EXHIBIT 10.9
ASSET PURCHASE AGREEMENT
BY
AND
AMONG
INTERGRAPH CORPORATION
AND THE OTHER SELLING ENTITIES SPECIFIED HEREIN
AND
UNIGRAPHICS SOLUTIONS INC.
AND THE OTHER ACQUIRING ENTITIES SPECIFIED HEREIN
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
1.1 Certain Definitions..................................................1
1.2 Other...............................................................16
ARTICLE II
THE PRINCIPAL CLOSING; INTERNATIONAL CLOSINGS
2.1 Time and Place of Principal Closing.................................16
2.2 Time and Place of International Closings............................16
2.3 Acquisition of the Acquired Assets..................................17
2.4 Closing Deliveries by Acquiring Entities............................19
2.5 Closing Deliveries by the Selling Entities..........................21
2.6 Other Deliveries....................................................24
2.7 Responsibility for the Retained Liabilities.........................24
2.8 Allocation of the Consideration for the Acquired Assets.............24
2.9 Waiver of Bulk Sales Compliance.....................................25
2.10 Waivers of Deliveries or Conditions Precedent.......................25
2.11 Customer Contracts..................................................25
2.12 Distributor Contracts...............................................26
2.13 Consents............................................................26
2.14 Interim Operation for International Selling Entities................27
ARTICE III
REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES
3.1 Corporate Existence and Authority...................................28
3.2 Authorization and Effect of Agreement, Etc..........................29
3.3 No Violation........................................................29
3.4 Consents............................................................30
3.5 General Warranty....................................................30
3.6 Challenges To This Agreement........................................30
3.7 Financial Statements................................................30
3.8 Accounts Receivable.................................................31
3.9 Customer Discounts..................................................31
3.10 SEC Reports.........................................................31
3.11 Absence of Changes..................................................32
3.12 Books and Records...................................................32
3.13 Taxes...............................................................32
3.14 Disputes and Litigation.............................................33
3.15 Environmental Matters...............................................34
3.16 Bank Accounts.......................................................34
3.17 Year 2000 Compliance................................................34
3.18 Rights Used; Certain Relationships..................................34
3.19 Title to Properties and Absence of Liens............................34
3.20 Real Property.......................................................35
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3.21 Contracts...........................................................35
3.22 Contract Status.....................................................36
3.23 Certain Contracts...................................................37
3.24 Employees...........................................................38
3.25 Employee Benefit Matters............................................39
3.26 Compliance with Export Laws.........................................41
3.27 Inventories.........................................................41
3.28 Master Purchase Agreements..........................................41
3.29 Compliance with Law.................................................41
3.30 Projections.........................................................42
3.31 Intellectual Property...............................................42
3.32 Software............................................................46
3.33 Development and Protection of the Owned IP..........................47
3.34 Accuracy of Consent Schedules.......................................48
3.35 Confidential Information............................................48
3.36 Brokers.............................................................49
3.37 Commercial Software.................................................49
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING ENTITIES
4.1 Corporate Existence and Authority...................................50
4.2 Authorization and Effect of Agreement, Etc..........................50
4.3 No Violation........................................................51
4.4 Challenges To This Agreement........................................51
4.5 Consents............................................................51
4.6 Brokers.............................................................51
ARTICLE V
COVENANTS OF THE SELLING ENTITIES
5.1 Consummation of Transactions........................................51
5.2 Conduct of Business.................................................52
5.3 Preservation of Business............................................52
5.4 Access to Information...............................................54
5.5 Notification of Certain Matters.....................................55
5.6 Furnishing of Information...........................................55
5.7 Non-Solicitation....................................................55
5.8 Use of Owned Software...............................................56
5.9 Expenses of Transaction.............................................56
5.10 Further Assurances..................................................56
5.11 Period of Exclusivity...............................................56
5.12 Noncompetition......................................................57
5.13 Certain Employee Benefit Matters....................................57
5.14 Intergraph Guaranty.................................................61
5.15 Enforcement of Confidentiality Agreement............................61
5.16 Confidential Information............................................62
5.17 Assistance and Cooperation..........................................62
5.18 Product Serial Numbers..............................................63
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ARTICLE VI
COVENANTS OF THE ACQUIRING ENTITIES
6.1 Consummation of Transactions........................................63
6.2 Notification of Certain Matters.....................................63
6.3 Employment..........................................................63
6.4 Assistance with Specified Contracts and Litigation Contracts........64
6.5 Trade Names and Service Marks.......................................64
6.6 EDS and USI Guaranty................................................64
6.7 Assistance and Cooperation..........................................65
ARTICLE VII
CONDITIONS PRECEDENT
TO THE OBLIGATIONS OF THE ACQUIRING ENTITIES
7.1 Representations and Warranties......................................65
7.2 Performance by the Selling Entities.................................65
7.3 Prohibitions, Restrictions and Litigation...........................66
7.4 Consents............................................................66
7.5 Governmental Clearances.............................................66
7.6 Satisfactory Proceedings............................................66
7.7 Certificate of Intergraph and Certain Officers......................66
7.8 Waiver of Conditions................................................66
7.9 New Collateral Contracts............................................67
7.10 Absence of Material Adverse Change..................................67
ARTICLE VIII
CONDITIONS PRECEDENT
TO THE OBLIGATIONS OF THE SELLING ENTITIES
8.1 Representations and Warranties......................................67
8.2 Performance by the Acquiring Entities...............................67
8.3 Prohibitions, Restrictions and Litigation...........................67
8.4 Consents............................................................68
8.5 Governmental Clearances.............................................68
8.6 Certificate of USI and Certain Officers.............................68
8.7 Waiver of Conditions................................................68
8.8 New Collateral Contracts............................................68
ARTICLE IX
INDEMNIFICATION; OFFSET
9.1 Indemnification by the Acquiring Entities...........................68
9.2 Indemnification by the Selling Entities.............................70
9.3 Satisfaction of Claims..............................................72
9.4 Matters Which May Give Rise to Claims...............................73
ARTICLE X
GENERAL
10.1 Survival of Representations and Agreements..........................74
10.2 Termination.........................................................75
10.3 HSR Filings; Other Filings..........................................76
10.4 Expenses of Transaction.............................................76
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10.5 Public Disclosure...................................................76
10.6 Notices.............................................................76
10.7 Assignment..........................................................77
10.8 Amendments; Waivers, Etc............................................77
10.9 Governing Law.......................................................78
10.10 Consent to Jurisdiction.............................................78
10.11 Arbitration.........................................................78
10.12 Specific Performance................................................80
10.13 Tax Matters.........................................................80
10.14 Number and Gender...................................................83
10.15 Section Headings, Schedules, Etc....................................83
10.16 Complete Agreement; Counterparts....................................83
10.17 Severability........................................................83
10.18 No Third Party Beneficiaries........................................84
10.19 Inconsistencies.....................................................84
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of March 2, 1998, by and among INTERGRAPH CORPORATION, a Delaware corporation
("Intergraph"), and the other Selling Entities (as defined below), and
UNIGRAPHICS SOLUTIONS INC., a Delaware corporation ("USI"), and the other
Acquiring Entities (as defined below).
W I T N E S S E T H:
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WHEREAS, the Selling Entities desire to sell and transfer to the Acquiring
Entities, and the Acquiring Entities desire to purchase and acquire from the
Selling Entities, the Acquired Assets (as defined below), all on the terms and
conditions set forth in this Agreement;
WHEREAS, as more fully described in this Agreement, in addition to the
transfer of certain of the Acquired Assets to occur at the Principal Closing (as
defined below) concurrently with the execution of this Agreement, at one or more
concurrent or subsequent International Closings (as defined below) provided for
herein, certain Selling Entities and certain Acquiring Entities will execute and
deliver Closing Agreements (as defined below), pursuant to which each applicable
Selling Entity will sell and transfer certain of the Acquired Assets to each
applicable Acquiring Entity at such International Closing or Closings, all upon
the terms and conditions set forth in this Agreement and in each applicable
Closing Agreement;
NOW, THEREFORE, in consideration of the premises, the respective covenants,
representations and warranties set forth below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto warrant, represent,
covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. In addition to other terms defined in this
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Agreement, the following terms, as used herein, shall have the respective
meanings set forth below:
"Accounts Receivable" as of any specified date shall mean the accounts,
notes and other receivables (including without limitation any "accounts" as
defined under the Uniform Commercial Code) of any Selling Entity relating to the
Business as of such date, including any indebtedness arising from the sale or
license of products or merchandise or the provision of services by any such
Selling Entity relating to the Business and the right to payment of any interest
or finance charges or similar fees or charges relating thereto.
"Acquired Assets" shall mean all of the business, assets, properties and
goodwill of every kind and description (real, personal, mixed, tangible and
intangible) of the Selling Entities constituting the Business as a going
concern, wherever located, and whether or not reflected in the
Books and Records of Intergraph, to which, or in which, any of the Selling
Entities have any right, title or interest as of the Principal Closing Date or
the applicable International Closing Date, as the case may be, by reason of
ownership, use or otherwise; including, without limitation, (i) the assets
reflected on the Balance Sheet, (ii) the Transferred Intellectual Property
Interests and, solely with respect to the Transferred Intellectual Property
Interests assigned to the Acquiring Entities pursuant to the General Xxxx of
Sale, the Copyright Assignment, the Trademark Assignment, a Closing Agreement or
any document equivalent to the Copyright Assignment or Trademark Assignment
entered into in connection with an International Closing, any and all claims for
damages and other relief by reason of any past infringement or misappropriation
thereof, (iii) all Contract rights related to the Business, including, without
limitation, maintenance, distributor, value added reseller or business partner
agreements and the rights of any Selling Entity under the Purchase and Sale
Agreement between Intergraph (Deutschland) GmbH, Norsk Data GmbH and Norsk Data
A.S. dated April 30, 1992 related to the acquisition of the Technovision
Software and all rights under the agreement related to the acquisition of the
ProRen Software, (iv) customer and supplier lists, (v) sales and promotional
literature, (vi) machinery, equipment, computer hardware, workstations,
furniture and replacement parts which are used in the Business, (vii) production
manuals, correspondence and research; (viii) personnel, financial and other
Books and Records, (ix) inventories, supplies, work in progress and supplies,
prepaid expenses and similar items; (x) Accounts Receivable attributable to
products or services furnished on or following the Principal Closing Date and
(xi) trade association memberships that are used exclusively or primarily in
connection with the Business; provided, however, that the Acquired Assets shall
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not include the Retained Assets.
"Acquiring Entities" shall mean those Persons listed as Acquiring Entities
on the signature pages hereof and "Acquiring Entity" shall mean any of such
Persons.
"Affiliate" shall mean any Person that directly or indirectly through one
or more intermediaries controls, is controlled by or is under common control
with the Person specified (for purposes of this definition, a Person will be
deemed to have control of a corporation or other entity if it holds, directly or
indirectly, a greater than 50% voting interest in that corporation or other
entity).
"Agreed Courts" shall have the meaning ascribed thereto in Section 10.10.
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"Arbitration Panel" shall have the meaning ascribed thereto in Section
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10.11(a)(iii).
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"Assumed Contracts" shall mean (i) those Contracts of any of the Selling
Entities relating to the Business and listed in Section 2 of Schedule 3.23(a),
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Schedule 3.31(b) or Schedule 3.32(b) (excluding those Contracts specifically
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identified on Schedules 3.31(b) or 3.32(b) as not being included within the
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Acquired Assets), (ii) any Successor Distributor Contract entered into pursuant
to Section 2.12 hereof, and (iii) outstanding bids and accepted customer orders
of the Selling Entities, in each case made in the ordinary course of business,
as of the relevant Closing Date for new business with respect to the Business
made in the ordinary course of business under the standard terms and conditions
of the Selling Entities; provided, however, that notwithstanding any provision
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in this Agreement or in any instrument of assignment or transfer, certificate or
other document executed and delivered pursuant to this Agreement to the
contrary, if any of such
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Contracts referenced above is a Specified Contract or a Litigation Contract,
then (i) such Specified Contract or Litigation Contract, as the case may be,
shall be deemed not to be an Assumed Contract for any reason whatsoever under or
by reason of this Agreement or any such instrument of assignment or transfer,
certificate or other document, and (ii) no Acquiring Entity shall be deemed to
have assumed any debt, liability or obligation whatsoever under such Specified
Contract or Litigation Contract.
"Assumed Liabilities" shall mean all executory obligations of the
respective Selling Entities under the Assumed Contracts arising from and after
the applicable Closing Date; provided, however, that the Assumed Liabilities
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shall not include any of the Retained Liabilities.
"BAG Products License Agreement" shall have the meaning ascribed thereto in
Section 2.4.
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"BAG Tools" shall have the meaning set forth in the BAG Products License
Agreement.
"Balance Sheet" shall have the meaning ascribed thereto in the definition
of Financial Statements.
"Balance Sheet Date" shall mean December 31, 1997.
"Xxxx of Sale Transaction" shall mean the transaction at the Principal
Closing with respect to which USI and Intergraph will execute and deliver the
General Xxxx of Sale and the Transferred Intellectual Property License
Agreements pursuant to which the Acquired Assets held by Intergraph are
transferred and conveyed by Intergraph to USI.
"Books and Records" shall mean all accounting, financial reporting, Tax,
business, marketing, corporate and other files, documents, instruments, papers,
books and records of a specified Person, including without limitation financial
statements, budgets, projections, ledgers, journals, titles, manuals, Contracts,
agency lists, customer lists, supplier lists, reports, computer files, retrieval
programs and operating data or plans.
"Business" shall mean the three-dimensional mechanical CAD/CAM/CAE business
conducted by Intergraph and its direct and indirect subsidiaries (and/or a
branch of Intergraph or any such subsidiary) through the SolidEdge and EMS
product lines and which include, without, limitation, the software and related
maintenance businesses for the SolidEdge, EMS, Technovision and ProRen products.
"Business Day" shall mean a day on which federally chartered banks located
in Dallas, Texas are required or authorized to open for business (other than a
Saturday or Sunday) under the Legislative Enactments of the United States.
"Bylaws" shall mean the bylaws or, as appropriate, other generally
recognized body of comparable written statements (other than a Charter or its
equivalent) establishing the internal organization of a Person and/or its
primary relationships with its management and with its shareholders or other
owners.
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"CAD II Agreements" shall mean the following Contracts between Intergraph
and the Government of the United States of America: (i) Contract Number N66032-
91-D-0003, dated April 8, 1991; (ii) Contract Number N66032-93-D-0021, dated
August 30, 1993; and (iii) Contract Number N66032-94-D-0012, dated July 13,
1994.
"CAD II Trademark Agreement" shall have the meaning ascribed thereto in
Section 2.4.
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"Charter" shall mean the Articles of Incorporation, Certificate of
Incorporation, Memorandum and Articles of Association and/or other charter of
any Person.
"Claim" shall have the meaning ascribed thereto in Section 9.3.
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"Closing" shall mean those events which occur on the Principal Closing Date
(or, with respect to International Closings, on the respective International
Closing Dates) for the purpose of consummating the transactions contemplated by
this Agreement in accordance with Article II.
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"Closing Agreement" shall have the meaning ascribed thereto in Section
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2.3(a).
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"Closing Date" shall mean the date on which occurs the Principal Closing or
an International Closing, as the case may be.
"COBRA" shall mean the Congressional Omnibus Budget Reconciliation Act of
1985, together with any amendments and supplements thereto, providing for health
care continuation coverage under Section 4980B of the Code or Section 601 et
seq. of ERISA.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended, including without limitation any successor revenue code of the United
States federal government, together with the rules and regulations promulgated
thereunder.
"Competitive Activity" shall have the meaning ascribed thereto in Section
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5.12(b).
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"Compliance Group" shall mean the Selling Entities and any predecessors to
each of the Selling Entities.
"Compliance Property" shall mean any real or personal property, including,
without limitation the Real Property, presently or previously owned, leased or
used by any Person in the Compliance Group.
"Confidentiality Contracts" shall have the meaning ascribed thereto in
Section 3.33(b).
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"Confidential Software" shall have the meaning ascribed thereto in Section
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3.33(b).
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"Consideration" shall have the meaning ascribed thereto in Section 2.3.
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"Consents" shall mean consents, waivers, permits, clearances, approvals and
other authorizations.
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"Contract" shall mean any binding contract, agreement, understanding,
lease, sublease, license, sublicense, distribution agreement, promissory note,
evidence of indebtedness, indenture, instrument, mortgage, insurance policy,
annuity or other binding commitment, whether written or oral.
"Copyright Assignment" shall have the meaning ascribed thereto in Section
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2.5.
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"Copyrights" shall mean all copyright interests comprising a part of the
Business, including, without limitation, all moral rights, all common-law
rights, and all rights to register and obtain renewals and extensions of
copyright registrations, together with all other copyright interests accruing by
reason of international copyright convention, and the right to xxx for past,
present, or future infringement and to collect and retain all damages and
profits therefor.
"Customer Contracts" shall have the meaning ascribed thereto in Section
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3.23(a).
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"Distributor Contracts" shall have the meaning ascribed thereto in Section
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3.23(b).
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"EDS" shall mean Electronic Data Systems Corporation, a Delaware
corporation and the parent corporation of USI.
"Employee Matter" shall mean personnel policies or practices and any
employee program, plan, arrangement or understanding, whether written or oral,
including all matters relating to a Contract of employment, in each case with
respect to periods on or prior to the Principal Closing Date.
"Employee Pension Benefit Plans" shall have the meaning ascribed thereto in
Section 3.25(b)(i).
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"Employee Welfare Benefit Plans" shall have the meaning ascribed thereto in
Section 3.25(a)(i).
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"EMS Code" shall have the meaning set forth in the EMS License Agreement.
"EMS License Agreement" shall have the meaning ascribed thereto in Section
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2.4.
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"Environmental Laws" shall mean (a) all Legislative Enactments and Official
Actions relating to industrial hygiene, environmental protection, air emissions,
water discharges, or the use, analysis, manufacture, transportation, generation,
handling, treatment, storage or disposal of any Hazardous or Toxic Substances or
the cleanup or remediation of any contamination, together with all rules and
regulations promulgated with respect to any of the foregoing; and (b) all
Legislative Enactments and Official Actions with respect to property transfer
limitations with respect to Hazardous or Toxic Substances, whether or not
conditioned upon disclosure or upon permit or approval.
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"Environmental Liabilities" shall mean any obligation or liability arising
under an applicable Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974.
"Escrow Agreement" shall have the meaning ascribed thereto in Section
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2.3(c).
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"Financial Statements" shall mean the consolidated balance sheets for the
Business at December 31, 1996 and 1997 (the "Balance Sheet") and the
consolidated statements of revenues and direct expenses for the Business for the
years ended December 31, 1995, 1996 and 1997, together with an audit "comfort
letter" of Ernst & Young dated the Principal Closing Date with respect to the
consolidated statements of revenues and direct expenses; provided that the audit
report of Ernst & Young as independent auditors, on the Financial Statements
(which report may be with respect to the statement of assets purchased referred
to in Section 5.6 hereof in lieu of the Balance Sheet) shall be delivered as
soon as practicable following the Principal Closing Date pursuant to such
Section 5.6 rather than at the Principal Closing.
"GAAP" shall mean generally accepted accounting principles and practices
which are recognized as such by the American Institute of Certified Public
Accountants acting through its Accounting Principles Board or other appropriate
board or committee (other than the Emerging Standards Committee), and which are
consistently applied for all periods so as to fairly reflect the financial
condition, the results of operations and the cash flows of the relevant Person
or Persons.
"General Xxxx of Sale" shall have the meaning ascribed thereto in Section
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2.3.
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"Hazardous or Toxic Substances" shall mean: all elements, compounds,
substances, matrices or mixtures ("Materials or Substances") that are hazardous,
toxic, ignitable, reactive or corrosive including without limitation the
following: (i) all Materials or Substances (whether or not wastes, contaminants
or pollutants) that are or become regulated by any of the Environmental Laws;
(ii) all Materials or Substances which are or become defined or described by any
of the Environmental Laws as "hazardous" or "toxic" or a "hazardous waste,"
"extremely hazardous waste," "acutely hazardous waste" or "acute hazardous
waste"; (iii) all Materials or Substances which, after release into the
environment and exposure thereto (including contact, ingestion, inhalation,
uptake or assimilation), in any organism (directly or indirectly, immediately or
after any period of any duration) does or will cause or significantly contribute
to (or may be anticipated to cause or to significantly contribute to) death,
disease, disability, psychological deformations or dysfunctions, psychological
or behavioral abnormalities, cancerous or pre-cancerous conditions, neurological
disorders or dysfunctions, or genetic mutation or damage; (iv) all Materials or
Substances listed in the U.S. Department of Transportation Hazardous Materials
Table (49 CFR (S)172.101); (v) all Materials or Substances listed as a
"hazardous substance" by the Environmental Protection Agency in 40 CFR (S)302.4;
(vi) petroleum and petroleum products and derivatives; (vii) phenols,
polychlorinated phenols (including polychlorinated biphenols (PCBs)), asbestos
or radon; (viii) all Materials or Substances that are regulated under the Atomic
Energy Act of 1954, 42 USC (S)(S)2011 et seq., or otherwise by the Nuclear
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Regulatory Commission; and (ix) all Materials or Substances (whether raw or
processed, active or spent) that include any of the foregoing as constituents.
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"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"Indemnified Party" shall have the meaning ascribed thereto in Section 9.3.
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"Indemnifying Party" shall have the meaning ascribed thereto in Section
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9.3.
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"India Support Agreement" shall have the meaning ascribed thereto in
Section 2.4.
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"INGR Tools" shall have the meaning set forth in the INGR Tools License
Agreement.
"INGR Tools License Agreement" shall have the meaning ascribed thereto in
Section 2.4.
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"Intellectual Property" shall mean and include (a) Patents, (b) Trademarks,
(c) Copyrights and registrations of claim to Copyright, including moral rights
(if any), (d) Inventions, (e) Software, (f) Trade Secrets and (g) Know-How.
"Intergraph Fields" shall mean the following specific fields: (a) three-
dimensional products, without significant capability for use as a three-
dimensional mechanical system, intended primarily for data capture, design,
analysis and management of infrastructure systems, such as Intergraph's highway
design, utility distribution and mapping systems; and (b) three-dimensional
products, without significant capability for use as a three-dimensional
mechanical system, for modeling, designing (including design of component
parts), analyzing, drawing production, or operation of any of the following
systems which are utilized in chemical and process industry plants, ships,
marine vessels, or offshore platforms, including without limitation (i) piping,
(ii) heating, ventilation and air conditioning (HVAC), (iii) cable routing, (iv)
structural support systems for marine vessels, ships and offshore platforms, and
(v) process and/or instrument diagrams.
"Intergraph Indemnitees" shall have the meaning ascribed thereto in Section
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9.1.
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"Intergraph Losses" shall have the meaning ascribed thereto in Section 9.1.
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"International Closing Date" shall mean any date other than the Principal
Closing Date upon which an International Closing occurs.
"International Closings" shall mean the Closings with respect to such
portion of the Business conducted outside the United States as to which all
conditions to such Closing have been satisfied.
"International Selling Entity" shall mean any Selling Entity organized
under the laws of a jurisdiction outside of the United States.
"Inventions" shall mean and include novel devices, processes, compositions
of matter, methods, techniques, observations, discoveries, apparatuses, designs,
expressions, theories and ideas, whether or not patentable.
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"IP" shall have the meaning ascribed thereto in Section 3.31(b).
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"IRS" shall mean the United States Internal Revenue Service.
"Joint Fields" shall mean the following specific fields: (a) two-
dimensional drafting systems (including those which may have application to the
mechanical drafting market); (b) two-dimensional modeling systems (including
those which may have application to the mechanical drafting market); (c)
creation, publication or distribution of technical manuals; and (d) electrical
CAD, CAM or CAE systems (or combinations thereof) without significant capability
for use as a three-dimensional mechanical system.
"Know-How" shall mean scientific, engineering, mechanical, electrical,
marketing or practical knowledge or experience used in the operation of any of
the Business.
"Lease" shall have the meaning ascribed thereto in Section 3.20(a).
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"Lease Agreement" shall have the meaning ascribed thereto in Section 2.4.
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"Legal Expenses" of a Person shall mean any and all reasonable out-of-
pocket fees, costs and expenses of any kind (including attorneys' and experts'
fees) incurred by a Person and its counsel in investigating, preparing for,
prosecuting, defending against or providing evidence, producing documents or
taking other action with respect to any threatened or asserted Claim.
"Legislative Enactments" shall mean domestic, foreign and international
laws (including without limitation common law), treaties, ordinances,
regulations and rules at any international, national, federal, state, local or
regional level, both as presently existing and as may become effective in the
future.
"License Transactions" shall mean the transactions at the Principal Closing
pursuant to which USI and Intergraph will execute and deliver the SolidEdge
Common Code License Agreement, the BAG Products License Agreement, the INGR
Tools License Agreement, the Trademark License Agreement and the Patent License
Agreement pursuant to which certain of the Transferred Intellectual Property
Interests are licensed to USI, subject to the terms set forth in such
agreements.
"Lien" shall mean any lien, mortgage, security interest, tax lien,
financing statement, pledge, assessment, lease, sublease, adverse claim, levy,
charge, hypothecation or other encumbrance of any kind or nature whatsoever
including without limitation any conditional sale Contract, title retention
Contract or other Contract to give any of the foregoing.
"Litigation Contract" shall mean any Contract relating to the Business
pursuant to which a suit, action, litigation or proceeding exists as of the
applicable Closing Date between the applicable Selling Entity and one or more of
the other Persons that are party thereto in or before any Tribunal.
"Loss Amount" shall have the meaning ascribed thereto in Section 2.14.
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"Losses" shall have the meaning ascribed thereto in Section 9.1.
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"LTS Tools" shall mean the Third Party Software described on Schedule
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3.31(b)F.2. hereof.
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"Master Purchase Agreements" shall have the meaning ascribed thereto in
Section 3.28.
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"Materials or Substances" shall have the meaning ascribed thereto in the
definition of Hazardous or Toxic Substances.
"Miscellaneous Software Components" shall have the meaning ascribed thereto
in the definition of "Software."
"Non-Compete Covenant" shall mean any provision, covenant or obligation
binding on any Selling Entity that limits or restricts in any manner whatsoever
(whether during any particular period of time from and after the applicable
Closing Date, in certain geographic areas or otherwise) the ability of any of
the Acquiring Entities, any of their Affiliates or any of the employees, acting
in his or her capacity as an employee of an Acquiring Entity or an Affiliate of
the same, of any of the Acquiring Entities or their Affiliates (a) to engage in
any line of business or to sell any products or services, or (b) to compete with
or to obtain products or services from any Person, in each case during any
period of time after the applicable Closing Date.
"Not-Owned IP" shall have the meaning ascribed thereto in Section 3.31(b).
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"Not-Owned Software" shall have the meaning ascribed thereto in Section
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3.32(b).
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"Official Action" shall mean any domestic or foreign decision, order, writ,
injunction, decree, judgment, award or any determination, both as presently
existing or as may become effective in the future, by any Tribunal.
"Owned IP" shall have the meaning ascribed thereto in Section 3.31(a).
---------------
"Owned Software" shall have the meaning ascribed thereto in Section
-------
3.32(a).
-------
"Ownership Interests" shall mean the ownership interests in any Person,
whether classified as debt, equity, profit-sharing or some other type of
ownership interest, including without limitation capital stock, bonds, notes or
other securities.
"Patent License Agreement" shall have the meaning ascribed thereto in
Section 2.4.
-----------
"Patents" shall mean all domestic and foreign patents (including, without
limitation, certificates of invention, utility models, and other patent
equivalents), provisional applications, patent applications and patents issuing
therefrom, as well as any division, continuation, continuation in part, reissue,
extension, reexamination certification, revival or renewal of any patent, all
inventions and subject matter related to such patents, in any and all forms, and
all patents and applications for patents related to such patents, including the
right to xxx for past,
9
present, or future infringement and to collect and retain all damages and
profits therefor.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, an agency of
the United States government.
"Permits and Orders" shall have the meaning ascribed thereto in Section
-------
3.15(e).
-------
"Permitted Encumbrance" shall have the meaning ascribed thereto in Section
-------
3.19.
----
"Person" shall mean any natural person, corporation, limited liability
company, general partnership, limited partnership, joint venture,
proprietorship, trust, association, unincorporated association, Tribunal or
other entity of any kind.
"Powers of Attorney" shall mean the separate powers of attorney executed
and delivered by each of the Selling Entities substantially in the form of
Exhibit A hereto and each of the Acquiring Entities substantially in the form of
---------
Exhibit B hereto, in each case effective as of the Principal Closing Date.
---------
"Prepaid Maintenance Contracts" shall have the meaning set forth in Section
-------
3.23(a).
-------
"Prime Rate" shall mean a fluctuating rate of interest equal to the prime
rate or reference rate of interest announced or published from time to time, at
the rate in effect immediately before the first business day in each month at
Citibank, N.A. in New York, New York; provided, however, that in no event shall
such interest rate exceed the maximum rate of interest allowed by applicable
law.
"Principal Closing" shall mean the Closing of the Xxxx of Sale Transaction
and any International Closing occurring concurrently therewith.
"Principal Closing Date" shall have the meaning ascribed thereto in Section
-------
2.1.
---
"Proceedings" shall have the meaning ascribed thereto in Section 10.10.
-------------
"Profit Amount" shall have the meaning ascribed thereto in Section 2.14.
------------
"Projections " shall have the meaning ascribed thereto in Section 3.30.
------------
"Real Property" shall mean that real property (together with the fixtures
and improvements thereon) owned or leased (as lessor, sublessor, lessee or
sublessee) by any of the Selling Entities and used in the current conduct of the
Business, as more fully described in Section 1 of Schedule 3.20(a).
--------- ----------------
"Request" shall have the meaning ascribed thereto in Section 9.3.
-----------
"Retained Assets" shall mean (a) the Charter, Bylaws, corporate seal,
minute books, stock certificates and stock record books, and stock transfer
ledgers of the Selling Entities; (b) the
10
Customer Contracts; provided, however, that the retention of such Contracts
-------- -------
shall not diminish the rights of the Acquiring Entities under Section 2.11
hereof; (c) the Distributor Contracts; other than those Distributor Contracts
which will have been amended prior to the Principal Closing to relate
exclusively to the Business as contemplated by Section 2.12 hereof; (d) the
Master Purchase Agreements and any general corporate or administrative assets or
services furnished by Intergraph for the benefit of all of its business units,
subsidiaries or divisions and not principally to the Business, including,
without limitation, accounting and legal support and the services provided under
the Transition Services Agreement; (e) employee benefit agreements, plans or
arrangements maintained by any of the Selling Entities, except with respect to
those transfers contemplated by Section 5.13 hereof; (f) all Accounts Receivable
of the Business, except to the extent any such Accounts Receivable are
attributable to products or services furnished on or following the Principal
Closing Date; (g) the Selling Entities Tax Returns and such other tax returns
and reports, general ledgers and any other books, records, files or
correspondence not directly and exclusively pertaining to the Business; (h)
personnel Books and Records not relating to the Transitioned Employees; (i)
except as otherwise expressly provided in Section 6.5, the name and xxxx
-----------
"Intergraph Corporation"; (j) solely with respect to the Transferred
Intellectual Property Interests which are not assigned to an Acquiring Entity
pursuant to the General Xxxx of Sale, the Copyright Assignment, the Trademark
Assignment, a Closing Agreement or any document equivalent to the Copyright
Assignment or Trademark Assignment entered into in connection with an
International Closing, any and all claims for damages and other relief by reason
of any past infringement or misappropriation thereof; (k) the Intellectual
Property subject to the Transferred Intellectual Property License Agreements, in
each case subject to the licenses granted to the Acquiring Entities or their
assignees thereunder and the restrictions on use contained therein; (l) all
Contract rights relating to the CAD II Agreements; (m) all rights of Intergraph
under its Contracts with Spatial Technology relating to its use of the ACIS
Software, subject to the rights granted to USI under the Version 4 Reseller
Agreement; (n) all Contracts related to real property of the Selling Entities,
and all real property other than the interest in real property transferred under
the Lease Agreement; (o) building security systems and telephone systems,
subject to the rights of the Acquiring Entities under the Lease Agreement and
the Transition Services Agreement; (p) customer Contracts for the sale and
maintenance of Software used principally in the design and manufacturing of
structural support systems for ships and other marine vessels; (p) the assets
used by the employees providing services under the India Support Agreement
(provided that such assets will be deemed Acquired Assets in the event USI shall
exercise its option during or following the term of the India Support Agreement
to offer to employ such persons); and (r) Contract rights relating to (i) that
certain agreement dated April 1992 between Xxxxx Xxxxxxxx (d/b/a Marcomp) and
Intergraph, (ii) that certain Non-Exclusive License Agreement for Dimensional
Constraint Manager between D-Cubed Limited and Intergraph executed by D-Cubed
Limited on July 1, 1994, and (iii) that certain Agreement Licensing Digital
Typefaces dated September 26, 1985 between Bitstream, Inc. and Intergraph, as
amended.
"Retained Liabilities" shall mean any liability or obligation of the
Selling Entities which is not specifically included in the Assumed Liabilities,
including without limitation: (a) any liability or obligation of any Person
under any Customer Contract or Distributor Contract (other than any Successor
Distributor Contracts); (b) any liability or obligation of any Person under any
lease or sublease of Real Property (other than the obligations of USI under the
Lease Agreement); (c) any pending suit, action, litigation or proceeding
affecting or against any Selling Entity with respect to
11
the Business or any of the Acquired Assets in or before any Tribunal (including,
without limitation, any liability or obligation relating to the matters
disclosed on Schedule 3.14); (d) any liability or obligation of the Business
-------------
evidenced by checks written against the account of the applicable Selling
Entity; (e) any liability or obligation of the Selling Entities or Affiliates
thereof with respect to the operation of the Business prior to the Principal
Closing Date (other than the obligations under the Assumed Contracts to be
performed in accordance with the terms thereof following the applicable Closing
Date); (f) any liability or obligation (including any liability or obligation
for Taxes) in connection with or relating to any of the Retained Assets; (g) any
liability or obligation existing as of the applicable Closing Date of the
Selling Entities for vacation, sick leave, holidays and similar benefits for
Transitioned Employees; (h) any liability or obligation in connection with or
relating to any Employee Matter (including any liability or obligation for
Taxes, contributions or premiums); (i) any liability or obligation of the
Selling Entities under this Agreement or any certificate or other document or
instrument entered into in connection with this Agreement or the consummation of
the transactions contemplated hereby (including, without limitation, the Closing
Agreement); (j) any liability or obligation of a Selling Entity to Intergraph or
any of its Affiliates; (k) any Environmental Liability (except those for which
USI shall be specifically responsible under the terms of the Lease Agreement as
a result of actions taken by USI following the Principal Closing Date); (l) any
liability or obligation of the Selling Entities or Affiliates for Taxes; (m) any
liability or obligation of the Selling Entities or Affiliates for Taxes of any
Person under Treas. Reg. Sec. 1.1502-6 (or any similar provision of state, local
or foreign law), as a transferee or successor, by contract, or otherwise; and
(n) except as otherwise provided in Section 10.13 hereof with respect to
Transaction Taxes, any Taxes attributable to the transfers and other actions or
events required to consummate the transactions contemplated hereby (including
federal state, local, and foreign income, franchise, gross receipts and net
worth taxes).
"Selling Entities" shall mean those Persons listed as Selling Entities on
the signature pages hereof, and "Selling Entity" shall mean any of such Persons.
"SolidEdge Common Code" shall have the meaning set forth in the SolidEdge
Common Code License Agreement.
"SolidEdge Common Code License Agreement" shall have the meaning ascribed
thereto in Section 2.4.
-----------
"SolidEdge License Agreement" shall have the meaning ascribed thereto in
Section 2.4.
-----------
"SolidEdge Reseller Agreement" shall have the meaning ascribed thereto in
Section 2.4.
-----------
"SolidEdge Specific Code" shall have the meaning set forth in the SolidEdge
License Agreement.
"Software" shall mean the expression of an organized set of instructions in
a natural or coded language which is contained on a physical media of any nature
(e.g., written, electronic, magnetic, optical or otherwise) and which may be
used with a computer or other automated data processing equipment device of any
nature which is based on digital technology, to make such computer or other
device operate in a particular manner and for a certain purpose, as well as any
12
related documentation for such set of instructions. The term shall include
computer programs in source and object code, test or other significant data
libraries, documentation for computer programs, and any of the following
("Miscellaneous Software Components") which is contained on a physical media of
any nature and which is used in the design, development, modification,
enhancement, testing, installation, maintenance, diagnosis or assurance of the
performance of a computer program: narrative descriptions, notes,
specifications, designs, flowcharts, parameter descriptions, logic flow
diagrams, masks, input and output formats, file layouts, database formats, test
programs, test or other data, user guides, manuals, installation and operating
instructions, diagnostic and maintenance instructions, source code, object code
and other similar materials and information; provided, however, that such term
shall not include Patents.
"Specified Contract" shall mean any Contract that contains any Non-Compete
Covenant.
"Subcontract Period" shall have the meaning ascribed thereto in Section
-------
2.11(b).
-------
"Successor Customer Contract" shall have the meaning ascribed thereto in
Section 2.11(a).
---------------
"Successor Distributor Contract" shall have the meaning ascribed thereto in
Section 2.12.
------------
"Taxes" shall mean all taxes, charges, fees, levies or other similar
assessments or liabilities, including, without limitation, any federal, state,
local or foreign income, receipts, ad valorem, value added, purchases, premium,
excise, real property, personal property, windfall profit, sales, stamp, use,
consumption, licensing, withholding, employment, payroll, share, capital,
surplus, franchise, occupational, net proceeds, estimated, alternative or add-on
minimum, production, severance, lease, excise, duty, net worth, transfer, fuel,
excess profits, interest equalization or other taxes of any kind whatsoever, and
any recording, registration or notary fees, together with any interest, fines,
penalties, assessments or additions to tax resulting from, attributable to or
incurred in connection with, any such tax or any contest or dispute thereof;
"Tax" means any of the foregoing.
"Tax Return" shall mean any report, return, information returns, estimates
or other information, including any schedule or attachment thereto, required to
be supplied to, or filed with, the IRS or any other Tax Tribunal (as defined in
Section 3.13), and any amendment thereto, with respect to Taxes.
------------
"Third Party Matter" shall have the meaning ascribed thereto in Section
-------
9.4(a).
------
"Trade Secrets" shall mean any formula, design, device or compilation of
information which comprises a part of the Business, which gives the holder
thereof an advantage or opportunity for advantage over competitors which do not
have or use the same, and which is not generally known by the public. Trade
Secrets can include, by way of example, Software (including, without limitation,
source code for the Owned Software), information contained on drawings and other
documents, and information relating to the research, development, testing,
marketing plans, business strategy, finances or employees of a business.
"Trademark Assignment" shall have the meaning ascribed thereto in Section
-------
2.5.
---
13
"Trademark License Agreement" shall have the meaning ascribed thereto in
Section 2.4.
-----------
"Trademarks" shall mean all domestic and foreign trademarks, trade dress,
service marks, trade names, icons, logos, slogans, and any other indicia of
source or sponsorship of goods and services, designs and logotypes related to
the above, in any and all forms, and all trademark registrations and
applications for registration related to such trademarks (including, but not
limited to intent to use applications), including the right to xxx for past,
present, or future infringement and to collect and retain all damages and
profits therefor, which comprise a part of the Business, and all designs and
logotypes related to such trademarks, in any and all forms, and all trademark
registrations and applications for registration related to such trademarks,
including those registrations and applications listed on Schedule 3.31 attached
-------------
hereto.
"Transaction Taxes" shall mean any federal, state, foreign or local
transfer, sales, use, value added tax (VAT), registration tax, consumption tax,
documentary stamp, conveyance or any other similar Taxes, together with any
interest, fines, penalties, assessments, or additions to tax resulting from,
attributable to or incurred in connection with any such Transaction Taxes or any
contest or dispute thereof, and any recording, registration or notary fees, and
any fees for appraisals ordered by an Acquiring Entity, in each case arising
solely out of the sale, conveyance, transfer and/or delivery of the Acquired
Assets to the appropriate Acquiring Entity and the assumption of the Assumed
Liabilities by the appropriate Acquiring Entity. Transaction Taxes shall not
include any income, receipts, payroll, surplus, franchise, net proceeds,
estimated, alternative or add on minimum, net worth or similar taxes of the
Selling Entities.
"Transferred Intellectual Property Interests" shall mean:
(i) all Intellectual Property transferred, assigned and conveyed to
a Selling Entity pursuant to (A) the General Xxxx of Sale, (B) the
Copyright Assignment, (C) the Trademark Assignment, (D) a Closing
Agreement, and (E) any document equivalent to the Copyright Assignment or
Trademark Assignment entered into in connection with an International
Closing, and in each case any and all claims for damages and other relief
by reason of any past infringement or misappropriation thereof;
(ii) the rights to Intellectual Property transferred pursuant to the
Transferred Intellectual Property License Agreements;
(iii) the Intellectual Property listed on Schedule 1.1,
------------
(iv) All Know-How, Trade Secrets, Copyrights and Software comprising
a part of the Business, other than that comprising or used to produce the
Solid Edge Common Code, the INGR Tools and the BAG Tools;
(v) any invention comprising a part of the Business that was
conceived or reduced to practice prior to the Effective Date other than
inventions comprising or used to produce the Solid Edge Common Code, the
INGR Tools or the BAG Tools;
(vi) applications for Trademark registration and unregistered
Trademarks;
14
(vii) the Intellectual Property and rights thereto identified on
Schedules 3.31(b) and 3.32(b), except for such Intellectual Property
specifically identified on such schedules as not constituting Acquired
Assets or Transferred Intellectual Property Interests; and
(viii) all Intellectual Property comprising a part of the
Technovision and ProRen businesses of the Selling Entities.
"Transferred Intellectual Property License Agreements" shall mean,
collectively, the SolidEdge Common Code License Agreement, the BAG Products
License Agreement, the INGR Tools License Agreement, the Patent License
Agreement and the Trademark License Agreement.
"Transition Services Agreement" shall have the meaning ascribed thereto in
Section 2.4.
-----------
"Transitioned Employee" means any person who was employed by any Selling
Entity immediately prior to the applicable Closing Date and is hired by any
Acquiring Entity as of such Closing Date, including any person so hired as an
employee by any Acquiring Entity for any period of time and thereafter
terminated.
"Tribunal" shall mean any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States or any foreign or domestic state, province,
commonwealth, nation, territory, possession, country, parish, town, township,
village or municipality.
"Undertaking and Assumption Agreements" shall have the meaning ascribed
thereto in Section 2.3(a).
--------------
"USI" shall mean Unigraphics Solutions Inc., a Delaware corporation.
"USI Indemnitees" shall have the meaning ascribed thereto in Section 9.2.
-----------
"USI Losses" shall have the meaning ascribed thereto in Section 9.2.
-----------
"Validated Licenses" shall have the meaning ascribed thereto in Section
-------
3.35.
----
"VAT" shall have the meaning ascribed thereto in Section 10.13.
-------------
"Version 4 Reseller Agreement" shall have the meaning ascribed thereto in
Section 2.4.
-----------
"WARN Act" shall mean the Federal Workers Adjustment and Retraining Act,
P.L. 100-379, 000 Xxxx. 000.
"Year 2000 Compliant" with respect to any item shall mean that such item:
(i) from now until January 1, 2000, must correctly operate, store, process and
produce data containing dates before January 1, 2000; (ii) from now until 1
January 2000, must correctly operate, store, process
15
and produce data containing dates after December 31, 1999; (iii) from January 1,
2000, must correctly operate, store, process and produce data containing dates
before January 1, 2000; (iv) from January 1, 2000, must correctly operate,
store, process and produce data containing dates after December 31, 1999; (v)
must be able to handle the date January 1, 2001 correctly; (vi) must recognize
the year 2000 as a leap year (February 2000 is recognized as a valid date,
Julian date 00060 is recognized as February 29, 2000, Julian date 00366 is
recognized as December 31, 2000, arithmetic operations performed recognize that
the year 2000 has 366 days and binary date 36584 is recognized as February 29,
2000); and (vii) must be able to correctly process data containing the date
September 9, 1999. For purposes of this definition, "correctly" shall mean
accurately and without delay, corruption, interruption or error relating to the
time at which or the date on which such items are operating.
1.2 Other. All references in this document to this "Agreement" include
-----
all documents, schedules and exhibits (including without limitation the Closing
Agreements) referred to herein. The transactions contemplated by this Agreement
and all references in this Agreement to "the transactions contemplated hereby"
and similar phrases shall be deemed to include without limitation all
transactions contemplated by the Closing Agreements. All terms defined in this
Agreement shall have such meanings ascribed thereto when used in any
certificate, schedule, exhibit, report or other document made or delivered
pursuant to this Agreement, unless the context shall otherwise clearly require.
ARTICLE II
PRINCIPAL CLOSING; INTERNATIONAL CLOSINGS
2.1 Time and Place of Principal Closing. The Principal Closing will take
-----------------------------------
place on March 2, 1998, at 10:00 a.m., Dallas, Texas time, at the offices of
EDS, 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxx 00000 (the "Principal Closing Date"). The
Principal Closing shall be effective as of 12:01 a.m. on the Principal Closing
Date.
2.2 Time and Place of International Closings. Each International Closing
----------------------------------------
will take place on the Principal Closing Date or an International Closing Date
at such time and place as may be specified in the applicable Closing Agreement,
and each International Closing shall be effective as of 12:01 a.m. on the
Principal Closing Date or an International Closing Date, as the case may be,
unless otherwise specified in the applicable Closing Agreement. Each
International Closing not occurring on the Principal Closing Date shall take
place on the later of (a) March 31, 1998 or (b) the date which is five Business
Days after the last to occur of the dates on which all conditions set forth in
Articles VII and Article VIII with respect to such International Closing are
------------ ------------
satisfied or waived by the applicable party, or such earlier date as USI and
Intergraph may agree upon in writing.
2.3 Acquisition of the Acquired Assets.
----------------------------------
(a) Unless otherwise indicated in the applicable Closing Agreement, the
Acquired Assets shall be acquired, and the Assumed Liabilities shall be assumed,
generally on a country-by-country basis, by the one or more Acquiring Entities
specified below in Section 2.3(b) below from
16
the corresponding Selling Entity specified in Section 2.3(b) below, as of such
Closing Date. Physical delivery of the Acquired Assets to the Acquiring Entities
generally will be made at the current location of each Acquired Asset or as
otherwise provided in the General Xxxx of Sale or any Closing Agreement. In
connection with the consummation of the Xxxx of Sale Transaction, Intergraph and
USI shall execute and deliver a General Xxxx of Sale and Assignment,
substantially in the form of Exhibit C (the "General Xxxx of Sale"), and an
---------
Undertaking and Assumption Agreement, substantially in the form of Exhibit D
---------
(the "Undertaking and Assumption Agreement"), with respect to the transfer and
conveyance of the applicable Acquired Assets pursuant thereto and the assumption
of any related Assumed Liabilities. In connection with the transfer and
conveyance of any Acquired Assets at the Principal Closing or any International
Closing other than pursuant to the Xxxx of Sale Transaction, each applicable
Selling Entity and each applicable Acquiring Entity shall execute and deliver a
closing agreement or such other agreements as are appropriate in any applicable
foreign jurisdiction to consummate the transactions contemplated thereby
(together with all instruments of transfer, conveyance and assignment and other
documents attached thereto or referred to therein, the "Closing Agreement"),
substantially in the form attached hereto as Exhibit E, as such form shall be
---------
revised to the extent required to reflect applicable law. At any Closing, on the
terms and subject to the conditions set forth in this Agreement and any
applicable Closing Agreement, and on the basis of the representations and
warranties, covenants and agreements set forth in this Agreement and any
applicable Closing Agreement, each Selling Entity participating in such Closing
shall assign, transfer and sell, or cause to be assigned, transferred and sold,
to the applicable Acquiring Entity participating in such Closing, and each such
Acquiring Entity shall acquire from the applicable Selling Entity, the
applicable Acquired Assets in exchange for (i) the applicable Consideration set
forth in Section 2.3(b) below and (ii) the assumption by such Acquiring Entity
of the obligation to pay, perform, satisfy and discharge the applicable Assumed
Liabilities. At each Closing the applicable Acquiring Entity shall deliver to
the applicable Selling Entity a wire or intrabank transfer of immediately
available funds in the amount of the applicable Consideration set forth in
Section 2.3(b) below. With respect to any payments made to a designated
Intergraph bank account on behalf of a Selling Entity, such Selling Entity
agrees that Intergraph shall receive such payment as agent and on behalf and for
the direct benefit of such Selling Entity. In each such case, Intergraph shall
provide USI written instructions at least two Business Days prior to the Closing
Date as to the routing of the wire or intrabank transfer and the designated
Intergraph bank account to which payment shall be made.
(b) The consideration shall be Xxx Xxxxxxx xxx Xxxx Xxxxxxx Xxxxxx Xxxxxx
Dollars ($105,000,000.00), subject to the withholding and payments into escrow
pursuant to the terms of the Escrow Agreement, payable as follows (the
"Consideration"):
Selling Entity Acquiring Entity U.S. Dollars
-------------- ---------------- ------------
Intergraph USI $103,669,000
Intergraph GmbH (Osterreich) Unigraphics Solutions 5,000
Handelsgesellschaft m.b.H.
Intergraph Benelux BV Unigraphics Solutions N.V. 11,000
17
Selling Entity Acquiring Entity U.S. Dollars
-------------- ---------------- ------------
Intergraph Canada Ltd. Unigraphics Solutions Canada Ltd. 14,000
Intergraph CR s.r.o. Unigraphics Solutions s.r.o. * 8,000
Intergraph CAD/CAM (Danmark) A/S Unigraphics Solutions Danmark A/S 10,000
Intergraph Finland Oy UG Solutions AB (branch to be formed 5,000
in Finland) **
Intergraph France SA Unigraphics Solutions France SAS 46,000
Intergraph (Deutschland) GmbH Unigraphics Solutions GmbH 636,000
Intergraph (Italia) L.L.C. Unigraphics Solutions S.p.A. 145,000
Intergraph Japan K.K. Unigraphics Solutions Japan Ltd. 220,000
Intergraph Korea Ltd. Unigraphics Solutions (Korea) Ltd. * 23,000
Intergraph de Mexico, S.A. de Unigraphics Solutions de Mexico, S.A. 18,000
C.V. de C.V.
Intergraph Benelux B.V. and Unigraphics Solutions B.V. 20,000
Intergraph European
Manufacturing L.L.C.
Intergraph Norge AS Unigraphics Solutions Norge AS 11,000
Intergraph Europe (Polska) Unigraphics Solutions Sp.z.o.o. * 6,000
Sp.z.o.o.
Intergraph Systems Pte. Ltd. Unigraphics Solutions Pte. Limited 4,000
Intergraph (Portugal) Sistemas Unigraphics Solutions Espana, S.A. 7,000
de Computacao Grafica S.A. (branch to be formed in Portugal) **
Intergraph Espana, S.A. Unigraphics Solutions Espana, S.A. 29,000
Intergraph (Sverige) AB UG Solutions AB 46,000
Intergraph (UK) Ltd. Unigraphics Solutions Ltd. 67,000
------------
$105,000,000
18
___________
* As of the date of this Agreement the incorporation process for these entities
has not been completed. Therefore, such entities have not executed this
Agreement but will, pursuant to the Closing Agreement to be entered into by
such entity at the applicable Closing, agree to be bound by the terms of this
Agreement as an Acquiring Entity in accordance with the terms hereof.
** As of the date of this Agreement the formation of these branches has not been
completed. However, the Acquiring Entities which are forming these branches
have executed this Agreement as Acquiring Entities.
(c) At the Principal Closing, the Selling Entities and the Acquiring
Entities shall enter into the Escrow Agreement (the "Escrow Agreement")
substantially in the form attached hereto as Exhibit F.
---------
2.4 Closing Deliveries by Acquiring Entities. USI shall deliver to
----------------------------------------
Intergraph the following:
(a) At the applicable Closing, the Consideration specified in Section 2.3
(subject to the withholding and payments into escrow pursuant to the terms
of the Escrow Agreement) to be paid with respect to the Assets Acquired at
that Closing, portions of which will be paid by each Acquiring Entity to
each Selling Entity as provided in Section 2.3 above;
(b) At the Principal Closing, a copy of the resolutions of the Boards of
Directors of each of USI and EDS authorizing the execution, delivery and
performance by USI of this Agreement and by EDS and USI of the other
agreements contemplated hereby to which such Person is a party, and the
consummation of the transactions contemplated hereby and thereby, certified
as of the Closing Date by the Secretary or Assistant Secretary (or other
appropriate officer) of USI and EDS, respectively;
(c) At the Principal Closing, duly executed certificates of the Secretary
or Assistant Secretary of each of EDS and USI, certifying as of the Closing
Date as to the incumbency and signature of the officers of such
corporations who have executed this Agreement and the documents delivered
at such Closing on behalf of such corporation;
(d) At the Principal Closing, the Undertaking and Assumption Agreement,
duly executed by USI;
(e) At the Principal Closing, the SolidEdge Reseller Agreement in the form
attached hereto as Exhibit G pursuant to which Intergraph will become a
---------
reseller of the SolidEdge product of the Business to purchasers under the
CAD II Agreements (the "SolidEdge Reseller Agreement"), duly executed by
USI;
(f) At the Principal Closing, the SolidEdge License Agreement in the form
attached hereto as Exhibit H-1 pursuant to which USI will license certain
-----------
Intellectual Property related to the current SolidEdge product of the
Business to Intergraph for distribution pursuant to the CAD II Agreements
(the "SolidEdge License Agreement"), the EMS
19
License Agreement in the form attached hereto as Exhibit H-2 pursuant to
-----------
which USI will license certain Intellectual Property related to the current
EMS product of the Business to Intergraph for distribution pursuant to the
CAD II Agreements (the "EMS License Agreement"), and the Trademark License
for CAD II and Ship Building Contracts in the form attached hereto as
Exhibit H-3 pursuant to which USI would license certain Trademarks for the
-----------
uses described therein in connection with Intergraph's performance of the
CAD II Agreements (the "CAD II Trademark Agreement"), each duly executed by
USI;
(g) At the Principal Closing, the SolidEdge Common Code License Agreement
in the form attached hereto as Exhibit I pursuant to which Intergraph will
---------
grant a perpetual, royalty-free license to USI and its Affiliates to use
the Intellectual Property described therein (the "SolidEdge Common Code
License Agreement"), duly executed by USI;
(h) At the Principal Closing, the BAG Products License Agreement in the
form attached hereto as Exhibit J pursuant to which Intergraph will grant a
---------
perpetual, royalty-free license to USI and its Affiliates for certain
Software described therein (the "BAG Products License Agreement"), duly
executed by USI;
(i) At the Principal Closing, the INGR Tools License Agreement in the form
attached hereto as Exhibit K pursuant to which Intergraph will grant a
---------
perpetual, royalty-free license to USI and its Affiliates for certain
Software described therein (the "INGR Tools License Agreement"), duly
executed by USI;
(j) At the Principal Closing, the Lease Agreement in the form attached
hereto as Exhibit L related to certain office space occupied by the
---------
Business at Intergraph's Huntsville, Alabama headquarters (the "Lease
Agreement"), duly executed by USI;
(k) At the Principal Closing, the Agreement for Engineering Services in
the form attached hereto as Exhibit M providing for, among other things,
---------
the services of Intergraph's Software engineers in India to be provided to
USI under the terms thereof (the "India Support Agreement"), duly executed
by USI;
(l) At the Principal Closing, the Transition Services Agreement in the
form attached hereto as Exhibit N pursuant to which Intergraph will provide
---------
certain support services to USI on a transition basis following the
Principal Closing (the "Transition Services Agreement"), duly executed by
the Acquiring Entities;
(m) At the Principal Closing, the Version 4 Reseller Agreement in the form
attached hereto as Exhibit O pursuant to which USI will be designated as a
---------
reseller of Version 4 of SolidEdge (which version contains the ACIS
Software referred to in clause (m) of the definition of Retained Assets)
(the "Version 4 Reseller Agreement"), duly executed by USI;
(n) At the Principal Closing, the Trademark License Agreement in the form
attached hereto as Exhibit P pursuant to which Intergraph will grant a
---------
perpetual, royalty-free license to USI and its Affiliates to use certain
Trademarks described therein (the "Trademark License Agreement"), duly
executed by USI;
20
(o) At the Principal Closing, the Patent License Agreement in the form
attached hereto as Exhibit Q pursuant to which Intergraph will grant a
---------
perpetual, royalty-free license to USI and its Affiliates to use certain
Patents described therein (the "Patent License Agreement"), duly executed
by USI;
(p) At the Principal Closing, the Escrow Agreement, duly executed by USI;
and
(q) At the applicable Closing, other documents or instruments as the
Selling Entities participating in the Closing may reasonably request;
provided, however, that any such request shall be subject to any
limitations or restrictions expressly provided in this Agreement.
2.5 Closing Deliveries by Selling Entities.
--------------------------------------
Intergraph shall deliver to USI the following:
(a) At the applicable Closing, a copy of the Charter (as in effect on the
Closing Date) of each Selling Entity participating in the Closing certified
as of a recent date to the Closing Date (or, if such certification is not
obtainable in a particular jurisdiction, a certified copy as of the nearest
practicable date to the Closing Date) by the Secretary of State (or other
appropriate official) of the respective State or other jurisdiction of its
incorporation or organization;
(b) At the applicable Closing, a copy of the Bylaws (as in effect on the
Closing Date) of such Selling Entity participating in the Closing,
certified as of such Closing Date by the Secretary or Assistant Secretary
(or other appropriate officer) of such Selling Entity;
(c) At the applicable Closing, a copy of all resolutions adopted by the
Board of Directors or other governing body of such Selling Entity
participating in the Closing (together with a copy of all resolutions
adopted by the shareholders of such Selling Entity where legally required),
authorizing the execution, delivery and performance by the Selling Entity
of this Agreement and the other agreements contemplated hereby to which
such Person is a party (and any applicable Power of Attorney), and the
consummation of the transactions contemplated hereby and thereby, certified
as of the Closing Date by the Secretary or Assistant Secretary (or other
appropriate officer) of such Selling Entity;
(d) At the applicable Closing, appropriate evidence of all Consents
referred to in Schedule 2.5(d) relating to such Closing;
---------------
(e) At the applicable Closing, certificates of existence and, to the
extent available in the appropriate jurisdiction, good standing (including
evidence of payment of any franchise Taxes), and bring down telegrams or
telexes if issued in such jurisdiction, dated, to the extent practicable,
within the five-day period preceding the Closing Date (i) with respect to
Intergraph, from the appropriate Tribunals in the States of Delaware and
Alabama and (ii) with respect to any other Selling Entity participating in
the Closing, from the appropriate Tribunals in such Selling Entity's
jurisdiction of incorporation or other organization;
21
(f) At the applicable Closing, duly executed certificates of the Secretary
or Assistant Secretary (or other appropriate officer) of such Selling
Entity participating in the Closing, certifying as of the Closing Date as
to the incumbency and signature of the officers of such Selling Entity who
have executed this Agreement and the documents delivered at such Closing on
behalf of such Person (or any applicable Power of Attorney);
(g) At the Principal Closing, a duly executed legal opinion of
Intergraph's corporate counsel as to the matters set forth on Exhibit R;
---------
(h) At the Principal Closing, the General Xxxx of Sale, duly executed by
Intergraph, dated the Principal Closing Date;
(i) At the Principal Closing, a Copyright Assignment in the form attached
hereto as Exhibit S-1 ("Copyright Assignment") and a Trademark Assignment
-----------
in the form attached hereto as Exhibit S-2 ("Trademark Assignment"), each
-----------
duly executed by Intergraph and dated the Principal Closing Date;
(j) At the applicable Closing, appropriate evidence, satisfactory to USI,
that the Successor Distributor Contracts identified in Schedule 2.5(j) have
---------------
been entered into by the appropriate Selling Entity participating in the
Closing, in each case upon the terms and conditions previously agreed to by
the parties, and that such Contracts can be assigned to the appropriate
Acquiring Entity without any further consent or notification;
(k) At the Principal Closing, copies of any and all releases, termination
statements and other documents and instruments as are necessary to remove
and release any Liens which may encumber any of the Acquired Assets to be
transferred at any Closing (regardless of whether such Closing is occurring
concurrently with the Principal Closing);
(l) At the Principal Closing, the SolidEdge Reseller Agreement, duly
executed by Intergraph;
(m) At the Principal Closing, the SolidEdge License Agreement, the EMS
License Agreement and the CAD II Trademark Agreement, each duly executed by
Intergraph;
(n) At the Principal Closing, the SolidEdge Common Code License Agreement,
duly executed by Intergraph;
(o) At the Principal Closing, the BAG Products License Agreement, duly
executed by Intergraph;
(p) At the Principal Closing, the INGR Tools License Agreement, duly
executed by Intergraph;
(q) At the Principal Closing, the Lease Agreement, duly executed by
Intergraph;
(r) At the Principal Closing, the India Support Agreement, duly executed
by Intergraph;
22
(s) At the Principal Closing, the Transition Services Agreement, duly
executed by the Selling Entities;
(t) At the Principal Closing, the Version 4 Reseller Agreement, duly
executed by Intergraph;
(u) At the Principal Closing, the Trademark License Agreement, duly
executed by Intergraph;
(v) At the Principal Closing, the Patent License Agreement, duly executed
by Intergraph;
(w) At the Principal Closing, the Escrow Agreement, duly executed by
Intergraph;
(x) At the applicable Closing, such other instruments of assignment or
transfer as the applicable Acquiring Entity may reasonably request and
shall be necessary or appropriate in order to more effectively convey and
transfer the Acquired Assets to be transferred at such Closing to the
applicable Acquiring Entity or for aiding and assisting, collecting and
reducing to possession, and exercising, any rights with respect thereto;
provided, however, that any such request shall be subject to any
-------- -------
limitations or restrictions expressly provided in this Agreement;
(y) Concurrently with the Principal Closing, CD-ROMs and tapes containing
the SolidEdge Common Code, the SolidEdge Specific Code, the BAG Tools, and
the EMS Code, the delivery of which will occur at the site of the principal
operations of the Business in Alabama; and
(z) At the applicable Closing, other documents or instruments as the
Acquiring Entities participating in such Closing may reasonably request;
provided, however, that any such request shall be subject to any
-------- -------
limitations or restrictions expressly provided in this Agreement.
2.6 Other Deliveries. With respect to any aspect of the Principal
----------------
Closing or any International Closing other than the Xxxx of Sale Transaction,
each Selling Entity and each Acquiring Entity participating in such Closing
shall deliver to the other applicable parties on the Closing Date a duly
executed copy of a Closing Agreement, together with a duly executed copy of such
other instruments of transfer, conveyance and assignment and other documents
attached thereto or referred to therein, in each case dated as of the applicable
Closing Date.
2.7 Responsibility for the Retained Liabilities. Notwithstanding anything
-------------------------------------------
in this Agreement, any closing document or otherwise to the contrary:
(a) None of the Acquiring Entities or any of their Affiliates,
individually or collectively, shall be responsible for, or shall assume or
undertake to pay, perform, satisfy or discharge, any of the Retained
Liabilities or any other liability or obligation, other than the Assumed
23
Liabilities and those Transaction Taxes, if any, specified in Section
10.13, of any Selling Entity.
(b) Intergraph and its Affiliates (including the Selling Entities) and
their respective successors and assigns shall be and remain responsible for
the Retained Liabilities.
2.8 Allocation of the Consideration for the Acquired Assets. The
-------------------------------------------------------
Consideration for the Acquired Assets shall generally be allocated in accordance
with the following guidelines:
(a) The portion of the Consideration which is allocated among the Acquired
Assets located outside the United States shall equal the respective fair
market values of each of such assets, which amounts are more particularly
set forth on Schedule 2.8 hereto.
------------
(b) The remaining amount of the Consideration shall be allocated to
Acquired Assets located within the United States, in accordance with their
respective fair market values as set forth on Schedule 2.8 hereto. The
------------
value of the Acquired Assets located and to be delivered within the United
States will be set forth on Schedule I to the General Xxxx of Sale, and USI
and Intergraph agree that such allocation shall be adopted by them in
preparing, and shall be reflected on, (i) any statements and any tax
returns required to be filed with any state or local taxing authority and
(ii) any invoice or other documentation prepared with respect to
Transaction Taxes.
As soon as practicable after the Principal Closing, USI shall prepare and
furnish to Intergraph detailed allocations that are consistent with the
allocations set forth on Schedule 2.8 and Intergraph shall furnish USI with such
------------
information and documentation as is reasonably requested by USI in order to
enable USI to prepare such detailed allocations. Such agreed allocation shall
be adopted by each of the Selling Entities and Acquiring Entities in preparing,
and shall be reflected on, (i) the completed Form 8594 (Asset Acquisition
Statement under Section 1060 of the Code) which is required to be filed pursuant
to the requirements of Section 1060(b) of the Code, (ii) any similar statements
and any tax returns required to be filed with any state, local or foreign taxing
authority, (iii) each xxxx of sale or similar document delivered by a Selling
Entity to an Acquiring Entity, and (iv) any invoice or other documentation
prepared with respect to Transaction taxes.
2.9 Waiver of Bulk Sales Compliance. The Acquiring Entities and the
-------------------------------
Selling Entities hereby waive compliance with the bulk transfer or bulk sales
provisions of the applicable state Uniform Commercial Code provisions or any
other Legislative Enactment; provided, however, that such waiver shall not
-------- -------
constitute a limitation of the rights of the Acquiring Entities under Article
-------
IX.
--
2.10 Waivers of Deliveries or Conditions Precedent. Notwithstanding any
---------------------------------------------
provision to the contrary in this Agreement or in any certificate, document or
instrument delivered pursuant to this Agreement (including without limitation
any Closing Agreement), any express or implied waiver by the Acquiring Entities
of the requirement of the Selling Entities to deliver any item or Consent to be
delivered at any Closing (including without limitation those items referenced in
Section 2.5 or in any Closing Agreement) or to satisfy any conditions precedent
-----------
shall not abrogate,
24
diminish or otherwise affect any rights of the Acquiring Entities under this
Agreement, including without limitation those rights set forth in Section 9.2.
-----------
2.11 Customer Contracts.
------------------
(a) As soon as practicable following the Principal Closing Date, the
applicable Selling Entity and the applicable Acquiring Entity shall jointly
notify each customer under a Customer Contract (other than those identified on
Section 2 of Schedule 3.23(a) which are being assigned to the Acquiring
----------------
Entities) that effective as of the Principal Closing Date the Business has been
transferred to the Acquiring Entities pursuant to this Agreement, and such
Selling Entity shall use its best efforts to assist the applicable Acquiring
Entity in obtaining a successor Customer Contract with the applicable Acquiring
Entity with respect to the products and services of the Business on
substantially the same terms as the Customer Contract (a "Successor Customer
Contract"). In the event that a Successor Contract is not entered into by the
customer and the applicable Acquiring Entity under terms acceptable to both
Persons prior to the termination of a Customer Contract (under the current terms
of the Customer Contract without giving effect to any automatic renewal or
"evergreen" provisions thereof), the applicable Selling Entity shall continue
the performance of such Contract as contemplated in Section 2.11(b) below.
(b) During the period from the Principal Closing Date through the earlier
of (i) the termination of a Customer Contract under the terms thereof (not
giving effect to any automatic renewal provisions thereof) and (ii) the date a
Successor Contract to a Customer Contract is entered into between the customer
and an Acquiring Entity as contemplated by Section 2.11(a) above (such period
being referred to hereinafter as the "Subcontract Period"), Intergraph and each
other applicable Selling Entity shall cause the benefits of their respective
right, title and interest (or the economic equivalent thereof) under such
Customer Contracts to be provided to the applicable Acquiring Entity and shall
cooperate with such Acquiring Entity to provide such Acquiring Entity with such
benefits, which cooperation shall include without limitation: (A) maintenance by
Intergraph and each other applicable Selling Entity of rights under such
Customer Contract in their name in trust for the benefit of such Acquiring
Entity; (B) payment to the applicable Acquiring Entity of amounts collected in
respect of such Customer Contract as follows: for payments received by a Selling
Entity during March 1998, by wire transfer to an account designated by USI not
later than 12:00 noon on the Wednesday following the week during which such
payment was received by a Selling Entity; and for payments received by a Selling
Entity after March 1998, by wire transfer to an account designated by USI not
later than 12:00 noon on the second Business Day following receipt thereof; and
(C) at the sole option and subject to the control of such Acquiring Entity,
enforcement for its benefit of any and all such rights against a third party in
the event such rights can not be enforced by the Acquiring Entity. Unless not
permitted under any Assumed Contract with respect to which rights are made
available to an Acquiring Entity and except to the extent contemplated by the
Version 4 Reseller Agreement, the performance of such Selling Entity's
obligations thereunder shall be subcontracted or sublicensed to such Acquiring
Entity from the time such rights are made available to such Acquiring Entity
through the termination of the Subcontract Period and the applicable Acquiring
Entity shall perform such obligations in accordance with their terms. If such
assignment, subcontracting or sublicensing is not permitted, such Acquiring
Entity will use commercially reasonable efforts to perform and complete such
Assumed Contract in accordance with its terms from and after the time such
rights are made available; provided,
--------
25
however, that in connection with the foregoing, such Acquiring Entity shall have
-------
all rights and remedies against the other party to such Assumed Contracts,
including without limitation the right to cease providing products and services
thereunder if the other party thereto fails to perform its obligations
thereunder.
(c) Intergraph shall deliver to USI amounts prepaid under Prepaid
Maintenance Contracts in respect of the period following the applicable Closing
Date as follows: (i) concurrently with the applicable Closing, Intergraph shall
deliver to USI the amounts prepaid under such Contracts in respect of the month
in which such Closing occurs (pro-rated from the applicable Closing Date); and
(ii) on the first day of each month thereafter, Intergraph shall deliver to USI
the amounts prepaid under such Contracts in respect of each such month.
2.12 Distributor Contracts. Prior to the Principal Closing Date, the
---------------------
Selling Entities shall use their best efforts to amend each Distributor Contract
to remove therefrom the products and services of the Business and, except with
respect to such Distributor Contracts covering a territory or territories
outside of the United States identified on Schedule 2.12, to enter into a
-------------
separate successor distributor contract (a "Successor Distributor Contract")
covering the products and services of the Business on terms reasonably
acceptable to USI. For purposes of this Agreement, terms consistent with those
contained in the existing Distributor Agreement shall be deemed to be reasonably
acceptable to USI. Each Successor Distributor Agreement shall be assignable to
USI or another applicable Acquiring Entity effective as of the Principal Closing
Date and shall be assigned at the Closing and be an Assumed Contract hereunder
(subject to the proviso set forth in the definition of "Assumed Contract" in
Section 1.1).
2.13 Consents. The parties will cooperate with each other in good
--------
faith to timely obtain all Consents from any and all Tribunals and other Persons
that are required (i) for the consummation of the transactions contemplated by
this Agreement; (ii) to permit the continued operation of that portion of the
Business conveyed on any Closing Date on or after such Closing Date in
substantially the same manner as it was carried on and conducted prior thereto,
including, without limitation, the execution of Successor Contracts pursuant to
Section 2.12 hereof; and (iii) to prevent a breach of, a default, penalty or
increase in payment under, or a termination of any Contract relating to the
Business. The cost of obtaining such Consents shall be borne by the party who
is required to obtain such Consent under the applicable Legislative Enactment or
under the terms of the relevant Contract, provided, however, that if the
applicable Legislative Enactment does not provide which party shall pay such
costs, the costs shall be borne equally by USI and Intergraph (although in all
cases each party shall pay the fees and expenses of its own counsel). The
parties hereto agree to use their best efforts to obtain such Consents in a cost
effective and efficient manner. Until all Consents referenced in this Section
-------
2.13 are obtained, the applicable Selling Entities shall provide the applicable
----
Acquiring Entity with the rights and benefits, and the Selling Entities shall in
any event continue to have the indemnity and hold harmless obligations set forth
in Article IX.
----------
2.14 Interim Operation for International Selling Entities.
----------------------------------------------------
(a) With respect to each International Selling Entity that does not
transfer and convey all of its respective portion of the Business and Acquired
Assets on the Principal Closing Date,
26
from and after the Principal Closing Date USI may, at its option, designate one
or more employees or other representatives of the Acquiring Entities to serve as
managers of the Business of each such International Selling Entity to the extent
permitted by applicable law. The management of the Business of each respective
International Selling Entity shall report to, and be subject to the direction
of, such manager so designated by the Acquiring Entities. Such managers may
serve their functions on-site at such International Selling Entities. The
Acquiring Entities shall be free to make oral and written communications to the
employees of the International Selling Entities during the period following the
Principal Closing Date (provided that communications describing the terms of
this Section 2.14(a) shall be provided to Intergraph in advance of their release
for their prompt comment and review). During this period, USI may request that
the employment of any employee of the International Selling Entity who would be
a Transitioned Employee be terminated. In such event, no later than five days
following the date of such request Intergraph may either (i) continue the
employment of such person for Intergraph's benefit (which continuation would not
be a violation of Section 5.7 hereof), in which event USI shall not be obligated
to reimburse USI for such person's salary upon the occurrence of the applicable
International Closing, or (ii) terminate the employment of such person, in which
event USI will reimburse Intergraph for any required severance payments to any
such employee in accordance with Intergraph's severance policy.
(b) From and after the Principal Closing Date, the Business of each
International Selling Entity shall be conducted and operated for the account and
benefit of the applicable Acquiring Entities. At the applicable International
Closing for an International Selling Entity, the Closing Agreement shall provide
for (i) the payment by the applicable Selling Entity to the applicable Acquiring
Entity of all revenues derived by the portion of the Business attributable to
such Selling Entity (which revenues shall have been collected by the Selling
Entities and held for the benefit of the applicable Acquiring Entity) during the
period from and after the Principal Closing Date to the date of the applicable
International Closing (the "Interim Period"), (ii) the reimbursement by the
applicable Acquiring Entity to the applicable Selling Entity of all expenses
directly attributable to the operation of the Business by such Selling Entity
during the Interim Period (and excluding any expenses attributable to any other
business or businesses of the Selling Entities), including, without limitation,
costs and expenses associated with employment of the Transitioned Employees and
Taxes (other than Transaction Taxes) attributable to the operation of the
Business during the Interim Period, and (iii) the payment of any excess of the
amount described in clause (i) over the amount described in clause (ii) (a
"Profit Amount") from the applicable Selling Entity to the applicable Acquiring
Entity, or the payment of any excess of the amount described in clause (ii) over
the amount described in clause (i) (a "Loss Amount") from the applicable
Acquiring Entity to the applicable Selling Entity. The payment of any Profit
Amount or Loss Amount, as the case may be, shall be treated as an adjustment to
the Consideration payable in respect of such International Closing. Not later
than 15 Business Days following the applicable International Closing, the
applicable Selling Entity and Acquiring Entity shall adjust the Profit Amount or
Loss Amount, as the case may be, based on any revenues or expenses which were
unidentified at the time of the International Closing and, based on such post-
closing adjustment, any excess amounts delivered at the applicable International
Closing pursuant to the immediately preceding sentence shall be immediately
returned and/or any additional payments which would be required to have been
made at such International Closing pursuant to such sentence shall be
immediately paid by the applicable party. At an International Closing, the
applicable Selling Entity shall deliver to the applicable Acquiring Entity cash
in an
27
amount equal to the accrued liability of such Selling Entity in respect of
employee benefits (such as severance, termination indemnities or vacation) which
benefits are required to be assumed by the Acquiring Entity as a matter of
applicable law, except to the extent that such liabilities are settled directly
with the relevant employees at the applicable Closing or are governed by Section
5.13(h) hereof.
(c) USI and Intergraph will use their commercially reasonable best efforts
to consummate all International Closings as soon as practicable following the
Principal Closing Date. Until such time as all International Closings have been
consummated, USI and Intergraph shall cause their representatives to confer
frequently (and in any event not less frequently than monthly) with each other
regarding the status of such International Closings.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES
To induce the Acquiring Entities to enter into this Agreement and to
consummate the transactions contemplated hereby, the Selling Entities jointly
represent and warrant to the Acquiring Entities as follows and as may be
additionally provided in the applicable Closing Agreement:
3.1 Corporate Existence and Authority. Each Selling Entity is a
---------------------------------
corporation or other legal entity (as indicated on Schedule 3.1) duly organized,
------------
validly existing and to the extent such a concept or a similar concept exists in
the relevant jurisdiction, in good standing under the laws of the state or other
jurisdiction of its incorporation or other organization, as set forth on
Schedule 3.1. Each Selling Entity has all requisite power and authority to own
------------
and lease its properties and assets and to carry on the Business, as such
business is being conducted currently. Schedule 3.1 contains a true, complete
------------
and correct list of all jurisdictions in which any of the Selling Entities owns
or leases any real property or has employees or offices relating to the
Business. Each Selling Entity is duly qualified and licensed to do business as
a foreign corporation or entity and is in good standing in all jurisdictions in
which the nature of the business being conducted requires it to be so qualified
except where the failure so to qualify may reasonably be expected not to have a
material adverse effect on the Business or the Acquired Assets, taken as a
whole.
3.2 Authorization and Effect of Agreement, Etc. Each Affiliate of
------------------------------------------
Intergraph whose action is legally required to transfer to the Acquiring
Entities the Acquired Assets in accordance with this Agreement is listed as a
Selling Entity on the signature pages hereof. Each Selling Entity has all
requisite power and authority to enter into, execute and deliver this Agreement
and the other agreements contemplated hereby to which such Person is a party and
to perform its obligations hereunder and thereunder and to consummate the
respective transactions contemplated hereby and thereby for such Selling Entity.
The execution, delivery and performance of this Agreement by each of the Selling
Entities and the other agreements contemplated hereby to which such Person is a
party and the consummation by the Selling Entities of the transactions
contemplated hereby and thereby have been duly authorized by all corporate and
other entity action. This Agreement has been, and the other agreements
contemplated hereby to which any of the Selling Entities is a party will be,
duly executed and delivered by each of the Selling Entities (to the extent such
Person is a
28
party thereto) and constitute, or when executed and delivered will constitute,
the valid and binding obligation of the Selling Entities, enforceable in
accordance with its respective terms, except that (a) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
Legislative Enactments now or hereafter in effect relating to creditors' rights
generally, and (b) the remedy of specific performance and injunctive relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding may be brought. This Agreement, the General Xxxx of Sale, the
Copyright Assignment, the Trademark Assignment, the Transferred Intellectual
Property License Agreements and the Closing Agreements, when executed and
delivered by the respective Selling Entities, will be sufficient to assign,
convey, transfer, vest, perfect and confirm in the appropriate Acquiring
Entities, good and marketable title in and to the Acquired Assets.
3.3 No Violation. Except as set forth on Schedule 3.3, neither the
------------ ------------
execution, delivery or performance by any of the Selling Entities of this
Agreement or of any other agreement contemplated hereby to which any of such
Persons is a party, nor the consummation by any of the Selling Entities of any
of the transactions contemplated hereby or thereby in accordance with the terms
hereof or thereof does or will (with the passage of time, the giving of notice
or otherwise), with respect to any Selling Entity (a) violate or conflict with
any provision of the Charter, Bylaws or other governance document of such
Selling Entity; (b) violate, conflict with, modify or cause any default under or
acceleration of (or give any party any right to declare any default or
acceleration, upon notice or passage of time or otherwise with respect to), in
whole or in part, any Contract related to the Business to which such Selling
Entity is a party or by which such Selling Entity or any of the Acquired Assets
is bound; (c) violate, conflict with or cause any default under (or give any
party any right to declare any default, upon notice or passage of time or
otherwise, under) any Legislative Enactments, Official Actions or any other
restriction of any kind or character to which such Selling Entity is a party or
by which such Selling Entity or any of its respective properties or any of the
Acquired Assets is bound; (d) result in the creation or imposition of any Lien,
proscription or restriction on any of the Acquired Assets; or (e) permit any
Tribunal to impose any material restrictions or limitations of any nature on
such Selling Entity or its properties or activities.
3.4 Consents.
--------
(a) Except as set forth in Schedule 3.4(a), no Consent of, or
----------------
registration, declaration or filing with, or permit from, any Tribunal, lessor,
lender or any other Person is required to be made or obtained by any Selling
Entity in connection with the execution, delivery and performance by any of the
Selling Entities of this Agreement or the other agreements contemplated hereby
or the consummation of the transactions contemplated hereby or thereby in
accordance with the terms hereof and thereof.
(b) After the Principal Closing, except with respect to those Acquired
Assets to be transferred at each International Closing (and with respect to such
Acquired Assets, after such International Closing related thereto) and except as
set forth on Schedule 3.4(b), the Acquiring Entities shall have the unrestricted
---------------
right to own, use, operate and sell all or any of the Acquired Assets and to
conduct the Business as it is currently conducted by the Selling Entities
without the payment of any royalty, license or other fee to any Person by USI or
any Affiliate of USI, including
29
without limitation any transfer fee, relicensing fee or other fee with respect
to Software to be transferred or assigned.
3.5 General Warranty. All written statements, certificates or documents
----------------
furnished by any Selling Entity in accordance with this Agreement, taken as a
whole, are true, complete and correct in all material respects and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading, provided,
however, that the only representation or warranty made with respect to the
Projections is the representation and warranty set forth in Section 3.30.
3.6 Challenges To This Agreement. No suit, action, proceeding or
----------------------------
investigation against any Selling Entity challenging this Agreement or any of
the transactions contemplated hereby or claiming damages in connection with this
Agreement or any of the transactions contemplated hereby has been instituted or,
to the knowledge of the Selling Entities (without independent investigation),
threatened.
3.7 Financial Statements. The Selling Entities have provided to USI
--------------------
true, complete and correct copies of the Financial Statements, which are
attached hereto as Schedule 3.7. The Financial Statements fairly present,
------------
except for the presentation of footnote disclosures (which footnote disclosures
are not material to an understanding of the Financial Statements) which will be
provided as soon as practicable following the Principal Closing pursuant to
Section 5.6 hereof, the financial position of the Selling Entities with respect
to the Business and the related results of operations at the dates and for the
periods covered thereby, subject with respect to quarterly financial information
to normal, recurring year-end audit adjustments described in Section 1 of
---------
Schedule 3.7. The Financial Statements have been prepared in accordance with
------------
GAAP, other than the aforementioned footnote disclosures, applied on a
consistent basis during the periods involved. As of the Balance Sheet Date, (A)
none of the Selling Entities had any liability or expense of any nature, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
with respect to the Business which was not reflected in the Financial Statements
and which was of a nature required under GAAP to be reflected in the Financial
Statements or disclosed in the notes thereto when prepared, (B) all allowances
and reserves set forth in the Financial Statements were adequate for the
respective purposes for which they were established, and (C) there were no loss
contingencies (as such term is used in Statement of Financial Accounting
Standards No. 5) or contingent liabilities which were of a nature required under
GAAP to be reflected or disclosed and were not reflected in the Financial
Statements or will be disclosed in the notes thereto. Since the Balance Sheet
Date, except for liabilities that have been incurred in the ordinary course of
the Business consistent with past practices, none of the Selling Entities has
incurred any material liability of any nature (whether accrued, absolute,
contingent or otherwise) with respect to the Business. Except as set forth in
Schedule 3.7(a), none of the Selling Entities is liable upon or with respect to,
---------------
or obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, obligation or dividend of any Person related to
the Business. The Financial Statements fairly reflect the liabilities accrued
for the annual incentive compensation benefits payable under the plans and
programs set forth in Schedule 3.25(c), consistent with prior application of the
----------------
terms of such plans and taking into account performance to date.
30
3.8 Accounts Receivable. All of the Accounts Receivable reflected in
-------------------
the Balance Sheet have arisen in connection with bona fide sales and deliveries
of goods, performance of services or other bona fide business transactions in
the ordinary course of the Business, consistent with past practices (including
regular credit practices). All reserves reflected in the Balance Sheet against
doubtful accounts of, valid counterclaims or setoffs by, rebates, discounts and
allowances to, and returns from, customers were established in a manner
consistent with the collection experience of the Business in prior year s.
3.9 Customer Discounts. Except as set forth on Schedule 3.9, since
------------------ ------------
December 31, 1996, no Selling Entity has granted any rebates, discounts,
advances or allowances to any customers of the Business for products or
services, except in the ordinary course of business consistent with past
practice.
3.10 SEC Reports. Intergraph has previously furnished to USI true,
-----------
complete and correct copies of Intergraph's (i) Annual Report on Form 10-K for
the year ended December 31, 1996, and (ii) Quarterly Reports on Form 10-Q for
the quarters ended March 31, June 30, and September 30, 1997, each as filed with
the SEC. As of their respective filing dates and to the extent such reports and
statements relate to the Business, such reports and statements complied in all
material respects with all applicable requirements of the Exchange Act and the
rules and regulations promulgated thereunder, and such reports and statements as
of the date of their respective filing did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.11 Absence of Changes. Except as set forth in Schedule 3.11, since
------------------ -------------
December 31, 1997 there has not been, occurred or arisen any change in, or any
event (including without limitation any damage, destruction or loss whether or
not covered by insurance), condition or state of facts of any character that
individually or in the aggregate has or may be expected to have a material
adverse effect on the Acquired Assets or the Business, taken as a whole. Since
December 31, 1997, except as set forth in Schedule 3.11: (a) no Selling Entity
-------------
has taken or failed to take any action the taking of which or failure of which
to take, as the case may be, would have violated any of the provisions of
Sections 5.2 or 5.3 if they had then been applicable to any portion of the
------------ ---
Business; and (b) there has not been any damage, destruction or loss (whether or
not covered by insurance) affecting any of the Acquired Assets the result of
which individually or in the aggregate has or may reasonably be expected to have
a material adverse effect on the Business or the Acquired Assets, taken as a
whole.
3.12 Books and Records. Each Selling Entity makes and keeps Books and
-----------------
Records with respect to the Business which, in reasonable detail, accurately and
fairly reflect in all material respects its transactions and the acquisitions
and dispositions of its assets since the date of its organization. The present
system of internal accounting controls of each Selling Entity with respect to
the Business reasonably assures that: (a) transactions are executed only in
accordance with the general or specific authorization of its management, (b)
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with GAAP and to maintain accountability for its
assets, (c) access to its assets is permitted only in accordance with the
general or specific authorization of its management, and (d) the recorded
accountability for its assets is
31
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. No Selling Entity has used any
improper accounting practices with respect to the Business, including any
practices for the purposes of deceptively reflecting or not reflecting any of
its properties, assets, liabilities, revenues or expenses in any of its Books
and Records.
3.13 Taxes. Except as otherwise disclosed on Schedule 3.13:
----- -------------
(a) Each Selling Entity has timely filed or will file in a timely manner
with the appropriate Tax or revenue service, taxing authority, or taxing
Tribunal (collectively, "Tax Tribunal") all Tax Returns required to be filed
regarding any period up to but not including the applicable Closing Date which
relates to Taxes attributable to the Acquired Assets, and all such Tax Returns
were or will be correct and complete in all material respects.
(b) Each Selling Entity has paid or will pay on the applicable due date
all Taxes owing by any Selling Entity (whether or not shown on any Tax Return),
which are due and payable on or before the applicable Closing Date.
(c) Except for claims that were resolved more than three years ago, no
claim has been made by any Tax Tribunal in a jurisdiction where Intergraph,
Intergraph (Deutschland) GmbH, or Intergraph (Italia) L.L.C. did not file Tax
Returns, that any of such Persons is or may be subject to taxation by that
jurisdiction.
(d) Intergraph, Intergraph (Deutschland) GmbH, and Intergraph (Italia)
L.L.C. are neither presently under examination by any tax authorities, nor in
receipt of any notice of impending examination. There are no pending and, to the
best knowledge of Intergraph, threatened, examinations, audits, investigations,
suits, or other legal proceedings involving, or material assessments against,
Intergraph, Intergraph (Deutschland) GmbH, or Intergraph (Italia) L.L.C. with
respect to Taxes attributable to the Business, or any other material claims for
unpaid Taxes attributable to the Business, which have been or may be asserted
against any of those entities.
(e) There are no pending or threatened audits, investigations,
examinations, suits or other legal proceedings involving, or material
assessments against, any Selling Entity with respect to Taxes attributable to
the Business, or any other material claims for unpaid Taxes attributable to the
Business which may be asserted against any Selling Entity.
(f) There are no Liens for Taxes upon any assets of any Selling Entity,
except for statutory Liens disclosed on Schedule 3.13 for Taxes or assessments
not yet delinquent.
(g) All material amounts required to be withheld or collected by any
Selling Entity and paid to any Tax Tribunal for income, social security,
unemployment insurance, sales, excise, use, property and other Taxes have been
timely withheld or collected and, to the extent required, have been timely paid,
remitted or deposited to or with the relevant Tax Tribunal.
32
(h) There are no material proposed reassessments of the taxable value of
any of the Acquired Assets or similar matters pending with respect to any Tax
Tribunal.
(i) No Selling Entity that is transferring any interest in real property
located in the United States is a "foreign person" as that term is referred to
in Section 1445(f)(3) of the Code.
(j) Intergraph will provide to USI within sixty days of the Principal
Closing Date, a document which shall be deemed to be incorporated by reference
into this Agreement as Schedule 3.13(j) hereto extending the representations
----------------
made in Sections 3.13(c)-(e) above to all Selling Entities, with the same legal
effects as if included in this Agreement as of the date hereof. Should
Intergraph fail to timely deliver Schedule 3.13(j) to USI, then the
----------------
representations of Sections 3.13(c)-(e) above shall be deemed to be
representations by Intergraph with respect to all Selling Entities which are not
subject to any exceptions other than those contained in Schedule 3.13. It is
-------------
expressly acknowledged and agreed that this Section 3.13(j) is intended solely
to resolve a logistical difficulty in obtaining sufficient and reliable
information with which to make the representations under Sections 3.13(c)-(e)
with respect to all Selling Entities.
3.14 Disputes and Litigation. Except as set forth in Schedule 3.14,
----------------------- -------------
there is not existing or pending or, to the best knowledge of any of the Selling
Entities (without independent investigation), threatened (a) any suit, action,
litigation, proceeding, investigation, claim, complaint or accusation affecting
or against any Selling Entity with respect to the Business or any of the
Acquired Assets in or before any Tribunal or (b) any Official Actions which
individually or in the aggregate has or may reasonably be expected to have a
material adverse effect on the Business or the Acquired Assets or to which any
Selling Entity is a party with respect to the Business.
3.15 Environmental Matters. To the best knowledge of any of the
---------------------
Selling Entities, without independent investigation, the Compliance Group has
fully, completely and timely complied with, and are currently in compliance
with, all Environmental Laws and all related permits, licenses, orders,
approvals, waivers and variances. Except as set forth in Schedule 3.15, to the
-------------
best knowledge of the Selling Entities, without independent investigation, no
Hazardous or Toxic Substances are, or have been, used, generated, handled,
treated, stored or disposed of on, under or in, or transported from, the
Compliance Property except in full compliance with applicable Environmental
Laws. Except as set forth in Schedule 3.15, none of the Compliance Group has
-------------
ever received any complaint, order, citation or notice, public or private, with
respect to any possible violation of the Environmental Laws or obligation or
liability thereunder related to the Business.
3.16 Bank Accounts. No Selling Entity maintains any bank account, safe
-------------
deposit box or similar arrangement relating exclusively to the Business.
3.17 Year 2000 Compliance. All Software products included within the
--------------------
Business, including without limitation the BAG Tools, the INGR Tools, the
SolidEdge Common Code, the SolidEdge Specific Code and the SolidEdge and EMS
products, are Year 2000 Compliant. With respect to all such Software products,
Intergraph has completed the assessment stage for the determination of Year 2000
Compliance and concluded that no renovation is necessary.
33
3.18 Rights Used; Certain Relationships. Except as set forth in
----------------------------------
Schedule 3.18, the Acquired Assets, including, without limitation, the
-------------
Transferred Intellectual Property Interests, contain all rights, properties and
assets utilized or necessary in the conduct of the Business and are sufficient
in all respects to carry on and conduct the Business after each Closing in
substantially the same manner as it was carried on and conducted prior thereto.
No Affiliate of Intergraph other than the Selling Entities holds any assets
comprising a part of the Business. No officer or director of any Selling Entity
(or any relative of any such director or officer) has any material business or
other relationship (as creditor, lessor, lessee, supplier, dealer, distributor,
franchisee, customer or otherwise) with any Selling Entity with respect to the
Business. To the best knowledge of the Selling Entities, without independent
investigation, none of the Selling Entities or any of their respective
Affiliates, directors, officers, employees or agents has, directly or
indirectly, given or agreed to give any improper gift or similar benefit to any
creditor, lessor, lessee, supplier, dealer, distributor, franchisee, customer,
competitor or governmental employee or official (domestic or foreign) (a) that
could subject any of the Acquiring Entities or any of its Affiliates to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, or (b) the absence or discontinuation of which could have had a
material adverse effect on the Business or the Acquired Assets.
3.19 Title to Properties and Absence of Liens. Each Selling Entity has
----------------------------------------
good and marketable title or valid leasehold title to its respective Acquired
Assets, subject to no Liens or any other adverse interests or restrictions of
any kind except as disclosed in Schedule 3.19 (such Liens being hereinafter
-------------
collectively referred to as "Permitted Encumbrances"), all of which Permitted
Encumbrances will be removed prior to the Principal Closing.
3.20 Real Property.
-------------
(a) Section 1 of Schedule 3.20(a) sets forth the street address of all
--------- ----------------
Real Property used in the Business, the Selling Entity which holds the interest
in such Real Property and whether such interest is a leasehold interest or an
ownership interest. Section 2 of Schedule 3.20(a) sets forth the street address
--------- ----------------
of each parcel of Real Property occupied by the Business and with respect to
which the applicable Selling Entity and the applicable Acquiring Entity shall
enter into a lease. The respective Selling Entity enjoys peaceful possession of
its interest in all such Real Property. The Real Property used in the Business
and all material personal property owned or leased and included in the Acquired
Assets or comprising a part of the Business are in good operating condition and
repair (ordinary wear and tear excepted) and suitable and sufficient for the
purposes for which used.
(b) None of the buildings, structures or improvements located on the Real
Property subject to the Lease Agreement is the subject of any official complaint
or notice of violation of any material applicable zoning ordinance, building
code or regulation, and no such violation exists which materially detracts from
or interferes with the present use of such properties or materially detracts
from the value thereof or materially impairs the operations thereon; and there
is no zoning ordinance, building code, use or occupancy restriction or
condemnation action or proceeding pending, or, to the best knowledge of the
Selling Entities, without independent investigation, threatened with respect to
any such building, structure or improvement on any of the Real Property which
would materially detract from, or interfere with the present use of, such parcel
or materially
34
detract from the value thereof or materially impair the operations of the
Business thereon, as presently conducted.
3.21 Contracts. Schedule 3.21 sets forth a true, complete and correct
--------- -------------
list, correlated with the applicable clauses of this Section 3.21, of the
------------
following (true, complete and correct copies, or if none, written descriptions,
of which have been provided or made available to USI, together with all
exhibits, amendments or modifications thereto):
(a) All Contracts relating to the Business containing any provision,
covenant or obligation limiting or restricting in any manner whatsoever the
ability of any of the Selling Entities or any of the employees of the
Selling Entities to engage in any line of business, to sell any products or
services or to compete with or to obtain products or services from any
Person or limiting the ability of any Person to compete with or to provide
products or services to any of the Selling Entities;
(b) All Contracts pursuant to which Intergraph or any of its Affiliates
may have granted, or agreed to grant, to another Person exclusive rights
with respect to any goods or services, items of Software or territory
relating to the Business;
(c) To the extent not covered in clause (b) above, all partnership, joint
venture, profit-sharing or similar Contracts with any Person relating to
the Business;
(d) All Contracts that involve the disposition or acquisition after the
date hereof of any assets of any of the Selling Entities relating to the
Business that do not relate to transactions entered into in the ordinary
course of business, consistent with past practices;
(e) All Contracts or arrangements (including without limitation those
relating to allocations of expenses, personnel, services, equipment or
facilities) between or among Intergraph or any of its Affiliates with
respect to the Acquired Assets or the Business;
(f) All other Contracts relating to the Business, to the extent not set
forth above, that were not entered into in the ordinary course of business,
consistent with past practices, and that individually involve the payment
or potential payment, pursuant to the terms of such Contracts, of more than
$10,000 individually or that are otherwise material to the Acquired Assets
or the Business;
(g) Each business name which has been used by any of the Selling Entities
with respect to any portion of the Business (separately listed for each
such portion or Person);
(h) All Contracts pursuant to which Intergraph or any of its Affiliates
may have granted, or agreed to grant (whether or not any requirement such
as the giving of notice, the lapse of time or the happening of any further
condition, event or act has been satisfied), to another Person the right to
sublicense or transfer any Software relating to the Business (other than to
an Affiliate of such Person);
35
(i) All Contracts pursuant to which Intergraph or any of its Affiliates
may have delivered to another Person, or granted or agreed to grant
(whether or not any requirement such as the giving of notice, the lapse of
time or the happening of any further condition, event or act has been
satisfied) to another Person the rights to obtain, any source code to any
Software relating to the Business;
(j) All Contracts pursuant to which Intergraph or any of its Affiliates
may have delivered to another Person, or granted or agreed to grant
(whether or not any requirement such as the giving of notice, the lapse of
time or the happening of any further condition, event or act has been
satisfied) to another Person the rights to obtain, any Software "keys"
allowing access to additional modules or programs of any Software relating
to the Business;
(k) All performance bonds posted by any of the Selling Entities in
connection with the Business; and
(l) All outstanding bids involving amounts exceeding $10,000 for new
business or projects submitted by any of the Selling Entities in connection
with the Business.
3.22 Contract Status. Schedules 3.21, 3.23, 3.24(g), 3.31(b) and
--------------- -------------- ---- ------- -------
3.32(b) set forth a true, complete and correct list of all Contracts (true,
-------
complete and correct copies, or if none, written descriptions, of which have
been provided or made available to USI, together with all exhibits, amendments
and modifications thereto) used in the Business, other than the leases of Real
Property referred to in Section 3.20 and the Contracts listed on Schedule 3.22.
-------------
Each such Contract is in full force and effect and constitutes a valid, legal
and binding obligation of (i) the Selling Entity that is a party thereto,
enforceable against such Selling Entity in accordance with its terms and (ii) to
the knowledge of the Selling Entities, without independent investigation, the
other party thereto, enforceable in accordance with its terms. No Selling
Entity that is a party to any such Contract, and to the knowledge of the Selling
Entities, without independent investigation, no other party to such Contract, is
in breach or default thereunder, and no notice of default, defense, offset,
counterclaim, termination, cancellation or acceleration has been received by any
party with respect thereto. To the knowledge of the Selling Entities, without
independent investigation, (i) there exists no event or condition that (with or
without notice or lapse of time or both) would constitute a breach or violation
thereof, or a default thereunder, or give rise to any right of offset,
counterclaim, termination, cancellation or acceleration pursuant thereto, (ii)
there is no threat to cancel, or not to renew or extend, any such Contract which
by its terms may be renewed or extended, and (iii) there are no material
disputes with respect to any such Contract. No Selling Entity has any present
expectation or intention of not fully performing such Contract in accordance
with its terms.
3.23 Certain Contracts.
-----------------
(a) Customer Contracts. Section 1 of Schedule 3.23(a), sets forth a true,
------------------ --------- ----------------
complete and correct list of all executory Contracts providing for the sale,
lease or rental of products and services of the Business. Except as set forth on
Section 2 of Schedule 3.23(a), all such Contracts also relate to the sale of
--------- ----------------
products and services of the Selling Entities not included within the Business
(such Contracts, other than those Contracts identified on such Section 2 which
---------
are being assigned to the Acquiring Entities, are referred to as the "Customer
Contracts"). As a result, the Customer
36
Contracts are not being assigned by the Selling Entities to the Acquiring
Entities but the Acquiring Entities shall be entitled to the rights of the
Selling Entities under such Customer Contracts pursuant to the provisions of
Section 2.11 hereof. The enforceability of each such Customer Contract and the
rights and benefits of the Selling Entities thereunder will not be affected by
the execution and delivery of this Agreement or any of the other agreements
contemplated hereby, the performance by the parties of their obligations
hereunder and thereunder or the consummation of the transactions contemplated
hereby and thereby, other than as specifically provided for in Section 2.11
hereof. Each Contract identified on Section 2 of Schedule 3.23(a) is assignable
--------- ----------------
(and will be assigned and transferred) by the respective Selling Entity to the
appropriate Acquiring Entity pursuant to the transactions contemplated hereby
without requiring any payment to, or Consent from, any Person or any waiting
period, payment of any charge, fee or expense or any notice to any Person.
Section 3 of Schedule 3.23(a) sets forth a true and correct list as of the date
--------- ----------------
hereof of all Customer Contracts, including, without limitation, any software
warranty upgrade agreements, under which a customer has prepaid a Selling Entity
for products or maintenance services ("Prepaid Maintenance Contracts"). The
Selling Entities will update the schedules set forth in this Section 3.23 prior
to an applicable Closing. The Selling Entities shall take all action necessary
so that the current term of any Customer Contract shall not be extended either
under the terms thereof or by operation of law. No Customer Contract has a
current term ending after the one-year anniversary of the date hereof (except
such Customer Contracts as may be terminated by the Selling Entities prior to
such date, and the Selling Entities agree to so terminate any such contract
before such date at the request of USI).
(b) Distributor, Reseller and Business Partner Contracts.
----------------------------------------------------
Schedule 3.23(b) sets forth a true, complete and correct list of all
distributor, reseller and business partner agreements related to the Business
(the "Distributor Contracts"), all of which as of the date of this Agreement
also relate to products and services of the Selling Entities not included within
the Business. Except as may be modified by the amendments contemplated by
Section 2.12 and except as set forth on Schedule 3.23(b), all Distributor
----------------
Contracts (i) are non-exclusive, (ii) with respect to Distributor Contracts
covering a territory or territories within the United States are terminable by
either party thereto on not greater 30 days notice, and (iii) with respect to
Distributor Contracts covering a territory or territories outside of the United
States are terminable by either party thereto on not greater than 90 days
notice.
3.24 Employees.
---------
(a) Schedule 3.24(a) sets forth a true, complete and correct list of each
----------------
manager, officer and employee of each of the Selling Entities whose primary
function relates to the Business, together with each such Person's name, job
title, current annual compensation, amounts and forms of special fringe
benefits, if any, and duration of employment with such entity. Each of the
Selling Entities with respect to the Business (i) is in substantial compliance
with all applicable Legislative Enactments and Official Actions regarding
employment, wages and hours with respect to their employees, consultants and
independent contractors and (ii) is not engaged in any unfair labor practice or
discriminatory employment practice. No lawsuit or complaint against any Selling
Entity with respect to the Business has been filed or, to the best knowledge of
the Selling Entities (without independent investigation), threatened to be
filed, with or by the National Labor Relations Board, the Equal Employment
Opportunity Commission or any other Tribunal that regulates labor or
37
employment practices, and there is no grievance filed or, to the best knowledge
of the Selling Entities, threatened to be filed, against any Selling Entity with
respect to the Business by any employee pursuant to any collective bargaining or
other employment agreement. There is no consultant or independent contractor
who, individually or together with others, is material to the Business. None of
the managerial employees of the Selling Entities have any knowledge that any
employee, consultant or independent contractor with respect to the Business will
terminate his employment or cease to do business with the Business after
consummation of the transactions contemplated by this Agreement. To the best
knowledge of the Selling Entities (without independent investigation), there are
no material controversies pending or threatened between any Selling Entity and
any of its employees with respect to the Business, and no labor union or other
organization represents or claims to represent any of such employees' interests.
Except as set forth in Schedule 3.24(a), none of the Selling Entities has been a
----------------
party to any Contract with any union, labor organization or collective
bargaining unit with respect to any of its employees conducting the Business and
none of such employees outside of the United States is represented by a works
council. No union organizing or election activities involving any employees of
any Selling Entity with respect to the Business are in progress or, to the best
knowledge of the Selling Entities (without independent investigation),
threatened.
(b) All payments due from any of the Selling Entities on account of
employer's social security contributions and employee health and welfare
insurance under applicable Legislative Enactments with respect to the Business
in respect of years and periods (and portions thereof) ended on or prior to the
Balance Sheet Date were either paid prior to the Balance Sheet Date or accrued
in full as a liability on the Balance Sheet.
(c) All severance payments, if any, which as of the applicable Closing
Date would be payable by any of the Selling Entities with respect to any of the
Transitioned Employees under the terms of any oral or written agreement or
commitment have been or will be paid on or prior to such applicable Closing
Date.
(d) The Selling Entities have withheld proper amounts from the
Transitioned Employees (all of which has been timely remitted to the appropriate
Tax authority) and have timely filed or will timely file all Tax Returns with
respect to employee income Tax withholding and social security and unemployment
Taxes, all in compliance with the Tax withholding provisions of the Code and
other applicable Legislative Enactments.
(e) No Selling Entity has made any payments, or is or may become obligated
to make any payments to any Person with respect to the Business as a result of
the transactions contemplated by this Agreement which could result in "excess
parachute payments" (as defined in Section 280G(b) of the Code) to any such
Person.
(f) Through the Principal Closing Date, the Selling Entities shall have
taken all necessary actions (if any) to comply with the WARN Act, to the extent
they are subject to such act, and no Acquiring Entity shall have any disclosure
or announcement obligations under the WARN Act. As of the date hereof, and in
reliance upon the covenant of the Acquiring Entities in Section 6.3 hereof, none
of the Selling Entities subject to the WARN Act contemplates any "plant closing"
38
or "employee layoff," as such terms are used in the WARN Act, with respect to
any employees of any of the Selling Entities.
(g) Schedule 3.24(g) sets forth a true, complete and correct list of all
----------------
employment agreements to which any Selling Entity is a party with respect to any
of the Transitioned Employees.
(h) Schedule 3.24(h) sets forth a true, complete and correct list of all
----------------
employee manuals, policies, procedures and work related rules that apply to any
of the Transitioned Employees.
(i) No Selling Entity has made any representations or warranties or any
other statements or communications regarding any Acquiring Entity's right,
ability, plan or intention to dismiss any Transitioned Employee or the terms and
conditions upon which any such Transitioned Employee will be employed by any
Acquiring Entity, other than statements regarding the terms and conditions of
employment based on information provided by USI.
3.25 Employee Benefit Matters.
------------------------
(a) Employee Welfare Benefit Plans. Schedule 3.25(a) indicates therein
------------------------------ ----------------
each and every "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA) maintained, contributed to or to which contributions are required to be
made by any of the Selling Entities or any of their Affiliates with respect to
employees of the Business either presently or within the previous 12-month
period, or any such plan related to the Business to which any of the Selling
Entities or any of their Affiliates contributes, is required to contribute or
has contributed, including any such similar type of plan established,
maintained, or contributed to under the laws of any foreign country (such plans
being hereinafter collectively referred to as the "Employee Welfare Benefit
Plans"). Intergraph has delivered to USI true, complete and correct copies of
each and every Employee Welfare Benefit Plan, together with all documents and
instruments establishing or constituting any related trust, annuity contract or
other funding instrument, and including any summary plan descriptions or
substantive communication to employees concerning the establishment, operation
or termination of any such plan.
(b) Employee Pension Benefit Plans. Schedule 3.25(b) indicates therein
------------------------------ ----------------
each and every "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) maintained, contributed to or to which contributions are required to be
made by any of the Selling Entities or any of their Affiliates with respect to
employees of the Business either presently or within the previous 12-months,
including any Multiemployer Pension Plan (as defined in either Section 3(37) or
Section 4001(a)(3) of ERISA) and including any such similar plan established,
maintained or contributed to under the laws of any foreign country (such
employee benefit plans being hereinafter collectively referred to as the
"Employee Pension Benefit Plans"). Intergraph has delivered to USI true,
complete and correct copies of each and every such Employee Pension Benefit
Plan, together with such copies of all documents or instruments establishing or
constituting any related trust, annuity contract or other funding instruments,
and including any summary plan descriptions or substantive description or
communication concerning such plan to employees or participants therein.
39
(c) Other Employee Benefit Arrangements. Schedule 3.25(c) indicates
----------------------------------- ----------------
therein each and every stock option plan, pension plan, collective bargaining
agreement, bonus, incentive award, vacation pay, severance pay or any other
material personnel policy, employee benefit plan arrangement, agreement or
understanding which any of the Selling Entities or any of their Affiliates
presently maintains or has maintained in the previous 12-month period or to
which any of the Selling Entities or any such Affiliate contributes or has
contributed in such period, or has been required to contribute in such period,
with respect to employees of the Business and which is not required to be listed
in Schedule 3.25(a) or 3.25(b) (including with respect to any plans which are
---------------- -------
unwritten, a detailed written description of eligibility, participation,
benefits, funding arrangements, assets and any other matters which relate to the
obligations of the Selling Entities or their Affiliates). Intergraph has
delivered to USI a true, complete and correct copy of each such plan together
with copies of all documents or instruments establishing or constituting any
related trust, annuity contract or other funding instruments, and including any
substantive communication to employees or participants concerning such plans.
(d) PBGC and Other Liabilities. Neither EDS, USI nor any of their
--------------------------
Affiliates will have any liability of whatever nature or kind including with
respect to the establishment, maintenance, operation or termination of any
employee benefit plan, practice or program, including any Employee Welfare
Benefit Plan, Employee Pension Benefit Plan or other plan described in paragraph
(c) above, by reason of USI's acquisition of the Business, including any
liability to the PBGC, any employee benefit plan, the trustee of any employee
benefit plan or any employee or participant or any other corporation,
individual, trust, entity or government agency.
(e) COBRA. Neither USI, EDS nor any of their Affiliates will have any
-----
obligation to maintain any medical benefit plans, programs or practices, nor to
allow any individual, whether an employee, participant, former employee or
beneficiary of one of the foregoing, to participate in any health care plan, by
reason of the health care continuation requirements of COBRA except with respect
to those individuals who actually become employees of USI or its Affiliates, and
thereafter an event occurs entitling the employee, or some person related to the
employee, to such health care continuation coverage by reason of an employee's
employment with USI and participation in USI's medical benefit plans.
3.26 Compliance with Export Laws. Each of the Selling Entities
---------------------------
currently holds and is in compliance with the export licenses listed with
respect to such Person in Schedule 3.26; such export licenses ("Validated
-------------
Licenses") are the only export license documents issued with respect to the
Business and the Acquired Assets as of the date hereof. Each of the Selling
Entities is also in compliance with the general export licenses it relies upon
with respect to the Business and the Acquired Assets.
3.27 Inventories. As of the Balance Sheet Date, all of the inventories
-----------
and supplies that are reflected in the Balance Sheet were in good condition,
priced at the lower of cost (on the first-in, first-out basis) or market, and
(as to classes of items inventoried and methods of accounting and pricing)
determined in a manner consistent with prior years. All of such inventories and
supplies (together with the inventories and supplies which have been or will be
purchased or acquired by any Selling Entity with respect to the Business during
the period from the Balance Sheet Date to and including the applicable Closing
Date) which are included in the Acquired Assets were
40
purchased or acquired in the ordinary course of the Business, consistent with
past practices. All of the inventory included in the Acquired Assets is in good
condition and is not obsolete or defective. Purchase commitments for merchandise
are not in excess of normal requirements and are not at prices in excess of
market prices. The Selling Entities have the types and quantities of inventory
appropriate, taken as a whole, to conduct the Business in accordance with past
practices.
3.28 Master Purchase Agreements. Schedule 3.28 sets forth a true and
-------------------------- -------------
correct list of those vendor agreements under which the Selling Entities make
purchases principally related to the Business (excluding those that relate to
assets or services furnished by Intergraph for the benefit of all of its
business units, subsidiaries or divisions and not principally to the Business,
including, without limitation, accounting and legal support and the services
provided under the Transition Services Agreement) (the "Master Purchase
Agreements").
3.29 Compliance with Law. To the best knowledge of the Selling
-------------------
Entities, without independent investigation, each of the Selling Entities (a)
has complied with all Legislative Enactments and Official Actions applicable to
its respective portion of the Business or the Acquired Assets, and (b) has duly
and timely made all filings and submissions that are required by Legislative
Enactments to be made with respect to such portion of the Acquired Assets or
such Business, and has provided the Acquiring Entities copies of all such
filings and submissions that have been made since January 1, 1993.
3.30 Projections. The financial projections for the Business prepared
-----------
by the Selling Entities and attached as Schedule 3.30 (the "Projections") were
-------------
prepared in good faith and, when prepared and furnished to USI, were based
solely upon assumptions that Intergraph believed to be reasonable. None of the
Selling Entities has any reason to believe that the Business will not so
substantially achieve the results described in the Projections (other than the
fact that the Business has not substantially achieved such results through the
date hereof and that the failure to achieve such results may impact the ability
of the Business to timely achieve the results described in the Projections),
although no assurance is given that the results set forth therein will be
achieved or that actual results will not differ materially from the results
reflected therein.
3.31 Intellectual Property.
---------------------
(a) Schedule 3.31(a), together with Schedule 3.32(a), set forth a true,
---------------- ----------------
complete and correct list of all items of Intellectual Property (i) which are
owned by a Selling Entity or an Affiliate of a Selling Entity, (ii) which also
comprise a part of the Business on the Principal Closing Date, and (iii) which
comprise a part of the Transferred Intellectual Property Interests (the "Owned
IP"). All patents, Trademark registrations and Copyright registrations which are
part of the Owned IP are in good standing, are valid and subsisting, and are in
full force and effect in accordance with their terms.
(b) Schedule 3.31(b), together with Schedule 3.32(b), set forth a true,
---------------- ----------------
complete and correct list of all items of Intellectual Property (i) which no
Selling Entity owns, but in which a Selling Entity has a right or rights (by
license or otherwise) and (ii) which also comprise a part of the Business on the
Principal Closing Date (the "Not-Owned IP"; the Owned IP and the Not-Owned IP
collectively referred to as the "IP"). All such items of Intellectual Property
comprise a
41
part of the Transferred Intellectual Property Interests except as
specifically noted opposite the reference to any such item on Schedule 3.31(b)
----------------
or 3.32(b). The right of the Selling Entities to use the Not-Owned IP in the
-------
Business is solely under the written license agreements or other Contracts
listed on Schedules 3.31(b) and 3.32(b).
----------------- -------
(c) To the best knowledge of the Selling Entities, without independent
investigation, the development, license, use, sale, distribution and
modification of the Owned IP by the Selling Entities in connection with the
Business, and the use of the Not-Owned IP by the Selling Entities in connection
with the Business, has not infringed on or otherwise violated the rights of any
other Person or constituted an unlawful disclosure, use or misappropriation of
the right or rights of any other Person. The continued and future license, use,
sale and distribution of the Owned IP by the Acquiring Entities and their
agents, representatives or Affiliates from and after the Principal Closing in a
manner which is substantially identical to the license, use, sale and
distribution by the Selling Entities prior to the Principal Closing, and the
continued and future use of the Not-Owned IP by the Acquiring Entities and their
agents, representatives or Affiliates from and after the Principal Closing in a
manner which is substantially identical to the use by the Selling Entities prior
to the Principal Closing, shall not constitute an infringement or other
violation of the rights of any other Person or constitute an unlawful
disclosure, use or misappropriation of the right or rights of any other Person.
No Selling Entity is in material violation of, or in default under, any Contract
or other legal requirement relating to the IP.
(d) There is (i) no suit, action, complaint, proceeding, opposition,
petition to cancel, interference, re-examination or audit pending, or to the
best knowledge of the Selling Entities without independent investigation,
threatened, with respect to, (ii) to the best knowledge of the Selling Entities
without independent investigation, no presently existing factual basis that is
reasonably likely to result in any suit, action, complaint, proceeding or formal
audit contesting, and (iii) no outstanding Official Action concerning, any of
(A) the Owned IP or, to the best knowledge of any of the Selling Entities
without independent investigation, the Not-Owned IP, (B) any right of the
Selling Entities to develop, license, use, sell, distribute or modify the Owned
IP or (C) any right under a Contract or any other right of the Selling Entities
to use the Not-Owned IP.
(e) Except as set forth on Schedule 3.31(e), the Selling Entities have the
----------------
right, which is non-terminable and not subject to expiration or revocation, to
develop, license, control or regulate the use of, make, sell, have made, have
used, perform, copy, have sold, distribute and modify the Owned IP without any
valid legal or equitable claim by, or payment or other obligation owing to, or
Consent from, any Person, and the Acquiring Entities will acquire at the
Principal Closing (or at such other Closing as appropriate) all of such rights
in the Owned IP on the same basis and geographic scope as that enjoyed by the
Selling Entities immediately prior to the Principal Closing, without any
diminution or alteration as a result of the Principal Closing (or such other
appropriate Closing).
(f) Except as set forth on Schedule 3.31(f) (and subject only to the
----------------
express terms of those Contracts which are listed in Schedules 3.31(b) and
-----------------
3.32(b) to the extent that true and complete copies have been provided to USI),
-------
the Selling Entities have the right, which is non-terminable and not subject to
expiration or revocation, to use the Not-Owned IP without any valid legal or
equitable claim by, or payment or other obligation owing to, any other Person,
and the
42
Acquiring Entities will acquire at the Principal Closing (or at such
other Closing, as appropriate) all of such rights on the same basis as that
enjoyed by the Selling Entities immediately prior to the Principal Closing (or
such other appropriate Closing), without any diminution or alteration as a
result of such Closing. Schedule 3.31(f) sets forth a true and complete list of
----------------
all Consents required to permit the Acquiring Entities to make, license, use,
have sold, have made, have used, perform, copy, make derivative works of, sell,
distribute and modify the Not-Owned IP on the same basis as that enjoyed by the
Selling Entities immediately prior to the Principal Closing or at such other
appropriate Closing, without any diminution or alteration as a result of the
Closing or such other appropriate Closing (except with respect to Software which
may have been installed by a Transitioned Employee on an individual personal
computer included in the Acquired Assets which Software is not used by other
employees and is not material to the Business).
(g) Except as set forth on Schedule 3.31(g), the rights to develop, make,
----------------
license, use, have sold, have made, have used, perform, copy, make derivative
works of, sell, distribute, modify and exploit the Owned IP held by the
Acquiring Entities immediately after the Principal Closing (or such other
appropriate Closing) and the consummation of the transactions contemplated by
this Agreement will be the same rights to develop, make, license, use, sell,
have sold, have made, have used, perform, copy, make derivative works of,
distribute, modify and exploit the Owned IP held by the Selling Entities
immediately prior to the Principal Closing (or such other appropriate Closing)
and consummation of the transactions contemplated by this Agreement, without any
diminution or alteration as a result of the Closing or the consummation of any
of the transactions contemplated by this Agreement. The Transferred
Intellectual Property Interests set forth on Schedule 3.31(g) for which, to the
----------------
best of the Selling Entities' knowledge without independent investigation, there
is no functionally comparable equivalent publicly available have been so
designated.
(h) Except (i) with respect to rights under the agreements entered into
pursuant to this Agreement, (ii) as set forth in Schedule 3.31(h) or in Schedule
---------------- --------
3.21, and (iii) end-user licenses for INGR Tools and non-source code licenses
----
for BAG Tools, to the best knowledge of the Selling Entities without any
independent investigation, no Selling Entity has granted or obligated itself to
grant to any Person any license, option or other right to develop, make,
license, sell, have sold, have made, have used, perform, copy, make derivative
works of, distribute or modify in any manner any of the Owned IP, whether or not
requiring payment to any Selling Entity. To the knowledge of the Selling
Entities without independent investigation, no Person has either asserted any
right to develop, make, license, use, sell, have sold, have made, have used,
perform, copy, make derivative works of, distribute or modify the Owned IP
except in accordance with a license or other Contract described on Schedule
--------
3.31(h) or in Schedule 3.21, or offered to grant any Selling Entity a license or
------- -------------
any other right of use with respect to the Owned IP. No Selling Entity has any
obligation to compensate any Person for any development, license, use, sale,
distribution or modification of any of the Owned IP except as set forth in
Schedule 3.21. No consent, approval, or authorization of or by any other Person
-------------
will be required after the Closing either (i) for the Acquiring Entities to
develop, license, make, use, sell, have sold, have made, have used, perform,
copy, make derivative works of, distribute, modify or exploit any of the Owned
IP or (ii) for the Acquiring Entities to use the Not-Owned IP. To the best
knowledge of the Selling Entities without any independent investigation, no
Person has or shall have any right to terminate or revoke any grant to or other
43
acquisition by any Selling Entity of any right to develop, license, make, use,
sell, have sold, have made, have used, perform, copy, make derivative works of,
distribute, modify, or exploit any of the Owned IP. None of the Owned IP was
developed as part of the performance of any obligation for any Tribunal, or any
other Person which would require the taking of any action, whether or not
actually taken, in order for all rights to the Owned IP to become vested in, or
retained by, any Selling Entity. Other than the Owned IP and the rights of any
Selling Entity in the Not-Owned IP, except as set forth in Schedule 3.31(h) no
----------------
Intellectual Property right is used in any of the Business or is necessary for
the conduct of any of the Business as presently conducted.
(i) Schedule 3.31(i) sets forth a true, complete and accurate list of all
----------------
patents, patent applications, provisional applications, Trademark registrations,
applications for Trademark registration, Copyright registrations, applications
for Copyright registration and other registrations of and applications to
register Owned IP by or for any Selling Entity with any government or
governmental instrumentality. All such patents and registrations are in good
standing, valid and subsisting, and are in full force and effect in accordance
with their terms. To the best knowledge of the Selling Entities without any
independent investigation, no Person other than a Selling Entity has either
applied for any patent or registered any claim to Copyright with respect to any
part of the Owned Software.
(j) Except as set forth in Schedule 3.31(j) and to the best knowledge of
----------------
the Selling Entities without independent investigation, (i) none of the Owned IP
has been infringed by any other Person, and (ii) none of the Owned IP is being
used by any other Person except pursuant to a license agreement or other
Contract as set forth in Schedule 3.31(h).
----------------
(k) To the best knowledge of the Selling Entities without any independent
investigation, there are no moral rights that protect, affect, concern, or are
related to any of the Transferred Intellectual Property Interests, and no party
will assert any such rights.
44
3.32 Software.
--------
(a) Schedule 3.32(a) sets forth a true, complete and correct list of all
items of Software (i) which are owned by a Selling Entity, (ii) which comprise a
part of the Business, and (iii) which comprise a part of the Transferred
Intellectual Property Interests (the "Owned Software") and specifically shall
include (by way of example and not implying any limitation) all of the Software
commonly known as or described as a part of the SolidEdge, EMS, Technovision and
Proren systems. The Owned Software shall include without limitation all earlier
or predecessor versions of any of such Software (whether or not released) if and
to the extent that such can be identified.
(b) Schedule 3.32(b) sets forth a true, complete and correct list of all
----------------
items of Software (i) which no Selling Entity owns but in which a Selling Entity
has a right or rights (by license or otherwise) and (ii) which also comprise a
part of the Business (the "Not-Owned Software"). All such items of the Owned
Software and the rights of the Selling Entities under the Not-Owned Software
comprise a part of the Transferred Intellectual Property Interests except as
specifically noted opposite the reference to any such item on Schedule 3.32(b).
----------------
The right of the Selling Entities to use the Not-Owned Software is solely under
the written license agreements or other Contracts listed in Schedule 3.32(b).
----------------
To the best knowledge of the Selling Entities without independent investigation,
the use by the Acquiring Entities of the Not-Owned Software subject to the
Contracts referred to in clause (r) of the definition of Retained Assets in
Section 1.1 hereof (which Contracts are not included in the Transferred
Intellectual Property Interests) pursuant to successor agreements entered into
by USI, to the extent that the Software covered thereby is the same as the Not-
Owned Software covered by such Contracts referred to in clause (r), will not
constitute an infringement or other violation of the rights of any other Person
or constitute an unlawful disclosure, use or misappropriation of the right or
rights of any other Person.
(c) All Owned Software is free from material defects in programming and
operation and performs in accordance with all normal industry expectations for
quality and relevant HELP files and published user manuals therefor and in
accordance with all technical, promotional and other written material used or
provided to any Person in connection with the Owned Software.
(d) Except as permitted under the EMS License Agreement or the SolidEdge
License Agreement, Intergraph will not copy, maintain, store, or archive any
computer software source code provided in the assets transferred to Unigraphics
by the concurrently executed Xxxx of Sale. Furthermore, except as contemplated
by the EMS License Agreement and the SolidEdge License Agreement, Intergraph
agrees that it will not have any access whatsoever to any such computer software
source code except through Unigraphics who has sole discretion whether to grant
such access.
(e) No Software comprising a part of the Business (1) contains any coded
instructions, routine, or other means (including but not limited to any back
door) that would enable any person or computer system, including authorized or
unauthorized users, to bypass any log-in and/or any security feature of the
Software or any computer on which the Software is installed; (2) contains any
coded instructions, routine or other means (including but not limited to any
time bomb or drop dead device) that, when activated in accordance with a
predetermined method, date, or event, causes the Software to cease to operate,
to operate in a degraded manner,
45
to damage or destroy data or code, or otherwise deleteriously affect the
functioning of the Software, other programs, or the computer systems on which
the Software is installed, or with which such computer systems are in
communication (except demonstration versions or copies of Software which cease
to function at a predetermined date if not purchased or if other similar action
is not taken); (3) contains any coded instructions, routine or other means that
causes the Software, other software, or the computer system on which the
Software is installed to perform an unauthorized function or to operate in an
unauthorized manner; or (4) contains any coded instructions, routine or other
means (including any virus, trojan horse, or worm) that disables, erases, or
otherwise xxxxx software, hardware or data or otherwise causes such actions.
3.33 Development and Protection of the Owned IP.
------------------------------------------
(a) The Owned IP consists exclusively of "works made for hire" as that
term is used in Title 17 of the United States Code, and a Selling Entity is
considered the author of each of such works. The Owned IP was developed entirely
by (i) full time employees working within the scope of their employment within
the meaning of 17USC(S)101 of a Selling Entity during the period (for each such
person, his "Engagement Period") in which either (I) (A) he was a full time
employee of a Selling Entity, (B) he was employed only by a Selling Entity and
(C) he was expressly employed for the purpose of or his written job description
in the employment of a Selling Entity at the time of such actions included as a
primary duty the development of part of the Owned IP or (II) he was subject to a
valid and enforceable written Contract (an "Employee IP Contract") which
assigned to such Selling Entity ownership of the work or works produced,
including, without limitation, all intellectual property rights therein (such
employee, solely when meeting all of these criteria, referred to as a
"Developer"), or (ii) independent contractors or consultants engaged by a
Selling Entity which have assigned to such Selling Entity their entire right,
title, and interest in and to the work or works produced, including without
limitation all intellectual property rights therein pursuant to a valid and
enforceable written Contract (an "Independent Contractor IP Contract") (such
contractor or consultant meeting these criteria also referred to as a
"Developer"). No material Owned IP includes (i) any Intellectual Property in
which any Person other than a Selling Entity has or may acquire any right of
ownership, control or compensation, or (ii) any invention made by (A) any
employee of a Selling Entity who was not hired to invent at any time other than
during his Engagement Period or (B) any independent contractor or consultant
engaged by a Selling Entity who is not subject to an Independent Contractor IP
Contract, or (iii) the product of any effort to develop independently, through a
"clean room" effort or otherwise, an expression in which any Person other than a
Selling Entity has intellectual property rights. None of the Owned IP is the
product of a joint invention or authorship by a Developer and any Person who is
not also a Developer. No right of any Person other than a Selling Entity to any
patent, patent application, Trademark or Copyright is embodied in any of the
Owned Software, except as set forth on Schedule 3.33(a).
----------------
(b) Each Selling Entity has diligently taken reasonable measures to
protect for the sole use and benefit of the Selling Entities the confidential
and proprietary nature of the Trade Secrets and the source code, object code and
access codes for the Software (the "Confidential Software"). Each Person,
including without limitation employees, agents, consultants, distributors and
licensees of the Selling Entities, who has had access to or otherwise been
exposed to any of the Trade Secrets or Confidential Software (including without
limitation any of the source code for the Owned
46
Software) has been advised of the confidential and proprietary nature of the
Trade Secrets and the Confidential Software and any such agent, consultant,
distributor or licensee has been required to enter into a written agreement
("Confidentiality Contract") with the appropriate Selling Entity acknowledging
and agreeing that (i) the Owned IP is and shall remain the sole and exclusive
property of, and may be confidential to, such Selling Entity, and (ii) the Owned
IP is not to be used or disclosed to any Person other than as specifically
authorized by such Selling Entity. Each of the Confidentiality Contracts and
Employee IP Contracts relating to the Transferred Intellectual Property
Interests was and is in full force and effect, and constitutes the legal, valid
and binding obligation of each Selling Entity which is a party thereto and, to
the best knowledge of the Selling Entities without independent investigation,
each other Person which is a party thereto, enforceable in accordance with its
terms, except that (iii) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (iv) the remedy of specific
performance and injunctive relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding may be brought. Each
Selling Entity has kept all of the Trade Secrets, including without limitation
all of the source code for the Owned Software, strictly confidential and secret.
The Trade Secrets are not and have not been a part of the public knowledge or
literature. No Selling Entity has disclosed, divulged or otherwise provided
access to any part of the source code for the Owned Software other than to
Persons which have entered into written Confidentiality Contracts with the
appropriate Selling Entity or who have a confidential relationship with the
Selling Entity or a duty to keep such source code for the Owned Software
confidential. To the best knowledge of the Selling Entities without independent
investigation, no Person which is a party to an IP Contract or confidentiality
agreement or has a confidential relationship with any Selling Entity is in
violation of, or in default under, any term or provision of such Contract which
relates to the Owned IP.
(c) All Know-How comprising a part of the Business is included in the
assets assigned to the Acquiring Entities by the Selling Entities in this
Agreement. Schedule 3.33(c) sets forth a true, complete and correct list of all
----------------
locations where the descriptions of any material Know-How comprising a part of
the Business is kept. Such descriptions explain the material Know-How
comprising a part of the Business. Each Selling Entity has taken all
commercially reasonable appropriate measures to protect in all material respects
the confidential and proprietary nature of the information related to the
business strategy, finances, marketing plans or employees of the Business which
has not been published and is not generally known to the public.
3.34 Accuracy of Consent Schedules. Schedules 2.5(d) and 7.4 set forth
----------------------------- ---------------- ---
a true, complete and correct list of all material Consents from any Tribunal or
other Person as may be necessary or appropriate to consummate the transactions
contemplated by this Agreement in accordance with this Agreement and to enable
the Acquiring Entities to carry on and conduct the Business, in all material
respects, subsequent to the applicable Closing in substantially the same manner
as was carried on and conducted prior to such Closing, or that are necessary to
prevent a breach of or a default or penalty, or increase in payments, under or a
termination of any material Contract relating to the Business.
3.35 Confidential Information. All confidential or proprietary
------------------------
information relating to any aspect of the Business which has been provided by
any Selling Entity to any Person that entered or proposed to enter into
negotiations for the sale of the Business (including a sale of capital stock of
47
any Selling Entity) or any portion thereof, whether or not under a Contract or
other assurances of confidentiality, has been destroyed or returned to the
applicable Selling Entity.
3.36 Brokers. None of the Selling Entities has authorized any Person to
-------
act as a broker or finder or in any similar capacity in connection with this
Agreement or the transactions contemplated hereby in such a manner as to give
rise to a valid claim against EDS or any of the Acquiring Entities for any
brokers' or finders' fees or similar fees or expenses.
3.37 Commercial Software. The Software subject to each of the EMS
-------------------
License Agreement and the SolidEdge License Agreement are commercial computer
Software which is used regularly for other than government purposes and is sold,
licensed or leased in significant quantities to the general public at
established market or catalog prices.
48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING ENTITIES
To induce the Selling Entities to enter into this Agreement and to
consummate the transactions contemplated hereby, USI jointly represents and
warrants with respect to itself and each other Acquiring Entity, and each other
Acquiring Entity with respect to itself represents and warrants to the Selling
Entities as set forth in this Article IV and as may be additionally provided in
the applicable Closing Agreement. Notwithstanding anything to the contrary set
forth in this Agreement, Intergraph acknowledges that the representations and
warranties set forth in this Article IV are qualified by the fact that as of the
date of this Agreement the formation of the Portugese branch of Unigraphics
Solutions Espana, S.A., the Finnish branch of Unigraphics Solutions Sverige AB,
and the legal entities in Poland, Korea and the Czech Republic to consummate the
transactions contemplated hereby in those countries have not yet been completed.
4.1 Corporate Existence and Authority. Each Acquiring Entity is a
---------------------------------
corporation or (as indicated on Schedule 4.1) other legal entity duly organized,
------------
validly existing and, to the extent such a concept or similar concept exists in
the relevant jurisdiction, in good standing under the laws of the state or other
jurisdiction of its incorporation or other organization, as set forth on
Schedule 4.1. Each Acquiring Entity has all requisite power and all requisite
------------
franchises, license, permits and authority to own and lease its properties and
assets and to carry on its business, as such business has been conducted and is
being conducted currently. None of the Acquiring Entities is in breach or
violation of its Charter or Bylaws.
4.2 Authorization and Effect of Agreement, Etc. Each Acquiring Entity
------------------------------------------
has all requisite power and authority to enter into, execute and deliver this
Agreement and the other agreements contemplated hereby to which such Person is a
party and to perform its obligations hereunder and thereunder and to consummate
the respective transactions contemplated hereby and thereby for such Acquiring
Entity. The execution, delivery and performance of this Agreement by each of
the Acquiring Entities and the other agreements contemplated hereby to which
such Person is a party and the consummation by the Acquiring Entities of the
transactions contemplated hereby and thereby have been duly authorized by all
corporate and other entity action. This Agreement has been, and the other
agreements contemplated hereby to which any of the Acquiring Entities is a party
will be, duly executed and delivered by each of the Acquiring Entities (to the
extent such Person is a party thereto) and constitutes, or when executed and
delivered will constitute, the valid and binding obligation of the Acquiring
Entities, enforceable in accordance with its respective terms, except that (i)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding may be brought.
4.3 No Violation. Except as set forth in Schedule 4.3, neither the
------------ ------------
execution, delivery or performance by any of the Acquiring Entities of this
Agreement or any other agreement contemplated hereby to which any of such
Persons is a party, nor the consummation by any of the Acquiring Entities of any
of the transactions contemplated hereby or thereby in accordance with the terms
hereof or thereof, does or will (with the passage of time, the giving of notice
or otherwise)
49
(a) violate or conflict with any provision of the Charter or Bylaws of any
Acquiring Entity; (b) violate, conflict with, modify or cause any default under
or acceleration of (or give any party any right to declare any default or
acceleration, upon notice or passage of time or otherwise, with respect to), in
whole or in part, any Lien or Contract to which any Acquiring Entity is a party
or by which it or any Acquiring Entity or any of its respective properties are
bound; (c) violate, conflict with or cause any default under (or give any party
any right to declare any default, upon notice or passage of time or otherwise,
under) any Legislative Enactments, Official Actions or any other restriction of
any kind or character to which any Acquiring Entity is a party or by which any
Acquiring Entity or any of its respective properties is bound; (d) result in the
creation or imposition of any Lien, proscription or restriction on any property
or asset; or (e) permit any Tribunal to impose any restrictions or limitations
of any nature on any Acquiring Entity or its respective properties or
activities.
4.4 Challenges To This Agreement. No suit, action, proceeding or
----------------------------
investigation against any Acquiring Entity challenging this Agreement or any of
the transactions contemplated hereby or claiming damages in connection with this
Agreement or any of the transactions contemplated hereby has been instituted or,
to the knowledge of the Acquiring Entities, without independent investigation,
threatened.
4.5 Consents. Except as set forth in Schedule 4.5, no Consent of, or
-------- ------------
registration, declaration or filing with, or permit from, any Tribunal, lessor,
lender or any other Person is required to be made or obtained by any Acquiring
Entity in connection with the execution, delivery and performance by any of the
Acquiring Entities of this Agreement or the other agreements contemplated hereby
or the consummation of the transactions contemplated hereby or thereby in
accordance with the terms hereof and thereof.
4.6 Brokers. Neither EDS nor any Acquiring Entity has authorized any
-------
Person to act as a broker or finder or in any similar capacity in connection
with this Agreement or the transactions contemplated hereby in such a manner as
to give rise to a valid claim against any of the Selling Entities for any
brokers' or finders' fees or similar fees or expenses, other than Xxxxxx Xxxxxxx
& Co. Incorporated, the fees and expenses of which will be paid by USI.
ARTICLE V
COVENANTS OF THE SELLING ENTITIES
5.1 Consummation of Transactions. Subject to the terms and conditions
----------------------------
herein provided, from the date hereof through its applicable Closing Date, each
Selling Entity will take, or cause to be taken, all actions and do, and cause to
be done, all things necessary, proper or advisable to consummate and make
effective, as promptly as practicable, the transactions contemplated by this
Agreement in accordance with the terms of this Agreement applicable to such
Selling Entity. From the date hereof through its applicable Closing Date, no
Selling Entity shall voluntarily take, and Intergraph shall cause each Affiliate
of any Selling Entity not to take voluntarily, any action or course of action
inconsistent with the satisfaction of the respective conditions, terms and
provisions of this Agreement or the consummation of the respective transactions
contemplated by this Agreement in accordance with the terms of this Agreement
applicable to such Selling Entity.
50
5.2 Conduct of Business. From the date hereof and through its applicable
-------------------
Closing Date, each Selling Entity will conduct such portions of the Business as
it may directly or indirectly control only in the ordinary course of its
respective portion of the Business, consistent with past practices, unless USI
shall otherwise consent in writing. Without limiting the generality of the
foregoing, unless USI has given its prior written consent otherwise, none of
such Selling Entities will take any action that would cause the breach of any
covenant of such Selling Entity in this Agreement (including in this Article V)
---------
or that would cause the representations and warranties of such Selling Entity in
this Agreement (including those set forth in Article III) to be untrue in any
-----------
respect at any time through the final Closing Date.
5.3 Preservation of Business. Without limiting the generality of
------------------------
Section 5.1 and Section 5.2, from the date hereof and through the applicable
----------- -----------
Closing Date, each Selling Entity will, with respect to such portions of the
Acquired Assets, the Assumed Liabilities and the Business it may directly or
indirectly control:
(a) use its best efforts to preserve intact its present business
organization and not alter or change its methods of operation;
(b) use its best efforts to preserve its goodwill and its present
business relationships with all Persons;
(c) use its best efforts to keep available the services of its present
officers and employees, except as USI may otherwise require or direct,
provided that the Selling Entities shall not be obligated to increase
compensation or benefits outside of the ordinary course of business in
order to retain such persons;
(d) maintain and keep its respective portion of the Acquired Assets in
good repair and condition, normal wear and tear excepted;
(e) pay and perform, when due, all obligations under its Contracts
relating to the Business and the Acquired Assets;
(f) comply with and perform all its obligations and duties imposed by all
Legislative Enactments and Official Actions, except as may be contested by
such Selling Entity in good faith by appropriate proceedings;
(g) maintain in full force and effect policies of insurance of the same
type, character and coverage as the policies of insurance listed with
respect to it in Schedule 5.3;
------------
(h) not amend or make other changes to its Charter or Bylaws in any
manner whatsoever that would inhibit or hinder its ability to consummate
the transactions contemplated hereby;
(i) not purchase, sell, lease, mortgage, pledge or otherwise acquire or
dispose of its respective portion of the Acquired Assets, except for
tangible personal property purchased,
51
sold, leased or pledged in the ordinary course of its respective portion of
the Business, consistent with past practices;
(j) not enter into, or become obligated under, any Contract relating to
the Business, or change, amend, terminate or otherwise modify any such
Contract, except as contemplated by Section 2.12 and except for Customer
Contracts and other normal purchase, sale, license and lease agreements and
commitments for tangible personal property which are entered into in the
ordinary course of its respective portion of the Business, consistent with
past practices;
(k) not incur or commit to any capital expenditures, obligations or
liabilities, other than capital expenditures, obligations or liabilities
not in excess of $25,000 in the aggregate;
(l) not change its method of accounting from that in effect at the
Balance Sheet Date;
(m) not increase or otherwise change the rate or nature of the
compensation (including wages, salaries, bonuses, perquisites and benefits
under pension, profit sharing, deferred compensation and similar plans or
programs) which is paid or payable, directly or indirectly, to or for the
benefit of any of its officers or employees employed or engaged primarily
in connection with the Business or hire any such employee at an annual
salary in excess of $35,000, or terminate any such employee whose annual
compensation is in excess of $35,000;
(n) not establish any employee plan or program as described in Section
-------
3.24 or 3.25 nor make, or commit to make, any payment, contribution or
---- ----
award under or into any such employee plan or program except in the
ordinary course of business as required thereunder;
(o) not modify, release or cancel any obligations, indebtedness,
liabilities or Liens (unless such obligation, indebtedness, liability or
Lien has been paid in full to such Person at the time of release or
cancellation) with respect to the Business;
(p) not waive, compromise or settle any right or claim with respect to
the Business, or institute, settle or agree to settle any litigation,
action or proceeding with respect to the Business before any Tribunal;
(q) not subject any of the Acquired Assets to any newly created Lien or
other adverse interest or restriction, other than Permitted Encumbrances
and Liens for Taxes not yet due and payable that have been incurred in the
ordinary course of its respective portion of the Business, consistent with
past practices;
(r) not incur any indebtedness, obligation or liability, except those
arising in the ordinary course of its respective portion of the Business,
consistent with past practices;
(s) not assume, guaranty or endorse the obligations of any Person, except
in the ordinary course of its respective portion of the Business,
consistent with past practices;
52
(t) except in the ordinary course of its respective portion of the
Business, consistent with past practices, not extend any credit or commit
to extend credit to any Person;
(u) not grant any rebates, discounts, advances or allowances to any
customers except in the ordinary course of its respective portion of the
Business, consistent with past practices (without limiting the generality
of the foregoing, none of the Selling Entities shall provide any products
(including Software products) or services at discounted rates or free of
charge to any customer as a rebate, discount or advance, except in the
ordinary course of business consistent with past practices); and
(v) use or sell the inventories and supplies in its respective portion of
the ordinary course of the Business, consistent with past practices;
provided, however, that the Selling Entities shall not be in breach of this
Section 5.3 as a result of any act or omission to act pursuant to the direction
or approval of a USI manager serving pursuant to Section 2.14 hereof.
5.4 Access to Information. From the date hereof to its applicable
---------------------
Closing Date, each Selling Entity shall furnish, and shall cause each Affiliate
of the Selling Entities which it directly or indirectly controls to furnish, the
officers, employees and agents of the Acquiring Entities reasonable access to
(a) the officers, employees, agents, properties, Books and Records as they
relate to its respective portion of the Business and (b) all of its financial,
operating and other data and information with respect to such portion of the
Business. The Acquiring Entities shall have the right to review the Books and
Records of each Selling Entity as they relate to its respective portion of the
Business prior to the final Closing Date. Each Selling Entity shall use its
best efforts to allow the Acquiring Entities to accomplish their reviews as
rapidly as possible. No such examination, inspection or audit by the Acquiring
Entities or their agents and representatives (whether in accordance with this
Section 5.4 or otherwise) shall in any way diminish, modify, terminate or
-----------
otherwise affect the respective representations, warranties, covenants or
agreements of each Selling Entity contained in this Agreement or in any
certificate or other instrument furnished or to be furnished by any of the
Selling Entities or any Affiliate of any of the Selling Entities in connection
with this Agreement. Such access and information shall be afforded to the
officers, employees and agents of the applicable Acquiring Entities by the
applicable Selling Entities, who shall also cause their respective officers,
directors, employees and agents (including attorneys and accountants) to afford
such access and information.
5.5 Notification of Certain Matters. Prior to its applicable Closing
-------------------------------
Date, each Selling Entity shall give prompt notice to USI of (a) any threatened
or actual lawsuit, any proposed settlement of any threatened or actual lawsuit
and any pending or threatened governmental action or proceeding of any kind
known to such Selling Entity which relates to its respective portion of the
Business or the Acquired Assets or the transactions then contemplated by this
Agreement; and (b) any material failure of any of the Selling Entities to comply
with or satisfy any covenant, condition or agreement then remaining to be
complied with or satisfied by it hereunder.
5.6 Furnishing of Information. As soon as available but not later than
-------------------------
March 31, 1998, Intergraph will furnish to USI unaudited statements of revenues
and direct expenses of the Business
53
for the period commencing on January 1, 1998 and ending on the Principal Closing
Date in the form and detail similar to those included within the Financial
Statements, certified by the chief financial officer or treasurer (or other
comparable officer) of Intergraph as being prepared in accordance with GAAP and
fairly presenting the results of operations of the Business for the period then
ended, subject to normal, recurring quarter-end and year-end audit adjustments,
as described therein. Following the Principal Closing Date and prior to the
consummation of each International Closing, Intergraph will furnish to USI, as
soon as available, but in any event not later than 30 days after the end of each
calendar month, an unaudited balance sheet for each Selling Entity which has not
yet consummated its International Closing with respect to the Business as of the
end of such month and the related unaudited statements of revenues and direct
expenses of such Selling Entity with respect to the Business for such month in
the form and detail similar to those included within the Financial Statements,
certified by the chief financial officer or treasurer (or other comparable
officer) of Intergraph as being prepared in accordance with GAAP and fairly
presenting the financial position of the Business conducted by the Selling
Entity as of the dates thereof and the results of operations of the same for the
period then ended, subject to normal, recurring quarter-end and year-end audit
adjustments, as described therein. All such financial statements described above
shall be true, complete and correct and shall be prepared in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such officer and disclosed therein). The
Selling Entities have been advised that USI intends to include the Financial
Statements (and possibly the unaudited financial statements for the Business for
periods following January 1, 1998) in a Registration Statement on Form S-1 to be
filed with the Securities and Exchange Commission and consent to the inclusion
thereof in such Registration Statement (and similar financial statements for
subsequent periods depending on the timing of the filing of such Registration
Statement). USI has been advised by the Securities and Exchange Commission that
it may include a statement of assets purchased in such Registration Statement in
lieu of the Balance Sheet, and Intergraph agrees to promptly furnish such
Statement to USI for inclusion in any such Registration Statement. Intergraph
will obtain the consent of Ernst & Young to the inclusion of their report on the
Financial Statements in any such Registration Statement and will instruct Ernst
& Young to cooperate with a reasonable request for a "comfort letter" which may
be requested by the underwriters.
5.7 Non-Solicitation. From the date hereof and until the five-year
----------------
anniversary of the Principal Closing Date, neither Intergraph nor any Affiliate
of Intergraph shall, directly or indirectly, solicit for employment (other than
through public advertisements or other widely disseminated employment notices)
or hire any employee of any of the Selling Entities with respect to the Business
who is then currently employed by any of the Acquiring Entities or any of their
Affiliates, and during such period, without the prior written consent of USI,
Intergraph may not offer employment or employ any person who identified on
Schedule 6.3 who does not accept the offer of employment by the Acquiring
------------
Entities contemplated hereby.
5.8 Use of Owned Software. None of Intergraph, any other Selling Entity
---------------------
or any of their Affiliates shall access, operate, distribute, copy, use, or
modify any of the Owned Software, other than the Owned Software subject to the
Transferred Intellectual Property License Agreements and except as permitted
under the terms of the EMS License Agreement or the SolidEdge License Agreement.
54
5.9 Expenses of Transaction. The Business has not incurred or paid and
-----------------------
will not incur or pay legal or consulting fees or expenses in connection with
any offer for sale of (a) the Acquired Assets or the Business, (b) all or
substantially all of the assets of any Selling Entity or (c) the negotiation,
preparation, execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
5.10 Further Assurances. If at any time after any Closing, any
------------------
Acquiring Entity shall consider or be advised that any further assignments,
conveyances, transfers or assurances in law, or any other actions or things, may
be necessary or appropriate to assign, convey, transfer, set over or deliver to,
or to vest, perfect or confirm in, the applicable Acquiring Entity any right,
title or interest of any Selling Entity, of record or otherwise, in or to the
Acquired Assets or the Business or to place the Acquiring Entities in operating
control of any of the Acquired Assets, the respective Selling Entities shall
promptly execute, deliver and record, or cause to be executed, delivered and
recorded, any and all such further instruments of assignment, conveyance and
transfer and take, or cause to be taken, all actions and do, or cause to be
done, all things, as may be reasonably requested by the applicable Acquiring
Entity to assign, convey, transfer, set over and deliver to, and to vest,
perfect and confirm in, the appropriate Acquiring Entity all right, title and
interest of the Selling Entities, of record and otherwise, in and to the
Acquired Assets and the Business or to place the Acquiring Entities in operating
control of any of the Acquired Assets, including, without limitation the
execution, delivery and filing of such documents and instruments as are
necessary in order to effectuate the transfer of the Transferred Intellectual
Property Interests to the applicable Acquiring Entities; provided, however, that
any such request shall be subject to any limitations or restrictions contained
in this Agreement.
5.11 Period of Exclusivity. Except with respect to the Acquiring
---------------------
Entities, during the period commencing on the date of this Agreement and ending
on the earliest to occur of (a) the final Closing or (b) termination of this
Agreement in accordance with Section 10.2, none of the Selling Entities shall
------------
provide, and each of the Selling Entities will cause its respective directors,
officers, employees and other representatives not to provide, any information
with respect to, or participate in any discussions concerning, any corporate
transaction relating to a sale or transfer (directly, indirectly or by operation
of law) of any or all of the Acquired Assets, any merger or corporate
reorganization relating to all or any of the Acquired Assets or any other
significant corporate transaction involving any of the Acquired Assets.
5.12 Noncompetition.
--------------
(a) The Selling Entities agree that during the seven-year period
commencing on the date of this Agreement they (i) will not, either directly or
indirectly (including through any Affiliate), own, manage, control or operate or
participate in the ownership, management, operation or control of, any business,
whether in corporate proprietorship or partnership form or otherwise, which
engages in a Competitive Activity in any location, whether inside or outside of
the United States; (ii) will not engage in a Competitive Activity at any place,
whether inside or outside of the United States, directly or indirectly
(including through an Affiliate), whether individually, in partnership, jointly,
or in conjunction with, or on behalf of, any Person; and (iii) will not,
directly or indirectly (including through an Affiliate), whether individually,
in partnership, jointly, or in conjunction with, or on behalf of, any Person,
solicit or accept any business which requires engagement in
55
Competitive Activities; provided, however, the foregoing shall not be deemed to
prohibit the Selling Entities from the performance of its obligations under the
CAD II Contracts as contemplated by the SolidEdge License Agreement, the EMS
License Agreement and the SolidEdge Reseller Agreement.
(b) The term "Competitive Activity" means the maintenance, marketing or
selling, or the development for marketing or sale by a third party, of three-
dimensional modeling Software intended primarily for use in the automotive,
aerospace or manufacturing (including, without limitation, mechanical design of
consumer products, consumer electronics, computers and machine tooling)
industries for equipment design, machine design, product design, finite element
analysis, mechanism analysis or numerical control tool path creation, provided,
however, that the foregoing shall not be deemed to restrict Intergraph from the
maintenance, marketing, development or sale of Software intended to be used for
the Intergraph Fields or the Joint Fields.
(c) The parties hereto specifically acknowledge and agree that the remedy
at law for any breach of the foregoing will be inadequate and that the aggrieved
party, in addition to any other relief available to it, shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damage. In the event that the provisions of this Section 5.12 should
ever be deemed to exceed limitations provided by applicable law, then the
parties hereto agree that such provisions shall be reformed to set forth the
maximum limitations permitted; provided, however, nothing in this Section 5.12
shall prevent a Selling Entity or any Affiliate thereof from acquiring less than
a 2% ownership interest in a company which is engaged in a Competitive Activity.
The provisions of this Section 5.12 shall not restrict Intergraph from engaging
in any activity not prohibited hereunder or by the exclusive nature of certain
of the Intellectual Property covered by the Transferred Intellectual Property
License Agreements.
5.13 Certain Employee Benefit Matters.
--------------------------------
(a) Intergraph Incentive Benefits. Not later than seven days following
-----------------------------
the Principal Closing Date, each Selling Entity will pay to the Transitioned
Employees identified on Schedule 5.13(a) any incentive compensation benefits due
----------------
to such Transitioned Employee through the Principal Closing Date and to the
other Transitioned Employees the pro rata portion of the bonus payments to such
persons through the Principal Closing Date in accordance with the bonus scheme
in effect for 1997.
(b) Intergraph Vacation Pay. Not later than seven days following the
-----------------------
Principal Closing Date, each Selling Entity will pay an amount in respect of all
accumulated vacation days and, with respect to non-U.S. Transitioned Employees
if required by applicable law, accumulated holiday or similar benefits (in each
case based on the then current salary of the Transitioned Employee or, outside
the United States, as may otherwise be required by law) as of the Principal
Closing to each Transitioned Employee who was employed immediately prior to such
Closing by such Selling Entity. Each of the Closing Agreements may set forth
additional obligations or procedures for effecting the foregoing obligations of
the Selling Entities organized outside the United States and each branch of a
Selling Entity organized under the laws of the United States but whose branch
operations are conducted outside the United States.
56
(c) Intergraph Stock Incentive Plan. Intergraph shall extend, for a
-------------------------------
period of three months from the date of termination with respect to each
Transitioned Employee, the exercise periods under the Intergraph Corporation
1992 Stock Option Plan and the Intergraph Corporation 1997 Stock Option Plan for
all vested awards as of the date of termination of employment by a Selling
Entity of such Transitioned Employee.
(d) Intergraph 401(k) Plan. Effective as of the date of the termination
----------------------
of employment by a Selling Entity in connection with this Transaction,
Intergraph shall take all actions which are necessary and appropriate to fully
vest each Transitioned Employee in all amounts in such employee's individual
account in the Intergraph Corporation SavingsPlus Plan (the "Intergraph 401(k)
Plan"). Any Transitioned Employee who, as of the date of termination of such
employee's employment with a Selling Entity, has an outstanding balance on any
loan from the Intergraph 401(k) Plan, shall be eligible to transfer such loan,
along with all amounts vested in such employee's Intergraph 401(k) Plan
individual account, into the EDS Deferred Compensation Plan ("EDS 401(k) Plan")
pursuant to a trust-to-trust transfer ("Plan Asset Transfer") made in accordance
with the administrative policies and procedures of the Electronic Data Systems
Deferred Compensation Plan (the "EDS 401(k) Plan") and Section 414(l) of the
Code, provided that at the time of the Plan Asset Transfer Intergraph can
represent and warrant to EDS that the Intergraph 401(k) Plan (i) provides for
Plan Asset Transfers and (ii) is a qualified employee pension benefit plan in
compliance with Code Sections 401 et seq. The plan administrator of the
-------
Intergraph 401(k) Plan shall, upon reasonable request, promptly provide the plan
administrator of the EDS 401(k) Plan with any and all data, records and other
information pertaining to any Transitioned Employee, a beneficiary, dependent,
spouse or former spouse of any Transitioned Employee, the Intergraph 401(k) Plan
individual account for any Transitioned Employee, and any other information
considered necessary and appropriate for the plan administrator of the EDS
401(k) Plan to establish and administer an individual account for any
Transitioned Employee in the EDS 401(k) Plan. The plan administrator of the
Intergraph 401(k) Plan shall further cooperate to take all such reasonable
actions as are necessary or appropriate for such plan administrator to take to
effect the Plan Assets Transfer in a timely and efficient manner, including the
filing of any reports, notices or disclosures which may be required by any
governmental agency.
(e) Foreign Nationals. The Transitioned Employees identified on Schedule
----------------- --------
5.13(e) are foreign nationals working in the United States ("Foreign National
-------
Employees"). Each Foreign National Employee shall remain employed by Intergraph
until such persons are granted permanent United States residency by the
Department of Immigration (the "Transition Date"). During the period from the
applicable Closing Date through the applicable Transition Date, each Foreign
National Employee shall be employed by Intergraph for the full-time benefit of
USI and the Acquired Business, and USI shall reimburse Intergraph for their
salaries at the rates set forth opposite their respective names on Schedule
--------
5.13(e), which rates are the current salaries of such persons, and for the
-------
direct benefit costs of Intergraph attributable to such persons. During this
period, USI may request that the employment of any such person be terminated.
In such event, later than five days following the date of such request
Intergraph may either (i) continue the employment of such person for
Intergraph's benefit, in which event USI shall discontinue payments of salary
reimbursement, or (ii) terminate the employment of such person, in which event
USI will
57
reimburse Intergraph for any required severance payments to any terminated
Foreign National Employee in accordance with Intergraph's severance policy.
(f) Employment Assistance. Each Selling Entity will cooperate with the
---------------------
applicable Acquiring Entity in (i) where the law so requires, the facilitation
of the transfer of the employees of the Selling Entity engaged in the Business
to the relevant Acquiring Entity, (ii) the performance by such Acquiring Entity
of its obligations under Section 6.3 to offer employment with USI or another
-----------
Acquiring Entity to such employees of the Business as such parties shall agree
upon prior thereto or in the applicable Closing Agreement and (iii) such
Acquiring Entity's effort to employ such employees. No Selling Entity will (A)
except with the written consent of USI, make any representations, promises or
other communications, whether written or oral, to such employees regarding
employment with any of the Acquiring Entities or employee benefits, plans or
practice of the Acquiring Entities, or (B) take any act that diminishes any
Acquiring Entity's right to dismiss, subject to applicable law, any such
employee with or without cause.
(g) Expense Report Reimbursement. Each Selling Entity will reimburse a
----------------------------
Transitioned Employee for any business related expenses incurred by that
Transitioned Employee with respect to a period prior to the Principal Closing in
accordance with the Selling Entities' standard expense reimbursement policy.
(h) Transfer of Certain Non-U.S. Pension Assets.
-------------------------------------------
(I) At or prior to the applicable International Closing, Intergraph
shall contribute in cash to the underlying trusts (or comparable funding
arrangements) of the EDS pension plans (the "EDS Pension Trusts") or in the
case of an unfunded book reserve maintained by Intergraph or an Affiliate
of Intergraph, to USI (which shall accept such funds on behalf of EDS) an
amount equal to the Projected Benefit Obligation value ("PBO") of the
benefits accrued for and in respect of the Transitioned Employees under the
applicable Intergraph pension plan as determined under the rules of the
respective Intergraph pension plan and applicable law as if the
Transitioned Employee's employment with a Selling Entity had terminated the
day before the applicable Closing Date. The PBO will be calculated using
the Intergraph pension plan rules as in effect on the applicable Closing
Date and the actuarial methodology and assumptions which were applicable
for the EDS annual disclosure under FAS87 as of December 31, 1997. For this
purpose, each Transitioned Employee shall be deemed to have a fully vested
benefit under the applicable Intergraph pension plan. Notwithstanding the
foregoing, to the extent that the applicable Intergraph pension plan is a
defined contribution plan, the PBO shall refer to each Transitioned
Employee's full account balance credited to him or her under the Intergraph
pension plan, consisting of both employee and employer contributions and
any adjustments thereon due to investment performance, as of the applicable
Closing Date.
(II) To the extent permitted by law, all payments will be made
directly from the underlying trust (or other comparable funding
arrangements) of each Intergraph pension plan (the "Intergraph Pension
Trusts") to the corresponding EDS Pension Trust in the respective country
and, to the extent so paid, Intergraph's obligation to pay the
58
amounts referred to in (I) above shall be correspondingly reduced. If,
under applicable law the legally required minimum amount to be transferred
exceeds the PBO, then such payment will in no event be less than the amount
necessary to satisfy the requirements of any applicable law.
59
(III) Intergraph shall pay interest on the amount payable to the EDS
Pension Trust or USI, as the case may be, accruing for the period beginning
on the day after the Principal Closing Date until the date the amount is
paid to the EDS Pension Trust at the discount rate per annum used to
calculate the PBO. To the extent permitted by law, this payment shall be
made from the Intergraph Pension Trusts to the EDS Pension Trusts.
(IV) For each Transitioned Employee, Intergraph will transfer from
the Intergraph Pension Trusts, and USI will assume (or cause the applicable
EDS pension plan to assume) as of the EDS plan eligibility date, an amount
of plan liabilities equal to the PBO under the Intergraph pension plan as
of the applicable Closing Date.
(V) All calculations contemplated herein shall be performed by an
actuary designated by USI, which may be reviewed by an actuary designated
by Intergraph prior to the transfer, and shall be performed within 30 days
after the applicable Closing Date, or as soon thereafter as practicable
(provided that to the extent permitted by law all payments to be made at
the applicable Closing shall be estimated in good faith by USI and
Intergraph with such estimates to be confirmed on a post-closing basis by
such actuary or actuaries). EDS shall cause the EDS Pension Trusts to
accept their respective transfer of plan assets and the corresponding EDS
Pension Plans to assume their respective transfer of liabilities (such
transfers of plan assets and liabilities and the acceptance of such assets
and assumption of such liabilities shall hereafter be referred to as the
"Transfers"). The Transfers will be accomplished in full compliance with
applicable law. Further, Intergraph and USI will file or cause to be filed
in a timely manner whatever reports, forms and notices as are necessary
under applicable law as a result of the Transfers. EDS and Intergraph agree
to cooperate with each other in providing the other on a timely basis with
employee data and other information which may be reasonably required to
effect the respective Transfers. Each Transfer will be accomplished by way
of a single transfer of plan assets and liabilities from the respective
Intergraph Pension Plan and will not occur until the PBO under the
respective Intergraph Pension Plan has been determined.
5.14 Intergraph Guaranty. Intergraph hereby guarantees to the Acquiring
-------------------
Entities the due and punctual performance by each of the other Selling Entities
of its respective obligations under this Agreement and each of the Closing
Agreements.
5.15 Enforcement of Confidentiality Agreement. The Selling Entities
----------------------------------------
agree to enforce, for the benefit of the Acquiring Entities any and all rights
of the Selling Entities under any Contract retained by the Selling Entities
pursuant to which any confidential or proprietary information relating to any
aspect of the Business was provided by any Selling Entity to any Person. The
Selling Entities shall promptly inform the Acquiring Entities of any breach of
which they become aware by any Person of the confidentiality obligations under
any such Contract relating to confidential or proprietary information relating
to the Business.
5.16 Confidential Information. Each of the Selling Entities hereby
------------------------
acknowledges that the Acquiring Entities would be irreparably damaged if any
proprietary or confidential information
60
possessed by any of the Selling Entities concerning the Business, the Acquired
Assets or any of the Acquiring Entities (except for any information that is or
becomes generally known to the public, otherwise than through a breach of this
Agreement) were disclosed to or used by any Person engaged in competition with
the Business or any of the Acquiring Entities. Each of the Selling Entities
agrees that it will not, and will not permit any of its Affiliates, directors,
officers, employees, accountants, agents and other representatives to use or
disclose any such confidential or proprietary information, except as expressly
permitted hereunder or under any other agreement between such Selling Entity and
USI or any of its Affiliates. If any Selling Entity is requested or required by
any Tribunal to disclose any of such proprietary or confidential information,
then such Selling Entity will provide USI with prompt written notice of such
request or requirement unless prohibited by applicable law. USI may then either
seek appropriate protective relief from all or part of such request or
requirement or waive such Selling Entity's compliance with the provisions of
this Section 5.16 with respect to all or part of such request or requirement.
------------
Such Selling Entity will cooperate with USI in attempting to obtain any
reasonable protective relief that USI chooses to seek. If, after USI has had a
reasonable opportunity to seek such relief, USI fails to obtain such relief,
then such Selling Entity may disclose only that portion of such proprietary or
confidential information which its legal counsel advises it is compelled to
disclose.
5.17 Assistance and Cooperation. After each respective Closing Date, each
--------------------------
applicable Selling Entity agrees:
(a) to assist the applicable Acquiring Entities in preparing any tax
returns that such Acquiring Entities are responsible for preparing and
filing after such Closing Date with respect to that portion of the Business
and the Acquired Assets conveyed on such Closing Date to the extent such
tax returns require information not included within such Acquired Assets;
to reasonably cooperate at the Acquiring Entity's cost in preparing for any
audits of, or disputes with Tribunals regarding, any tax returns relating
to such portion of the Business and the Acquired Assets; and to make
available to the applicable Acquiring Entities and to any Tribunal as
reasonably requested all information, records and documents relating to
liabilities for taxes associated with such portion of the Business or the
Acquired Assets;
(b) to provide the Acquiring Entities with reasonable access to the
portions of the Selling Entities' tax records and reports, general ledgers
and any other books, records, files or correspondence which relate to the
Business and to preserve all such information, records and documents until
the expiration of any applicable statutes of limitation or extensions
thereof and as otherwise required by law; and
(c) to provide timely notice to the applicable Acquiring Entities in
writing of any pending or threatened tax audits or assessments related to
the Business or the Acquired Assets for periods beginning after such
Closing Date and of which such Selling Entity has knowledge and to furnish
such Acquiring Entities with copies of all correspondence received from any
Tribunal in connection with any tax audit or information request with
respect to any such period.
5.18 Product Serial Numbers. At or prior to the Principal Closing,
----------------------
Intergraph shall furnish to USI a block of not less than 100,000 serial numbers,
assigned in accordance with
61
Intergraph's Gen Key internal system, which the Acquiring Entities may assign
following such Closing to the products of the Business. The Selling Entities
will not use any of such serial numbers assigned to USI for any purpose
following the Principal Closing.
ARTICLE VI
COVENANTS OF THE ACQUIRING ENTITIES
6.1 Consummation of Transactions. Subject to the terms and conditions
----------------------------
herein provided, from the date hereof through its applicable Closing Date, each
Acquiring Entity will use its best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective, as promptly as practicable, the
transactions contemplated by this Agreement in accordance with the terms of this
Agreement applicable to such Acquiring Entity. From the date hereof through its
applicable Closing Date, each Acquiring Entity shall not voluntarily take any
action or course of action inconsistent with the satisfaction of the respective
conditions, terms and provisions of this Agreement or the consummation of the
respective transactions contemplated by this Agreement in accordance with the
terms of this Agreement applicable to such Acquiring Entity.
6.2 Notification of Certain Matters. Prior to its applicable Closing
-------------------------------
Date, each Acquiring Entity shall give prompt notice to Intergraph of any
material failure of any of the Acquiring Entities or any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement then remaining to be complied with or satisfied by it hereunder.
6.3 Employment. Effective upon the Principal Closing, USI will offer
----------
employment with USI or such Acquiring Entity to those employees of the Business
in the U.S. identified on Schedule 6.3 at the salaries set forth opposite their
------------
name on such Schedule, which salaries were the rates in effect on December 31,
1997 (except for any increases approved by the President of USI). Such offer
shall be consistent with the hiring policies of USI and, with respect to
Transitioned Employees in the United States, shall include employee benefits
generally comparable to those of other United States USI employees. USI
reserves the right to revoke the offer and refuse to hire any employee who does
not satisfy USI's pre-employment requirements. Effective upon each
International Closing, USI or another Acquiring Entity will make a similar offer
to those employees of the Business outside of the U.S. identified on Schedule
--------
6.3. USI shall recognize the service with Intergraph of each United States
---
Transitioned Employee for purposes of its vacation policy. Nothing in this
Agreement shall diminish the right of USI or such other Acquiring Entity,
subject to any then applicable Legislative Enactments, to dismiss any of those
employees of the Selling Entities who become employees of USI or such other
Acquiring Entity with or without cause and to change the terms and conditions of
employment of any or all of such employees.
6.4 Assistance with Specified Contracts and Litigation Contracts. As
------------------------------------------------------------
referenced in the proviso to the definition of Assumed Contracts in Section 1.1,
-----------
no Specified Contract or Litigation Contract shall be considered to be an
Assumed Contract under or by reason of this Agreement. With respect to any
Specified Contract or Litigation Contract to which a Selling Entity is a party,
the performance of the applicable Selling Entity's obligations thereunder shall
be deemed to be subcontracted or sublicensed to the applicable Acquiring Entity
for the remainder of the term of the
62
Specified Contract or Litigation Contract, as the case may be, unless (a) in the
case of a Specified Contract, such Acquiring Entity reasonably determines that
such a subcontracting or sublicensing arrangement effectively subjects such
Acquiring Entity or any of its Affiliates or any employees of such Acquiring
Entity or any of its Affiliates to a Non-Compete Covenant, (b) in the case of a
Litigation Contract, such Acquiring Entity reasonably determines that such a
subcontracting or sublicensing arrangement effectively subjects such Acquiring
Entity or any of its Affiliates or any employees of such Acquiring Entity or any
of its Affiliates to any pending suit, action, litigation or proceeding or (c)
in either such case, such a subcontracting or sublicensing arrangement is not
permitted by such Specified Contract or Litigation Contract, as the case may be.
In any such case, the applicable Acquiring Entity, at the expense of the
applicable Selling Entity, will use commercially reasonable efforts to otherwise
assist the Selling Entity that is party thereto in the performance of such
Selling Entity's contractual obligations thereunder; provided, however, that the
-------- -------
parties expressly acknowledge and agree that in no event shall such Acquiring
Entity be deemed to accept any obligation that could subject such Acquiring
Entity, any of its Affiliates or any employees of such Acquiring Entity or any
of its Affiliates to a Non-Compete Covenant or to any pending suit, action,
litigation or proceeding. The Selling Entities shall cause the benefits of each
Specified Contract and Litigation Contract (or the economic equivalent thereof)
to be provided to the applicable Acquiring Entity and shall cooperate in any
arrangement required to provide such Acquiring Entity with the same, including
without limitation (i) maintenance by the Selling Entity of the Specified
Contract or Litigation Contract, as the case may be, in its name in trust for
the benefit of the Acquiring Entity or (ii) at the option of the Acquiring
Entity and at its cost, enforcement for the benefit of such Acquiring Entity of
such Specified Contract or Litigation Contract, as the case may be against a
third party.
6.5 Trade Names and Service Marks. Each Acquiring Entity agrees that it
-----------------------------
will discontinue the use, directly or indirectly, in any manner or form, of the
name "Intergraph" and the corresponding logo thereof; provided, however, that
until the earlier of (i) the six-month anniversary of the Principal Closing Date
and (ii) the date on which all inventory and supplies of the Business
transferred at a Closing shall be depleted, the Acquiring Entities shall be
permitted to use such name and logo only in connection with the distribution of
such inventory and supplies; and provided further that at any time following the
Principal Closing Date, the Acquiring Entities shall be able to identify that
the Business was previously owned by the Selling Entities.
6.6 EDS and USI Guaranty. EDS hereby guarantees to the Selling Entities
--------------------
the due and punctual performance by each of the Acquiring Entities of its
respective obligations under this Agreement and each of the Closing Agreements,
provided, however, that the obligations of EDS under this Section 6.6 shall
terminate immediately following the Principal Closing. USI hereby guarantees to
the Selling Entities the due and punctual performance by each of the other
Acquiring Entities of its respective obligations under this Agreement and each
of the Closing Agreements.
6.7 Assistance and Cooperation. After the Principal Closing Date, the
--------------------------
Acquiring Entities shall, to the extent reasonably requested by the Selling
Entities, make available to the Selling Entities and to any Tribunal all
information, records and documents relating to (i) liabilities of the Selling
Entities for Taxes relating to the Business, (ii) matters disclosed on Schedule
--------
3.14, (iii) such other matters as the Selling Entities may reasonably request
----
relating to the Retained Assets or the performance of the Retained Liabilities.
Without limiting the
63
generality of the foregoing, upon the request of the Selling Entities, the
Acquiring Entities shall use commercially reasonable efforts to permit certain
of the Transitioned Employees identified by the Selling Entities to appear as
witnesses or trial representatives, and to assist the Selling Entities in trial
preparation, in connection with any litigation or proceeding relating to the
matters disclosed on Schedule 3.14; provided, however, that the Selling Entities
------------- -------- -------
shall bear all reasonable out-of-pocket expenses (but without other expense or
hourly charges) incurred by such Transitioned Employees in providing any such
requested assistance to the Selling Entities.
ARTICLE VII
CONDITIONS PRECEDENT
TO THE OBLIGATIONS OF THE ACQUIRING ENTITIES
The obligations of an Acquiring Entity under this Agreement to acquire the
Acquired Assets and to assume the Assumed Liabilities shall be subject to the
fulfillment of all of the following conditions at or before any Closing:
7.1 Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Selling Entities (or, in the case of an International
Closing subsequent to the Principal Closing, the representations and warranties
of the applicable Selling Entity) set forth herein or in any Schedule, Exhibit,
instrument or other document delivered to an Acquiring Entity pursuant to this
Agreement (including without limitation any applicable Closing Agreement) shall
be true and correct in all respects as of the date hereof and on and as of such
Closing Date, to the same extent and with the same effect as if made on and as
of such Closing Date, except where such representation clearly relates to
another date specified therein (in which case, such representation shall relate
to such specific date).
7.2 Performance by the Selling Entities. The Selling Entities shall have
-----------------------------------
fully performed and complied with all covenants and agreements required by this
Agreement and any applicable Closing Agreement to be performed or complied with
by each of them on or before such Closing.
7.3 Prohibitions, Restrictions and Litigation. On such Closing Date,
-----------------------------------------
there shall be no Official Action outstanding, and no proceeding or other
litigation shall be pending by any other Person, against any of the applicable
Acquiring Entities which prohibits or restricts, challenges or reasonably may be
expected to give rise to a material challenge to, consummation of the
transactions contemplated by this Agreement and any applicable Closing Agreement
with respect to such Closing or which claims (or reasonably may be expected to
give rise to a claim of) damages as a result of the consummation of the
transactions contemplated by this Agreement and any applicable Closing Agreement
or otherwise have a material adverse effect on the Business subsequent to such
Closing.
7.4 Consents. The Selling Entities participating in such Closing shall
--------
have received the Consents referred to in Schedule 7.4 that relate to such
------------
Closing and such other material Consents from any Tribunal or other Person as
may be necessary or appropriate (a) to consummate the transactions contemplated
by this Agreement and any applicable Closing Agreement with respect to such
Closing in accordance with this Agreement; (b) to enable the applicable
Acquiring Entities to
64
carry on and conduct that portion of the Business to be conveyed at such Closing
subsequent to such Closing in substantially the same manner as was carried on
and conducted prior to such Closing; or (c) that are necessary to prevent a
breach of or a material default or penalty, or material increase in payments
under, or a termination of any material Contract relating to the Business.
7.5 Governmental Clearances. All required filings with Tribunals shall
-----------------------
have been made and all waiting periods, including any extensions thereof, which
may be applicable to the transactions contemplated by this Agreement shall have
expired or terminated.
7.6 Satisfactory Proceedings. All proceedings to be taken in connection
------------------------
with the consummation of the transactions contemplated by this Agreement and any
applicable Closing Agreement, and all certificates, documents and instruments
incidental hereto and required hereby, shall be reasonably satisfactory in form
and substance to the Acquiring Entities, and the applicable Acquiring Entities
shall have received copies of all such documents and instruments as such
Acquiring Entities may reasonably request in connection with such transactions.
7.7 Certificate of Intergraph and Certain Officers. USI shall have
----------------------------------------------
received a certificate, dated the applicable Closing Date, executed by
Intergraph and, with respect to the Selling Entities participating in each such
Closing, by the Chairman of the Board, President or any Vice President of each
such Selling Entity, to the effect that the conditions set forth in Sections
--------
7.1, 7.2, 7.3, 7.4 and 7.5 have been satisfied.
--- --- --- --- ---
7.8 Waiver of Conditions. USI shall have the right and the authority, on
--------------------
behalf of each and all of the Acquiring Entities, to waive any or all of the
foregoing conditions precedent to the obligations of such Acquiring Entities;
provided, however, that no waiver by USI of any condition precedent to the
-------- -------
obligations of the Acquiring Entities with respect to a particular Closing shall
constitute a waiver by the Acquiring Entities of any other condition precedent
or a waiver by the Acquiring Entities with respect to any other Closing.
7.9 New Collateral Contracts. With respect to an International Closing,
------------------------
the respective Acquiring Entities and the respective Selling Entities shall have
entered into the collateral Contracts identified in each applicable Closing
Agreement relating to such International Closing, all upon such terms and
conditions as are reasonably acceptable to the parties thereto.
7.10 Absence of Material Adverse Change. Since the date of this
----------------------------------
Agreement, there shall have occurred no materially adverse change in the
condition (financial or otherwise), assets (taken as a whole), liabilities
(taken as a whole), properties (taken as a whole), business or prospects of the
Business or the Acquired Assets.
ARTICLE VIII
CONDITIONS PRECEDENT
TO THE OBLIGATIONS OF THE SELLING ENTITIES
The obligations of a Selling Entity under this Agreement to sell the
Acquired Assets shall be subject to the fulfillment of all of the following
conditions at or before any Closing:
65
8.1 Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Acquiring Entities (or, in the case of an International
Closing subsequent to the Principal Closing, the representations and warranties
of the applicable Acquiring Entity) set forth herein or in any Schedule,
Exhibit, instrument or other document delivered to a Selling Entity pursuant to
this Agreement (including without limitation any applicable Closing Agreement)
shall be true and correct in all respects as of the date hereof and on and as of
such Closing Date, to the same extent and with the same effect as if made on and
as of such Closing Date, except where such representation clearly relates to
another date specified therein (in which case such representation shall relate
to such specified date).
8.2 Performance by the Acquiring Entities. The Acquiring Entities shall
-------------------------------------
have fully performed and complied with all covenants and agreements required by
this Agreement and any applicable Closing Agreement to be performed or complied
with by each of them on or before such Closing Date.
8.3 Prohibitions, Restrictions and Litigation. On such Closing Date,
-----------------------------------------
there shall be no Official Action outstanding, and no proceeding or other
litigation shall be pending by any other Person, against any of the applicable
Selling Entities which prohibits or restricts, challenges or reasonably may be
expected to give rise to a material challenge to consummation of the
transactions contemplated by this Agreement and any applicable Closing Agreement
with respect to such Closing or which claims (or reasonably may be expected to
give rise to a claim of) damages as a result of the consummation of the
transactions contemplated by this Agreement and any applicable Closing Agreement
or otherwise have a material adverse effect on Intergraph subsequent to such
Closing.
8.4 Consents. The Acquiring Entities participating in such Closing shall
--------
have received the Consents that relate to such Closing and such other material
Consents from any Tribunal or other Person as may be necessary or appropriate to
enable the Selling Entities participating in such Closing to consummate the
transactions contemplated by this Agreement and any applicable Closing Agreement
with respect to such Closing in accordance with this Agreement without any
conditions which Intergraph might reasonably consider to be material and adverse
to Intergraph or its business and operations after such Closing.
8.5 Governmental Clearances. All required filings with Tribunals shall
-----------------------
have been made and all waiting periods, including any extensions thereof, which
may be applicable to the transactions contemplated by this Agreement with
respect to such Closing shall have expired or terminated.
8.6 Certificate of USI and Certain Officers. Intergraph shall have
---------------------------------------
received a certificate, dated such Closing Date, executed by USI and, with
respect to the Acquiring Entities participating in such Closing, the Chairman of
the Board, President or any Vice President of each such Acquiring Entity, to the
effect that the conditions set forth in Sections 8.1, 8.2, 8.3, 8.4 and 8.5 have
------------ --- --- --- ---
been satisfied.
66
8.7 Waiver of Conditions. Intergraph shall have the right and the
--------------------
authority on behalf of the Selling Entities participating in such Closing, to
waive any or all of the foregoing conditions precedent to the obligations of
such Selling Entities; provided, however, that no waiver by Intergraph of any
-------- -------
condition precedent to the obligations of the Selling Entities with respect to a
particular Closing shall constitute a waiver by the Selling Entities of any
other condition precedent or a waiver by the Selling Entities with respect to
any other Closing.
8.8 New Collateral Contracts. With respect to an International Closing,
------------------------
the respective Acquiring Entities and the respective Selling Entities shall have
entered into the collateral Contracts identified in each applicable Closing
Agreement relating to such International Closing, all upon such terms and
conditions as are reasonably acceptable to the parties thereto.
ARTICLE IX
INDEMNIFICATION; OFFSET
9.1 Indemnification by the Acquiring Entities. USI jointly agrees with
-----------------------------------------
respect to itself and each other Acquiring Entity, and each other Acquiring
Entity agrees with respect to itself, to indemnify and hold harmless each of the
Selling Entities and their respective directors, officers, employees, advisors,
Affiliates, agents and representatives, stockholders, successors and assigns
(the "Intergraph Indemnitees") from and against any and all losses, damages,
liabilities, claims, costs and expenses, including without limitation Legal
Expenses (collectively, "Losses") arising out of, based upon or resulting from:
(a) any violation or breach by any of the Acquiring Entities of, or any
default by any of the Acquiring Entities under, this Agreement or any
certificate, Schedule, Exhibit or other document or instrument furnished or
to be furnished by any of the Acquiring Entities to any of the Selling
Entities in connection with this Agreement, including, without limitation,
the Transferred Intellectual Property License Agreements, or the
consummation of the transactions contemplated hereby or from any error,
inaccuracy or misrepresentation in any of the representations and
warranties made by, or on behalf of, any of the Acquiring Entities herein
or therein;
(b) the failure of the Acquiring Entities to pay, perform or discharge
when due any of the Assumed Liabilities and any of its obligations with
respect to Transaction Taxes, if any, to the extent provided for in Section
10.13 hereof;
(c) any condition, event or activity relating to that portion of the
Business or those Acquired Assets transferred and conveyed on any Closing
Date and that existed or occurred on or after the Principal Closing Date
(excluding any condition, event or activity that existed or occurred after
the Principal Closing Date as a result of any action taken by a Selling
Entity without USI's consent with respect to a non-U.S. Selling Entity
prior to the applicable International Closing);
(d) the termination of a Foreign National Employee's employment by
Intergraph pursuant to clause (ii) of the final sentence of Section 5.13(e)
or the employee of an
67
International Selling Entity who would otherwise have been a Transitioned
Employee pursuant to Section 2.14(a), in each case in accordance with terms
set forth by USI in termination request delivered by USI pursuant to either
such Section;
(e) (i) any use or exploitation by USI of the Intellectual Property
subject to the Transferred Intellectual Property License Agreements not
permitted by the terms thereof; (ii) any amounts for which Intergraph shall
indemnify a USI Indemnitee pursuant to Section 9.2(b) hereof to the extent
that the Losses which resulted in such indemnification obligations arose
due to the failure by USI to use any modification, enhancement or
adaptation to any BAG Tool, INGR Tool or SolidEdge Common Code provided by
Intergraph to USI, provided that USI was given notice by Intergraph of such
modification, enhancement or adaptation (along with the reasons therefor),
that USI had reasonable opportunity to implement such modification,
enhancement or adaptation, and that Intergraph could demonstrate to USI
that such modification, enhancement or adaptation provided the same
functionality as the BAG Tool, INGR Tool or SolidEdge Common Code that
resulted in such Loss; or (iii) USI's use of any BAG Tool or the SolidEdge
Common Code in a modified form from that delivered to USI at the Principal
Closing to the extent that the Losses of the Intergraph Indemnitees
resulted from such modification; or
(f) any suit or action at law or in equity, arbitration proceeding,
interference or opposition proceeding, governmental or quasi-governmental
proceeding, complaint or investigation, or liability claim which arises (or
is claimed to arise) in connection with, or relates to (or is claimed to
relate to), any of the matters referred to above in this Section 9.1.
-----------
Notwithstanding the foregoing provisions of this Section 9.1, with respect to
-----------
any Losses arising out of, based upon or resulting from any error, inaccuracy or
misrepresentation in any of the representations and warranties contained in
Article IV or in any of the representations and warranties (but not covenants)
----------
of any of the Acquiring Entities contained in any certificate, document,
affidavit or instrument delivered pursuant to this Agreement (including without
limitation the Closing Agreements) (the "Intergraph Losses"), the foregoing
indemnity and hold harmless obligations of the Acquiring Entities relating to
such Intergraph Losses shall become operative and effective only if and when all
Intergraph Losses for which Intergraph Indemnitees are entitled to receive
indemnification under this Section 9.1 exceed, in the aggregate, $150,000 (it
-----------
being understood and agreed that all such Intergraph Losses shall accumulate
until such time as they exceed $150,000, at which time the Acquiring Entities
shall be obligated to indemnify any Intergraph Indemnitees seeking
indemnification under this Section 9.1 for the aggregate amount of such
-----------
Intergraph Losses, rather than the amount that exceeds $150,000). The parties
expressly acknowledge and agree that the immediately preceding sentence shall
not apply to any Losses other than the Intergraph Losses. The parties further
agree that the liability of the Acquiring Entities specified above with respect
to the Intergraph Losses shall be reduced to the extent of any insurance
proceeds actually received by any of the Intergraph Indemnitees for such
Intergraph Losses from any of the Acquiring Entities or any of their Affiliates
or any insurance carrier of the Acquiring Entities or any of their affiliates.
9.2 Indemnification by the Selling Entities. Intergraph jointly agrees
---------------------------------------
with respect to itself and each other Selling Entity, and each other Selling
Entity agrees with respect to itself, to
68
indemnify and hold harmless each of the Acquiring Entities and each of their
respective directors, officers, employees, advisors, Affiliates, agents,
representatives, stockholders, successors and assigns (the "USI Indemnitees")
from and against any and all Losses arising out of, based upon or resulting
from:
(a) any violation or breach by any of the Selling Entities of, or default
by any of the Selling Entities under, this Agreement or any certificate or
other document or instrument furnished or to be furnished by any of the
Selling Entities to any of the Acquiring Entities in connection with this
Agreement, including, without limitation, the Transferred Intellectual
Property License Agreements, or the consummation of the transactions
contemplated hereby (including without limitation the Closing Agreements)
or from any error, inaccuracy or misrepresentation in any of the
representations and warranties (other than the representations and
warranties in Sections 3.31, 3.32 and 3.33 hereof) made by, or on behalf
of, any of the Selling Entities herein or therein;
(b) any error, inaccuracy or misrepresentation in any of the
representations and warranties made by the Selling Entities in Sections
3.31, 3.32 and 3.33 hereof, provided that for purposes of this Article IX,
the Selling Entities shall indemnify the USI Indemnitees in respect of
Sections 3.31, 3.32 and 3.33 viewing such Sections without reference to any
"knowledge of the Selling Entities" or similar qualification set forth
therein (i.e., the representation and warranty shall be viewed as if no
such knowledge or similar qualification was set forth therein);
(c) any of the Retained Assets (including, without limitation, any
Contract included within the Retained Assets) or any of the Retained
Liabilities;
(d) any condition, event or activity relating to that portion of the
Business or those Acquired Assets transferred and conveyed on any Closing
Date and that existed or occurred before the Principal Closing Date
(regardless of whether such condition, event or activity would have
constituted a breach of any representation or warranty hereunder);
(e) except as set forth in Section 9.1(d), any liability or obligation
arising out of the termination of employment of an employee of a Selling
Entity;
(f) any liability or obligation which related to any noncompliance with
any bulk sales in connection with the transactions contemplated by this
Agreement;
(g) any liability or obligation with respect to the payment of the
applicable Consideration to Intergraph as agent and on behalf of a Selling
Entity;
(h) any liability or obligation with respect to any income, franchise,
sales, use or other Taxes (and Transactions Taxes, if any, to the extent
provided in Section 10.13 hereof) and with respect to any social security
contributions (including both employers' and employees' contributions) of
any Selling Entity which are attributable periods ending prior to the
Principal Closing Date;
69
(i) the enforcement, or the attempted enforcement, of any Non-Compete
Covenant contained in a Specified Contract against any of the Acquiring
Entities, any of their Affiliates or any of their employees, acting in his
or her capacity as an employee of an Acquiring Entity or an Affiliate of
the same;
(j) the transfer to the Acquiring Entities of the rights and obligations
of the Selling Entities arising with respect to periods prior to the
applicable Closing Date from the employment relationships of the Selling
Entities with the Transitioned Employees existing immediately prior to the
applicable Closing Date where, by virtue of applicable Legislative
Enactments of any Tribunal to implement EEC Council Directive 77/187, any
Transitioned Employee is not regarded as employed in the Business;
(k) the failure to transfer to the Acquiring Entities the rights and
obligations of the Selling Entities arising from the employment
relationships of the Selling Entities with any of their employees existing
immediately prior to the applicable Closing Date where, by virtue of
applicable Legislative Enactments of any Tribunal to implement EEC Council
Directive 77/187, any such employee is regarded as employed in the Business
(other than any such failure due to USI's breach of its obligation to offer
employment to such persons in accordance with Section 6.3);
(l) any liability or obligation arising under an applicable Environmental
Law relating to the Compliance Group or a Compliance Property (whether or
not such liability or obligation would constitute a breach of the
representation and warranty set forth in Section 3.15 hereof), except those
for which USI shall be specifically responsible under the terms of the
Lease Agreement as a result of actions taken by USI following the Principal
Closing Date;
(m) any liability or obligation arising out of the failure of the
Software products of the Business to be Year 2000 Compliant, regardless of
whether such non-compliance resulted in a breach of the representation and
warranty set forth in Section 3.17 hereof; or
(n) any suit or action at law or in equity, arbitration proceeding,
interference or opposition proceeding, governmental or quasi-governmental
proceeding, complaint or investigation, or liability claim which arises in
connection with, or relates to (or is claimed to relate to), any of the
matters referred to above in this Section 9.2.
-----------
Notwithstanding the foregoing provisions of this Section 9.2, with respect to
-----------
any Losses arising out of, based upon or resulting from any error, inaccuracy or
misrepresentation in any of the representations and warranties contained in
Article III or in any of the representations and warranties (but not covenants)
-----------
of any of the Selling Entities contained in any certificate, document, affidavit
or instrument delivered pursuant to this Agreement (including without limitation
the Closing Agreements) (the "USI Losses"), the foregoing indemnity and hold
harmless obligations of the Selling Entities relating to such USI Losses shall
become operative and effective only if and when all USI Losses for which USI
Indemnitees are entitled to receive indemnification under this Section 9.2
-----------
exceed, in the aggregate, $150,000 (it being understood and agreed that all such
USI Losses shall accumulate until such time as they exceed $150,000, at which
time the Selling Entities shall be obligated to indemnify any USI Indemnitees
seeking indemnification under this Section 9.2
-----------
70
for the aggregate amount of the USI Losses, rather than the amount that exceeds
$150,000). The parties expressly acknowledge and agree that the immediately
preceding sentence shall not apply to any Losses other than the USI Losses. The
parties further agree that the liability of the Selling Entities specified above
with respect to the USI Losses shall be reduced to the extent of any insurance
proceeds actually received by any of the USI Indemnitees for such USI Losses
from any of the Selling Entities or any of their Affiliates or any insurance
carrier of the Selling Entities or any of their affiliates.
9.3 Satisfaction of Claims. If any Person entitled to indemnification
----------------------
under this Article IX (an "Indemnified Party") desires to assert any claim for
----------
indemnification or to be held harmless under this Article IX (a "Claim"), the
----------
Indemnified Party shall deliver to the Person that is obligated to provide such
indemnification (the "Indemnifying Party") notice of its demand for satisfaction
of such Claim (a "Request"), specifying in reasonable detail the amount of such
Claim and, to the extent practicable under the circumstances, the basis for
asserting such Claim. Within 30 days after the Indemnifying Party has been given
a Request, the Indemnifying Party shall either (i) satisfy the Claim requested
to be satisfied in such Request by delivering to the Indemnified Party payment
by wire transfer or a certified or bank cashier's check payable to the
Indemnified Party in immediately available Federal Reserve Funds in an amount
equal to the amount of such Claim, or (ii) notify the Indemnified Party that the
Indemnifying Party contests such Claim by (A) delivering to the Indemnified
Party an objection to such Claim, specifying in reasonable detail, to the extent
practicable under the circumstances, the basis for contesting such Claim, and
(B) demanding arbitration of the Claim in accordance with Section 10.11. If the
-------------
Indemnifying Party fails to satisfy a Claim (or portion of a Claim) within 30
days after the Indemnifying Party has been given a Request with respect to such
Claim, and whether or not the Indemnifying Party has contested such Claim, the
Indemnifying Party shall pay the Indemnified Party asserting such Claim interest
on the unpaid amount of such Claim (or unpaid portion of a Claim) at the Prime
Rate, computed from the date such Request was given to the Indemnifying Party to
the date such Claim (or portion of a Claim) is satisfied; provided, however,
------------------
that the Indemnifying Party shall not be required to pay the Indemnified Party
----
interest on that part of any unpaid Claim (or portion of a Claim) which the
Indemnifying Party successfully contests.
9.4 Matters Which May Give Rise to Claims.
-------------------------------------
(a) Notice and Control. Within 20 days (or such earlier time as might be
------------------
required to avoid prejudicing the Indemnifying Party's capacity to defend) after
receipt by an Indemnified Party of notice of commencement of any action
evidenced by service of process or other legal pleading which it determines has
given or could give rise to a Claim (a "Third-Party Matter"), the Indemnified
Party shall give the Indemnifying Party written notice thereof (together with a
copy of such Claim, process or other legal pleading). The Indemnifying Party
shall assume the defense of such Claim and in connection therewith:
(i) such Indemnifying Party shall defend such Third-Party Matter at
its own expense, in good faith and in a manner consistent with the
best interests of the Indemnified Party;
71
(ii) such Indemnifying Party shall keep the Indemnified Party fully
informed as to the status of the defense of such Third-Party Matter;
(iii) such Indemnifying Party shall employ legal counsel, accountants
and/or other experts reasonably satisfactory to the Indemnified Party
to represent the Indemnified Party in connection with such Third-
Party Matter;
(iv) the Indemnified Party shall have the right to observe and be
present (at its own expense) at any and all meetings, conferences and
other proceedings with respect to such Matter;
(v) the Indemnifying Party shall obtain the prior written approval
of the Indemnified Party before entering into any settlement of such
Third-Party Matter or ceasing to defend against such Third-Party
Matter, if, pursuant to or as a result of such settlement or
cessation, injunctive or other equitable relief would be imposed
against the Indemnified Party;
(vi) without the written consent of the Indemnified Party, the
Indemnifying Party shall not consent to the entry of any judgment or
enter into any settlement that does not include as an unconditional
term thereof the giving of a release from liability in respect of
such Third-Party Matter to each Indemnified Party by the claimant or
plaintiff; and
(vii) unless such Indemnifying Party is successful in defending such
Third-Party Matter on the merits, any and all losses, damages, costs,
and expenses which any Indemnified Party shall suffer or incur in
connection with such Third-Party Matter shall be conclusively deemed
to be losses, damages, costs and expenses as to which the Indemnified
Party shall have the right to be indemnified and held harmless under
this Article IX.
----------
Neither the observation or participation by any Indemnified Party in the
defense of any Third-Party Matter, nor the failure by any Indemnified Party to
observe or participate in the defense of any Third-Party Matter, shall affect in
any way the liabilities and obligations of the Indemnifying Party with respect
to such Third-Party Matter under this Article IX.
----------
If the Indemnifying Party does not assume the defense of such Third-Party
Matter with legal counsel reasonably satisfactory to the Indemnified Party
within 15 days after the Indemnifying Party has received notice of such Third-
Party Matter from the Indemnified Party, the Indemnified Party shall have the
right to undertake the defense, compromise and settlement of such Third-Party
Matter on behalf of and for the account and risk of the Indemnifying Party.
(b) Expenses. If the Indemnified Party undertakes the defense, compromise
--------
and settlement of such Third-Party Matter pursuant to Section 9.4(a), the
--------------
Indemnifying Party will promptly reimburse the Indemnified Party for all
reasonable fees, costs and expenses (including without limitation any Legal
Expenses) incurred by the Indemnified Party in respect of such Third-Party
Matter. The reimbursement of such fees, costs and expenses shall be made by
periodic
72
payments during the course of any investigation or defense, as and when bills
are received or expenses incurred.
(c) Cooperation. The Indemnified Party and the Indemnifying Party shall
-----------
cooperate in the defense of a Third Party Matter that is defended in accordance
with this Section 9.4, and shall make available to the defending person or its
-----------
representative all records and materials required for its use in such defense.
ARTICLE X
GENERAL
10.1 Survival of Representations and Agreements. All representations and
------------------------------------------
warranties contained in this Agreement or in any certificate, document,
affidavit or instrument delivered pursuant to this Agreement (including without
limitation the Closing Agreements) shall survive the Principal Closing and each
International Closing and any investigation made at any time by or on behalf of
any of the parties or any other Person and shall continue in full force and
effect:
(a) forever and without any limit upon duration in the case of the
representations and warranties set forth in Sections 3.3, 3.14, 3.15, 3.19,
------------ ---- ---- ----
3.25, 3.31, 3.32, 3.33, 3.37 and 4.3;
---- ---- ---- ----- ---- ----
(b) until 60 days following the latest date on which any statute of
limitations (including any extensions thereof) expires with respect to any
taxable year or period up to and including any taxable year or period
ending on or which includes a Closing Date, in the case of the
representation and warranty of the Selling Entities set forth in Section
-------
3.13 hereof;
----
(c) in the case of a representation or warranty of the Selling Entities
set forth in Sections 3.26 and 3.29 hereof, until 60 days following the
------------- ----
expiration date of the statute of limitations underlying such
representation or warranty;
(d) until the expiration of the thirty-month period following the
applicable Closing Date in the case of all other representations and
warranties; and
(e) for the comparable periods of time set forth above in this Section
-------
10.1 in the case of each representation and warranty (but no covenant) set
----
forth in any certificate, document, affidavit or instrument delivered
pursuant to this Agreement (including, without limitation, the Closing
Agreements), based upon the nature of such representation and warranty when
compared to the most analagous representation and warranty set forth above.
10.2 Termination. This Agreement may be terminated at any time prior to
-----------
the final International Closing:
(a) by the mutual consent in writing of USI and Intergraph; or
(b) by USI or Intergraph if any court of competent jurisdiction in the
United States or other United States Tribunal shall have issued an Official
Action or taken any other action
73
restraining, enjoining or otherwise prohibiting any part of the
transactions contemplated by this Agreement, and such order, decree, ruling
or other action shall have become final.
If, for any reason whatsoever the Principal Closing shall not have taken
place on or before March 15, 1998, either party may, by notice to the other,
terminate this Agreement, whereupon all of the rights and obligations of the
Selling Entities and the Acquiring Entities under this Agreement shall terminate
without any liability to any party or to its directors, officers, stockholders,
successors and assigns, except for the liability of any party for any breach of
this Agreement, provided that the right to terminate this Agreement pursuant to
this sentence shall not be available to any party whose failure to perform any
material covenant or obligation under this Agreement has been the cause of or
resulted in the failure of the Principal Closing to occur on or before such
date. Unless earlier terminated in accordance with the previous sentence, the
obligations of the Selling Entities and the Acquiring Entities to conduct any or
all International Closings shall terminate on December 31, 1998; provided,
--------
however, that the termination of such obligation shall not impair any rights or
-------
obligations of the Selling Entities and the Acquiring Entities arising under
Article IX prior to December 31, 1998, with respect to International Closings
----------
contemplated by this Agreement or the transactions contemplated hereby.
10.3 HSR Filings; Other Filings. Each of Intergraph and USI has filed
--------------------------
with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice a Notification and Report Form and related material
required to be filed by it under the HSR Act with respect to the transactions
contemplated hereby. The Selling Entities and the Acquiring Entities shall
cooperate and use reasonable efforts to prepare and file as promptly as
practicable after the date hereof all requisite applications, notices and other
necessary instruments or documents in order to obtain the approvals, consents
and other authorizations referred to in Section 3.4 and agree to act with all
-----------
reasonable diligence to obtain all such approvals and licenses.
10.4 Expenses of Transaction. Each party shall be responsible for its
-----------------------
own costs associated with the negotiation and consummation of the transactions
contemplated hereby, including without limitation all legal, consulting and
accounting expenses and any fees or commissions due any broker as a consequence
of the consummation of such transactions. The filing fees incurred in connection
with the filings pursuant to the HSR Act have been borne by USI. Each of the
parties hereto is responsible for, and shall indemnify the other against, any
claim by any third party to a fee, commission or other remuneration arising by
reason of any services alleged to have been rendered to or at the instance of
said party with respect to this Agreement or any of the transactions
contemplated hereby.
10.5 Public Disclosure. No party shall issue any press release or
-----------------
otherwise make any public statement with respect to the transactions
contemplated hereby, except with the prior written consent of the other party;
provided, however, that such consent shall not be required for any disclosure or
-------- -------
reporting obligations of any party, to the extent required by applicable
Legislative Enactments or other competent authority, but (as is practicable
under the circumstances) such disclosing party shall consult with the other
party in advance.
10.6 Notices. Any notices or other communications required or permitted
-------
hereunder or under any other agreement contemplated hereunder shall be deemed
given if sent by registered or
74
certified mail (postage prepaid), overnight delivery via nationally recognized
courier, or facsimile transmission (provided that in the case of courier or
facsimile transmission, a copy is also sent by registered or certified mail,
postage prepaid); in each case addressed as follows:
If to any of the Selling Entities, to:
Intergraph Corporation
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000)000-0000
with a copy (which shall not constitute notice) to:
Intergraph Corporation
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: General Counsel
Facsimile No.: (000)000-0000
If to any of the Acquiring Entities, to:
Unigraphics Solutions Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Electronic Data Systems Corporation
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
Each such Person may designate by notice to all other such Persons a new address
for its receipt of notices and other communications. The return receipt for
mail, the delivery receipt for such a courier or the answerback for facsimile
transmission shall be conclusive evidence of such delivery.
10.7 Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the parties and their respective successors and permitted assigns.
No Acquiring Entity may assign any right under this Agreement or delegate any
obligations hereunder without the express prior written consent of Intergraph,
except to another Acquiring Entity or one or more other Affiliates of EDS;
provided, however, that any such delegation of obligations hereunder to another
-------- -------
Acquiring Entity or to one or more Affiliates of USI shall not relieve USI of
any of its obligations under this Agreement. No Selling Entity may assign any
rights under this Agreement or delegate any obligations hereunder without the
express prior written consent of USI, provided that USI
75
acknowledges that Foothill Capital Corporation, Intergraph's lender, has a lien
on Intergraph's rights under this Agreement.
10.8 Amendments; Waivers, Etc. This Agreement may not be modified or
------------------------
amended except by a written instrument executed by or on behalf of each of the
parties to this Agreement. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the party against which such
waiver is to be asserted. Unless otherwise expressly provided in this
Agreement, no delay or omission on the part of any party in exercising any right
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right or privilege under this
Agreement operate as a waiver of any other right or privilege under this
Agreement nor shall any single or partial exercise of any right or privilege
preclude any other or further exercise thereof or the exercise of any other
right or privilege under this Agreement.
10.9 Governing Law. Notwithstanding the place where this Agreement may be
-------------
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be governed by, and interpreted and construed
in accordance with, the substantive laws of the State of Delaware, without
giving effect to principles relating to conflict of laws.
10.10 Consent to Jurisdiction. In relation to any legal action, suit or
-----------------------
proceeding to which any Acquiring Entity or any Selling Entity is a party
arising out of or in connection with this Agreement or any of the transactions
contemplated by this Agreement, after the resolution of the related dispute,
controversy or claim pursuant to the arbitration proceedings contemplated by
Section 10.11 ("Proceedings"), each of the Acquiring Entities and each of the
-------------
Selling Entities hereby irrevocably, for itself and on behalf of its Affiliates,
(a) submits to the non-exclusive jurisdiction of the courts of the United States
of America for the Eastern District of Missouri (such courts being herein
referred to as the "Agreed Courts") solely in respect of the interpretation and
enforcement of the provisions of this Agreement and of the documents referred to
herein, and (b) waives and agrees not to assert, as a defense in any Proceeding
for the interpretation or enforcement hereof or of any document referred to
herein, that it is not subject to the jurisdiction of the Agreed Courts, or that
such Proceeding may not be brought or is not maintainable in the Agreed Courts,
or that this Agreement or any of such documents may not be enforced in or by the
Agreed Courts, or that its property is exempt or immune from execution, or that
the Proceeding is brought in any inconvenient forum or that the venue of the
Proceeding is improper. Such submission to jurisdiction shall not affect any
right of any Acquiring Entity or any Selling Entity to commence Proceedings in
any other jurisdiction, and the commencement of Proceedings in any jurisdiction
shall not preclude any Acquiring Entity or any Selling Entity from commencing
Proceedings in any other jurisdiction. Service of any and all process that may
be served on any party hereto in any Proceeding arising out of this Agreement
may be made in the manner and to the addresses set forth in Section 10.6 and
------------
service thus made shall be taken and held to be valid personal service upon such
party by any party hereto on whose behalf such service is made. Nothing shall
affect the right to serve any process in any other manner permitted by law.
10.11 Arbitration.
-----------
76
(a) In the event of any dispute, controversy or claim of any kind or
nature arising under or in connection with this Agreement or the other
agreements contemplated hereby that the parties are unable to resolve
through informal discussions or negotiations, the parties agree to submit
such dispute, controversy or claim to arbitration in accordance with the
following procedures:
(i) Either Intergraph or USI may demand arbitration by giving the
other party written notice to such effect, which notice will (i)
describe, in reasonable detail, the nature of the dispute, controversy
or claim, the amount, if any, involved and the remedy sought, and (ii)
name an independent arbitrator who is experienced in the resolution of
disputes, controversies or claims of such a nature. In addition, such
party demanding arbitration shall take such steps as are necessary to
commence arbitration proceedings under the rules of the American
Arbitration Association (including, without limitation, the payment of
any administrative fees provided thereunder).
(ii) Within 30 days after the other party's receipt of such demand,
such other party will name a second independent arbitrator who is
experienced in the resolution of disputes, controversies or claims of
such a nature.
(iii) The two arbitrators so named will promptly select a third
neutral arbitrator who is experienced in the resolution of disputes,
controversies and claims of such a nature. The arbitration will be
heard by a panel of the three arbitrators so chosen (the "Arbitration
Panel") in the United States, and the resolution of the dispute,
controversy or claim will be determined by a majority vote of the
Arbitration Panel. The Commercial Arbitration Rules of the American
Arbitration Association will govern the conduct of the arbitration and
the selection of the arbitrators. The arbitration proceedings shall be
conducted in the English language.
(iv) The Arbitration Panel may apportion between the parties as the
Arbitration Panel may deem equitable the fees, costs and expenses of
the arbitration incurred by the parties. The Arbitration Panel may
also award interest on any awards made by the Arbitration Panel. In
the assessment of any award of interest, the Arbitration Panel shall
consider any delay in the satisfaction of Claims by the Indemnifying
Party.
(v) The party demanding arbitration will request the Arbitration
Panel to (i) allow for the parties to request reasonable discovery
pursuant to the rules then in effect under the Federal Rules of Civil
Procedure for a period not to exceed 60 days prior to such arbitration
(all with the stated intent of establishing a fair, speedy and cost-
effective dispute resolution mechanism) and (ii) require the testimony
to be transcribed. No findings of fact or opinions of law will be
required to be made by the arbitrators.
77
(vi) Any award rendered by the Arbitration Panel will be final,
conclusive and binding upon the parties and any judgment thereon may
be entered and enforced in any court of competent jurisdiction.
(b) Other than actions for temporary and permanent injunctive relief or
specific performance or any action necessary to enforce the award of the
Arbitration Panel, the provisions of this Section 10.11 will constitute the
-------------
exclusive remedy of the parties and a complete defense to any suit, action
or other proceeding instituted in any court or before any administrative
tribunal with respect to any dispute, controversy or claim arising under or
in connection with this Agreement or the other agreements contemplated
hereby. Nothing in this Section 10.11 will prevent the parties from
-------------
exercising their rights to terminate this Agreement in accordance with
Section 10.2.
------------
(c) Notwithstanding any other provision in this Section 10.11 to the
-------------
contrary, the Arbitration Panel will not have the authority to amend the
provisions of this Section 10.11 without obtaining the prior written
-------------
consent of each of the parties to this Agreement.
10.12 Specific Performance. In addition to any other remedy to which any
--------------------
party may be entitled, including arbitration as provided in Section 10.11, the
-------------
parties agree that temporary and permanent injunctive relief and specific
performance (which specific performance may take the form of delivery of any
assets which may inadvertently have been omitted from a Schedule hereto) may be
granted, to the extent permitted under applicable law, without proof of actual
damages or inadequacy of legal remedy in any proceeding that may be brought to
enforce any of the provisions of this Agreement; provided, however, that this
-------- -------
Section 10.12 shall not be deemed to abrogate the agreement of the parties
-------------
provided in Section 10.11(b).
----------------
10.13 Tax Matters
-----------
(a) Tax Reporting for 1998. The Selling Entities will (i) prepare and
----------------------
timely file with each applicable tax or revenue service, taxing authority,
or taxing tribunal (where the operations of the Business are subject to
Tax) Tax Returns which include all income, gains, losses, deductions and
credits attributable to the operations of the Business for the period or
periods up to but not including the applicable Closing Date and (ii) make
timely payments of, and indemnify and hold the Acquiring Entities harmless
from and against, all Taxes required to be reflected on such Tax Returns.
The Acquiring Entities will (A) prepare and timely file with each
applicable tax or revenue service, taxing authority, or taxing tribunal
(where the operations of the Businesses are subject to Tax) Tax Returns
which include all income, gains, losses, deductions and credits
attributable to the operations of the Business for the period on or after
the applicable Closing Date and (B) make timely payments of, and indemnify
and hold the Selling Entities harmless from and against, all Taxes required
to be reflected on such Tax Returns.
(b) Transaction Taxes.
-----------------
(i) Liability, Indemnification and Payment. (A) Intergraph (Italia)
--------------------------------------
L.L.C. and Unigraphics Solutions S.p.A. agree to equally share and
pay the 3% Italian
78
registration tax and the cost of the third party appraisal. (B) If,
contrary to the considered judgment of the parties' as set forth in
Section 10.13(b)(ii) below, any sales and use taxes are imposed by any
taxing authority, tax or revenue service, or tax tribunal within the
state of Alabama (the "Alabama Sales and Use Taxes"), the party upon
which such Alabama Sales and Use Taxes are legally imposed shall pay
such sales and use taxes and any related interest, penalty, etc. to
the applicable taxing authority and the other party shall promptly pay
to, indemnify and hold the paying party harmless from and against 50%
of such Alabama Sales and Use Taxes and any related interest, penalty,
etc. (C) The Acquiring Entities shall pay, and indemnify and hold the
Selling Entities harmless from and against, all other Transaction
Taxes ("Other Transaction Taxes"). (D) In every case where a payment
of Transaction Taxes is required to be made directly by the indemnitee
to the relevant taxing authority, (i) the indemnifying party shall pay
to the indemnitee the amount of such Transaction Taxes which are
required to be paid by the indemnitee within thirty (30) days of the
date that the indemnitee furnishes the indemnifying party with written
notice and documentation proving that such Transaction Taxes are due
and payable by the indemnitee to the applicable taxing authority and
(ii) such amount shall bear interest at 18% per annum if not paid
within such thirty (30) day period. In this regard, Transaction Taxes
shall not be deemed to be due and payable by the indemnitee during any
period in which such Transaction Taxes may legally be contested
without advance payment, unless the indemnifying party requests the
indemnitee to make payment of such Transaction Taxes.
(ii) Planning and Cooperation. Each of the Selling Entities and each
------------------------
of the Acquiring Entities (A) believe, based on their separate and
independent research, that each of the transfers provided for in this
Agreement are transfers of a business as a going concern, if and to
the extent allowable under applicable Legislative Enactments with
respect to value added taxes ("VAT") (if this belief proves to be in
error, the Selling Entities shall invoice the Acquiring Entities for
any such VAT.), (B) believe, based on their separate and independent
research, that each of the transfers provided for in this Agreement
qualify as transfers that are exempt from Alabama Sales and Use Taxes,
based on the casual sale and other allowable exemptions, and (C) shall
act in a manner consistent with the foregoing. In the event that
there is any assertion or determination that VAT, Alabama Sales and
Use Tax, or Other Transaction Tax applies or may apply in connection
with any transactions under this Agreement, or in connection with any
transactions under this Agreement as to which any type of Other
Transaction Tax does or may apply, the applicable Selling Entities and
the applicable Acquiring Entities shall, in consultation and
cooperation with each other and on a timely basis and commercially
reasonable basis, give such notices, make such filings and requests,
adopt such reporting positions, provide such information, and appear
before such tax or revenue service, taxing authority, or taxing
tribunal as are required, desirable, or reasonably requested by the
other party, in an effort to maintain that such transfers are exempt
or otherwise outside the scope of VAT, the Alabama Sales and Use Tax,
or Other Transaction Taxes (as the case may be), in order to
79
obtain or perfect an exemption of such transactions from VAT, the
Alabama Sales and Use Tax, or Other Transaction Taxes (as the case may
be), in order to obtain a reduction in rates for VAT applicable to
such transactions, or in order to obtain a recovery of any VAT,
Alabama Sales and Use Tax, or Other Transaction Tax (as the case may
be) paid with respect to such transactions. Notwithstanding anything
in this Section 10.13(b)(ii) to the contrary, however, no party (the
"first party") shall be required to take any action requested by the
other party (the "requesting party") which results or could reasonably
result in an increase in the amount of Taxes or Transaction Taxes
imposed upon the first party or its Affiliates, unless the requesting
party agree to indemnify the first party and its Affiliates for the
amount of any such increase in Taxes or Transaction Taxes. Further, no
party will be required to take any action requested by the other party
that is not based on accepted tax practice and the legal requirements
regarding the Transaction Tax involved.
(iii) Audits, Litigation, and other Contests. (A) Each party shall
--------------------------------------
promptly provide the other party with written notice of any claim, or
of the commencement of any audit or proceeding, together with copies
of all correspondence, notices or other documents relating thereto,
which may result in increased Transaction Taxes. (B) In the case of
Alabama Sales and Use Taxes, both Intergraph and USI shall jointly
control the contest of such sales and use taxes, both Intergraph and
USI shall keep each other fully informed of all proceedings relating
to Alabama Sales and Use Taxes, both Intergraph and USI shall take
such steps as are reasonably requested by the other party in order to
allow such other party to participate in any contest of such Alabama
Sales and Use Taxes, and neither Intergraph nor USI shall be permitted
to settle or compromise the dispute of Alabama Sales and Use Taxes
without the written consent of the other party. However, either party
can pay its 50% share of any disputed Alabama Sales and Use Taxes (and
any related interest, penalties, etc.) at any time by notifying and
paying to the other party such 50% share of disputed Alabama Sales and
Use Taxes and any related interest, penalties, etc. that have accrued
through such date of payment. In cases where a party (the
"surrendering party") pays its 50% share of disputed Alabama Sales and
Use Taxes in accordance with the preceding sentence, the surrendering
party shall provide the other party (the "continuing party") with
powers of attorney or other appropriate documents which will enable
the continuing party to fully control and continue the dispute, shall
not take any actions or disclose any information that would adversely
affect the continuing party's conduct or resolution of the dispute,
and shall be released of any further liability with respect to, and
shall not share in any favorable resolution of, the disputed Alabama
Sales and Use Taxes. (C) The Acquiring Entities shall, in their sole
discretion, control and direct the conduct of any audit or inquiry or
any administrative or judicial appeal or other proceeding regarding
Other Transaction Taxes, each Selling Entity shall provide any
Acquiring Entity who so requests with powers of attorney or other
appropriate documents which will enable the Acquiring Entity to
conduct any such proceeding, and each Selling Entity agrees to furnish
the Acquiring Entities with such information and documentation as is
80
reasonably requested by the Acquiring Entities in connection with
such proceedings. The Acquiring Entity may, in its sole discretion,
agree to pay, settle, compromise, or concede any contest or claim
relating to Other Transaction Taxes.
(iv) Record Retention. Each party will retain all Tax Returns,
----------------
schedules, material records, workpapers or other documents relating
to Transaction Taxes until the expiration of the statute of
limitations (including extensions) for assessing or collecting such
Transactions Taxes. Before any tax records or documents are
destroyed, the party holding such records shall notify the other
party of its intent to destroy them and shall offer any such records
to the other party. If the other party wishes to receive such
records, it shall notify the party holding the records or documents
within 45 days of receipt of notice of the other party's intent to
destroy, and will be liable for any costs related to the transfer of
such records.
10.14 Number and Gender. Unless the context otherwise requires, the
-----------------
singular and plural forms in this Agreement shall be mutually inclusive, and the
masculine, feminine and neuter forms in this Agreement shall be mutually
inclusive.
10.15 Section Headings, Schedules, Etc. The cover page and table of
--------------------------------
contents preceding this Agreement and the headings of the various sections of
this Agreement and the Schedules hereof and Exhibits hereto are for convenience
of reference only and do not, and shall not be deemed to, modify, define, expand
or limit any of the terms or provisions hereof. Any item referenced in a
Schedule hereto is deemed to be disclosed only with respect to the specific
Section number of this Agreement which is explicitly referenced in the Schedule.
Any item referenced in a Schedule hereto is deemed to be disclosed only with
respect to the specific country corresponding to such Schedule. The absence of
any Schedule hereto, the purpose of which is set forth exceptions or other
qualifications to the representations and warranties hereunder, shall be deemed
to state that no such exceptions or qualifications exist.
10.16 Complete Agreement; Counterparts. This document and the documents
--------------------------------
(including Exhibits and Schedules) referred to herein, contain the complete
agreement and understanding of the parties hereto and thereto with respect to
the matters covered hereby and thereby, and they rescind and supersede any prior
agreements and understandings which may have in any way related to the subject
matter hereof and thereof, including without limitation those matters set forth
in those certain letters, dated October 10, 1997, November 4, 1997 and January
28, 1998, from EDS to Intergraph specifically therein agreed to be binding upon
EDS and Intergraph. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the terms hereof.
This Agreement may be executed by the parties hereto in several counterparts,
and, when so executed and delivered, shall be an original as against any party
whose signature appears thereon, but all such counterparts shall together
constitute but one and the same instrument. Each counterpart may consist of a
number of copies hereof each executed by less than all, but together executed by
all, of the parties hereto. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart. Notwithstanding anything to
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the contrary contained in this Agreement, it is the explicit intention of the
parties hereto that no party is making any representation or warranty
whatsoever, express or implied, beyond those expressly given in Articles III and
IV hereof and those expressly set forth in any of the Exhibits hereto,
including, but not limited to, any implied warranty or representation as to
condition, merchantability, fitness for any particular purpose, or suitability
of the Acquired Assets.
10.17 Severability. If any provision of this Agreement or the application
------------
of any such provision to any Person or circumstance, shall be declared
judicially to be invalid, unenforceable or void, such decision shall not have
the effect of invalidating or voiding the remainder of this Agreement, it being
the intent and agreement of the parties that this Agreement shall be deemed
amended by modifying such provision to the extent necessary to render it valid,
legal and enforceable while preserving its intent or, if such modification is
not possible, by substituting therefor another provision that is legal and
enforceable and that achieves the same objective.
10.18 No Third Party Beneficiaries. Nothing in this Agreement is intended
----------------------------
or shall be construed to give any Person, other than the parties hereto, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
10.19 Inconsistencies. The provisions of the Closing Agreements supplement
---------------
the provisions of this Agreement; provided, however, that to the extent that the
-------- -------
provisions of any Closing Agreement are in any respect inconsistent with the
provisions of this Agreement, the provisions of this Agreement shall govern and
control; provided further that to the extent that the application of Section
-------- ------- -------
10.9 to any instrument of transfer, conveyance and assignment delivered pursuant
----
to a Closing Agreement would render the transfer, conveyance or assignment
contemplated thereby ineffective or invalid, any governing law provisions
otherwise specified in such instrument of transfer, conveyance and assignment
shall govern and control.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be duly executed by their respective duly authorized officers or
representatives, all as of the day and year first above written.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
INTERGRAPH CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxx, Vice President
INTERGRAPH GMBH (OSTERREICH)
INTERGRAPH BENELUX BV
INTERGRAPH CANADA LTD.
INTERGRAPH CR S.R.O.
INTERGRAPH CAD/CAM (DANMARK) A/S
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INTERGRAPH FINLAND OY
INTERGRAPH FRANCE SA
INTERGRAPH (DEUTSCHLAND) GMBH
INTERGRAPH (ITALIA) L.L.C.
INTERGRAPH JAPAN K.K.
INTERGRAPH KOREA LTD.
INTERGRAPH DE MEXICO, S.A. DE C.V.
INTERGRAPH EUROPEAN
MANUFACTURING L.L.C.
INTERGRAPH NORGE AS
INTERGRAPH EUROPE (POLSKA) SP.Z.O.O.
INTERGRAPH SYSTEMS PTE. LTD.
INTERGRAPH (PORTUGAL) SISTEMAS DE
COMPUTACAO GRAFICA S.A.
INTERGRAPH ESPANA, S.A.
INTERGRAPH (SVERIGE) AB
INTERGRAPH (SWITZERLAND) AG
INTERGRAPH (UK) LTD.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx,
as attorney in fact
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UNIGRAPHICS SOLUTIONS INC.
By: /s/ H. Xxxxxxx Xxxxxxxx
-------------------------------------
H. Xxxxxxx Xxxxxxxx, Vice President
UNIGRAPHICS SOLUTIONS
HANDELSGESELLSCHAFT M.B.H.
UNIGRAPHICS SOLUTIONS N.V.
UNIGRAPHICS SOLUTIONS CANADA LTD.
UNIGRAPHICS SOLUTIONS DANMARK
A/S
UNIGRAPHICS SOLUTIONS FRANCE SAS
UNIGRAPHICS SOLUTIONS GMBH
UNIGRAPHICS SOLUTIONS S.P.A.
UNIGRAPHICS SOLUTIONS JAPAN LTD.
UNIGRAPHICS SOLUTIONS DE MEXICO,
S.A. DE C.V.
UNIGRAPHICS SOLUTIONS B.V.
UNIGRAPHICS SOLUTIONS NORGE AS
UNIGRAPHICS SOLUTIONS PTE. LIMITED
UNIGRAPHICS SOLUTIONS ESPANA, S.A.
UG SOLUTIONS AB
UNIGRAPHICS SOLUTIONS AG
UNIGRAPHICS SOLUTIONS LTD.
By: /s/ H. Xxxxxxx Xxxxxxxx
-------------------------------------
H. Xxxxxxx Xxxxxxxx,
as attorney in fact
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The undersigned is executing this Agreement to acknowledge its obligations under
Section 6.6.
ELECTRONIC DATA SYSTEMS
CORPORATION
By: /s/ D. Xxxxxxx Xxxxxxxxxxx
---------------------------------------------
D. Xxxxxxx Xxxxxxxxxxx, Senior Vice President
85