Purchaser. All Financial
Statements, including any notes thereto, fairly present the
financial position and condition of the
Business as of their respective dates and the results of its
operations for the periods covered in
accordance with GAAP applied on a consistent basis throughout the
periods covered thereby and
on a basis consistent with that of prior years and periods;
provided, however, that any interim
Financial Statements listed on such Schedule lack footnotes and
other required presentation
items. Except for Liabilities (i) reflected or reserved against in
the balance sheet (the "Balance
Sheet") of the Business as of March 31, 2003 (the "Balance Sheet
Date") or in the notes thereto,
(ii) incurred in the Ordinary Course of Business since the Balance
Sheet Date (none of which
resulted from, arose out of, is related to, or was caused by any
breach of Contract, breach of
warranty, tort, infringement or violation of Applicable Laws), (iii)
arising under Contracts to
which the Company is a party, and/or (iv) described on Schedule 3.12
hereto, the Company does
not have any Liabilities which, individually or in the aggregate,
would have a Material Adverse
Effect on the Business. The reserves reflected in the Balance Sheet
are adequate.
3.13 Absence of Certain Developments. Except for the
transactions contemplated by
this Agreement or as otherwise set forth on Schedule 3.13 hereto,
since March 31, 2003, the
Company has conducted the Business only in the Ordinary Course of
Business and has not:
(a) Sold, leased, assigned or otherwise transferred any
material properties or
assets, or disposed of or permitted to lapse any rights in any
Permit or Intellectual
Property owned by the Company and used by the Business, other
than in the usual and
Ordinary Course of Business, or organized any new business
entity or acquired any
equity securities, assets, properties, or business of any
Person or any equity or ownership
interest in any business or merged with or into or consolidated
with any other Person;
(b) Suffered, sustained or incurred any material Loss or
waived or released
any material right or claim, whether or not (i) in the Ordinary
Course of Business, and
(ii) covered by insurance.
(c) Suffered, sustained or incurred any material damage,
destruction or
casualty loss to any material Assets, whether or not covered by
insurance;
(d) Subjected any of the Assets to any Encumbrance,
whether or not in the
Ordinary Course of Business;
(e) Increased the salary, wage or other compensation or
level of benefits
payable or to become payable by the Company to any of its
officers, directors, employees
or agents other than as set forth on Schedule 3.13;
(f) Except as described in the Schedules hereto, amended
or terminated any
of the Operating Contracts of the Business (as hereinafter
defined);
(g) Changed accounting methods or practices;
(h) Suffered a Material Adverse Change, other than (i)
recognizing the current
state of the economics of the Company, and such being the
primary reason for entering
into this transaction which condition will not materially
deteriorate between the date
hereof and the Closing, and (ii) the fact that the subscription
renewal peak cycle of the
Business occurred on or about March, 2003 and, due to the
seasonable fluctuation of cash
flow, will decline in subsequent months of the fiscal year; or
(i) Entered into any Contract to do any of the foregoing.
3.14 Intellectual Property. Schedule 3.14 hereto contains a
list and description of all
Intellectual Property owned or used by the Company in the operation
of the Business. Except as
set forth in Schedule 3.14, (i) the Company owns or has the valid,
enforceable and exclusive
right to use all Intellectual Property used or necessary to be used
in the operation of the Business
("Business Intellectual Property"), free and clear of all liens or
other Encumbrances, (ii) there
are no pending or, to the Company's Knowledge, Threatened, claims,
suits, oppositions,
cancellation proceedings, invalidity proceedings, arbitrations,
interference proceedings or re-
examination proceedings with respect to the Business Intellectual
Property, (iii) the operation of
the Business or the possession or use in the Business of any of the
Intellectual Property listed
and described on Schedule 3.14 hereto does not, infringe,
misappropriate or dilute the
Intellectual Property rights of any other Person, (iv) all of the
Intellectual Property listed and
described on Schedule 3.14 is valid, subsisting and has not been
abandoned, and the Company is
not obligated under any Contract or otherwise to pay royalties, fees
or other payments with
respect to any of the Intellectual Property listed and described on
Schedule 3.14 hereto, (v) the
consummation of the transactions contemplated by this Agreement will
not adversely affect the
use by the Company of any of the Intellectual Property owned or used
by the Company in the
operation of its Business or require the consent of any Person or
Governmental Body, (vi) the
Company has not granted any Person the right, license or permission
to use any of the Business
Intellectual Property or agreed that the Company will not use any
Intellectual Property and there
are no settlements, Injunctions, forbearances to sue, consents,
judgments, orders or similar
obligations which restrict the right to use any of the Business
Intellectual Property, (vii) to the
Knowledge of the Company, no Person is infringing, misappropriating
or diluting any of the
Business Intellectual Property, (viii) no trade secret of the
Company used in the Business has
been disclosed to any Person in any manner that would be reasonably
likely to result in a
forfeiture of that trade secret, (ix) no unlicensed copies of any
mass market software are installed
on any Company computer or computer system used in the operation of
the Business, and
(x) subject to the terms of the Commercial Agreement, after the
Closing, neither the Company
nor any other Person other than the Purchaser will retain any of the
Company's rights of
ownership or use, respectively (based on whether owned or licensed),
with respect to the
Business Intellectual Property. Notwithstanding the foregoing,
subject to the terms of the
Commercial Agreement, the Purchaser and the Purchaser Parent
acknowledge and agree that no
Intellectual Property needed to conduct the business operations of
the BPS Division is a part of
the Assets and Business Intellectual Property conveyed hereunder.
3.15 Compliance with Laws. The Business has been operated, and
the Company is in
compliance in all material respects with the requirements of all
Applicable Laws to which the
Company is subject. The Company has not received any notice of, and
the Company has no
Knowledge of any violation of a material nature of any Applicable
Laws respecting the Business
and, to the Knowledge of the Company, no investigation, inspection,
audit, or other Proceeding
by any Governmental Body is in process or Threatened.
3.16 Operating Contracts. Except as disclosed in Schedule
3.16(a), and except with
respect to Contracts that have been fully performed as of the date
hereof and have no further
force or effect, the Company is not a party to any oral or written
Contract in connection with the
Business. All of the Contracts of the Business are listed on
Schedule 3.16(b) hereto are referred
to in this Agreement as the "Operating Contracts." All of the
Operating Contracts were made
in the Ordinary Course of Business, and, to the Knowledge of the
Company, are valid, binding
and currently in full force and effect. The Company is not in
default under any of the Operating
Contracts, and, to the Knowledge of the Company, no event has
occurred which, through the
passage of time or the giving of notice, or both, would constitute a
default by the Company or
give rise to a right of termination or cancellation by another party
under any of the Operating
Contracts, or cause the acceleration of any Liability, or result in
the creation of any
Encumbrance upon any of the Assets. To the Knowledge of the
Company, no other party is in
default under any of the Operating Contracts. Except as described
on Schedule 3.16(b) hereto,
none of the Operating Contracts have been canceled, terminated,
amended or modified. Except
as provided in Schedule 3.4 hereto, the consummation of the
transactions contemplated hereby
will not require the consent or approval of any Person under any of
the Operating Contracts.
3.17 Real Estate. The Company owns no real property other than
the leasehold
interests described in Schedule 3.17 attached hereto with respect to
the real estate leased by the
Company (the "Leased Real Estate"). The Leased Real Estate will not
be assumed by the
Purchaser and the Purchaser shall not acquire any rights therein
under this Agreement.
3.18 Accounts Receivable. The accounts receivable of the
Business and other rights
of the Business to the payment of money represent, and on the
Closing Date will represent, valid
obligations arising from sales actually made or services actually
performed in the Ordinary
Course of Business and, subject to the reserves set forth in the
Financial Statements or as
disclosed in Schedule 3.18, such receivables are collectible.
3.19 Books and Records; Bank Accounts. All of the books of
account of the
Business and other financial and corporate records relating to the
Business have been made
available to the Purchaser and its representatives. Such books of
account and records are
complete in all material respects. All such books and records are
consistent with the Financial
Statements listed on Schedule 3.12 hereto.
3.20 Employees and Employee Related Commitments.
(a) Schedule 3.20 hereto contains a list of the names,
positions, annual salary
rates, hourly wage rates, severance benefits and accrued
vacation and sick leave, as of
May 31, 2003, of all present employees of the Business
(including those on furlough,
leave, disability (short- or long-term) or layoff of any kind).
Except as set forth in
Schedule 3.20, none of the employees has informed the Company
that he/she intends to
terminate employment with the Business. Schedule 3.20 also
sets forth a description of
any written Contract, other than the Benefit Plans described on
Schedule 3.10(a) hereto,
with respect to the conditions of employment of any of the
employees of the Business.
All employees are employed on an "at-will" basis.
(b) Except for the claims set forth in Schedule 3.20, the
consummation of the
transactions described in this Agreement, in and of themselves,
will not entitle any
current or former employee of the Company to severance pay,
unemployment
compensation or any other payment, or accelerate the time of
payment or vesting, or
increase the amount of compensation due to any such employee or
former employee.
3.21 Permits. Except as set forth in Schedule 3.21, the
Company has obtained and
possesses all Permits of each and every Governmental Body having
jurisdiction over the
Company, the Business, or any of the Assets to operate and carry on
the Business as it is now
being conducted. All such Permits are listed on Schedule 3.21
hereto. The Company is
presently conducting the Business so as to comply in all material
respects with all Permits.
3.22 Other Material Contracts and Obligations. Except for the
Operating Contracts
and the Contracts disclosed on Schedule 3.16(a) hereto, the Business
is not a party to or bound
by any:
(a) Distributorship or sales agency agreements, excluding
purchase orders
with respect to the purchase or sale of products or services in
the Ordinary Course of
Business;
(b) Advertising Contracts;
(c) Contracts for capital expenditures having an
aggregate remaining balance
in excess of $10,000;
(d) Leases with respect to any property, real or
personal, whether as lessor or
lessee, except for any leases having a term of one year or less
or aggregate rents payable
over their lives of $10,000 or less;
(e) Contract containing covenants by the Company or any
officer, director,
employee or Affiliate of the Company not to compete in any
lines of the Business or with
any Person;
(f) Franchise or license agreements;
(g) Except as disclosed in Schedule 3.13, and accounts
payable and
obligations arising under the Operating Contracts, loan or
credit agreements, promissory
notes or other evidences of indebtedness, including all
agreements or commitments for
future loans, extensions of credit or financing, excluding
credit extended by the Company
to its customers;
(h) Contract or purchase order for the purchase of any
services, supplies or
equipment involving payments of more than $5,000 per annum or
an aggregate of more
than $10,000; or
(i) Contract for the sale of any properties, assets or
services involving a value
estimated at more than $10,000.
3.23 Subsidiaries. The Company has no subsidiaries. Except as
set forth on
Schedule 3.23 hereto, the Business, through the Company, does not
own any shares of stock or
other securities or equity interests, directly or indirectly, in any
other Person. Except as
disclosed or described in this Agreement or as set forth on Schedule
3.23 hereto, the Business,
through the Company, is not subject to any obligation or requirement
to provide funds to, or
invest in, any Person.
3.24 Insurance. The Company has maintained and will continue
to maintain until the
Closing Date the insurance described in Schedule 3.24, which
insurance covers the Assets,
whether owned or leased, against loss or damage by fire or other
casualty. All such insurance is
in full force on the date of this Agreement and is carried with
insurers licensed in the states
affected by such policies. The Company has promptly and adequately
notified the Company's
insurance carriers of any and all claims known to the Company with
respect to the operations,
products or services of the Company for which the Company is insured
and the Company has
complied with all terms and conditions of such policies, except
where such noncompliance
would not provide grounds for termination. All such insurance
provides adequate coverage for
compliance by the Company with all requirements of Applicable Law
and all Operating
Contracts to which the Company is a party or by which any of the
Assets are bound. Except as
set forth in Schedule 3.24, none of the insurance carriers has
indicated to the Company an
intention to cancel, or alter the coverage under, any of the
Company's current policies. All
applications for the insurance policies are accurate in all material
respects. The Company has
not been refused any insurance coverage by any insurance carrier to
which it has applied for
insurance during the past three (3) years. The Purchaser and the
Purchaser Parent acknowledge
and agree that all insurance policies, and all interests therein,
are Excluded Assets under this
Agreement.
3.25 Brokers. Other than the engagement of Innovation
Advisors, the Company has
not employed or engaged any broker, finder, agent, banker or Third
Party, nor has it otherwise
dealt with anyone purporting to act in the capacity of a finder or
broker in connection with the
transactions contemplated hereby. No other commissions, finder's
fees or like charges have been
or will be incurred by the Company in connection with the execution
and delivery of this
Agreement or the consummation of the transactions contemplated
hereby. Any such
commissions, finders' fees or like charges shall be directly
chargeable to the Company as
contemplated by the terms of this Agreement and not assumed by the
Purchaser.
3.26 Relationship with Related Persons. Except as set forth in
Schedule 3.26 hereto,
the present and former shareholders, directors, officers, and
employees of the Company, and
their Related Persons do not have any interest in any of the Assets
and do not own, of record or
as a beneficial owner, an equity interest or any other financial or
profit interest in any Person that
(i) has had business dealings or a material financial interest in
any transaction with the Company
related to the Business or, (ii) has engaged or is engaged in
competition with the Company with
respect to any line of Business of the Company in any market served
or anticipated to be served
by the Company (a "Competing Business") (except for less than three
percent (3%) of the
outstanding capital stock of any Competing Business that is publicly
traded on any recognized
exchange or in the over-the-counter market). To the Knowledge of
the Company, and except as
set forth on Schedule 3.26 hereto, neither the Company, the Company
Parent nor any of their
respective Related Persons is a party to any Contract with, or has
any claim or right against, the
Assets or the Business. All money owed by the Company related to
the Business to its
shareholders, directors or officers, or their Related Persons,
(other than for salary) are for bona
fide debts and are set forth in Schedule 3.26 hereto.
3.27 Debt Instruments. Schedule 3.27 is a true, correct and
complete list showing
the names of the parties and outstanding indebtedness as of the
respective dates set forth on
Schedule 3.27 under all mortgages, indentures, notes, guarantees and
other obligations for or
relating to borrowed money, purchase money debt (including
conditional sales contract and
capital leases) or covenants not to compete (the "Debt Instruments")
for which the Business,
through the Company, is primarily or secondarily obligated. The
Company has previously
delivered to the Purchaser true, complete and correct copies of each
of the Debt Instruments.
Except as described in Schedule 3.27, the Company has performed all
of the material
obligations required to be performed by it, is not in material
default under any of the provisions
of any of the Debt Instruments, and there has not occurred any event
which, (with or without
notice, lapse of time or the happening or occurrence of any other
event) would constitute such a
default.
3.28 Customers and Suppliers. Except as set forth on Schedule
3.28, to the
Knowledge of the Company, (i) no present material customer or a
group of customers of the
Business intends to terminate, cancel, limit or modify the
customer's business relationship with
the Business in any material respect, (ii) no present vendor,
supplier, dealer, representative or
consultant of the Business which is material to the Business intends
to terminate, cancel, limit or
modify its business relationship with the Company in any material
respect, and (iii) no major
customer or supplier has experienced a work stoppage or other
material adverse circumstances
that would be likely to materially and adversely affect their
business relationship with the
Business. The foregoing shall include Contracts that will expire in
accordance with their terms
at the end of the service/consulting relationship and, to the
Knowledge of the Company, will not
be renewed.
3.29 Affiliate Loans. Except as set forth in Schedule 3.29,
there are no loans,
advances or other obligations for borrowed money owing by the
Company to its Affiliates with
respect to the Business as of the date hereof, and no amount shall
be owing for such obligations
at and upon the Closing. Except as set forth in Schedule 3.29, no
Affiliate has any claim of any
kind against the Business, and no amount shall be owing for such
obligations at and upon the
Closing.
3.30 Absence of Certain Business Practices. Except as set
forth in Schedule 3.30,
none of the Company, its Related Parties or any Affiliates or any
other Person acting on behalf
of or associated with the Company or any individual related to any
of the foregoing Persons,
acting alone or together, has with respect to the Business: (a)
received, directly or indirectly, any
rebates, payments, commissions, promotional allowances or any other
economic benefits,
regardless of their nature or type, from any customer, supplier,
trading company, shipping
company, governmental employee or other Person with whom the Company
has done business
directly or indirectly, or (b) directly or indirectly, given or
agreed to give any gift or similar
benefit of any customer, supplier, trading company, shipping
company, governmental employee
or other Person who is or may be in a position to help or hinder the
Business (or assist the
Company in connection with any actual or proposed transaction with
respect to the Business)
which (i) may subject the Company to any damage or any penalty in
any civil, criminal or
governmental litigation or Proceeding, (ii) if not given in the
past, may have had a Material
Adverse Effect with respect to the Business, or (iii) if not
continued in the future, may materially
adversely affect the Assets and/or the Business.
3.31 Insolvency. Except as set forth in Schedule 3.31, the
Company is able to pay its
debts as they mature and the transfer of the Assets by the Company
to the Purchaser in
accordance with the terms of this Agreement shall not constitute a
voidable preference or
transfer in fraud of any creditor under applicable federal or state
insolvency law.
3.32 Representations and Warranties Regarding the Company
Parent. As an
inducement to the Purchaser and the Purchaser Parent to enter into
this Agreement and to
consummate the transactions contemplated hereby, the Company Parent
hereby represents and
warrants to the Purchaser and the Purchaser Parent that each and all
of the following
representations and warranties are true and correct as of the date
of this Agreement and will be
true and correct as of the Closing Date.
(a) Organization. The Company Parent is a corporation
duly organized,
legally existing and in good standing under the laws of the
United Kingdom. The
Company Parent has all requisite power and authority, corporate
and otherwise, to own,
operate and lease its properties and assets and to conduct its
business as it is now being
conducted.
(b) Due Authorization. The execution, delivery and
performance of this
Agreement and the Ancillary Documents to be executed and
delivered by the Company
Parent pursuant to this Agreement, and the consummation of the
transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary
action, corporate or otherwise. This Agreement has been, and
the Ancillary Documents
to be executed and/or delivered by the Company Parent pursuant
to this Agreement have
been or will be on or before the Closing Date, duly and validly
authorized, executed and
delivered by such party and the obligations of such party
hereunder and thereunder are or
will be upon such execution and delivery valid, legally binding
and enforceable against
such party in accordance with their respective terms.
(c) No Breach. The Company Parent has full power and
authority to perform
its obligations under this Agreement and the Ancillary
Documents. Except as set forth
on Schedule 3.32(c), the execution and delivery of this
Agreement and the Ancillary
Documents to be executed and/or delivered by the Company Parent
pursuant to this
Agreement, and the consummation of the transactions
contemplated hereby and thereby
will not: (i) violate any provision of the governing documents
of the Company Parent,
(ii) violate any Applicable Laws or Injunction applicable to
the Company Parent,
(iii) other than any filing with, Permit from, authorization,
consent or approval of, or the
giving of any notice to, any Person, (iv) result in a violation
or breach of, or constitute
(with or without due notice or lapse of time or both) a default
or give another party any
rights of termination, cancellation or acceleration under any
of the terms, conditions or
provisions of any material Contract to which the Company Parent
is a party or by which
it or any of its properties or assets may be bound.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE
PURCHASER PARENT
As an inducement for the Company and the Company Parent to enter
into this Agreement
and consummate the transactions contemplated hereby, the Purchaser
and the Purchaser Parent
hereby jointly and severally represent and warrant to the Company
and the Company Parent that
each and all of the following representations and warranties (as
modified by the Schedules and
any Supplement delivered by the Purchaser and/or the Purchaser
Parent pursuant to
Section 13.21 of this Agreement) are true and correct as of the date
of this Agreement and will
be true and correct as of the Closing Date. The Schedules are
arranged in numbered paragraphs
generally corresponding to the sections and subsections contained in
this Article 4. Any
disclosure as to one schedule, section or subsection shall not be
deemed to be a disclosure on any
other schedule, section or subsection unless such disclosure
specifically cross-references such
other schedule, section or subsection.
4.1 Organization. Each of the Purchaser and the Purchaser
Parent are corporations
duly organized, legally existing and in good standing under the laws
of the States of Delaware
and New York, respectively, and have all requisite power and
authority, corporate and otherwise,
to own, operate and lease their respective properties and assets and
to conduct their respective
businesses as now being conducted. Each of the Purchaser and the
Purchaser Parent are duly
qualified to transact business as a foreign corporation and is in
good standing under the laws of
every state or jurisdiction in which the nature of their activities
or of its properties owned, leased
or operated makes such qualification necessary and in which the
failure to be so qualified could
reasonably be expected to have a Material Adverse Effect on the
Purchaser or the Purchaser
Parent, as applicable.
4.2 Due Authorization
(a) General Transaction. The execution, delivery and
performance of this
Agreement and the Ancillary Documents to be executed and
delivered by the Purchaser
and the Purchaser Parent pursuant to this Agreement and the
Ancillary Documents, and
the consummation of the transactions contemplated hereby and
thereby have been duly
and validly authorized by all necessary corporate action on the
part of the Purchaser and
the Purchaser Parent. This Agreement and the Ancillary
Documents to be executed and
delivered by the Purchaser and the Purchaser Parent pursuant to
this Agreement have
been, or will be on or before the Closing Date, duly and
validly authorized, executed and
delivered by each of the Purchaser and the Purchaser Parent and
the obligations of the
Purchaser and the Purchaser Parent hereunder and thereunder are
or will be valid, legally
binding and enforceable against each of the Purchaser and the
Purchaser Parent in
accordance with their respective terms.
(b) Reservation of Shares. The Purchaser Parent Stock
that is to be issued
pursuant to this Agreement has been duly reserved and
authorized for issuance, and such
Purchaser Parent Stock shall be validly issued, fully paid and
non-assessable and,
assuming the accuracy of the representations and warranties of
the Company in the
investor letter annexed hereto as Exhibit E (the "Investor
Letter"), issued in compliance
with applicable federal and state securities laws.
4.3 No Breach. The Purchaser and the Purchaser Parent each
have full power and
authority, corporate and otherwise, to perform its obligations under
this Agreement and the
Ancillary Documents to be executed and delivered by the Purchaser
and the Purchaser Parent
pursuant hereto. The execution and delivery of this Agreement,
including the documents,
instruments and agreements to be executed by the Purchaser pursuant
to this Agreement, and the
consummation of the transactions contemplated hereby and thereby
will not: (i) violate any
provision of the Articles of Incorporation or Bylaws (or comparable
governing documents or
instruments) of the Purchaser, (ii) violate any Applicable Laws or
Injunction applicable to the
Purchaser, (iii) other than applicable requirements of the
Securities Act, the Exchange Act and
state securities "blue sky" laws, require any filing with, Permit
from, authorization, consent or
approval of, or the giving of any notice to, any Person, (iv) result
in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a
default (or give another party
any rights of termination, cancellation or acceleration) under, any
of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license,
franchise, Permit (including, but not
limited to, any Permits, appeals or authorizations of any
Governmental Body), lease or other
Contract to which the Purchaser is a party, or by which it or any of
its assets or properties.
4.4 Brokers. Neither the Purchaser nor the Purchaser Parent
has employed or
engaged any broker, finder, agent, investment banker or Third Party
nor has the Purchaser
otherwise dealt with anyone purporting to act in the capacity of a
finder or broker, in connection
with the transactions contemplated hereby.
4.5 Articles of Incorporation and Bylaws. The Purchaser has
previously delivered
to the Company a true, complete and correct copy of the Articles of
Incorporation, the Bylaws or
equivalent organizational documents, each as amended to date, of the
Purchaser. Such Articles
of Incorporation, Bylaws and equivalent organizational documents are
in full force and effect.
The Purchaser is not in violation of any provision of its Articles
of Incorporation, By-laws or
equivalent organizational documents.
4.6 Capitalization. The authorized capital stock of the
Purchaser Parent consists of
100,000,000 shares of the Purchaser's common stock, $.0001 par
value, and 2,000,000 shares of
preferred stock, $.0001 par value per share, of which 500,000 shares
have been designated as
Series A Preferred Stock. As of May 12, 2003, 10,791,464 shares of
the Purchaser's common
stock were issued and outstanding.
4.7 SEC Reports. The Purchaser Parent has filed all forms,
reports and documents
required to be filed by it with the SEC since January 1, 2000 and
has heretofore made available
to the Company, in the form filed with the SEC (excluding any
exhibits thereto), (i) its Annual
Report on Form 10-K for the fiscal year ended December 31, 2002, and
(ii) all other forms,
reports, Registration Statements and other documents filed by the
Purchaser Parent with the SEC
since January 1, 2000 (the forms, reports, Registration Statements
and other documents referred
to in clauses (i) and (ii) above being referred to herein,
collectively, as the "Purchaser Parent
SEC Reports"). The Purchaser Parent SEC Reports and any other
forms, reports and other
documents filed by the Purchaser Parent with the SEC before or after
the date of this Agreement
to the Closing Date (i) were or will be prepared in all material
respects in accordance with the
requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and
regulations thereunder, and (ii) did not at the time they were
filed, or will not at the time they are
filed, contain any untrue statement of a material fact or omit to
state a material fact required to
be stated therein or necessary in order to make the statements made
therein, in the light of the
circumstances under which they were or are made, not misleading.
Except as set forth in the
Purchaser Parent SEC Reports, since December 31, 2002 there has not
been any Material
Adverse Change in the business, results of operations, condition
(financial or otherwise),
properties, Assets, Liabilities or obligations of the Purchaser
Parent that would be required to be
disclosed.
4.8 Stockholders' Consent. No consent or approval of the
stockholders of the
Purchaser or the Purchaser Parent is required (i) to enter into this
Agreement and the Ancillary
Documents to which it is a party or to consummate the transactions
contemplated hereby and
thereby, or (ii) to issue the Purchaser Parent Stock.
ARTICLE 5
PERFORMANCE AND COVENANTS PENDING CLOSING
The Company covenants and agrees that from and after the date of
this Agreement and
until the earlier of the Closing Date or the termination of this
Agreement in accordance with
Article 12 hereof:
5.1 Access to Information. At the request of the Purchaser,
the Company shall give
or cause to be given to the Purchaser, its officers, employees,
counsel, accountants and other
representatives, upon reasonable notice to the Company, complete
access to the properties and
assets and all of the books, minute books, title papers, records,
files, Contracts, insurance
policies, licenses and documents of every character of or relating
to the Business, and the
Company shall furnish or cause to be furnished to the Purchaser, its
officers, employees,
counsel, accountants and other representatives all of the
information with respect to the Business
and/or properties or assets of the Business as any of them may
request (in the reasonable
judgment of the Purchaser). The Purchaser may, subject to the
conditions stated above, at its
sole cost and expense, at any time prior to the Closing Date,
through its officers, employees,
counsel, accountants and other representatives, conduct such
investigations and examinations of
the properties and assets of the Business as it deems necessary or
advisable, and the Company
will provide reasonable cooperation to such Persons in such
investigations.
5.2 Conduct of Business. The Company shall carry on the
Business only in the
Ordinary Course of Business and substantially in the same manner as
heretofore conducted and
will keep and maintain the properties and assets of the Business in
good condition consistent
with past practices. Except for the filings described on Schedule
5.2 or except as contemplated
by Section 5.16, the Company from the date of this Agreement to the
Closing Date shall not
(i) make any regulatory filings with any Governmental Body with
respect to the Business, except
in the Ordinary Course of Business or with the prior written consent
of the Purchaser, which
consent shall not be unreasonably withheld, delayed or conditioned,
or (ii) do any of the
following (unless otherwise expressly contemplated by this Agreement
or approved in writing by
the Purchaser):
(a) create, incur or assume any Liability or indebtedness
in connection with
the Business, except trade indebtedness in the Ordinary Course
of Business or
borrowings with the Company's lender, Silicon Valley Bank, in
accord with the Debt
Instruments with such bank, in all such cases consistent with
past practices;
(b) alter the manner of keeping the books, accounts or
records of the
Business, or change in any manner the accounting practices
therein reflected;
(c) do any act, or omit to do any act, or permit to the
extent within the
Company's control, any act or omission to act which would cause
a material violation or
breach of any of the representations, warranties or covenants
of the Company or the
Company Parent set forth in this Agreement or cause any
representation or warranty set
forth herein, or in any certificate or other document delivered
in connection herewith, to
be untrue in any material respect on the Closing Date;
(d) take any action which has or could have a Material
Adverse Effect with
respect to the Business; or
(e) agree, whether in writing or otherwise, to do any of
the foregoing.
In the event that the Company intends to (i) amend its Articles of
Incorporation or
Bylaws, (ii) offer any of the Company's securities or other equity
interests for issuance or sale,
or (iii) redeem or otherwise acquire, directly or indirectly, any
shares of its securities or other
equity interests, then the Company shall promptly and in advance
(within not less than three (3)
business days) notify the Purchaser and the Purchaser Parent of such
event(s).
5.3 Encumbrances. The Company shall not, directly or
indirectly, perform or fail to
perform any act which would, with substantial certainty, in the
creation or imposition of any
Encumbrance on any of the properties or assets of the Company or
otherwise adversely affect the
marketability of the Company's title to any of its properties or
assets, outside of the Ordinary
Course of Business.
5.4 Pay Increases. The Company shall not, without the prior
written consent of the
Purchaser, grant any increase in the salaries or rate of pay to any
employees of the Business,
grant any increase in any benefits or establish, adopt, enter into,
make any new grants or awards
under, or amend any collective bargaining agreement, employment
agreement or Benefit Plan
for the benefit of any of the employees of the Business.
5.5 Restrictions on New Contracts. Except with the prior
written consent of the
Purchaser, or as specifically contemplated by this Agreement, which
consent shall not be
unreasonably withheld, the Company shall not enter into any Contract
for the Business, or waive
any right or enter into any other transaction, in each case (i) with
respect to the Business, and
(ii) other than in the Ordinary Course of Business and consistent
with the Company's normal
business practices.
5.6 Preservation of Business. The Company shall use
reasonable best efforts to
preserve the Business and its internal organization intact, to keep
available to the Purchaser the
present employees of the Business and to preserve for the Purchaser
the present goodwill and
relationship of the Business with its vendors, suppliers, customers
and others having business
relationships with the IM Division of the Company.
5.7 Payment and Performance of Obligations. The Company shall
make
reasonable commercial efforts to timely pay and discharge all
invoices, bills and other monetary
Liabilities of the Business, consistent with its present financial
condition and its present payment
practices.
5.8 Restrictions on Sale of Assets. The Company shall not
sell, assign, transfer,
lease, sublease, pledge or otherwise encumber or dispose of any of
the Assets, except as
specifically contemplated by this Agreement.
5.9 Prompt Notice. The Company and the Purchaser shall
promptly notify the other
in writing upon becoming aware of any of the following: (i) any
claim, demand or other
Proceeding that may be brought, Threatened or commenced against the
Company or the
Purchaser, and their respective officers or directors, (ii) any
changes in the accuracy of the
representations and warranties made by the Company in this
Agreement, (iii) any Injunction or
any complaint praying for an Injunction restraining or enjoining the
consummation of the
transactions contemplated hereby, or (iv) any notice from any Person
of its intention to institute
an investigation into, or institute a Proceeding to restrain or
enjoin the consummation of the
transactions contemplated hereby or to nullify or render ineffective
this Agreement or such
transactions if consummated.
5.10 Consents. As soon as reasonably practicable, the Company
and the Purchaser
will use commercially reasonable efforts to obtain or cause to be
obtained all of the consents and
approvals of all Persons deemed necessary by the parties hereto to
consummate the transactions
contemplated hereby, which are limited by the parties to the
consents and approvals listed on
Schedule 5.10 hereto. After the Closing the provisions of Section
11.6 of this Agreement shall
apply.
5.11 Copies of Documents. The Company agrees that as soon as
reasonably possible
following the execution hereof, to the extent not already provided
to the Purchaser, it shall
furnish or make available to the Purchaser a copy of each Operating
Contract on Schedule 3.16.
5.12 No Solicitation of Other Offers.
(a) No-Shop. From the date hereof through the end of the
business day on
July 15, 2003, subject to Section 5.12(b) below, the Company
will not, and will not
permit its representatives, investment bankers, agents and
Affiliates to, directly or
indirectly, (i) solicit or encourage submission of or any
inquiries, proposals or offers by,
(ii) participate in any negotiations with, (iii) afford any
access to the properties, books or
records of the Company to, (iv) accept or approve, or (v)
otherwise assist, facilitate or
encourage, or enter into any Contract with, any Person or group
(other than the Purchaser
and its Affiliates, agents and representatives), in connection
with any Acquisition
Proposal. In addition, the Company will not, and will not
permit its respective
representatives, investment bankers, agents and Affiliates to,
directly or indirectly, make
or authorize any statement, recommendation or solicitation in
support of any Acquisition
Proposal made by any Person or group (other than the
Purchaser). In addition, the
Company will immediately cease any and all existing activities,
discussions or
negotiations with any parties with respect to any of the
foregoing.
(b) Exception to No-Shop. Notwithstanding the provisions
of Section 5.12(a)
above, the provisions of such Section 5.12 shall not apply to
the Company's ongoing
discussions with its Affiliates or the one Third Party that has
been disclosed to the
Purchaser relating to the potential sale of the Business (or
all or substantially all of the
Assets) or the Company.
(c) Notice. The Company and the Company Parent shall
promptly notify the
Purchaser and the Purchaser Parent in writing of the receipt of
any Third Party's
Acquisition Proposal, or communication in connection with any
potential Acquisition
Proposal and a consummation of a transaction; provided,
however, neither the Company
nor the Company Parent shall be obligated to disclose to the
Purchaser and/or the
Purchaser Parent the terms and conditions thereof.
5.13 Accounts Receivable and Payable. The Company shall not
accelerate the
collection of its accounts receivable or delay the payments of its
accounts payable or other
Liabilities, in each case solely arising out of the operation of the
Business in a manner which
would be inconsistent with past practice.
5.14 Inventory. The Company shall maintain the levels of
inventory, materials and
supplies used in the Business consistent with past practice.
5.15 Insurance. The Company shall maintain in full force and
effect all insurance
coverages for the Assets substantially comparable to coverages
existing on the date hereof.
5.16 Filing Reports and Making Payments. The Company shall
timely file all
required reports and notices relating to the Business with each and
every applicable
Governmental Body and timely make all payments due and owing to each
such Governmental
Body, including, but not by way of limitation, any filings, notices
and/or payments required by
reason of the transactions contemplated by this Agreement.
5.17 Capital Expenditures. The Company shall not make any
capital expenditures
relating solely to the Business in excess of $5,000 individually or
$25,000 in the aggregate
without the Purchaser's prior written consent, which consent shall
not be unreasonably withheld,
delayed or conditioned.
5.18 Lien Search. Within seven (7) days prior to the Closing
Date, the Company shall
deliver an Encumbrance search report to the Purchaser which
discloses any and all UCC-1
filings, Tax liens, and litigation filed with respect to the
Business in all state jurisdictions in
which the Company has a business location.
5.19 Transition Services Agreement. For a period of
approximately three (3) months
following the Closing, the Purchaser shall occupy and lease certain
space and services from the
Company, and shall share in an allocable amount of operating
expenses related to the Leased
Real Estate and the operation of the shared office arrangement of
the parties, pursuant to a
transition services agreement to be entered into between the parties
on the Closing Date (the
"Transition Services Agreement"). Any terms set forth in the
Transition Services Agreement
shall, if inconsistent in any way with this Agreement, be deemed to
amend this Agreement to the
extent, and only to the extent, of such inconsistency.
5.20 [THIS SECTION INTENTIONALLY OMITTED.]
5.21 Commercial Agreement. The parties hereto intend to enter
into a mutually
agreeable five (5) year strategic commercial relationship pursuant
to which the parties will
(i) provide, among other things, access to technology and
proprietary content and Teltech.com
service, (ii) establish a business and marketing relationship, and
(iii) covenants with respect to
mutual confidentiality, non-competition and non-solicitation (the
"Commercial Agreement").
Any terms set forth in the Commercial Agreement shall, if
inconsistent in any way with this
Agreement, be deemed to amend this Agreement to the extent, and only
to the extent, of such
inconsistency.
5.22 Employment Agreements. The Purchaser and the Company will
cooperate and
make reasonable commercial efforts to negotiate and complete the
employment agreements
described in Section 7.6.
ARTICLE 6
MUTUAL CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS
Unless waived in writing by each of the parties hereto, each and
every obligation of the
Purchaser and the Purchaser Parent, on the one hand, and the Company
and the Company Parent,
on the other hand, to be performed at or upon the Closing shall be
subject to the satisfaction at or
prior thereto of each and all of the following conditions precedent:
6.1 Proceedings. There being no (i) Proceedings which have
been brought, asserted,
commenced or Threatened against the Purchaser or the Company by any
Person involving or
affecting in any way the Purchaser's or the Company's consummation
of the transactions
contemplated hereby, or (ii) Applicable Laws restraining or
enjoining, or which may reasonably
be expected to nullify or render ineffective, this Agreement or the
consummation of the
transactions contemplated hereby or which otherwise could reasonably
be expected to have a
Material Adverse Effect on the Assets or the Business.
6.2 Consents and Approvals. The Purchaser and the Company
shall have received
evidence, in form and substance reasonably satisfactory to the
Purchaser and the Company, that
all consents, waivers, releases, authorizations, approvals,
licenses, certificates, Permits and
franchises of all Persons (including each and every Governmental
Body) set forth on
Schedule 5.10 of this Agreement. All consents of a Governmental
Body shall be by Final Order;
provided, however, that if the Purchaser and the Company waive the
condition of Governmental
Body consent by Final Order, the parties shall consider the
Governmental Body consent without
Final Order sufficient to proceed to Closing according to the other
terms of this Agreement.
"Final Order" means an action or decision of the Governmental Body
as to which (i) no request
for a stay is pending, no stay is in effect, and any deadline for
filing such request that may be
designated by statute or regulation has passed, (ii) no petition for
rehearing or reconsideration or
application for review is pending and the time for the filing of
such petition or application has
passed, (iii) the Governmental Body does not have the action or
decision under reconsideration
on its own motion and the time within which it may effect such
reconsideration has passed, and
(iv) no judicial appeal is pending or in effect and any deadline for
filing any such appeal that
may be designated by statute or rule has passed.
ARTICLE 7
ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PURCHASER AND THE PURCHASER PARENT
Unless waived by the Purchaser and the Purchaser Parent in writing,
each and every
obligation of the Purchaser and the Purchaser Parent to be performed
at the Closing shall be
subject to the satisfaction at or prior thereto of each and all of
the following conditions
precedent:
7.1 Accuracy of Representations and Warranties. The
representations and
warranties (as modified by the Schedules and any Supplement(s)) made
by the Company and the
Company Parent in this Agreement and in the Ancillary Documents,
shall be true and correct at
and as of the Closing with the same force and effect as though such
representations and
warranties had been made or given at and as of the Closing.
7.2 Compliance with Covenants and Agreements. The Company and
the Company
Parent shall have performed and complied with all of their
respective covenants, agreements and
obligations under this Agreement which are to be performed or
complied with by them at or
prior to the Closing, including the execution and delivery of the
Ancillary Documents specified
in Section 2.3(b) hereof or in such other documents, instruments and
agreements, all of which
shall be reasonably satisfactory in form and substance to the
Purchaser and the Purchaser Parent.
7.3 No Material Adverse Change. As of the Closing Date,
nothing shall have
occurred which had, or which would with reasonable certainty be
likely to have, individually or
in the aggregate, a Material Adverse Effect on the Business.
7.4 Legal Opinion. The Purchaser shall have received an
opinion from the counsel
for the Company, dated as of the Closing Date, in form and substance
satisfactory to the
Purchaser and the Purchaser Parent in their reasonable commercial
discretion.
7.5 Corporate Action. The Purchaser and the Purchaser Parent
shall have received
(a) a certificate of the Secretary of the Company as to the
incumbency and signatures of the
officers and directors, and (b) a legal existence certificate of
existence from (i) the State of
Minnesota for the Company, and (ii) foreign qualification good
standing certificates from each
jurisdiction set forth on Schedule 3.1.
7.6 Employment Agreements. Employment agreements with and
executed by those
Persons listed on Schedule 7.6, who are each executive employees of
the Company (the
"Employment Agreements") shall be delivered to the Purchaser and the
Company.
7.7 Confidentiality Agreements and Non-Competition. Each of
the Hired Active
Employees shall execute and deliver at or prior to the Closing to
the Purchaser confidentiality
and non-competition agreements acceptable to the Purchaser.
ARTICLE 8
ADDITIONAL CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
Unless waived by the Company and the Company Parent in writing, each
and every
obligation of the Company and the Company Parent to be performed at
the Closing shall be
subject to the satisfaction at or prior thereto of each and all of
the following conditions
precedent:
8.1 Accuracy of Representations and Warranties. The
representations and
warranties (as modified by the Schedules and any Supplement(s)) made
by the Purchaser and the
Purchaser Parent in this Agreement, including the documents,
instruments and agreements to be
executed and delivered by the Purchaser and the Purchaser Parent
pursuant to this Agreement,
shall be true and correct at and as of the Closing with the same
force and effect as though such
representations and warranties had been made or given at and as of
the Closing.
8.2 Compliance with Covenants and Agreements. The Purchaser
and the
Purchaser Parent shall have performed and complied in all material
respects with all of their
respective covenants, agreements and obligations under this
Agreement which are to be
performed or complied with by them at or prior to the Closing,
including the execution and
delivery of the documents, instruments and agreements specified in
Section 2.3(c) hereof or in
such documents, instruments and agreements, all of which shall be
reasonably satisfactory in
form and substance to the Company and the Company Parent.
8.3 Legal Opinion. The Company shall have received an opinion
from the counsel
for the Purchaser and the Purchaser Parent, dated as of the Closing
Date, in form and substance
satisfactory to the Company and the Company Parent in their
reasonable commercial discretion.
8.4 Delivery of Receipt for Purchase Price and the Shares.
The Purchaser shall
have delivered to the Company, against receipt of the executed Bill
of Sale, Assignment and
Assumption Agreement and the other documents and instruments to be
delivered by the
Purchaser pursuant to this Agreement for the Assets, the Purchase
Price to be paid on the
Closing Date determined in accordance with Section 2.2.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by the Company. The Company and the
Company Parent
hereby covenant and agree to jointly and severally indemnify and
hold the Purchaser, the
Purchaser Parent, and its respective officers, directors, employees,
Affiliates, shareholders and
agents, and each of its respective heirs, personal representatives,
successors and permitted
assigns (the "Purchaser Indemnified Parties"), harmless from,
against and in respect of any
and all losses, costs, expenses (including without limitation,
reasonable attorneys' and
independent accountants' fees and disbursements), Liabilities,
damages (excluding incidental,
consequential or punitive damages), fines, penalties, charges,
assessments, judgments,
settlements, claims, causes of action and other obligations of any
nature whatsoever
(individually, a "Loss" and collectively, "Losses") that the
Purchaser or the Purchaser Parent
may at any time, directly or indirectly, suffer, sustain, incur or
become subject to, to the extent
arising out of, based upon or resulting from or on account of each
of the following:
(a) the breach or falsity of any representation or
warranty made by the
Company or the Company Parent in this Agreement (as amended by
any Supplement),
including the Ancillary Documents to be executed and delivered
by the Company and the
Company Parent pursuant hereto and thereto; or
(b) the breach of any covenant or agreement made by the
Company or the
Company Parent in this Agreement, including the Ancillary
Documents to be executed
and delivered by the Company or the Company Parent;
(c) any and all Excluded Liabilities;
(d) any (i) Contract of the Company that is not part of
the Assets, or (ii) any
breach by the Company at or prior to the Closing of a Contract
of the Company that is
part of the Assets, or any failure by the Company to have
performed any obligation or
satisfied any Liability thereunder to the extent required to be
performed or satisfied by
the Company at or prior to the Closing, to the extent not
adequately reserved for on the
Closing Balance Sheet as set forth in Section 2.2(b);
(e) any claim by a Third Party arising out of, relating
to, resulting from or
caused (whether in whole or in part) by any transaction, event,
condition, occurrence or
situation in any way relating to the Company or the operation
of the Business and the
ownership or use of the Assets at any time on or prior to
Closing without regard to
whether such claim is first asserted at or prior to Closing or
is first asserted at any time
thereafter, to the extent it is not an Assumed Liability or is
not adequately reserved for on
the Closing Balance Sheet;
(f) any obligation or Liability of the Company or the
Company Parent for the
conduct of any business by the Company or the Company Parent or
any Taxes
attributable to or arising from the ownership or sale or use of
the Assets prior to and on
the Closing Date, to the extent not adequately reserved for on
the Closing Balance Sheet;
and
(g) any Liability resulting from any current or future
Proceeding (whether
Threatened or unthreatened) involving the Company, the Company
Parent, the Business
or the Assets to the extent that such cause of action arose on
or prior to the Closing Date,
regardless of whether or not such Proceeding or Threatened
Proceeding was commenced
on or prior to the Closing Date or disclosed by the Company on
Schedule 3.7, to the
extent not adequately reserved for on the Closing Balance Sheet.
Provided, however, that the Company and the Company Parent shall not
be required to
provide such indemnification for a Loss or Losses resulting from (x)
a breach or falsity of any
representation and warranty in this Agreement or any Ancillary
Document, or (y) the breach of a
covenant of this Agreement or any Ancillary Document, unless and
until the Purchaser
Indemnified Parties shall have sustained aggregate Losses as a
result of one or more such
breaches or falsities of Thirty-Five Thousand Dollars ($35,000) (the
"Basket Amount") (and
then only for claims which in the aggregate, when combined with all
other claims for Losses
result in Losses which exceed the Basket Amount), except that the
Basket Amount for purposes
of this Section 9.1 shall not apply to any Loss or Losses arising
from, in connection with or
incident to any Liability resulting from (i) the fraudulent actions
or intentional
misrepresentations by the Company or the Company Parent, (ii)
Excluded Liabilities, or
(iii) Transactional Expenses of the Company or the Company Parent
incurred in connection with
the consummation of the transactions contemplated hereby, including
those set forth in
Section 13.10 hereof.
Notwithstanding the foregoing, any Loss or aggregate Losses to be
indemnified in excess
of the Basket Amount by the Company and/or the Company Parent under
this Agreement shall
not exceed the Purchase Price paid by the Purchaser, except that the
indemnity limit shall not
apply to any Loss or Losses arising from, in connection with or
incident to any Liability
resulting from the fraudulent actions or intentional
misrepresentations of the Company or the
Company Parent. Rescission shall not be a remedy available to the
parties. The parties shall
compute damages for a Loss or Losses based on the reasonable
estimation of actual economic
loss; provided, however, it is acknowledged and agreed that the
Company and the Company
Parent shall not be responsible for the conduct of the Business by
the Purchaser after the Closing
Date.
Notwithstanding any contrary provision or direction set forth in
this Agreement, in the
event that any claims are made with respect to specific balance
sheet items set forth on the
Financial Statements or Closing Balance Sheet accounts, such as
accounts receivable, accrued
expenses or accounts payable, any such claim shall be analyzed in
relation to whether the
amount of the claim when compared to the Net Current Liabilities
would have resulted in any
Purchase Price Adjustment. For example, in the event that accounts
payable are understated in
the Closing Balance Sheet, but the Net Current Liabilities as
computed in accordance with this
Section 2.2(b) are more than (in absolute value terms), there shall
be no claim for such item
unless the amount, when added to the Guaranteed Net Current
Liabilities computed in the
Closing Balance Sheet would have resulted in a payment to the
Purchaser by the Company. In
addition, any claim of an excess current Liability may be offset by
the Company for any current
Asset which is in excess of the Asset amount as set forth in the
Closing Balance Sheet.
In the event the Company and the Company Parent become obligated to
the Purchaser
and/or the Purchaser Parent for a Loss or Losses, the Company shall
remit to the Purchaser
and/or the Purchaser Parent (i) first, the Purchaser Parent Stock in
escrow and, if necessary,
(ii) second, the Company Parent Stock in escrow, in full or partial
payment of the Loss or Losses
(with reissuance of a new certificate if the Loss is, or Losses are,
less than the value of the
Purchaser Parent Stock and/or the Company Parent Stock, as
applicable). The Purchaser Parent
Stock and the Company Parent Stock in escrow for the purpose of such
payment(s) will be
valued at the volume weighted average reported closing price of the
Purchaser Parent Stock or
the Company Parent Stock, as applicable, for the ten (10) trading
days immediately preceding
the third (3rd) day prior to the date such stock is tendered.
9.2 Indemnification by the Purchaser. The Purchaser hereby
agrees to defend,
indemnify and hold the Company and its respective Affiliates,
officers, trustees, beneficiaries,
heirs, personal representatives, successors and assigns (the
"Company Indemnified Parties"),
harmless from, against and in respect of any and all Losses that the
Company may at any time,
directly or indirectly, suffer, sustain, incur or become subject to,
to the extent arising out of,
based upon or resulting from or on account of each or all of the
following:
(a) the breach or falsity of any representation or
warranty made by the
Purchaser in this Agreement (as amended by any Supplement
properly provided),
including the documents, instruments and agreements to be
executed and/or delivered by
the Purchaser pursuant hereto and thereto; or
(b) the breach of any covenant or agreement made by the
Purchaser in this
Agreement, including the documents, instruments and agreements
to be executed and/or
delivered by the Purchaser pursuant hereto or thereto; or
(c) any Assumed Liabilities.
Provided, however, that the Purchaser and the Purchaser Parent shall
not be required to
provide such indemnification for a Loss or Losses resulting from (x)
breach or falsity of any
representation or warranty in this Agreement or any Ancillary
Document, or (y) breach of a
covenant of this Agreement or any Ancillary Document, unless and
until the Company
Indemnified Parties shall have sustained Losses as a result of one
or more such breaches or
falsities of the Basket Amount (and then only for claims which in
the aggregate when combined
with all other claims for Losses result in Losses which exceed the
Basket Amount), except that
the Basket Amount for purposes of this Section 9.2 shall not apply
to any claims of, or Loss or
Losses incurred by, the Company or the Company Parent arising from,
in connection with or
incident to (i) the payment of the Purchase Price to the Company,
(ii) any Taxes, fees or
penalties payable by the Purchaser or the Purchaser Parent, (iii)
the payment and performance of
any Contract assumed by the Purchaser and/or the Purchaser Parent,
or (iv) any Assumed
Liability or Liability resulting from fraudulent actions or
intentional misrepresentations by the
Purchaser or the Purchaser Parent.
9.3 Procedure for Indemnification. In the event any of the
Purchaser Indemnified
Parties or the Company Indemnified Parties intends to seek
indemnification pursuant to the
provisions of Sections 9.1 or 9.2 hereof (the "Indemnified Party"),
the Indemnified Party shall
promptly give notice hereunder to the other party (the "Indemnifying
Party") after obtaining
written notice of any claim, investigation, or the service of a
summons or other initial or
continuing legal or administrative process or Proceeding in any
action instituted against the
Indemnified Party as to which recovery or other action may be sought
against the Indemnified
Party because of the indemnification provided for in Section 9.1 or
9.2 hereof, and, if such
indemnity shall arise from the claim of a Third Party, the
Indemnified Party shall permit the
Indemnifying Party to assume the defense of any such claim and any
litigation resulting from
such claim; provided, however, that the Indemnified Party shall not
be required to permit such an
assumption of the defense of any claim or Proceeding which, if not
first paid, discharged or
otherwise complied with, would result in a material interruption or
disruption of the business of
the Indemnified Party, or any material part thereof.
Notwithstanding the foregoing, the right to
indemnification hereunder shall not be affected by any failure of
the Indemnified Party to give
such notice (or by delay by the Indemnified Party in giving such
notice) unless, and then only to
the extent that, the rights and remedies of the Indemnifying Party
shall have been prejudiced as a
result of the failure to give, or delay in giving, such notice.
Failure by the Indemnifying Party to
notify the Indemnified Party of its election to defend any such
claim or action by a Third Party
within twenty (20) days after notice thereof shall have been given
to the Indemnifying Party
shall be deemed a waiver by the Indemnifying Party of its right to
defend such claim or action.
If the Indemnifying Party assumes the defense of such claim,
investigation or Proceeding
resulting therefrom, the obligations of the Indemnifying Party
hereunder as to such claim,
investigation or Proceeding shall include taking all steps necessary
in the defense or settlement
of such claim, investigation or Proceeding and holding the
Indemnified Party harmless from and
against any and all Losses arising from, in connection with or
incident to any settlement
approved by the Indemnifying Party or any judgment entered in
connection with such claim,
investigation or Proceeding (subject to the remaining Basket Amount,
if any, and
indemnification limits set forth in this Agreement), except where,
and only to the extent that, the
Indemnifying Party has been prejudiced by the actions or omissions
of the Indemnified Party.
The Indemnifying Party shall not, in the defense of such claim or
any Proceeding resulting
therefrom, consent to entry of any judgment (other than a judgment
of dismissal on the merits
without costs) except with the written consent of the Indemnified
Party (which consent shall not
be unreasonably withheld, delayed or conditioned) or enter into any
settlement (except with the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld,
delayed or conditioned) unless (i) there is no finding or admission
of any violation of Applicable
Law and no material effect on any claims that could reasonably be
expected to be made against
the Indemnified Party, (ii) the sole relief provided is monetary
damages that are paid in full for
Losses (subject to the remaining Basket Amount (which will be paid
by the Purchaser), if any,
but which payment does not exceed the indemnification limits set
forth in this Agreement), and
(iii) the settlement shall include the giving by the claimant or the
plaintiff to the Indemnified
Party a release from all Liability in respect to such claim or
litigation.
If the Indemnifying Party assumes the defense of such claim,
investigation or Proceeding
resulting therefrom, the Indemnified Party shall be entitled to
participate in the defense of the
claim, but solely by observation and comment to the Indemnifying
Party, and the counsel
selected by the Indemnified Party shall not appear on its behalf in
any Proceeding arising
hereunder. The Indemnified Party shall bear the fees and expenses
of any additional counsel
retained by it to participate in its defense unless any of the
following shall apply: (i) the
employment of such counsel shall have been authorized in writing by
the Indemnifying Party, or
(ii) the Indemnifying Party's legal counsel shall advise the
Indemnifying Party in writing, with a
copy to the Indemnified Party, that there is a conflict of interest
that would make it inappropriate
under applicable standards of professional conduct to have common
counsel. If clause (i) or (ii)
in the immediately preceding sentence is applicable, then the
Indemnified Party may employ
separate counsel at the expense of the Indemnifying Party to
represent the Indemnified Party, but
in no event shall the Indemnifying Party be obligated to pay the
costs and expenses of more than
one such separate counsel for any one complaint, claim, action or
Proceeding in any one
jurisdiction.
If the Indemnifying Party does not assume the defense of any such
claim by a Third Party
or litigation resulting therefrom after receipt of notice from the
Indemnified Party, the
Indemnified Party may defend against such claim or litigation in
such manner as it reasonably
deems appropriate, and unless the Indemnifying Party shall deposit
with the Indemnified Party a
sum equivalent to the total amount demanded in such claim or
litigation plus the Indemnified
Party's estimate of the cost (including attorneys' fees) of
defending the same, the Indemnified
Party may settle such claim or Proceeding on such terms as it may
reasonably deem appropriate
and the Indemnifying Party shall, subject to its defenses and the
applicability of any remaining
threshold loss amount provided for in Section 9.1 hereof, promptly
reimburse the Indemnified
Party for the amount of such settlement and for all reasonable costs
(including attorneys' fees),
expenses and damages incurred by the Indemnified Party in connection
with the defense against
or settlement of such claim, investigation or litigation, or if any
such claim or litigation is not so
settled, the Indemnifying Party shall, subject to its defenses and
the applicability of any
remaining Basket Amount provided for in Section 9.1 hereof, promptly
reimburse the
Indemnified Party for the amount of any final non-appealable
judgment rendered with respect to
any claim by a Third Party in such litigation and for all costs
(including attorneys' fees),
expenses and damage incurred by the Indemnified Party in connection
with the defense against
such claim or litigation, whether or not resulting from, arising out
of, or incurred with respect to,
the act of a Third Party.
Each party shall cooperate in good faith and in all respects with
each Indemnifying Party
and its representatives (including without limitation its counsel)
in the investigation, negotiation,
settlement, trial and/or defense of any Proceedings (and any appeal
arising therefrom) or any
claim. The parties shall cooperate with each other in any
notifications to and information
requests of any insurers. No individual representative of any
Person, or their respective
Affiliates shall be personally liable for any Loss or Losses under
this Agreement, except as
specifically agreed to by said individual representative.
9.4 Dispute Resolution. In the event a dispute arises under
this Agreement, except
with respect to the Purchase Price Adjustment under Section 2.2(b)
and equitable remedies
pursued under this Agreement (including Section 11.3), such disputes
shall be resolved in the
manner set forth in this Section 9.4.
(a) If a dispute arises under this Agreement, including
any question regarding
the existence, validity, interpretation or termination hereof,
which is not described as an
exception in this Section 9.4, the Purchaser and the Company
may invoke the dispute
resolution procedure set forth in this Section 9.4 by giving
written notice to the other
party. The parties shall enter into discussions concerning
this dispute. If the dispute is
not resolved as a result of such discussion in ten (10) days.
(b) The matter shall be submitted for, subject to and
decided by arbitration in
accordance with the Commercial Arbitration Rules of the
American Arbitration
Association currently in effect as of the date of this
Agreement ("AAA Rules"), except to
the extent those rules are inconsistent with this Section 9.4.
Any arbitration must be held
in New York by a single arbitrator mutually selected by the
parties hereto or, if the
parties hereto cannot agree on the appointment of such
arbitrator within ten (10) days
following the date notice of the dispute is given by a party to
the adverse party, an
arbitrator selected according to the AAA Rules. The
arbitrator's award shall be final,
conclusive and binding upon all parties to this Agreement, and
judgment may be entered
upon it in accordance with the Federal Arbitration Act in any
court of general jurisdiction
in New York, or in any United States District Court for the
Southern District of New
York. The arbitrator shall be required to provide in writing
to the parties the basis for the
award or order of such arbitrator, and a court reporter shall
record all hearings (unless
otherwise agreed to by the parties), with such record
constituting the official transcript of
such Proceedings. The Company and the Purchaser specifically
desire this arbitration
clause to be governed by the United States Federal Arbitration
Act, and not by the
arbitration laws of any state.
(c) The parties hereto agree and consent that any legal
action, suit or
Proceeding seeking to enforce this Section 9.4 or to confirm or
contest any arbitration
award shall be instituted and adjudicated solely and
exclusively in any court of general
jurisdiction in New York, or in the United States District
Court for the Southern District
of New York and the parties hereto agree that venue will be
proper in such courts and
waive any objection which they may have now or hereafter to the
venue of any such suit,
action or Proceeding in such courts, and irrevocably consent
and agree to the jurisdiction
of said courts in any such suit, action or Proceeding. Each of
the parties hereto further
agree to accept and acknowledge service of any and all process
which may be served in
any such suit, action or Proceeding in said courts, and also
agree that service of process
or notice upon them shall be deemed in every respect effective
service of process or
notice upon them, in any suit, action, Proceeding or
arbitration demand, if given or made:
(i) according to Applicable Law, (ii) according to the AAA
Rules, (iii) by a Person over
the age of eighteen who personally serves such notice or
service of process on the
applicable party(ies) hereto, or (iv) by certified mail, return
receipt requested, mailed to
the applicable party(ies) hereto, at their respective addresses
set forth in this Agreement.
(d) In the event of arbitration filed or instituted
between or among the parties
pursuant to this Section 9.4, the prevailing party will be
entitled to receive from the
adverse party all costs, damages and expenses, including
reasonable attorney's fees,
incurred by the prevailing party in connection with that action
or Proceeding, whether or
not the controversy is reduced to judgment or award. The
prevailing party will be that
party who is determined by the arbitrator to have prevailed on
the major disputed issues.
9.5 Effect of Insurance. An Indemnified Party who has a right
to make a claim
under any policy of insurance with respect to an indemnified claim
made by the Indemnified
Party shall use commercially reasonable efforts to make such claim
on a prompt and competent
basis in the manner required by the insurance carrier. The
Indemnified Party shall use
commercially reasonable efforts to promptly and diligently pursue
such claim and shall
cooperate fully with the insurance carrier and the Indemnifying
Party in the prosecution of the
claim or claims. In the event an Indemnified Party receives
insurance proceeds with respect to
Losses for which the Indemnified Party has made an indemnification
claim prior to the date on
which the Indemnifying Party is required pursuant to this Article 9
to pay such indemnification
claim, the indemnification claim shall be reduced by an amount equal
to such insurance proceeds
received by the Indemnified Party less all reasonable out-of-pocket
costs incurred by the
Indemnified Party in its pursuit of such insurance proceeds. If
such insurance proceeds are
received by the Indemnified Party after the date on which the
Indemnifying Party is required
pursuant to this Article 9 to pay such indemnification claim, the
Indemnified Party shall, no later
than five (5) days after the receipt of such insurance proceeds,
reimburse the Indemnifying Party
in an amount equal to such insurance proceeds (but in no event in an
amount greater than the
Losses theretofore paid to the Indemnified Party by the Indemnifying
Party) less all reasonable
out-of-pocket costs incurred by the Indemnified Party in obtaining
such insurance proceeds. In
either case, the Indemnifying Party shall compensate the Indemnified
Party for all costs incurred
by the Indemnified Party subsequent to either the reduction of any
indemnification claim as
provided above, or the delivery of any such insurance proceeds to
the Indemnifying Party as
provided above, as the case may be, as a result of any such
insurance, including, but not limited
to, retrospective premium adjustments, experience-based premium
adjustments (whether
retroactive or prospective) and indemnification or surety
obligations of the Indemnified Party to
any insurer. A claim for such costs shall be made by an Indemnified
Party by delivery of a
written notice to the Indemnifying Party requesting compensation and
specifying this Section 9.5
as the basis on which compensation for such costs is sought, and the
Indemnifying Party shall
pay such costs no later than thirty (30) days after receiving the
written notice requesting such
compensation. Notwithstanding the foregoing, except to the extent
set forth in the first two
sentences of this Section 9.5, the Indemnified Party is not required
to pursue a recovery from an
insurer as a precondition to the Indemnifying Party's obligation to
pay any indemnification claim
as required by this Article 9, and the Indemnifying Party shall not
be entitled to delay any
payment beyond the respective payment dates for any indemnification
claims referred to in this
Article 9 for the purpose of awaiting receipt of insurance proceeds
or credits therefor as provided
herein.
ARTICLE 10
EMPLOYEE MATTERS
10.1 Information on Active Employees. For the purpose of this
Agreement, the term
"Active Employees" shall mean all employees employed by the Company
on the Closing Date
that are principally engaged in the performance of services in
connection with the Business as
currently being performed, including employees on temporary leave of
absence, including family
medical leave, military leave, temporary disability or sick leave,
but excluding employees on
long-term disability leave. The names, titles and salaries of all
Active Employees are set forth in
Schedule 10.1 of this Agreement.
10.2 Employment of Active Employees by the Purchaser. The
Purchaser is not
obligated to hire any Active Employee but intends to hire all or
substantially all such employees
upon the Closing. The Purchaser may interview all Active Employees.
Within ten (10) days
prior to the Closing Date, the Purchaser will provide the Company
with a list of Active
Employees to whom the Purchaser will make an offer of employment
which will become
effective on the Closing Date. Such list will be annexed hereto as
Schedule 10.2. Provided that
the Active Employees set forth on Schedule 10.2 commence work with
the Purchaser, each such
Active Employee shall be known herein as a "Hired Active Employee,"
and collectively, the
"Hired Active Employees." Effective upon the Closing, the Company
shall have terminated the
employment of all of its employees set forth on Schedule 10.2, and
the Company shall not
solicit the continued employment of (or employ) any Hired Active
Employee for a period of one
year after the Closing, unless such employee has been (i) terminated
for any reason by the
Company, or (ii) separated from employment by the Company for a
period of three (3) months
or more.
10.3 Terms and Conditions of Offers of Employment. It is
understood and agreed
that (i) the Purchaser's expressed intention to extend offers of
employment as set forth in this
Article shall not constitute any commitment, contract or
understanding (express or implied) or
any obligation on the part of the Purchaser to an employment
relationship of any fixed term or
duration after Closing or upon any terms or conditions other than
those that the Purchaser may
establish pursuant to individual offers of employment, and (ii)
employment offered by the
Purchaser is "at will" and may be terminated by the Purchaser or an
employee at any time for
any reason (subject to any written commitments to the contrary made
by the Purchaser or an
employee and Applicable Law and regulation). Nothing in this
Agreement shall be deemed to
prevent or restrict in any way the right of the Purchaser to
terminate, reassign, promote or
demote any of the Hired Active Employees after the Closing or to
change adversely or favorably
the title, powers, duties, responsibilities, functions, locations,
salaries, other compensation or
terms or conditions of employment of such employees. The Purchaser
will set its own initial
terms and conditions of employment for the Hired Active Employees
and others it may hire,
including work rules, benefits and salary and wage structure, all as
permitted by law. The
Purchaser is not assuming any collective bargaining agreements under
this Agreement. The
Company shall be solely liable for any severance payment required to
be made to its employees
due to the consummation of the transactions contemplated by this
Agreement.
10.4 Salaries and Benefits Prior to Closing. The Company shall
be responsible for
(i) the payment of all wages and other remuneration due to Active
Employees with respect to
their services as employees of the Company through the Closing,
including incentive payments,
(ii) payment of 401(k) match contributions and other payments with
respect to Benefit Plans,
(iii) employee bonus payments, (iv) the payment of any termination
or severance payments for
Active Employees, and the provision of health plan continuation
coverage in accordance with the
requirements of COBRA and Sections 601 through 608 of ERISA, and (v)
any and all payments
to Active Employees required under the WARN Act, similar state law,
COBRA, and any other
Applicable Law. To the extent accrued on the Closing Balance Sheet,
the Purchaser shall be
obligated to pay or allow as credit all accrued vacation pay and
personal time off earned prior to
the Closing Date.
10.5 Benefits and Benefit Plans. Effective as of the Closing
Date, the Purchaser shall
offer to all Hired Active Employees the opportunity to participate
in the Purchaser's Benefit
Plans. The Purchaser shall use commercially reasonable efforts to
not treat any Hired Active
Employee as "new" employee for purposes of any exclusion under any
health plan or dental
plan of the Purchaser or any of its Affiliates for a pre-existing
medical condition and shall
attempt to make appropriate arrangements with its insurance
carrier(s) to achieve such result.
Nothing herein shall require the Purchaser to maintain in effect any
plan, plan benefit or similar
provisions with respect to any of its employees including but not
limited to Hired Active
Employees. Notwithstanding any contrary provision of this Article
10, all Hired Active
Employees, to the extent the decision is within the discretion of
the Purchaser or the Purchaser
Parent, will be credited as of the Closing Date with all past
service time with the Company for
purposes of vacation, sick time and personal time off.
10.6 Company's Retirement and Savings Plans. The Company
covenants that all
Hired Active Employees who are participants in the Company's
retirement and savings plans, if
any, shall retain their vested benefits thereunder as of the Closing
Date in accordance with the
terms thereof and the Company (or the Company's retirement or
savings plans) shall retain sole
Liability for the payment for such benefits as and when such Hired
Active Employees become
eligible therefor under such plans. The parties hereto acknowledge
that the Purchaser shall not
assume, maintain, or contribute to any employee pension plan or
employee welfare benefit plan
of the Company. The Company will not make or cause any transfer of,
and the Purchaser shall
not under any circumstances be deemed to have assumed or accrued,
any Liability with respect
to pension or other employee benefit plans or assets of the Company.
10.7 Further Actions. The Company shall give any notices
required by Applicable
Law and take whatever other actions with respect to the plans,
programs and policies described
in this Article 10 as may be necessary to carry out the arrangements
described in this Article 10.
The Company and the Purchaser shall provide each other with such
plan documents and
summary plan descriptions, employee data or other information to the
extent reasonably required
to carry out the arrangements described in this Article 10. If any
of the arrangements described
in this Article 10 are determined by the IRS or other Governmental
Body to be prohibited by
law, the Company and the Purchaser shall modify such arrangements to
as closely as possible
reflect their expressed intent and retain the allocation of economic
benefits and burdens to the
parties contemplated herein in a manner that is not prohibited by
law. Other than as reserved for
on the Closing Balance Sheet, the Purchaser shall not have any
responsibility, Liability or
obligation, whether to Active Employees, former employees, their
beneficiaries or to any other
Person, with respect to any employee benefit plans, practices,
programs or arrangements
(including the establishment, maintenance, operation, sponsorship or
termination thereof and the
notification and provision of COBRA coverage extension) maintained
by the Company.
10.8 Forms. To the extent allowed by Applicable Law, the
Company shall provide the
Purchaser with completed I-9 forms and attachments with respect to
all Hired Active Employees,
except for such employees as the Company certifies in writing to the
Purchaser are exempt from
such requirement.
10.9 WARN Act. Should any Liability occur as a result of the
failure to comply with
or give any required notice to employees under the Workers
Adjustment and Retraining
Notification Act of 1988, as amended (the "WARN Act") and any other
Applicable Law, the
Company assumes all responsibility and Liability for any wages and
benefits for employees of
the Company who did not receive any such required notice and for
civil penalties by local
governments which may be imposed for failure to give such required
notice, including without
limitation fines and attorneys' fees. In the context of any
situation in which the WARN Act
applies, (i) the Company has not effectuated a "plant closing" (as
defined in the WARN Act)
affecting any site of employment or one or more facilities or
operating units within any site of
employment or facility of the Company, and (ii) there has not
occurred a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or
facility of the Company. The
Company has not been affected by any transaction or engaged in
layoffs or employment
terminations sufficient in number to trigger application of any
similar state, local or foreign
"plant closing" Law or regulation. The Company assumes
responsibility for any notice which
may be required by the WARN Act as a result of the transactions
contemplated by this
Agreement. The Company has not taken any action prior to the
Closing Date to cause any
employees to be included in an "employment loss" for purposes of the
WARN Act.
10.10 COBRA. The Company agrees that the Company shall be
solely liable and
responsible for providing COBRA coverage with respect to employees
and their eligible spouses
and dependents who are terminated at the time of the Closing or
prior to the Closing and in
connection with the transaction covered by this Agreement and who
have previously elected or
are eligible to elect COBRA. Accordingly, the Company shall
maintain in effect its group health
insurance plan for the longest required COBRA coverage period
applicable to any terminated
employee or dependents that may be required under the preceding
sentence. Other than as
reserved for on the Closing Balance Sheet of the Business as
provided in Section 2.2(b), the
Company agrees that the Company shall discharge, in accordance with
their terms, all
obligations and Liabilities of the Company or the Company's
Affiliates with respect to costs of
termination of any employees including: (a) any severance claim
made by any employee (i) that
is not offered employment by the Purchaser, or (ii) to whom
employment is offered by the
Purchaser, but not accepted by such employee, or (b) any claim for
accrued but unused vacation,
personal, or sick days.
10.11 No Intended or Incidental Third Party Beneficiary. The
employees of the
Company are not and shall not be deemed to be intended or incidental
Third Party beneficiaries
of this Agreement and shall not have standing to bring a Proceeding
to enforce the covenants set
forth in this Agreement. Only the Parties hereto shall have such
standing.
ARTICLE 11
PERFORMANCE FOLLOWING THE CLOSING DATE
The following covenants and agreements are to be performed after the
Closing by the
parties and shall continue in effect for the periods respectively
indicated or, where no indication
is made, until performed:
11.1 Further Acts and Assurances. The parties agree that, at
any time and from time
to time, on and after the Closing Date, upon the reasonable request
of the other party, they will
do or cause to be done all such further acts and things and execute,
acknowledge and deliver, or
cause to be executed, acknowledged and delivered any and all papers,
documents, instruments,
agreements, assignments, transfers, assurances and conveyances as
may be necessary or
desirable to carry out and give effect to the provisions and intent
of this Agreement. In addition,
from and after the Closing Date, the Purchaser and the Company will
afford to the other and
their respective attorneys, accountants and other representatives
access, during normal business
hours, to such personnel, books and records relating to the Company
or the Business as may
reasonably be required in connection with the preparation of
financial information, the filing of
Tax Returns and the operation of the Business, and will cooperate in
all reasonable respects in
connection with claims and Proceeding asserted by or against third
parties, relating to or arising
from the transactions contemplated hereby.
11.2 Confidential Information and Non-Competition Agreements.
(a) Confidential Information. The Company understands
and agrees that the
Business and the Purchaser understands that the business of the
BPS Division and the
Company, each is based upon specialized work and that it has,
along with their respective
shareholders, Related Persons and/or Controlled Persons,
received, had access to and/or
contributed to Confidential Information. Except as may be
necessary or desirable (i) for
defense of a Loss or conducting or participating in a
Proceeding in accordance with
Sections 9.1, 9.3 or 9.4 hereof, (ii) in enforcing a Party's
rights under this Agreement or
any Ancillary Document, (iii) for the purpose of filing any
report required to be filed
with any Governmental Body, or (iv) in connection with advice
sought from an attorney,
accountant or similar professional, each party hereto agrees
that at all times from and
after the Closing Date, each party hereto and its trustees,
officers, directors, shareholders,
Related Persons and Controlled Persons, shall keep secret all
such Confidential
Information of the other (assuming the transfer of the Assets)
and will not directly or
indirectly Use or Disclose the other party's Confidential
Information to any Person
without first obtaining the written consent of the other party,
which consent may be
withheld or given in the other party's sole discretion. At any
time the affected party may
so request, the other party and its trustees, officers,
directors, shareholders, Related
Persons and Controlled Persons, shall turn over to the other
party all Confidential
Information of such requesting party compiled by or delivered
to such Persons, including
copies thereof, in its possession, it being agreed that the
same and all information
contained therein are at all times the exclusive property of
the requesting party.
(b) Covenant Not to Compete.
(i) Company and Company Parent. The Company and the
Company
Parent acknowledge that in order to assure the Purchaser,
the Purchaser Parent
and their respective Affiliates (the "Purchaser
Non-Compete Parties") that the
Purchaser will retain the value of the Assets, the Company
and the Company
Parent agree, for a period of four (4) years following the
Closing Date on the
terms set forth in this Section 11.2(b)(i), not to compete
with the Purchaser Non-
Compete Parties solely in the provision of primary and
secondary research for
information and knowledge which has, at its core, the
aggregation, interpretation
and assimilation capabilities conducted by human
researchers (versus machine-
generated data and information) (the "Purchaser
Competitive Business"),
subject to the terms hereafter set forth.
For a period of four (4) years beginning on the Closing
Date, each of the
Company and the Company Parent and their respective
Affiliates, other than
Sopheon GmbH as it relates to the European market, at the
time of determination,
shall not engage or have an interest, anywhere in the
United States of America or
any other geographic area where the Purchaser Non-Compete
Parties do business
at the date hereof or in which their respective products
or services are marketed at
the date hereof (in each case after giving effect to the
purchase of the Assets),
alone or in association with others, as principal,
officer, agent, employee, director,
member, partner, lender or stockholder (except as an
employee or consultant of
the Purchaser Non-Compete Parties or as an owner of five
percent (5%) or less of
the stock of any company listed on a national securities
exchange or traded in the
over-the-counter market), or through the investment of
capital, lending of money
or property, provision of capital, or otherwise, in any
business involving a
Purchaser Competitive Business. The foregoing shall
specifically not apply to the
business, business practices and activities described in
the definition of the
BPS Division set forth in Recital B to this Agreement.
Notwithstanding and in clarification of the forgoing:
(A) the restrictions contained in this clause
(i) shall not in any
manner prohibit or restrict any sale of the Company
Non-Compete Parties
(or all or substantially all of the Company
Non-Compete Party's assets) to
a Person that is not a Related Party that has
revenues that are derived,
directly or indirectly, from a Purchaser Competitive
Business which are
less than twenty-five percent (25%) of total revenues
of such Person or the
Affiliate in interest of such Person or the continued
business operations of
such Person, nor shall such Purchaser Competitive
Business be subject to
the obligations of the Company and the Company Parent
under this
Section 11.2.
(ii) Purchaser Non-Compete Parties. The Purchaser
and the Purchaser
Parent acknowledge that in order to assure the Company,
the Company Parent
and their respective Affiliates (the "Company Non-Compete
Parties") that the
Company and the Company Parent will retain the value of
the respective
remaining businesses of the BPS Division and the Company
Parent, the Purchaser
and the Purchaser Parent agree, for a period of four (4)
years following the
Closing Date on the terms set forth in this Section
11.2(b)(ii), not to compete with
the Company Non-Compete Parties solely in the sale or
marketing, other than
portal technology used for access to and distribution of
IM Division services, of
software for the management and automation of Knowledge
Intensive Business
Processes, and related installation and integration
services (the "Company
Competitive Business"), subject to the terms hereafter set
forth.
For a period of four (4) years beginning on the Closing
Date, each of the
Company and the Company Parent and their respective
Affiliates at the time of
determination, shall not engage or have an interest,
anywhere in the United States
of America or any other geographic area where the
Purchaser Non-Compete
Parties do business at the date hereof or in which their
respective products or
services are marketed at the date hereof (in each case
after giving effect to the
purchase of the Assets), alone or in association with
others, as principal, officer,
agent, employee, director, member, partner, lender or
stockholder (except as an
employee or consultant of the Company Non-Compete Parties
or as an owner of
five percent (5%) or less of the stock of any company
listed on a national
securities exchange or traded in the over-the-counter
market), or through the
investment of capital, lending of money or property,
provision of capital, or
otherwise, in any business involving a Company Competitive
Business. The
foregoing shall specifically not apply to the IM Division
Business.
Notwithstanding and in clarification of the foregoing:
(A) no Hired Active Employee shall at any time
while an
employee of Purchaser or Purchaser Parent during such
four (4) year
period engage in any Company Competitive Business,
whether or not such
activity may be allowed as an exception to the
covenant of the Purchaser
Non-Compete Parties hereunder;
(B) subject to (A) above, the restrictions
contained in this
clause (ii) shall lapse and no longer be effective or
enforceable in
connection with and upon the sale of the Purchaser or
the Purchaser Parent
to a Third Party that was not a Related Person prior
to such sale, whether
or not such Third Party is primarily engaged in a
software business
competitive with the Company Non-Compete Parties in a
transaction that
transfers the Business to such Third Party; or
(C) the restrictions contained in this clause
(ii) shall not in any
manner prohibit or restrict any acquisition by the
Purchaser Non-Compete
Parties of a Person that has revenues that are
derived, directly or
indirectly, from a Company Competitive Business which
are less than
twenty-five percent (25%) of total revenues of such
Person or the Affiliate
in interest of such Person or the continued business
operations of such
Person.
(iii) Non-Solicitation. During the same period,
neither the Purchaser
Non-Compete Parties nor the Company Non-Compete Parties
will recruit or
otherwise solicit or induce any Person who is an employee
of, or otherwise
engaged by, the other or any of their respective
Affiliates to terminate his or her
employment or other relationship with such party, or hire
any Person who has left
the employ of such party during the preceding four (4)
months.
(iv) Reasonable Restrictions. The parties hereto
acknowledge that
compliance with the restrictions set forth in this Section
11.2(b) are reasonable
and will not prevent them from earning a livelihood. The
parties hereto
acknowledge that this Section 11.2(b) and the parties'
respective obligations
hereunder are reasonable in light of the consideration of
this Agreement and were
a material inducement and condition to the parties
entering into this Agreement
and performing the transactions contemplated hereby, and
are necessary to protect
the respective goodwill and legitimate business interests
of the parties.
(v) Assignment and Assumption. If there shall be any
consolidation,
merger or amalgamation of the Company or the Company
Parent with another
Person or any acquisition of capital stock of the Company
or the Company Parent
by means of a share exchange (other than a consolidation,
merger or share
exchange in which the Company or the Company Parent is the
continuing
corporation) or any sale or conveyance of all or a portion
of the BPS Division
(any such event being called a "Capital Reorganization"),
as a condition to
effecting any Capital Reorganization, the Company or the
Company Parent or the
successor or surviving corporation or the acquirer of the
BPS Division, as the case
may be, shall assume the obligations of the Company and
the Company Parent
under this Section 11.2.
11.3 Injunctive Relief. The parties agree that the remedy of
damages at law for the
breach by any party of any of the covenants contained in Sections
11.1 or 11.2 is an inadequate
remedy. In recognition of the irreparable harm that a violation by
(i) the Company of any of the
covenants, agreements or obligations arising under Sections 11.1 or
11.2 would cause the
Purchaser, and (ii) the Purchaser of any of the covenants,
agreements or obligations arising
under Section 11.1, would cause the Company, (x) the Company, and
(y) the Purchaser, each
agree on behalf of themselves and their trustees, officers,
directors, shareholders, Related
Persons and Affiliates, that in addition to any other remedies or
relief afforded by law, an
Injunction against an actual or Threatened violation or violations
may be issued against it and/or
them and every other Person concerned thereby, it being the
understanding of the parties that
both damages and Injunction shall be proper modes of relief and are
not to be considered
alternative remedies.
11.4 Blue Pencil Doctrine. In the event that any of the
restrictive covenants contained
in this Article shall be found by a court of competent jurisdiction
to be unreasonable by reason of
its extending for too great a period of time or over too great a
geographic area or by reason of its
being too extensive in any other respect, then such restrictive
covenant shall be deemed modified
to the minimum extent necessary to make it reasonable and
enforceable under the circumstances.
11.5 Company Parent Indemnification Shares. In connection with
the
indemnification obligations of the Company Parent under this
Agreement, the Company Parent
shall deliver the number of shares of Company Parent common stock
("Company Parent
Stock") calculated in accordance with this Section 11.5, to the
Escrow Agent in the name of the
Purchaser within five (5) business days after the Closing. In
connection with this transmittal,
the Purchaser shall concurrently deliver an assignment separate from
certificate (the "Purchaser
Stock Assignment") for the Company Parent Stock to the Escrow Agent
to enable the Company
Parent Stock to be redelivered to the Company Parent or such other
nominee as the Company
Parent shall advise the Escrow Agent in the event that all or a
portion of the Company Parent
Stock is not claimed and used to indemnify the Purchaser Indemnified
Parties pursuant to this
Agreement. The Purchaser Stock Assignment will be signed by the
Purchaser, but the transferee
and the number of shares to be transferred will be left blank for
completion by the Escrow
Agent. The number of shares of Company Parent Stock required will
be determined by dividing
$100,000 by the average closing price for the Company Parent Stock
which shall be calculated
as the volume weighted average on the AIM market of the London Stock
Exchange of the
Company Parent Stock ten (10) consecutive trading days immediately
preceding the third (3rd)
day prior to the Closing Date converted to United States dollars
from United Kingdom pounds
pursuant to the average exchange rate (between such dollars and
pounds) during such ten (10)
day consecutive trading period, unless the number of shares of
common stock determined to be
required is more than 500,000, in which case the amount of Company
Parent Stock shall be
restricted to 500,000 shares. The disposition of the Company Parent
Stock once delivered to the
Escrow Agent shall be determined by the terms of the Escrow Agreement.
11.6 Consents. After the Closing Date, the Company and the
Purchaser will cooperate
and will each use commercially reasonable efforts to obtain any
consents listed on Schedule 3.4
that are not obtained prior to the Closing Date. Anything to the
contrary notwithstanding, this
Agreement shall not operate to assign any Contract, or any claim,
right or benefit arising
thereunder or resulting therefrom, if an attempted assignment
thereof, without the consent of a
Third Party thereto, would constitute a breach, default or other
contravention thereof or in any
way adversely affect the rights of the Company or the Purchaser
thereunder. In the event that a
consent required to assign any Contract or Permit is not obtained on
or prior to the Closing Date,
then, subject always to the terms of the applicable Contract or
Permit and to the extent permitted
by Applicable Law, the parties will use commercially reasonable
efforts to (i) provide to the
Purchaser the benefits of the applicable Contract to the extent
related to the Business, (ii) relieve
the Company to the extent possible, of the performance obligations
of the applicable Contracts
and Permits, (iii) cooperate in any reasonable and lawful
arrangement designed to provide the
benefits to the Purchaser, including entering into subcontracts for
performance, and (iv) enforce
at the request of the Purchaser and for the account of the Purchaser
any rights of the Company
arising from any such Contract or Permit (including the right to
elect to terminate such Contract
in accordance with the terms thereof upon the request of the
Purchaser).
11.7 Certain Tax Matters.
(a) Income and Transfer Taxes. All income, transfer,
registration, sales and
use, excise, franchise and similar Taxes and fees of any kind
(including all penalties and
interest) which arise from, in connection with or are imposed
incident to the sale of the
Assets or any other transaction that occurs pursuant to this
Agreement shall be borne and
timely paid (without penalty or distraint) solely by the Company.
(b) Allocation of Purchase Price. Within one hundred
thirty-five (135) days
following the Closing Date, the Purchaser shall, in a
reasonable manner after appropriate
consultation, determine the fair market value of the Assets,
and the Purchaser and the
Company shall allocate in writing the Purchase Price among the
Assets as required by
Section 1060 of the Code and the Treasury Regulations
thereunder in connection with the
transactions contemplated by this Agreement. Such allocation
and fair market values
shall be set forth on Schedule 11.7(b) hereto. The Purchaser
and the Company, as
appropriate, shall file an Asset Acquisition Statement on Form
8594 (which conforms
with the parties' allocation) with their federal income Tax
Returns for the Tax year in
which the Closing occurs and shall contemporaneously provide
the other party with a
copy of the Form 8594 being filed. Each party agrees not to
assert, in connection with
any Tax Return, claim, audit or similar Proceeding, any
allocation of the Purchase Price
which contradicts the allocation and fair market values
determined by the parties
hereunder.
(c) Post-Closing Access and Cooperation. From and after
the Closing Date,
each of the parties hereto agrees to permit the other parties
hereto to have reasonable
access, during normal business hours, to the books and records
of the Business, to the
extent that such books and records relate to a Pre-Closing
Period, and personnel, for the
purpose of enabling the parties hereto to: (i) prepare Tax
Returns or financial statements,
(ii) investigate or contest any Tax matter, and (iii) evaluate
any claim for indemnification
made by a party hereto.
11.8 Covenant Regarding Active Hired Employee Non-Compete. The
Company
shall not enforce the non-competition and confidentiality provisions
of its agreements with Hired
Active Employees with respect to the work that will be performed by
such employees on behalf
of the Purchaser or its Affiliates.
ARTICLE 12
TERMINATION
12.1 Termination. This Agreement may be terminated and the
transactions
contemplated herein may be abandoned at any time after the date of
this Agreement, but not later
than the Closing:
(a) by mutual written consent of all parties hereto;
(b) by the Purchaser or the Company if any of the
conditions provided for in
Article 6 of this Agreement have not been met and have not been
waived in writing by
the party seeking to terminate on or before the Closing Date;
(c) by the Purchaser if any of the conditions provided
for in Article 7 of this
Agreement have not been met (other than through the failure of
the Purchaser to comply
with their obligations under this Agreement) and have not been
waived or deemed
waived in accordance with the provisions of this Agreement in
writing by the Purchaser
on or before the Closing Date;
(d) by the Company if any of the conditions provided for
in Article 8 of this
Agreement have not been met (other than through the failure of
the Company to comply
with its obligations under this Agreement) and have not been
waived in writing by the
Company on or before the Closing Date;
(e) by either the Purchaser or the Company if the Closing
shall not have
occurred on or before July 15, 2003, at which time this
Agreement may be terminated
upon written notice to the other parties hereto; and
(f) by a party who objects to a Supplement pursuant to
Section 13.21.
In the event of termination or abandonment by any party as provided
in this Section 12.1, written
notice shall forthwith be given to the other party and, except as
otherwise provided herein, each
party shall pay its own expenses incident to preparation or
consummation of this Agreement and
the transactions contemplated hereunder and no party shall have any
Liability to any other party
hereunder except such Liability as may arise as a result of a breach
hereof.
12.2 Return of Documents and Nondisclosure. If this Agreement
is terminated for
any reason pursuant to Section 12.1 hereto, each party and its
counsel shall return all documents
and materials which shall have been furnished by or on behalf of the
other party, and all copies
thereof, and each party hereby covenants that it will not Use or
Disclose to any Person any
Confidential Information about the other party or any information
about the transactions
contemplated hereby, except insofar as may be necessary to comply
with the requirements of any
Governmental Body or Final Order or to assert its rights hereunder.
ARTICLE 13
MISCELLANEOUS
13.1 Survival of Representations and Warranties, Covenants and
Agreements.
Each of the representations and warranties of the parties contained
in this Agreement and in any
Exhibit, Schedule, certificate, instrument or document delivered by
or on behalf of any of the
parties hereto pursuant to this Agreement and the transactions
contemplated hereby shall survive
the Closing of the transactions contemplated hereby and any
investigation made by the parties or
their agents for a period of twenty-one (21) months after the
Closing, after which no claim for
indemnification for any misrepresentation, or for the breach or
falsity of any representation or
warranty under this Agreement or any Ancillary Document, may be
brought, and no action with
respect thereto may be commenced, and no party shall have any
Liability or obligation with
respect thereto, unless (i) the Indemnified Party gave written
notice to the Indemnifying Party
specifying with particularity the misrepresentation or a breach of
representation or warranty
claimed on or before the expiration of such period, (ii) the claim
relates to a breach of any
representations or warranties contained in Sections 3.10 or 3.25, or
3.1, 3.2, 3.3, 3.7, 3.9, 3.10 in
which case the right to indemnification shall survive until the
expiration of the applicable statute
of limitations, or (iii) the claim relates to any representation or
warranty in Section 3.5, in which
case the representation or warranty shall indefinitely survive the
Closing. The covenants and
agreements arising from, incident to or in connection with this
Agreement shall survive the
Closing indefinitely, until such covenants and agreements are fully
satisfied and require no
performance or forbearance, or the rights of a party hereto expire
on a specific date by the terms
hereof.
13.2 Preservation of and Access to Records. The Purchaser
shall preserve all books
and records of the Company transferred as part of the Assets for a
period of six (6) years after
the Closing Date; provided, however, the Purchaser may (i) destroy
any part or parts of such
records upon obtaining written consent of the Company for such
destruction, which consent shall
not be unreasonably withheld, delayed or conditioned, or (ii) return
to the Company or the
Company Parent such records in lieu of such preservation. Such
records shall be made available
to the Company and its representatives at all reasonable times
during normal business hours of
the Purchaser during said six-year period with the right at its
expense to make abstracts from and
copies thereof.
13.3 Cooperation. The parties hereto shall cooperate with each
other in all respects,
including using commercially reasonable efforts to assist each other
in satisfying the conditions
precedent to their respective obligations under this Agreement and
any Ancillary Document, to
the end that the transactions contemplated hereby will be consummated.
13.4 Public Announcements. The timing and content of all
public announcements
relating to the execution of this Agreement and the Ancillary
Documents, and the consummation
of the transactions contemplated hereby shall be approved by both
the Purchaser and the
Company prior to the release of such public announcements, and each
party agrees to cooperate
with the other party as appropriate to comply with all Applicable
Laws and stock exchange rules.
Notwithstanding any provision of this Section 13.4, any Party may
file all required filings
pursuant to Applicable Law on the last day required under such
Applicable Law without taking
into effect late filing extensions.
13.5 Notices. All notices, demands and other communications
provided for hereunder
shall be in writing and shall be given by personal delivery, via
facsimile transmission (receipt
telephonically confirmed), by nationally recognized overnight
courier (prepaid), or by certified
or registered first class mail, postage prepaid, return receipt
requested, sent to each party, at
its/his address as set forth below or at such other address or in
such other manner as may be
designated by such party in written notice to each of the other
parties. All such notices, demands
and communications shall be effective when personally delivered, one
(1) business day after
delivery to the overnight courier, upon telephone confirmation of
facsimile transmission or upon
receipt after dispatch by mail to the party to whom the same is so
given or made:
If to Company: Sopheon PLC
or Company Parent Stirling House
Stirling Road
Surrey Research Park
Guildford, Surrey GU2 5RF
ENGLAND
Attention: Barry Mence
Arif Karimjee
With a copy to: Briggs and Morgan, Professional Association
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Attention: Michael J. Grimes
If to the Purchaser Find/SVP, Inc.
or Purchaser Parent: 625 Avenue of the Americas
New York, New York 10011-2020
Attention: Chief Executive Officer
With a copy to: Kane Kessler, P.C.
1350 Avenue of the Americas
New York, NY 10019-4896
Attention: Robert L. Lawrence
13.6 Entire Agreement. Other than the Non-Disclosure Agreement
executed by the
parties on or about July 24, 2002, this Agreement and the Ancillary
Documents to be executed
and/or delivered by the parties pursuant hereto, contains the entire
agreement of the parties
hereto and supersedes all prior or contemporaneous agreements and
understandings, oral or
written, between the parties hereto with respect to the subject
matter hereof. By execution of
this Agreement, the Letter of Intent dated April 2, 2003 is hereby
terminated, void and of no
further force or effect.
13.7 Remedies. The respective indemnification obligations of
the parties set forth in
Article 9 of this Agreement are the exclusive remedies of the
parties and their successors,
assigns, heirs, beneficiaries or others seeking to claim by,
through, or on behalf of a party, under
this Agreement or any Ancillary Document, and no other remedy or
remedies, whether arising
under any Applicable Law, common law or otherwise, may be used,
asserted or prosecuted in
connection with this Agreement or any Ancillary Document and any
transaction, occurrence, or
omission arising from, in connection with or otherwise based upon
this Agreement or any
Ancillary Document; provided, however, that all equitable remedies
and assertions of fraud
and/or intentional misrepresentation shall remain available and
shall not require an election of
remedies.
13.8 Amendments. No purported amendment, modification or
waiver of any
provision of this Agreement or any Ancillary Document to be executed
and delivered by the
parties pursuant hereto shall be effective unless in a writing
specifically referring to this
Agreement and signed by all of the parties hereto.
13.9 Successors and Assigns. This Agreement and the Ancillary
Documents shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and
permitted assigns, but except as hereinafter provided in this
Section, nothing in this Agreement
is to be construed as an authorization or right of any party to
assign its rights or delegate its
duties under this Agreement without the prior written consent of the
other parties hereto.
Notwithstanding the foregoing, in its sole discretion, any party
hereto may assign its respective
rights in and/or delegate its respective duties under this Agreement
to an Affiliate. In the event
of such an assignment of rights and/or delegation of duties, all
references to such party, as
applicable to the assignment, in this Agreement shall also be deemed
to be references to the
Person to which this Agreement is assigned; provided that no such
assignment and/or delegation
shall relieve the assignor of any of its duties or obligations
hereunder or under any Ancillary
Document.
13.10 Fees and Expenses. Each party hereto shall pay their own
fees and expenses
incurred in connection with negotiating and preparing this Agreement
and consummating the
transactions contemplated hereby, including but not limited to fees
and disbursements of their
respective attorneys, accountants and investment bankers. If the
transaction is consummated, all
fees and expenses, including legal, accounting, investment banking,
broker's and finder's fees
and expenses incurred by the Company or the Company Parent in
connection with this
transaction (the "Transactional Expenses") shall be deemed expenses
of the Company and shall
be borne by the Company.
13.11 Governing Law and Jurisdiction. This Agreement and the
Ancillary
Documents to be executed and/or delivered by the parties pursuant
hereto, shall be construed,
governed by and enforced in accordance with the internal laws of the
State of Delaware, without
giving effect to the principles of comity or conflicts of laws
thereof. The Company and the
Purchaser agree and consent that any legal action, suit or
Proceeding seeking to enforce any
provision of this Agreement with the exception of Section 9.4 (which
is governed by
Section 9.4(c)) shall be instituted and adjudicated solely and
exclusively in any court of general
jurisdiction in New York, or in the United States District Court
having jurisdiction in New York
and the Company and the Purchaser agree that venue will be proper in
such courts and waive any
objection which they may have now or hereafter to the venue of any
such suit, action or
Proceeding in such courts, and each hereby irrevocably consents and
agrees to the jurisdiction of
said courts in any such suit, action or Proceeding. The Company and
the Purchaser further agree
to accept and acknowledge service of any and all process which may
be served in any such suit,
action or Proceeding in said courts, and also agree that service of
process or notice upon them
shall be deemed in every respect effective service of process or
notice upon them, in any suit,
action, Proceeding, if given or made (i) according to Applicable
Law, (ii) by a Person over the
age of 18 who personally served such notice or service of process on
the Company or the
Purchaser, as the case may be, or (iii) by certified mail, return
receipt requested, mailed to the
Company or the Purchaser, as the case may be, at their respective
addresses set forth in this
Agreement.
13.12 Counterparts and Facsimile Signatures. This Agreement and
the Ancillary
Documents may be executed in two or more counterparts, each of which
shall be deemed an
original but all of which together shall constitute one and the same
instrument. The counterparts
of this Agreement and the Ancillary Documents may be executed and
delivered by facsimile
signature by any of the parties to any other party and the receiving
party may rely on the receipt
of such document so executed and delivered by facsimile as if the
original had been received.
13.13 Headings. The headings of the articles, sections and
subsections of this
Agreement are intended for the convenience of the parties only and
shall in no way be held to
explain, modify, construe, limit, amplify or aid in the
interpretation of the provisions hereof.
The terms "this Agreement," "hereof," "herein," "hereunder,"
"hereto" and similar expressions
refer to this Agreement as a whole and not to any particular
article, section, subsection or other
portion hereof and include the Schedules and Exhibits hereto and any
document, instrument or
agreement executed and/or delivered by the parties pursuant hereto.
13.14 [THIS SECTION INTENTIONALLY OMITTED]
13.15 Number and Gender. Unless the context otherwise requires,
words importing
the singular number shall include the plural and vice versa and
words importing the use of any
gender shall include all genders.
13.16 Severability. In the event that any provision of this
Agreement or any Ancillary
Document is declared or held by any court of competent jurisdiction
to be invalid or
unenforceable, such provision shall be severable from, and such
invalidity or unenforceability
shall not be construed to have any effect on, the remaining
provisions of this Agreement or the
applicable Ancillary Document, unless such invalid or unenforceable
provision goes to the
essence of this Agreement, in which case the entire Agreement may be
declared invalid and not
binding upon any of the parties.
13.17 Parties in Interest. Nothing expressed or implied in this
Agreement, specifically
including the provisions of Article 10 hereof, is intended or shall
be construed to confer any
rights or remedies under or by reason of this Agreement upon any
Person other than the Parties
hereto and their respective successors and permitted assigns.
Nothing in this Agreement is
intended to relieve or discharge the Liabilities of any third Person
to the Purchaser or the
Company.
13.18 Waiver. The terms, conditions, warranties,
representations and indemnities
contained in this Agreement, including the documents, instruments
and agreements executed
and/or delivered by the parties pursuant hereto, may be waived only
by a written instrument
executed by the party waiving compliance. Any such waiver shall
only be effective in the
specific instance and for the specific purpose for which it was
given and shall not be deemed a
waiver of any other provision hereof or of the same breach or
default upon any recurrence
thereof. No failure on the part of a party hereto to exercise and
no delay in exercising any right
hereunder shall operate as a waiver thereof nor shall any single or
partial exercise of any right
hereunder preclude any other or further exercise thereof or the
exercise of any other right.
13.19 Construction. The parties have participated jointly in
the negotiation and
drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by
the parties and no presumption
or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any
of the provisions of this Agreement. The words "including,"
"include" or "includes" shall mean
including without limitation. The parties intend that each
representation, warranty and covenant
contained herein shall have independent significance. If any party
has breached any
representation, warranty or covenant contained herein in any
respect, the fact that there exists
another representation, warranty or covenant relating to the same
subject matter (regardless of
the relative levels of specificity) which the party has not breached
shall not detract from or
mitigate the fact that the party is in breach of the first
representation, warranty or covenant.
13.20 Specific Performance. The parties hereto agree that
irreparable damage would
occur in the event that any of the provisions of this Agreement were
not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that
the parties shall be entitled to injunctive relief to prevent
breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of
the United States or any state
having jurisdiction, this being in addition to any other remedy to
which they are entitled at law
or in equity.
13.21 Supplementation of Schedules. The Company or the
Purchaser may elect to
deliver a supplement ("Supplement") to one or more of the Schedules
previously delivered to
the other in accordance with the procedures set forth in this
Section 13.21 as follows:
(a) Prior to the Closing Date, any and all Supplements
must be in writing and
must be delivered to the other party before the date that is
five (5) business days prior to
the scheduled Closing Date. The other party shall be given the
opportunity during the
five (5) business days following the delivery of the proposed
Supplement to consider that
Supplement. If the recipient does not object to the contents
of the Supplement within
such period, the Schedule in question shall be deemed amended
by the Supplement. If
the recipient objects to a proposed Supplement, the sole remedy
of such objecting party
shall be termination of this Agreement in accordance Section
12.1(f) of this Agreement;
(b) Any and all Supplements within five (5) business days
prior to the
scheduled Closing Date must be in writing and delivered to the
other party pursuant to
Section 13.5 of this Agreement, and will only be deemed to
amend a Schedule with the
written consent of the recipient of the Supplement; and
(c) Any and all Supplements provided pursuant to this
Section 13.21 shall
only address or update items, events and changes in
circumstances first occurring or
arising after the date of this Agreement and prior to the
Closing, and such items, events
or changes in circumstances may not have arisen in connection
with a direct or indirect
breach of the terms of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by duly authorized representations as of the day, month and
year first above written.
PURCHASER: COMPANY:
TTECH ACQUISITION CORP. SOPHEON CORPORATION
By_________________________________
By_______________________________
Its_______________________________
Its_____________________________
PURCHASER PARENT: COMPANY PARENT:
FIND/SVP, INC. SOPHEON PLC
By_________________________________
By_____________________________
Its________________________________
Its___________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED ASSET PURCHASE
AGREEMENT]
EXHIBITS AND SCHEDULES
Schedules
2.1(a)(i)(A) Accounts Receivable
2.1(a)(i)(B) Prepaid Assets and Expenses
2.1(a)(i)(C) Property, Equipment and Other Tangible Personal Property
2.1(a)(i)(D) Intellectual Property and Other Intangible Assets
2.1(a)(i)(E) Transferable Permits
2.1(a)(i)(F) Operating Contracts
2.1(a)(ii) Other Excluded Assets
2.1(b)(i)(D) Obligations Associated with Deferred Revenue
2.1(b)(i)(E) Obligations Associated with Employee Hired by the
Purchaser
2.2(a)(iii)(B) Expiring Subscription Contracts
3.1 Foreign Qualification
3.4 No Breach; Consents and Approvals
3.5 Clear Title
3.6 Condition of Assets
3.7 Litigation
3.8 Labor Matters
3.9(a) Tax Returns
3.10 Employee Benefits
3.10(a) Other Benefit Plan Issues
3.11 Guaranties
3.12 Financial Statements
3.13 Absence of Certain Developments
3.14 Intellectual Property
3.16(a) Company Contracts
3.16(b) Operating Contracts
3.17 Leased Real Estate
3.18 Accounts Receivable
3.20 Employees and Employee Related Commitments
3.21 Permits
3.23 Subsidiaries
3.24 Insurance
3.26 Relationship with Related Persons
3.27 Debt Instruments
3.28 Customers and Suppliers
3.29 Affiliate Loans
3.30 Absence of Certain Business Practices
3.31 Insolvency
3.32(c) No Breach regarding Company Parent
5.2 Conduct of Business
5.10 Consents
7.6 Employment Agreements
10.1 Active Employees
10.2 Hired Active Employees
11.7(b) Allocation of Purchase Price
Exhibits
Exhibit A Escrow Agreement (Section 2.2(a)(ii)(A))
Exhibit B Company and Company Parent Closing Certificate (Section
2.3(b)(i))
Exhibit C Assignment and Assumption Agreement (Section 2.3(b)(ii))
Exhibit D Bill of Sale (Section 2.3(b)(iii))
Exhibit E Investor Letter (Section 2.3(b)(xii))
Exhibit F Purchaser and Purchaser Parent Closing Certificate
(Section 2.3(c)(ii))
EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as
of the
____ day of _______, 2003, by and between TTECH ACQUISITION CORP., a
Delaware
corporation (the "Purchaser"), FIND/SVP, INC., a New York
corporation (the "Purchaser
Parent"), SOPHEON CORPORATION, a Minnesota corporation, (the
"Company"),
SOPHEON PLC, a registered corporation in United Kingdom (the
"Company Parent") and
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
escrow agent
(the "Escrow Agent"). The Purchaser and the Purchaser Parent may be
referred to collectively
herein as the "Purchaser Parties." The Company and the Company
Parent may be referred to
collectively herein as the "Company Parties."
RECITALS
A. The Company, the Company Parent, the Purchaser and the
Purchaser Parent are
parties to that certain Amended and Restated Asset Purchase
Agreement dated as of June 25,
2003 (the "Asset Purchase Agreement") pursuant to which the
Purchaser shall acquire certain
assets of the Company in exchange for [______________] shares of
common stock of the
Purchaser Parent as set forth on Exhibit A hereto (the "Purchaser
Parent Shares").
B. Subsequent to the Closing, in accordance with Section 11.5 of
the Asset Purchase
Agreement, the Company Parent will deposit shares of its common
stock (the "Company
Parent Shares") with the Escrow Agent, which shares shall also be
set forth in Exhibit A
hereto.
C. Pursuant to Section 2.3 of the Asset Purchase Agreement, this
Agreement must be
entered into at and upon the closing of the transactions
contemplated by the Asset Purchase
Agreement.
D. The Company, the Company Parent, the Purchaser and the
Purchaser Parent
desire to enter into this Agreement to establish the terms and
conditions of the Escrow Fund as
defined below and agreed upon in the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for
other good and valuable consideration, and intending to be legally
bound, the parties hereto
agree as follows:
1. Definitions. Capitalized terms used but not otherwise
defined herein or in the
Recitals hereto shall have the meanings ascribed to such terms in
the Asset Purchase Agreement.
2. Appointment of Escrow Agent; Payment of Escrow Fees. The
Purchaser, the
Purchaser Parent, the Company and the Company Parent hereby appoint
the Escrow Agent to act
as escrow agent hereunder and the Escrow Agent hereby accepts such
appointment for the
purpose of receiving, safeguarding and disbursing the Escrow Fund
(as defined below) in
accordance with the terms and conditions set forth herein. The
Escrow Agent's fees shall be as
set forth on Schedule A hereto. The Escrow Agent acknowledges
receipt of an executed copy of
the Asset Purchase Agreement. The acceptance fee and the Escrow
Agent's first year's
administrative fees shall be due upon execution and delivery of this
Agreement. Unless
otherwise agreed to by the parties in a joint written instruction to
the Escrow Agent, all fees and
charges shall be paid by the Company Parent. The administrative
fees set forth on Schedule A
hereto shall govern.
3. Deposit to Escrow. (i) Simultaneously with the execution
of this Agreement, the
Purchaser Parent has deposited with the Escrow Agent certificates
evidencing an aggregate
number of [________] Purchaser Parent Shares together with a blank
stock power duly executed
by the Company (the "Purchaser Parent Shares Escrow") pursuant to
Section 2.2 of the Asset
Purchase Agreement, and (ii) in accordance with Section 11.5 of the
Asset Purchase Agreement,
(x) the Company Parent shall deposit with the Escrow Agent
certificates evidencing the
Company Parent Shares, and (y) the Purchaser shall deliver an
assignment separate from
certificate with respect to the Company Parent Shares (collectively,
the Purchaser Parent Shares
and the Company Parent Shares shall be referred to herein as the
"Shares Escrow" or the
"Escrow Fund"). The Escrow Agent hereby acknowledges receipt of the
Purchaser Parent
Shares of the Escrow Fund. The Escrow Fund shall not be subject to
any lien, attachment,
trustee, process or any other judicial process of any creditor of
any party hereto, as well as, the
Escrow Agent. The Escrow Agent agrees to hold the Escrow Fund in
escrow subject to the
terms and conditions of this Agreement.
4. [THIS SECTION INTENTIONALLY OMITTED]
5. Disbursements of Escrow Fund. The Escrow Agent shall hold
the Escrow Fund
in its possession until authorized to make disbursements as provided
below. Except as provided
in Sections 5(b), 5(c), and 5(d), the Escrow Agent shall only make
disbursements from the
Escrow Fund in accordance with a joint written direction from the
Purchaser Parties and the
Company Parties executed and delivered to the Escrow Agent (a
"Written Direction").
(a) In the event that the Purchaser presents a
certificate (the "Purchase Price
Adjustment Certificate") to the Escrow Agent, executed by an
officer of such person
enclosing either (i) a copy of the Closing Certificate issued
pursuant to Section 2.2(b) of
the Asset Purchase Agreement and a statement that no objection
was made by the
Company or the Company Parent to the Closing Period during the
Response Period, or
(ii) a copy of the Independent Accountant's decision rendered
pursuant to Section 2.2(b)
of the Asset Purchase Agreement, in each case stating:
(i) the dollar amount and conversion to Purchaser Parent
Shares
and/or Company Parent Shares, as applicable, or portion
thereof, to be disbursed
by the Escrow Agent from the Escrow Fund (the "Purchase
Price Adjustment
Amount");
(ii) the name of the payee and appropriate contact
information; and
(iii) that the Purchaser has sent a copy of such Purchase
Price
Adjustment Certificate to the other parties hereto in
accordance with Section 17
hereof,
then the Escrow Agent shall be authorized, five (5) business
days after the receipt of such
certificate, to transfer Purchaser Parent Shares and/or Company
Parent Shares from the
Shares Escrow to the Purchaser, in payment of the amount due to
the Purchaser to satisfy
the Purchase Price Adjustment under the Asset Purchase
Agreement. Any such
distribution shall first consist of the distribution of
Purchaser Parent Shares, and
thereafter, Company Parent Shares, as necessary to satisfy the
Purchase Price
Adjustment.
(b) If, at any time on or before June [____], 2004 (the
"Escrow Termination
Date"), an event occurs in which the Purchaser believes
constitutes the basis for the
Purchaser Parties or any other Purchaser Indemnified Party to
receive indemnity from the
Indemnifying Parties pursuant to Article 9.1 of the Asset
Purchase Agreement, the
Purchaser shall furnish written notice in accordance with
Section 17 hereof of such event
(the "Indemnity Notice") to each of the Company Parties and the
Escrow Agent setting
forth the Purchaser Parties' or any other Purchaser Indemnified
Party's belief of the basis
therefor together with a good faith estimate of the reasonably
foreseeable dollar amount,
to be disbursed by the Escrow Agent from the Escrow Fund (the
"Disputed Amount")
then the Escrow Agent shall be authorized to make disbursements
to the Purchaser of the
Disputed Amount thirty (30) days after the receipt thereof;
provided, however, if, within
thirty (30) days following receipt by the Escrow Agent of such
Indemnity Notice, the
Escrow Agent receives a certificate executed by the Company or
the Company Parent (a
"Company Certificate") that the Company Parties in good faith
dispute the Purchaser's
claim, the Escrow Agent shall be authorized to disburse to the
Purchaser the portion of
the Disputed Amount which is not disputed by the Company
Parties in the Company
Certificate. If the Purchaser Parties and the Company Parties
are unable to resolve any
dispute that arises under this Section 5(b) within twenty (20)
days of the Escrow Agent's
receipt of the Company Certificate, such dispute shall be
submitted to dispute resolution
pursuant to Section 9.4 of the Asset Purchase Agreement. The
Escrow Agent shall set
aside the undistributed portion of the Disputed Amount until
the arbitrator provided for in
Section 9.4 of the Asset Purchase Agreement shall deliver its
final decision, at which
time the Escrow Agent shall release such Disputed Amount in
accordance with the
arbitrator's award.
(c) If, at any time prior to the Escrow Termination Date,
the Escrow Agent
receives a certificate executed by the Purchaser Parties
(together with all Indemnity
Notices and Company Certificates, the "Certificates") stating
(i) that the Purchaser or
any other Indemnified Party is entitled to indemnification from
the Indemnifying Parties
pursuant to Article 9 of the Asset Purchase Agreement by reason
of a binding arbitration
award pursuant to Section 9.4 of the Asset Purchase Agreement
and attaching a copy of
such award, (ii) the dollar amount of such indemnification
which is to be disbursed by
the Escrow Agent from the Escrow Fund (which shall not exceed
the amount granted in
such award) and the conversion to the Purchaser Parent Shares
and/or the Company
Parent Shares, as applicable, and (iii) the name of the payee
and appropriate contact
information (which shall be the Person in whose name such award
has been entered),
then the Escrow Agent shall be authorized, ten (10) days after
receipt thereof, to make
disbursements of the amount indicated in such certificate. The
mailing of the
Certificates, along with all documents and instruments thereto,
shall be simultaneously
mailed to the Escrow Agent and the Company Parties by the
Purchaser in accordance
with Section 17 hereof.
(d) No later than twenty (20) days prior to the Escrow
Termination Date, the
Escrow Agent shall notify the Purchaser Parties and the Company
Parties in writing that,
unless the Purchaser Parties notify the Escrow Agent to the
contrary in a writing received
prior to the Escrow Termination Date, the Escrow Agent will
assign and deliver to the
Company or the Company Parent or its nominee, as applicable,
the remaining Escrow
Fund; provided, however, that in the event the Purchaser
Parties have prior to the Escrow
Termination Date delivered an Indemnity Notice to the Escrow
Agent in accordance with
Section 5(b), the Escrow Agent shall only be authorized under
this Section 5(d) to assign
and deliver the excess of the Escrow Fund over the Disputed
Amount (to the extent such
Disputed Amount has not already been disbursed by the Escrow
Agent to the Purchaser,
pursuant to Section 5(b) or otherwise).
(e) Value of Escrowed Shares. For the purpose of
determining the number of
Escrow Shares required for (i) a distribution of Escrow Shares
to the Purchaser Parties
pursuant to an indemnification claim in accordance with Section
5(b), or (ii) otherwise,
the Escrow Agent shall divide (x) the applicable Disputed
Amount, or (y) any applicable
amount determined pursuant to this Agreement, as the case may
be, by the amount which
is the average closing price of the Purchaser Parent Shares
and/or the Company Parent
Shares, as applicable, under the method described in the last
paragraph of Section 9.1 of
the Asset Purchase Agreement.
(f) Fluctuations in Value of Escrow Shares. It is
recognized by the parties
hereto that the Purchaser Parent Shares and the Company Parent
Shares, certificates of
which comprise the Escrow Shares, are publicly traded and that
fluctuations in the prices
of such stock will occur from day to day. The Escrow Agent
shall not be required or
expected to notify any of the parties hereto of any fluctuation
in value of the said stock
during the term hereof and the Company shall not be required to
provide any additional
Escrow Shares or other property by reason thereof.
(g) Notification of Receipts; Deliveries and
Disbursements by the Escrow
Agent. As promptly as practicable after receipt by the Escrow
Agent of each delivery of
funds, certificates, instruments or other documents from a
party and as promptly as
practicable after delivery of funds, certificates, instruments
or other documents by the
Escrow Agent to a party, the Escrow Agent shall inform all the
parties in writing of such
deposit, disbursement or delivery.
6. Termination.
(a) This Agreement shall be effective as of the date
hereof and shall continue
in full force and effect until the earlier of (i) a written
agreement between the parties to
terminate this Agreement, or (ii) the close of business on the
Business Day during which
the last of the Escrow Fund is distributed in full pursuant to
the terms hereof, at which
time this Agreement shall terminate. Upon termination of this
Agreement, the Escrow
Agent shall be discharged from any further obligation hereunder.
(b) Except as specifically agreed in writing by the
parties hereto, termination
of this Agreement under Section 6(a) shall not relieve any of
the parties hereto of any
obligation arising under this Agreement prior to its
termination. The provisions of this
Section 6(b) and of Sections 7, 13, 14, 15, 16, 17, 18, 19, 20,
21 and 22 shall survive the
termination or expiration of this Agreement, irrespective of
the reason therefor.
(c) For purposes of this Agreement, the term "Business
Day" shall mean any
day other than a Saturday or a Sunday or a day on which
commercial banks in New York,
New York are required or authorized by law or executive order
to remain closed.
7. Taxation of Income on Escrow Fund. The Purchaser Parties
and the Company
Parties agree that, for income Tax purposes, the Company shall
include the income earned on the
Escrow Fund until disbursement in gross income for each taxable year
of the Company in which
such income is earned (each, a "Taxable Year"), without regard to
when or to whom such
income is paid. The Company Parties shall pay all applicable
income, withholding and any other
taxes imposed on or measured by income which is attributable to
income from the Escrow Fund
and shall file all tax and information returns applicable thereto.
8. Exculpation and Indemnification of Escrow Agent. If is
understood and agreed
that the Escrow Agent shall:
(a) be under no duty to accept information from any
Person other than either
the Purchaser Parties and the Company Parties and then only to
the extent and in the
manner provided in this Agreement;
(b) be protected in acting upon any written notice,
opinion, request,
certificate, approval, consent or other document reasonably
believed by it in good faith to
be genuine and to be signed by the proper party or parties;
(c) be deemed conclusively to have given and delivered
any notice required to
be given or delivered hereunder if the same is given in
accordance with Section 17
hereof;
(d) be indemnified and held harmless jointly and
severally by the Company
against any claim made against it by reason of its acting or
failing to act in connection
with any of the transactions contemplated hereby and against
any loss, liability or
expense, including the expense of defending itself against any
claim of liability it may
sustain in carrying out the terms of this Agreement, except
such claims as are occasioned
by its bad faith, gross negligence, willful misconduct, fraud
or any other breach of
fiduciary duty; provided, however, that promptly after the
receipt by the Escrow Agent of
notice of any demand or claim or the commencement of any
action, suit or proceeding,
the Escrow Agent shall, if a claim in respect thereof is to be
made against any of the
other parties hereto, notify each other party thereof in
writing; and provided, further, that
the indemnitor hereunder shall be entitled, jointly and
severally and at their own expense,
to participate in and/or assume the defense of any such action,
suit or proceeding;
(e) have no liability or duty to inquire into the terms
and conditions of any
agreements to which the Escrow Agent is not a party, its duties
under this Agreement
being understood to be purely ministerial in nature;
(f) be permitted to consult with counsel of its choice
selected with reasonable
care and shall not be liable for any action taken, suffered or
omitted by it in good faith in
accordance with the written advice of such counsel; provided,
however, that nothing
contained in this subsection (f), nor any action taken by the
Escrow Agent, or of any
counsel, shall relieve the Escrow Agent from liability for any
claims which are
occasioned by its bad faith, gross negligence, willful
misconduct, fraud or any other
breach of fiduciary duty, all as provided in subsection (d) above;
(g) not be bound by any modification, amendment,
termination, cancellation,
rescission or supersession of this Agreement, unless the same
shall be in writing and
signed by the parties hereto;
(h) if and to the extent it is uncertain as to its duties
and rights hereunder, be entitled to
refrain from taking any action other than to keep all property
held by it in escrow until it shall be directed
otherwise in a joint writing by the Purchaser Parties and the
Company Parties, in accordance with this
Agreement, or by a final judgment of a court or arbitrator of
competent jurisdiction;
(i) have no liability for any act or omission done
pursuant to the instructions contained or
expressly provided for herein, or written instructions given by
joint instructions of the Purchaser Parties and
the Company Parties pursuant hereto;
(j) have the right, at any time, to resign hereunder by
giving written notice of its resignation
to the Purchaser Parties and the Company Parties, in accordance
with Section 17 hereof, at least thirty (30)
business days prior to the date specified for such resignation
to take effect; in which case, upon the
effective date of such resignation:
(i) all cash and other payments and all other
property then held by the Escrow
Agent hereunder shall be delivered by it to such Person as
may be designated jointly in writing by
the Purchaser Parties and the Company Parties, whereupon
the Escrow Agent's obligations
hereunder shall cease and terminate;
(ii) if no such Person has been designated by such
date, the Escrow Agent's sole
responsibility thereafter shall be to keep all property
then held by it and to deliver the same to a
Person designated jointly in writing by the Purchaser
Parties and the Company Parties, or, if no
such Person shall have been so designated, in accordance
with the directions of a final order or
judgment of a court of competent jurisdiction, and the
provisions of subsections (f), (j) and (k) of
this Section 8 shall remain in effect; and
(k) be reimbursed upon its request for all reasonable
expenses, disbursements and advances
incurred or made by it in accordance with any provisions of
this Agreement, except any such expenses,
disbursements or advances as may be attributable to its gross
negligence, willful misconduct (including
breach of this Agreement), bad faith, fraud or other breach of
fiduciary duty. All reimbursements pursuant
to this Section 8(k) shall be made by the Company.
(l) The Escrow Agent shall not be entitled to
indemnification from the Escrow Fund for any
indemnification required by this Section 8.
9. [INTENTIONALLY OMITTED]
10. Representations and Warranties of the Company Parties.
The Company Parties jointly and
severally hereby represent and warrant to each other party hereto that:
(a) this Agreement has been duly authorized, executed and
delivered by the Company
Parties, and is the legal, valid and binding agreement of the
Company Parties, enforceable against them in
accordance with its terms; and
(b) the execution, delivery and performance of this
Agreement and the consummation of the
transactions contemplated hereby will not violate any provision
of, or be an event that is or, with the
passage of time will result in, a violation of, or result in
the acceleration of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both)
any obligation under or pursuant to any
mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which the
Company Parties are a party or by which they or any of their
assets are bound.
11. Representations and Warranties of the Purchaser Parties.
The Purchaser Parties jointly and
severally hereby represent and warrant to each other party hereto that:
(a) this Agreement has been duly authorized, executed and
delivered by the Purchaser Parties
and is the legal, valid and binding agreement of the Purchaser
Parties, enforceable against them in
accordance with its terms; and
(b) the execution, delivery and performance of this
Agreement and the consummation of the
transactions contemplated hereby will not violate any provision
of, or be an event that is or, with the
passage of time will result in, a violation of, or result in
the acceleration of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both)
any obligation under or pursuant to any
mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which the
Purchaser Parties are a party or by which they or any of their
assets are bound.
12. Representations and Warranties of the Escrow Agent. The
Escrow Agent hereby represents and
warrants to each other party hereto that:
(a) this Agreement has been duly authorized, executed and
delivered by the Escrow Agent,
and is the legal, valid and binding agreement of the Escrow
Agent, enforceable against the Escrow Agent in
accordance with its terms; and
(b) the execution, delivery and performance of this
Agreement and the consummation of the
transactions contemplated hereby will not violate any provision
of, or be an event that is or, with the
passage of time will result in, a violation of, or result in
the acceleration of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both)
any obligation under or pursuant to any
mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which the
Escrow Agent is a party or by which it or any of its assets is
bound.
13. Removal. The Purchaser Parties and the Company Parties
may, through a joint written notice
delivered thirty (30) days prior to its effective date and
designating a substitute escrow agent, dismiss the Escrow
Agent hereunder and appoint a successor. Upon the effective date of
such replacement, the Escrow Agent shall
promptly account for and deliver to the successor escrow agent
designated in such notice the Escrow Fund, including
all investments thereof and accrued income thereon on the date of
such accounting and delivery. Upon acceptance
of such accounting and delivery by such successor escrow agent, and
upon reimbursement to the Escrow Agent of
all fees and expenses due hereunder through the date of such
accounting and delivery, the Escrow Agent shall be
released and discharged form all of its duties and obligations
hereunder, but without prejudice to any liability of the
Escrow Agent for its gross negligence, willful misconduct (including
breach of this Agreement), bad faith, fraud or
other breach of fiduciary duty.
14. Entire Agreement. This Agreement (together with the Asset
Purchase Agreement and the
Ancillary Documents thereto) embodies the entire agreement of the
parties hereto with respect to
the subject matter hereof and supersedes any other prior oral or
written agreements,
arrangements or understandings between the parties hereto, and any
such prior agreements,
arrangements or understandings are hereby terminated and of no
further effect.
15. Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or a waiver of any subsequent breach. No
failure on the part of any party hereto to exercise, and no delay in
exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such
party preclude any other further exercise thereof or the exercise of
any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies
provided by law.
16. Binding Effect; Assignment. This Agreement shall inure to
the benefit of, and shall be binding
upon the Purchaser Parties, the Company Parties and the Escrow Agent
and their respective successors and
permitted assigns.
17. Notices. All notices, demands and other communications
provided for hereunder
shall be in writing and shall be given by personal delivery, via
facsimile transmission (receipt
telephonically confirmed), by nationally recognized overnight
courier (prepaid), or by certified
or registered first class mail, postage prepaid, return receipt
requested, sent to each party, at
its/his address as set forth below or at such other address or in
such other manner as may be
designated by such party in written notice to each of the other
parties. All such notices, demands
and communications shall be effective when personally delivered, one
(1) business day after
delivery to the overnight courier, upon telephone confirmation of
facsimile transmission or upon
receipt after dispatch by mail to the party to whom the same is so
given or made:
If to the Company or Sopheon PLC
the Company Parent: Stirling House
Stirling Road
Surrey Research Park
Guildford, Surrey GU2 5RF
ENGLAND
Facsimile No.: 011-44-1483-883050
Telephone No.: 011-44-1483-883000
Attention: Barry Mence
Arif Karimjee
With a copy to: Briggs and Morgan, Professional Association
2400 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Facsimile No.: 612-977-8650
Telephone No.: 612-977-8492
Attention: Michael J. Grimes
If to the Purchaser Find/SVP, Inc.
or the Purchaser 625 Avenue of the Americas
Parent: New York, New York 10011-2020
Facsimile No.: 212-255-7632
Telephone No.: 212-645-4500
Attention: Chief Executive Officer
With a copy to: Kane Kessler, P.C.
1350 Avenue of the Americas
New York, New York 10019-4896
Facsimile No.: 212-245-3009
Telephone No.: 212-541-6222
Attention: Robert L. Lawrence, Esq.
If to the Escrow U.S. Bank National Association
Agent: 180 East Fifth Street, EP-MN-T2CT
St. Paul, Minnesota 55101
Attention: Thomas H. Caruth
Facsimile No.: 651-244-0712
Telephone No.: 651-244-0733
Either party hereto may change the address to which notices shall be
sent by sending written notice of such change
of address to the other parties in accordance herewith.
18. Further Assurances. The parties hereto agree to execute
and deliver such other documents or
agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this
Agreement and the consummation of the transactions contemplated hereby.
19. Interpretation.
(a) Headings. The section headings of this Agreement are
for reference purposes only and
are to be given no effect in the construction or interpretation
of this Agreement.
(b) Certain Terms and Quantities. In this Agreement, in
the computation of periods of time
from a specified date to a later specified date, the word
"from" means "from and including," the words "to"
and "until" each mean "to but excluding" and the word "through"
means "to and including." Except in the
preceding sentence, the word "including" means "including
without limitation." The words "either" and
"or" refer to an exclusive choice. Capitalized terms defined
in any Section of this Agreement shall be used
throughout this Agreement as so defined. Where appropriate,
words denoting the singular shall include the
plural and words denoting the masculine shall include the
feminine and neuter. In all cases herein where a
dollar amount, time period, percentage or other quantity is
expressed using roman numerals and fully
written out, the latter expression shall govern over the
expression using roman numerals. A reference to
conduct includes references to an omission, statement or
undertaking.
(c) Internal Cross References. The words "herein,"
"hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and
not to any particular section, subsection or
clause in this Agreement. Unless otherwise specified,
references herein to a section, subsection or cause
refer to the appropriate section, subsection or clause in this
Agreement.
(d) No Drafting Presumption. The parties hereto
acknowledge and agree that they have
participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto
and no presumption or burden of proof shall arise favoring or
disfavoring any party hereto by virtue of the
authorship of any of the provisions of this Agreement. The
parties hereto are familiar with the Asset
Purchase Agreement and the definitions therein.
20. Counterparts and Facsimile Signatures. This Agreement may
be executed in one or more
counterparts, each of which shall be deemed to be an original, but
all of which taken together shall constitute one
and the same instrument. Such execution shall be effective when one
or more such counterparts shall have been
executed by each of the parties hereto and at least one of each such
counterpart shall have been delivered to each of
the other parties hereto. The counterparts of this Agreement and
all ancillary documents hereto may
be executed and delivered by facsimile signature by any of the
parties to any other party and the
receiving party may rely on the receipt of such document so executed
and delivered by facsimile
as if the original had been received.
21. Miscellaneous. This Agreement and its provisions shall be
construed, governed by and
enforced in accordance with the internal laws of the State of
Delaware, without giving effect to
the principles of comity or conflicts of laws thereof. This
Agreement may be amended or
modified only in writing signed by each of the parties hereto. The
parties hereto agree and
consent that any legal action, suit or proceeding seeking to enforce
any provision of this
Agreement shall be instituted and adjudicated solely and exclusively
in any court of general
jurisdiction in the State of New York, or in the United States
District Court having jurisdiction in
the State of New York, and the parties agree that venue will be
proper in such courts and waive
any objection that they may have now or hereafter have to the venue
of any such suit, action or
proceeding in such courts, and each hereby irrevocably consents and
agrees to the jurisdiction of
said courts in any such suit, action or proceeding. The parties
hereto further agree to accept and
acknowledge service of any and all process which may be served in
any such suit, action or
proceeding in said courts, and also agree that service of process or
notice upon them shall be
deemed in every respect effective service of process or notice upon
them, in any suit, action or
proceeding, if given or made (i) according to applicable law, (ii)
by a person over the age of
eighteen (18) who personally served such notice or service of
process on a party hereto, or
(iii) by certified mail, return receipt requested, mailed to the
applicable party at such party's
address as set forth in this Agreement (as such addresses may be
hereafter modified by notice
given in accordance herewith).
22. Severability. If any provision of this Agreement or the
application of any such provision to any
Person or circumstances shall be held invalid, illegal or
unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision hereof.
23. Transferability. The respective interests of the Company
Parties in the Escrow
Fund shall not be assignable or transferable, other than by
operation of law or pursuant to the
terms hereof. Notice of any such assignment or transfer by
operation of law shall be given to the
Escrow Agent and the Purchaser Parties in accordance with Section 17
hereof, and no such
assignment or transfer shall be valid until such notice is given.
24. Voting of Shares. The Company shall have the sole right to
vote any Escrow
Shares being held in the name of the Company and to receive any
dividends thereon.
25. Adjustments to Escrow Shares. If all or any portion of the
Escrow Shares are
subject to any share distribution, share split, split-up, split-off,
spin-off, recapitalization,
reincorporation merger with a wholly owned Delaware subsidiary,
separation, reorganization,
liquidation, combination, redemption, or exchange of shares,
warrants or other units of equity
(together, "Equity Equivalents") of the Purchaser, occurring after
the date hereof, as a result of
which Equity Equivalents of any class shall be issued in respect of
outstanding Purchaser's
common stock being changed into the same or a different number of
shares of Purchaser's
common stock or other Equity Equivalents, the number and value of
Escrow Shares shall be
correspondingly and ratably adjusted by the Purchaser's board of
directors so as to be
substantially the economic equivalent of the number and value of the
Escrow Shares that are in
the possession of the Escrow Agent immediately preceding the event
that causes the change in
the number or character of the shares of the Purchaser's common
stock. The Purchaser shall
effect this change by replacing the Escrow Shares with Equity
Equivalents within fifteen (15)
days of the effective date of the event that caused the change in
the number or character of the
shares of Purchaser's common stock. Upon receipt by Escrow Agent,
the Equity Equivalents
shall be deemed to be Escrow Shares for all purposes hereof;
provided, that the valuation
provisions set forth Section 5(e) hereof shall be ratably adjusted
by the Purchaser in accordance
with the actions of its board of directors causing the Equity
Equivalents to be issued.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the
date first above written.
COMPANY: COMPANY PARENT:
SOPHEON CORPORATION SOPHEON PLC
By By . . . . . . . . . . . . . . . . .
.. . .
Its____________________________
Its. . . . . . . .
PURCHASER: PURCHASER PARENT:
TTECH ACQUISITION CORP. FIND/SVP, INC.
By By . . . . . . . . . . . . . . . . .
.. . .
Its____________________________
Its. . . . . . . .
ESCROW AGENT:
U.S. BANK NATIONAL ASSOCIATION
By
Its______________________________________
[SIGNATURE PAGE TO ESCROW AGREEMENT]
EXHIBIT A
TO
ESCROW AGREEMENT
Stock Ownership
Company
Shares
Percent
TIN
Address
Sopheon Corporation
[_______]
100
[________]
2850 Metro Drive
Bloomington, Minnesota
55425
TTech Acquisition Corp.
[_______]
100
[________]
625 Avenue of the Americas
New York, NY 10019-4896
SCHEDULE A
TO
ESCROW AGREEMENT
Escrow Agent's Fees
Acceptance Fee:
$1,000
(Includes review of Agreement and establishing procedures
and controls)
First year's administrative fee:
(payable upon opening account, nonrefundable)
If all funds are invested in a Money Market Fund
utilized by U.S. Bank
$1,500
If funds are invested other than above
$2,000
Subsequent year administration fee: as
above
(non-proratable to commence on first anniversary date)
EXHIBIT B
COMPANY AND COMPANY PARENT CLOSING CERTIFICATE
The undersigned hereby certify to TTECH ACQUISITION CORP., a Delaware
corporation (the "Purchaser") and Find/SVP, Inc., a New York
corporation (the "Purchaser
Parent") pursuant to Section 2.3(b)(i) of the Amended and Restated
Asset Purchase Agreement
made and entered into on the 25th day of June, 2003, by and between
the Purchaser, the
Purchaser Parent, Sopheon Corporation, a Minnesota corporation (the
"Company") and Sopheon
PLC, a registered corporation in the United Kingdom (the "Company
Parent") (the "Asset
Purchase Agreement"), as follows:
1. All of the representations and warranties made by the Company
and the Company
Parent in the Asset Purchase Agreement and the Ancillary Documents
(as modified by the
Schedules and the Supplements thereto) are true and correct on and
as of the date hereof with the
same force and effect as though as such representations and
warranties had been made on or
given on and as of the date hereof; and
2. The Company and the Company Parent have performed and/or
complied with all
of their covenants, agreements and obligations under the Asset
Purchase Agreement which are to
have been performed and complied with by the Company and the Company
Parent prior to or on
the date hereof.
3. Capitalized terms not otherwise defined herein shall have the
meaning set forth in
the Asset Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Company and Company Parent Closing
Certificate has
been executed as of the ____ day of __________________, 2003.
SOPHEON CORPORATION
By . . . . . . . . . . . . . . . . .
.. . .
Its. . . . . . . . . . . . . .
.. . .
SOPHEON PLC
By . . . . . . . . . . . . . . . . .
.. . .
Its. . . . . . . . . . . . . .
.. . .
[SIGNATURE PAGE TO COMPANY AND COMPANY PARENT CLOSING
CERTIFICATE]
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "Agreement"), is made
this ___ day
of _______________________, 2003 by and between TTECH ACQUISITION
CORP., a
Delaware corporation (the "Purchaser"), and Sopheon Corporation, a
Minnesota corporation
(the "Company"). All capitalized terms used but not defined herein
shall have the meaning
ascribed thereto in that certain Amended and Restated Asset Purchase
Agreement entered into on
June 25, 2003, by and between the Purchaser, Find/SVP, Inc., a New
York corporation (the
"Purchaser Parent"), the Company and Sopheon PLC, a registered
corporation in the United
Kingdom (the "Company Parent") (the "Asset Purchase Agreement").
RECITALS
A. Pursuant to the terms of the Asset Purchase Agreement, the
parties hereto have
agreed, among other things, that the Company will (i) assign,
transfer and convey to the
Purchaser all of the Company's right, title and interest in and to,
and (ii) delegate the Company's
obligations and duties under the Assumed Liabilities (but not any
Excluded Liabilities) including
in, to and under, the contracts set forth on Schedule 1 attached
hereto (the "Contracts").
B. The Parties hereto desire to provide for the assignment of such
right, title and
interest in and to the Contracts and the assumption of certain
liabilities of the Company in
accordance with the applicable terms of the Asset Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, the
covenants set forth
herein, and other good and valuable consideration, the nature,
receipt and sufficiency of which is
hereby acknowledged, the Parties hereto agree as follows:
1. Assignment and Delegation. The Company does hereby:
(a) convey, grant, bargain, sell, transfer, assign, deliver
and confirm unto the
Purchaser, its successors and permitted assigns forever all of the
Company's right, title and
interest in and to the Contracts set forth on Schedule 1 hereto; and
(b) delegates to the Purchaser all of the Company's
obligations and duties
under the Assumed Liabilities (but not any Excluded Liabilities),
including the Assumed
Liabilities, but not any Excluded Liabilities, under such Contracts;
provided, however, such
delegation shall not under any circumstances include any Excluded
Liability.
2. Acceptance and Assumption. The Purchaser does hereby:
(a) accept the assignment by the Company as set forth in
Section 1(a) above;
and
(b) accept such delegation and assume all of the Company's
obligations and
duties under the Assumed Liabilities, but not any Excluded
Liabilities, including in, to and under
such Contracts.
3. Excluded and Assumed Liabilities.
(a) The Company hereby acknowledges and agrees that it will
pay the
Excluded Liabilities. The Purchaser hereby acknowledges and agrees
to pay and perform the
Assumed Liabilities (i) to be paid or performed after the Closing
Date under the Contracts which
are expressly assumed on Schedule I and (ii) arising or incurred in
connection with, pursuant to,
or with respect to the Contracts after the Closing Date and only in
the amounts not in excess of
the amounts set forth therein with respect to each Assumed
Liability. Nothing contained in this
Agreement shall require the Purchaser to pay, perform, or discharge
any Assumed Liabilities as
long as the Purchaser shall in good faith contest or cause to be
contested the amount or validity
thereof.
(b) The Purchaser expressly does not, and shall not, assume,
be deemed to
assume, or be obligated to pay, perform or otherwise discharge any
Excluded Liabilities of the
Company, the Company Parent or their respective Affiliates, direct
or indirect, known or
unknown, absolute or contingent, not expressly assumed by the
Purchaser pursuant to this
Agreement.
4. The Company covenants and agrees that if any Contracts cannot
be transferred or
assigned by the Company without the consent of or notice to a third
party and in respect of
which any necessary consent or notice has not as of the date hereof
been obtained or given, the
beneficial interest in and to the same will in any event pass to the
Purchaser; and the Company
covenants and agrees (a) to hold, and hereby declares that it holds,
such Contracts in trust for,
and for the benefit of, the Purchaser, (b) to use all reasonable
means to obtain and to secure such
consents and give such notice as may be required to effect a valid
transfer or transfers of such
rights, and (c) to use all reasonable means to make, complete or
cause any such transfers as soon
as reasonably possible.
5. Governing Law and Jurisdiction. The governing law and
jurisdiction under this
Agreement shall be governed by Section 13.11 of the Asset Purchase
Agreement.
6. Counterparts. This Agreement may be executed in counterparts
and when taken
together shall constitute one and the same Agreement. Signatures to
this Agreement received by
facsimile may and shall be received and relied upon in the same
manner as set forth in the Asset
Purchase Agreement.
7. Further Assurances. Each party hereto shall from and after the
date hereof, upon
the reasonable request of the other party hereto, take such acts or
actions, including the execution
and delivery of such other documents, instruments and certificates
as such other party may
reasonably require to obtain the full benefit of the terms of this
Agreement.
8. Definitions. All terms and phrases used herein and not
otherwise defined shall
have the meaning set forth in the Asset Purchase Agreement.
9. Successors and Assigns. All of the terms and provisions of this
Agreement are
binding upon and inure to the benefit of the Company and Purchaser
and their respective
successors and assigns.
10. Terms of Asset Purchase Agreement. The Company and the Purchaser
acknowledge and agree that the representations, warranties,
covenants, agreements and
indemnities contained in the Asset Purchase Agreement shall not be
superseded hereby but shall
remain in full force and effect to the full extent, and for the
term, provided therein. In the event
of any conflict or inconsistency between the terms of the Asset
Purchase Agreement and the
terms hereof, the terms of the Asset Purchase Agreement shall govern.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be executed as of the date first above written.
COMPANY:
PURCHASER:
SOPHEON CORPORATION TTECH ACQUISITION CORP.
By By
Its________________________
Its______________________________
[SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT]
SCHEDULE 1
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
CONTRACTS
EXHIBIT D
BILL OF SALE
SOPHEON CORPORATION, a Minnesota corporation (the "Company"), for good
and valuable consideration given by TTECH ACQUISITION CORP., a
Delaware corporation
(the "Purchaser"), the receipt of which is hereby acknowledged by
the Company, pursuant to
that certain Amended and Restated Asset Purchase Agreement by and
between the Purchaser and
the Company, entered into on June 25, 2003 (the "Asset Purchase
Agreement"), by these
presents does hereby convey, grant, bargain, sell, transfer, set
over, assign, deliver and confirm
unto the Purchaser, its successors and assigns, forever, free and
clear of all Encumbrances,
Assumed Liabilities and Excluded Liabilities with respect thereto,
except for Permitted
Encumbrances or as expressly provided in and pursuant to the Asset
Purchase Agreement and
the exhibits and schedules thereto, the Assets, as defined by and in
the Asset Purchase
Agreement; provided, however, nothing herein sells, conveys, assigns
or transfers to the
Purchaser the Excluded Assets as identified in the Asset Purchase
Agreement:
All right, title and interest in and to the Assets of the Company,
except the Excluded
Assets, arising from, in connection with, necessary or used in
conjunction with, the Business,
including:
[FINAL DESCRIPTION OF THE ASSETS];
Intellectual Property rights, identified on Schedule A hereto;
Contracts identified on Schedule B hereto, and all rights
thereunder;
Furniture, fixtures, equipment and all other tangible
personal property, wherever
located, identified on Schedule C hereto;
provided, however, that the Assets shall not include the
Excluded Assets.
In furtherance of the foregoing, the Company agrees that it will, at
any time and from
time to time, on and after the Closing Date, upon the reasonable
request of the Purchaser, do or
cause to be done all such further acts and things and execute,
acknowledge and deliver, or cause
to be executed, acknowledged and delivered, any and all papers,
documents, instruments,
agreements, assignments, transfers, assurances and conveyances as
may be necessary or
desirable to carry out and give effect to the provisions and intent
of the Asset Purchase
Agreement and this Bill of Sale. In addition, from and after the
Closing Date, the Purchaser and
the Company will afford to the other and their respective attorneys,
accountants and other
representatives access, during normal business hours, to such
personnel, books and records
relating to the Company or the Business as may reasonably be
required in connection with the
preparation of financial information, the filing of Tax Returns and
the operation of the Business,
and will cooperate in all reasonable respects in connection with
claims and Proceeding asserted
by or against third parties, relating to or arising from the
transactions contemplated hereby.
The Company covenants and agrees that if either (i) any Assets
cannot be transferred or
assigned by the Company without the consent of or notice to a third
party and in respect of
which any necessary consent or notice has not as of the date hereof
been obtained or given, or
(ii) any such Assets are non-assignable by their nature and title
thereto or ownership thereof
cannot be transferred by this Agreement, the beneficial interest in
and to the same will in any
event pass to the Purchaser; and the Company covenants and agrees
(a) to hold, and hereby
declares that it holds, such Assets in trust for, and for the
benefit of, the Purchaser, (b) to use
reasonable commercial efforts to obtain and to secure such consents
and give such notice as may
be required to effect a valid transfer or transfers of such
property, assets or rights, and (c) to use
reasonable commercial efforts to make, complete or cause any such
transfers as soon as
reasonably possible.
This instrument shall be effective at the close of business on the
date hereof, and shall be
binding upon and inure to the benefit of the Parties hereto and
their respective successors and
assigns.
The governing law and jurisdiction under this Bill of Sale shall be
governed by Section
13.11 of the Asset Purchase Agreement.
This Agreement may be executed in counterparts and when taken
together shall
constitute one and the same Agreement. Signatures to this Agreement
received by facsimile may
and shall be received and relied upon in the same manner as set
forth in the Asset Purchase
Agreement.
All terms and phrases used herein and not otherwise defined shall
have the meaning set
forth in the Asset Purchase Agreement.
The Company and the Purchaser acknowledge and agree that the
representations,
warranties, covenants, agreements and indemnities contained in the
Asset Purchase Agreement
shall not be superseded hereby but shall remain in full force and
effect to the full extent, and for
the term, provided therein. In the event of any conflict or
inconsistency between the terms of the
Asset Purchase Agreement and the terms hereof, the terms of the
Asset Purchase Agreement
shall govern.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company has caused this Bill of Sale to be
executed by
an authorized representative, effective as of the ___ day of
____________________, 2003.
SOPHEON CORPORATION
By__________________________________
Its________________________________
[SIGNATURE PAGE TO BILL OF SALE]
SCHEDULE A
TO
BILL OF SALE
INTELLECTUAL PROPERTY
SCHEDULE B
TO
BILL OF SALE
CONTRACTS
SCHEDULE C
TO
BILL OF SALE
TANGIBLE PERSONAL PROPERTY
EXHIBIT E
INVESTOR LETTER
SOPHEON CORPORATION
____________, 2003
FIND/SVP, INC.
625 Avenue of the Americas
New York, New York 10011
Re: Shares of FIND/SVP, INC. (the "Company")
Gentlemen:
In connection with the Amended and Restated Asset Purchase Agreement
entered into on
June 25, 2003, by and among the Company, TTech Acquisition Corp.
(the "Purchaser"),
Sopheon PLC and the undersigned (the "Asset Purchase Agreement")
pursuant to which,
among other things, the undersigned (the "Transferee") will be
receiving shares (the
"Securities") of common stock of the Company, the Transferee hereby
represents and warrants
to the Company that the Transferee is an "accredited investor", as
such term is defined in Rule
501 of Regulation D as promulgated under the Securities Act of 1933,
as amended (the "Act").
In addition, the Transferee hereby represents and warrants:
(a) The Transferee understands and acknowledges that the
Securities have not
been registered under the Act.
(b) The Securities are being acquired by the Transferee only
for investment
for the Transferee's own account, and not as a nominee or agent
and not with a view to
the resale or distribution thereof in contravention of
applicable laws, and the Transferee
has no present intention of selling, granting any participation
in or otherwise distributing
any interest therein within the meaning of the Act.
(c) The Transferee does not have any contracts,
understandings, agreements
or arrangements with any person (other than the Company and the
Purchaser pursuant to
the Escrow Agreement of even date herewith) to sell, transfer
or grant participation to
such person or any third person, with respect to any of the
Securities.
(d) The Transferee has had an opportunity to seek outside
advice and has
sought such advice to the extent Transferee deemed appropriate
with respect to the terms
and conditions of the Agreement.
(e) The Transferee acknowledges that it can bear the economic
risk of his
investment in the Securities for an indefinite period of time
and has alone, or together
with a financial advisor of its selection, such knowledge and
experience in financial and
business matters as to be capable of evaluating the merits and
risks of an investment
therein. The Transferee understands that the Securities are
characterized as "restricted
securities" under federal securities laws since they are being
acquired in a transaction not
involving a public offering and that under such laws and
applicable regulations the
Securities may not be resold without registration or an
exemption from registration under
the Act. The Transferee represents that it is familiar with
and understands the resale
limitations imposed by the Act and the rules and regulations
promulgated thereunder.
(f) The Transferee understands and agrees that the
certificates evidencing the
Securities will bear an appropriate legend evidencing the
restricted nature of the
Securities indicating that no transfer of any of the Securities
may be made unless such
Securities are registered under the Act or an exemption from
such registration is
available, and that the Company will instruct its transfer
agent not to transfer any such
Securities unless such transfer shall be made in compliance
with such legend. The
legend shall be substantially in the form set forth below:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("ACT") OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND SUCH STATE SECURITIES
LAWS, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE
ACT (OF ANY SIMILAR RULE UNDER SUCH ACT RELATING TO
THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF
COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL OF THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH SECURITIES LAWS IS AVAILABLE."
(g) Transferee understands that the Securities are being
offered and sold to it
in reliance on specific exclusions from the registration
requirements of Federal and State
securities laws of the United States, and that the Transferor,
the Company, and Kane
Kessler, P.C., counsel to the Company, are relying upon the
truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of
Transferee set forth herein in order to determine the
applicability of such exclusions and
the suitability of Transferee to acquire the Securities.
The Transferee agrees to indemnify and hold harmless the Company and
Kane Kessler,
P.C. from and against any and all claims, liabilities, losses or
damages (or actions in respect
thereof) or other expenses arising out of or resulting from the
breach of any warranty,
representation, or covenant set forth herein. The Company, its
transfer agent, Kane Kessler,
P.C., and their agents and representatives may rely on this
representation letter.
TRANSFEREE:
SOPHEON CORPORATION
By:_____________________________________
Name:_______________________________
Title:_________________________________
[SIGNATURE PAGE TO INVESTOR LETTER]
EXHIBIT F
PURCHASER AND PURCHASER PARENT CLOSING CERTIFICATE
The undersigned, TTECH ACQUISITION CORP., a Delaware corporation (the
"Purchaser") and Find/SVP, Inc., a New York corporation (the
"Purchaser Parent") hereby
certify to Sopheon Corporation, a Minnesota corporation (the
"Company") and Sopheon PLC, a
registered corporation in the United Kingdom (the "Company Parent"),
pursuant to
Section 2.3(c)(ii) of the Amended and Restated Asset Purchase
Agreement made and entered
into on the 25th day of June, 2003, by and between the Purchaser,
the Purchaser Parent, the
Company, and the Company Parent (the "Asset Purchase Agreement"), as
follows:
1. All of the representations and warranties made by the Purchaser
and the Purchaser
Parent in the Asset Purchase Agreement and the Ancillary Documents
(as modified by the
Schedules and the Supplements thereto) are true and correct at and
as of the date hereof with the
same force and effect as though such representations and warranties
had been made on or given
on and as of the date hereof; and
2. The Purchaser and the Purchaser Parent have performed and/or
complied with all
of their covenants, agreements, and obligations under the Asset
Purchase Agreement which are
to have been performed and complied with by them prior to or on the
date hereof.
3. Capitalized terms not otherwise defined herein shall have the
meaning set forth in
the Asset Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Purchaser and the Purchaser Parent, by their
authorized
representatives, executed this Closing Certificate as of the ____
day of _____________, 2003.
TTECH ACQUISITION CORP.
By . . . . . . . . . . . . . . . . .
.. . .
Its. . . . . . . . . . . . . . .
.. . .
FIND/SVP, INC.
By . . . . . . . . . . . . . . . . .
.. . .
Its. . . . . . . . . . . . . .
.. . .
[SIGNATURE PAGE TO PURCHASER AND PURCHASER PARENT CLOSING
CERTIFICATE]