Exhibit 2.1
ASSET PURCHASE AGREEMENT
Dated as of April 10, 2002
By and Between
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
And
HIGH PROCESS TECHNOLOGY, INC.
TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF ASSETS.............................................................................1
1.1 Purchase of Assets..............................................................................1
1.2 Limited Assumption of Liabilities...............................................................5
1.3 Purchase Price..................................................................................6
1.4 Purchase Price Adjustment.......................................................................6
1.5 Allocation of Purchase Price....................................................................8
1.6 Subsidiary Agreements...........................................................................8
1.7 Maintenance Contracts>>.........................................................................9
1.8 Bulk Sales Laws.................................................................................9
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER...............................................................9
2.1 Organization....................................................................................9
2.2 Authorization..................................................................................10
2.3 No Conflict....................................................................................10
2.4 Completeness of Assets.........................................................................11
2.5 Financial Statements...........................................................................11
2.6 Absence of Undisclosed Liabilities.............................................................11
2.7 Absence of Certain Facts or Events.............................................................11
2.8 Property, Leases and Encumbrances..............................................................12
2.9 Contracts and Commitments......................................................................13
2.10 Permits and Authorizations.....................................................................14
2.11 No Violations..................................................................................14
2.12 No Consents....................................................................................14
2.13 Proceedings....................................................................................14
2.14 Insurance......................................................................................15
2.15 Intellectual Property..........................................................................15
2.16 Software.......................................................................................16
2.17 Employee Benefits..............................................................................16
2.18 Employment Matters.............................................................................17
2.19 Environmental Laws.............................................................................17
2.20 Taxes..........................................................................................18
2.21 Accounts Receivable; Customers.................................................................19
2.22 Warranties.....................................................................................19
2.23 No Finders or Brokers..........................................................................19
2.24 Delivery of Documents..........................................................................19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................................19
3.1 Organization...................................................................................19
3.2 Authorization..................................................................................20
3.3 No Conflict....................................................................................20
3.4 No Finders or Brokers..........................................................................20
3.5 Litigation.....................................................................................21
3.6 Sufficient Funds...............................................................................21
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ARTICLE IV COVENANTS OF SELLER...................................................................................21
4.1 Access.........................................................................................21
4.2 Conduct of Business............................................................................21
4.3 Exclusivity....................................................................................22
4.4 Third Party Confidentiality Agreements.........................................................22
ARTICLE V MUTUAL COVENANTS OF PURCHASER AND SELLER...............................................................22
5.1 Post Closing Cooperation.......................................................................22
5.2 Payments With Respect to Accounts Receivable...................................................23
5.3 Fulfillment of Conditions......................................................................23
5.4 Further Assurances.............................................................................24
5.5 Confidentiality................................................................................24
5.6 Personnel Matters..............................................................................24
5.7 Third Party Consents...........................................................................26
5.8 Public Announcements...........................................................................27
5.9 Certain Notifications..........................................................................27
5.10 Use of Division Names..........................................................................27
5.11 SCT Name.......................................................................................28
5.12 Cooperation Regarding Minimization of Costs....................................................29
5.13 Sales, Transfer and Other Taxes................................................................29
5.14 Release of Certain Guaranties..................................................................29
ARTICLE VI CONDITIONS OF CLOSING.................................................................................30
6.1 Conditions of Obligations of Purchaser.........................................................30
6.2 Conditions of Obligations of Seller............................................................32
ARTICLE VII CLOSING..............................................................................................34
7.1 Closing Date...................................................................................34
7.2 Termination of Agreement.......................................................................34
7.3 Effect of Termination..........................................................................35
ARTICLE VIII POST-CLOSING........................................................................................35
8.1 Survival of Representations and Warranties.....................................................35
8.2 Indemnification of Purchaser by Seller.........................................................36
8.3 Indemnification of Seller by Purchaser.........................................................37
8.4 Procedure for Indemnification..................................................................37
8.5 No Other Representations or Warranties.........................................................39
8.6 Exclusive Remedy...............................................................................39
8.7 Mitigation.....................................................................................39
8.8 Losses Net of Insurance Proceeds, Etc..........................................................39
8.9 Collateral Sources.............................................................................39
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ARTICLE IX MISCELLANEOUS.........................................................................................39
9.1 Further Actions................................................................................40
9.2 Expenses.......................................................................................40
9.3 Entire Agreement...............................................................................40
9.4 Descriptive Headings; Interpretation...........................................................40
9.5 Notices........................................................................................40
9.6 Governing Law..................................................................................41
9.7 Assignability..................................................................................41
9.8 Waivers and Amendments.........................................................................42
9.9 Third Party Rights.............................................................................42
9.10 Severability...................................................................................42
9.11 Arbitration....................................................................................42
9.12 Specific Performance...........................................................................43
9.13 Counterparts...................................................................................43
9.14 Schedules and Exhibits.........................................................................43
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SCHEDULES
EXHIBIT A..................Form of Subsidiary Agreement
EXHIBIT B..................Form of Transition Services Agreement
EXHIBIT C..................[Intentionally Omitted]
EXHIBIT D.................Form of Royalty Agreement
EXHIBIT E..................Form of Non-competition Agreement
EXHIBIT F..................[Intentionally Omitted]
EXHIBIT G-1................Form of Trademark Assignment
EXHIBIT G-2................Form of Copyright Assignment
EXHIBIT H..................Form of Signing Date Press Release
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ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is dated as
of April 10, 2002, by and between High Process Technology, Inc., a company
organized under the laws of the Cayman Islands ("Purchaser") and Systems &
Computer Technology Corporation, a Delaware corporation ("Seller"). Capitalized
terms not otherwise defined in this Agreement are used as defined in Appendix A
hereto. Unless otherwise stated, all monetary references shall be in the
currency of the United States. Any reference in this Agreement to any United
States federal or state legal term or concept (including, without limitation,
any action, remedy, method of judicial proceeding, document, statute, court
official, governmental authority or agency) shall in respect of any jurisdiction
other than the United States be construed as references to the term or concept
which most nearly corresponds to it in that jurisdiction.
W I T N E S S E T H:
WHEREAS, Seller and its Affiliates are in the business of, among other
things, developing, supporting and marketing, licensing and selling end-to-end
e-business solutions (including the individual components of the iProcess.sct
solution, consisting of the Internet Business Suite, Supply Chain Executive
Suite and Supply Chain Planning and Optimization Suite) and related services to
process manufacturers and distributors worldwide, which business Seller and its
Affiliates carry on through their Global Manufacturing & Distribution Solutions
Business division (the "Division").
WHEREAS, Seller and certain of its Affiliates desire to sell, and
Purchaser and certain of its Affiliates desire to purchase, substantially all of
the assets of the Division as hereinafter specified. The purchase and sale of
the Division Assets (as defined in Section 1.1(a)) will be accomplished by
direct purchase, sale and conveyance of the assets specified herein upon the
terms and conditions set forth below.
WHEREAS, Seller and Purchaser each expect to benefit from the
consummation of the transactions contemplated hereby and, to induce each other
to enter into this Agreement, agree to be bound by the terms and provisions in
this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived
and the representations and warranties, conditions and promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase of Assets
(a) On the terms and subject to the conditions contained in
this Agreement, on the Closing Date, Purchaser or one or more of its Affiliates
shall purchase, and Seller or one or more of its Affiliates shall sell, convey,
assign, transfer and deliver, free and clear of all Indebtedness and
Encumbrances (except for any Permitted Encumbrances) by appropriate instruments
of conveyance reasonably satisfactory to Purchaser, all assets, properties,
rights, titles and interests of every kind or nature owned, leased, licensed or
otherwise held by Seller or its Affiliates (including indirect and other forms
of beneficial ownership) as of the Closing Date, whether tangible, intangible,
real or personal and wherever located, which are exclusively used by, or
exclusively for the benefit of, the Division in operating the Business or are
exclusively related to the Business, including all of the following assets which
are exclusively used by, or exclusively for the benefit of, the Division in
operating the Business or are exclusively related to the Business, but excluding
all Excluded Assets (all such assets hereinafter referred to as the "Division
Assets"):
(i) except those accounts receivable described in
Section 1.1(b)(vi) attached hereto, all accounts receivable (billed and
unbilled) and all correspondence with respect thereto, including without
limitation, all trade accounts receivable, notes receivable from customers,
vendor credits and accounts receivable from employees and all other obligations
from customers with respect to sales of goods or services, whether or not
evidenced by a note;
(ii) all prepayments, prepaid expenses and other
similar assets (it being agreed that between the date hereof and the Closing
Date, the parties will prepare and mutually agree upon a specifically
identifiable list of such assets and attach such list hereto as Schedule
1.1(a)(ii));
(iii) all interests in leased or subleased real
estate set forth on Schedule 1.1(a)(iii);
(iv) all inventories, work in progress and supplies
(it being agreed that between the date hereof and the Closing Date, the parties
will prepare and mutually agree upon a specifically identifiable list of such
assets and attach such list hereto as Schedule 1.1(a)(iv));
(v) all machinery, equipment, furniture, automobiles
and other vehicles, spare parts and supplies, computers and all related
equipment, telephones and all related equipment and all other tangible personal
property (it being agreed that between the date hereof and the Closing Date, the
parties will prepare and mutually agree upon a specifically identifiable list of
such assets and attach such list hereto as Schedule 1.1(a)(v));
(vi) all rights existing under all contracts,
agreements and arrangements to which Seller or any of its Affiliates is a party
(it being agreed that, the Business' maintenance contracts shall be transferred
in accordance with Section 1.7) ("Contracts");
(vii) all rights to the employment of the employees
of the Business set forth on Schedule 1.1(a)(vii) hereto;
(viii) all lists and records pertaining to customer
accounts (whether past or current), suppliers, licensors, distributors,
personnel and agents;
(ix) all claims, deposits, prepayments, warranties,
guarantees, causes of action, rights of recovery, rights of set-off and rights
of recoupment of every kind and nature, but only to the extent Purchaser has
assumed the related liabilities with respect thereto pursuant to Section 1.2(a);
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(x) all Division Intellectual Property, including any
internally developed software used to operate the Business;
(xi) all Authorizations, but excluding any such
Authorizations that are not transferable;
(xii) except as provided in Section 1.1(b)(ii) below,
all books, records, ledgers, files, documents, correspondence, lists, studies
and reports and other printed or written materials;
(xiii) all Software, except the Arcian/Relationship
Network Management Software which will be addressed as set forth in Sections
6.1(h) and 6.2(g);
(xiv) the Contracts of Systems & Computer Technology
GmbH set forth on Schedule 1.1(a)(xiv); and
(xv) all other assets of any kind or nature which are
exclusively used by, or exclusively for the benefit of, the Division in
operating the Business or are exclusively related to the Business.
(b) Excluded Assets. Notwithstanding the foregoing, the
following assets are expressly excluded from the purchase and sale contemplated
hereby (the "Excluded Assets") and, as such, are not included in the assets to
be conveyed hereby:
(i) Seller's and its post-Closing Affiliates' rights
under or pursuant to this Agreement, including under any agreement entered into
in connection with this Agreement or the transactions contemplated hereby or
thereby;
(ii) Seller's and its post-Closing Affiliates'
general ledger, accounting records, minute books, statutory books and corporate
seal, provided that Purchaser shall be given copies of the general ledger and
accounting records as such documents exist as of the Closing Date to the extent
such documents relate to the Business;
(iii) any right to receive mail and other
communications addressed to Seller or any of its post-Closing Affiliates, other
than mail and other communications relating to the Division Assets or the
Assumed Liabilities;
(iv) all contracts, agreements, arrangements and
other assets listed on Schedule 1.1(b)(iv) attached hereto;
(v) all intercompany receivables (short and long
term), intercompany investments or other intercompany assets of any kind or
nature;
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(vi) all accounts receivable (short and long term)
and the related specifically identified dollar amount of allowances for doubtful
accounts set forth on Schedule 1.1(b)(vi) attached hereto, which will include
all such amounts related to Birmingham Steel, Microfibres, Inc., Agrilink
(including amounts owed to Mellon Bank), Eskimo Pie Corporation, Cherrydale
Farms, Foxboro Company (Invensys)/Ken's Foods, Foxboro Company/Alto Dairy,
Shamrock Foods Company, Sugar Creek Packaging Company, Gulf States Steel, Inc.,
Xxxxxxxxxx.xxx, Xxxxxxxx Brands International, Inc. and Westin;
(vii) any cash and cash equivalents;
(viii) any interests in any real estate, whether
leased or subleased located at (A) 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx,
(B) Mississauga, Ontario, (C) Malvern, Pennsylvania (which will be the subject
of the Sublease Agreement), (D) Nuremberg, Germany, (E) Alpharetta, Georgia
(which will be the subject of the Second Sublease Agreement) or (F)
Xxxxxx-in-Xxxxx, United Kingdom (which will be the subject of the Third Sublease
Agreement);
(ix) any of the capital stock of Seller or any of its
Affiliates;
(x) except as set forth on Schedule 1.1(a)(xiv)
attached hereto, any assets of any kind or nature of Systems & Computer
Technology GmbH;
(xi) except for any assets or services to be made
available under this Agreement or any other agreement entered into in connection
with this Agreement, any corporate or intercompany services or benefits provided
by Seller or any of its post-Closing Affiliates to the Division, including
legal, real property, tax, human resources and information systems;
(xii) all insurance and condemnation proceeds
received after the Closing Date under policies of insurance maintained by Seller
or any of its Affiliates with respect to damage, non-conformance of or loss to
the Division Assets incurred prior to the Closing Date;
(xiii) all rights and claims to refunds or credits of
Taxes paid or payable by Seller or any post-Closing Affiliate;
(xiv) the Arcian/Relationship Network Management
software and all Intellectual Property related thereto, including the assets set
forth on Schedule 1.1(b)(xiv) attached hereto;
(xv) except for the limited grant of rights set forth
in Section 5.11, all of Seller's and its Affiliates' goodwill and rights in and
to the name "Systems & Computer Technology Corporation," "SCT" or any name
incorporating the foregoing, such as "iProcess.sct", and in any trade name,
trademark or service xxxx thereof, or application therefor or registrations
thereof;
(xvi) Seller's and each of its post-Closing
Affiliates' governmental licenses, permits and other Authorizations that are not
transferable or are not related exclusively to the Business; and
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(xvii) any other asset not specified in Section
1.1(a).
1.2 Limited Assumption of Liabilities
(a) Except for the Excluded Liabilities, from and after the
Closing, Purchaser or one or more of its Affiliates will assume and agree to
pay, defend, discharge and perform as and when due all liabilities and
obligations of Seller and its Affiliates, but only to the extent such
liabilities and obligations relate to the Division Assets or the Business (in
each case, whether known or unknown, whether asserted or unasserted, whether
accrued or unaccrued, whether liquidated or unliquidated and whether due or to
become due) (the "Assumed Liabilities"), including the following:
(i) all liabilities and obligations of performance
under each Contract;
(ii) all liabilities and obligations of performance
under each real property lease set forth on Schedule 1.1(a)(iii) hereto; and
(iii) those accounts payable, accrued expenses and
other liabilities specifically attributable to the Division Assets or the
Business which would be required to be set forth on or accrued on a Closing Date
balance sheet of the Division prepared in accordance with U.S. GAAP,
consistently applied in accordance with Seller's past practices.
(b) Excluded Liabilities. Notwithstanding anything to the
contrary contained in this Agreement and regardless of whether such liability is
disclosed herein or on any schedule or exhibit hereto, neither Purchaser nor any
of its Affiliates will assume or be liable for any liabilities or obligations of
Seller or any of its Affiliates (i) to the extent not related to the Business or
(ii) arising out of, related to, resulting from, in the nature of or caused by
any (A) Taxes, except as provided in Section 5.13 (regardless of when incurred),
(B) indebtedness for borrowed money or deferred purchase price for property or
any cash overdrafts of the Business arising on or prior to the Closing Date or
any outstanding checks of the Business incurred on or prior to the Closing Date,
(C) intercompany payables, intercompany loans or other intercompany liabilities
of any kind or nature, (D) Excluded Asset, (E) matter disclosed on Schedule 2.13
hereto (or, which otherwise would have been required to be disclosed on such
Schedule if prepared as of the Closing Date) or any litigation, claim or
assessment of any kind or nature which is commenced (by the filing of a
complaint or the like or the presentation of a written claim to Seller or any of
its Affiliates) with any court or similar legal or administrative authority or
any mediator or arbitrator (or, in the case of a written claim, by presentation
of such claim to Seller or any of its Affiliates) at any time on or prior to the
Closing (including any customer litigation, breach of contract, breach of
warranty, tort, infringement, violation of law or environmental matter),
including any such matter disclosed in the Schedules hereto, (F) facts, events
or circumstances related to the Business' relationship with Birmingham Steel
Corporation, Microfibres, Inc., Agrilink, Eskimo Pie Corporation, Cherrydale
Farms, Foxboro Company (Invensys)/Ken's Foods, Foxboro Company/Alto Dairy,
Shamrock Foods Company, Sugar Creek Packaging Company, Gulf States Steel, Inc.,
Xxxxxxxxxx.xxx, Xxxxxxxx Brands International, Inc. or Westin or (G) deferred
revenue liability, which will be treated as specified in Section 1.7 hereof (in
each case with respect to any of the matters specified in this Section 1.2(b),
whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated and
whether due or to become due) (the "Excluded Liabilities").
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1.3 Purchase Price.
(a) The aggregate purchase price for the Division Assets is
(i) $13,200,000 (the "Cash Portion") and (ii) the assumption of the Assumed
Liabilities ((i) and (ii) collectively referred to as the "Purchase Price"). The
Cash Portion will be subject to adjustment as set forth in Section 1.4. On the
Closing Date (as defined herein), Purchaser shall pay to the account or accounts
designated by Seller, by wire transfer of immediately available funds, an
aggregate amount equal to the Cash Portion, as the same may be adjusted as set
forth in Section 1.4.
1.4 Purchase Price Adjustment.
(a) Closing Determination. No later than five (5) Business
Days prior to the Closing, Seller and Purchaser will confer and make a mutually
agreed upon determination of the Division's estimated Net Asset Value as of the
Closing (the "Estimated Net Asset Value") as set forth on a mutually agreed upon
estimated Closing Date balance sheet reflecting the assets of the Division being
purchased and the liabilities of the Division being assumed. "Net Asset Value"
means, except as otherwise set forth in this Section 1.4, the aggregate net book
value of the Division Assets, less the sum of (i) the aggregate net book value
of all intangible Division Assets (including, without limitation, the aggregate
net book value of (A) any capitalized software costs, (B) software purchased for
resale, (C) purchased software, the license of which is not transferable to
Purchaser and (D) any Division Asset included in the caption "Intangibles" in
the attached Financial Statements) and (ii) the aggregate net book value of all
liabilities of the Division required to be set forth on the face of a Closing
Date balance sheet, all as determined in accordance with U.S. GAAP applied in a
manner consistent with Seller's past practices; it being agreed that (A) the
calculation of the Net Asset Value will not include accounts receivable related
to the delivery of future services, unless a corresponding amount of deferred
revenue liability with respect to such accounts receivable is included in the
calculation of the Division's liabilities, (B) the calculation of Net Asset
Value will not include the benefit of, or the burden of, any asset or liability
which inures to the benefit of, or is to be borne by, Seller or its post-closing
Affiliates, (C) notwithstanding the agreement of the parties to leave all
maintenance contracts related to the Business with Seller and its Affiliates as
specified in Section 1.7 hereof, the determination of Net Asset Value will be
made as if all maintenance contracts and the related deferred revenue
liabilities with respect thereto are to be transferred to Purchaser and its
Affiliates effective as of the Closing Date, (D) notwithstanding any provision
to the contrary contained herein, the determinations of prepaid assets,
inventory and property, plant and equipment, any other fixed assets and any
other assets or liabilities to be included in the determination of Net Asset
Value will be made based on the specifically identified schedules of such assets
made pursuant to Sections 1.1(a)(ii), 1.1(a)(iv) and 1.1(a)(v) hereto or other
schedules specifically identifying any such assets and liabilities, in each case
as updated to reflect activity through the Closing Date and (E) the calculation
of the Net Asset Value will not include any of the Division Assets included in
the captions "Net Capitalized Software" or "Long-Term Receivables-Clients" in
the attached Financial Statements or any of the amounts related to the Business'
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relationship with Agrilink included in the caption "Other Receivables" in the
attached Financial Statements. With regard to the Division Assets and Assumed
Liabilities required to be set forth on Schedules as described in Section 1.1
and Section 1.2, such Schedules will be subject to the procedural mechanisms set
forth in this Section 1.4 (e.g., the post-Closing determination and review
process set forth in Section 1.4(b)). If the Estimated Net Asset Value is less
than $3,590,000, the Cash Portion of the Purchase Price otherwise deliverable to
Seller at the Closing will be reduced by an amount equal to such shortfall. If
the Estimated Net Asset Value is greater than $3,590,000, the Cash Portion of
the Purchase Price otherwise deliverable to Seller at the Closing will be
increased by the amount of such excess.
(b) Post-Closing Determination. No later than 90 days after
the Closing Date, Purchaser's independent auditors, PricewaterhouseCoopers, will
prepare and deliver to Seller a Closing Date balance sheet reflecting the assets
and liabilities of the Division transferred to and assumed by Purchaser and its
Affiliates and reflecting the Net Asset Value of the Division (the "Draft
Closing Date Balance Sheet"). If Seller disagrees with the calculation of the
Net Asset Value of the Division reflected on the Draft Closing Date Balance
Sheet, Seller may, within 30 days after receipt of the Draft Closing Date
Balance Sheet, deliver a notice (an "Objection Notice") to Purchaser setting
forth any such disagreement. If Seller does not deliver an Objection Notice
within such 30 day period, then the Net Asset Value set forth on the Draft
Closing Date Balance Sheet shall be deemed final and conclusive and binding on
each of the parties. Purchaser and Seller will use commercially reasonable
efforts to resolve any disagreements as to the calculation of the Net Asset
Value of the Division, but if they do not obtain a final resolution no later
than 45 days after Purchaser's receipt of the Objection Notice, Purchaser and
Seller will mutually agree upon and jointly retain either KPMG Peat Marwick or
Deloitte & Touche (the "Firm") to resolve any remaining disagreements. If
Purchaser and Seller are unable to agree on the choice of the Firm, then one of
the two aforementioned accounting firms will be selected by lot. Purchaser and
Seller will direct the Firm to render a determination within 30 days of its
retention and Purchaser, Seller and their respective agents will cooperate with
the Firm during its engagement. The Firm will consider only those items and
amounts with respect to the Draft Closing Date Balance Sheet set forth in the
Objection Notice which Purchaser and Seller are unable to resolve. Purchaser and
Seller shall each make written submissions to the Firm promptly (and in any
event no later than 15 days after the Firm's engagement), which submissions
shall contain such party's computation of the Net Asset Value and information,
arguments, and support for such party's position. The Firm shall review such
submissions and base its determination solely on such submissions. In resolving
any disputed item, the Firm may not assign a value to any item greater than the
greatest value for such item claimed by either party or less than the smallest
value for such item claimed by either party. The Firm's determination will be
based on the definition of the Net Asset Value included herein. The
determination of the Firm will be conclusive and binding upon Purchaser and
Seller. Purchaser and Seller shall each bear the costs and expenses of the Firm
based on the percentage which the portion of the contested amount not awarded to
each party bears to the amount actually contested by such party (e.g., if
Purchaser makes a claim for $1,000 and Seller only contests $500 of the amount
claimed by Purchaser, and if the Firm resolves the dispute by awarding Purchaser
$300 of the $500 contested, then the Firm's costs and expenses will be allocated
60% to Seller and 40% to Purchaser). The Net Asset Value as finally determined
pursuant to this Section 1.4(b) is referred herein as the "Actual Net Asset
Value" and the final balance sheet on which it is reflected as the "Closing Date
Balance Sheet."
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(c) Post-Closing Adjustment.
(i) Payment by Seller. If the Actual Net Asset Value
is less than Estimated Net Asset Value, Seller will, within five (5) business
days after the determination thereof, pay to Purchaser an amount equal to such
shortfall, by wire transfer of immediately available funds.
(ii) Payments by Purchaser. If the Actual Net Asset
Value is greater than the Estimated Net Asset Value, Purchaser will, within five
(5) business days after the determination thereof, pay to Seller an amount equal
to such excess, by wire transfer of immediately available funds.
(iii) Dispute. If, pursuant to this Section 1.4,
there is a dispute as to the amount of the Estimated Net Asset Value or the
amount of the Actual Net Asset Value, then subject to the other terms and
conditions of this Section 1.4, Purchaser and Seller shall promptly pay to the
other, as appropriate, such amounts as are not in dispute, pending final
determination of such dispute pursuant to this Section 1.4.
1.5 Allocation of Purchase Price. Seller and Purchaser shall use
commercially reasonable efforts to agree, within sixty (60) days after the Net
Asset Value is finally determined pursuant to Section 1.4(b), to a final
allocation of the Purchase Price among the Division Assets; it being agreed that
if the parties cannot agree on such an allocation, each party shall be entitled
to use its own allocation. Any such allocation will comply with the requirements
of Section 1060 of the Code. Each of Seller and Purchaser agrees that, to the
extent permitted by applicable law, it will adopt and utilize the amounts
allocated to each asset or class of assets determined pursuant to this Section
1.5 for purposes of all Tax Returns filed by it, and that it will not
voluntarily take any position inconsistent therewith upon examination of any
such Tax Returns, in any claim for any Tax refund, in any litigation or
otherwise with respect to such Tax Returns.
1.6 Subsidiary Agreements.
(a) Seller and Purchaser shall pursuant to, and in accordance
with, the terms and conditions of this Agreement enter into, or cause their
respective Affiliates to enter into, as soon as reasonably practicable following
the date hereof (but in any event prior to the Closing Date) separate agreements
(the "Subsidiary Agreements") documenting the purchase and sale of each portion
of the Division Assets and the Assumed Liabilities to be conveyed separately to
Purchaser or one or more of its Affiliates. Such individual Subsidiary
Agreements will be used merely to memorialize the transfer of particular assets
and liabilities to particular Affiliates of Purchaser, it being agreed that
notwithstanding any provision in this Agreement to the contrary, all intangible
assets of any type or nature (including, without limitation, any Intellectual
Property and any contracts) will be conveyed directly from Seller and its
Affiliates directly (by direct asset transfer rather than indirectly by transfer
of capital stock) to Purchaser (rather than its Affiliates). Each separate
Subsidiary Agreement shall reflect an individual allocation of the Purchase
Price consistent with the determination of the Estimated Net Asset Value.
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(b) The Subsidiary Agreements shall be in substantially the
form attached hereto as Exhibit A, with such modifications as are necessary and
appropriate as a result of differences in local laws or customs, in order to
maintain substantially the same legal meaning and effect as provided for in this
Agreement.
(c) In the event of any conflict or inconsistency between the
terms and conditions of this Agreement and any Subsidiary Agreement, the terms
and conditions of this Agreement shall prevail.
1.7 Maintenance Contracts. Purchaser and Seller agree that no
maintenance contract related to the Business will be assigned or transferred
from Seller or its Affiliates to Purchaser or its Affiliates effective as of the
Closing Date. Rather, each such individual maintenance contract will be
transferred from Seller and its Affiliates to Purchaser and its Affiliates
effective as of the day immediately preceding the receipt of the first cash
payment occurring after the Closing Date under each such maintenance contract.
Except for Section 1.4, and except as described in the following sentence, until
such maintenance contract transfer occurs, Seller, Purchaser and their
respective Affiliates will treat such maintenance contracts as retained by
Seller and its Affiliates for all purposes, including Taxes. Notwithstanding the
foregoing, all benefits of (including the right to all revenues and cash
receipts therefrom), and all burdens (including all liabilities and obligations
under such maintenance contracts, including all servicing obligations) of, all
such maintenance contracts, to the extent related to the Business, will inure
to, or be borne by, Purchaser and its Affiliates, including Taxes. From and
after the Closing, Purchaser and its Affiliates will have the right to renew any
such maintenance contracts in their own name and for their own account.
Purchaser shall indemnify, defend and hold harmless Seller and each of its
Affiliates against any Losses suffered by any of them as a result of the
arrangements set forth in this Section 1.7.
1.8 Bulk Sales Laws. Purchaser hereby waives, to the extent permitted
by applicable law, compliance by Seller and each of its Affiliates with the
provisions of any so-called bulk sales or bulk transfer law in any jurisdiction
in connection with the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser, as of the date
hereof or as otherwise set forth in such representation or the schedules hereto,
as follows:
2.1 Organization. Seller and each of its Affiliates to be party to any
agreement contemplated hereby is a corporation properly organized, validly
existing and in good standing (to the extent such concept is relevant in any
particular jurisdiction) under the laws of its jurisdiction of incorporation,
and has the requisite power and authority to conduct its business as it is
presently being conducted and to own and lease its properties and assets. Seller
and each of its Affiliates to be party to any agreement contemplated hereby is
properly qualified to do business as a foreign corporation and is in good
standing (to the extent such concept is relevant in any particular jurisdiction)
in each jurisdiction in which such qualification is necessary under the
applicable law as a result of the conduct of the Business, except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
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2.2 Authorization. The execution and delivery of this Agreement by
Seller and the performance by Seller of its obligations hereunder has been
authorized by all necessary action on the part of Seller. No other corporate
action or approval is necessary for the execution, delivery or performance of
this Agreement by Seller, including any approval of Seller's shareholders. Prior
to the Closing, Seller will cause each of its Affiliates transferring any
Division Assets or Assumed Liabilities to authorize by all necessary action
(whether by such Affiliate or its shareholders) the execution, delivery and
performance by such Affiliate of such other agreements and instruments to which
any such Person is a party. Seller and each of its Affiliates has full right,
power, authority and capacity to execute, deliver and perform this Agreement and
such other agreements and instruments as are contemplated hereby to which any
such Person is a party. This Agreement has been duly executed and delivered by
Seller. This Agreement and each other agreement and instrument to be executed or
delivered by Seller or any of its Affiliates constitutes, or will constitute,
when executed and delivered, valid and binding obligations of Seller or such
Affiliate, enforceable against them in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and (b) general principles
of equity (whether considered in an action in equity or at law).
2.3 No Conflict. Neither the execution and delivery of this Agreement
or any other agreement or instrument to be executed and delivered in connection
herewith by Seller or any of its Affiliates nor the consummation of the
transactions contemplated hereby or thereby nor the fulfillment by Seller or any
of its Affiliates of any of terms contemplated hereby or thereby will, except as
described on Schedule 2.3:
(a) conflict with or result in a breach by Seller or any of
its Affiliates of, or constitute a default under, or create an event that, with
the giving of notice or the lapse of time, or both, would be a default under or
breach of, or give a right to terminate or cancel under, any of the terms,
conditions or provisions of (i) any Material Contract (as defined in Section
2.9), (ii) the articles/certificate of incorporation or the bylaws (or
equivalent governing documents) of Seller or any of its Affiliates or (iii) any
judgment, order, writ, injunction, decree or demand of any Governmental Entity
involving Seller or any of its Affiliates;
(b) result in the creation or imposition of any Encumbrance,
other than Permitted Encumbrances, of any nature whatsoever upon any of the
Division Assets that would affect Purchaser's or its Affiliates' ability to
conduct the Business as conducted by Seller and its Affiliates prior to the date
of this Agreement; or
(c) cause a loss or adverse modification of any Authorization
granted by a Governmental Entity to or otherwise held by the Business which is
necessary to operate the Business in any respect that would affect Purchaser's
or its Affiliates' ability to conduct the Business as conducted by Seller and
its Affiliates prior to the date of this Agreement.
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2.4 Completeness of Assets. The Division Assets (including, without
limitation, Software and Division Intellectual Property being transferred to
Purchaser and its Affiliates pursuant to this Agreement), the services to be
made available to Purchaser and its Affiliates pursuant to the Transition
Services Agreement and the other rights being made available to Purchaser and
its Affiliates pursuant to this Agreement or the Proprietary Rights Agreement
constitute all the assets and services used by Seller and its Affiliates in
operating the Business of the Division as it is currently operated by Seller and
its Affiliates. The price or cost of each service to be provided to Purchaser
and its Affiliates under the Transition Services Agreement does not exceed the
historical price or cost of such service as reflected in the Financial
Statements (assuming the same levels of activity during the applicable period).
2.5 Financial Statements. Seller has delivered to Purchaser and
attached hereto as Schedule 2.5: (i) the unaudited consolidated balance sheet
(the "2001 Balance Sheet") and related consolidated statements of operations of
the Division as at and for the year ended September 30, 2001 and (ii) the
unaudited unconsolidated balance sheet (the "Most Recent Balance Sheet") and
related consolidated statements of operations of the Division as at and for the
five-month period ended February 28, 2002, all as prepared in accordance with
U.S. GAAP, consistently applied in accordance with Seller's past practices,
except for the absence of notes and, with respect to the financial statements
described in clause (ii), subject to year-end adjustments (none of which will be
material, individually or in the aggregate) (collectively, the "Financial
Statements"). The Financial Statements (including the notes thereto, if any) (i)
present fairly the financial position and results of operations of the Division
as of the dates and for the periods then ended in accordance with U.S. GAAP,
consistently applied in accordance with Seller's past practices and (ii) are in
agreement with the books and records of Seller and its Affiliates with respect
to the Division.
2.6 Absence of Undisclosed Liabilities. The Business does not have, and
as of the Closing, will not have, any obligation or liability (in any case,
whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated or due or to become due)
arising out of or related to facts, events, transactions, occurrences or actions
or inactions arising on or prior to the Closing Date, other than: (i)
liabilities and obligations reflected on the face of the Most Recent Balance
Sheet, (ii) liabilities and obligations incurred in the ordinary course of
business (none of which is a liability resulting from, arising out of, relating
to, in the nature of, or caused by any breach of contract, breach of warranty,
tort, infringement, violation of law, environmental matter, claim or lawsuit or
indebtedness for borrowed money) and (iii) other liabilities and obligations
expressly disclosed (both by description and amount) on Schedule 2.6.
2.7 Absence of Certain Facts or Events. Except as listed on Schedule
2.7, since September 30, 2001, Seller and each of its Affiliates have conducted
the Business in the ordinary course of business consistent with past custom and
practice and there has not been:
(a) a Material Adverse Effect suffered by the Business, and
during the period from September 30, 2001 through and including the Closing
Date, there shall not have been a Material Adverse Effect suffered by the
Business;
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(b) any damage, destruction or loss to any Division Asset,
whether tangible or intangible, whether covered by insurance or not, involving
losses cumulatively in excess of $100,000;
(c) any hiring of new employees of the Business whose annual
compensation exceeds $100,000, any amendment to or entering into of any
employment agreement or any increase in the compensation payable or to become
payable by the Business to any of its employees whose annual remuneration (for
the calendar year ended December 31, 2001) exceeded $100,000 or any material
increase in the coverage or benefits under any bonus, insurance, pension or
other Benefit Plan (excluding annual length-of-service and similar adjustments
to the benefits of individual participants) or the transfer of any employee of
the Business whose annual remuneration (for the calendar year ended December 31,
2001) exceeded $100,000 to any other business conducted by Seller or its
Affiliates;
(d) any sale, assignment, modification or transfer of any
contractual rights, claims or other assets of the Business valued at more than
$100,000 individually or in the aggregate, other than changes to sales or
purchase orders, licenses or other customer contracts and changes thereto in the
ordinary course of business consistent with past custom and practice;
(e) any Encumbrance placed on any of the Division Assets,
other than any Permitted Encumbrances which would not prevent or materially
limit the sale of any Division Asset;
(f) any waiver or release of any of the Business' rights with
a value, individually or in the aggregate, in excess of $100,000;
(g) any adverse modification, any termination of, or claims of
any breach under, any Material Contract;
(h) any material transaction entered into or consummated by
Seller or any of its Affiliates with respect to the Business, except in the
ordinary course of business consistent with past custom and practice;
(i) any material addition to or modification of the Benefit
Plans of the Business or other arrangements or practices affecting personnel of
the Business (other than extensions of coverage thereunder to employees of the
Business who became eligible to participate in such Benefit Plans after
September 30, 2001 in accordance with the terms thereof); or
(j) any obligation or liability incurred by Seller or any of
its Affiliates involving any capitalized expenditures of any kind or nature of
the Business in excess of $100,000.
2.8 Property, Leases and Encumbrances.
(a) Schedule 2.8(a) hereto accurately sets forth as of the
date hereof all real properties (the "Real Property") used in connection with
the Business that are to be transferred as part of the transactions contemplated
by this Agreement, whether owned or leased, and contains a list of all leases,
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franchises and similar material agreements creating, or materially modifying or
altering rights to such Real Property, including material zoning or use
restrictions. Seller or one of its Affiliates has good and marketable title to
such owned Real Property, free and clear of all Encumbrances of any nature
whatsoever other than Permitted Encumbrances and a valid leasehold interest in
such leased Real Property.
(b) Seller or one of its Affiliates has good and marketable
title to all material items of machinery, equipment, furniture, and other
tangible personal property of the Business constituting Division Assets, free
and clear of all Encumbrances of any nature whatsoever other than Permitted
Encumbrances.
(c) The tangible Division Assets are in good operating
condition and repair, ordinary wear and tear excepted.
2.9 Contracts and Commitments.
(a) Except as set forth on Schedule 2.9, with respect to the
Business, neither Seller nor any of its Affiliates has any: (i) collective
bargaining agreements or any agreements or policies that contain or include any
severance pay liabilities or obligations; (ii) employment, consulting or similar
agreement, contract or commitment which is not terminable without penalty or
cost by Seller or one of its Affiliates on notice of thirty (30) days or less or
contains an obligation of Seller or one of its Affiliates to pay more than
$100,000; (iii) lease of real or personal property (as lessor or lessee)
involving rental payments in excess of $100,000 per annum; (iv) note or other
evidence of Indebtedness for borrowed money or the deferred purchase price of
property or services (other than accounts payable and accrued expenses incurred
in the ordinary course of business consistent with past custom and practice);
(v) agreement, contract or commitment relating to capitalized expenditures of
any kind or nature involving unpaid obligations in excess of $100,000; (vi)
agreement, contract or commitment relating to the acquisition of assets of, or
any interest in, any business enterprise; (vii) license agreement (including any
Software License), or any other contract, arrangement or binding commitment,
whether written or oral, with any third party relating to Intellectual Property
involving payment obligations (whether executory or fully performed) in excess
of $100,000; (viii) contract or group of related contracts with the same party
for the sale of products or services under which the undelivered balance of such
products or services has a sales price in excess of $100,000; or (ix) other
contract or agreement which involves payments of $100,000 or more and is not
cancelable by any party thereto on thirty (30) days or less notice without
penalty or cost. Each of the contracts, agreements or commitments required to be
disclosed on Schedule 2.9 is referred to herein as a "Material Contract." Seller
has delivered or made available to Purchaser copies of each Material Contract
required to be disclosed on Schedule 2.9.
(b) Except as expressly disclosed on Schedule 2.9: (i) neither
Seller nor any of its Affiliates is in violation of, nor has Seller or any of
its Affiliates received any claim, whether written or oral, that any of them has
breached any of the terms or conditions of any Material Contract; (ii) each
Material Contract is in full force and effect and is valid, binding and
enforceable without any default, breach, waiver or indulgence thereunder by
Seller or any of its Affiliates or, to Seller's Knowledge, by any other party
thereto; and (iii) to Seller's Knowledge, there are no facts or conditions which
have occurred which, through the passage of time or the giving of notice, or
both, could reasonably be expected to constitute a default under any Material
Contract.
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2.10 Permits and Authorizations.
(a) All consents, licenses, permits, grants or other
authorizations of a Governmental Entity pursuant to which Seller or any of its
Affiliates conduct the Business are collectively referred to herein as
"Authorizations". All Authorizations are in full force and effect and constitute
all Authorizations required to operate the Division Assets and conduct the
Business, except those Authorizations, the lack of which would not materially
impair the ability of Purchaser and its Affiliates to conduct the Business in
substantially the same manner conducted by Seller and its Affiliates prior to
the Closing Date. Except as disclosed on Schedule 2.10(a), the Authorizations
may be transferred to Purchaser or one of its Affiliates on the Closing Date.
The consummation of the transactions contemplated by this Agreement will not,
except as disclosed on Schedule 2.10(a), require any transfer, renewal or notice
with respect to any Authorizations.
(b) Neither Seller nor any of its Affiliates has been notified
in writing that any material Authorization will not in the ordinary course of
business be renewed upon its expiration.
(c) No claim or assertion has been made against Seller or any
of its Affiliates alleging that any such Person has breached any of the terms or
conditions of any Authorization in such manner (i) as would permit any other
Person to cancel, terminate or materially amend any Authorization necessary to
permit the continued operation of the Division as presently conducted or the use
of any material Division Asset or (ii) that is reasonably likely to result in a
penalty or fee of more than $25,000.
2.11 No Violations. Except as disclosed on Schedule 2.11 hereto, Seller
and each of its Affiliates is and, since September 30, 2000, has been in
compliance in all material respects with each applicable law, statute, order,
rule or regulation promulgated or judgment entered against any of them with
respect to the Business, the Division or any Division Asset.
2.12 No Consents. Except as disclosed on Schedule 2.12 hereto, no
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Entity is required to be made or obtained by Seller or
any of its Affiliates in connection with the execution, delivery or performance
by any of them of this Agreement.
2.13 Proceedings.
(a) Schedule 2.13 lists all claims, investigations, suits,
actions, arbitrations, mediations and legal or administrative proceedings and
governmental investigations (collectively, "Proceedings") relating to the
Business or the Division or any Division Asset demanding injunctive relief or
involving a claim for damages or any unspecified claim, which are pending
against Seller or any of its Affiliates, to which any of them is a party or as
to which any of them has received any written claim or assertion and, to
Seller's Knowledge, no such Proceeding has been threatened. Except as set forth
on Schedule 2.13, to Seller's Knowledge, there are no facts in existence which
are reasonably likely to lead to the instigation of any such Proceeding. Except
14
as set forth on Schedule 2.13, there is no outstanding unsatisfied judgment,
order, decree, award, stipulation or injunction of any Governmental Entity
against or affecting the Business or the Division or any Division Asset.
(b) Except as set forth on Schedule 2.13, there is no
Proceeding pending, or to Seller's Knowledge, threatened against Seller or any
of its Affiliates seeking to prevent or delay the consummation of the
transactions contemplated by this Agreement.
2.14 Insurance. Seller and each of its Affiliates conducting any
portion of the Business have insurance coverage under policies that provide
adequate insurance coverage for the Division and the Business until the Closing
Date.
2.15 Intellectual Property.
(a) Schedule 2.15(a) attached hereto contains a true, complete
and correct list of all (i) patented and registered Division Intellectual
Property owned by the Seller or any of its Affiliates, (ii) pending patent
applications and applications for registration of other Division Intellectual
Property filed by or on behalf of the Seller or any of its Affiliates, (iii)
computer software used by the Division (whether or not owned by the Seller or
any of its Affiliates) other than commercially-available third-party
off-the-shelf software purchased or licensed for less than a total cost of
$25,000, (iv) trade or corporate names used by the Division, (v) material
unregistered trademarks, service marks, and copyrights used by the Division
(whether or not owned by the Seller or any of its Affiliates) and (vi) Software.
(b) Except as set forth on Schedule 2.15(b) attached hereto,
the Seller or one of its Affiliates owns all right, title and interest to, or
has the right to use pursuant to a valid, enforceable and effective license,
free and clear of all Encumbrances, other than Permitted Encumbrances, all
Division Intellectual Property. The Division Intellectual Property and any
Intellectual Property being made available to Purchaser and its Affiliates
pursuant to any other agreement contemplated hereby comprises all of the
Intellectual Property necessary for the operation of the Business as currently
conducted. No loss, other than by expiration of patents at the end of their
respective statutory terms (and not as a result of any failure by the Seller or
any of its Affiliates to pay maintenance fees), of any of the Division
Intellectual Property is pending or, to Seller's Knowledge, threatened. The
Seller and each of its Affiliates has taken all commercially reasonable action
to maintain and protect the material Division Intellectual Property.
(c) Except as set forth on Schedule 2.15(c) attached hereto,
(i) there are no claims against the Seller or any of its Affiliates that were
either made within the past three (3) years or are presently pending asserting
the invalidity, misuse or unenforceability of any of the Division Intellectual
Property and, to the Knowledge of the Seller, there is no reasonable basis for
any such claim and no such claim has been threatened, (ii) neither Seller nor
any of its Affiliates has infringed, misappropriated or otherwise conflicted
with, and the operation of the Business as currently conducted does not
infringe, misappropriate or conflict with, any Intellectual Property of any
other Person in any material respect and neither Seller nor any of its
Affiliates has received any written notices regarding any of the foregoing
(including, without limitation, any offers to license any Intellectual Property
from any other Person) and (iii) to the Knowledge of the Seller, no third party
15
has infringed, misappropriated or otherwise conflicted with any of the Division
Intellectual Property. All of the Division Intellectual Property shall be owned
or available for use by the Purchaser and its Affiliates immediately after the
Closing Date on terms and conditions substantially similar to those under which
the Seller and its Affiliates owned or used the Division Intellectual Property
immediately prior to the Closing Date.
(d) The computer software, computer firmware, computer
hardware (whether general or special purpose) and other similar or related items
of automated, computerized and/or software system(s) (collectively, the
"Computer Systems") that are used or relied on by the Division in the conduct of
the Business are sufficient in each material respect for the current needs of
the Business, including, without limitation, as to capacity and ability to
process peak volumes in a timely manner. In the past twelve months, there have
been no bugs in, or failures, breakdowns, or continued substandard performance
of any such Computer Systems which has caused any substantial disruption or
interruption in or to the use of such Computer Systems by the Division.
2.16 Software.
(a) Specifications; Claims. The Software functions in
accordance with the published documentation and specifications therefor in all
material respects (including any such documentation and specifications delivered
to customers of the Business). Except as set forth on Schedule 2.16(a), all of
the Software is available in "general release" form (as opposed to only "alpha,"
"beta" or "early release" forms) and except as set forth in Schedule 2.16(a)
there exists user and technical documentation that describes the functionality
provided by such Software which is accurate in all material respects.
(b) Software Licenses. Except as set forth on Schedule
2.16(b), neither Seller nor any of its Affiliates has licensed, leased, sold or
otherwise transferred or disclosed the source code for any of the Software to
any Person. The cost of Seller's and its Affiliates' outstanding obligations
under the Software Licenses, including the performance or re-performance of any
installation, implementation, warranty, maintenance, modification, upgrade,
enhancement, consulting or other service does not exceed the aggregate payments
to be received by the Seller and its Affiliates attributable to each such
obligation.
2.17 Employee Benefits.
(a) Except as set forth on Schedule 2.17, no employee benefit
plans (including, without limitation, "plans" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
vacation pay, holiday pay, pension, retirement plans, medical and other
compensation or benefit arrangements (collectively, "Benefit Plans") are
maintained or contributed to or required to be contributed to by Seller or any
of its Affiliates for the benefit of the Business' employees (or former
employees) and/or their beneficiaries. Seller has delivered or made available to
Purchaser true and complete copies of all documents pertaining to those items
required to be disclosed on Schedule 2.17. Neither Seller nor any of its
Affiliates maintains, contributes to or has any liability with respect to any
Benefit Plans with respect to the Business' employees other than those disclosed
on Schedule 2.17.
16
(b) Seller and each of its Affiliates have timely made all
contributions required by law to be made to the Benefit Plans, and have timely
filed all reports and other documents required to be filed with respect thereto.
(c) All Benefit Plans of any Affiliate of Seller which is the
sponsor of any Benefit Plan required by operation of law to be transferred to
Purchaser or one of its Affiliates as a result of the transactions contemplated
hereby and the Systems & Computer Technology Corporation 401(k) Plan (i) have
complied in form and operation with the applicable requirements of law; and (ii)
with respect to each such Benefit Plan that is intended to be qualified under
Section 401(a) of the Code, such plan has received a favorable determination
letter from the Internal Revenue Service and no event has occurred and no
condition exists which could reasonably be expected to result in the revocation
of any such favorable determination letter. Neither the Seller nor any of its
Affiliates (i) has any obligation or liability to provide any post-employment
welfare benefits to any employee of the Business (other than as required under
Section 4980(B) of the Code) or (ii) contributes to or has any liability with
respect to a multiemployer plan, as defined in Section 3(37) of ERISA.
2.18 Employment Matters.
(a) Seller and each of its Affiliates has paid or made
adequate provision to pay all wages and other compensation and all other amounts
due and payable to any employee or former employee of the Business through and
including the Closing Date.
(b) Except for requirements of local law or as otherwise
disclosed on Schedule 2.18, no collective bargaining agreement is currently in
existence or is being negotiated by Seller or any of its Affiliates with respect
to the Business and, as of the date of this Agreement, no labor organization or
worker's council has been certified or recognized as the representative of any
employees of Seller or any of its Affiliates with respect to the Business.
Seller and each of its Affiliates operates the Business in all material respects
with all applicable laws respecting employment and employment practices,
including but not limited to terms and conditions of employment, wages and
hours, and occupational safety, and has not received written or verbal notice
of, and, to Seller's Knowledge, is not engaged in, any unfair labor practice
with respect to the Business. Seller and each of its Affiliates has made all
required payments of social security, unemployment and similar taxes.
2.19 Environmental Laws.
(a) Except as disclosed on Schedule 2.19, (i) the Division
Assets and the Division have been operated by Seller and each of its Affiliates
in compliance in all material respects with all applicable Environmental Laws
including, without limitation, obtaining and complying with all material
Authorizations required for the occupation and use of their respective
properties and facilities, (ii) there has been no production, generation,
storage, treatment, Release, disposal or arrangement for disposal of any
Hazardous Materials in a manner that has given or could reasonably be expected
to give rise to any material liabilities or obligations (contingent or
otherwise) pursuant to Environmental Laws at, in, on, under, about or from any
of the Real Properties by or on behalf of Seller or any of its Affiliates, (iii)
there has been no production, generation, storage, treatment, Release or
disposal of any Hazardous Materials in a manner that has given or could
17
reasonably be expected to give rise to any material liabilities or obligations
(contingent or otherwise) pursuant to Environmental Laws by or on behalf of
Seller or any of its Affiliates at any other Division site, (iv) there are no
storage tanks or electrical equipment containing polychlorinated biphenyls on
the Real Properties, or any asbestos-containing materials on the Real Properties
and (v) neither Seller nor any of its Affiliates has received, nor has Knowledge
of, any notice, report or other information regarding any violation of, or any
liability (contingent or otherwise) or investigatory, corrective or remedial
obligation under, any Environmental Laws with respect to their or their
predecessors' past or current operations, properties or facilities to the extent
it could reasonably be expected to have a Material Adverse Effect. The Seller
and its Affiliates have made available to Purchaser all environmental audits,
reports and other material environmental documents relating to their or their
predecessors' past or current properties, facilities or operations that
constitute part of the Division Assets that are in their possession or under
their reasonable control.
(b) "Environmental Law" shall mean all federal, state, local
and foreign (including, without limitation, European Union) laws and directives,
including statutes, regulations, rules, ordinances, orders and similar
provisions having the force or effect of law, and all common law, which purport
to regulate the Release of Hazardous Materials to the environment, or impose
requirements relating to environmental management, reporting or protection or
public or employee health and safety, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. Section 6901 et seq., the Emergency Planning
and Community Right-to-Know Act, as amended, 42 U.S.C. Section 11001 et seq.,
the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq., the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq., the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq., the Federal
Insecticide, Fungicide & Rodenticide Act, as amended, 7 U.S.C. Section 136 et
seq., the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C. Section 301
et seq. and the Occupational Safety and Health Act, as amended, 29 U.S.C.
Section 651 et seq.
(c) "Hazardous Material(s)" shall mean any substance which is
defined as a hazardous substance, hazardous material, hazardous waste,
pollutant, contaminant or words of similar import under any Environmental Law.
(d) "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or discarding of
barrels, containers or other receptacles containing any Hazardous Material).
2.20 Taxes. Except as set forth on Schedule 2.20, Seller and each of
its Affiliates has accurately prepared and has duly filed with the appropriate
Governmental Entities all material Tax Returns required to be filed on or before
the date of this Agreement with respect to the Business or the Division Assets,
and all such returns were and remain true and complete in all material respects.
All Taxes relating to the Business or the Division Assets, and which are due and
payable to any Governmental Entity with respect to any period (or portions
thereof) ending on or before the Closing Date, and all interest, penalties,
assessments and deficiencies connected therewith, have been or will be paid in
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full or adequate reserves have been established therefor. Except as set forth on
Schedule 2.20, neither Seller nor any of its Affiliates is a party to any
pending action or proceeding, nor to Seller's Knowledge, is any such action or
proceeding threatened, by a Governmental Entity for the assessment or collection
of Taxes with respect to the Business and no unresolved deficiency notices or
reports have been received by Seller or any of its Affiliates with respect to
the Business or the Division Assets. There are no claims against Seller or any
of its Affiliates for any Taxes which have resulted in, or may result in, an
Encumbrance against any Division Asset other than a Permitted Encumbrance. None
of the Assumed Liabilities is an obligation that could result in the payment of
any "excess parachute payment" within the meaning of Section 280G of the
Internal Revenue Code (the "Code") (or any corresponding provision of state,
local or non-U.S. income Tax law).
2.21 Accounts Receivable; Customers. Except as set forth on Schedule
2.21, the accounts receivable reflected on the Financial Statements of the
Business or originated thereafter by Seller or any of its Affiliates with
respect to the Business through the Closing Date are not subject to any dispute
in excess of $25,000, individually or in the aggregate. To Seller's Knowledge,
there are no facts existing with respect to any of the accounts receivable which
would give rise to a dispute in excess of $25,000, individually or in the
aggregate, over the same. Schedule 2.21 discloses as of September 30, 2001, (x)
the identity of the ten (10) largest customers (by dollar volume) of the
Division for the year ended September 30, 2001, and (y) the fiscal year-to-date
sales for each customer identified on Schedule 2.21.
2.22 Warranties. Neither Seller nor any of its Affiliates has given or
made any binding warranties of any kind or nature to any Person with respect to
any products sold or services performed by or on behalf of the Business, except
in accordance with Seller's standard warranties for products and services of the
Business included in the written contracts with the customers of the Business.
2.23 No Finders or Brokers. Except for the Seller's arrangements with
X.X. Xxxxxxxxx, Towbin with respect to the sale of the Business (the cost and
expense of which will be borne solely by Seller), neither Seller nor any of its
Affiliates has entered into any agreement, arrangement or understanding with any
Person to pay any finder's fee, brokerage commission, advisory fee or similar
payment in connection with the transactions contemplated hereby.
2.24 Delivery of Documents. Seller has delivered or made available to
Purchaser true and correct copies of all documents, and any and all amendments
to any such documents, referred to in Article II of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
3.1 Organization. Purchaser and each of its Affiliates is a properly
organized corporation, validly existing and in good standing under the laws of
its jurisdiction of incorporation, and has the power and authority to conduct
its business as it is presently being conducted and to own and lease its
properties and assets. As of the Closing, Purchaser and each of its Affiliates
will be qualified to do business as a foreign entity in each jurisdiction as is
necessary in order to conduct the Business following the Closing.
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3.2 Authorization. The execution and delivery of this Agreement by
Purchaser and the performance by Purchaser of its obligations hereunder have
been duly authorized by all necessary action on the part of Purchaser, and no
other action or approval by Purchaser is necessary for the execution, delivery
or performance of this Agreement by Purchaser. Prior to the Closing, Purchaser
will cause each of its Affiliates which is the assignee of any Division Assets
or Assumed Liabilities to authorize by all necessary action (whether by such
Affiliate or its shareholders) the execution, delivery and performance by such
Affiliate of such other agreements and instruments to which any such Person is a
party. This Agreement has been duly executed and delivered by Purchaser. This
Agreement and each other agreement and instrument to be executed and delivered
by Purchaser or any of its Affiliates constitutes, or will constitute when
executed and delivered, valid and binding obligations of Purchaser or such
Affiliate, enforceable against them in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and (b) general principles
of equity (whether considered in an action in equity or at law).
3.3 No Conflict. Neither the execution and delivery of this Agreement
or any other agreement or instrument to be executed and delivered in connection
herewith by Purchaser or any of its Affiliates nor the consummation of the
transactions contemplated hereby or thereby nor the fulfillment by Purchaser or
any of its Affiliates of any of the terms contemplated hereby or thereby will:
(a) conflict with or result in a breach by Purchaser or any of
its Affiliates of, or constitute a default under, or create an event that, with
the giving of notice or the lapse of time, or both, would be a default under or
breach of, any of the terms, conditions or provisions of (i) any indenture,
mortgage, lease, deed of trust, pledge, loan or credit agreement or any other
material contract, arrangement or agreement to which Purchaser or any of its
Affiliates is a party or to which any of the assets of Purchaser or any of its
Affiliates is subject, (ii) the articles/certificate of incorporation or bylaws
(or equivalent governing documents) of Purchaser or any of its Affiliates or
(iii) any judgment, order, writ, injunction, decree or demand of any
Governmental Entity applicable to Purchaser or any of its Affiliates;
(b) result in the creation or imposition of any Encumbrance
which will materially affect the ability of Purchaser or any of its Affiliates
to conduct their business as conducted prior to the date of this Agreement; or
(c) cause a loss or adverse modification of any permit,
license, or other authorization granted by any Governmental Entity to or
otherwise held by Purchaser or any of its Affiliates which is necessary to
operate their respective businesses prior to the Closing.
3.4 No Finders or Brokers. Neither Purchaser nor any of its Affiliates
has entered into any agreement, arrangement or understanding with any Person to
pay any finder's fee, brokerage commission, advisory fee or similar payment in
connection with this Agreement or the transactions contemplated hereby.
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3.5 Litigation. There is no Proceeding pending, or to Purchaser's
Knowledge, threatened against or affecting Purchaser or any of its Affiliates
seeking to prevent or delay the consummation of the transactions contemplated by
this Agreement.
3.6 Sufficient Funds. Purchaser has delivered to Seller a true and
complete copy of its financing commitment letter. As of the Closing (assuming
satisfaction or waiver of each of Purchaser's closing conditions), Purchaser
will have sufficient funds available to consummate the transactions contemplated
hereby and pay all related fees and expenses.
ARTICLE IV
COVENANTS OF SELLER
Seller hereby covenants and agrees that from the date of this
Agreement until the Closing Date, unless another time period is specified:
4.1 Access. Purchaser and its counsel, accountants, other
representatives and lenders have had, and will continue to have, reasonable
access upon reasonable advance notice and during normal business hours to all
properties, books, accounts, records, contracts, documents, key senior
management personnel (such key senior management personnel who are identified by
Seller to be Purchaser's primary contacts), independent accountants, legal
counsel and customers and suppliers of Seller and its Affiliates with respect to
the Business. All contacts with customers or suppliers shall be arranged through
the senior management personnel of the Business. Seller and its Affiliates shall
furnish or cause to be furnished to Purchaser and its representatives all data
and information concerning the Business that may reasonably be requested by
Purchaser.
4.2 Conduct of Business. Except as specifically contemplated in this
Agreement, from the date of this Agreement to the Closing Date, the Business
will be operated only in the ordinary course of business, consistent with past
custom and practice, and Seller shall not and shall not permit any of its
Affiliates to (without the prior written approval of Purchaser, which will not
be unreasonably withheld or delayed):
(a) enter into any material contract, commitment or other
transaction relating to the Business, except in the ordinary course of business
consistent with past custom and practice;
(b) materially modify, amend, cancel or terminate any Material
Contract, except in the ordinary course of business consistent with past custom
and practice;
(c) take any action which, or omit to take any action the
omission of which, would require disclosure under Section 2.7 hereof; or
(d) agree to do any of the actions described in the preceding
clauses (a) through (c).
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4.3 Exclusivity. From and after the date hereof until the first to
occur of (i) the Closing or (ii) the termination of this Agreement pursuant to
Article VII, Seller agrees, on behalf of itself and each of its Affiliates, that
neither they nor any of their respective directors, officers, employees,
stockholders, agents or representatives will discuss or pursue a possible sale,
recapitalization or other disposition of the Business, any securities or assets
of the Business (other than the sale or license of goods or services in the
ordinary course of business) or any interest therein with any other party or
provide any information to any other party in connection therewith. Seller
represents that, from and after the date hereof, neither it nor any of its
Affiliates will, by pursuing the transactions contemplated hereby, violate the
terms of any other agreement or obligation to which it or any such Affiliate is
subject, and will promptly (but in any event within one Business Day) inform
Purchaser of and provide Purchaser with information regarding any other offers
or expressions of interest for the Business. Seller shall immediately cease and
cause its Affiliates and their respective directors, officers, employees,
stockholders, agents and representatives to immediately cease any and all
existing activities, discussions or negotiations with any parties (other than
Purchaser or any of its representatives) conducted heretofore with respect to
any sale, recapitalization or other disposition of the Business or any interest
therein, and shall use commercially reasonable efforts to cause any such parties
in possession of confidential information about the Business that was furnished
by or on behalf of Seller or any of its Affiliates to return or destroy all such
information in the possession of any such party.
4.4 Third Party Confidentiality Agreements. During the period from the
date of this Agreement through the Closing Date, without the prior written
consent of Purchaser (not to be unreasonably withheld or delayed), Seller shall
not terminate, amend, modify or waive any material provision of any
confidentiality agreement that related to the Business (other than any such
agreement involving Parallax Capital Partners, LLC or Golden Gate Private
Equity, Inc.). During such period, Seller agrees to use commercially reasonable
efforts in order to enforce, to the fullest extent permitted under applicable
law, the provisions of any such agreements, including, but not limited to,
seeking injunctions to prevent any breaches of such agreements to enforce
specifically the terms and provisions thereof.
ARTICLE V
MUTUAL COVENANTS OF PURCHASER AND SELLER
5.1 Post Closing Cooperation. After the Closing Date, each party will
give, or cause to be given, to the other party and its representatives, upon
reasonable notice during normal business hours, such reasonable access to its
personnel, contracts, books, records, files, electronic files and documents
pertaining to the conduct of the Business prior to the Closing Date, and copies
of such contracts, books, records, files, electronic files and documents as such
party may reasonably request (it being agreed that the requesting party will
reimburse the providing party for all out-of-pocket expenses incurred by the
providing party in connection therewith). The parties shall cooperate fully
(including the provision of reasonable access described in the preceding
sentence) with each other after the Closing Date with respect to any Proceeding
(as defined in Section 2.13), demand, audit, tax or financial filings or
governmental investigation against Seller or any of its Affiliates, or Purchaser
or any of its Affiliates, as the case may be, whether known or unknown, asserted
or unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, due or to become due or otherwise, in respect to the conduct of
22
the Business prior to the Closing Date, including but not limited to the pending
and potential Proceedings identified on the Schedules to this Agreement. Each
party shall preserve and not otherwise destroy or dispose of the contracts,
books, records, files, electronic files and documents pertaining to the Business
or the Division Assets for at least six years after the Closing Date.
5.2 Payments With Respect to Accounts Receivable. Following the Closing
Date, Seller shall continue to remit to Purchaser all monies received by Seller
or any of its Affiliates in payment for any accounts receivable included in the
Division Assets acquired by Purchaser as of the Closing Date pursuant to this
Agreement. Payments remitted to Purchaser pursuant to this Section 5.2 shall be
accompanied by a description of the accounts receivable to which they relate,
including an invoice and/or account number, as applicable and as available from
normal accounting systems of the Seller or its Affiliates. Seller shall
periodically provide Purchaser with such additional evidence or supporting
detail as Purchaser may reasonably request regarding particular payments or
outstanding accounts. With respect to any accounts receivables constituting
Division Assets transferred to Purchaser or its Affiliates which have been
commingled with accounts receivable of any of Seller's or its Affiliates' other
businesses, each party and its Affiliates shall have the right to collect any
such commingled accounts receivable which are owned by such party or its
Affiliates from and after the Closing Date, following advice from and
consultation with the other party so as to preserve the other party's business
relationships with its customers. Each party shall promptly account for any
portion of such commingled accounts receivable which do not relate to their
respective businesses and promptly remit any such amounts to the other party or
its Affiliates. At either party's request, the other party or its Affiliates
shall use commercially reasonably efforts to assist the requesting party or its
Affiliates in the collection of any such commingled accounts receivable.
5.3 Fulfillment of Conditions.
(a) Seller will use all commercially reasonable efforts, and
will cause each of its Affiliates to use all commercially reasonable efforts, to
perform, comply with and fulfill all obligations, covenants and conditions
required by this Agreement to be performed, complied with or fulfilled by any of
them prior to or as of the Closing Date. Purchaser will use all commercially
reasonable efforts, and will cause each of its Affiliates to use all
commercially reasonable efforts, to perform, comply with and fulfill all
obligations, covenants and conditions required by this Agreement to be
performed, complied with or fulfilled by any of them prior to or as of the
Closing Date. Between the date hereof and the Closing Date, the parties will
mutually agree upon and finalize the schedules to be appended to the Transition
Services Agreement as Exhibit I and Exhibit II thereto (detailing the transition
services to be provided, the price or cost thereof and the term such services
are to be provided, including the scope and cost of subcontracted professional
services to be provided by Purchaser and its Affiliates to Seller and its
Affiliates to satisfy Seller's obligations to Agrilink).
(b) Seller will use all commercially reasonable efforts, and
will cause each of its Affiliates to use all commercially reasonable efforts, to
secure all necessary consents, waivers, permits, approvals, licenses and
authorizations and will make, and will cause each of its Affiliates to make, all
necessary filings in order to enable the parties to consummate the transactions
contemplated hereby, including but not limited to any filing required pursuant
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to any applicable foreign antitrust laws. Purchaser will use all commercially
reasonable efforts, and will cause each of its Affiliates to use all
commercially reasonable efforts, to secure all necessary consents, waivers,
permits, approvals, licenses and authorizations and will make all necessary
filings in order to enable Purchaser to consummate the transactions contemplated
hereby, including but not limited to any required filings under any applicable
foreign antitrust laws.
5.4 Further Assurances. Each of the parties hereto agrees to use all
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, any such action in relation to the granting of
security by Purchaser or any of its Affiliates in connection with any financing
necessary or desirable for the consummation of the transactions contemplated
hereby.
5.5 Confidentiality.
(a) Until the Closing, each party shall treat in confidence
and not disclose to any third Person any confidential information which such
party shall have obtained regarding the other party. In the event the sale and
purchase called for by this Agreement shall not be consummated, Purchaser, on
the one hand, and Seller, on the other hand, shall return or destroy (verified
in writing) all copies of documents and materials constituting confidential
information (whether or not such information is marked or designated as
"confidential") which have been furnished by the other in connection with this
Agreement. However, nothing contained herein shall prohibit any party from (i)
using such documents, materials and other information in connection with any
action or proceeding brought or any claim asserted with respect to any breach of
any representation, warranty or covenant made in or pursuant to this Agreement;
(ii) supplying or filing such documents, materials or other information to or
with any Governmental Entity or other Person which either party deems reasonably
necessary in connection with the obtaining of any consent, waiver, amendment,
modification, approval, authorization, permit or license which may be necessary
to effectuate this Agreement and to consummate the transactions contemplated
hereby; (iii) supplying such documents, materials or other information to such
party's lenders, counsel, accountants and other consultants and representatives
in connection with the transactions contemplated hereby; or (iv) issuing any
press releases or other announcements or disclosures permitted under Section
5.8, including the Signing Date Press Release.
(b) From and after the Closing Date, Seller and Purchaser
shall each treat, and shall cause each of their respective Affiliates to treat,
in confidence and shall not disclose, and cause their respective Affiliates to
not disclose, all confidential information with respect to the Business, Seller
and/or Purchaser, or their respective Affiliates, which are in their possession
or control, subject to the requirements of applicable securities laws.
5.6 Personnel Matters.
(a) Transferred Employees. As of the Closing Date, the parties
agree that the employees of the Business shall only include (i) those United
States employees of the Business set forth on Schedule 1.1(a)(vii) that accept
an offer of employment from Purchaser or one of its Affiliates (the "US
Transferred Employees") and (ii) with respect to any portion of the Business
conducted outside of the United States, only those foreign employees set forth
24
on Schedule 1.1(a)(vii) who accept the offer of employment (without any
rejection thereof as permitted under applicable law) made by Purchaser or one of
its Affiliates or, in the case of local law which provides for a transfer of
employment, those foreign employees set forth on Schedule 1.1(a)(vii) whose
employment is so transferred to Purchaser or one of its Affiliates (the
employees described in clause (ii), the "Foreign Transferred Employees", and
together with the US Transferred Employees, the "Transferred Employees"). In
furtherance of the foregoing, the employment of each US Transferred Employee and
the employment of each Foreign Transferred Employee will be terminated by Seller
or its applicable Affiliate immediately prior to the Closing. Purchaser or one
of its Affiliates shall make an offer of employment to each employee of the
Business set forth on Schedule 1.1(a)(vii). The employment of each Transferred
Employee shall be, in the aggregate, on substantially similar terms to those in
effect prior to the Closing Date (other than with respect to equity-based
compensation), including compensation, title, position and location. As of the
Closing Date, the parties will prepare, and update as a supplemental schedule to
Schedule 1.1(a)(vii), a list of Transferred Employees to reflect hiring and
termination activity between the date hereof and the Closing Date.
(b) Employee Costs. Except for any liabilities or obligations
with respect to the Transferred Employees included in the determination of
Actual Net Asset Value included in the Closing Date Balance Sheet and except as
provided in the last sentence of Section 5.6(c), (i) neither Purchaser nor any
of its Affiliates shall assume or in any way be liable for any liability or
obligation with respect to Seller's or its Affiliates' employees, former
employees or retirees, regardless of when such liability or obligation arises or
is incurred (whether on, prior to or after the Closing Date), (ii) Seller and
its Affiliates shall be solely responsible for the payment of all wages,
salaries and other compensation and employee benefits (including, without
limitation, any severance pay, insurance, supplemental pension, deferred
compensation, "stay" or other similar incentive bonuses, change-in-control
bonuses (or other bonuses related to the execution, delivery or performance of
this Agreement), retirement and any other benefits, premiums and claims and
related costs) to any of Seller's or its Affiliates' employees, former employees
or retirees and (iii) except as required by operation of law, neither Purchaser
nor any of its Affiliates shall assume any liability or obligation with respect
to any employee benefit plan of any kind or nature maintained by Seller or any
of its Affiliates for any of their employees, former employees or retirees.
(c) Certain Foreign Employee Matters. Neither Purchaser nor
any of its Affiliates shall have any obligation to provide employment to any
non-United States employee of the Business who properly objects to becoming a
Foreign Transferred Employee or refuses to assent to the consummation of the
transactions contemplated hereby (a "Foreign Objecting Employee"). Except as
provided in the last sentence of this Section 5.6(c), Purchaser and its
Affiliates shall have no liability or obligation to any Foreign Objecting
Employee and Seller shall be fully responsible for any liability or obligation
with respect to any Foreign Objecting Employee. Seller shall indemnify and save
harmless Purchaser and its Affiliates from any and all Losses arising out of,
relating to or based in any way upon the employment relationship of any Foreign
Objecting Employee with Seller or its Affiliates prior to the Closing Date or
with Purchaser or its Affiliates on and after the Closing Date, including
reimbursement of all compensation and benefit costs related to such persons, if
(i) Seller or its Affiliates terminated or attempted to terminate such person on
or prior to the Closing Date but such termination or attempted termination is
25
invalid for any reason, (ii) such person is classified as a Foreign Transferred
Employee by operation of law or otherwise but such person is not listed on
Schedule 1.1(a)(vii) or (iii) Seller or its Affiliates have failed to comply
with applicable law on or prior to the Closing Date, whether by failure to
properly consult with employees in connection with the transactions contemplated
hereby or otherwise. Notwithstanding any provision in this Agreement to the
contrary, Purchaser will reimburse Seller, on demand, for the lesser of (i)
$75,000 and (ii) up to 50% of all out-of-pocket costs incurred by Seller or any
of its Affiliates, in each case in connection with any severance costs paid to
any Foreign Objecting Employee or Foreign Transferred Employee as a result of
(A) such person's objection to becoming a Foreign Transferred Employee or (B) as
required pursuant to applicable law.
(d) Except to the extent otherwise set forth in the Transition
Services Agreement, Transferred Employees shall not accrue benefits under any
employee benefit policy, plan, arrangement, program or agreement of Seller or
its Affiliates after the Closing Date. Notwithstanding the foregoing, except
with respect to any liability or obligation included in the determination of
Actual Net Asset Value included in the Closing Date Balance Sheet, Seller shall
be responsible for all benefits accrued, claims incurred or obligations arising
with respect to the Transferred Employees' service with Seller or its Affiliates
on or prior to the Closing Date, and Seller shall satisfy such responsibility by
paying to Purchaser the amount of any such pre-Closing Date obligations which
are assumed by Purchaser or its Affiliates, by operation of law or by express
assumption.
(e) Seller is wholly responsible for complying with all
applicable health care continuation coverage requirements under the law commonly
known as COBRA with respect to the employees of the Business as to qualifying
events that occur on or prior to the Closing Date, and Purchaser is wholly
responsible for complying with such coverage requirements with respect to
employees employed by Purchaser and its Affiliates from and after the Closing
Date who have qualifying events that occur after the Closing.
(f) Effective as of the Closing Date, Seller shall cause the
Trustees of the Systems & Computer Technology Corporation 401(k) Plan ("SCT
Plan") to vest all then nonvested account balances in the SCT Plan for each US
Transferred Employee.
(g) In the event that medical or dental insurance coverage
under Purchaser's welfare plans is not available for the Transferred Employees
as of the Closing Date, Seller agrees to provide medical continuation coverage
to such employees and their covered dependents for up to three months following
the Closing Date in accordance with Section 4980B of the Code or the other
analogous provisions of foreign law; provided that the appropriate premiums are
paid on a timely basis.
(h) Effective as of the Closing, Seller will offer the US
Transferred Employees domiciled in California the option to (i) transfer all or
a part of their vacation accrual to Purchaser's U.S. Affiliate or (ii) be paid
all or a part of their vacation accrual as of the Closing Date.
5.7 Third Party Consents. Prior to the Closing Date, Seller shall, and
shall cause each of its Affiliates to, use their respective commercially
reasonable efforts to obtain all necessary third party consents required in
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connection with the transfer to Purchaser of the Division Assets, each Contract
and the Assumed Liabilities, and shall advise Purchaser from time to time, or as
requested by Purchaser, regarding the status of such consents. If any contract
to be assigned to Purchaser hereunder requires the consent of a third party
which has not been obtained as of the Closing Date, this Agreement shall not be
deemed to effect an assignment of such contract. In such a case, with respect to
each such Contract (including, for avoidance of doubt, each real property lease
to be transferred hereby), Seller agrees that it shall, and shall continue to
cause its Affiliates to, use their respective commercially reasonable efforts to
obtain the required consent to the assignment of each such Contract and real
property lease, it being agreed that nothing contained in this Section 5.7 shall
operate as a waiver to the closing condition specified in Section 6.1(e). Unless
and until such consent is obtained, Purchaser will perform and fulfill, on a
subcontractor basis, the obligations of Seller or its Affiliates to be performed
under such Contracts and real property leases after the Closing Date in
accordance with the terms thereof as in effect as of the date hereof, and Seller
will, and will cause its Affiliates to, remit to Purchaser all payments received
in connection with such Contracts or real property leases.
5.8 Public Announcements. From and after the date hereof through and
including the Closing Date, except as required by law or regulation, including
Nasdaq rules and except for the Signing Date Press Release as defined below, no
press releases or other public announcements relating to the transactions
contemplated hereby will be issued or otherwise released by any party without
the prior written consent of the other party. If Seller or Purchaser or any of
their respective Affiliates is required by law or regulation (including Nasdaq
rules) to make any public announcements relating to the transactions
contemplated hereby from and after the date hereof through and including the
Closing Date, except as permitted in the next sentence, such party will submit
its proposed announcement in advance to the other party and will give it a
reasonable opportunity in the circumstances to comment thereon in advance of
release. Promptly after the execution of this Agreement, Seller shall be
permitted to issue a press release announcing the transactions contemplated
hereby which press release shall be substantially in the form of Exhibit H (the
"Signing Date Press Release") and thereafter Seller shall be permitted to
discuss and disclose this Agreement and the transactions contemplated hereby on
or in conference calls, web-casts or other broadcasts, or SEC filings.
5.9 Certain Notifications. At all times from the date hereof and prior
to the Closing Date, each party shall promptly notify the other party in writing
of the occurrence of any event known to such party which will or is likely to
result in the failure to satisfy any of the conditions specified in Article VI
hereof.
5.10 Use of Division Names. From and after the Closing, as soon as is
reasonably practicable, but no later than 180 days after the Closing, Seller
shall amend the Articles of Incorporation or Certificate of Incorporation of any
of its Affiliates using any of the names of the Division listed on Schedule 5.10
and shall remove, or shall cause to be removed, from the exterior of the
Seller's or any of its Affiliates' premises any such names listed on said
schedule or any related logo. After Closing, Seller and its Affiliates shall
have quantities of inventory, software, preprinted stationery, packaging
material and other supplies which bear such names and logos. With respect to (i)
such preprinted stationery, packaging material and other supplies, for a period
of up to nine (9) months from the Closing Date and (ii) inventory and software,
27
for such period of time until such inventory or software is sold or otherwise
consumed in the ordinary course of business consistent with past practice,
Purchaser hereby grants to Seller and each of its Affiliates a worldwide,
non-exclusive, non-transferable, royalty-free license to use the names and logos
specified on Schedule 5.10 and any trademarks, service marks, logos, corporate
names, trade names or trade dress associated therewith ("Business Marks") solely
in connection with the marketing of Seller's products as the same exist as of
the date hereof (other than the Software) and in the operation of Seller's
business; provided that (a) such use is in accordance with Seller's trademark
usage guidelines in effect as of the Closing Date and (b) such license shall
cease immediately upon the expiration of the periods identified above. Any
goodwill arising from such use shall inure to the benefit of Purchaser. Seller
agrees that the nature and quality of all goods and services rendered by Seller
in connection with the Business Marks shall be advertised, offered and provided
in a manner consistent with the quality control standards previously used by
Seller in connection with the Business. Upon any termination of the licenses set
forth above, Seller will no longer make any use of the Business Marks, except as
may be required to be disclosed in any filings made with the US Securities and
Exchange Commission. Purchaser will have the exclusive right to own, use, hold,
apply for registration for, and register the Business Marks during the term of,
and after the expiration or termination of, this license. Seller will neither
take nor authorize any activity inconsistent with such exclusive right. Seller
and its Affiliates shall not be entitled to use the Business Marks except as
provided in this Section 5.10 or as otherwise permitted in accordance with the
Transition Services Agreement.
5.11 SCT Name. From and after the Closing, as soon as is reasonably
practicable, but no later than 180 days after the Closing, Purchaser shall
remove, or shall cause to be removed, from the exterior of the Business'
premises the "SCT" name and "SCT" logo. Within 180 days following the Closing,
Purchaser shall change the name of the iProcess.sct solution to a name that does
not include "SCT", subject to the license granted to Purchaser and its
Affiliates in the following sentence with respect to the quantities of inventory
and software in existence as of the Closing. After Closing, Purchaser and its
Affiliates shall have quantities of inventory, software, preprinted stationery,
packaging material and other supplies which bear the "SCT" name and logo, which,
for purposes of this Section 5.11 shall include the names and logo "Systems &
Computer Technology Corporation" or any name incorporating the foregoing. With
respect to (i) such preprinted stationery, packaging material and other
supplies, for a period of up to nine (9) months from the Closing Date and (ii)
inventory and software, for such period of time until such inventory or software
is sold or otherwise consumed in the ordinary course of business consistent with
past practice, Seller hereby grants to Purchaser and each of its Affiliates a
worldwide, non-exclusive, non-transferable, royalty-free license to use the
"SCT" name and logo and any trademarks, service marks, logos, corporate names,
trade names or trade dress associated therewith ("SCT Marks") solely in
connection with the marketing of the Software and in the operation of the
Business; provided that (a) such use is in accordance with Seller's trademark
usage guidelines in effect as of the Closing Date and (b) such license shall
cease immediately upon the expiration of the periods identified above. Any
goodwill arising from such use shall inure to the benefit of Seller. Purchaser
agrees that the nature and quality of all goods and services rendered by
Purchaser in connection with the SCT Marks shall be advertised, offered and
provided in a manner consistent with the quality control standards previously
used by Seller in connection with the Business. Upon any termination of the
licenses set forth above, Purchaser will no longer make any use of the SCT
Marks, except as may be required to be disclosed in any filings made with the US
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Securities and Exchange Commission. Seller will have the exclusive right to own,
use, hold, apply for registration for, and register the SCT Marks during the
term of, and after the expiration or termination of, this license. Purchaser
will neither take nor authorize any activity inconsistent with such exclusive
right. Purchaser and its Affiliates shall not be entitled to use the "SCT" name
and/or logo except as provided in this Section 5.11 or as otherwise permitted in
accordance with the Transition Services Agreement.
5.12 Cooperation Regarding Minimization of Costs. Purchaser and Seller
hereby agree to work cooperatively from and after the date hereof (including
during the period following the Closing Date) to minimize any costs and expenses
to be shared by Purchaser and Seller pursuant to the terms of this Agreement.
Furthermore, Purchaser and Seller hereby agree to work cooperatively from and
after the date hereof (including during the period following the Closing Date)
to minimize the costs and expenses that may result from the separation of the
Business from Seller's other business operations in order to reduce or eliminate
any adverse economic exposure to Purchaser; provided that Seller shall not be
required to take any action that would, in any material respect, adversely
affect Seller or its other business operations. Except as otherwise set forth
herein, Purchaser and Seller shall bear equally the costs and expenses of
obtaining consents and approvals of governmental authorities or third parties
for the consummation of the transactions contemplated hereby (including, without
limitation, any consents required to be obtained in connection with the transfer
of any Contracts).
5.13 Sales, Transfer and Other Taxes. Purchaser shall pay the first
$25,000 of any sales and use Taxes, transfer, stamp and similar Taxes, if any,
applicable to the consummation of the transactions contemplated hereby and the
consummation of the transactions in any other agreement contemplated hereby. The
next $50,000 of any such Taxes (excluding value-added or similar Taxes, to the
extent fully refundable to Purchaser, which costs will be borne solely by
Purchaser) will be borne equally by Purchaser and Seller. Purchaser shall pay
any such Taxes in excess of $75,000. Purchaser shall prepare and file, or cause
to be filed, any Tax Returns required to be filed in respect of such Taxes, and
Seller shall provide such reasonable cooperation and assistance as Purchaser may
request in that regard (including, as required by law, the execution of or
joining in of any such Tax Return). Notwithstanding the foregoing, between the
date hereof and the Closing Date, if Purchaser learns that the cost of the
transfer taxes anticipated to be paid pursuant to this Section 5.13 would be
materially increased because of the parties' arrangement set forth in Section
1.7, then Purchaser shall notify Seller of such fact and the parties shall
negotiate and enter into a mutually satisfactory amendment to (i) treat all such
maintenance contracts and liabilities related thereto to be transferred as of
the Closing and (ii) agree that all transfer taxes be borne as follows: (A) the
first $25,000 solely by Purchaser and (B) all amounts in excess thereof equally.
5.14 Release of Certain Guaranties(a) . Following the Closing Date,
Purchaser shall use its commercially reasonable efforts to cause itself or one
of its Subsidiaries to be substituted as of the Closing or as soon as reasonably
practicable thereafter for Seller or any of its Subsidiaries under each
performance bond or bid bond issued by or on behalf of Seller or any of its
Subsidiaries in connection with the Business' customer contracts or proposals,
and which shall be set forth on a mutually prepared and agreed upon Schedule
5.14 to be attached hereto prior to the Closing Date (collectively, the
"Guaranties"). In the event Purchaser is unable to effect a substitution with
respect to any such Guarantee after using its commercially reasonable efforts to
do so, Purchaser shall indemnify Seller and each of its Subsidiaries from any
and all Losses incurred by any of them under any such Guaranty.
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ARTICLE VI
CONDITIONS OF CLOSING
6.1 Conditions of Obligations of Purchaser. The obligation of Purchaser
to consummate the transactions contemplated hereby is subject to the
satisfaction of the following conditions, any of which may be waived by
Purchaser:
(a) Representations and Warranties; Performance of
Obligations. The representations and warranties of Seller set forth in Article
II hereof, and in all agreements, documents and instruments executed and
delivered pursuant hereto or in connection with the Closing shall be true and
correct in all material respects as of the Closing Date (except for those
representations and warranties that address matters only as of an earlier date,
which shall be true and correct in all material respects as of such date).
Seller and each of its Affiliates shall have performed in all material respects
the agreements and obligations required to be performed by them under this
Agreement prior to the Closing Date.
(b) Bring-Down Certificate. Purchaser shall have received a
certificate, dated the Closing Date, signed by an officer of Seller, certifying
that the conditions specified in Section 6.1(a) have been fulfilled.
(c) Certificate of Secretary. Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or any Assistant
Secretary of Seller, attesting to the completion of all necessary action by
Seller and each of its Affiliates with respect to the transactions contemplated
by this Agreement, and including copies of the constating documents of Seller
and each of its Affiliates party to any Subsidiary Agreement and all corporate
resolutions required in connection with this Agreement.
(d) No Injunction. No preliminary or permanent injunction or
order that would prohibit or restrain the consummation of the transactions
contemplated hereunder shall be in effect and no Governmental Entity or other
third Person shall have commenced or threatened to commence an action or
proceeding seeking to enjoin the consummation of such transactions or to impose
liability on the parties hereto in connection therewith; provided that Purchaser
shall use commercially reasonable efforts to have any such order vacated.
(e) Consents and Approvals. All necessary governmental
consents or approvals to the consummation of the transactions contemplated
hereby by Seller or any of its Affiliates shall have been obtained by Seller and
delivered to Purchaser, including any consents or approvals required under any
applicable foreign antitrust or tax laws or regulations. All consents or
approvals of each third party which are required in order to effect the transfer
of each Scheduled Contract (as defined below) will have been obtained on terms
and conditions no less favorable than in effect as of the date hereof.
"Scheduled Contract" means each of (i) each real property lease set forth on
Schedule 1.1(a)(iii), (ii) each Contract involving a third party software
component included in or embedded in any product of the Business (including,
30
without limitation, the Contracts set forth on Schedule 6.1(e)), (iii) each
Contract involving a third party software component sold as a supplement to
products developed by the Business, but only if the aggregate license fee
revenue for the three-year period ended September 30, 2001 for the sale of the
developed product and the third party software component represents 10% or more
of the aggregate license fee revenue for such period for the sale of such
developed product whether or not sold with such third party software component
and (iv) each customer Contract of the Business representing $100,000 or more of
maintenance fee revenue for the trailing twelve-month period ended September 30,
2001.
(f) Transition Services Agreement, Proprietary Rights
Agreement and Royalty Agreement. Seller, on behalf of itself and its
post-Closing Affiliates, shall have executed and delivered (i) a Transition
Services Agreement in form and substance as set forth on Exhibit B attached
hereto together with Exhibit I and Exhibit II thereto as contemplated in Section
5.3 above (the "Transition Services Agreement") and the Transition Services
Agreement shall be in full force and effect as of the Closing, (ii) a
Proprietary Rights Agreement in form and substance to be mutually agreed upon by
Purchaser and Seller (which will include a fully paid-up, royalty free license
to Seller's and its Affiliates' Customer Management and Support System software
developed by Seller and any improvements or enhancements thereto, it being
agreed that Purchaser will obtain and pay for any third party licenses required
in connection therewith) (the "Proprietary Rights Agreement") and the
Proprietary Rights Agreement shall be in full force and effect as of the Closing
and (iii) a Royalty Agreement in form and substance as set forth on Exhibit D
attached hereto (the "Royalty Agreement") and the Royalty Agreement shall be in
full force and effect as of the Closing.
(g) Noncompetition and Nonsolicitation Agreement. Seller, on
behalf of itself and each of its post-Closing Affiliates, shall have executed
and delivered the Noncompetition and Nonsolicitation Agreement in the form and
substance attached hereto as Exhibit E, and such agreement shall be in full
force and effect as of the Closing.
(h) Distribution Agreement. Either (i) Seller and Purchaser
shall have executed and delivered a mutually satisfactory distribution agreement
for the Arcian/Relationship Network Management Software (the "Arcian Product
Line") and such distribution agreement shall be in full force and effect as of
the Closing or (ii) if (A) the parties are unable to mutually agree on the
aforementioned distribution agreement, (B) Seller elects to shut down and
discontinue further development of the Arcian Product Line and (C) Seller
provides Purchaser with written notice granting Purchaser the right to negotiate
with Seller to purchase the Arcian Product Line during the 60-day period
immediately following the receipt of such notice, then the aforementioned
distribution agreement will not be a pre-condition to Purchaser's obligations to
effect the Closing; provided that, Seller shall continue to operate the Arcian
Product Line during such 60-day period and promptly thereafter shall either shut
down the Arcian Product Line or transfer it to Purchaser upon such terms as the
parties may mutually agree or transfer it to another unaffiliated third party.
(i) Subleases. Seller shall have executed and delivered
sublease agreements (and, if required, the consent thereto by the landlord of
the prime lease) for the Business' current facilities located in (i) Malvern,
Pennsylvania, (ii) Alpharetta, Georgia and (iii) Xxxxxx-in-Xxxxx, United
Kingdom, each in form and substance to be mutually agreed upon by Purchaser and
Seller (collectively, the "Sublease Agreements"), and each such Sublease
Agreement shall be in full force and effect as of the Closing.
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(j) Works Council. This Agreement shall not be deemed to sell
or transfer any Division Assets or Assumed Liabilities of the Business or
Systems & Computer Technology International B.V. or Fygir Logistics Information
Systems B.V. unless and until Works Council approval has been obtained.
(k) Deliveries of Seller. Seller shall have delivered or cause
to be delivered to Purchaser the following:
(i) possession of all of the Division Assets
(excluding, for avoidance of doubt, any Excluded Assets);
(ii) one or more Assignments and Assumptions and
Bills of Sale, executed by Seller and/or its Affiliates transferring the
Division Assets and Assumed Liabilities, in the form and substance mutually
agreed to by the parties;
(iii) one or more Trademark Assignments, executed by
Seller and/or its Affiliates conveying any trademarks and service marks included
within the Division Assets, in the form attached hereto as Exhibit G-1 and one
or more Copyright Assignments, executed by Seller and/or its Affiliates
conveying any copyrights included within the Division Assets, in the form
attached hereto as Exhibit G-2;
(iv) one or more domain name transfer documents
conveying any domain names included among the Division Assets to Purchaser; and
(v) other documents reasonably required to be
delivered by Seller or its Affiliates in order to effect the transactions
contemplated hereby, in form and substance reasonably satisfactory to Purchaser
and its counsel.
6.2 Conditions of Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated hereby is subject to the satisfaction
of the following conditions, any of which may be waived by Seller:
(a) Representations and Warranties; Performance of
Obligations. The representations and warranties of Purchaser set forth in
Article III hereof, and in all agreements, documents and instruments executed
and delivered pursuant hereto or in connection with the Closing shall be true
and correct in all material respects as of the Closing Date (except for those
representations and warranties that address matters only as of an earlier date,
which shall be true and correct in all material respects as of such date).
Purchaser and each of its Affiliates shall have performed in all material
respects the agreements and obligations required to be performed by them under
this Agreement prior to the Closing Date.
(b) Bring-Down Certificate. Seller shall have received a
certificate, dated the Closing Date, signed by an officer of Purchaser,
certifying that the conditions specified in Section 6.2(a) have been fulfilled.
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(c) Certificate of Secretary. Seller shall have received a
certificate, dated the Closing Date, signed by the Secretary or any Assistant
Secretary of Purchaser, attesting to the completion of all necessary action by
Purchaser and each of its Affiliates with respect to the transactions
contemplated by this Agreement, and including copies of the constating documents
of Purchaser and each of its Affiliates party to any Subsidiary Agreement and
all corporate resolutions required in connection with this Agreement.
(d) No Injunction. No preliminary or permanent injunction or
order that would prohibit or restrain the consummation of the transactions
contemplated hereunder shall be in effect and no Governmental Entity or other
third Person shall have commenced or threatened to commence an action or
proceeding seeking to enjoin the consummation of such transactions or to impose
liability on the parties hereto in connection therewith; provided that Seller
shall use commercially reasonable efforts to have any such order vacated
(e) Consents and Approvals. All necessary governmental
consents or approvals to the consummation of the transactions contemplated
hereby by Purchaser or any of its Affiliates shall have been obtained by
Purchaser and delivered to Seller, including any consents or approvals required
under any applicable foreign antitrust or tax laws or regulations.
(f) Transition Services Agreement, Proprietary Rights
Agreement and Royalty Agreement. Purchaser or one or more of its Affiliates
shall have executed and delivered (i) the Transition Services Agreement in form
and substance as set forth on Exhibit B attached hereto together with Exhibit I
and Exhibit II thereto as contemplated in Section 5.3 above and the Transition
Services Agreement shall be in full force and effect as of the Closing, (ii) the
Proprietary Rights Agreement in form and substance to be mutually agreed upon by
Purchaser and Seller and the Proprietary Rights Agreement shall be in full force
an effect as of the Closing and (iii) the Royalty Agreement in form and
substance as set forth on Exhibit D attached hereto and the Royalty Agreement
shall be in full force and effect as of the Closing.
(g) Distribution Agreement. Either (i) Seller and Purchaser
shall have executed and delivered a mutually satisfactory distribution agreement
for the Arcian Product Line and such distribution agreement shall be in full
force and effect as of the Closing or (ii) if (A) the parties are unable to
mutually agree on the aforementioned distribution agreement, (B) Seller elects
to shut down and discontinue further development of the Arcian Product Line and
(C) Seller provides Purchaser with written notice granting Purchaser the right
to negotiate with Seller to purchase the Arcian Product Line during the 60-day
period immediately following the receipt of such notice, then the aforementioned
distribution agreement will not be a pre-condition to Seller's obligations to
effect the Closing; provided that, Seller shall continue to operate the Arcian
Product Line during such 60-day period and promptly thereafter shall either shut
down the Arcian Product Line or transfer it to Purchaser upon such terms as the
parties may mutually agree or transfer it to another unaffiliated third party.
(h) Subleases. One or more of Purchaser's Affiliates
designated by Purchaser shall have executed and delivered the Sublease
Agreements to be mutually agreed upon by Purchaser and Seller and each such
agreement shall be in full force and effect as of the Closing.
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(i) Works Council. This Agreement shall not be deemed to sell
or transfer any Division Assets or Assumed Liabilities of the Business or
Systems & Computer Technology International B.V. or Fygir Logistics Information
Systems B.V. unless and until Works Council approval has been obtained.
(j) Deliveries of Purchaser. Purchaser shall have delivered or
cause to be delivered to Seller the following:
(i) the Cash Portion of the Purchase Price, as
adjusted pursuant to Section 1.4 as of the Closing;
(ii) one or more Assignments and Assumptions and
Bills of Sale, executed by Purchaser and/or its Affiliates accepting the
transfer of the Division Assets and Assumed Liabilities, in the form and
substance mutually agreed to by the parties;
(iii) one or more Trademark Assignments, executed by
Purchaser and/or its Affiliates accepting the transfer of any trademarks and
service marks included within the Division Assets, in the form attached hereto
as Exhibit G-1 and one or more Copyright Assignments, executed by Purchaser
and/or its Affiliates accepting the transfer of the copyrights included within
the Division Assets, in the form attached hereto as Exhibit G-2;
(iv) one or more domain name transfer documents
conveying any domain names included in the Division Assets to Purchaser; and
(v) other documents reasonably required to be
delivered by Purchaser or its Affiliates in order to effect the transactions
contemplated hereby, in form and substance reasonably satisfactory to Seller and
its counsel.
ARTICLE VII
CLOSING
7.1 Closing Date. The closing for the consummation of the transactions
contemplated by this Agreement (the "Closing") shall, unless another date or
place is agreed to in writing by Seller and Purchaser, take place no later than
three (3) Business Days following the satisfaction or waiver of each of the
conditions specified in Article VI hereof (the "Closing Date") at a place to be
determined by the parties.
7.2 Termination of Agreement. This Agreement may be terminated and
abandoned at any time prior to the Closing Date:
(a) By mutual consent of the parties hereto; or
(b) By Purchaser or Seller, if any governmental authority
shall have issued an order (which has not been vacated, withdrawn or overturned)
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby and such order shall have become final and nonappealable;
provided that the right to terminate this Agreement pursuant to this Section
7.2(b) shall not be available to any party that has failed to perform in all
material respects its obligations under Section 5.3 or the proviso contained in
Sections 6.1(e) or 6.2(d); or
34
(c) By Purchaser or Seller, if the transactions contemplated
hereby shall not have been consummated on or before June 30, 2002 (the
"Expiration Date") or if events have occurred which have made it impossible to
satisfy on or before the Expiration Date a condition precedent to the
terminating party's obligations to consummate the transactions contemplated
hereby; provided that the right to terminate this Agreement under this Section
7.2(c) shall not be available to any party whose failure to perform any covenant
or obligation under this Agreement has been the proximate cause of or resulted
in the failure of the transactions contemplated hereby to occur on or before the
Expiration Date; or
(d) By Purchaser or Seller, if there shall be any law,
statute, rule or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited; or
(e) By Purchaser if there has been a material breach by Seller
of any of its representations, warranties or covenants contained in this
Agreement, which breach is not cured within ten (10) days after notice thereof
is received by Seller (provided that Seller shall not be entitled to any cure
period for any breach of Section 4.3); or
(f) By Seller if there has been a material breach by Purchaser
of any of its representations, warranties or covenants contained in this
Agreement, which breach is not cured within ten (10) days after notice thereof
is received by Purchaser.
7.3 Effect of Termination. In the event of termination of this
Agreement as provided in Section 7.2, notice thereof shall be promptly given by
the terminating party to the other party and thereafter this Agreement shall
forthwith become void, and there shall be no liability or obligation on the part
of Purchaser or Seller or any of their respective Affiliates except that (a)
Section 5.5, regarding confidentiality, and this Section 7.3 shall remain in
full force and effect and (b) nothing herein will relieve any party from
liability for any breach of any representation, agreement or covenant herein.
ARTICLE VIII
POST-CLOSING
8.1 Survival of Representations and Warranties. Regardless of any
investigation at any time made by or on behalf of any party hereto, or of any
information any party may have in respect thereof, all representations and
warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall, except as otherwise set forth in this
Section 8.1, survive the Closing for a period of or until (i) the second
anniversary of the Closing Date, (ii) the third anniversary of the Closing Date,
in the case of any breach of any representation or warranty contained in Section
2.6 (Undisclosed Liabilities), Section 2.13 (Proceedings), Section 2.15
(Intellectual Property) or Section 2.16 (Software), (iii) the fifth anniversary
of the Closing Date, in the case of any breach of any representation or warranty
contained in Section 2.19 (Environmental Laws) and (iv) 30 days after the
35
expiration of the relevant statute of limitations, in the case of any breach of
any representation or warranty contained in Section 2.8(b) (regarding title to
tangible assets), the first sentence of Section 2.15(b) (regarding title to the
Division Intellectual Property), Section 2.17 (Employee Benefits) or Section
2.20 (Taxes) (each of the foregoing clauses (i), (ii), (iii) and (iv)
collectively referred to as the "Indemnification Deadline"); provided that so
long as such written notice of a Loss (as hereinafter defined) is given on or
prior to the Indemnification Deadline, such representations and warranties shall
continue to survive until such matter is resolved. Notwithstanding the
foregoing, any breaches of any of the covenants or agreements of any party
hereto will not be subject to any time limitations.
8.2 Indemnification of Purchaser by Seller. From and after the Closing
Date, Seller (for purposes of this Section 8.2 only, "Indemnifying Party") shall
indemnify, defend, and hold harmless Purchaser, each of its Affiliates, and
their respective officers, directors, shareholders, successors and assigns, from
and against any and all costs, expenses, losses, damages, fines, penalties or
liabilities (including, without limitation, interest which may be imposed in
connection therewith, court costs, litigation expenses, reasonable attorneys'
fees and accounting fees), but excluding any punitive or exemplary damages
("Losses") incurred by any such Person with respect to, in connection with,
arising from, or alleged to result from, arise out of, or be in connection with:
(a) A breach by the Indemnifying Party of any representation
or warranty made by the Indemnifying Party and contained in this Agreement or in
any certificate or other document delivered by said party to Purchaser or its
Affiliates hereunder or thereunder;
(b) A breach by the Indemnifying Party of any covenant,
restriction or agreement made by or applicable to the Indemnifying Party and
contained in this Agreement or in any certificate or other document delivered by
said party to Purchaser or its Affiliates hereunder or thereunder;
(c) Any claim of any broker or finder claiming by, through or
under Seller or any of it Affiliates; or
(d) All loss, expense or damage suffered as the direct result
of the Indemnifying Party's failure to pay or perform those liabilities
expressly assumed or undertaken under this Agreement, including any failure to
pay or perform any of the Excluded Liabilities.
The Indemnifying Party shall not be required to indemnify Purchaser and its
Affiliates pursuant to Section 8.2(a) unless and until the aggregate of all
Losses pursuant to Section 8.2(a) exceeds $250,000 (the "Basket") and in such
case (i) Purchaser's and its Affiliates' right to recover for Section 8.2(a)
claims shall apply only to the excess of the Basket; (ii) in no event shall the
aggregate amount of indemnification in excess of the Basket under Section 8.2(a)
by the Indemnifying Party exceed $7,000,000 (the "Cap Amount"); provided that
the Basket shall not apply to any Losses relating to Section 2.4 (Completeness
of Assets), Section 2.8(b) (regarding title to tangible assets) or the first
sentence of Section 2.15(b) (regarding title to the Division Intellectual
Property), the Cap Amount shall not apply to any Losses relating to Section
2.8(b) (regarding title to tangible assets), the first sentence of Section
2.15(b) (regarding title to the Division Intellectual Property) or Section 2.20
(Taxes) and the Cap Amount shall not apply to any Losses relating to Section 2.4
36
(Completeness of Assets), but rather in no event shall the aggregate amount of
indemnification under Section 8.2(a) by the Indemnifying Party for any such
Losses for a breach of Section 2.4 (Completeness of Assets) exceed the Purchase
Price. If any Loss indemnifiable pursuant to Section 8.2(a) above would also be
indemnifiable pursuant to Section 8.2(b), Section 8.2(c) or Section 8.2(d)
above, such Loss will be deemed to be the subject matter of the indemnity set
forth in Section 8.2(b), Section 8.2(c) or Section 8.2(d), and thus, not subject
to the limitations set forth in Section 8.1 or this Section 8.2 (including,
without limitation, the Basket, the Cap Amount or the Indemnification Deadline).
8.3 Indemnification of Seller by Purchaser. From and after the Closing
Date, Purchaser (for purposes of this Section 8.3 only, "Indemnifying Party")
shall indemnify, defend, and hold harmless Seller and its Affiliates and their
respective officers, directors, shareholders, successors and assigns, from and
against any and all costs, expenses, losses, damages, fines, penalties or
liabilities (including, without limitation, interest that may be imposed in
connection therewith, court costs, litigation expenses, reasonable attorneys'
fees and accounting fees), but excluding any punitive or exemplary damages
("Losses") incurred by any such Person with respect to, in connection with,
arising from, or alleged to result from, arise out of, or be in connection with:
(a) A breach by the Indemnifying Party of any representation
or warranty made by the Indemnifying Party and contained in this Agreement or in
any certificate or other document delivered by said party to Seller or its
Affiliates hereunder or thereunder;
(b) A breach by the Indemnifying Party of any covenant,
restriction or agreement made by or applicable to the Indemnifying Party and
contained in this Agreement or in any certificate or other document delivered by
said party to Seller or its Affiliates hereunder or thereunder; or
(c) All loss, expense or damage suffered as the direct result
of (i) the Indemnifying Party's failure to pay or perform those liabilities
expressly assumed or undertaken under this Agreement, including, without
limitation, any Assumed Liability or (ii) the assertion against Seller or any of
its Affiliates of any liability or obligation of the Business as owned or
operated by Purchaser or its Affiliates, except for any liability or obligation
for which Seller is required to indemnify Purchaser for pursuant to this
Agreement.
The Indemnifying Party shall not be required to indemnify Seller and its
Affiliates pursuant to Section 8.3(a) unless and until the aggregate of all
Losses pursuant to Section 8.3(a) exceeds $250,000 (the "Basket") and in such
case (i) Seller's and its Affiliates' right to recover for Section 8.3(a) claims
shall apply only to the excess of the Basket; and (ii) in no event shall the
aggregate amount of indemnification in excess of the Basket under Section 8.3(a)
by the Indemnifying Party exceed $7,000,000 (the "Cap Amount"). If any Loss
indemnifiable pursuant to Section 8.3(a) above would also be indemnifiable
pursuant to Section 8.3(b) or Section 8.3(c) above, such Loss will be deemed to
be the subject matter of the indemnity set forth in Section 8.3(b) or Section
8.3(c), and thus, not subject to the limitations set forth in Section 8.1 or
this Section 8.3 (including, without limitation, the Basket, the Cap Amount or
the Indemnification Deadline).
8.4 Procedure for Indemnification.
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(a) The party which is entitled to be indemnified hereunder
(the "Indemnified Party") shall promptly give written notice hereunder to the
party required to indemnify (the "Indemnifying Party") after obtaining notice of
any claim as to which recovery may be sought against the Indemnifying Party
because of the indemnity in Section 8.2 or Section 8.3 hereof and, if such
indemnity shall arise from the claim of a third party, shall permit the
Indemnifying Party to assume the defense of any such claim and any litigation
resulting from such claim. Notwithstanding the foregoing, the right to
indemnification hereunder shall not be affected by any failure of an Indemnified
Party to give such notice, or delay by an 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 materially prejudiced as a result of the
failure to give, or delay in giving, such notice. Failure by an Indemnifying
Party to notify an Indemnified Party of its election to defend any such claim or
action by a third party within thirty (30) 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.
(b) Subject to Section 8.2 or Section 8.3, as applicable, if
the Indemnifying Party assumes the defense of such claim or litigation resulting
therefrom, the obligations of the Indemnifying Party hereunder as to such claim
shall include taking all steps necessary in the defense or settlement of such
claim or litigation and holding the Indemnified Party harmless from and against
any and all damages caused by or arising out of any settlement approved by the
Indemnifying Party or any judgment in connection with such claim or litigation.
The Indemnifying Party shall not, in the defense of such claim or any litigation
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, or enter into any settlement (except with the written consent
of the Indemnified Party) which does not include as an unconditional term
thereof the giving by claimant or plaintiff to the Indemnified Party of a
release from all liability in respect of such claim or litigation. Anything in
this Section 8.4 to the contrary notwithstanding, the Indemnified Party may,
with counsel of its choice and at its expense, participate in the defense of any
such claim or litigation. In all cases, the Indemnified Party shall cooperate
with the Indemnifying Party in the defense of claims or litigation, including by
making employees, information, and documentation reasonably available.
(c) If the Indemnifying Party shall not assume the defense of
any such claim by a third party or litigation resulting therefrom after receipt
of notice from such Indemnified Party, the Indemnified Party may defend against
such claim or litigation in such manner as it 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 costs of defending the same, the Indemnified Party may
settle such claim or litigation on such terms as it may deem appropriate and,
subject to Section 8.2 or Section 8.3, as applicable, the Indemnifying Party
shall promptly reimburse the Indemnified Party for the amount of such settlement
and for all damages incurred by the Indemnified Party in connection with the
defense against or settlement of such claim or litigation.
(d) Subject to Section 8.2 or Section 8.3, as applicable, the
Indemnifying Party shall promptly reimburse the Indemnified Party for the amount
of any judgment rendered with respect to any claim by a third party in such
litigation and for all 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.
38
8.5 No Other Representations or Warranties. Notwithstanding anything to
the contrary contained in this Agreement, neither party nor any of their
respective Affiliates is making any representation or warranty whatsoever,
express or implied, except those representations and warranties made in this
Agreement, and each of the other agreements and certificates contemplated
hereby.
8.6 Exclusive Remedy. The indemnification provided in this Article VIII
shall be the sole and exclusive remedy after the Closing Date for monetary
damages available to Purchaser, Seller and their respective Affiliates for
breaches of any of the terms, conditions, representations, warranties or
covenants contained in this Agreement (excluding, for avoidance of doubt, any of
the subject matter, events giving rise to or transactions provided for in any of
the other agreements contemplated hereby). Without limiting the generality of
the foregoing, as a material inducement to the other party entering into this
Agreement, each party to this Agreement hereby waives any claim or cause of
action, known or unknown, foreseen or unforeseen, which exists or may arise in
the future, or which it otherwise might assert, including without limitation
under the common law or federal or state securities laws, trade regulation laws,
Environmental Laws or other laws, by reason of this Agreement or its subject
matter, the events giving rise to this Agreement and the transactions provided
for in this Agreement, except for (i) claims or causes of action brought under
and subject to the terms and conditions of this Agreement or (ii) injunctive
relief or other equitable relief.
8.7 Mitigation. Each of the parties shall take, and shall cause their
respective Affiliates to take, all commercially reasonable steps within their
control to mitigate any Losses as soon as reasonably practicable after such
party becomes aware of any event which does, or could reasonably be expected to,
give rise to any such Losses.
8.8 Losses Net of Insurance Proceeds, Etc. The amount of any Loss for
which indemnification is provided under this Article VIII shall be net of (i)
any amounts, as and when recovered in cash, by an Indemnified Party pursuant to
any indemnification agreement with any third party, including any insurer (it
being agreed that nothing in this Agreement shall impair any right of
subrogation to which such third party may be entitled) (any such third party
referred to in this clause (i), a "Collateral Source") and (ii) any Tax benefits
attributable to any such Loss, as and when realized.
8.9 Collateral Sources. An Indemnified Party shall use commercially
reasonable efforts to seek recovery from any Collateral Source in connection
with any Losses for which indemnification is provided under this Article VIII,
it being agreed that nothing in this Agreement shall require such Indemnified
Party to proceed against such Collateral Source prior to making a demand for
indemnification from the Indemnifying Party.
39
ARTICLE IX
MISCELLANEOUS
9.1 Further Actions. From time to time, as and when requested by the
other party, Seller and Purchaser shall, and shall cause each of their
respective Affiliates to, execute and deliver, or cause to be executed and
delivered, such documents and instruments and shall take, or cause to be taken,
such further or other actions as the requesting party may reasonably deem
necessary or desirable to carry out the intent and purposes of this Agreement,
and to consummate and give effect to the other transactions, covenants and
agreements contemplated hereby.
9.2 Expenses. Except as otherwise expressly provided herein, each of
Seller, on the one hand, and Purchaser, on the other hand, shall bear its own
expenses incident to its obligations under this Agreement and each of the other
agreements contemplated hereby and the transactions contemplated hereby and
thereby, including, without limitation, all fees and expenses of its bankers,
investment bankers, legal counsel, brokers, accountants or other representatives
or consultants.
9.3 Entire Agreement. This Agreement, which includes the Appendix, the
Schedules and the Exhibits hereto and the other documents, agreements and
instruments executed and delivered pursuant to this Agreement, contains the
entire agreement between the parties hereto with respect to the transactions
contemplated by this Agreement and supersedes all prior arrangements, agreements
or understandings with respect thereto, whether written or oral.
9.4 Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are for convenience only and shall not control or affect the
meaning or construction of any provision of this Agreement. Whenever required by
the context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa. Unless the context of this
Agreement clearly requires otherwise, (a) "or" has the inclusive meaning
frequently identified with the phrase "and/or," (b) "including" has the
inclusive meaning frequently identified with the phrase "but not limited to" and
(c) references "hereunder" or "herein" relate to this Agreement.
9.5 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (a) delivered
personally, (b) sent by registered or certified mail, postage prepaid, (c) sent
by overnight courier with a nationally recognized courier or (d) via facsimile
confirmed in writing in any of the foregoing manners, as follows:
40
If to Seller: Systems & Computer Technology Corporation
------------- Great Valley Corporate Center
Four Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx, Senior Vice
President and General Counsel
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxxx LLP
-------------- 0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Purchaser: High Process Technology, Inc.
---------------- c/o Golden Gate Private Equity, Inc.
Xxx Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxx, Managing Director
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxx
-------------- 000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Xxxx Xxxxxxx
Facsimile: (000) 000-0000
If sent by mail, notice shall be considered delivered five (5) Business Days
after the date of mailing, and if sent by any other means set forth above,
notice shall be considered delivered upon delivery thereof. Any party may by
notice to the other parties change the address to which notice or other
communications to it are to be delivered or mailed.
9.6 Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (other than the choice of law
principles thereof). Any action, suit or other proceeding relating to injunctive
relief or the enforcement of an award by an arbitrator or the Firm initiated by
either party against the other under or in connection with this Agreement may be
brought in any Federal or state court in the State of New York, as the party
bringing such action, suit or proceeding shall elect, having jurisdiction over
the subject matter thereof. Each of Seller and Purchaser hereby submit
themselves to the jurisdiction of any such court for the purposes of this
Section 9.6 only. Except to the extent specifically awarded by the court, each
party shall bear its own expenses in connection with any claims brought pursuant
to this Section 9.6 and agree that service of process on them in any such
action, suit or proceeding may be effected by the means by which notices are to
be given to it under this Agreement.
9.7 Assignability. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Notwithstanding the foregoing, this Agreement shall not be assignable
by any party without the written consent of the other party and any such
purported assignment by any party without such consent shall be void, except
that:
(a) any or all rights of either Seller or Purchaser to receive the
performance of the obligations of the other party hereunder, any or all rights
to assert claims against the other party in respect of any inaccuracy in or
breach of any representations, warranties or covenants of such party hereunder
and any or all of either party's obligations to the other party hereunder, may
be assigned by either Seller or Purchaser to any of their respective Affiliates
(it being agreed that no such assignment shall relieve either Seller or
Purchaser from any liability to the other party with respect to any such
assignment of such party's obligations); and
41
(b) Purchaser may assign to any financial institution providing
financing to Purchaser or any of its Affiliates any or all of its rights to
assert claims against Seller in respect of any inaccuracy in or breach of
representations, warranties or covenants under this Agreement, but Purchaser
shall require any assignee of such rights under clause (a) or (b) to take such
rights subject to any defenses, counterclaims and rights to which Seller might
be entitled under this Agreement.
9.8 Waivers and Amendments. Any waiver of any term or condition of this
Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in writing and signed by the parties hereto. A waiver of any
breach or failure to enforce any of the terms or conditions of this Agreement
shall not in any way affect, limit or waive a party's rights hereunder at any
time to enforce strict compliance thereafter with every term or condition of
this Agreement.
9.9 Third Party Rights. Notwithstanding any other provision of this
Agreement, and except as expressly provided in Article VIII hereof or as
permitted pursuant to Section 9.7 hereof, this Agreement shall not create
benefits on behalf of any shareholder or employee of any Person (including,
without limitation, any broker or finder), except for Seller or Purchaser
themselves and this Agreement shall be effective only as between the parties
hereto, their successors and permitted assigns.
9.10 Severability. If any term or provision of this Agreement shall, in
any jurisdiction, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable such term or
provision in any other jurisdiction, or affecting any other provision of this
Agreement.
9.11 Arbitration. With the exception of any matter involving a request
for injunctive relief or the retention of the Firm to resolve any dispute with
respect to the determination of Net Asset Value, from and after the Closing, any
dispute regarding the validity, the terms or any aspect of this Agreement, or
any act which allegedly has or would violate any provision of this Agreement,
will be submitted to binding arbitration and shall be administered by the
JAMS/Endispute, Inc. ("JAMS") or the American Arbitration Association ("AAA"),
which shall be the exclusive remedy for such claim or dispute. The selection of
JAMS or AAA will be at the option of the claimant, and the matter shall be
conducted in accordance with the rules for commercial arbitration then in effect
for the tribunal selected. The arbitrator shall be a retired judge or attorney
licensed to practice law in New York having more than five years of substantial
experience in litigation of similar disputes. Unless the parties otherwise
agree, or except where the law of another jurisdiction shall be applicable, the
arbitrator shall apply the substantive New York and federal law applicable to
the claim asserted, as though the matter were heard in the courts of those
jurisdictions located in the State of New York. The arbitrator shall not have
the power to commit errors of law or legal reasoning, or to award punitive
damages, and the award may be vacated for any such error. The arbitration shall
be conducted in New York, New York, at a location to be determined by the
arbitrator. Unless specifically awarded by the arbitrator, each party shall bear
the cost of its own attorneys' fees and expenses.
42
9.12 Specific Performance. The parties recognize that if either party
refuses to perform its obligation to consummate the transactions contemplated
hereby, monetary damages alone will be inadequate to compensate the other party
for its injury. Accordingly, either party shall, so far as it is able under the
applicable law of any relevant jurisdiction, be entitled to obtain specific
performance (without the requirement of posting any bond or other security) of
the terms of this Agreement with respect to the consummation of the transactions
contemplated hereby in addition to any other remedies to which such party may be
entitled to, at law or in equity, including, but not limited to, monetary
damages.
9.13 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement. Facsimile signatures shall be treated as if they were originals.
9.14 Schedules and Exhibits. Disclosure of any fact or item in any
Schedule or Exhibit hereto, to the extent the relevance of any such deemed
cross-referenced disclosure is readily and obviously apparent, shall be deemed
to have been so disclosed in any other Schedule or Exhibit or representation or
warranty made by either party herein. Matters reflected in the Schedules and
Exhibits hereto are not necessarily limited to matters required by this
Agreement to be disclosed herein or therein. Such additional matters are
provided for information purposes only. Any conflict or inconsistency between
the Schedules and this Agreement will be governed by the terms and conditions of
this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
43
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Asset Purchase Agreement as of the date first above written.
"Purchaser"
HIGH PROCESS TECHNOLOGY, INC.
By: /s/ Xxxxx Xxxxxxx
----------------------------
Its: Director
----------------------------
"Seller"
SYSTEMS & COMPUTER TECHNOLOGY
CORPORATION
By: /s/ Xxxx Xxxxxxx
----------------------------
Its: Sr. Vice President
----------------------------
APPENDIX A
----------
Definitions
Capitalized terms in this Agreement shall have the meanings
ascribed to them in this Appendix A unless such terms are defined elsewhere in
this Agreement:
Affiliate: With respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" means the power to direct the management and policies of
another Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Business: Means the Division's business of developing,
supporting and marketing, licensing and selling end-to-end e-business solutions
(including the individual components of the iProcess.sct solution, consisting of
the Internet Business Suite, Supply Chain Executive Suite and Supply Chain
Planning and Optimization Suite) and related services to process manufacturers
and distributors worldwide. For avoidance of doubt, the Business shall not
include the Excluded Assets.
Business Day: Any day that is not a Saturday, Sunday or a day
on which commercial banks in the State of New York are required or permitted by
law to be closed.
Division Intellectual Property: Means all Intellectual
Property owned or used by Seller or any of its Affiliates which are exclusively
used in, used exclusively for the benefit of or exclusively related to the
Business, including, without limitation, all Software, in each case together
with all income, royalties, damages and payments due or payable at the Closing
or thereafter (including, without limitation, damages and payments for past or
future infringements or misappropriations thereof), the right to xxx and recover
for past infringements or misappropriations thereof and any and all
corresponding rights that now or hereafter may be secured throughout the world,
and including without limitation the Intellectual Property set forth on Schedule
2.15(a).
Encumbrance: Any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind, whether voluntary or involuntary (including
any conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest) and, with respect to
capital stock, any option or other right to purchase or any restriction on
voting or other rights.
Governmental Entity: Any nation or any state, commonwealth,
territory, possession or tribe and any political subdivision, courts,
departments, commissions, boards, bureaus, agencies or other instrumentalities
of any of the foregoing.
Indebtedness: With respect to any Person (a) all indebtedness
for borrowed money; (b) that portion of obligations with respect to capital
leases that is properly classified as a liability on a balance sheet in
conformity with U.S. GAAP; (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(d) any obligation owed for all or any part of the deferred purchase price of
property or services if the purchase price is due more than six months from the
date the obligation is incurred or is evidenced by a note or similar written
instrument; and (e) all indebtedness secured by any Encumbrance on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person.
A-1
Intellectual Property: Means all (i) patents, patent
applications and patent disclosures; (ii) trademarks, service marks, trade
dress, trade names, logos, slogans, corporate names, trade names and domain
names, and any registrations or applications for registration of any of the
foregoing, together with all good will associated therewith; (iii) copyrights
and copyrightable works and registrations and applications for registration
thereof; (iv) mask works and registrations and applications for registration
thereof; (v) trade secrets, know how and other confidential or proprietary
information (including, without limitation, inventions, specifications, flow
charts, designs, proposals, financial and marketing plans and customer and
supplier lists and information); (vi) software, data, databases and related
documentation; and (vii) copies and tangible embodiments of the foregoing (in
whatever form or medium).
Knowledge: Means (i) in the case of an individual, to the best
of such Person's knowledge and (ii) in the case of a Person other than a human
being, to the best of such Person's knowledge after due inquiry of the executive
officers of such Person.
Material Adverse Effect: A material adverse effect on the
business, operations, condition (financial or otherwise) or prospects of the
Division, taken as a whole.
Permitted Encumbrances: Means (i) Encumbrances for Taxes or
other governmental charges, assessments or levies (A) which are not delinquent
or (B) the validity of which is being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established on the
Business' financial statements, (ii) landlord's, mechanic's, carrier's,
workmen's, repairmen's or other similar Encumbrances arising or incurred in the
ordinary course of business, (iii) other Encumbrances the existence of which do
not materially impair the operations of the Business in the ordinary course or
the value of the Division Assets taken as a whole and (iv) minor imperfections
of title, conditions, easements and reservations of rights, including easements
and reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, encroachments,
covenants and restrictions. Notwithstanding the foregoing, any Encumbrance for
Indebtedness as of the Closing will not be a Permitted Encumbrance.
Person: An individual, corporation, partnership, joint
venture, trust or unincorporated organization or association or other form of
business enterprise or a Governmental Entity.
Software: Means all computer software programs and related
object code and source codes, marketed, distributed or licensed to third parties
(or currently under development by Seller or any of its Affiliates) in
connection with the Business, together with third party software programs and
related object code or source codes incorporated therein. All documentation and
other related materials in any and all media used in connection with the
Business and related to the Software shall be included in the definition of
"Software."
A-2
Software Licenses: Means the license agreements (and related
support, development or maintenance agreements) between Seller or any of its
Affiliates, on the one hand, and each Person to whom Seller or any of its
Affiliates has granted rights to use any of the Software, on the other hand, a
list of which is set forth on Schedule 2.9(a)(vii) attached hereto.
Tax: Any and all license and registration fees, taxes
(including, without limitation, income, minimum or alternative minimum tax,
gross receipts, ad valorem, value added, environmental tax, turnover, sales,
use, personal property (tangible and intangible), stamp, leasing, lease, user,
leasing use, excise, payroll, franchise, transfer, fuel, excess profits,
occupational, interest equalization and other taxes), levies, imposts, duties or
withholdings of any nature whatsoever imposed by any Governmental Entity,
together with any and all penalties, fines, additions to tax and interest
thereon, whether or not such Tax shall be existing or hereafter adopted.
Tax Return: Shall mean any return, report, information return,
declaration, claim for refund or other document (including any related or
supporting information) filed or required to be filed with any taxing authority
with respect to Taxes.
U.S. GAAP: Generally accepted accounting principles,
consistently applied, in the United States as promulgated by the Financial
Accounting Standards Board, the Accounting Principles Board and other recognized
sources for the promulgation of such generally accepted accounting principles.
Works Council: Means the Works Council representing the
employees of Fygir Logistics Information Systems B.V. and Systems & Computer
Technology International B.V.
Other Definitions: The following terms have the meanings
ascribed to them in the Sections noted:
Term Section
---- -------
2001 Balance Sheet 2.5(a)
AAA 9.11
Agreement 9.11
Actual Net Asset Value 1.4(b)
Agreement Recitals
Arcian Product Line 6.1(h)
Assumed Liabilities 1.2(a)
Authorizations 2.10(a)
Basket 8.2 / 8.3
Benefit Plans 2.18(a)
Business Marks 5.10
Cap Amount 8.2 / 8.3
Cash Portion 1.3(a)
Closing 7.1
A-3
Closing Date 7.1
Closing Date Balance Sheet 1.4(b)
Code 2.20
Collateral Source 8.8
Contracts 1.1(a)(vi)
Computer Systems 2.15(d)
Division Recitals
Division Assets 1.1(a)
Draft Closing Date Balance Sheet 1.4(b)
Environmental Law 2.20(b)
ERISA 2.18(a)
Estimated Net Asset Value 1.4(a)
Excluded Assets 1.1(b)
Excluded Liabilities 1.2(b)
Expiration Date 7.2(c)
Financial Statements 2.5(a)
Firm 1.4(b)
Foreign Objecting Employee 5.6(c)
Foreign Transferred Employees 5.6(a)
Guaranties 5.13
Hazardous Material(s) 2.20(c)
Indemnification Deadline 8.1
Indemnified Party 8.4(a)
Indemnifying Party 8.2 / 8.3 / 8.4(a)
JAMS 9.11
Losses 8.2 / 8.3
Material Contract 2.9(a)
Most Recent Balance Sheet 2.5(a)
Net Asset Value 1.4(a)
Objection Notice 1.4(b)
Proceedings 2.13(a)
Proprietary Rights Agreement 6.1(f)
Purchase Price 1.3(a)
Purchaser Recitals
Real Property 2.8(a)
Release 2.20(d)
Royalty Agreement 6.1(f)
SCT Marks 5.11
SCT Plan 5.6(f)
Scheduled Contracts 6.1(e)
Seller Recitals
Signing Date Press Release 5.8
Sublease Agreements 6.1(i)
Subsidiary Agreements 1.6(a)
Transferred Employees 5.6(a)
Transition Country 5.15
Transition Expiration Date 5.15(c)
Transition Period 5.15
Transition Services Agreement 6.1(f)
US Transferred Employees 5.6(a)
A-4
