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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
By and Among
ILOG S.A.,
ILOG, INC.,
CPLEX OPTIMIZATION, INC.
and
XXXX X. XXXX,
XXXXX XXXX AND
XXXXXX XXXXX
Dated as of
August 4, 1997
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TABLE OF CONTENTS
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SECTION 1 - PURCHASE AND CONSIDERATION.........................................1
1.1 Sale and Purchase of Transferred Assets............................1
1.2 Assets Not to be Transferred.......................................3
1.3 Assumption of Liabilities..........................................3
1.4 Consideration......................................................4
1.5 Sales, Other Taxes and Expenses....................................5
1.6 Instruments of Conveyance and Transfer.............................5
SECTION 2 - REPRESENTATIONS, WARRANTIES OF SELLER AND SHAREHOLDERS.............6
2.1 Organization of Seller.............................................6
2.2 Seller Capital Structure...........................................6
2.3 Obligations With Respect to Capital Stock..........................6
2.4 Authority..........................................................7
2.5 Title to Assets; Effect of Agreement...............................7
2.6 Consents and Absence of Conflicts..................................7
2.7 Financial Statements...............................................8
2.8 Properties.........................................................8
2.9 Intellectual Property..............................................9
2.10 Customer List.....................................................12
2.11 Litigation........................................................13
2.12 Compliance with Laws..............................................13
2.13 Assumed Contracts.................................................13
2.14 Status of Contracts...............................................14
2.15 Employees of the Business.........................................14
2.16 Power of Attorney or Suretyship...................................14
2.17 Insurance.........................................................14
2.18 No Material Changes...............................................14
2.19 Environmental Matters.............................................15
2.20 Taxes.............................................................16
2.21 No Finder.........................................................16
2.22 Representations Complete..........................................16
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................16
3.1 Organization of Purchaser.........................................16
3.2 ILOG Capital Structure............................................17
3.3 Obligations With Respect to Capital Stock.........................18
3.4 Authority.........................................................18
3.5 SEC Filings; ILOG Financial Statements............................19
3.6 Absence of Certain Changes or Events..............................20
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TABLE OF CONTENTS
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3.7 ILOG Press Releases.................................................20
3.8 ILOG Intellectual Property Rights...................................20
3.9 Litigation..........................................................20
3.10 Consents and Absence of Conflicts...................................21
3.11 No Finder...........................................................21
3.12 Representations Complete............................................21
SECTION 4 - AGREEMENTS, ARRANGEMENTS AND COVENANTS PRIOR TO THE CLOSING.........21
4.1 Full Access.........................................................21
4.2 Conduct of Business.................................................22
4.3 Advice of Developments and Notification of Certain Matters..........23
4.4 Further Purchase Offers.............................................24
4.5 Employees...........................................................24
4.6 Employee Tax Matters................................................25
4.7 Best Efforts; Further Assurances; Consents of Third Parties.........25
SECTION 5 - CONDITIONS PRECEDENT TO OBLIGATIONS OF ILOG AND ILOG, U.S...........25
5.1 Representations True and Correct....................................25
5.2 Covenants Performed.................................................26
5.3 No Material Adverse Effect..........................................26
5.4 Corporate Action....................................................26
5.5 Injunctions or Restraints on Conduct of Business....................26
5.6 Necessary Consents..................................................26
5.7 Employee Agreements.................................................26
5.8 Asset Contribution Agreement........................................27
5.9 Seller Intellectual Property Actions................................27
5.10 CPLEX License Agreement.............................................27
5.11 Technology Access Letter............................................27
5.12 Transfer of Transferred Assets......................................27
5.13 Investment Representations..........................................27
5.14 Audited Financial Statements........................................27
5.15 Officers' and Shareholders's Certificates...........................27
5.16 Good Standing Certificates; Tax Certificate.........................28
5.17 Opinion of Seller's Counsel.........................................28
5.18 Approval of Documentation...........................................28
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TABLE OF CONTENTS
(CONTINUED)
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SECTION 6 - CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER AND
SHAREHOLDERS......................................................28
6.1 Representations True and Correct..................................28
6.2 Covenants Performed...............................................28
6.3 No Material Adverse Effect........................................28
6.4 Corporate Action..................................................28
6.5 Injunctions or Restraints on Conduct of Business..................29
6.6 Employment Agreements.............................................29
6.7 Board Appointments................................................29
6.8 Stock Option Grants...............................................29
6.9 Asset Contribution Agreement......................................29
6.10 Technology Access Letter..........................................29
6.11 Registration Rights...............................................29
6.12 Payment of Purchase Price.........................................30
6.13 Opinion of Counsel................................................30
6.14 Opinion of French Counsel.........................................30
6.15 Officers' Certificate.............................................30
6.16 Approval of Documentation.........................................30
6.17 Depositary Arrangement............................................30
SECTION 7 - THE CLOSING.......................................................30
7.1 The Closing.......................................................30
7.2 Deliveries at the Closing.........................................31
SECTION 8 - OBLIGATIONS OF THE PARTIES AFTER CLOSING..........................31
8.1 Survival of Representations, Warranties and Covenants.............31
8.2 Indemnification by Seller and Shareholders........................31
8.3 Indemnification for Third Party Claims............................31
8.4 Procedures for Asserting Claims...................................33
8.5 Offset Against Promissory Notes...................................34
8.6 Seller and Shareholder Maximum Remedy.............................34
8.7 Post-Closing Date Access to Information...........................35
8.8 Use of CPLEX Name and Logo........................................35
8.9 Covenant Not to Compete...........................................35
8.10 Rule 144 Reports and Restricted Securities........................35
8.11 Further Assurances................................................36
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TABLE OF CONTENTS
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SECTION 9 - TERMINATION.........................................................36
9.1 Termination........................................................36
9.2 Effect of Termination..............................................36
SECTION 10 - CONFIDENTIALITY....................................................37
10.1 Confidentiality....................................................37
10.2 Public Announcements...............................................37
SECTION 11 - GENERAL PROVISIONS.................................................37
11.1 Payment of Costs...................................................37
11.2 Entire Agreement; Waivers..........................................37
11.3 Successors and Assigns.............................................38
11.4 Effect of Headings.................................................38
11.5 Notices............................................................38
11.6 Governing Law; Submission to Jurisdiction..........................39
11.7 Parties in Interest................................................40
11.8 Invalid Provisions.................................................40
11.9 Counterparts.......................................................40
11.10 Assignment.........................................................40
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EXHIBITS
A - Asset Contribution Agreement
B(i) - Promissory Note
B(ii) - Promissory Note
B(iii) - Promissory Note
C - Seller's Financial Statements
D - ILOG Press Releases
E(i) - Employment Agreement
E(ii) - Employment Agreement
E(iii) - Employment Agreement
F - Copyright Agreement
G - Trademark Assignment
H - Internet Domain Name Transfer Agreement
I - CPLEX License Agreement
J - Technology Access Letter
K - Investment Representations
L - Opinion of Xxxxxx and Xxxxxx
M - Stock Option Grant and Agreement
O - Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
P - Opinion of Stibbe Simont Xxxxxxx Duhot & Xxxxxx
SCHEDULES
1.1(b) - Fixed Assets
1.2 - Excluded Assets
2.3 - Obligations With Respect to Capital Stock
2.5 - Security Interests, Liens, Encumbrances, etc.
2.6 - Required Consents & Absence of Conflicts
2.17 - Seller's Insurance Policies
2.18 - Material Changes Since June 30, 1997
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT"), dated as of this 4th
day of August, 1997 is made and entered into by and among ILOG S.A., a French
societe anonyme ("ILOG"), ILOG, Inc., a California corporation ("ILOG, U.S."),
CPLEX Optimization, Inc, a Texas corporation ("SELLER"), and Xxxx Xxxx, Xxxxx
Xxxx and Xxxxxx Xxxxx, each a shareholder of Seller (the "SHAREHOLDERS").
WHEREAS, Seller is in the business of manufacturing, developing,
marketing and selling mathematical programming software (including, without
limitation, software presently under development) used for formulating and
solving optimization problems in the fields of business decision making,
operations, research and management science (the "BUSINESS");
WHEREAS, Seller desires to sell, and each of ILOG and ILOG, U.S.
(herein together referred to as the "PURCHASERS" and individually as a
"PURCHASER") desire to purchase, certain of the assets of Seller related to the
Business on the terms and conditions hereinafter set forth.
WHEREAS, before Closing Date (as defined below), Seller will be
reincorporated in the State of Nevada via the merger (the "REINCORPORATION
MERGER") of Seller with and into a wholly owned subsidiary of Seller (the
"MERGER SUBSIDIARY") to be organized by Seller for such purpose, whereupon the
Merger Subsidiary will succeed to all of the assets, properties, business,
rights, liabilities and obligations of Seller, including the rights and
obligations of Seller under this Agreement and the Ancillary Agreements (as
defined below) (from and after the effective time of the consummation of the
Reincorporation Merger, all references in this Agreement to "Seller" shall be
deemed to refer to both the Merger Subsidiary and the Seller as the predecessor
corporation of the Merger Subsidiary, unless the context otherwise clearly
requires).
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and in reliance upon the
representations and warranties contained herein, the parties hereto covenant and
agree as follows:
SECTION 1
PURCHASE AND CONSIDERATION
1.1 SALE AND PURCHASE OF TRANSFERRED ASSETS. On the terms and subject
to the conditions of this Agreement and except for the Excluded Assets (as
defined in Section 1.2 hereof), effective as of the Closing Date, Seller agrees
to transfer, convey, assign and deliver to ILOG or ILOG, U.S. and ILOG and ILOG,
U.S. jointly and severally agree to buy from Seller, free and clear of any
liens, charge, security interest, mortgage, pledge, easement, confidential sale
or other title retention or other restriction ("ENCUMBRANCE") the Business as a
going concern and all of Seller's rights, title and interest in and to all of
the assets and properties, tangible and intangible, real, personal or mixed,
owned or leased by Seller, of and pertaining to or used by Seller in the
Business, wherever located, whether known or unknown, and whether or not on the
books and records of
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Seller, including, for the avoidance of doubt, any assets to be transferred by
Seller to ILOG pursuant to that certain asset contribution agreement (contrat
d'apport) (the "ASSET CONTRIBUTION AGREEMENT") to be entered into on the Closing
Date (as defined hereunder) among ILOG, Seller and Shareholders, substantially
in the form annexed hereto as Exhibit A (the "TRANSFERRED ASSETS"), including by
way of example but not limited to the following:
(a) all equipment, furniture, fixtures, leasehold
improvements, tooling, machinery and other tangible property of the Business,
wherever located, which are currently carried on the books of Seller as listed
on Schedule 1.1(b), hereto (the "FIXED ASSETS");
(b) all inventories, including finished goods, work in
process, purchased parts, supplies and materials (the "INVENTORIES");
(c) all of Seller's rights to market, license and sell all
products marketed, licensed or sold with respect to the Business;
(d) all of Seller's claims against any third parties relating
to items included in the Transferred Assets, including, without limitation,
unliquidated rights under manufacturers' and vendors' warranties or guarantees,
but only to the extent such claims do not relate to any liabilities retained by
Seller and not assumed by Purchaser;
(e) all of Seller's right, title and interest under the
contracts, agreements, commitments, licenses from third parties, leases and
similar documents to which Seller is a party listed on Schedule 1.3 hereto (the
"ASSUMED CONTRACTS");
(f) all of Seller's right, title and interest under the
agreements pursuant to which Seller has licensed its software products and any
associated Seller Intellectual Property (the "ASSUMED LICENSE AGREEMENTS");
(g) the $5,000 security deposit paid pursuant to the sublease
of Seller's premises (the "SELLER SUB-LEASE");
(h) all of Seller's transferable books and records used in
connection with the Business, including, without limitation, all customer and
supplier lists, all advertising materials and marketing plans, drawings,
blueprints and manuals and other materials of Seller used in employee and
management training in the Business;
(i) all of Seller's business systems, including software
programs, computer printouts, databases and related items used in the Business,
including all of Seller's rights in such items;
(j) all of Seller's Intellectual Property (as defined in
Section 2.9 hereof) relating to or used in connection with the Business
(including, without limitation, the registered trademark and the trade name
"CPLEX" and the items listed on Schedule 2.9, and the business and goodwill of
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Seller associated therewith) and the right to xxx for and recover damages for
the past infringement of such Seller Intellectual Property;
(k) all permits, licenses, franchises, consents and other
similar authorizations, if any, of any federal, state, local or foreign
governmental body which relate to the Business and which may be lawfully
assigned or transferred, subject to any action by such body which may be
required in connection with such assignment or transfer; and
(l) all other properties, rights and assets owned by Seller
and used in the Business, whether tangible or intangible, in whatever form or
medium, absolute, contingent, or otherwise.
1.2 ASSETS NOT TO BE TRANSFERRED. Seller shall retain and neither ILOG
nor ILOG, U.S. shall acquire (i) Seller's notes and accounts receivable on the
Closing Date; (ii) Seller's cash in any form and cash equivalents on the Closing
Date; (iii) Seller's minute books, tax returns, financial statements, books of
account (including its general ledger) and similar corporate documents which are
not necessary for Purchaser to operate the Business, (iv) all of the Seller's
rights under any of its insurance policies and any rights to refunds for prepaid
premiums; (v) any tax refunds available to Seller; (vi) Seller's rights under
this Agreement and (vii) those assets set forth on Schedule 1.2 (collectively,
the "EXCLUDED ASSETS").
1.3 ASSUMPTION OF LIABILITIES.
(a) On the terms and subject to the conditions contained
herein, on the Closing Date, the Purchasers shall jointly and severally assume
and agree thereafter to pay, perform and discharge only (i) the obligations and
liabilities of Seller remaining unpaid or unperformed on the Closing Date under
the Assumed Contracts and the Assumed License Agreements; and (ii) the Seller's
accrued liability for vacation in respect of its employees. The liabilities
described in (i) and (ii) of the preceding sentence shall be collectively
referred to herein as the "ASSUMED LIABILITIES."
(b) Except for the Assumed Liabilities, neither Purchaser
shall assume or have any responsibility for any other liability, obligation or
commitment of any nature, whether now or hereafter existing of Seller or
Shareholders (the "EXCLUDED LIABILITIES") and Seller or Shareholders, as the
case may be, shall be responsible for any payment, settlement or discharge of
all such liabilities, obligations or commitments which are not Assumed
Liabilities, including but not limited to the following:
(i) accounts payable of Seller incurred prior
to and as of the Closing Date;
(ii) liabilities for any income, business,
occupation, property, sales or use, withholding or similar tax or taxes of any
kind of the Seller or attributable to or pertaining to (1) the Transferred
Assets or (2) the Business of the Seller with respect to any period or
portion of any period ending prior to the Closing Date;
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(iii) liabilities for any income, business,
occupation, sales or use, withholding or similar tax or taxes of any kind
relating to the sale of the Transferred Assets hereunder or under the Asset
Contribution Agreement;
(iv) any liability concerning storage, disposal,
treatment or spillage of Hazardous Materials (as defined below) or any other
liability relating to environmental matters;
(v) save in respect of the Assumed Liabilities,
any contingent liabilities of Seller pertaining to the ownership, distribution
or use of any of Seller's Intellectual Property sold or licensed prior to or on
the Closing Date not identified on Schedule 1.3;
(vi) any liabilities, obligations or commitments
of Seller under any Seller employee contracts or benefit plans other than
accrued vacation;
(vii) any tort liability, including liabilities based
on theories of strict liability or product liability, arising from the Seller's
business, its assets, or the operation thereof arising from events, actions or
inactions occurring prior to
the Closing Date; and
(viii) any obligation of Seller in respect of
employees or other service providers of Seller arising on or prior to the
Closing Date, including, without limitation, any obligations in respect of
(i) severance pay or arrangements; (ii) workers compensation;
(iii) wrongful termination; (iv) discrimination; and (v) executive
reimbursements.
1.4 CONSIDERATION. At the Closing, in consideration of the sale and
transfer of the Transferred Assets, ILOG and/or ILOG, U.S. shall (i) assume the
Assumed Liabilities and (ii) deliver to Seller the following consideration (the
"PURCHASE PRICE"):
(a) Initial Cash Payment. ILOG and/or ILOG, U.S. shall
pay Seller an aggregate amount of Fifteen Million Dollars ($15,000,000)
(the "INITIAL CASH PAYMENT") in cash by means of wire transfers of immediately
available funds to the following bank account:
U.S. Bank of Nevada
Phone: (000)000-0000
Routing Number: 000000000
Account Number: 8290002602
Account Name: CPLEX Optimization, Inc.
(b) Additional Payment. ILOG shall deliver to Seller
three promissory notes, each to be substantially in the form attached hereto as
Exhibit B (i), (ii), and (iii) (the "PROMISSORY NOTES"), in the original
aggregate principal amount of Five Million Dollars ($5,000,000), bearing
interest at the lowest rate allowable by the United States Internal Revenue
Service for notes of such maturities to avoid the imputation of interest as
determined on the Closing Date (which rate is currently 6.65% per annum) and
subject to the provisions of this Section 1.4(b), providing for the payment of
principal in three equal installments of $1,666,666.67 in aggregate on each of
the second,
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third and fourth anniversary of the Closing Date; provided, however, that in the
event that the per-share closing sale price (or the average of the closing bid
and ask price if no sales were reported) for transactions executed over the
Nasdaq National Market of American Depositary Shares representing shares of ILOG
on the trading day immediately preceding the Closing Date (as reported in The
Wall Street Journal) (the "CLOSING DATE STOCK PRICE") shall be greater than
$7.00, then the aggregate original principal amount of the Promissory Notes
shall instead be an amount equal to $5,000,000 increased by the lesser of in
aggregate (i) $2,400,000 or (ii) the product of $2,400,000 and a fraction, the
numerator of which shall be equal to the amount by which the Closing Date Stock
Price exceeds $7.00 and the denominator of which shall be $3.00; this additional
amount shall also be paid on the fourth anniversary of the Closing Date.
Interest on the outstanding principal amount shall be compounded monthly and
shall be due and payable on a quarterly basis as more particularly set forth in
the Promissory Notes; and
(c) Consideration Shares. ILOG shall issue one million seven
hundred thousand (1,700,000) shares in registered form, which shares shall be
validly issued, fully paid and nonassessable (the "CONSIDERATION SHARES"). The
Consideration Shares will be deposited pursuant to the Deposit Agreement
referred to in Section 6.17 below and delivered to Seller in the form of
American Depositary Shares (the "ADSS").
1.5 SALES, OTHER TAXES AND EXPENSES.
(a) Seller or Shareholders shall bear all United States
federal and state income taxes, and the Purchasers shall bear all sales,
registration, transfer and other like taxes, if any, arising by reason of or in
connection with the sale and transfer hereunder of the Transferred Assets. ILOG
shall bear all French taxes, duties and assessments by reason of or in
connection with the sale and transfer hereunder of the Transferred Assets. Each
of Seller, Shareholder or ILOG, as the case may be, agrees to pay and discharge
promptly when due the entire amount of all such taxes arising in connection with
the transactions set forth hereunder, in accordance with the provisions of this
Section 1.5 whether levied on Seller, Shareholders or ILOG, as the case may be.
(b) All miscellaneous expenses related to the Business,
including rent, utilities and other similar and related expenses shall be
allocated ratably to the period based on the number of days in the period prior
to the Closing Date and Seller and Shareholders shall be responsible for (and
shall indemnify ILOG and ILOG, U.S. against) all such expenses. ILOG and ILOG,
U.S. shall be responsible for (and shall indemnify Seller and Shareholders
against) all such expenses applicable after the Closing with respect to the
Transferred Assets and the Seller Lease.
1.6 INSTRUMENTS OF CONVEYANCE AND TRANSFER. On the Closing Date, Seller
shall deliver to the respective Purchasers such bills of sale, endorsements,
consents, assignments and other good instruments of conveyance and assignment as
shall be reasonably satisfactory to the respective Purchasers and their counsel
and effective to vest in the respective Purchasers all right, title and interest
in and to the Transferred Assets free and clear of any Encumbrances (the
"CONVEYANCE DOCUMENTS").
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SECTION 2
REPRESENTATIONS, WARRANTIES OF SELLER AND SHAREHOLDERS
Seller and each Shareholder jointly and severally represent and warrant
to the Purchasers that:
2.1 ORGANIZATION OF SELLER.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
has the corporate power and authority to own, lease and operate its assets and
property and to carry on its business as now being conducted and as proposed to
be conducted and is duly qualified or licensed to do business and is in good
standing in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary except where the failure to be so qualified
would not have a Material Adverse Effect (as defined below) on Seller.
(b) Seller has no subsidiaries and no ownership interest in
any other entity.
(c) Seller has delivered or made available to ILOG a true and
correct copy of the Articles of Incorporation and Bylaws of Seller, each as
amended to date, and each of such instruments are in full force and effect.
Seller is not in violation of any of the provisions of its Articles of
Incorporation or Bylaws or equivalent governing instruments.
(d) As of the effective time of the Reincorporation Merger,
Merger Subsidiary as Seller under this Agreement and the Ancillary Agreements
will have succeeded to all the assets, properties, business, rights, liabilities
and obligations of Seller, including the rights and obligations of Seller under
this Agreement and the Ancillary Agreements.
(e) When used in connection with Seller, the term "MATERIAL
ADVERSE EFFECT" means, for purposes of this Agreement, any change, event or
effect that is materially adverse to the business, assets (including intangible
assets), financial condition or results of operations of Seller.
2.2 SELLER CAPITAL STRUCTURE. The authorized capital stock of Seller
consists of 5,000 shares of Common Stock, $1.00 par value, of which there were
1,095 shares issued and outstanding as of the close of business on June 30,
1997. Since the close of business on June 30, 1997, no shares of Seller Capital
Stock have been issued.
2.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in
Section 2.2, there are no equity securities or similar ownership interests of
any class of Seller, or any securities exchangeable or convertible into or
exercisable for such equity securities or similar ownership interests, issued,
reserved for issuance or outstanding. Except as set forth in Schedule 2.3, there
are no options, warrants, equity securities or similar ownership interests,
calls, rights (including preemptive rights), commitments or agreements of any
character to which Seller is a party or by which it is bound obligating Seller
to issue, deliver or sell, or cause to be issued, delivered or sold, or
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repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or
acquisition, of any shares of capital stock or similar ownership interests of
Seller or obligating Seller to grant, extend, accelerate the vesting of or enter
into any such option, warrant, equity security, call, right, commitment or
agreement. There are no registration rights and, as of the date of this
Agreement, there are no voting trusts, proxies or other agreements or
understandings with respect to any equity security of any class of Seller other
than the Seller Shareholder Agreement dated March 29, 1989.
2.4 AUTHORITY. Seller has all requisite power and authority to enter
into this Agreement and all other agreements executed by Seller in connection
herewith, including the Asset Contribution Agreement, and all other Exhibits
hereto (the "ANCILLARY AGREEMENTS") and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each of the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Seller. This Agreement and each of the Ancillary
Agreements has been duly executed and delivered by Seller and each of the
Shareholders and, assuming the due authorization, execution and delivery by the
respective Purchasers, constitutes valid and binding obligations of Seller and
each of the Shareholders, enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity.
2.5 TITLE TO ASSETS; EFFECT OF AGREEMENT. Except as set forth on
Schedule 2.5, Seller has good and marketable title to, or a valid leasehold
interest in, the Transferred Assets, free and clear of all Encumbrances (other
than Permitted Encumbrances as defined below) and at the Closing will convey,
assign, transfer and deliver to ILOG or ILOG, U.S. good and marketable title to
the Transferred Assets free and clear of any Encumbrances (other than Permitted
Encumbrances as defined below). Neither Seller nor any Shareholder knows of any
infringement by third parties of its right, title and interest to the
Transferred Assets and no third party has any interest in the Transferred
Assets.
For purposes of this Agreement "PERMITTED ENCUMBRANCE" shall mean any
encumbrance consisting of (i) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or similar common law or statutory liens or
encumbrances arising in the ordinary course of business which are not delinquent
or remain payable without penalty and (ii) the rights of Seller's licensees
under the Assumed License Agreements.
2.6 CONSENTS AND ABSENCE OF CONFLICTS.
(a) Except as set forth on Schedule 2.6, no consent of any
person not a party to this Agreement and no consent of any governmental
authority is required to be obtained on the part of Seller or Shareholders to
permit the consummation of the transactions contemplated by this Agreement, and
the Ancillary Agreements including without limitation, the transfer to the
respective Purchasers of all right, title and interest in and to the Transferred
Assets, free and clear of any Encumbrances.
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(b) Except as set forth on Schedule 2.6, as of the Closing,
neither the execution and delivery by Seller or the Shareholders of the
Agreements and Ancillary Agreements applicable to them, the compliance by Seller
or the Shareholders with the terms and conditions hereof or thereof, nor the
consummation by Seller and the Shareholders of the transactions contemplated
hereby or thereby, will (i) conflict with any of the terms, conditions and/or
provisions of the Articles of Incorporation, Bylaws or other constituent
documents of Seller, (ii) violate any provision of, or require any consent,
authorization or approval under, any law or regulation or any judicial or
administrative order, award, judgment, writ, injunction or decree or any
governmental permit or license issued to or applicable to Seller or any
Shareholder, which in the case of Seller is material to the Business or
condition of Seller or to the transactions contemplated by this Agreement or any
Ancillary Agreement, or (iii) conflict with, result in a breach of, constitute a
default or event of default under, or require any consent, authorization or
approval under any contract, lien, or instrument to which Seller or any
Shareholder is a party or by which it may be bound, which in the case of Seller
is material to the Business or condition of Seller or to the transactions
contemplated by this Agreement or any Ancillary Agreement.
2.7 FINANCIAL STATEMENTS.
(a) Attached hereto as Exhibit C are a draft balance sheet and
an income statement of Seller for the year ended as of June 30, 1997 ("SELLER'S
FINANCIAL STATEMENTS"). Seller's Financial Statements fairly present the
financial position and results of operations of the Business at the dates and
for the periods reflected therein in all material respects. Seller's Financial
Statements have been prepared in accordance with United States generally
accepted accounting principles ("U.S. GAAP"). The balance sheet of Seller dated
June 30, 1997 is referred to in this Agreement as the "6/30/97 BALANCE SHEET."
(b) Seller has no debt, liability or obligation of a nature
required to be disclosed on a balance sheet or a related note to financial
statements prepared in accordance with U.S. GAAP that is not set forth on the
face of the 6/30/97 Balance Sheet, except for those that have been incurred
after June 30, 1997 in the ordinary course of business and consistent with past
practice.
2.8 PROPERTIES.
(a) Seller does not have a freehold interest in any real
property.
(b) No real property related to the Business is leased to
Seller other than the Seller Sub-Lease described on Schedule 2.8(b).
(c) Except for the Excluded Assets and except for the
Equipment Loan and Porting Agreements as set forth on Schedule 2.8(c), to
Seller's and Shareholders' knowledge, included in the Transferred Assets are all
the personal and tangible property necessary for the conduct by Purchaser of the
Business as now conducted by Seller.
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(d) All tangible personal property included in the Transferred
Assets is in good operating condition and repair, ordinary wear and tear
excepted. No shareholder, officer, director or employee of Seller, nor any
spouse, child or other relative of any of these persons, owns, or has any
interest, directly or indirectly, in any of the real or personal property
included in the Transferred Assets, or except as set forth in Schedule 2.8(d),
any intangible property included in the Transferred Assets.
(e) Except as set forth in Schedule 2.8(e) to the knowledge of
Seller and Shareholders, no shareholder, officer or director of Seller or any
affiliates of any of them, nor any spouse or child of any of them, has any
direct or indirect interest in any competitor, supplier or customer of Seller or
in any person from whom or to whom Seller leases any real or personal property,
or in any other person with whom Seller is doing a material amount of business
or currently proposes to do a material amount of business except in each case
not more than a one percent (1%) beneficial ownership interest in the
outstanding stock of any such entity the stock of which is publicly traded.
2.9 INTELLECTUAL PROPERTY.
For the purposes of this Agreement, the following terms have
the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following
and all rights therein, arising therefrom, or associated therewith: (i) all
United States and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor and all other rights corresponding thereto throughout
the world; (iv) all mask works, mask work registrations and applications
therefor; (v) all industrial designs and any registrations and applications
therefor throughout the world; (vi) all trade names, logos, common law
trademarks and service marks; trademark and service xxxx registrations and
applications therefor and all goodwill associated therewith throughout the
world; (vii) all databases and data collections and all rights therein
throughout the world; and (viii) all computer software including all source
code, object code, firmware, development tools, files, records and data, all
media on which any of the foregoing is recorded, all Web addresses, sites and
domain names, and (ix) any similar, corresponding or equivalent rights to any of
the foregoing and (x) all documentation related to any of the foregoing.
"SELLER INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned by or exclusively licensed to Seller.
"REGISTERED INTELLECTUAL PROPERTY" shall mean all United
States, international and foreign: (i) patents, patent applications (including
provisional applications); (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or
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applications related to trademarks; (iii) registered copyrights and applications
for copyright registration; (iv) any mask work registrations and applications to
register mask works; and (v) any other Seller Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued by, filed with, or recorded by, any state, government or other public
legal authority.
(a) Schedule 2.9 lists all Registered Intellectual Property
owned by, or filed in the name of, Seller (the "SELLER REGISTERED INTELLECTUAL
PROPERTY") and lists any proceedings or actions before any court, tribunal
(including the United States Patent and Trademark Office (the "PTO") or
equivalent authority anywhere in the world) related to any of the Seller
Registered Intellectual Property rights.
(b) Except as reflected in the Assumed Contracts and Assumed
License Agreements, each item of Seller Intellectual Property, including all
Seller Registered Intellectual Property listed in Schedule 2.9, is free and
clear of any Encumbrances. Seller (i) is the exclusive owner of all trademarks
and trade names used by Seller in connection with the operation or conduct of
the Business, including the sale of any products or technology or the provision
of any services by Seller and (ii) owns exclusively (subject to the rights of
its licensees under the Assumed License Agreements), and has good title to, all
copyrighted works that are Seller products or other works of authorship that the
Seller otherwise purports to own.
(c) To the extent that any Seller Intellectual Property has
been developed or created by any person other than Seller for which the Seller
has, directly or indirectly, paid or provided consideration, the Seller has a
written agreement with such person with respect thereto and Seller thereby has
obtained ownership of, and is the exclusive owner of, all such Intellectual
Property by operation of law or by valid assignment.
(d) Except under the Assumed License Agreements, Seller has
not transferred ownership of or granted any license of or right to use or
authorized the retention of any rights to use any Intellectual Property that is
or was Seller Intellectual Property, to any other person.
(e) The Seller Intellectual Property constitutes all the
Intellectual Property used in and/or necessary to the conduct of its business as
it currently is conducted or is reasonably contemplated to be conducted,
including, without limitation, the design, development, manufacture, use, import
and sale of the products, technology and services of the Seller (including
products, technology or services currently under development).
(f) Other than "shrink-wrap" and similar widely available
commercial end-user licenses, the licenses evidenced by Assumed Contracts and
the Assumed License Agreements include all contracts, licenses and agreements to
which Seller is a party with respect to any Intellectual Property. No person
other than Seller has ownership rights to improvements made by the Seller in
Intellectual Property which has been licensed to Seller.
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(g) The licenses evidenced by the Assumed Contracts and the
Assumed License Agreements comprise all contracts, licenses and agreements
between Seller and any other person wherein or whereby Seller has agreed to, or
assumed, any obligation or duty to warrant, indemnify, reimburse, hold harmless,
guaranty or otherwise assume or incur any obligation or liability or provide a
right of rescission with respect to the infringement or misappropriation by
Seller or such other person of the Intellectual Property of any person other
than Seller. With respect to the Assumed License Agreements, Seller has
delivered to ILOG, U.S., copies of those documents set forth on Schedule 2.9(g)
hereto and there is no other Assumed License Agreements in which Seller has
agreed to assume or has assumed any obligation or duty to warrant, indemnify,
reimburse, hold harmless, guaranty or otherwise assume or incur any obligation
or liability or provide a right of rescission with respect to the infringement
or misappropriation of third party intellectual property rights which is
materially different to the terms relating to the same in the agreements
disclosed to Purchaser on Schedule 2.9(g).
(h) The operation of the business of Seller as it currently is
conducted or is reasonably contemplated to be conducted, including but not
limited to Seller's design, development, use, import, manufacture and sale of
the products, technology or services (including products, technology or services
currently under development) of Seller does not infringe or misappropriate the
Intellectual Property of any person, violate the rights of any person (including
rights to privacy or publicity), or constitute unfair competition or trade
practices under the laws of any jurisdiction, and Seller has not received notice
from any person claiming that such operation or any act, product, technology or
service (including products, technology or services currently under development)
of Seller infringes or misappropriates the Intellectual Property of any person
or constitutes unfair competition or trade practices under the laws of any
jurisdiction (nor is the Seller or any of the Shareholders aware of any basis
therefor).
(i) Except as described in Schedule 2.9, each item of Seller
Registered Intellectual Property is valid and subsisting, all necessary
registration, maintenance and renewal fees in connection with such Registered
Intellectual Property have been paid and all necessary documents and
certificates in connection with such Seller Registered Intellectual Property
have been filed with the relevant patent, copyright, trademark or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Registered Intellectual Property. For each
product or technology of Seller that constitutes or includes a copyrightable
work, Seller has registered the copyright in the latest released version of such
work with the U.S. Copyright Office. In each case in which Seller has acquired
ownership of any Intellectual Property rights from any person, Seller has
obtained a valid and enforceable assignment sufficient to irrevocably transfer
all rights in such Intellectual Property (including the right to seek past and
future damages with respect to such Intellectual Property) to Seller and, to the
maximum extent provided for by, and in accordance with, applicable laws and
regulations, Seller has recorded each such assignment with the relevant
governmental authorities, including the PTO, the U.S. Copyright Office, or their
respective equivalents in any relevant foreign jurisdiction, as the case may be.
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(j) Except as set forth on Schedule 2.9, there are no
contracts, licenses or agreements between Seller and any other person with
respect to Seller Intellectual Property under which there is any dispute known
to Seller or any Shareholder regarding the scope of such agreement, or
performance under such agreement including with respect to any payments to be
made or received by Seller thereunder.
(k) To the Knowledge of Seller and each Shareholder, no person
is infringing or misappropriating any Seller Intellectual Property.
(l) Seller has taken all steps that are reasonably required to
protect the Seller's rights in confidential information and trade secrets of
Seller or provided by any other person to Seller. Without limiting the
foregoing, Seller has, and enforces, a policy requiring each employee,
consultant and contractor to execute proprietary information, confidentiality
and assignment agreements substantially in the Seller's standard forms, and all
current and former employees, consultants and contractors of the Seller have
executed such an agreement.
(m) Other than general regulatory or other restrictions
applicable to the business in which Seller is engaged, no Seller Intellectual
Property or product, technology or service of Seller is subject to any
proceeding or outstanding decree, order, judgment, agreement or stipulation that
restricts in any manner the use, transfer or licensing thereof by Seller or may
affect the validity, use or enforceability of such Seller Intellectual Property.
(n) No (i) product, technology, service or publication of
Seller (ii) material published or distributed by Seller or (iii) conduct or
statement of Seller constitutes obscene material, a defamatory statement or
material, false advertising or otherwise violates any law or regulation.
(o) All of Seller's products distributed after December 1995
(including products currently under development) will record, store, process,
calculate and present calender dates falling on and after (and if applicable,
spans of time including) January 1, 2000 and will calculate any information
dependent on or relating to such dates in the same manner, and with the same
functionality, data integrity and performance, as the products record, store,
process, calculate and present calendar dates on or before December 31, 1999, or
calculate any information dependent on or relating to such dates (collectively,
"YEAR 2000 COMPLIANT"). All of Seller's products (i) will lose no functionality
with respect to the introduction of records containing dates falling on or after
January 1, 2000 and (ii) will be interoperable with other products used by
Purchaser that may deliver records to Seller's products or receive records from
Seller's products, or interact with Seller's products, including but not limited
to back-up and archived data.
2.10 CUSTOMER LIST. Schedule 2.10 contains a correct and current list
of all customers (including independent distributors and value added resellers)
of the Business for the twelve months preceding June 30, 1997 from which Seller
derived invoiced or non-invoiced revenues in excess of $50,000. Except as
indicated on Schedule 2.10, each of Seller and Shareholders does not have any
specific information indicating that any customers which would be reasonably
considered to
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represent a material repeat revenue source intends to materially decrease the
amount of business that any such customer is presently doing with Seller.
2.11 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which Seller has received any
notice of assertion, nor, to Seller's knowledge, is there a threatened action,
suit, proceeding, claim, arbitration or investigation against Seller which
reasonably would be likely to be material to Purchaser, or which in any manner
challenges or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement. To the knowledge of Seller and Shareholder, no
governmental entity has at any time challenged or questioned in writing the
legal right of Seller to manufacture, offer, sell or license any of its products
in the present manner or versions thereof.
2.12 COMPLIANCE WITH LAWS. Seller has complied with all, and is not in
violation of any, applicable federal, state and local statutes, laws and
regulations (including, without limitation, any and all applicable building,
zoning, environmental, employment or other law, ordinance or regulation)
affecting its properties, employees or the operation of its Business.
2.13 ASSUMED CONTRACTS. Schedule 1.3 contains an accurate and complete
list of all Assumed Contracts to be assumed by the Purchasers as Assumed
Liabilities pursuant to this Agreement. There is no breach or default, or event
that with notice or lapse of time, or both, would constitute a breach or
default, by Seller, or to the knowledge of Seller or the Shareholders, any other
party to any of the Assumed Contracts, except as described on such Schedule.
Neither Seller nor any Shareholder has received notice that any party to any of
the Assumed Contracts intends to cancel or terminate any of such Assumed
Contracts or to exercise or not exercise any options under any of the Assumed
Contracts, except as described on such Schedule. Except as set forth on Schedule
1.3, Seller is not a party to or bound by:
(i) any contract for the purchase, licensing or development
of any Intellectual Property by Seller, whether as licensor or licensee,
involving the payment of more than $25,000 after the date hereof, or which
purports to be exclusive in any respect;
(ii) any guarantee of the obligations of customers, suppliers,
officers, directors, employees, affiliates of Seller or others;
(iii) any contract that provides for the incurrence by Seller
of indebtedness for borrowed money secured by any Transferred Assets;
(iv) any non-competition agreement or similar contract that
limits or restricts Seller from carrying on any business; or
(v) any other material contract entered into outside the
ordinary course of business.
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2.14 STATUS OF CONTRACTS. Each of the Assumed Contracts and Assumed
License Agreements (i) constitutes a valid and binding obligation of Seller and,
to the knowledge of Seller and Shareholders, the other parties thereto (subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general application relating to or affecting creditors' rights and to general
equity principles), and (ii) is in full force and effect. Seller has not been
notified that any other party to any such contract intends to terminate it.
Complete and correct copies of each of the Assumed Contracts have heretofore
been delivered to Purchaser (including all amendments, estoppel certificates,
modifications and material correspondence between Seller and the other party
thereto).
2.15 EMPLOYEES OF THE BUSINESS. Schedule 2.15 attached hereto contains
a true and complete list of the names of all directors, officers and employees
of Seller who work in the Business. Schedule 2.15 contains a schedule showing
the cash and non-cash compensation (including any and all perquisites) of all
such persons.
2.16 POWER OF ATTORNEY OR SURETYSHIP. Seller does not have any power of
attorney with respect to the Business or the Transferred Assets which will not
be terminated by the Closing.
2.17 INSURANCE. Schedule 2.17 attached hereto contains a true and
correct list of all insurance policies held by Seller. Seller has provided to
Purchaser copies of all such insurance policies. Seller has in full force and
effect property and casualty insurance in types and amounts normal and
appropriate for a business of its type. Such insurance or comparable insurance
will be maintained in full force and effect up to and including the Closing
Date.
2.18 NO MATERIAL CHANGES.
With respect to the Business, except as disclosed in Schedule
2.18, since June 30, 1997, there has not been any:
(a) Material adverse change in the financial condition,
liabilities, assets, business or prospects of the Business other than those
relating to the economy or industry of the Business generally;
(b) Destruction, damage to or loss of any asset (whether or
not covered by insurance) that materially and adversely affects the financial
condition, business or prospects of the Business;
(c) Sale, transfer, lease, license or agreement concerning any
asset of Seller, except in the ordinary course of business;
(d) Amendment, termination, relinquishment or nonrenewal of
any Assumed Contract or Assumed License Agreement, except in the ordinary course
of business;
(e) Waiver or release of any right or claim of Seller relating
to the Business, except in the ordinary course of business;
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(f) Other event or condition of any character that has or
might have a Material Adverse Effect on Seller; or
(g) Agreement by Seller to do any of the things described in
the preceding clauses (a) through (f).
2.19 ENVIRONMENTAL MATTERS.
(a) Compliance with Laws. Seller has no liability, actual or
contingent, for any claims, costs, suits or damages of any kind or nature
arising out of the presence prior to the Closing of any Hazardous Materials in,
under, or on any property that Seller has at any time owned, operated, occupied
or leased and that Purchaser will own, operate, occupy or lease in connection
with the Transferred Assets.
(b) Environmental Proceedings. Seller has not received any
notice that it (i) is the subject of any pending claim, investigation, action,
proceeding, injunction or decree relating to the use or disposal of any
Hazardous Materials by it, (ii) may be responsible for any investigation,
remediation, removal, emission or spill of Hazardous Materials, or (iii) is the
subject of any pending claim, action, proceeding, or investigation relating to
its exposure of others to Hazardous Materials. Neither Seller nor any
Shareholder is aware of any fact or circumstance which could involve Seller in
any environmental litigation or impose any material environmental liability upon
either Seller or Purchaser.
(c) Permits. Seller currently holds all environmental permits
(if any) required for the conduct of its Business as presently conducted. All
such environmental permits are in full force and effect, and Seller has complied
with any covenants or conditions set forth in the environmental permits. To the
knowledge of Seller and Shareholders, and assuming that Purchaser operates the
Business in a manner similar to Seller, Purchaser will not be required to make
any material capital expenditures to comply with any environmental permit or
environmental law in effect at the Closing Date.
(d) Definitions. The following definitions will apply for
purposes of this Section 2.19:
(i) HAZARDOUS MATERIALS: A Hazardous Material
is any material or substance that is prohibited or regulated by any
Environmental Law or that has been designated by any governmental authority to
be radioactive, toxic, hazardous, otherwise a danger to health or reproduction
or the environment.
(ii) ENVIRONMENTAL LAWS ARE: all laws, rules,
regulations, orders, treatises, statutes, and codes promulgated by any
governmental authority which prohibit, regulate or control any Hazardous
Material and the use, storage, generation, treatment, manufacture, transport,
exposure of others to, or handling of Hazardous Materials.
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2.20 TAXES. To the extent a failure to do so would adversely affect a
Purchaser or the Transferred Assets, Seller has (i) timely filed within the time
period for filing or any extension granted with respect thereto all federal,
state, local and other returns, estimates and reports relating to any and all
taxes or other governmental charges, obligations or fees and any related
interest or penalties ("TAX" or "TAXES") it is required to file and has paid all
Taxes shown due thereon or has provided adequate reserves therefor on its books
and records, and (ii) withheld with respect to Seller's employees all federal
and state income Taxes, FICA, FUTA and other Taxes required to be withheld and
paid such withheld amounts to the appropriate governmental body within the time
period required by law.
2.21 NO FINDER. Neither Seller nor any of the Shareholders nor any
person acting on their behalf has paid or become obligated to pay or taken any
act which would obligate any Purchaser to pay, any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement or the Ancillary Agreements.
2.22 REPRESENTATIONS COMPLETE. None of the representations and
warranties made by Seller or Shareholders herein, in any Ancillary Agreement or
in any certificate furnished by any of them, or on their behalf, pursuant to
this Agreement or any Ancillary Agreement, contains or will contain any untrue
statement of a material fact, or omits to state any material fact required to be
stated therein or necessary in order to make the statements made, in the light
of the circumstances under which they were made, not misleading.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchasers jointly and severally represent and warrant to Seller
and Shareholders that:
3.1 ORGANIZATION OF PURCHASER.
(a) ILOG and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted and as proposed to be conducted and is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified would not have a Material Adverse Effect (as defined
below) on ILOG or ILOG, U.S. ILOG, U.S. is a wholly owned subsidiary of ILOG.
(b) Each of ILOG and ILOG, U.S. has delivered or made
available to Seller a true and correct copy of its Statuts, Certificate of
Incorporation and Bylaws (or equivalent governing instruments) of ILOG or ILOG,
U.S. Neither ILOG nor any of its subsidiaries is in violation of any
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of the provisions of its Statuts, Certificate of Incorporation or Bylaws or
equivalent governing instruments.
(c) When used in connection with a Purchaser, the term
"MATERIAL ADVERSE EFFECT" means, for purposes of this Agreement, any change,
event or effect that is materially adverse to the business, assets (including
intangible assets), financial condition or results of operations of ILOG or
ILOG, U.S. and their affiliated entities taken as a whole, except that a change
in the market price of the ILOG shares shall not, in and of itself, be deemed a
Material Adverse Effect with respect to ILOG or ILOG, U.S.
3.2 ILOG CAPITAL STRUCTURE. The authorized issued and outstanding
capital stock of ILOG consists, as of the close of business on June 30, 1997, of
10,959,622 shares, 4.00 French francs par value. Since the close of business on
June 30, 1997, no shares of ILOG capital stock have been issued except pursuant
to the exercise of options outstanding as of June 30, 1997 under the ILOG Stock
Option Plans (as defined below) and except under the ILOG Employee Stock Plans
(as defined below). As of the close of business on June 30, 1997, there were no
other outstanding commitments to issue any shares of capital stock or voting
securities of ILOG other than pursuant to the exercise of options outstanding as
of that date under the 1992 and 1996 Stock Option Plans of ILOG (collectively,
the "ILOG STOCK OPTION PLANS") and pursuant to the 1996 International Employee
Stock Purchase Plan and the 1996 French Employee Savings Plan (collectively, the
"ILOG EMPLOYEE STOCK PLANS"). All outstanding shares of ILOG have been duly
authorized, validly issued, fully paid and are nonassessable and free of any
liens or encumbrances other than any liens or encumbrances created by or imposed
upon the holders thereof. As of the close of business on June 30, 1997, ILOG has
reserved 1,775,473 shares for issuance to employees, directors and independent
contractors pursuant to the ILOG Stock Option Plans, net of exercises,
cancellations, repurchases and expiration of options of which, as of the close
of business on June 30, 1997, 1,284,004 shares were subject to outstanding,
unexercised options and 461,470 shares remained available for future grant. In
July ILOG issued a total of 18,989 shares under the ILOG Employee Stock Plans.
Other than pursuant to this Agreement, the Asset Contribution Agreement, the
ILOG Stock Option Plans and the ILOG Employee Stock Plans, there are no other
options, warrants, calls, rights, commitments or agreements of any character to
which ILOG is a party or by which ILOG is bound obligating ILOG to issue,
deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of the capital stock of ILOG or obligating
ILOG to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. The shares of ILOG shares to be issued pursuant to the
Asset Contribution Agreement will be duly authorized, validly issued, fully
paid, and non-assessable. At the Closing Date, the maximum number of shares for
which the options described in Sections 6.8(a) and 6.8(b) are exercisable
(without regard to any vesting requirement) will be reserved for issuance upon
exercise of such options, and upon exercise of such options in accordance with
their terms all shares issued upon such exercise will be duly authorized,
validly issued, fully paid and nonassessable.
There are no obligations of ILOG to register any of its shares other
than pursuant to the ILOG Registration Rights Agreement as delivered to Seller.
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3.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in
Section 3.2, there are no equity securities, partnership interests or similar
ownership interests of any class of ILOG, or any securities exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except for securities ILOG owns, directly or indirectly through one
or more subsidiaries or director nominee shares, there are no equity securities,
partnership interests or similar ownership interests of any class of any
subsidiary of ILOG, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in Section 3.2, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which ILOG or
any of its subsidiaries is a party or by which it is bound obligating ILOG or
any of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition, of any shares of capital stock,
partnership interests or similar ownership interests of any of ILOG's
subsidiaries.
3.4 AUTHORITY.
(a) Each of ILOG and ILOG, U.S. has all requisite corporate
power and authority to enter into this Agreement and the Ancillary Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby has been duly
authorized by the respective Boards of Directors of ILOG and ILOG, U.S. A vote
of the holders of at least a two-thirds majority of the outstanding shares of
ILOG is required for ILOG's stockholders to approve certain of the transactions
contemplated by this Agreement and the Ancillary Agreements. This Agreement has
been duly executed and delivered by each of ILOG and ILOG, U.S., and assuming
the due authorization, execution and delivery by Seller and Shareholders,
constitutes the valid and binding obligation of each of ILOG and ILOG, U.S.,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws and general principles of equity.
The execution and delivery of this Agreement and the Ancillary Agreements by
ILOG and ILOG, U.S. does not, and upon approval by the stockholders of ILOG as
set forth above, the performance of this Agreement and the Ancillary Agreements
by ILOG and ILOG, U.S. will not, (i) conflict with or violate the Statuts,
Certificate of Incorporation or Bylaws of ILOG or ILOG, U.S. or the equivalent
organizational documents of any of ILOG's subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to ILOG
or any of its subsidiaries or by which its or any of their respective properties
is bound or affected or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or impair ILOG's or ILOG, U.S.'s rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of an encumbrance on any of the properties or assets of ILOG or any of
its subsidiaries pursuant to, any material notes, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which ILOG or any of its subsidiaries is a party or by which ILOG
or any of its subsidiaries or its or any of their respective properties are
bound or affected except, with respect to
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clause (iii), for any such conflicts, violations, defaults or other occurrences
that would not have a Material Adverse Effect on ILOG or ILOG, U.S.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any governmental entity is required by
or with respect to ILOG or ILOG, U.S. in connection with the execution and
delivery of this Agreement or any Ancillary Agreement, except for (i) the filing
of the Asset Contribution Agreement with the Commissaire aux Apports (French
Contribution Auditor) and the rendering of an audit report by such auditor and
(ii) such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not have a Material Adverse Effect on Seller
or ILOG or ILOG, U.S. or have a material adverse effect on the ability of the
parties to consummate this Agreement and the transactions contemplated hereby.
3.5 SEC FILINGS; ILOG FINANCIAL STATEMENTS.
(a) ILOG has filed all forms, reports and documents required
to be filed with the SEC since February 14, 1997, and has made available to
Seller such forms, reports and documents in the form filed with the SEC. All
such required forms, reports and documents (including those that ILOG may file
subsequent to the date hereof) are referred to herein as the "ILOG SEC REPORTS."
As of their respective dates, the ILOG SEC Reports (i) were prepared in
accordance with the requirements of the Securities Act of 1933, as amended or
the Securities and Exchange Act of 1934, as amended, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such ILOG SEC Reports,
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of ILOG's subsidiaries is required to file any forms, reports
or other documents with the SEC.
(b) The consolidated financial statements of ILOG included in
the February 14, 1997 Registration Statement with respect to ILOG's Initial
Public Offering and each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the ILOG SEC Reports
(collectively the "ILOG FINANCIALS"), including any ILOG SEC Reports filed after
the date hereof until the Closing, complied or will comply as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto and fairly presented or will fairly present the consolidated
financial position of ILOG and its subsidiaries as at the respective dates
thereof and the consolidated results of ILOG's operations and cash flows for the
periods indicated in accordance with US GAAP, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments. The condensed consolidated balance sheet of ILOG as of June 30,
1997 (hereinafter referred to as the "ILOG BALANCE SHEET") and the consolidated
statements of operations for the quarter and year ended June 30, 1997 contained
in the proposed ILOG Press Releases dated as of August 5, 1997, fairly present
the consolidated financial position of ILOG and its subsidiaries at the date
thereof and the results of their consolidated operations and the periods covered
thereby in accordance with U.S. GAAP, except for the condensation of the Balance
Sheets and the non-inclusion of Statements of Cash Flows and notes to
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the financial statements. Except as disclosed in the ILOG Financials, since the
date of the ILOG Balance Sheet, neither ILOG nor any of its subsidiaries has any
liabilities of a nature required to be disclosed on a balance sheet prepared in
accordance with U.S. GAAP which are, individually or in the aggregate, material
to the business, results of operations or financial condition of ILOG and its
subsidiaries taken as a whole, except liabilities (i) provided for in the ILOG
Balance Sheet, or (ii) incurred since the date of the ILOG Balance Sheet in the
ordinary course of business consistent with past practices.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the ILOG
Balance Sheet through the date of this Agreement, except to the extent disclosed
in the ILOG Press Releases (as defined below) there has not been: (i) any
Material Adverse Effect on ILOG, (ii) any material change by ILOG in its
accounting methods, principles or practices, except as required by concurrent
changes in historical accounting practices of ILOG, or (iii) any material
revaluation by ILOG of any of its assets, including, without limitation, writing
down the value of capitalized inventory or writing off notes or accounts
receivable other than in the ordinary course of business.
3.7 ILOG PRESS RELEASES. Set forth on Exhibit D hereto is the current
draft of the proposed ILOG Press Releases planned for August 5, 1997 relating to
ILOG's results for the fiscal year ended June 30, 1997 and to the announcement
of this Agreement and the consummation of the transactions contemplated hereby
which announcement is subject to the prior approval by Seller and Shareholders
(the "ILOG PRESS RELEASES").
3.8 ILOG INTELLECTUAL PROPERTY RIGHTS. ILOG and its subsidiaries own or
possess the right to use all patents, trademarks (including ILOG's name together
with its logo), trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets,
know-how and rights owned by them or any of them or necessary for the conduct of
their respective businesses, and ILOG is not aware of any claim to the contrary
or any challenge by any other person to the rights of ILOG and its subsidiaries
with respect to the foregoing. ILOG's business as now conducted and as proposed
to be conducted does not and will not infringe or conflict with patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses or
other intellectual property or franchise right of any person. No claim has been
made against or notice given to ILOG alleging the infringement or other
violation by ILOG of a patent, trademark, service xxxx, trade name, copyright,
trade secret, license in or other intellectual property right or franchise right
of any person.
3.9 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which ILOG or any of its
subsidiaries has received any notice of assertion nor, to ILOG's or ILOG, U.S.'s
knowledge, is there a threatened action, suit, proceeding, claim, arbitration or
investigation against ILOG or any of its subsidiaries which reasonably would be
likely to be material to ILOG or any of its subsidiaries, or which in any manner
challenges or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement or the Ancillary Agreement. To the knowledge of
ILOG and ILOG, U.S., no governmental entity has at any time challenged or
questioned in writing the legal right of ILOG or any of its subsidiaries to
manufacture, offer, sell or license any of its products in the present manner or
versions thereof.
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3.10 CONSENTS AND ABSENCE OF CONFLICTS.
(a) Except as disclosed herein, each of ILOG or ILOG, U.S. has
the full power to purchase the Transferred Assets and to perform its other
obligations set forth herein or in the Ancillary Agreements without obtaining
the consent or approval of any person not a party to this Agreement or any
governmental authority.
(b) As of the Closing, neither the execution and delivery by
ILOG or ILOG, U.S. of the Agreements and Ancillary Agreements applicable to it,
the compliance by ILOG or ILOG, U.S. with the terms and conditions hereof nor
the consummation by ILOG or ILOG, U.S. of the transactions contemplated hereby
will (i) conflict with any of the terms, conditions and/or provisions of the
Statuts, Certificate of Incorporation, Bylaws or other equivalent governing
documents of ILOG or any of its subsidiaries, or as the case may be, (ii)
violate any provision of, or require any consent, authorization or approval
under, any law or regulation or any judicial or administrative order, award,
judgment, writ, injunction or decree or any governmental permit or license
issued to or applicable to ILOG or any of its subsidiaries, which in the case of
ILOG or ILOG, U.S. is material to the business or condition of ILOG or ILOG,
U.S. or to the transactions contemplated by this Agreement, or (iii) conflict
with, result in a breach of, constitute a default or event of default under, or
require any consent, authorization or approval under any contract, lien, or
instrument to which ILOG or any of its subsidiaries is a party or by which any
of them may be bound, which is material to the business or condition of ILOG and
its subsidiaries taken as a whole or to the transactions contemplated by this
Agreement.
3.11 NO FINDER. Neither Purchaser nor any person acting on its behalf
has paid or become obligated to pay, or taken any act which would obligate
Seller or any Shareholder to pay, any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
Agreement or the Ancillary Agreements.
3.12 REPRESENTATIONS COMPLETE. None of the representations and
warranties made by ILOG or ILOG, U.S. herein or in any Exhibits or certificate
furnished by ILOG or ILOG, U.S. or on their behalf, pursuant to this Agreement
or any Ancillary Agreement, contains or will contain any untrue statement of a
material fact, or omits to state any material fact required to be stated therein
or necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.
SECTION 4
AGREEMENTS, ARRANGEMENTS AND COVENANTS PRIOR TO THE CLOSING
From the date of execution of this Agreement until and including the
Closing:
4.1 FULL ACCESS. Each of ILOG and ILOG, U.S. and its counsel,
accountants, and other representatives shall have full access during normal
business hours to all properties, books, accounts,
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records, contracts, and documents of or relating to the Business. Seller shall
furnish or cause to be furnished to the Purchasers and their representatives all
data and information concerning the business, finances and properties of the
Business in Seller's possession that may reasonably be requested, subject to
Section 10.1 hereof.
4.2 CONDUCT OF BUSINESS. Seller and Shareholders shall operate and
carry on the Business only in the ordinary course and consistent with past
practice. Consistent with the foregoing, Seller shall keep and maintain its
assets in good operating condition and repair and will use its best reasonable
efforts consistent with good business practice to preserve the goodwill of the
suppliers, contractors, licensors, employees, customers, distributors and others
having business relations with Seller. Without limiting the generality of the
foregoing, except with the prior notification to, and the express written
approval of, ILOG or ILOG, U.S. (which approval shall not be unreasonably
withheld) Seller:
(a) will use its best efforts to preserve and maintain the
business and assets of the Business in their present condition, to keep
available to Seller its present officers and employees and to preserve Seller's
present relationships with suppliers, customers and other third parties with
respect to the Business;
(b) will not enter into any transaction or incur any liability
or obligation (absolute or contingent) with respect to the Business, except
transactions entered into, or liabilities or obligations incurred, in the
ordinary course of business;
(c) will not extend or modify the terms of any Assumed
Contract or Assumed License Agreement that (i) involves the payment of more than
$15,000 per year; and will not (ii) extend any such agreement, contract or
obligation for more than one year;
(d) will not establish any new, or modify any existing,
employee benefit, compensation or stock agreement, plan or arrangement, except
that Seller may pay one-time severance or termination bonuses to its employees;
(e) will not hire any employee or retain any consultant or
terminate any employee or any consulting agreement that relates to the Business
other than in the ordinary course of business or terminations of employees for
cause;
(f) will not transfer, waive or compromise any right or claim
of or pertaining to the Transferred Assets;
(g) will not issue any securities of any class of its capital
stock or grant any rights to any person to purchase any such securities;
(h) save in respect of the Reincorporation Merger, will not
make any change in its Articles of Incorporation or Bylaws or equivalent charter
documents;
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(i) save in respect of the Reincorporation Merger, will not
acquire or agree to acquire by merging or consolidating with, or by purchasing
any equity interest in or a material portion of the assets of, or by any other
manner, any business or any corporation, partnership interest, association or
other business organization or division thereof, or otherwise acquire or agree
to acquire any assets which are material, individually or in the aggregate, to
the business of Seller;
(j) will not make any grant of exclusive rights to any
third party;
(k) will not enter into any agreement, contract or commitment
containing any covenant limiting its freedom to engage in any line of business
or compete with any person;
(l) will not commence a lawsuit other than (i) for the routine
collection of bills, (ii) in such cases where it in good faith determines that
failure to commence suit would result in the material impairment of a valuable
aspect of its Business or material impairment or loss of a Seller Intellectual
Property Right or a material asset, provided that it consults with the ILOG or
ILOG, U.S. prior to the filing of such a suit, or (iii) for a breach or
threatened breach of this Agreement or any Ancillary Agreement;
(m) will not enter into any partnership arrangements, joint
ventures, joint development agreements, strategic partnership or alliances, or
other material contracts other than in the ordinary course of business
consistent with past practice, or violate, amend or otherwise modify or waive
any material contract; and
(n) will not permit to be taken any action or do or knowingly
permit to be done anything in the conduct of the Business which would be
contrary to or in breach of any of the terms or provisions of this Agreement or
any Ancillary Agreement, or which would cause any of the representations and
warranties of Seller and Shareholders contained herein to be or become untrue in
any material respect;
4.3 ADVICE OF DEVELOPMENTS AND NOTIFICATION OF CERTAIN MATTERS.
(a) Seller shall have a continuing obligation to and through
the Closing to advise ILOG of any and all matters or occurrences relating to the
value of the Transferred Assets or the present or future operation of the
Business, including, without limitation, any increased costs or development
problems, any difficulties with customers, generally or on specific projects,
any sales or marketing problems or decreases in selling prices or profitability
for products of the Business other than changes, matters, problems, costs or
occurrences affecting the economy generally.
(b) ILOG or ILOG, U.S. will give prompt notice to Seller, and
Seller will give prompt notice to ILOG or ILOG, U.S., of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (a) any representation or warranty contained in this
Agreement and made by it to be untrue or inaccurate in any material respect at
any time from the date of this Agreement to the Closing Date such that the
conditions set forth in Section 2 or 3, as the case may be, would not be
satisfied as a result thereof, or (b) any material
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failure of ILOG or ILOG, U.S. or Seller or Shareholders, as the case may be, or
of any officer, director, employee or agent thereof, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement or any Ancillary Agreement. Notwithstanding the above, the
delivery of any notice pursuant to this Section 4.3(b) will not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
4.4 FURTHER PURCHASE OFFERS.
(a) Save in respect of the Reincorporation Merger, Seller and
Shareholders covenant and agree (in the case of Seller, on behalf of itself and
its respective employees, agents and representatives) that until the Closing
neither Seller nor any Shareholder will, directly or indirectly:
(i) solicit, initiate or encourage the
submission of inquiries, proposals or offers from any third party relating to
any acquisition or purchase of material assets (other than in the ordinary
course of business) of, or any equity interest in, Seller or any merger,
consolidation or other business combination involving the Business (each, an
"ACQUISITION PROPOSAL");
(ii) participate in any discussions or
negotiations regarding the foregoing;
(iii) authorize any officer or agent to do any of
the foregoing; or
(iv) otherwise cooperate in any way with, or
assist, facilitate, encourage, or participate in any effort or attempt by any
other person to do or seek any of the foregoing.
(b) Seller and the officers and directors of Seller will
immediately suspend any pre-existing discussions involving any Acquisition
Proposal. Seller will immediately communicate to ILOG and ILOG, U.S. the terms
of any inquiry, proposal, offer or contact with respect to any Acquisition
Proposal received after the date of this Agreement by any director or executive
officer of Seller.
4.5 EMPLOYEES. ILOG, U.S. hereby covenants and agrees to offer
employment to each individual who was an employee of Seller as of the instant
immediately prior to the Closing other than the Shareholders (the "SELLER
EMPLOYEES"), with salaries not less than those enjoyed by the Seller Employees
as of the Closing Date and as set forth on Schedule 2.15, and with benefits
being generally comparable to those in existence for ILOG, U.S. employees and,
with respect to such benefits, each Seller Employee shall, to the extent
permitted under such benefit plans, be given full credit for his or her prior
service with Seller, and ILOG, U.S. shall waive any pre-existing conditions,
waiting periods, or other restrictions based on length of service under ILOG,
U.S.'s benefits plans. ILOG, U.S. shall retain Seller Employees who accept such
offer. Seller understands that the individual components of the benefits package
offered to any such Seller Employee may vary. In addition, notwithstanding
anything in this Section 4.5 to the contrary, ILOG, U.S. makes no
representation, warranty or covenant and shall have no obligation as to the
continuing employment or level of responsibility of any Seller Employee so
hired. Seller shall not make any representations to any Seller Employee which is
inconsistent with this Section 4.5 and no Seller Employee shall have
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any rights as a third party beneficiary pursuant to this Agreement or any
Ancillary Agreement. ILOG, U.S.'s employment offers pursuant to this Section 4.5
shall be subject to any Seller Employee who accepts such offer agreeing to sign
the ILOG, U.S. Employment, Confidential Information and Invention Assignment
Agreement in standard form.
4.6 EMPLOYEE TAX MATTERS. ILOG, U.S. shall prepare and furnish to each
Seller Employee who accepts employment with ILOG, U.S., a Form W-2 which shall
reflect wages and compensation paid to the Seller Employee for that portion of
the calendar year after employment by ILOG, U.S. Seller shall prepare and
furnish to each Seller Employee a Form W-2 which shall reflect all wages and
compensation paid to the Seller Employee for that portion of the calendar year
in which the Closing Date occurs during which the Seller Employee was employed
by Seller.
4.7 BEST EFFORTS; FURTHER ASSURANCES; CONSENTS OF THIRD PARTIES. Each
of Seller, Shareholders, ILOG and ILOG, U.S. agree (i) to use its best
reasonable efforts to take or cause to be taken all reasonable actions as may be
necessary or advisable to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements as soon as reasonably practicable, (ii)
to promptly file or supply, or cause to be filed or supplied, all material
applications, notifications and information required to be filed or supplied by
them pursuant to applicable requirements of laws in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements and to
cooperate in good faith with each other in the preparation thereof and the
exchange of information with respect thereto, (iii) to use their best reasonable
efforts to obtain all consents, waivers, approvals, authorizations, permits,
orders, filings, registrations or qualifications of or with any governmental
body and all consents, approvals or authorizations of any other third party
consents required to be obtained by them for the consummation by them of the
transactions contemplated by this Agreement and the Ancillary Agreements
(including all consents of third parties required for valid assignment of the
Assumed Contracts to be assigned by Seller to ILOG or ILOG, U.S. at the
Closing).
SECTION 5
CONDITIONS PRECEDENT TO OBLIGATIONS OF ILOG AND ILOG, U.S.
The obligations of ILOG and ILOG, U.S. to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, or waiver in
writing by ILOG and ILOG, U.S., at or before the Closing, of each of the
following conditions:
5.1 REPRESENTATIONS TRUE AND CORRECT. All representations and
warranties made by Seller and Shareholders in this Agreement and the Ancillary
Agreements or in any other document or certificate to be furnished by Seller or
Shareholders to ILOG or ILOG, U.S. at the Closing, shall be true and correct in
all material respects on the date hereof and on and as of the Closing Date as
though made on such date.
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5.2 COVENANTS PERFORMED. Seller and Shareholders shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement and the Ancillary Agreements to be
performed, satisfied or complied with by them, or any of them, on or before the
Closing Date.
5.3 NO MATERIAL ADVERSE EFFECT. During the period from June 30, 1997 to
the Closing Date, there shall not have been any Material Adverse Effect on the
business, financial condition, results of operations or prospects of the
Business, and Seller shall not have sustained any material loss or damage to its
assets, whether or not insured, that materially affects its ability to conduct
the Business other than changes, matters, problems, costs or occurrences
affecting the economy generally.
5.4 CORPORATE ACTION. All corporate action necessary to authorize the
execution and delivery by Seller of this Agreement and the Ancillary Agreements,
and the performance by Seller of its obligations hereunder and thereunder shall
have been duly and validly taken by Seller, and Seller shall have delivered to
ILOG and ILOG, U.S. a certificate, dated the Closing Date and signed by the
Secretary or an Assistant Secretary of Seller, with respect to the resolutions
of the Board of Directors and the shareholders of Seller authorizing such
execution, delivery and performance of this Agreement and the Ancillary
Agreements.
5.5 INJUNCTIONS OR RESTRAINTS ON CONDUCT OF BUSINESS. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal, contractual or regulatory
restraint provision limiting or restricting ILOG's or ILOG, U.S.'s conduct or
operation of its business or the business of Seller following the execution of
this Agreement, shall be in effect, nor shall any proceeding brought by an
administrative agency or commission or other governmental entity, domestic or
foreign, seeking the foregoing be pending.
5.6 NECESSARY CONSENTS. All necessary agreements and consents required
for the consummation of the transactions contemplated by this Agreement, which
for purposes of this Section 5.6 shall mean: (i) any governmental consent set
forth on Schedule 2.6; or (ii) any other consent deemed by ILOG and ILOG, U.S.
as reasonably necessary for ILOG or ILOG, U.S. to acquire all right, title and
interest held by the Seller in the Transferred Assets, or otherwise pertaining
to the matters covered by this Agreement and the Ancillary Agreements, shall
have been obtained by Seller or Shareholders, as the case may be, and delivered
to ILOG or ILOG, U.S. and accepted by ILOG or ILOG, U.S. as satisfactory. For
purposes of paragraph (ii) of this Section 5.6, a "reasonably necessary" consent
shall mean any consent, the absence of which would have a Material Adverse
Effect on ILOG or ILOG, U.S.
5.7 EMPLOYEE AGREEMENTS. Each of Shareholders shall have executed
employment agreements with ILOG, U.S. substantially in the form set forth in
Exhibit E (i), (ii) and (iii) hereto (the "EMPLOYMENT AGREEMENTS").
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5.8 ASSET CONTRIBUTION AGREEMENT. Each of Seller and Shareholders shall
have executed the Asset Contribution Agreement and the conditions precedent to
the obligations of ILOG to consummate the transactions contemplated by such
agreement shall have been satisfied or waived in writing by ILOG.
5.9 SELLER INTELLECTUAL PROPERTY ACTIONS. Seller shall have taken all
actions reasonably practicable to be taken prior to Closing with respect to
maintaining, perfecting or renewing Seller Intellectual Property Rights as may
be requested by ILOG or ILOG, U.S. including, but not limited to, the execution
of agreements relating to the assignment of Seller copyrights pursuant to an
agreement substantially in the form set forth on Exhibit F hereto (the
"COPYRIGHT ASSIGNMENT"), the assignment of Seller's Trademark pursuant to an
agreement substantially in the form set forth on Exhibit G hereto (the
"TRADEMARK ASSIGNMENT"); and the assignment of Seller's Internet Domain Name
pursuant to an agreement substantially in the form set forth on Exhibit H hereto
(the "INTERNET DOMAIN NAME TRANSFER AGREEMENT");
5.10 CPLEX LICENSE AGREEMENT. Mr. Xxxxxx Xxxxx shall have executed and
delivered to Seller and Seller shall have executed a license agreement
substantially in the form set forth in Exhibit I hereto (the "CPLEX LICENSE
AGREEMENT").
5.11 TECHNOLOGY ACCESS LETTER. ILOG and Mr. Xxxxxx Xxxxx shall have
executed the Technology Access Letter substantially in the form set forth on
Exhibit J hereto (the "TECHNOLOGY ACCESS LETTER").
5.12 TRANSFER OF TRANSFERRED ASSETS. Seller and Shareholders shall have
validly and effectively transferred to ILOG or ILOG, U.S. the Transferred Assets
in accordance with this Agreement free and clear of any Encumbrances and Seller
shall have executed all the Conveyance Documents in connection therewith and
each of ILOG and ILOG, U.S. and their counsel shall be satisfied that the
Reincorporation Merger shall be effective to vest in Merger Subsidiary as Seller
under this Agreement and the Ancillary Agreements all right, title and interest
to the Transferred Assets such that the same may be effectively transferred to
ILOG or ILOG, U.S. pursuant to this Agreement and the Ancillary Agreements.
5.13 INVESTMENT REPRESENTATIONS. Each of Seller and Shareholders shall
have executed Investment Representations substantially in the form annexed
hereto as Exhibit K (the "INVESTMENT REPRESENTATIONS").
5.14 AUDITED FINANCIAL STATEMENTS. Each of ILOG and ILOG, U.S.
shall have received a duly audited copy of the Seller Financial Statements.
5.15 OFFICERS' AND SHAREHOLDERS'S CERTIFICATES. Purchaser shall have
received a certificate, dated the Closing Date, signed by each Shareholder and
by Seller's president and chief executive officer (in such capacities)
certifying, in such detail as Purchaser and its counsel may reasonably request,
that the conditions set forth in this Section 5 have been fulfilled.
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5.16 GOOD STANDING CERTIFICATES; TAX CERTIFICATE. Purchaser shall have
received certificates as to the good standing of Seller for Nevada and Texas and
any other state in which Seller conducts the Business and is qualified to do
business.
5.17 OPINION OF SELLER'S COUNSEL. Purchaser shall have received an
opinion from Xxxxxx and Xxxxxx, counsel for Seller and Shareholders, dated the
Closing Date, in substantially the form attached hereto as Exhibit L.
5.18 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments, opinions and all other documents delivered to
Purchaser by Seller and Shareholders under this Agreement and each Ancillary
Agreement shall be satisfactory in all reasonable respects to Purchaser and its
counsel.
SECTION 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE SELLER AND SHAREHOLDERS
The obligations of Seller and Shareholders to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
waiver in writing by Seller and Shareholders, at or before the Closing, of each
of the following conditions:
6.1 REPRESENTATIONS TRUE AND CORRECT. All representations and
warranties made by ILOG or ILOG, U.S. in this Agreement and the Ancillary
Agreements, or in any other document or certificate to be furnished by ILOG or
ILOG, U.S. under this Agreement, shall be true and correct in all material
respects on the date hereof and on and as of the Closing Date as though made on
such date.
6.2 COVENANTS PERFORMED. Each of ILOG and ILOG, U.S. shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement and the Ancillary
Agreements to be performed, satisfied or complied with by ILOG or ILOG, U.S. on
or before the Closing Date.
6.3 NO MATERIAL ADVERSE EFFECT. During the period from June 30, 1997 to
the Closing Date, there shall not have been any Material Adverse Effect on the
business, financial condition, results of operations or prospects of ILOG.
6.4 CORPORATE ACTION. All corporate action necessary to authorize the
execution and delivery by ILOG or ILOG, U.S. of this Agreement and the Ancillary
Agreements, and the performance by each of ILOG or ILOG, U.S. of its respective
obligations hereunder and thereunder, shall have been duly and validly taken by
ILOG or ILOG, U.S., as the case may be, and ILOG shall have delivered to Seller
certificates, dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the respective Purchasers with respect to the resolutions of the
Board of
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Directors and Shareholders of ILOG and the Board of Directors of ILOG, U.S.
authorizing such execution, delivery and performance of this Agreement and the
Ancillary Agreements.
6.5 INJUNCTIONS OR RESTRAINTS ON CONDUCT OF BUSINESS. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal, contractual or regulatory
restraint provision limiting or restricting ILOG's or ILOG, U.S.'s conduct or
operation of its business or the business of Seller, following the execution of
this Agreement, shall be in effect, nor shall any proceeding brought by an
administrative agency or commission or other governmental entity, domestic or
foreign, seeking the foregoing be pending.
6.6 EMPLOYMENT AGREEMENTS. ILOG, U.S. shall have executed the
Employment Agreements with each of the Shareholders;
6.7 BOARD APPOINTMENTS. Each of Mr. Xxxx Xxxx and Mr. Xxxxxx Xxxxx
shall have been elected as a member of the ILOG Board of Directors for a three
year term; such elections shall be valid and effective as of the Closing Date in
accordance with the ILOG Statuts and under French law.
6.8 STOCK OPTION GRANTS.
(a) Shareholder Options. ILOG shall have granted to the
Shareholders in aggregate 800,000 options under the 1996 ILOG Stock Option Plan,
such grants to be made effective as of the Closing Date and substantially in the
form of the Notice of Grant and Stock Option Agreement set forth on Exhibit M
hereto.
(b) Employee Options. ILOG shall have granted to the Seller
Employees listed in Exhibit N hereto that shall have accepted offers to become
employees of ILOG, U.S., that number of options set forth opposite each such
employee's name for an aggregate amount of 300,000 ILOG shares, such grants to
be made effective as of the Closing Date and in accordance with the standard
terms and conditions of the 1996 ILOG Stock Option Plan.
6.9 ASSET CONTRIBUTION AGREEMENT. ILOG shall have executed the Asset
Contribution Agreement and the conditions precedent to the obligations of Seller
and Shareholders to consummate the transactions contemplated by such Agreement
shall have been satisfied or waived in writing by the ILOG.
6.10 TECHNOLOGY ACCESS LETTER. ILOG shall have executed the
Technology Access Letter.
6.11 REGISTRATION RIGHTS. ILOG shall have executed a Registration
Rights Agreement pursuant to which each Shareholder shall have been granted
registration rights, pari passu, to those registration rights currently
outstanding under ILOG's existing Registration Rights Agreement, a copy of which
has been delivered to Seller and Shareholders.
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6.12 PAYMENT OF PURCHASE PRICE. The Purchasers shall have paid the
Initial Payment, and ILOG shall have delivered the Promissory Notes and issued
the Consideration Shares delivered to Seller in the form of American Depositary
Shares and Purchasers shall have assumed the Assumed Liabilities.
6.13 OPINION OF COUNSEL. Seller shall have received an opinion from
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for
Purchaser, dated the Closing Date, in substantially the form attached hereto as
Exhibit O.
6.14 OPINION OF FRENCH COUNSEL. Seller shall have received an opinion
from Stibbe Simont Xxxxxxx Duhot & Xxxxxx, French counsel for ILOG, dated the
Closing Date, in substantially the form attached hereto as Exhibit P.
6.15 OFFICERS' CERTIFICATE. Seller and Shareholders shall have received
certificates, dated the Closing Date, signed by each of ILOG's and ILOG, U.S.'s
chief executive officer or its chief financial officer (in such capacity)
certifying, in such detail, as Seller and Shareholders and their counsel may
reasonably request, that the conditions set forth in this Section 6 have been
fulfilled.
6.16 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments, and all other documents delivered to Seller and
Shareholders by Purchaser under this Agreement shall be reasonably satisfactory
to Seller, Shareholders and their counsel.
6.17 DEPOSITARY ARRANGEMENT. Xxxxxx Guaranty Trust Company of New York
(the "DEPOSITARY") shall have furnished to the Seller confirmation satisfactory
to Seller to the effect that the Consideration Shares have been deposited with
it in the form of American Depositary Shares pursuant to the deposit agreement
dated as of February 13, 1997, between ILOG and the Depositary (the "DEPOSIT
AGREEMENT").
SECTION 7
THE CLOSING
7.1 THE CLOSING. Subject to satisfaction or waiver of the conditions
precedent to the obligations of the parties hereto and the execution and
delivery of this Agreement and the Ancillary Agreements, the sale of the
Transferred Assets (the "CLOSING") shall take place at the offices of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx at 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, on
August 20 at 6:00 a.m. local time, or at such other time and place as the
parties may agree (the "CLOSING DATE").
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7.2 DELIVERIES AT THE CLOSING. At the Closing, (i) Seller and
Shareholders will deliver the various certificates, instruments and documents
referred to in Section 5; (ii) ILOG and/or ILOG, U.S. will deliver the various
certificates, instruments and documents referred to in Section 6; (iii) Seller
will execute, acknowledge and deliver to ILOG or ILOG, U.S., the Conveyance
Documents; and (iv) ILOG and/or ILOG, U.S. will deliver to Seller the Purchase
Price in the form of the Initial Payment, and ILOG will deliver the executed
Promissory Notes and the Consideration Shares in the form of American Depositary
Shares and each of ILOG or ILOG, U.S. will execute and deliver a certificate or
other instruments of assumption by which it assumes the Assumed Liabilities of
Seller as Seller's counsel may reasonably request.
SECTION 8
OBLIGATIONS OF THE PARTIES AFTER CLOSING
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants of each of Seller, Shareholders, ILOG
and ILOG, U.S., as the case may be, contained in this Agreement, in any
Ancillary Agreement or in any certificate, document or instrument delivered
pursuant hereto or thereto, shall survive the Closing for a period of one (1)
year; provided, however, that any claim does not have to be resolved within such
one year period and provided further that the representations and warranties and
covenants with respect to liabilities for Taxes shall survive until expiration
of all applicable statutes of limitations.
8.2 INDEMNIFICATION BY SELLER AND SHAREHOLDERS. Subject to the
remaining provisions of this Section 8.2, Seller and each Shareholder shall
indemnify and hold ILOG and ILOG, U.S. harmless and ILOG or ILOG, U.S. shall
indemnify and hold Seller and Shareholders harmless, from and after the Closing
Date from and against any claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries, and deficiencies, including interest,
penalties and attorney's fees ("DAMAGES") incurred or suffered by any of them,
directly or indirectly, as a result of, or arising from (i) any inaccuracy in
any of the representations and warranties made herein by any of them, (ii) any
breach of any covenant or agreement made herein by any of them, (iii) any
Excluded Liability, and (iv) the operations of Seller, ILOG or ILOG, U.S. as the
case may be prior to the Closing Date. Such indemnification shall be joint and
several as among Seller and Shareholders with respect to indemnification of ILOG
or ILOG, U.S., and as among ILOG and ILOG, U.S. with respect to indemnification
of Seller and Shareholders.
8.3 INDEMNIFICATION FOR THIRD PARTY CLAIMS.
(a) A party (the "INDEMNIFIED PARTY") wishing to claim
indemnification under Section 8.2 upon learning of any claim, action, suit,
proceeding or investigation as to which it wishes to be indemnified pursuant to
Section 8.2, shall notify the party or parties obligated to provide
indemnification (the "INDEMNIFYING PARTY") pursuant to Section 8.2 promptly;
provided, however, that no failure so to notify the Indemnifying Party will
relieve the Indemnifying Party of any obligation to indemnify the Indemnified
Party unless and except to the extent such failure so to
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notify prejudices the position of the Indemnifying Party in responding to such
claim action, suit or proceeding.
(b) If the facts giving rise to any indemnification provided
for in Section 8.2 involve any actual or threatened claim or demand by any
person other than the Indemnified Party, the Indemnified Party shall, by written
notice given to the Indemnifying Party within twenty (20) days after giving
notice of such claim pursuant to Section 8.3(a), to either (i) in the case of
certain third party claims as set forth in Section 8.3(e), assume the obligation
of negotiating a settlement of such claim with the third party or (ii) tender to
the Indemnifying Party the defense or prosecution of such claim and any
litigation resulting therefrom and through counsel of the Indemnifying Party's
own choosing, subject to the terms of Section 8.3 (c) or 8.3(d), as the case may
be.
(c) If the defense or prosecution of a third party claim is
tendered by the Indemnified Party to the Indemnifying Party pursuant to Section
8.3(b)(ii) and is subsequently assumed by the Indemnifying Party, the
Indemnified Party shall be entitled, at its own expense, to participate in such
settlement or defense through counsel chosen by the Indemnified Party. If the
Indemnifying Party assumes the defense or prosecution of such claim or
litigation, it will take all steps reasonably necessary in the defense,
prosecution or settlement of such claim or litigation and will hold the
Indemnified Party harmless from and against all Damages caused by or arising out
of any settlement thereof approved by the Indemnified Party (which approval
shall not be unreasonably withheld) or any judgment in connection therewith
(other than the Indemnified Party's expenses of participation in such defense,
prosecution or settlement). The Indemnifying Party may not, in the defense or
prosecution of any suit, claim, action or proceeding the defense of which the
Indemnifying Party has assumed, except with the written consent of the
Indemnified Party, consent to the entry of any judgment or enter into any
settlement (i) which does not include as an unconditional term thereof the
giving to the Indemnified Party by the third party of a full and final release
from all liability in respect of such suit, claim, action or proceeding or (ii)
which shall limit, restrict or otherwise affect the right of the Indemnified
party to carry on or conduct its business (then or in the future), or require
any payment to be made by the Indemnified Party or limit, restrict, make more
expensive or less profitable or otherwise adversely affect the manner in which
the Indemnified Party carries on or conducts its business (then or in the
future).
(d) If the Indemnifying Party does not assume the defense or
prosecution of any claim or litigation tendered to it pursuant to Section
8.3(b)(ii), the Indemnified Party may defend or prosecute such claim or
litigation in such manner as it may deem appropriate (in which case legal
expenses of the Indemnified Party's counsel shall be at the expense of the
Indemnifying Party) and the Indemnified Party may settle such claim or
litigation after giving written notice thereof (and reasonable opportunity to
respond) to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate; and the Indemnifying Party will promptly reimburse the
Indemnified Party for the Damages incurred as a result of such settlement for
which the Indemnified Party is entitled to be indemnified. If no such settlement
of such claim or litigation is made, the Indemnifying Party will promptly
reimburse the Indemnified Party for the Damages arising out of any judgment
rendered with respect to such claim or such litigation for which the Indemnified
Party has not been so reimbursed pursuant thereto; provided, however, that if
such judgment is appealable and the
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Indemnified Party notifies the Indemnifying Party of its intention not to
appeal, the Indemnifying Party may prosecute such appeal, at its sole cost and
expense and subject to the obligations set forth herein. Any expenses for which
the Indemnified Party is entitled to reimbursement hereunder shall be paid by
the Indemnifying Party as incurred.
(e) With respect to third party claims or demands which relate
to or are likely to affect the Indemnified Party's business (as determined in
the reasonable judgment of the Indemnified Party), including, without
limitation, the Indemnified Party's relationships with customers, the
Indemnified Party shall have the right to make the election referred to in
Section 8.3(b)(i). If such election is made, the Indemnified Party may employ
counsel at its own expense; provided, however, that no settlement of any such
claim with third party claimants or the costs incurred in reaching such
settlement shall be determinative of the liability of the Indemnifying party to
the Indemnified Party pursuant to this Section 8 unless the Indemnifying Party
has consented in advance to such settlement.
8.4 PROCEDURES FOR ASSERTING CLAIMS.
(a) The Indemnified Party shall give written notice to the
Indemnifying Party of any claim for Damages for which the Indemnified Party
claims a right of indemnification under Section 8.2 (a "CLAIM NOTICE") at any
time prior to the first anniversary of the Closing Date but not thereafter save
in respect of liability for Taxes as set forth in Section 8.1 hereof. If known
to the Indemnified Party, any such Claim Notice shall include (i) a summary
description of the facts upon which such claim is based and shall specify the
estimated amount of the Damages thereof and (ii) the amount which is payable to
the Indemnified Party pursuant to Section 8.2.
(b) The Indemnifying Party shall have thirty (30) days
following delivery of the Claim Notice to make such investigation of the claim
as it deems necessary or desirable. In connection with the Indemnifying Party's
evaluation of any Claim Notice, the Indemnified Party shall, at the Indemnifying
Party's expense, provide the Indemnifying Party with reasonable access to the
books and records of the Indemnified Party and, subject to the implementation of
reasonable procedures to protect the confidentiality of such information, supply
such factual and technical information as the Indemnifying Party may reasonably
require in connection with the evaluation of such Claim Notice. On or prior to
the expiration of such 30-day period, the Indemnifying Party shall, by written
notice to the Indemnified Party (a "RESPONSE NOTICE"), either (a) admit
liability in whole, or (b) admit that the claim is so covered by Section 8.2 but
dispute the amount of the claim, or (c) dispute that any amount of the claim is
so covered. The failure of the Indemnifying Party to deliver to the Indemnified
Party a Response Notice in accordance with and within the permitted time period
shall be deemed an admission of liability for the loss as set forth in the Claim
Notice.
(c) If any dispute arises with respect to this Agreement or
any Ancillary Agreement, then the Indemnifying Party and the Indemnified Party
shall use their best efforts to resolve such dispute. In the event the
Indemnifying Party and the Indemnified Party resolve the dispute, they shall
both execute a memorandum setting forth such resolution and, if applicable, the
amount of any Damages payable to the Indemnified Party. Any legal action or
proceeding regarding such dispute shall proceed in accordance with the terms of
Section 11.6.
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8.5 OFFSET AGAINST PROMISSORY NOTES.
(a) Each of ILOG's and/or ILOG, U.S.'s sole remedy with
respect to any Damages for which it is entitled to indemnification pursuant to
this Section 8 shall be to offset such Damages against the amount of outstanding
principal and accrued interest on the Promissory Notes up to a maximum amount of
Three Million Dollars ($3,000,000) in aggregate. Any such offset shall be
applied against each of the Promissory Notes in proportion to their respective
original principal amounts. Any such offset shall be first made against
interest, and then against the earliest due principal under the Promissory
Notes. For the avoidance of doubt, any indemnity for Damages due to ILOG, U.S.
hereunder shall be deemed assigned to ILOG which may offset such Damages against
the Promissory Notes pursuant to this Section 8.5. If the Purchaser elects to
exercise its right of set off against the Promissory Notes, and if it is
subsequently determined by judicial proceedings or admission of the Purchaser
that the Purchaser shall not have been entitled to set-off all or any portion of
the amount applied as a set-off against the Promissory Notes, then (i) any
amount improperly set off against the Promissory Notes shall bear interest at
the rate of 15% per annum from the date it shall have been due and payable under
the terms of the Promissory Notes until the date paid by the Purchaser, and (ii)
the Purchaser shall pay all reasonable attorney's fees and other direct,
out-of-pocket costs of collection (herein collectively called "COLLECTION
COSTS") incurred by the holder of the Promissory Notes in connection with the
collection of any amount improperly set-off against the Promissory Notes,
provided however, that the Collection Costs for which the Purchaser shall be
liable shall be limited to that portion thereof which bears the same
relationship to the total Collection Costs as the amount improperly set-off
against the Promissory Notes bears to the total amount set-off against the
Promissory Notes and disputed by the holder or holders thereof.
(b) Notwithstanding anything to the contrary set forth above,
and in addition to all other obligations and indemnities of Seller and the
Shareholders hereunder, Sellers and Shareholders hereby do, and agree, to,
without limit, jointly and severally indemnify and hold harmless ILOG and ILOG,
U.S., from and after the Closing Date through the end of time, from and against
any and all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries, and deficiencies, including interest, penalties and
attorney's fees, as incurred or suffered by ILOG or ILOG, U.S. or any customer
or licensee of ILOG or ILOG, U.S., directly or indirectly, as a result of,
arising from, or related to any software or technology owned by, licensed or
assigned by any of Xxx Xxxxxxx, Xxxxx Xxxxxx or Xxxxx Xxxxxx with respect to the
"Exclusive License Agreements" dated January 4, 1993 and the "Buyout and
Termination Agreements," dated as of July 17, 1997, not being fully transferred
as between each of such persons and Seller provided, however, that ILOG and/or
ILOG, U.S., shall have made all payments required to be made under the aforesaid
Buyout and Termination Agreements.
8.6 SELLER AND SHAREHOLDER MAXIMUM REMEDY. Seller and/or Shareholders'
right to indemnification for Damages pursuant to this Section 8 shall be limited
to a maximum aggregate amount of Five Million Dollars ($5,000,000).
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8.7 POST-CLOSING DATE ACCESS TO INFORMATION. If, after the Closing, in
order properly to prepare documents or reports required to be filed with
governmental authorities or with its financial statements, it is necessary that
ILOG, ILOG, U.S. or Seller be furnished with additional information relating to
the Transferred Assets and such information is in possession of the other party,
such other party will furnish, or cause to be furnished, such information to the
requesting party. Each of ILOG and ILOG, U.S. agrees to maintain and retain
financial and accounting information relating to the Business for periods prior
to the Closing provided to it by Seller for a period of six (6) years from the
Closing Date.
8.8 USE OF CPLEX NAME AND LOGO. Within thirty (30) days after the
Closing, Seller will amend its Articles of Incorporation to change its corporate
name. Seller will discontinue use of the name "CPLEX" for all uses within ninety
(90) days after the Closing. Effective upon and subject to the Closing, Seller
hereby grants to Purchaser a fully paid, exclusive and perpetual worldwide
license to use Seller's logo shown on Schedule 2.9.
8.9 COVENANT NOT TO COMPETE.
(a) Competition. Unless the obligations of each Shareholder
under this Section 8.9(a) shall have been waived in writing by ILOG, U.S., no
Shareholder shall, within the United States or elsewhere, during the
Non-Competition Period (as defined below) directly or indirectly, own, manage,
operate, join, control or participate in or be connected with, as an officer,
employee, agent, consultant, partner, stockholder or otherwise, any business,
individual, partnership, firm or corporation (an "ENTITY"), which competes
within the United States with the business of ILOG, U.S., or any subsidiary or
affiliate (as defined in the General Rules and Regulations promulgated under the
Securities Exchange Act of 1934, as amended) thereof, as such business is
conducted or as such business is proposed by ILOG, U.S. to be conducted on an
extended relational basis as the business now conducted by ILOG, U.S. within the
Non-Competition Period. Nothing herein, however, shall prohibit Shareholder from
acquiring or holding any issue of stock or securities of any Entity which has
any securities listed on a national securities exchange or quoted in the daily
listings of over-the-counter market securities, provided that at any one time he
and members of his immediate family do not own in the aggregate more than one
percent (1%) of any voting securities of any such Entity. The term
"NON-COMPETITION PERIOD" as used herein means the five-year period commencing on
the Closing Date.
(b) Nonsolicitation. Each Shareholder agrees that, during the
Non-Competition Period, Shareholder shall not, either directly or indirectly,
solicit, induce, recruit or encourage any of ILOG, U.S.'s employees (or any
subsidiary or affiliate employees of ILOG, U.S.) to leave their employment, or
take away such employees, or attempt to solicit, induce, recruit, encourage or
take away employees of ILOG, U.S., either on behalf of Shareholder or any other
person or entity.
8.10 RULE 144 REPORTS AND RESTRICTED SECURITIES. For as long as the
Seller or the Shareholders are required to comply with Rule 144 under the
Securities Act of 1933, as amended, in order to sell shares of ILOG to the
public without registration, ILOG will use its best reasonable
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efforts to make available to Seller or Shareholders the benefit of rules and
regulations of the SEC which may permit Seller or Shareholders to sell shares of
ILOG to the public without registration by:
(i) making and keeping "current public information"
"available" (as both those terms are defined in Rule 144 at
all times; and
(ii) timely filing with the SEC, in accordance with
all applicable rules and regulations, all reports and other
documents (x) required of ILOG pursuant to Rule 144, as it may
be amended from time to time (or any rule, regulation, or
statute replacing Rule 144) to be available and (y) required
to be filed under Section 15d of the Securities Exchange Act
of 1934, even if ILOG's duty to file those reports or
documents may be suspended or otherwise terminated under the
express terms of Section 15d.
8.11 FURTHER ASSURANCES. At the request and expense of ILOG or ILOG,
U.S., and without further consideration, Seller and Shareholders agree to
execute after the Closing Date such documents and instruments and to do such
further acts as may be reasonably necessary or desirable to perfect ILOG's or
ILOG, U.S.'s title to the Transferred Assets.
SECTION 9
TERMINATION
9.1 TERMINATION. This Agreement may be terminated before the Closing:
(a) at any time by mutual written agreement of Seller and
Purchaser;
(b) by Seller or ILOG or ILOG, U.S., if in the case of Seller,
Seller is not in default hereunder, or, in the case of ILOG or ILOG, U.S., ILOG
or ILOG, U.S. is not in default hereunder, by giving written notice of such
termination on the Closing Date to the other party if, as of the Closing Date,
any condition precedent to the obligations of the party giving such notice shall
not have been fulfilled and cannot be fulfilled by September 30, 1997, and shall
not have been waived by such party;
(c) at any time after September 30, 1997, if the Closing has
not been consummated, by Seller, ILOG or ILOG, U.S., unless the party giving
notice is in default hereunder.
9.2 EFFECT OF TERMINATION. In the event this Agreement is validly
terminated pursuant to Section 9.1, the Asset Contribution Agreement shall also
be deemed simultaneously and automatically terminated and (i) the Asset
Contribution Agreement, this Agreement and each other Ancillary Agreement shall
forthwith have no further force and effect except for Seller's,
Shareholders', ILOG's and ILOG, U.S.'s respective obligations set forth in
Sections 9 and 10 hereof,
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and (ii), neither ILOG, ILOG, U.S., Seller nor Shareholders will have any
obligation or liability to the other, except as set forth in clause (i)
above and except that termination shall be without prejudice to other rights
and remedies which any party may have if (a) a default shall be made by the
other party in the observance or in the due and timely performance by such
party of the covenants herein contained, or (b) there shall have been a breach
by the other party of any of the warranties and representations herein
contained.
SECTION 10
CONFIDENTIALITY
10.1 CONFIDENTIALITY. ILOG, ILOG, U.S., Seller and Shareholders hereby
confirm the continued effectiveness in accordance with its terms of the
Confidentiality Agreement, dated June 12, 1997, between ILOG and Seller except
as set forth in Section 10.2 below and except that such Confidentiality
Agreement shall terminate and be of no further force or effect upon the Closing.
10.2 PUBLIC ANNOUNCEMENTS. Except as required by applicable law, no
party hereto shall disclose, or permit their respective officers,
representatives, agents or employees to disclose the existence or terms of this
Agreement or any Ancillary Agreement to any third party without the prior
written consent of all other parties hereto, which consent shall not be
unreasonably withheld. The parties hereto will mutually agree in advance on the
form, timing and contents of announcements and disclosures regarding the
transactions contemplated by this Agreement or any Ancillary Agreement.
Following the Closing Date, ILOG and ILOG, U.S. shall have the right to make
public disclosures of the terms of this Agreement or any Ancillary Agreement and
the consummation of the transactions contemplated hereby without the written
consent of Seller or Shareholders.
SECTION 11
GENERAL PROVISIONS
11.1 PAYMENT OF COSTS. ILOG and ILOG, U.S. shall pay all costs and
expenses incurred or to be incurred by each of them in negotiating and preparing
this Agreement and the Ancillary Agreements and in effecting the consummation of
the transactions referred to hereunder and thereunder. Seller and Shareholders
shall pay all such costs and expenses incurred by Seller and Shareholders. ILOG
shall bear the costs of the preparation and the audit of the Seller's Financial
Statements and the costs of any appraisal of the Transferred Assets.
11.2 ENTIRE AGREEMENT; WAIVERS.
(a) This Agreement and the Ancillary Agreements supersede all
prior discussions and agreements between the parties hereto with respect to the
subject matter hereof and this Agreement and the Ancillary Agreements and other
documents delivered in connection herewith
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constitute the entire agreement between the parties pertaining to the
contemporaneous agreements, representations, and understandings of the parties.
No supplement, modification, or amendment of this Agreement or any Ancillary
Agreement shall be binding unless executed in writing by all the parties. No
waiver of any of the provisions of this Agreement or any Ancillary Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
(b) The Asset Contribution Agreement is intended only to
confirm certain of the transactions contemplated in this Agreement and is not
intended to create any independent or different rights or obligations on the
part of ILOG, Seller or Shareholders. In the event of any conflict between the
Asset Contribution Agreement and this Agreement, the provisions of the Agreement
will govern.
(c) Each of the Exhibits, Schedules and other documents
attached to this Agreement is incorporated herein by reference as if set forth
in full herein.
11.3 SUCCESSORS AND ASSIGNS. This Agreement and the Ancillary
Agreements shall be binding on, and shall inure to the benefit of, the parties
to it and their respective permitted successors, and assigns.
11.4 EFFECT OF HEADINGS. The subject headings of the Section and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction of any of its provisions.
11.5 NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be served (i) personally on
the party to whom notice is to be given, or (ii) by certified mail, return
receipt requested, postage prepaid, and properly addressed as follows:
To Seller;
Xxxx X. Xxxx
and/or Xxxxx Xxxx: CPLEX Optimization, Inc.
Xxxxx 000
000 Xxxxx Xxxx., Xxxx. 000
Xxxxxxx Xxxxxxx, Xxxxxx 00000
To Xxxxxx Xxxxx: Xxxxxx Xxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
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To ILOG S.A. ILOG S.A.,
0 xxx xx Xxxxxx
00000 Xxxxxxxx, XXXXXX
Attention: Chief Financial Officer
To ILOG, U.S.: ILOG, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
With respect to any
notice to ILOG
or ILOG, U.S.,
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Any party may change its address for purposes of this paragraph by giving notice
of the new address to each of the other parties in the manner set forth above.
11.6 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and be governed by the
laws of the State of Delaware (without giving effect to the principles thereof
relating to conflicts of law).
(b) Any legal action or proceeding with respect to this
Agreement and any action for enforcement of any judgment in respect thereof
shall be brought in the Federal Court, District of Northern California in San
Xxxx, and, by execution and delivery of this Agreement, each of the parties
hereto hereby accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts and
appellate courts. Each of the parties hereto irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party at its address set forth in Section 11.6. Each of
the parties hereto hereby irrevocably waives any objection which it may now or
hereafter have to be laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or the Ancillary
Agreements brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Any judgments or other awards of monetary damages arising
out of any legal action or proceeding pursuant to this Section 11.6 shall be
payable in United States currency.
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11.7 PARTIES IN INTEREST. Except as expressly provided hereunder,
nothing in this Agreement or any of the Ancillary Agreements, express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement or any of the Ancillary Agreements on any persons other than the
parties to it and their respective and permitted successors and assigns, nor is
anything in this Agreement or any of the Ancillary Agreements intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement or any of the Ancillary Agreements, nor shall any
provision give any third persons any right of subrogation or action against any
party to this Agreement or any of the Ancillary Agreements.
11.8 INVALID PROVISIONS. If any provision of this Agreement or any
Ancillary Agreement is held to be illegal, invalid, or unenforceable under any
present or future law, (a) such provisions will be fully severable; (b) this
Agreement or the applicable Ancillary Agreement, as the case may be, will be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part hereof; (c) the remaining provisions of this
Agreement or the applicable Ancillary Agreement, as the case may be, will remain
in full force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance herefrom; and (d) in lieu of such
illegal, invalid, or unenforceable provision, there will be added automatically
as a part of this Agreement or the applicable Ancillary Agreement, as the case
may be, a legal, valid, and enforceable provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible.
11.9 COUNTERPARTS. This Agreement and any Ancillary Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same instrument.
11.10 ASSIGNMENT. No party shall assign this Agreement without first
obtaining the written consent of the other parties. However, ILOG may assign the
rights hereunder to any subsidiary of ILOG without the consent of Seller or
Shareholders; provided, however, that no such assignment shall relieve ILOG of
any obligation or liability hereunder.
-40-
47
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
on the day and year first above written.
ILOG S.A.
By: /s/ XXXXXX XXXXX
-------------------------------
Title: Chairman and CEO
ILOG, Inc.
By: /s/ XXXXX XXXXXXXXXXX
-------------------------------
Title: Chief Financial Officer
CPLEX OPTIMIZATION, INC.
/s/ XXXX X. XXXX
-------------------------------
By: Xxxx X. Xxxx
Title: President
Xxxx X. Xxxx
/s/ XXXX X. XXXX
-------------------------------
Xxxxx Xxxx
/s/ XXXXX XXXX
-------------------------------
Xxxxxx Xxxxx
/s/ XXXXXX X. XXXXX
-------------------------------
[SIGNATURE PAGE TO ILOG-CPLEX ASSET PURCHASE AGREEMENT]
48
EXHIBIT A
ASSET CONTRIBUTION AGREEMENT
49
Translation
CONTRIBUTION AGREEMENT
Between
CPLEX Optimization, Inc.
And
ILOG X.X.
XXXXXX SIMONT XXXXXXX DUHOT & XXXXXX
000 Xxx xx x'Xxxxxxxxxx
00000 Xxxxx
50
Translation
CONTRIBUTION AGREEMENT
BETWEEN THE UNDERSIGNED:
CPLEX OPTIMIZATION, INC., a U.S. company having its registered office
located at 000 Xxxxx Xxxxxxxxx, 802-279 Incline Village, Nevada 89451, USA,
represented by Mr. Xxxx Xxxx, in his capacity as President of CPLEX
OPTIMIZATION, INC.
(hereinafter referred to as "CPLEX" or the "Contributing
Company")
AND:
ILOG S.A., a French societe anonyme with a share capital of FF
43,626,848, whose registered office is located at 0 xxx xx Xxxxxx, 00000
Xxxxxxxx Cedex, registered with the Registry of Commerce and Companies of
Creteil under number B 340 852 458, represented by Xx. Xxxxxx Xxxxx, in his
capacity as President of ILOG, S.A., or by Xx. Xxxxx Xxxxxxxxxxx duly authorised
for the purposes thereof by a resolution of the Board of Directors dated July
23, 1997.
(hereinafter individually referred to as "ILOG" or the
"Beneficiary Company")
(hereinafter individually referred to as a "Party" and collectively as the
"Parties")
51
Translation
WHEREAS:
1. CPLEX is in the business of manufacturing, developing,
marketing and selling mathematical programming software used for formulating
and solving optimization problems in the fields of business decision making.
2. The Contributing Company intends to contribute the intellectual
property rights it owns on the "Linear Optimization System" software to the
Beneficiary Company.
3. The purpose of this contribution agreement (hereinafter
referred to as the "Agreement") is to set the terms and conditions of the
contribution of the intellectual property rights owned by the Contributing
Company on the "Linear Optimization System" software (hereafter referred to as
the "Contribution").
NOW, THEREFORE, IT WAS AGREED AS FOLLOWS:
ARTICLE 1 - CONTRIBUTION
The Contributing Company contributes with effect as at August 20, 1997
(hereafter referred to as the "Completion Date"), subject to the conditions
precedent set forth in article 5 of the Agreement as well as under the ordinary
legal conditions, to the Beneficiary Company, which accepts, the assets
composing the Contribution described here below (hereafter referred to as the
"Contributed Assets").
1.1 CONTRIBUTED ASSETS
All the intellectual property rights attached to the "Linear
Optimization System" software described in Schedule 1 of this Agreement.
1.2 AMOUNT OF THE CONTRIBUTED ASSETS
The total amount of the Contributed Assets is of fifty four
million and four hundred thousand French francs (FF 54,400,000).
-2-
52
Translation
1.3 ARE NOT INCLUDED IN THE CONTRIBUTION
The debts resulting from the business carried on by CPLEX in
connection with the Contributed Assets before the Completion Date, including
all claims or actions based on the guaranty granted by or on the responsibility
incurred by CPLEX in connection with the Contributed Assets before the
Completion Date.
ARTICLE 2 -- APPRAISAL METHODS
The appraisal of the Contribution has been made under the
conditions and according to the appraisal methods described in Schedule 2 to
the Agreement.
ARTICLE 3 -- CONSIDERATION OF THE CONTRIBUTION
The Contribution is made and accepted in consideration of the
allocation to CPLEX of 1,700,000 shares of the Beneficiary Company of a nominal
value of FF. 4, to be issued by the Beneficiary Company.
In remuneration of the Contribution made by the Contributing
Company, the Beneficiary Company will increase its share capital by an amount
of six million and eight hundred thousand French francs (FF. 6,800,000) raising
it from FF. 43,626,848 to FF. 50,426,848, by the issue of 1,700,000 shares of
FF 4 each, at a price, issuing premium included, of FF. 32 each.
ARTICLE 4 -- TERMS AND CONDITIONS OF THE CONTRIBUTION
4.1 OWNERSHIP AND POSSESSION OF THE ASSETS
The Beneficiary Company shall own the Contributed Assets as
from the Completion Date, subject to the final completion of the Contribution
as provided under article 5 of this Agreement.
Should the Contribution not be completed on September 30, 1997
at the latest, the Agreement would be regarded as null and void without
indemnity due to any Party.
4.2 TAX REGIME
The Parties hereby declare that the Contribution will be
governed by the following tax regimes.
-3-
53
Translation
4.2.1 REGISTRATION DUTIES
This Agreement will be registered to the fixed tax duty of FF.
500 referred to under article 810 of the Xxxxxx Xxxxxxx Tax Code.
4.2.2 VAT
The Contribution referred to in this Agreement will be
submitted to VAT in France.
ARTICLE 5 -- PRECEDENT CONDITIONS
The final completion of the Contribution is subject to the
following condition precedent being met:
a) approval of the shareholders of the Contributing Company;
b) approval of the Contribution and of the subsequent increase of the
share capital by the extraordinary general meeting of the shareholders
of the Beneficiary Company.
ARTICLE 6 -- LEGAL REGIME OF THE CONTRIBUTION
The Parties declare that the Contribution is not governed by
the legal regime of splits provided under article 382 of the law of July 24,
1966 on commercial companies.
ARTICLE 7 -- FEES, COSTS AND TAXES
7.1 The expenses, costs and fees incurred by each Party in
connection with the implementation of the Agreement and its consequences shall
be borne by each of them.
7.2 Any registration and stamp duties relating to this Agreement
will be borne by the Beneficiary Company.
ARTICLE 8 -- MISCELLANEOUS
8.1 The Parties agree that the Schedules and provisions mentioned
in the Preamble to this Agreement are a whole part of the Agreement.
-4-
54
Translation
8.2 The Parties agree to communicate any information as well as to delivery
and execute any documents required for the implementation of the provisions of
the Agreement.
ARTICLE 9 -- GOVERNING LAW -- JURISDICTION
This Agreement will be governed by French law, and all disputes arising
in connection with the Agreement as well as with its schedules or amendments
and/or deriving therefrom shall be settled by the Commercial Court of Creteil.
ARTICLE 10 -- ORIGINAL VERSION OF THIS AGREEMENT
The Parties acknowledge that the French version of this agreement is
the original version, but that the English version represents an acceptable
translation and no official translation will be required for the interpretation
of this Agreement.
ARTICLE 11 -- POWERS
All powers are given to the bearer of an original copy or of a duly
certified copy of this Agreement for filing and advertising purposes prescribed
by the law as well as all formalities required by this Agreement.
Made in six original copies
in
On August , 1997
CPLEX OPTIMIZATION, INC. ILOG S.A.
------------ -------------
55
Translation
SCHEDULES
Schedule 1 Description of the Linear Optimizer System
software
Schedule 2 Appraisal methods
- 6 -
56
CPLEX OPTIMIZATION, INC.
CPLEX LINEAR OPTIMIZER BASE SYSTEM
The foundation for All CPLEX Products, the CPLEX Base System is a powerful and
comprehensive linear programming environment which includes fast optimization
algorithms as well as a full set of utilities to support solving linear
programming problems. The Base System can be licensed alone for use as an
interactive linear programming solver, or with additional algorithmic and/or
format options. When the Callable Library format option is also licensed, the
Base System becomes a useful prototyping and debugging tool. When optional
algorithms are added, users can solve an even broader range of problem types.
The Interactive Base System Environment is provided in an executable
ready-to-use form, packing all the power and speed of CPLEX optimization engines
in an easy-to-use and easy-to-learn format with a simple user interface and an
extensive help system. New users become proficient and productive immediately.
Just read in a problem, issue the "optimize" command, and review results.
State-of-the-Art Base Algorithms include problem reduction algorithms, CPLEX's
modified primal simplex, dual simplex, and a fast network optimizer that solves
network problems -- even those with side constraints. CPLEX Base Algorithms
have successfully solved problems with millions of constraints and continuous
variables, at record-breaking speed.
BENEFITS OF THE BASE SYSTEM
Simple, yet fast and powerful.
All the raw power and performance of the CPLEX optimization engine, but
in an interactive format that you can "load and run" right away -- on
problems of unlimited size or difficulty.
Reliable and stable.
Tried and proven in thousands of commercial installations throughout the
world. Even industry's toughest problems, with millions of variables and
constraints, have been solved quickly, reliably, and accurately with
CPLEX.
Flexible.
Just because we've made it easy to use doesn't mean you must be limited.
A variety of input/output and algorithmic options are under your
control. And while CPLEX was designed for interactive use, unattended
batch use is also supported.
Compatible.
The interactive Base System can read and write industry-standard MPS
files, and is linked to many popular modeling systems.
Widely available.
Our interactive Base System is available on a wide range of computer
systems, from personal computers to supercomputers.
LINEAR OPTIMIZER BASE SYSTEM FEATURES
Interactive problem entry, modification, and query capabilities
Designed for interactive use, enabling users to enter, modify, and
solve problems on-line. Unattended batch use is also supported.
* Enter problems directly using intuitive input format, or enter
problems from files
* Change problems in as many ways and as often as you'd like
* View all or part of any problem
* View problem statistics or histogram
57
Modern LP algorithms
* Modified simplex
* Dual simplex
* Network Optimizer
* Pre-solution reduction
Automatic and dynamic algorithm parameter control
CPLEX automatically determines "smart" settings for a wide range of
algorithm parameters, usually resulting in optimal LP solution performance.
However, for a more "hands-on" approach, dozens of parameters may be manually
adjusted, including algorithmic strategy controls, output information controls,
optimization duration limits, and numerical tolerances.
Fair automatic restarts from an advanced basis
Large problems can be modified, then solved again in a fraction of the
original solution time.
Wide variety of input/output options
* Problem files: read/write MPS files, CPLEX LP files, MPS basis and
revise files, binary problem/basis files
* Log files: session information and various solution reports
* Solution files: ASCII and binary solution files
* CPLEX messages: each message type (RESULTS, WARNINGS, ERRORS, etc.)
can be directed to any specified file(s) or completely suppressed
Post solution information and analysis
* Objective function value
* Solution variable and slack values
* Constraint dual values (shadow prices)
* Variable reduced costs
* Right hand side and objective function sensitivity ranges
* Basic variables and constraints
* solution infeasibilities (if any exist)
* Iteration/node count, solution time, process data
--------------------------------------------------------------------------------
On to CPLEX Callabic Library
Back to CPLEX Home Page
--------------------------------------------------------------------------------
CPLEX Web Info: xxxx@xxxxx.xxx
Last modified: February 23, 1996
58
SCHEDULE 2
APPRAISAL METHODS
The contributed software, "Linear Optimizer Base System", has been
estimated on the basis of a professional valuation by the method of the
actualized cash flows.
59
EXHIBIT B(i)
PROMISSORY NOTE
60
PROMISSORY NOTE
$2,547,945 August 20, 1997
FOR VALUE RECEIVED, ILOG S.A., a French societe anonyme ("COMPANY"),
promises to pay to CPLEX Optimization, Inc. ("PAYEE") the principal sum of two
million five hundred forty seven thousand nine hundred forty five dollars, or
such lesser amount as shall then equal the outstanding principal amount hereof,
together with interest from the date of this Promissory Note (the "NOTE") on the
unpaid principal balance at a rate per annum equal to 6.39% (the AFR Rate)
computed on the basis of the actual number of days elapsed and a year of 365
days, with such unpaid interest compounded monthly. Subject to the provisions of
Sections 2(c) and 6 below, all principal not previously paid pursuant to Section
2 hereof, together with any then unpaid and accrued interest, shall be due and
payable at the earlier of (i) the fourth anniversary of the date of this Note or
(ii) when such amounts are declared due and payable by the Payee, or made
automatically due and payable, upon or after the occurrence of an Event of
Default (as defined below).
This Note is one of three Promissory Notes of the Company (collectively
the "NOTES") of like tenor aggregating U.S. $5,000,000 in principal amount
issued by the Company under an Asset Purchase Agreement dated as of August 4,
1997 (the "ASSET PURCHASE AGREEMENT"), among the Company, ILOG, Inc., the Payee
and the shareholders of the Payee. No Note shall be preferred in any respect
over any other of the Notes because of its sale or transfer by its original or
any subsequent holder.
The following is a statement of the rights of the holder of this Note
and the conditions to which this Note is subject, and to which the holder
hereof, by the acceptance of this Note, agrees:
1. DEFINITIONS. Capitalized terms used without definition
herein which are defined in the Asset Purchase Agreement, dated as of August 4,
1997, between Company, Xxxx Xxxx, Xxxxx Xxxx, Xxxxxx Xxxxx and Payee (the "ASSET
PURCHASE AGREEMENT"), shall have the respective meanings given in the Asset
Purchase Agreement.
2. PAYMENTS; PREPAYMENT; RIGHT OF OFFSET.
(a) Scheduled Principal and Interest Payments. On
each of the second and third anniversaries of the date of this Note, Company
shall make a principal payment to Payee in the amount of eight hundred forty
nine thousand three hundred fifteen dollars ($849,315.00). On the fourth
anniversary of the date of this Note, Company shall pay the entire remaining
outstanding principal amount of this Note together with all accrued but unpaid
interest. On the first day of each fiscal quarter of the Company that begins
after the date hereof, the Company shall make a payment to the holder hereof of
all then-accrued and unpaid interest. Each date upon which principal, interest
and/or other amounts are due under any Note is hereinafter defined as a "Due
Date."
61
(b) Prepayment. This Note may be prepaid in whole or
in part by the Company at any time, or from time to time, without the further
consent of its holder; provided that all prepayments made by Company on this
Note and the other Notes shall be made on a pro rata basis on all of the Notes
in proportion to the amount outstanding under each such Note. Prepayments shall
be first applied to accrued and unpaid interest, and then to principal. If this
Note is prepaid in part, the principal amount so prepaid shall be applied
against the next scheduled principal payment or payments under Section 2(a).
(c) Company's Right of Offset. As more fully provided
in and subject to the terms of Section 8.5 of the Asset Purchase Agreement,
Company shall under certain circumstances have the right to offset any Damages
in respect of which the Payee or the holder hereof may become obliged to
indemnify the Company or ILOG, Inc. up to a maximum amount equal to one million
five hundred twenty eight thousand seven hundred sixty seven dollars
($1,528,767). Company shall give notice of any such offset to Payee in the
manner set forth in Section 8.4 of the Asset Purchase Agreement, and interest
shall cease to accrue on offset principal amounts on the date of such notice.
The amount offset shall first be applied to accrued and unpaid interest and then
to the principal amount of the next scheduled principal payment or payments
under Section 2(a).
3. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" under this Note:
(a) Failure to Pay. Company shall fail to pay any
principal, interest or other payment due under this Note or any other of the
Notes on a Due Date unless such payment is made within five (5) French banking
days of Company's receipt of the holder's written notice to Company of such
failure to pay; or
(b) Voluntary Bankruptcy or Insolvency Proceedings.
Company shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit
of its or any of its creditors, (iv) be dissolved or liquidated in full or in
part, or (v) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding commenced
against it;
(c) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Company or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to Company or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within sixty (60) days of commencement; or
-2-
62
(d) Cross Acceleration. Company shall default under
any contract or instrument evidencing indebtedness having a principal amount in
excess of $1,000,000 and such default shall result in such indebtedness becoming
due and owing prior to its stated maturity.
4. RIGHTS OF HOLDER UPON DEFAULT. Upon the occurrence or
existence of any Event of Default under Section 3(a) or 3(d) and at any time
thereafter during the continuance of such Event of Default, the holder of this
Note may with the consent of the Majority in Interest, by written notice to
Company, declare all unpaid principal and interest hereunder to be immediately
due and payable without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. Upon the occurrence or existence
of any Event of Default described in Paragraphs 3(b) or 3(c), immediately and
without notice, all outstanding amounts payable by Company hereunder shall
automatically become immediately due and payable. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Payee may
exercise any other right, power or remedy permitted to it by law, either by suit
in equity or by action at law, or both. Upon the occurrence and during the
continuance of an Event of Default under Section 3(a), all amounts outstanding
that are past due under this Note shall accrue interest at the rate of 15%. For
purposes of this Section 4, a "MAJORITY IN INTEREST" shall mean holders holding
a majority of the outstanding principal under all of the Notes.
5. ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Note may not be
assigned by the Payee without the written consent of the Company and the Company
hereby consents to the assignment of the Note to Xxxxxx Xxxxx. Notwithstanding
the foregoing, the rights and obligations of Company and the Payee of this Note
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
6. WAIVER AND AMENDMENT. Any provision of the Notes may be
amended, waived or modified only upon the written consent of Company and the
Majority in Interest.
7. NOTICES. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or mailed by registered or certified
mail, postage prepaid, or by recognized overnight courier or personal delivery
at the respective addresses of the parties as set forth in the Asset Purchase
Agreement or on the register maintained by Company. Any party hereto may by
notice so given change its address for future notice hereunder. Notice shall
conclusively be deemed to have been given when received.
8. PAYMENT. Payment shall be made in lawful tender of the
United States.
9. USURY. In the event any interest is paid on this Note which
is deemed to be in excess of the then legal maximum rate, then that portion of
the interest payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the principal of
this Note.
10. EXPENSES. If action is instituted to collect this Note,
the prevailing party shall be entitled to reimbursement from the other party for
all costs and expenses, including, without limitation, reasonable attorneys'
fees and costs, incurred by the prevailing party in connection with such action.
-3-
63
11. GOVERNING LAW. This Note and all actions arising out of or
in connection with this Note shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflicts of law
provisions of the State of Delaware or of any other jurisdiction.
IN WITNESS WHEREOF, Company has caused this Note to be issued
as of the date first written above.
ILOG S.A.
By:
----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
-------------------------------------
Title: Chief Financial Officer
-------------------------------------
-4-
64
EXHIBIT B(ii)
PROMISSORY NOTE
65
PROMISSORY NOTE
$1,470,320 August 20, 1997
FOR VALUE RECEIVED, ILOG S.A., a French societe anonyme ("COMPANY"),
promises to pay to CPLEX Optimization, Inc. ("PAYEE") the principal sum of one
million four hundred seventy thousand three hundred twenty dollars, or such
lesser amount as shall then equal the outstanding principal amount hereof,
together with interest from the date of this Promissory Note (the "NOTE") on the
unpaid principal balance at a rate per annum equal to 6.39% (the AFR Rate)
computed on the basis of the actual number of days elapsed and a year of 365
days, with such unpaid interest compounded monthly. Subject to the provisions of
Sections 2(c) and 6 below, all principal not previously paid pursuant to Section
2 hereof, together with any then unpaid and accrued interest, shall be due and
payable at the earlier of (i) the fourth anniversary of the date of this Note or
(ii) when such amounts are declared due and payable by the Payee, or made
automatically due and payable, upon or after the occurrence of an Event of
Default (as defined below).
This Note is one of three Promissory Notes of the Company (collectively
the "NOTES") of like tenor aggregating U.S. $5,000,000 in principal amount
issued by the Company under an Asset Purchase Agreement dated as of August 4,
1997 (the "ASSET PURCHASE AGREEMENT"), among the Company, ILOG, Inc., the Payee
and the shareholders of the Payee. No Note shall be preferred in any respect
over any other of the Notes because of its sale or transfer by its original or
any subsequent holder.
The following is a statement of the rights of the holder of this Note
and the conditions to which this Note is subject, and to which the holder
hereof, by the acceptance of this Note, agrees:
1. DEFINITIONS. Capitalized terms used without definition
herein which are defined in the Asset Purchase Agreement, dated as of August 4,
1997, between Company, Xxxx Xxxx, Xxxxx Xxxx, Xxxxxx Xxxxx and Payee (the "ASSET
PURCHASE AGREEMENT"), shall have the respective meanings given in the Asset
Purchase Agreement.
2. PAYMENTS; PREPAYMENT; RIGHT OF OFFSET.
(a) Scheduled Principal and Interest Payments. On
each of the second and third anniversaries of the date of this Note, Company
shall make a principal payment to Payee in the amount of four hundred ninety
thousand one hundred six dollars and sixty seven cents ($490,106.67). On the
fourth anniversary of the date of this Note, Company shall pay the entire
remaining outstanding principal amount of this Note together with all accrued
but unpaid interest. On the first day of each fiscal quarter of the Company that
begins after the date hereof, the Company shall make a payment to the holder
hereof of all then-accrued and unpaid interest. Each date upon which principal,
interest and/or other amounts are due under any Note is hereinafter defined as a
"Due Date."
66
(b) Prepayment. This Note may be prepaid in whole or
in part by the Company at any time, or from time to time, without the further
consent of its holder; provided that all prepayments made by Company on this
Note and the other Notes shall be made on a pro rata basis on all of the Notes
in proportion to the amount outstanding under each such Note. Prepayments shall
be first applied to accrued and unpaid interest, and then to principal. If this
Note is prepaid in part, the principal amount so prepaid shall be applied
against the next scheduled principal payment or payments under Section 2(a).
(c) Company's Right of Offset. As more fully provided
in and subject to the terms of Section 8.5 of the Asset Purchase Agreement,
Company shall under certain circumstances have the right to offset any Damages
in respect of which the Payee or the holder hereof may become obliged to
indemnify the Company or ILOG, Inc. up to a maximum amount equal to eight
hundred eighty two thousand one hundred ninety two dollars ($882,192). Company
shall give notice of any such offset to Payee in the manner set forth in Section
8.4 of the Asset Purchase Agreement, and interest shall cease to accrue on
offset principal amounts on the date of such notice. The amount offset shall
first be applied to accrued and unpaid interest and then to the principal amount
of the next scheduled principal payment or payments under Section 2(a).
3. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" under this Note:
(a) Failure to Pay. Company shall fail to pay any
principal, interest or other payment due under this Note or any other of the
Notes on a Due Date unless such payment is made within five (5) French banking
days of Company's receipt of the holder's written notice to Company of such
failure to pay; or
(b) Voluntary Bankruptcy or Insolvency Proceedings.
Company shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit
of its or any of its creditors, (iv) be dissolved or liquidated in full or in
part, or (v) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding commenced
against it;
(c) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Company or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to Company or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within sixty (60) days of commencement; or
-2-
67
(d) Cross Acceleration. Company shall default under
any contract or instrument evidencing indebtedness having a principal amount in
excess of $1,000,000 and such default shall result in such indebtedness becoming
due and owing prior to its stated maturity.
4. RIGHTS OF HOLDER UPON DEFAULT. Upon the occurrence or
existence of any Event of Default under Section 3(a) or 3(d) and at any time
thereafter during the continuance of such Event of Default, the holder of this
Note may with the consent of the Majority in Interest, by written notice to
Company, declare all unpaid principal and interest hereunder to be immediately
due and payable without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. Upon the occurrence or existence
of any Event of Default described in Paragraphs 3(b) or 3(c), immediately and
without notice, all outstanding amounts payable by Company hereunder shall
automatically become immediately due and payable. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Payee may
exercise any other right, power or remedy permitted to it by law, either by suit
in equity or by action at law, or both. Upon the occurrence and during the
continuance of an Event of Default under Section 3(a), all amounts outstanding
that are past due under this Note shall accrue interest at the rate of 15%. For
purposes of this Section 4, a "MAJORITY IN INTEREST" shall mean holders holding
a majority of the outstanding principal under all of the Notes.
5. ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Note may not be
assigned by the Payee without the written consent of the Company and the Company
hereby consents to the assignment of the Note to Xxxxx Xxxx. Notwithstanding the
foregoing, the rights and obligations of Company and the Payee of this Note
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
6. WAIVER AND AMENDMENT. Any provision of the Notes may be
amended, waived or modified only upon the written consent of Company and the
Majority in Interest.
7. NOTICES. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or mailed by registered or certified
mail, postage prepaid, or by recognized overnight courier or personal delivery
at the respective addresses of the parties as set forth in the Asset Purchase
Agreement or on the register maintained by Company. Any party hereto may by
notice so given change its address for future notice hereunder. Notice shall
conclusively be deemed to have been given when received.
8. PAYMENT. Payment shall be made in lawful tender of the
United States.
9. USURY. In the event any interest is paid on this Note which
is deemed to be in excess of the then legal maximum rate, then that portion of
the interest payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the principal of
this Note.
10. EXPENSES. If action is instituted to collect this Note,
the prevailing party shall be entitled to reimbursement from the other party for
all costs and expenses, including, without limitation, reasonable attorneys'
fees and costs, incurred by the prevailing party in connection with such action.
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68
11. GOVERNING LAW. This Note and all actions arising out of or
in connection with this Note shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflicts of law
provisions of the State of Delaware or of any other jurisdiction.
IN WITNESS WHEREOF, Company has caused this Note to be issued
as of the date first written above.
ILOG S.A.
By:
----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
-------------------------------------
Title: Chief Financial Officer
-------------------------------------
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69
EXHIBIT B(iii)
PROMISSORY NOTE
70
PROMISSORY NOTE
$981,735 August 20, 1997
FOR VALUE RECEIVED, ILOG S.A., a French societe anonyme ("COMPANY"),
promises to pay to CPLEX Optimization, Inc. ("PAYEE") the principal sum of nine
hundred eighty one thousand seven hundred thirty five dollars, or such lesser
amount as shall then equal the outstanding principal amount hereof, together
with interest from the date of this Promissory Note (the "NOTE") on the unpaid
principal balance at a rate per annum equal to 6.39% (the AFR Rate) computed on
the basis of the actual number of days elapsed and a year of 365 days, with such
unpaid interest compounded monthly. Subject to the provisions of Sections 2(c)
and 6 below, all principal not previously paid pursuant to Section 2 hereof,
together with any then unpaid and accrued interest, shall be due and payable at
the earlier of (i) the fourth anniversary of the date of this Note or (ii) when
such amounts are declared due and payable by the Payee, or made automatically
due and payable, upon or after the occurrence of an Event of Default (as defined
below).
This Note is one of three Promissory Notes of the Company (collectively
the "NOTES") of like tenor aggregating U.S. $5,000,000 in principal amount
issued by the Company under an Asset Purchase Agreement dated as of August 4,
1997 (the "ASSET PURCHASE AGREEMENT"), among the Company, ILOG, Inc., the Payee
and the shareholders of the Payee. No Note shall be preferred in any respect
over any other of the Notes because of its sale or transfer by its original or
any subsequent holder.
The following is a statement of the rights of the holder of this Note
and the conditions to which this Note is subject, and to which the holder
hereof, by the acceptance of this Note, agrees:
1. DEFINITIONS. Capitalized terms used without definition
herein which are defined in the Asset Purchase Agreement, dated as of August 4,
1997, between Company, Xxxx Xxxx, Xxxxx Xxxx, Xxxxxx Xxxxx and Payee (the "ASSET
PURCHASE AGREEMENT"), shall have the respective meanings given in the Asset
Purchase Agreement.
2. PAYMENTS; PREPAYMENT; RIGHT OF OFFSET.
(a) Scheduled Principal and Interest Payments. On
each of the second and third anniversaries of the date of this Note, Company
shall make a principal payment to Payee in the amount of three hundred twenty
seven thousand two hundred forty five dollars ($327,245.00). On the fourth
anniversary of the date of this Note, Company shall pay the entire remaining
outstanding principal amount of this Note together with all accrued but unpaid
interest. On the first day of each fiscal quarter of the Company that begins
after the date hereof, the Company shall make a payment to the holder hereof of
all then-accrued and unpaid interest. Each date upon which principal, interest
and/or other amounts are due under any Note is hereinafter defined as a "Due
Date."
-1-
71
(b) Prepayment. This Note may be prepaid in whole or
in part by the Company at any time, or from time to time, without the further
consent of its holder; provided that all prepayments made by Company on this
Note and the other Notes shall be made on a pro rata basis on all of the Notes
in proportion to the amount outstanding under each such Note. Prepayments shall
be first applied to accrued and unpaid interest, and then to principal. If this
Note is prepaid in part, the principal amount so prepaid shall be applied
against the next scheduled principal payment or payments under Section 2(a).
(c) Company's Right of Offset. As more fully provided
in and subject to the terms of Section 8.5 of the Asset Purchase Agreement,
Company shall under certain circumstances have the right to offset any Damages
in respect of which the Payee or the holder hereof may become obliged to
indemnify the Company or ILOG, Inc. up to a maximum amount equal to five hundred
eighty nine thousand forty one dollars ($589,041). Company shall give notice of
any such offset to Payee in the manner set forth in Section 8.4 of the Asset
Purchase Agreement, and interest shall cease to accrue on offset principal
amounts on the date of such notice. The amount offset shall first be applied to
accrued and unpaid interest and then to the principal amount of the next
scheduled principal payment or payments under Section 2(a).
3. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" under this Note:
(a) Failure to Pay. Company shall fail to pay any
principal, interest or other payment due under this Note or any other of the
Notes on a Due Date unless such payment is made within five (5) French banking
days of Company's receipt of the holder's written notice to Company of such
failure to pay; or
(b) Voluntary Bankruptcy or Insolvency Proceedings.
Company shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit
of its or any of its creditors, (iv) be dissolved or liquidated in full or in
part, or (v) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding commenced
against it;
(c) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Company or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to Company or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within sixty (60) days of commencement; or
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(d) Cross Acceleration. Company shall default under
any contract or instrument evidencing indebtedness having a principal amount in
excess of $1,000,000 and such default shall result in such indebtedness becoming
due and owing prior to its stated maturity.
4. RIGHTS OF HOLDER UPON DEFAULT. Upon the occurrence or
existence of any Event of Default under Section 3(a) or 3(d) and at any time
thereafter during the continuance of such Event of Default, the holder of this
Note may with the consent of the Majority in Interest, by written notice to
Company, declare all unpaid principal and interest hereunder to be immediately
due and payable without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. Upon the occurrence or existence
of any Event of Default described in Paragraphs 3(b) or 3(c), immediately and
without notice, all outstanding amounts payable by Company hereunder shall
automatically become immediately due and payable. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Payee may
exercise any other right, power or remedy permitted to it by law, either by suit
in equity or by action at law, or both. Upon the occurrence and during the
continuance of an Event of Default under Section 3(a), all amounts outstanding
that are past due under this Note shall accrue interest at the rate of 15%. For
purposes of this Section 4, a "MAJORITY IN INTEREST" shall mean holders holding
a majority of the outstanding principal under all of the Notes.
5. ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Note may not be
assigned by the Payee without the written consent of the Company and the Company
hereby consents to the assignment of the Note to Xxxx X. Xxxx. Notwithstanding
the foregoing, the rights and obligations of Company and the Payee of this Note
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
6. WAIVER AND AMENDMENT. Any provision of the Notes may be
amended, waived or modified only upon the written consent of Company and the
Majority in Interest.
7. NOTICES. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or mailed by registered or certified
mail, postage prepaid, or by recognized overnight courier or personal delivery
at the respective addresses of the parties as set forth in the Asset Purchase
Agreement or on the register maintained by Company. Any party hereto may by
notice so given change its address for future notice hereunder. Notice shall
conclusively be deemed to have been given when received.
8. PAYMENT. Payment shall be made in lawful tender of the
United States.
9. USURY. In the event any interest is paid on this Note which
is deemed to be in excess of the then legal maximum rate, then that portion of
the interest payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the principal of
this Note.
10. EXPENSES. If action is instituted to collect this Note,
the prevailing party shall be entitled to reimbursement from the other party for
all costs and expenses, including, without limitation, reasonable attorneys'
fees and costs, incurred by the prevailing party in connection with such action.
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73
11. GOVERNING LAW. This Note and all actions arising out of or
in connection with this Note shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflicts of law
provisions of the State of Delaware or of any other jurisdiction.
IN WITNESS WHEREOF, Company has caused this Note to be issued
as of the date first written above.
ILOG S.A.
By:
-----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
--------------------------------------
Title: Chief Financial Officer
--------------------------------------
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EXHIBIT C
PROMISSORY NOTE
75
FINANCIAL STATEMENTS
CPLEX OPTIMIZATION, INC.
YEAR ENDED JUNE 30, 1997
WITH REPORT OF INDEPENDENT AUDITORS
DRAFT AUGUST 1, 1997 10:50 AM
76
CPLEX Optimization, Inc.
Financial Statements
Year ended June 30, 1997
CONTENTS
Report of Independent Auditors.......................................... 1
Audited Financial Statements
Balance Sheets........................................................... 2
Statement of Operations.................................................. 3
Statement of Shareholders' Equity (Deficit).............................. 4
Statement of Cash Flows.................................................. 5
Notes to Financial Statements............................................ 6
77
Report of Independent Auditors
The Board of Directors and Shareholders
CPLEX Optimization, Inc.
We have audited the accompanying balance sheets of CPLEX Optimization, Inc. as
of June 30, 1997 and 1996, and the related statements of operations,
shareholders' equity (deficit), and cash flows for the year ended June 30, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audit in accordance with generally accepted accounting
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CPLEX Optimization, Inc. at
June 30, 1997 and 1996, and the results of its operations and its cash flows
for the year ended June 30, 1997 in conformity with generally accepted
accounting principles.
July 24, 1997
except for Note 5,
as to which the date is
August __, 1997
1
78
CPLEX Optimization, Inc.
Balance Sheets
June 30,
--------------------------
1997 1996
---------- ----------
Assets
Current assets:
Cash $ 78,829 $ 931,292
Accounts receivable, net of allowance
of $37,000 in 1997 and none in 1996 791,119 476,457
Prepaid expenses and other assets 15,500 6,000
---------- ----------
Total current assets 885,448 1,413,749
Property and equipment, net 106,996 53,170
---------- ----------
Total assets $ 992,444 $1,466,919
Liabilities and shareholders' equity (deficit)
Current liabilities:
Accrued royalties due to related party $ 147,182 $ 103,425
Accrued management fees due to related party 215,416 111,441
Loan from related party -- 7,229
Accrued expenses 189,079 109,566
Deferred revenue 624,754 397,108
---------- ----------
Total current liabilities 1,176,431 728,769
Commitments
Shareholders' equity (deficit):
Common stock, $1 par value:
Authorized shares - 5,000
Issued and outstanding shares -
1,095 in 1997 and 1996 1,095 1,095
Additional paid-in capital (3,161) (3,161)
Retained earnings (accumulated deficit) (181,921) 740,216
---------- ----------
Total shareholders' equity (deficit) (183,987) 738,150
---------- ----------
Total liabilities and shareholders'
equity (deficit) $ 992,444 $1,466,919
---------- ----------
See accompanying notes.
2
79
CPLEX Optimization, Inc.
Statement of Operations
Year Ended
June 30,
1997
----------
Revenues:
Software licenses $4,824,510
Services 834,083
----------
Total revenues 5,658,593
Cost of revenues:
Software licenses 740,148
Services 91,667
----------
Total cost of revenues 831,815
----------
Gross profit 4,826,778
Operating expenses:
Marketing and selling 783,688
Research and development 437,925
General and administrative 540,499
----------
Total operating expenses 1,762,112
----------
Income from operations 3,064,666
Interest income 33,197
----------
Net income $3,097,863
----------
See accompanying notes.
3
80
CPLEX OPTIMIZATION, INC.
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
TOTAL
ADDITIONAL SHAREHOLDERS'
COMMON PAID-IN RETAINED EQUITY
STOCK CAPITAL EARNINGS (DEFICIT)
------ ---------- -------- -------------
Balance at June 30, 1996 $1,095 $(3,161) $ 740,216 $ 738,150
Net income -- -- 3,097,863 3,097,863
Distribution of profits -- -- (4,020,000) (4,020,000)
------ --------- ----------- -----------
Balance at June 30, 1997 $1,095 $(3,161) $ (181,921) $ (183,987)
====== ========= =========== ===========
See accompanying notes.
4
81
CPLEX OPTIMIZATION, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED
JUNE 30,
1997
----------
OPERATING ACTIVITIES
Net income.................................................. $3,097,863
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization.......................... 29,361
Changes in operating assets and liabilities:
Accounts receivable................................. (314,662)
Other current assets................................ (9,500)
Accrued royalties due to related party.............. 43,757
Accrued management fees due to related party........ 103,975
Loan from related party............................. (7,229)
Accrued expenses.................................... 79,513
Deferred revenue.................................... 227,646
----------
Net cash provided by operating activities................... 3,250,724
INVESTING ACTIVITIES
Purchase of fixed assets.................................... (83,187)
----------
Net cash used in investing activities....................... (83,187)
FINANCING ACTIVITIES
Distribution of profits to shareholders..................... (4,020,000)
----------
Net cash used in financing activities....................... (4,020,000)
----------
Net decrease in cash........................................ (852,463)
Cash at beginning of year................................... 931,292
----------
Cash at end of year......................................... $ 78,829
==========
See accompanying notes.
5
82
CPLEX Optimization, Inc.
Notes to Financial Statements
June 30, 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
CPLEX Optimization, Inc. (the Company, an S Corporation, was incorporated in
Texas in October 1988. The Company is a provider of math programming software
and related services.
BASIS OF PRESENTATION
The accompanying financial statements were prepared in accordance with
generally accepted accounting principles. The preparation of financial
statements requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying footnotes.
Actual results could differ from those estimates.
DEPRECIATION
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally
three to five years.
In 1996, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" (FAS 121). FAS 121 requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds the future undiscounted cash flows attributable to such
assets. FAS 121 is effective for fiscal years beginning after December 15,
1996. The impact of the adoption of FAS 121 was not material to the Company's
financial position or results of operations.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with the American Institute of
Certified Public Accountants Statement of Position 91-1 on Software Revenue
Recognition.
License fees are earned under software license agreements with end users and
distributors and are recognized upon shipment if no significant vendor
obligations remain and collection of the resulting receivable is deemed
probable.
6
83
CPLEX Optimization, Inc.
Notes to Financial Statements (continued)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION (CONTINUED)
Service revenues are derived from consulting and training services and fees
earned under annual maintenance agreements for providing updates, on an "if and
when available" basis, for existing software products, user documentation, and
technical support. Maintenance revenue is recognized ratably over the term of
such agreements. If such services are included in the initial licensing fee,
the value of the services is unbundled and recognized ratably over the related
service period.
CONCENTRATION OF CREDIT RISK
The Company operates in one business segment, the development and licensing of
high-performance software, which it sells to various companies across several
industries. The Company performs ongoing credit evaluations of its customers
and generally requires no collateral.
SOFTWARE DEVELOPMENT COSTS
In accordance with Statement of Financial Accounting Standards, No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed," the Company capitalizes eligible computer software costs upon
achievement of technological feasibility, subject to net realizable value
considerations. The establishment of technological feasibility and the ongoing
assessment of the recoverability of these costs require management's judgment
with respect to certain external factors, including, but not limited to,
anticipated future gross license revenues, estimated economic life, and changes
in software and hardware technology. As of June 30, 1997 and 1996, such
capitalizable costs were insignificant. Accordingly, the Company has not
capitalized such costs but has charged all such costs to research and
development expense in the accompanying statements of operations.
7
84
CPLEX Optimization, Inc.
Notes to Financial Statements (continued)
2. Balance Sheet Components
June 30,
----------------------------
1997 1996
------------ ------------
Computer equipment and software $264,708 $209,114
Furniture and equipment 59,322 31,729
------------ ------------
324,030 240,843
Less accumulated depreciation 217,034 240,843
------------ ------------
$106,996 $ 53,170
------------ ------------
3. Commitments
The Company leases its facilities under an operating lease expiring in October
1997 with an option to renew for a five year term. In addition to base rent,
the Company is responsible for certain taxes, utilities, and maintenance costs.
Future minimum lease payments under noncancelable operating leases at June 30,
1997 are approximately $14,000 for fiscal 1998. There are no commitments
thereafter.
Total rent expense for fiscal 1997 was approximately $60,000.
4. Related Party Transactions
The Company has a contract with a company, owned by the nonemployee President
and Chief Executive Officer of the Company, to provide management services.
Total management service fees incurred during fiscal 1997 amounted to
approximately $704,000.
The Company has a royalty agreement with a founder and employee based on a
percentage of certain license revenues. During fiscal 1997, the royalties
incurred relating to this agreement amounted to approximately $429,000.
The Company pays an employee royalties on software code licensed by the Company
but developed by that employee prior to joining CPLEX. These royalties amounted
to approximately $38,000 during fiscal 1997.
8
85
CPLEX Optimization, Inc.
Notes to Financial Statements (continued)
4. Related Party Transactions (continued)
During fiscal 1997, the Company recognized approximately $210,000 in revenue
from a company partially owned by shareholders of the Company.
5. Subsequent Event (Unaudited)
The shareholders of the Company entered into an agreement on August __, 1997
with a third party where the third party will acquire the business of the
Company by purchasing the Company's fixed assets, technology, and other
intangibles and assuming certain of the Company's liabilities and contractual
obligations in exchange for cash, stock of the third party, and promissory
notes.
9
86
EXHIBIT D
ILOG PRESS RELEASES
87
Contact: Xxxxx Xxxxxxxxxxx
ILOG
000-000-00000000
- or -
Xxxxxx Xxxxxxxx
212-889-4350
ILOG ANNOUNCES ACQUISITION OF CPLEX OPTIMIZATION, INC.
Paris, France, August 5, 1997 -- ILOG S.A. (NASDAQ NMS: ILOGY), a leading
provider of advanced software components, today announced that it has signed a
definitive agreement to acquire the business of CPLEX Optimization, Inc. of
Incline Village, Nevada, a leader in linear optimization software.
CPLEX's business will be acquired in exchange for 1,700,000 ILOG shares,
$15,000,000 and a $5,000,000 four-year promissory note which is subject to
upward adjustment of up to an additional $2,400,000. The CPLEX management will
be joining ILOG and include Dr. Xxxxxx Xxxxx, its Chairman, and Mr. Xxxx Xxxx,
its President, whoa re being nominated to ILOG's Board of Directors. Options for
1,100,000 ILOG shares will be granted to the CPLEX management and employees,
under ILOG's 1996 US Share Option Plan, following the closing of the
acquisition. The business combination is subject to ILOG shareholder approval
and will be put to shareholders at a meeting to be held on August 20, 1997; the
acquisition will become effective shortly after shareholder approval is
received.
"ILOG and CPLEX share a common vision about the need for embeddable
optimization software for solving dynamic resource allocation problems in a wide
range of industries," commented Xxxxxx Xxxxx, ILOG's President and CEO.
"CPLEX's high visibility in the US operations research world complements ILOG's
established position in Europe. This business combination will provide our
customers with the very best libraries of linear, mixed-integer, quadratic and
constraint-based programming algorithms and creates a worldwide leader in
optimization software."
"I am also pleased to welcome Xx. Xxx Xxxxx and Xxxx Xxxx to the ILOG Board of
Directors. They bring a unique breadth of academic and business experience to
the company" added Xx. Xxxxx.
Xxxx Xxxx, President and CEO of CPLEX commented: "The combination of ILOG and
CPLEX technologies creates a remarkably complete and powerful arsenal of
optimization and application building tools. The resulting products will
empower creators and users of decision support and operations management
applications worldwide to achieve optimal results."
ABOUT CPLEX
CPLEX is a privately held company founded in 1988 by the principals and is a
leading provider of optimization software. Its revenues for the year ended June
30, 1997 were $5.7 million and the company has 13 employees who will continue
with ILOG at CPLEX's Incline Village location.
88
ABOUT ILOG
ILOG is a leading provider of advanced software components for graphics and
resource optimization. ILOG's products enable: high-performance
data-visualization for 2D and 3D user interfaces; constraint-based reasoning
systems for resource optimization, scheduling, logistics and planning
applications; dynamic rule systems for intelligent agents and real-time data
flow control; and component services for integrating C++ modules with real-time
and relational data sources. ILOG S.A. was founded in 1987, now employes
approximately 280 people worldwide, and is traded on NASDAQ NMS under the
symbol ILOGY.
This release contains "forward looking" information within the meaning of the
United States Securities laws that involve risks and uncertainties that could
cause actual results to differ materially from those in the forward looking
statements. Potential risks and uncertainties include, without limitation, the
company's lengthy sales process, the early development stage of the market for
the company's products, the timing of significant revenues, the economic,
political and currency risks associated with the company's European, North
American and Asian operations and the company's ability to consummate the
acquisition of CPLEX.
ILOG and CPLEX are registered trademarks of ILOG S.A. and CPLEX Optimization,
Inc. respectively.
89
Contact: Xxxxx Xxxxxxxxxxx
ILOG
000-000-00000000
- or -
Xxxxxx Xxxxxxxx Associates
212-889-4350
ILOG REPORTS RESULTS FOR THE QUARTER AND YEAR ENDED JUNE 30, 0000
Xxxxx, Xxxxxx, August 5, 1997 -- ILOG S.A. (NASDAQ NMS: ILOGY), a leading
provider of advanced software components, today reported revenues of $9.6
million for its fourth quarter ended June 30, 1997, an increase of 15% compared
to $8.3 million in the June 1996 quarter. The loss from operations for the June
1997 quarter was $425,000, compared to $593,000 in the June 1996 quarter. Loss
per share for the June 1997 quarter was $0.02 on 10.9 million shares, compared
to $0.10 on 7.0 million shares in the June 1996 quarter.
The company reported revenues of $33.3 million for the year ended June 30,
1997, an increase of 28% compared to $26.0 million in the prior year. The loss
from operations for the year was $3.7 million, compared to $4.7 million in the
prior year. Loss per share for the year was $0.31 on 8.4 million shares,
compared to $0.73 on 6.9 million shares in the prior year. Both revenues and
expenses in the year would have been each approximately $1.2 million higher if
the US dollar exchange rates for the year had been the same rates used in the
preceding year. Currency fluctuations did not have a material effect on the
company's results from operations, net loss or net loss per share.
In a separate release issued today ILOG also announced a proposed acquisition
of CPLEX Optimization, Inc. which is part of ILOG's strategic direction in
reinforcing its position as the world's leading purveyor of resource
optimization software components.
Revenues in the quarter grew by 15% over the same quarter in the previous year
and 28% for the year, reflecting higher revenues from services which grew by
58% over the same quarter in the preceding year and 50% for the year. "The
growth of our consulting business during the year and the achievement of
customer funded research and development in the most recent quarter" said
Xxxxxx Xxxxx, ILOG's President and CEO, "is expected to provide an impetus for
license revenues in the future and reflects our strategic decision to emphasize
the provision of services as a means to accelerate the time to customer
satisfaction."
Overall gross margin for the quarter decreased to 78% from 83% for the same
period in the preceding year due to the 58% growth in lower-margin services
revenues. Marketing and selling expenses for the quarter increased by 10% over
the same period in the prior year reflecting continuing investment in sales and
marketing personnel, particularly in North America. Research and development
expenses, net of government funding, for the quarter decreased by 15% over the
same period in the prior year primarily because certain research and
development activities were customer funded and are classified as cost of
revenues for operating statement reporting purposes. Government funding in the
quarter was $167,000 compared to $1,157,000 or the same period in the
preceding year as a number of funded
90
2
projects have been concluded. General and administrative expenses for the
quarter increased by 7% over the same period in the prior year. Net interest
income (expense) for the quarter increased from $(95,000) to $154,000 over the
same period in the prior year reflecting interest earned on the proceeds of the
company's February initial public offering.
Overall gross margin for the year was 80% compared to 79% in the prior year.
Marketing and selling expenses for the year increased by 25% over the prior
year reflecting continuing investment in sales and marketing personnel,
particularly in North America. Research and development expenses, net of
government funding, for the year increased by 3% over the prior year.
Government funding in the year was $415,000 compared to $2,549,000 in the prior
year as a number of funded projects were concluded in the year. General and
administrative expenses for the year increased by 21% over the prior year,
which reflects staffing additions to the company's finance organization and
on-going costs associated with being a public company. Net interest income
(expense) and other for the year increased from $(259,000) to $1,124,000 over
the prior year reflecting a $1,100,000 grant received from an agency of the
French government with respect to the company's establishment of subsidiaries
outside of France and interest earned on the proceeds of the company's February
initial public offering.
At June 30, 1997 shareholders' equity was $27.0 million, compared to $1.2
million at June 30, 1996. Cash at June 30, 1997 totaled $26.0 million compared
to $5.0 million at June 30, 1996. At June 30, 1997 the company had 11.0 million
shares issued and outstanding compared to 6.9 million at June 30, 1996.
BUSINESS DEVELOPMENTS IN THE QUARTER
40% of ILOG's revenues in the quarter were derived from telecom customers. In
this market segment ILOG libraries are being increasingly selected for
large-scale projects, and many customers are starting to reuse in-house
components that were build with ILOG libraries. Telecom industry applications
include network management, customer care and billing, and network
optimization. ILOG's increased focus in the telecom market has been rewarded in
the quarter by new business from Hitachi, Kolsch and Xxxxxxx, Lucent and
Mannesman. Repeat business with Alcatel, ATT, Bellcore, Ciena, DS Telematica,
France Telecom, Hewlett-Packard, IBM, NTT, Qualcomm, Telefonica, Telecom
Italia, SFR, TTC and US West was also received.
Also in the quarter Nortel (Northern Telecom Limited) signed an agreement with
ILOG to develop and license worldwide a Telecom Graphic Objects Library
embodying their proprietary graphical user interface. The library will be
commercially available in 1998 as a standard ready-to-use high-performance set
of network management graphic objects and states for integration in network
management platforms. "Delivering high-performance high-bandwidth graphics is
key to the telecom industry and the relationship with Nortel marks the growing
recognition by the telecom industry of the excellence of ILOG's libraries,"
added Xx. Xxxxx.
ILOG's optimization products during the quarter were selected for major
projects by ISCOR, a steel manufacturer in South Africa and Lockheed Xxxxxx.
Also in the quarter, a number of ILOG component-based manpower planning systems
started to reach deployment phase, notably at Clinica xx Xxxxxxx in Spain,
France Telecom and MacDonalds in Singapore.
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3
ABOUT ILOG
ILOG is a leading provider of advanced software components for graphics and
resource optimization. ILOG's products enable: high-performance
data-visualization for 2D and 3D user interfaces; constraint-based reasoning
systems for resource optimization, scheduling, logistics and planning
applications; dynamic rule systems for intelligent agents and real-time data
flow control; and component services for integrating C.++ modules with real-time
and relational data sources. ILOG S.A. was founded in 1987, now employs
approximately 280 people worldwide, and is traded on NASDAQ NMS under the
symbol ILOGY.
This release contains "forward looking" information within the meaning of the
United States securities laws that involve risks and uncertainties that could
cause actual results to differ materially from those in the forward looking
statements. Potential risks and uncertainties include, without limitation, the
company's lengthy sales process, the early development stage of the market for
the company's products, the timing of significant revenues, the economic,
political and currency risks associated with the company's European, North
American and Asian operations and the company's ability to consummate the
acquisition of CPLEX.
ILOG and CPLEX are registered trademarks of ILOG S.A. and CPLEX Optimization,
Inc. respectively.
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4
ILOG S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
THREE MONTHS ENDED YEAR ENDED
June 30 June 30 June 30 June 30
1997 1996 1997 1996
------- ------- ------- -------
Revenues:
License fees $ 6,115 $6,117 $22,553 $18,848
Services 3,454 2,186 10,772 7,166
------- ------ ------- -------
Total revenues 9,569 8,303 33,325 26,014
------- ------ ------- -------
Cost of revenues
License fees 191 268 801 1,050
Services 1,900 1,182 5,962 4,458
------- ------ ------- -------
Total cost of revenues 2,091 1,450 6,763 5,508
------- ------ ------- -------
Gross profit 7,478 6,853 26,562 20,506
------- ------ ------- -------
Operating expenses
Marketing and selling 5,827 5,284 21,451 17,227
Research and development 953 1,115 4,566 4,437
General and administrative 1,123 1,047 4,292 3,554
------- ------ ------- -------
Total operating expenses 7,903 7,446 30,309 25,218
Loss from operations (425) (593) (3,747) (4,712)
Net interest income (expense) and other 154 (95) 1,124 (259)
------- ------ ------- -------
Net loss $ (271) $ (688) $(2,623) $(4,971)
------- ------ ------- -------
Net loss per share $ (0.02) $(0.10) $ (0.31) $ (0.73)
Share and share equivalents used in per
share calculations 10,949 6,951 8,377 6,855
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5
ILOG S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
June 30, June 30,
1997 1996
-------- --------
ASSETS
Current assets
Cash and cash equivalents $26,037 $ 4,977
Accounts receivable 9,740 8,453
Other receivables and prepaid expenses 2,487 2,842
-------- --------
Total current assets 38,264 16,272
Property and equipment-net and other assets 3,044 2,813
-------- --------
Total assets $41,308 $19,085
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 7,799 $ 7,510
Current debt 2,183 1,567
Deferred revenue 3,165 2,136
-------- --------
Total current liabilities 13,147 11,213
Convertible bonds -- 4,272
Long-term portion of debt 1,134 2,364
-------- --------
Total liabilities 14,281 17,849
-------- --------
Shareholders' equity
Paid-in capital 38,398 8,965
Accumulated deficit and currency translation adjustment (11,371) (7,729)
-------- --------
Total shareholders' equity 27,027 1,236
-------- --------
Total liabilities and shareholders' equity $41,308 $19,085
-------- --------
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6
RESULTS AND PRESS RELEASE FOR FRENCH SHAREHOLDERS
For the benefit of our French shareholders a translation of this announcement
is also being sent to our shareholders with French addresses of record and to
anyone else upon request. In addition to facilitate their comprehension of the
Company's financial results the foregoing financial statements, which are
prepared under accounting principles generally accepted in the United States,
have been translated into French Francs at the average historical exchange
rates for the related periods and the exchange rates at the relevant balance
sheet dates. These translated financial statements for the benefit of
shareholders generally follow below.
ILOG S.A.
DONNEES FINANCIERES CONSOLIDEES CLEFS (NON AUDITEES)
(MONTANT EN MILLIERS DE FRANCS FRANCAIS, SAUF INFORMATIONS DONNEES PAR ACTION)
Trimestre clos le 30 Juin Douze mois clos le 30 Juin
------------------------- --------------------------
1997 1996 1997 1996
---- ---- ---- ----
Chiffre d'affaires
Logiciels 35,202 31,319 123,277 94,524
Services 19,884 11,192 58,982 35,891
------- ------ ------- -------
Total chiffre d'affaires 55,086 42,511 182,259 130,415
------- ------ ------- -------
Prix de revient des ventes
Logiciels 1,100 1,372 4,362 5,256
Services 10,938 6,052 32,691 22,294
------- ------ ------- -------
Total prix de revient des ventes 12,037 7,424 37,053 27,550
------- ------ ------- -------
Xxxxx Brute 43,048 35,087 145,207 102,865
------- ------ ------- -------
Frais generaux et commerciaux
Frais commerciaux 33,544 27,054 117,038 86,293
Frais de recherche et developpement 5,486 5,709 24,775 22,171
Frais generaux et administratifs 6,465 5,361 23,412 17,809
------- ------ ------- -------
Total frais generaux et commerciaux 45,495 38,124 165,225 126,273
------- ------ ------- -------
Resultat operationnel (2,447) (3,036) (20,018) (23,408)
Produits (charge) financiers et autres 887 (486) 5,923 (1,303)
------- ------ ------- -------
Resultat net (1,560) (3,523) (14,095) (24,711)
------- ------ ------- -------
Resultat net par action (0.14) (0.51) (1.68) (3.60)
Nombre moyen d'actions en circulation 10,949 6,951 8,377 6,855
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95
7
ILOG S.A.
BILANS CONSOLIDES RESUMES (NON AUDITES)
(EN MILLIERS DE FRANCS FRANCAIS)
30 Juin 30 Juin
1997 1996
------- -------
ACTIF
Actif circulant:
Disponibilites et valeurs mobilieres de placement...... 153,096 25,632
Clients, nets.......................................... 57,271 43,534
Autres elements d'actif circulant...................... 14,623 14,637
------- ------
Total de l'actif circulant........................... 224,990 83,803
Immobilisation corporelles, nettes et autres actifs...... 17,899 14,487
------- ------
Total de l'actif......................................... 242,889 98,290
======= ======
PASIF
Passif a moins d'un an:
Fournisseurs et comptes rattaches...................... 45,858 38,677
Dette financiere a court terme......................... 12,833 8,070
Produits constates d'avance............................ 18,611 11,001
------- ------
Total passif a moins d'un an......................... 77,302 57,748
Obligations convertibles................................. -- 22,001
------- ------
Dette financiere a long terme............................ 6,670 12,175
------- ------
Total passif a court et long terme.................. 83,972 91,925
------- ------
Capitaux propres
Capital souscrit et prime d'emission................... 225,778 46,171
Report a nouveau et ecart de conversion................ (66,681) (39,805)
------- ------
Total des capitaux propres........................... 158,917 6,366
------- ------
Total du passif...................................... 242,889 98,290
======= ======
Pour l'information de nos actionnaires francais, une traduction de cette
annonce sera egalement envoyee a nos actionnaires enregistres avec une adresse
francaise et a toute personne en faisant la demande. De plus, afin de faciliter
la comprehension des resultats financiers de la seciete, les comptes
consolides precedents ont ete traduits en francs francais aux taux moyens
historiques des periodes considerees et aux taux de cloture aux dates de bilan.
96
EXHIBIT E(i)
EMPLOYMENT AGREEMENT FOR XXXX X. XXXX
97
EXHIBIT E(i)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of the 20th day
of August, 1997 the ("EFFECTIVE DATE"), by and between ILOG, Inc., a California
corporation (the "COMPANY") and the undersigned employee ("EMPLOYEE") of
Company.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties hereto as
follows:
1. EMPLOYMENT BY COMPANY; DUTIES.
(a) Employment. Subject to the terms and conditions set forth
herein, the Company hereby agrees to employ Employee in the position of
Executive Vice President, CPLEX Business, having all the duties and
responsibilities customarily associated with such positions, subject to
modification from time to time by the Company, and Employee hereby accepts such
employment by the Company. Employee's duty's shall initially include the
management of the CPLEX Technology Center, and Employee shall report to the
Chief Executive Officer of the Company's parent entity. With respect to any
modifications of Employee's position and/or duties during the term of Employee's
employment hereunder, the Company shall give due consideration to Employee's
skills and experience in determining the appropriate position and duties of
Employee and shall not, without Employee's consent, modify Employee's position
or duties in a manner inconsistent with Employee's status as a senior executive
officer of the Company; provided, however, that the foregoing shall in no way
limit the ability of the Company to terminate Employee's employment at any time
for any reason or for no reason. Such employment shall commence on the Effective
Date and shall continue until terminated as provided in Paragraph 3 hereof.
Employee shall not, without the prior written consent of Company, directly or
indirectly, alone or as part of any group, association or organization, be
actively engaged in or concerned with any other duties or pursuits which
interfere with the performance of Employee's duties to Company or which may be
contrary to the best interests of the Company.
(b) Company Policies. The employment relationship between the
parties shall also be governed by the general employment policies and practices
of the Company now in effect or which may become effective in the future,
including those relating to the protection of confidential information and trade
secrets, except that when the terms of this Agreement differ from or are in
conflict with the Company's general employment policies or practices, this
Agreement shall control.
98
2. COMPENSATION AND BENEFITS.
(a) Base Salary; Bonuses; Compensation for Part-Time
Employment. As compensation for the services to be rendered by Employee during
his Full-Time Employment hereunder, including all services rendered to entities
affiliated with the Company, the Company agrees to pay Employee in accordance
with the Company's regular payroll practices, direct salary compensation at the
rate of $150,000 per year (as adjusted from time to time pursuant to the terms
hereof, the "BASE SALARY"), commencing on the Effective Date. In addition,
Employee shall be eligible to receive a performance bonus in the target amount
of $50,000, with the actual bonus to be determined based on the achievement of
performance criteria to be determined by mutual agreement of the Company and
Employee (as adjusted from time to time pursuant to the terms hereof, the
"BONUS"). For purposes of this Agreement, "FULL-TIME EMPLOYMENT" shall mean all
periods of time during which Employee is devoting all of Employee's working
time, attention and energies to performing Employee's duties to the Company. In
the event Employee desires to reduce the level of Employee's time, attention or
energies devoted to the Company to below Full-Time Employment levels, Employee
shall give the Company sixty day's written notice of such request and the
Company shall not unreasonably deny such request. Such notice shall quantify
Employee's desired level of time, attention and energies to be devoted to the
Company and the effective date of such reduction (any such periods of time
during which such reduction are in effect, "PART-TIME EMPLOYMENT"). Employee
may, subject to the consent of the Company which consent shall not be
unreasonably withheld, request to resume Full-Time Employment or further adjust
the level of Employee's Part-Time Employment upon sixty day's notice. During
any period of Part-Time Employment, Employee's Base Salary and Bonus shall be
proportionately adjusted by the Company in good faith. Such good-faith
adjustments by the Company shall be conclusive and binding on Employee.
(b) Employee Benefits. Employee shall be eligible to
participate in the employee benefit plans and arrangements which are available
or which become available, in the discretion of the Company's Board of
Directors, to other employees of the Company, subject in each case to the
generally applicable terms and conditions of the plan or arrangement in question
and to the determination of any committee administering such plan or
arrangement. The Company's presently available benefits are listed on Exhibit A
hereto. Employee's benefits shall not be reduced during periods of Part-Time
Employment, except that benefits that are based on levels of salary and bonus
compensation, such as moneys paid during periods of paid vacation, shall be
proportionately adjusted by the Company in good faith.
(c) Annual Compensation Review. Employee and the Company shall
review Employee's Base Salary and Bonus structure annually and may make mutually
agreeable adjustments at such times.
3. TERM AND TERMINATION.
(a) Term; Effect of Termination. Unless terminated by either
party as provided below, this Agreement shall remain in full force and effect
until the date three years after the Effective Date (such three year period, the
"DEFAULT TERM") and may be extended for one annual term upon the mutual
agreement of Employee and the Company (any such extension period, the "EXTENDED
TERM"). Provisions of this Agreement that expressly relate to periods of time
following
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99
the term of this Agreement or of Employee's employment shall survive any
termination or expiration of this Agreement or of Employee's employment with the
Company.
(b) Limitation of Liability upon Termination. If Employee's
employment terminates (or is terminated) for any reason (or for no reason),
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided in this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
policies at the time of termination. Subject to the terms and conditions hereof,
Employee acknowledges that Employee's employment hereunder shall be on an
at-will basis and that Company may terminate Employee's employment hereunder at
any time with or without Cause.
(c) Termination for Cause; Definition of "Cause". Employee's
employment with the Company may be terminated for Cause at any time by the
Company, upon reasonable notice to Employee of the circumstances leading to such
termination for Cause. For the purpose of this Agreement, "CAUSE" shall mean (i)
the substantial and continuing failure to render services to the Company or its
affiliated entities in accordance with Employee's assigned duties (other than as
a result of Employee's Disability, as defined below, or other medically
determinable serious physical impairment), as determined by the Board of
Directors of the Company's parent entity, if such failure remains uncured for a
period of 30 days following delivery of notice to Employee of such failure; (ii)
the conviction of a felony; (iii) gross negligence, dishonesty, breach of
fiduciary duty or material breach of the terms of any confidentiality,
noncompetition or other agreement in favor of the Company or its affiliated
entities; (iv) the commission of an act of fraud or embezzlement which results
in loss, damage or injury to the Company or its affiliated entities, whether
directly or indirectly; or (v) the commission of an act which constitutes unfair
competition with the Company or its affiliated entities or which induces any
customer of the Company or its affiliated entities to break a contract with the
Company or its affiliated entities.
(d) Continuation of Option Vesting upon Certain Events. In
connection with the commencement of Employee's employment with the Company,
Employee has been or will be granted an option to purchase up to 200,000 shares
of ILOG S.A. under its 1996 Stock Option Plan pursuant to an option agreement in
substantially the form attached hereto as Exhibit B (the "OPTION"). Upon
termination of Employee's employment for any reason, Employee shall have the
right to exercise, within 90 days of such termination, the portion of Employee's
Option that is then- exercisable pursuant to the terms and conditions of such
option agreement and such option plan; provided, however, that, notwithstanding
any term of such option agreement or such option plan to the contrary, if at any
time prior to such time as the Option becomes fully vested and exercisable,
either (X) the Company terminates Employee's employment with the Company without
Employee's consent other than for Cause or (Y) Employee dies or becomes Disabled
(as defined below) then, in each case, Employee's Option shall (i) continue to
vest until fully vested and (ii) continue to be exercisable to the extent
vested, in each case, as if Employee had remained alive, not Disabled and
employed by the Company throughout the term of the Option.
(e) Continuation of Salary, Bonus and Benefits upon
Termination without Cause. If the Company terminates Employee's employment with
the Company during the Default Term without Employee's consent other than for
Cause, then, during the remaining Default Term, the
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100
Company shall continue to pay Employee the annual Base Salary and target Bonus
in effect immediately prior to such termination and shall continue to provide
Employee with benefits substantially equivalent to those being provided
immediately prior to such termination.
(f) Definitions of Disability and Disabled. For purposes of
this Agreement, the terms "Disabled" and "Disability" shall refer to a state of
Employee's "permanent and total disability" as such term is defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended.
4. PROPRIETARY INFORMATION; NONINTERFERENCE. As a condition to the
effectiveness of this Agreement, Employee shall execute the Proprietary
Information and Invention Assignment Agreement attached hereto as Exhibit C.
5. MISCELLANEOUS.
(a) Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or upon the third day after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the Company or Employee at the addresses set forth on the signature
page of this Agreement, or at such other address as such party may designate by
ten (10) days advance written notice to the other party.
(b) Severability. Nothing in this Agreement shall be construed
so as to require the commission of any act contrary to law and wherever there is
any conflict between any provision of this Agreement and any law, statute,
ordinance, order or regulation, the latter shall prevail, but in such event any
provision of this Agreement shall be curtailed and limited only to the extent
necessary to bring it within applicable legal requirements. If any provision of
this Agreement should be held invalid or unenforceable, the remaining provisions
shall be unaffected by such a holding.
(c) Tax Matters. Employee has consulted Employee's own
independent tax and legal advisors with respect to the transactions contemplated
by this Agreement and is not relying in any respect on the Company or any
officer, employee, or other agent or representative of the Company to provide
any advice with respect to the federal, state, local or foreign tax consequences
of the transactions contemplated hereby. Employee alone will bear Employee's tax
consequences, if any, associated with the transactions contemplated hereby and
will not seek any reimbursement in connection with any such tax consequences
from the Company.
(d) Complete Agreement. This Agreement and the exhibits
attached hereto contain the entire agreement and understanding between the
parties relating to the subject matter hereof, and supersedes any prior
understandings, agreements, or representations by or between the parties,
written or oral, relating to the subject matter hereof.
(e) Successors and Assigns. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company by way of reorganization, merger or
consolidation and any assignee of all or substantially all of its
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101
business and assets, but except as to any such successor or assignee of the
Company, neither this Agreement nor any rights or benefits hereunder may be
assigned by the Company or Employee.
(f) Amendments. Notwithstanding anything to the contrary
contained in this Agreement, the parties to this Agreement may make any
modification or amendment to this Agreement only by a mutual agreement in
writing.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to contracts entered into and to be performed entirely within the
State of California..
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the day and year first above written.
ILOG, INC.
By:
--------------------------------------
EMPLOYEE
----------------------------------------
(Signature)
Xxxx Xxxx
-----------------------------------------
(Print Name)
-----------------------------------------
(Print Address)
-----------------------------------------
(Print Telephone Number)
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102
Exhibit A
While Employee remains employed with the Company, Employee shall be eligible for
all benefits offered to Company employees generally, currently including Aetna
Medical HMO/PPO coverage, dental and vision insurance plans, Accidental Death &
Disability Insurance, Section 125 pre-tax medical and dependent care expense
reimbursement plan, and 401(k) plan. In addition, Employee shall be entitled to
paid vacation during each year of employment of the greater of (i) four weeks or
(ii) the then-current annual paid vacation allowed by the Company's standard
benefit policy (currently three weeks).
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103
Exhibit B
(Form of Option Agreement is Attached)
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104
ILOG S.A.
1996 STOCK OPTION GRANT AGREEMENT
PART I
NOTICE OF STOCK OPTION GRANT
Mr. Xxxx Xxxx
You have been granted an Option to subscribe Shares of the
Company, subject to the terms and conditions of the 1996 Stock Option Plan, as
amended (the "Plan"), and this Option Agreement. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.
Grant Number: SO96/97/
Date of Grant: August 20, 1997
Vesting Commencement Date: August 20, 1997
Vesting period: Four years
Share Per Value: FF 4.00
Exercise Price per Share: FF
Total Number of Shares Granted: 200,000
Total Exercise Price: FF
Type of Option: Incentive Stock Option
Term/Expiration Date: Ten Years
105
VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in
accordance with the following schedule:
25% of the Shares subject to the Option shall vest twelve
months after the Vesting Commencement Date, and 1/48 of the Shares subject to
the Option shall vest each month thereafter.
Except as may be provided in that certain Employment Agreement
by and between Optionee and ILOG, Inc. dated as of August 20, 1997 (the
"Employment Agreement"), vesting shall continue only during Optionee's
Continuous Status as a Beneficiary.
TERMINATION PERIOD:
Except as provided in the Employment Agreement, this Option
may be exercised for ninety (90) days after termination of the Optionee's
employment or term of office with the Company or an Affiliated Company as the
case may be. Upon the Death or Disability of the Optionee, this Option may be
exercised for such longer period as provided in the Plan or the Employment
Agreement. Save as provided in the Plan, in no event shall this Option be
exercised later than the Term/Expiration Date as provided above.
By his signature and the signature of the Company's
representative below, the Optionee and the Company agree that this Option is
granted under and, except to the extent inconsistent with the Employment
Agreement, governed by the terms and conditions of the Plan and this Option
Agreement. The Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had the opportunity to obtain advice of counsel prior to executing
this Option Agreement and fully understands all provisions of the Plan and
Option Agreement. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement which are not governed by
the Employment Agreement. The Optionee further agrees to notify the Company upon
any change in the residence address indicated below.
The Company and the Optionee recognize that the Plan has been
prepared both in the French and the English language. The French version is the
version that binds the parties, notwithstanding this, the English version
represents an acceptable translation and, consequently, no official translation
will be required for the interpretation of this agreement.
OPTIONEE: ILOG S.A.
---------------------------------- -------------------------------------
Signature By:
Print Name
----------------------------------
Residence Address
----------------------------------
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106
ILOG S. A.
1996 STOCK OPTION GRANT AGREEMENT
PART II
TERMS AND CONDITIONS
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to subscribe the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the 1996 Stock Option Plan, as amended, which is incorporated
herein by reference. In the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Non-statutory Stock Option.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of Optionee's employment or
term of office, the exercisability of the Option is governed by the applicable
provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached hereto (the "Exercise Notice"), comprising
a share subscription form (bulletin de souscription) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company or its
designated representative or by facsimile message to be immediately confirmed by
certified mail to the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
107
No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law as set out under Section 14(a) of the Plan.
Upon the issuance of the Shares, the Optionee shall be
entitled to receive such Shares in the form of American Depositary Shares by
completing and signing the appropriate box of the Exercise Notice attached
hereto.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(1) wire transfer;
(2) check;
(3) delivery of a properly executed notice together with such
other documentation as the Administrator and the broker, if
applicable, shall require to effect exercise of the Option and
delivery to the Company of the sale or loan proceeds required
to pay the exercise price; or
(4) any combination of the foregoing methods of payment.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Terms of Option. Subject as provided in the Plan, this Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Option Agreement and the Employment Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. In the event of any
conflict between the provisions of this Option Agreement and the provisions of
the Employment Agreement, the Employment Agreement shall, to the extent of such
conflict, control. This Option Agreement is governed by the laws of the Republic
of France.
Any claim or dispute arising under the Plan or this Agreement shall be subject
to the exclusive jurisdiction of the Tribunal de Grande Instance of Creteil.
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CONSENT OF SPOUSE
(TO BE SIGNED BY RESIDENT OF CALIFORNIA AND OTHER COMMUNITY PROPERTY STATES)
The undersigned spouse of Optionee has read and hereby
approves the terms and conditions of the Plan and this Option Agreement. In
consideration of the Company's granting his or her spouse the right to subscribe
Shares as set forth in the Plan and this Option Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan
and this Option Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under the Plan or this Option Agreement.
----------------------------------
Spouse of Optionee
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EXHIBIT A
ILOG S.A.
SOCIETE ANONYME HAVING A SHARE CAPITAL OF 24,798,780 FRANCS
REGISTERED OFFICE: []
1996 STOCK OPTION PLAN
EXERCISE NOTICE
(SHARE SUBSCRIPTION FORM)
ILOG S.A.
[ ]
Date:
Attention:
1. Exercise of Option. Effective as of today, _______________________,
199_, the undersigned hereby elects to subscribe ( ________ ) shares (the
"Shares") of the Common Stock of ILOG S.A. (the "Company") under and pursuant to
the Company's 1996 Stock Option Plan (the "Plan") adopted by the Board of
Directors on May 30, 1996, as amended and the Stock Option Agreement dated
_______________ , 199_, (the "Option Agreement"). The subscription price for the
Shares shall be FF ___________ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full subscription price for the Shares.
3. Representation of Optionee. The Optionee acknowledges that Optionee
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company) of the Shares, the Optionee shall
have, as an Optionee, no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, except those
the Optionee may have as a shareholder of the Company. No adjustment will be
made
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for rights in respect of which the record date is prior to the issuance date for
the Shares, except as provided in Section 11 of the Plan.
5. Tax Consultation. The Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's subscription or disposition
of the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the subscription or
disposition of the Shares. The Optionee is not relying on the Company for any
tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. Reference is made to that certain Employment
Agreement by and between Optionee and ILOG, Inc. dated as of August __, 1997
(the "Employment Agreement"). This Exercise Notice, the Plan the Option
Agreement and the Employment Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Purchaser. In the event of any conflict between the provisions of this Exercise
Notice and the provisions of the Employment Agreement, the Employment Agreement
shall, to the extent of such conflict, control. This Exercise Notice is governed
by the laws of the Republic of France.
This Exercise Notice is delivered in two originals, one of which shall be
returned to the Optionee.
Submitted by: Accepted by:
OPTIONEE(*) ILOG S.A.
--------------------------------
Signature by:
-------------------------------- Its: CEO
Print Name
ADDRESS: ADDRESS:
-------------------------------- ILOG S.A.
--------------
(*) The signature of the Optionee must be preceded by the following
manuscript mention "accepted for formal and irrevocable subscription of ______
Shares."
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EXHIBIT C
(Form of Confidential Information and Invention Assignment Agreement)
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ILOG, INC.
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
As a condition of my employment with ILOG, INC., its subsidiaries,
affiliates, successors or assigns (together the "COMPANY"), and in consideration
of my employment with the Company and my receipt of the compensation now and
hereafter paid to me by Company, I agree to the following:
1. CONFIDENTIAL INFORMATION.
(a) COMPANY INFORMATION. I agree at all times during the term
of my employment and thereafter, to hold in strictest confidence, and not to
use, except for the benefit of the Company, or to disclose to any person, firm
or corporation without written authorization of the Company, any Confidential
Information of the Company. I understand that "CONFIDENTIAL INFORMATION" means
any Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
customer lists and customers (including, but not limited to, customers of the
Company on whom I called or with whom I became acquainted during the term of my
employment), markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed to me by the Company
either directly or indirectly in writing, orally or by drawings or observation
of parts or equipment. I further understand that Confidential Information does
not include any of the foregoing items which has become publicly known and made
generally available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.
(b) FORMER EMPLOYER INFORMATION. I agree that I will not,
during my employment with the Company, improperly use or disclose any
proprietary information or trade secrets of any former or concurrent employer or
other person or entity and that I will not bring onto the premises of the
Company any unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by such employer,
person or entity.
(c) THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third party.
2. INVENTIONS.
(a) INVENTIONS RETAINED AND LICENSED. I have attached hereto,
as Exhibit A, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by me prior to my
employment with CPLEX or the Company (collectively referred to as "PRIOR
INVENTIONS"), which belong to me, which relate to the Company's proposed
business, products
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or research and development, and which are not assigned to the Company
hereunder; or, if no such list is attached, I represent that there are no such
Prior Inventions. If in the course of my employment with the Company, I
incorporate into a Company product, process or machine a Prior Invention owned
by me or in which I have an interest, the Company is hereby granted and shall
have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to
make, have made, modify, use and sell such Prior Invention as part of or in
connection with such product, process or machine.
(b) ASSIGNMENT OF INVENTIONS. I agree that I will promptly
make full written disclosure to the Company, will hold in trust for the sole
right and benefit of the Company, and hereby assign to the Company, or its
designee, all my right, title, and interest in and to any and all inventions,
original works of authorship, developments, concepts, improvements or trade
secrets, whether or not patentable or registrable under copyright or similar
laws, which I may solely or jointly conceive or develop or reduce to practice,
or cause to be conceived or developed or reduced to practice, during the period
of time I am in the employ of the Company (collectively referred to as
"INVENTIONS"), except as provided in Section 2(e) below. I further acknowledge
that, except as provided in Section 2(e) below, all original works of authorship
which are made by me (solely or jointly with others) within the scope of and
during the period of my employment with the Company and which are protectible by
copyright are "works made for hire," as that term is defined in the United
States Copyright Act.
(c) MAINTENANCE OF RECORDS. I agree to keep and maintain
adequate and current written records of all Inventions made by me (solely or
jointly with others) during the term of my employment with the Company. The
records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company. The records will be available to and
remain the sole property of the Company at all times.
(d) PATENT AND COPYRIGHT REGISTRATIONS. I agree to assist the
Company, or its designee, at the Company's expense, in every proper way to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If the Company is unable
because of my mental or physical incapacity or for any other reason to secure my
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original works
of authorship assigned to the Company as above, then I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as
my agent and attorney in fact, to act for and in my behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by me.
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(e) EXCEPTION TO ASSIGNMENTS. I understand that the provisions
of this Agreement requiring assignment of Inventions to the Company do not apply
to any invention which qualifies fully under the provisions of California Labor
Code Section 2870 (attached hereto as Exhibit A).
3. CONFLICTING EMPLOYMENT. I agree that, during the term of my
employment with the Company, I will not engage in any other employment,
occupation, consulting or other business activity directly related to the
business in which the Company is now involved or becomes involved during the
term of my employment, nor will I engage in any other activities that conflict
with my obligations to the Company provided, however, that the Company
recognizes and agrees to my continued academic association and activities with
respect to Rice University.
4. RETURNING COMPANY DOCUMENTS. I agree that, at the time of leaving
the employ of the Company, I will deliver to the Company (and will not keep in
my possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications, drawings
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any aforementioned items developed by me pursuant to my
employment with the Company or otherwise belonging to the Company, its
successors or assigns. In the event of the termination of my employment, I agree
to sign and deliver the "Termination Certification" attached hereto as Exhibit
B.
5. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ
of the Company, I hereby grant consent to notification by the Company to my new
employer about my rights and obligations under this Agreement.
6. REPRESENTATIONS. I agree to execute any proper oath or verify any
proper document required to carry out the terms of this Agreement. I represent
that my performance of all the terms of this Agreement will not breach any
agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any oral or written agreement in
conflict herewith.
7. ARBITRATION AND EQUITABLE RELIEF.
(a) ARBITRATION. Except as provided in Section 8(b) below, I
agree that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement, shall be
settled by arbitration to be held in Santa Xxxxx County, California, in
accordance with the rules then in effect of the American Arbitration
Association. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction. The
Company and I shall each pay one-half of the costs and expenses of such
arbitration, and each of us shall separately pay our counsel fees and expenses.
(b) EQUITABLE REMEDIES. I agree that it would be impossible or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 1, 2, and 4 herein. Accordingly, I agree that if
I breach any of such Sections, the Company will have available, in addition to
any other right or remedy available, the right to obtain an injunction from a
court of competent jurisdiction restraining such breach or threatened breach and
to specific performance of any such provision of this Agreement.
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8. GENERAL PROVISIONS.
(a) GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This
Agreement will be governed by the laws of the State of California. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in California for any lawsuit filed there against me by the Company
arising from or relating to this Agreement.
(b) ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding between the Company and me relating to the subject
matter herein and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this agreement,
will be effective unless in writing signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
(c) SEVERABILITY. If one or more of the provisions in this
Agreement are deemed void by law, then the remaining provisions will continue in
full force and effect.
(d) SUCCESSORS AND ASSIGNS. This Agreement will be binding
upon my heirs, executors, administrators and other legal representatives and
will be for the benefit of the Company, its successors, and its assigns.
Date: August 20, 1997
-----------------------------------
Signature
Employee
------------------------
Witness
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EXHIBIT A
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."
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EXHIBIT B
ILOG, INC.
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I
failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to ILOG, Inc., its subsidiaries, affiliates, successors or
assigns (together, the "COMPANY").
I further certify that I have complied with all the terms of the
Company's Confidential Information and Invention Assignment Agreement signed by
me, including the reporting of any inventions and original works of authorship
(as defined therein), conceived or made by me (solely or jointly with others)
covered by that agreement.
I further agree that, in compliance with the Confidential Information
and Invention Assignment Agreement, I will preserve as confidential all trade
secrets, confidential knowledge, data or other proprietary information relating
to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of the Company or any of its
employees, clients, consultants or licensees.
I further agree that for twelve (12) months from this date, I will not
hire any employees of the Company and I will not solicit, induce, recruit or
encourage any of the Company's employees to leave their employment.
Date:
--------------
-----------------------------------
(Employee's Signature)
Xxxx Xxxx
-----------------------------------
(Type/Print Employee's Name)
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EXHIBIT E(ii)
EMPLOYMENT AGREEMENT FOR XXXXX XXXX
119
EXHIBIT E(ii)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of the _____ day
of August, 1997 the ("EFFECTIVE DATE"), by and between ILOG, Inc., a California
corporation (the "COMPANY") and the undersigned employee ("EMPLOYEE") of
Company.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties hereto as
follows:
1. EMPLOYMENT BY COMPANY; DUTIES.
(a) Employment. Subject to the terms and conditions set forth
herein, the Company hereby agrees to employ Employee in the position of
Strategic Marketing Director, having all the duties and responsibilities
customarily associated with such positions, subject to modification from time to
time by the Company, and Employee hereby accepts such employment by the Company.
Employee's duties shall initially include the strategic market planning for
CPLEX-related products, and Employee shall report to the Company's Executive
Vice President, CPLEX Business. With respect to any modifications of Employee's
position and/or duties during the term of Employee's employment hereunder, the
Company shall give due consideration to Employee's skills and experience in
determining the appropriate position and duties of Employee and shall not,
without Employee's consent, modify Employee's position or duties in a manner
inconsistent with Employee's status as a director-level employee of the Company;
provided, however, that the foregoing shall in no way limit the ability of the
Company to terminate Employee's employment at any time for any reason or for no
reason. Such employment shall commence on the Effective Date and shall continue
until terminated as provided in Paragraph 3 hereof. Employee shall not, without
the prior written consent of Company, directly or indirectly, alone or as part
of any group, association or organization, be actively engaged in or concerned
with any other duties or pursuits which interfere with the performance of
Employee's duties to Company or which may be contrary to the best interests of
the Company.
(b) Company Policies. The employment relationship between the
parties shall also be governed by the general employment policies and practices
of the Company now in effect or which may become effective in the future,
including those relating to the protection of confidential information and trade
secrets, except that when the terms of this Agreement differ from or are in
conflict with the Company's general employment policies or practices, this
Agreement shall control.
120
2. COMPENSATION AND BENEFITS.
(a) Base Salary; Bonuses; Compensation for Part-Time
Employment. As compensation for the services to be rendered by Employee during
her Full-Time Employment hereunder, including all services rendered to entities
affiliated with the Company, the Company agrees to pay Employee in accordance
with the Company's regular payroll practices, direct salary compensation at the
rate of $100,000 per year (as adjusted from time to time pursuant to the terms
hereof, the "BASE SALARY"), commencing on the Effective Date. In addition,
Employee shall be eligible to receive a performance bonus in the target amount
of $30,000, with the actual bonus to be determined based on the achievement of
performance criteria to be determined by mutual agreement of the Company and
Employee (as adjusted from time to time pursuant to the terms hereof, the
"BONUS"). For purposes of this Agreement, "FULL-TIME EMPLOYMENT" shall mean all
periods of time during which Employee is devoting all of Employee's working
time, attention and energies to performing Employee's duties to the Company. In
the event Employee desires to reduce the level of Employee's time, attention or
energies devoted to the Company to below Full-Time Employment levels, Employee
shall give the Company sixty day's written notice of such request and the
Company shall not unreasonably deny such request. Such notice shall quantify
Employee's desired level of time, attention and energies to be devoted to the
Company and the effective date of such reduction (any such periods of time
during which such reduction are in effect, "PART-TIME EMPLOYMENT"). Employee
may, subject to the consent of the Company which consent shall not be
unreasonably withheld, request to resume Full-Time Employment or further adjust
the level of Employee's Part-Time Employment upon sixty day's notice. During any
period of Part-Time Employment, Employee's Base Salary and Bonus shall be
proportionately adjusted by the Company in good faith. Such good-faith
adjustments by the Company shall be conclusive and binding on Employee.
(b) Employee Benefits. Employee shall be eligible to
participate in the employee benefit plans and arrangements which are available
or which become available, in the discretion of the Company's Board of
Directors, to other employees of the Company, subject in each case to the
generally applicable terms and conditions of the plan or arrangement in question
and to the determination of any committee administering such plan or
arrangement. The Company's presently available benefits are listed on Exhibit A
hereto. Employee's benefits shall not be reduced during periods of Part-Time
Employment, except that benefits that are based on levels of salary and bonus
compensation, such as moneys paid during periods of paid vacation, shall be
proportionately adjusted by the Company in good faith.
(c) Annual Compensation Review. Employee and the Company shall
review Employee's Base Salary and Bonus structure annually and may make mutually
agreeable adjustments at such times.
3. TERM AND TERMINATION.
(a) Term; Effect of Termination. Unless terminated by either
party as provided below, this Agreement shall remain in full force and effect
until the date three years after the Effective Date (such three year period, the
"DEFAULT TERM") and may be extended for one annual term upon the mutual
agreement of Employee and the Company (any such extension period, the "EXTENDED
TERM"). Provisions of this Agreement that expressly relate to periods of time
following
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the term of this Agreement or of Employee's employment shall survive any
termination or expiration of this Agreement or of Employee's employment with the
Company.
(b) Limitation of Liability upon Termination. If Employee's
employment terminates (or is terminated) for any reason (or for no reason),
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided in this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
policies at the time of termination. Subject to the terms and conditions hereof,
Employee acknowledges that Employee's employment hereunder shall be on an
at-will basis and that Company may terminate Employee's employment hereunder at
any time with or without Cause.
(c) Termination for Cause; Definition of "Cause". Employee's
employment with the Company may be terminated for Cause at any time by the
Company, upon reasonable notice to Employee of the circumstances leading to such
termination for Cause. For the purpose of this Agreement, "CAUSE" shall mean (i)
the substantial and continuing failure to render services to the Company or its
affiliated entities in accordance with Employee's assigned duties (other than as
a result of Employee's Disability, as defined below, or other medically
determinable serious physical impairment), as determined by the Board of
Directors of the Company's parent entity, if such failure remains uncured for a
period of 30 days following delivery of notice to Employee of such failure; (ii)
the conviction of a felony; (iii) gross negligence, dishonesty, breach of
fiduciary duty or material breach of the terms of any confidentiality,
noncompetition or other agreement in favor of the Company or its affiliated
entities; (iv) the commission of an act of fraud or embezzlement which results
in loss, damage or injury to the Company or its affiliated entities, whether
directly or indirectly; or (v) the commission of an act which constitutes unfair
competition with the Company or its affiliated entities or which induces any
customer of the Company or its affiliated entities to break a contract with the
Company or its affiliated entities.
(d) Continuation of Option Vesting upon Certain Events. In
connection with the commencement of Employee's employment with the Company,
Employee has been or will be granted an option to purchase up to 200,000 shares
of ILOG S.A. under its 1996 Stock Option Plan pursuant to an option agreement in
substantially the form attached hereto as Exhibit B (the "OPTION"). Upon
termination of Employee's employment for any reason, Employee shall have the
right to exercise, within 90 days of such termination, the portion of Employee's
Option that is then-exercisable pursuant to the terms and conditions of such
option agreement and such option plan; provided, however, that, notwithstanding
any term of such option agreement or such option plan to the contrary, if at any
time prior to such time as the Option becomes fully vested and exercisable,
either (X) the Company terminates Employee's employment with the Company without
Employee's consent other than for Cause or (Y) Employee dies or becomes Disabled
(as defined below) then, in each case, Employee's Option shall (i) continue to
vest until fully vested and (ii) continue to be exercisable to the extent
vested, in each case, as if Employee had remained alive, not Disabled and
employed by the Company throughout the term of the Option.
(e) Continuation of Salary, Bonus and Benefits upon
Termination without Cause. If the Company terminates Employee's employment with
the Company during the Default Term without Employee's consent other than for
Cause, then, during the remaining Default Term, the
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Company shall continue to pay Employee the annual Base Salary and target Bonus
in effect immediately prior to such termination and shall continue to provide
Employee with benefits substantially equivalent to those being provided
immediately prior to such termination.
(f) Definitions of Disability and Disabled. For purposes of
this Agreement, the terms "Disabled" and "Disability" shall refer to a state of
Employee's "permanent and total disability" as such term is defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended.
4. PROPRIETARY INFORMATION; NONINTERFERENCE. As a condition to the
effectiveness of this Agreement, Employee shall execute the Proprietary
Information and Invention Assignment Agreement attached hereto as Exhibit C.
5. MISCELLANEOUS.
(a) Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or upon the third day after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the Company or Employee at the addresses set forth on the signature
page of this Agreement, or at such other address as such party may designate by
ten (10) days advance written notice to the other party.
(b) Severability. Nothing in this Agreement shall be construed
so as to require the commission of any act contrary to law and wherever there is
any conflict between any provision of this Agreement and any law, statute,
ordinance, order or regulation, the latter shall prevail, but in such event any
provision of this Agreement shall be curtailed and limited only to the extent
necessary to bring it within applicable legal requirements. If any provision of
this Agreement should be held invalid or unenforceable, the remaining provisions
shall be unaffected by such a holding.
(c) Tax Matters. Employee has consulted Employee's own
independent tax and legal advisors with respect to the transactions contemplated
by this Agreement and is not relying in any respect on the Company or any
officer, employee, or other agent or representative of the Company to provide
any advice with respect to the federal, state, local or foreign tax consequences
of the transactions contemplated hereby. Employee alone will bear Employee's tax
consequences, if any, associated with the transactions contemplated hereby and
will not seek any reimbursement in connection with any such tax consequences
from the Company.
(d) Complete Agreement. This Agreement and the exhibits
attached hereto contain the entire agreement and understanding between the
parties relating to the subject matter hereof, and supersedes any prior
understandings, agreements, or representations by or between the parties,
written or oral, relating to the subject matter hereof.
(e) Successors and Assigns. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company by way of reorganization, merger or
consolidation and any assignee of all or substantially all of its
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business and assets, but except as to any such successor or assignee of the
Company, neither this Agreement nor any rights or benefits hereunder may be
assigned by the Company or Employee.
(f) Amendments. Notwithstanding anything to the contrary
contained in this Agreement, the parties to this Agreement may make any
modification or amendment to this Agreement only by a mutual agreement in
writing.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to contracts entered into and to be performed entirely within the
State of California.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the day and year first above written.
ILOG, INC.
By:
-----------------------------------
EMPLOYEE
--------------------------------------
(Signature)
Xxxxx Xxxx
--------------------------------------
(Print Name)
--------------------------------------
--------------------------------------
(Print Address)
--------------------------------------
(Print Telephone Number)
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Exhibit A
While Employee remains employed with the Company, Employee shall be eligible for
all benefits offered to Company employees generally, currently including Aetna
Medical HMO/PPO coverage, dental and vision insurance plans, Accidental Death &
Disability Insurance, Section 125 pre-tax medical and dependent care expense
reimbursement plan, and 401(k) plan. In addition, Employee shall be entitled to
paid vacation during each year of employment of the greater of (i) four weeks or
(ii) the then-current annual paid vacation allowed by the Company's standard
benefit policy (currently three weeks).
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Exhibit B
(Form of Option Agreement is Attached)
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126
ILOG S.A.
1996 STOCK OPTION GRANT AGREEMENT
PART I
NOTICE OF STOCK OPTION GRANT
Ms. Xxxxx Xxxx
You have been granted an Option to subscribe Shares of the
Company, subject to the terms and conditions of the 1996 Stock Option Plan, as
amended (the "Plan"), and this Option Agreement. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.
Grant Number: SO96/97/
Date of Grant: August 20, 1997
Vesting Commencement Date: August 20, 1997
Vesting period: Four years
Share Per Value: FF 4.00
Exercise Price per Share: FF
Total Number of Shares Granted: 200,000
Total Exercise Price: FF
Type of Option: Incentive Stock Option
Term/Expiration Date: Ten Years
127
VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in
accordance with the following schedule:
25% of the Shares subject to the Option shall vest twelve
months after the Vesting Commencement Date, and 1/48 of the Shares subject to
the Option shall vest each month thereafter.
Except as may be provided in that certain Employment Agreement
by and between Optionee and ILOG, Inc. dated as of August 20, 1997 (the
"Employment Agreement"), vesting shall continue only during Optionee's
Continuous Status as a Beneficiary.
TERMINATION PERIOD:
Except as provided in the Employment Agreement, this Option
may be exercised for ninety (90) days after termination of the Optionee's
employment or term of office with the Company or an Affiliated Company as the
case may be. Upon the Death or Disability of the Optionee, this Option may be
exercised for such longer period as provided in the Plan or the Employment
Agreement. Save as provided in the Plan, in no event shall this Option be
exercised later than the Term/Expiration Date as provided above.
By his signature and the signature of the Company's
representative below, the Optionee and the Company agree that this Option is
granted under and, except to the extent inconsistent with the Employment
Agreement, governed by the terms and conditions of the Plan and this Option
Agreement. The Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had the opportunity to obtain advice of counsel prior to executing
this Option Agreement and fully understands all provisions of the Plan and
Option Agreement. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement which are not governed by
the Employment Agreement. The Optionee further agrees to notify the Company upon
any change in the residence address indicated below.
The Company and the Optionee recognize that the Plan has been
prepared both in the French and the English language. The French version is the
version that binds the parties, notwithstanding this, the English version
represents an acceptable translation and, consequently, no official translation
will be required for the interpretation of this agreement.
OPTIONEE: ILOG S.A.
------------------------------- --------------------------------------
Signature By:
Print Name
-------------------------------
Residence Address
-------------------------------
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ILOG S. A.
1996 STOCK OPTION GRANT AGREEMENT
PART II
TERMS AND CONDITIONS
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to subscribe the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the 1996 Stock Option Plan, as amended, which is incorporated
herein by reference. In the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Non-statutory Stock Option.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of Optionee's employment or
term of office, the exercisability of the Option is governed by the applicable
provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached hereto (the "Exercise Notice"), comprising
a share subscription form (bulletin de souscription) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company or its
designated representative or by facsimile message to be immediately confirmed by
certified mail to the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
129
No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law as set out under Section 14(a) of the Plan.
Upon the issuance of the Shares, the Optionee shall be
entitled to receive such Shares in the form of American Depositary Shares by
completing and signing the appropriate box of the Exercise Notice attached
hereto.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(1) wire transfer;
(2) check;
(3) delivery of a properly executed notice together with
such other documentation as the Administrator and the broker,
if applicable, shall require to effect exercise of the Option
and delivery to the Company of the sale or loan proceeds
required to pay the exercise price; or
(4) any combination of the foregoing methods of payment.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Terms of Option. Subject as provided in the Plan, this Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Option Agreement and the Employment Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. In the event of any
conflict between the provisions of this Option Agreement and the provisions of
the Employment Agreement, the Employment Agreement shall, to the extent of such
conflict, control. This Option Agreement is governed by the laws of the Republic
of France.
Any claim or dispute arising under the Plan or this Agreement shall be subject
to the exclusive jurisdiction of the Tribunal de Grande Instance of Creteil.
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CONSENT OF SPOUSE
(TO BE SIGNED BY RESIDENT OF CALIFORNIA AND OTHER COMMUNITY PROPERTY STATES)
The undersigned spouse of Optionee has read and hereby
approves the terms and conditions of the Plan and this Option Agreement. In
consideration of the Company's granting his or her spouse the right to subscribe
Shares as set forth in the Plan and this Option Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan
and this Option Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under the Plan or this Option Agreement.
---------------------------------------
Spouse of Optionee
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EXHIBIT A
ILOG S.A.
SOCIETE ANONYME HAVING A SHARE CAPITAL OF 24,798,780 FRANCS
REGISTERED OFFICE: []
1996 STOCK OPTION PLAN
EXERCISE NOTICE
(SHARE SUBSCRIPTION FORM)
ILOG S.A.
[ ]
Date:
Attention:
1. Exercise of Option. Effective as of today, , 199__,
the undersigned hereby elects to subscribe (_____________ )
shares (the "Shares") of the Common Stock of ILOG S.A. (the "Company") under and
pursuant to the Company's 1996 Stock Option Plan (the "Plan") adopted by the
Board of Directors on May 30, 1996, as amended and the Stock Option Agreement
dated _________________, 199_, (the "Option Agreement"). The subscription
price for the Shares shall be FF ____________ , as required by the Option
Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full subscription price for the Shares.
3. Representation of Optionee. The Optionee acknowledges that Optionee
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company) of the Shares, the Optionee shall
have, as an Optionee, no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, except those
the Optionee may have as a shareholder of the Company. No adjustment will be
made
132
for rights in respect of which the record date is prior to the issuance date for
the Shares, except as provided in Section 11 of the Plan.
5. Tax Consultation. The Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's subscription or disposition
of the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the subscription or
disposition of the Shares. The Optionee is not relying on the Company for any
tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. Reference is made to that certain Employment
Agreement by and between Optionee and ILOG, Inc. dated as of August __, 1997
(the "Employment Agreement"). This Exercise Notice, the Plan the Option
Agreement and the Employment Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Purchaser. In the event of any conflict between the provisions of this Exercise
Notice and the provisions of the Employment Agreement, the Employment Agreement
shall, to the extent of such conflict, control. This Exercise Notice is governed
by the laws of the Republic of France.
This Exercise Notice is delivered in two originals, one of which shall be
returned to the Optionee.
Submitted by: Accepted by:
OPTIONEE(*) ILOG S.A.
-------------------------------------------
Signature by:
------------------------------------------- Its: CEO
Print Name
ADDRESS: ADDRESS:
------------------------------------------- ILOG S.A.
---------------------------
(*) The signature of the Optionee must be preceded by the following
manuscript mention "accepted for formal and irrevocable subscription of
________________ Shares."
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133
Exhibit C
(Form of Confidential Information and Invention Assignment Agreement)
-8-
134
ILOG, INC.
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
As a condition of my employment with ILOG, INC., its subsidiaries,
affiliates, successors or assigns (together the "COMPANY"), and in consideration
of my employment with the Company and my receipt of the compensation now and
hereafter paid to me by Company, I agree to the following:
1. CONFIDENTIAL INFORMATION.
(a) COMPANY INFORMATION. I agree at all times during the term
of my employment and thereafter, to hold in strictest confidence, and not to
use, except for the benefit of the Company, or to disclose to any person, firm
or corporation without written authorization of the Company, any Confidential
Information of the Company. I understand that "CONFIDENTIAL INFORMATION" means
any Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
customer lists and customers (including, but not limited to, customers of the
Company on whom I called or with whom I became acquainted during the term of my
employment), markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed to me by the Company
either directly or indirectly in writing, orally or by drawings or observation
of parts or equipment. I further understand that Confidential Information does
not include any of the foregoing items which has become publicly known and made
generally available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.
(b) FORMER EMPLOYER INFORMATION. I agree that I will not,
during my employment with the Company, improperly use or disclose any
proprietary information or trade secrets of any former or concurrent employer or
other person or entity and that I will not bring onto the premises of the
Company any unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by such employer,
person or entity.
(c) THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third party.
2. INVENTIONS.
(a) INVENTIONS RETAINED AND LICENSED. I have attached hereto,
as Exhibit A, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by me prior to my
employment with CPLEX or the Company (collectively referred to as "PRIOR
INVENTIONS"), which belong to me, which relate to the Company's proposed
business, products
135
or research and development, and which are not assigned to the Company
hereunder; or, if no such list is attached, I represent that there are no such
Prior Inventions. If in the course of my employment with the Company, I
incorporate into a Company product, process or machine a Prior Invention owned
by me or in which I have an interest, the Company is hereby granted and shall
have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to
make, have made, modify, use and sell such Prior Invention as part of or in
connection with such product, process or machine.
(b) ASSIGNMENT OF INVENTIONS. I agree that I will promptly
make full written disclosure to the Company, will hold in trust for the sole
right and benefit of the Company, and hereby assign to the Company, or its
designee, all my right, title, and interest in and to any and all inventions,
original works of authorship, developments, concepts, improvements or trade
secrets, whether or not patentable or registrable under copyright or similar
laws, which I may solely or jointly conceive or develop or reduce to practice,
or cause to be conceived or developed or reduced to practice, during the period
of time I am in the employ of the Company (collectively referred to as
"INVENTIONS"), except as provided in Section 2(e) below. I further acknowledge
that, except as provided in Section 2(e) below, all original works of authorship
which are made by me (solely or jointly with others) within the scope of and
during the period of my employment with the Company and which are protectible by
copyright are "works made for hire," as that term is defined in the United
States Copyright Act.
(c) MAINTENANCE OF RECORDS. I agree to keep and maintain
adequate and current written records of all Inventions made by me (solely or
jointly with others) during the term of my employment with the Company. The
records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company. The records will be available to and
remain the sole property of the Company at all times.
(d) PATENT AND COPYRIGHT REGISTRATIONS. I agree to assist the
Company, or its designee, at the Company's expense, in every proper way to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If the Company is unable
because of my mental or physical incapacity or for any other reason to secure my
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original works
of authorship assigned to the Company as above, then I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as
my agent and attorney in fact, to act for and in my behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by me.
2
136
(e) EXCEPTION TO ASSIGNMENTS. I understand that the provisions
of this Agreement requiring assignment of Inventions to the Company do not apply
to any invention which qualifies fully under the provisions of California Labor
Code Section 2870 (attached hereto as Exhibit A).
3. CONFLICTING EMPLOYMENT. I agree that, during the term of my
employment with the Company, I will not engage in any other employment,
occupation, consulting or other business activity directly related to the
business in which the Company is now involved or becomes involved during the
term of my employment, nor will I engage in any other activities that conflict
with my obligations to the Company provided, however, that the Company
recognizes and agrees to my continued academic association and activities with
respect to Rice University.
4. RETURNING COMPANY DOCUMENTS. I agree that, at the time of leaving
the employ of the Company, I will deliver to the Company (and will not keep in
my possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications, drawings
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any aforementioned items developed by me pursuant to my
employment with the Company or otherwise belonging to the Company, its
successors or assigns. In the event of the termination of my employment, I agree
to sign and deliver the "Termination Certification" attached hereto as Exhibit
B.
5. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ
of the Company, I hereby grant consent to notification by the Company to my new
employer about my rights and obligations under this Agreement.
6. REPRESENTATIONS. I agree to execute any proper oath or verify any
proper document required to carry out the terms of this Agreement. I represent
that my performance of all the terms of this Agreement will not breach any
agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any oral or written agreement in
conflict herewith.
7. ARBITRATION AND EQUITABLE RELIEF.
(a) ARBITRATION. Except as provided in Section 8(b) below, I
agree that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement, shall be
settled by arbitration to be held in Santa Xxxxx County, California, in
accordance with the rules then in effect of the American Arbitration
Association. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction. The
Company and I shall each pay one-half of the costs and expenses of such
arbitration, and each of us shall separately pay our counsel fees and expenses.
(b) EQUITABLE REMEDIES. I agree that it would be impossible or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 1, 2, and 4 herein. Accordingly, I agree that if
I breach any of such Sections, the Company will have available, in addition to
any other right or remedy available, the right to obtain an injunction from a
court of competent jurisdiction restraining such breach or threatened breach and
to specific performance of any such provision of this Agreement.
3
137
8. GENERAL PROVISIONS.
(a) GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This
Agreement will be governed by the laws of the State of California. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in California for any lawsuit filed there against me by the Company
arising from or relating to this Agreement.
(b) ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding between the Company and me relating to the subject
matter herein and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this agreement,
will be effective unless in writing signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
(c) SEVERABILITY. If one or more of the provisions in this
Agreement are deemed void by law, then the remaining provisions will continue in
full force and effect.
(d) SUCCESSORS AND ASSIGNS. This Agreement will be binding
upon my heirs, executors, administrators and other legal representatives and
will be for the benefit of the Company, its successors, and its assigns.
Date: August 20, 1997
-----------------------------------
Signature
Employee
------------------------
Witness
4
138
EXHIBIT A
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."
5
139
EXHIBIT B
ILOG, INC.
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I
failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to ILOG, Inc., its subsidiaries, affiliates, successors or
assigns (together, the "COMPANY").
I further certify that I have complied with all the terms of the
Company's Confidential Information and Invention Assignment Agreement signed by
me, including the reporting of any inventions and original works of authorship
(as defined therein), conceived or made by me (solely or jointly with others)
covered by that agreement.
I further agree that, in compliance with the Confidential Information
and Invention Assignment Agreement, I will preserve as confidential all trade
secrets, confidential knowledge, data or other proprietary information relating
to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of the Company or any of its
employees, clients, consultants or licensees.
I further agree that for twelve (12) months from this date, I will not
hire any employees of the Company and I will not solicit, induce, recruit or
encourage any of the Company's employees to leave their employment.
Date: August 20, 1997
-----------------------------------
(Employee's Signature)
Xxxxx Xxxx
-----------------------------------
(Type/Print Employee's Name)
6
140
EXHIBIT E(iii)
EMPLOYMENT AGREEMENT FOR XXXXXX XXXXX
141
EXHIBIT E(iii)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of the _____ day
of August, 1997 the ("EFFECTIVE DATE"), by and between ILOG, Inc., a California
corporation (the "COMPANY") and the undersigned employee ("EMPLOYEE") of
Company.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties hereto as
follows:
1. EMPLOYMENT BY COMPANY; DUTIES.
(a) Employment. Subject to the terms and conditions set forth
herein, the Company hereby agrees to employ Employee in the position of
Strategic Marketing Director, having all the duties and responsibilities
customarily associated with such positions, subject to modification from time to
time by the Company, and Employee hereby accepts such employment by the Company.
Employee's duties shall initially include the strategic market planning for
CPLEX-related products, and Employee shall report to the Company's Executive
Vice President, CPLEX Business. With respect to any modifications of Employee's
position and/or duties during the term of Employee's employment hereunder, the
Company shall give due consideration to Employee's skills and experience in
determining the appropriate position and duties of Employee and shall not,
without Employee's consent, modify Employee's position or duties in a manner
inconsistent with Employee's status as a director-level employee of the Company;
provided, however, that the foregoing shall in no way limit the ability of the
Company to terminate Employee's employment at any time for any reason or for no
reason. Such employment shall commence on the Effective Date and shall continue
until terminated as provided in Paragraph 3 hereof. Employee shall not, without
the prior written consent of Company, directly or indirectly, alone or as part
of any group, association or organization, be actively engaged in or concerned
with any other duties or pursuits which interfere with the performance of
Employee's duties to Company or which may be contrary to the best interests of
the Company.
(b) Company Policies. The employment relationship between the
parties shall also be governed by the general employment policies and practices
of the Company now in effect or which may become effective in the future,
including those relating to the protection of confidential information and trade
secrets, except that when the terms of this Agreement differ from or are in
conflict with the Company's general employment policies or practices, this
Agreement shall control.
142
2. COMPENSATION AND BENEFITS.
(a) Base Salary; Bonuses; Compensation for Part-Time
Employment. As compensation for the services to be rendered by Employee during
his Full-Time Employment hereunder, including all services rendered to entities
affiliated with the Company, the Company agrees to pay Employee in accordance
with the Company's regular payroll practices, direct salary compensation at the
rate of $135,000 per year (as adjusted from time to time pursuant to the terms
hereof, the "BASE SALARY"), commencing on the Effective Date. In addition,
Employee shall be eligible to receive a performance bonus in a target amount
which is commensurate with that of similarly situated employees, with the
actual bonus to be determined based on the achievement of performance criteria
to be determined by mutual agreement of the Company and Employee (as adjusted
from time to time pursuant to the terms hereof, the "BONUS"). For purposes of
this Agreement, "FULL-TIME EMPLOYMENT" shall mean all periods of time during
which Employee is devoting all of Employee's working time, attention and
energies to performing Employee's duties to the Company. In the event Employee
desires to reduce the level of Employee's time, attention or energies devoted to
the Company to below Full-Time Employment levels, Employee shall give the
Company sixty day's written notice of such request and the Company shall not
unreasonably deny such request. Such notice shall quantify Employee's desired
level of time, attention and energies to be devoted to the Company and the
effective date of such reduction (any such periods of time during which such
reduction are in effect, "PART-TIME EMPLOYMENT"). Employee may, subject to the
consent of the Company which consent shall not be unreasonably withheld, request
to resume Full-Time Employment or further adjust the level of Employee's
Part-Time Employment upon sixty day's notice. During any period of Part-Time
Employment, Employee's Base Salary and Bonus shall be proportionately adjusted
by the Company in good faith. Such good-faith adjustments by the Company shall
be conclusive and binding on Employee.
(b) Employee Benefits. Employee shall be eligible to
participate in the employee benefit plans and arrangements which are available
or which become available, in the discretion of the Company's Board of
Directors, to other employees of the Company, subject in each case to the
generally applicable terms and conditions of the plan or arrangement in question
and to the determination of any committee administering such plan or
arrangement. The Company's presently available benefits are listed on Exhibit A
hereto. Employee's benefits shall not be reduced during periods of Part-Time
Employment, except that benefits that are based on levels of salary and bonus
compensation, such as moneys paid during periods of paid vacation, shall be
proportionately adjusted by the Company in good faith.
(c) Annual Compensation Review. Employee and the Company shall
review Employee's Base Salary and Bonus structure annually and may make mutually
agreeable adjustments at such times.
3. TERM AND TERMINATION.
(a) Term; Effect of Termination. Unless terminated by either
party as provided below, this Agreement shall remain in full force and effect
until the date three years after the Effective Date (such three year period, the
"DEFAULT TERM") and may be extended for one annual term upon the mutual
agreement of Employee and the Company (any such extension period, the
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143
"EXTENDED TERM"). Provisions of this Agreement that expressly relate to periods
of time following the term of this Agreement or of Employee's employment shall
survive any termination or expiration of this Agreement or of Employee's
employment with the Company.
(b) Limitation of Liability upon Termination. If Employee's
employment terminates (or is terminated) for any reason (or for no reason),
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided in this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
policies at the time of termination. Subject to the terms and conditions hereof,
Employee acknowledges that Employee's employment hereunder shall be on an
at-will basis and that Company may terminate Employee's employment hereunder at
any time with or without Cause.
(c) Termination for Cause; Definition of "Cause". Employee's
employment with the Company may be terminated for Cause at any time by the
Company, upon reasonable notice to Employee of the circumstances leading to such
termination for Cause. For the purpose of this Agreement, "CAUSE" shall mean (i)
the substantial and continuing failure to render services to the Company or its
affiliated entities in accordance with Employee's assigned duties (other than as
a result of Employee's Disability, as defined below, or other medically
determinable serious physical impairment), as determined by the Board of
Directors of the Company's parent entity, if such failure remains uncured for a
period of 30 days following delivery of notice to Employee of such failure; (ii)
the conviction of a felony; (iii) gross negligence, dishonesty, breach of
fiduciary duty or material breach of the terms of any confidentiality,
noncompetition or other agreement in favor of the Company or its affiliated
entities; (iv) the commission of an act of fraud or embezzlement which results
in loss, damage or injury to the Company or its affiliated entities, whether
directly or indirectly; or (v) the commission of an act which constitutes unfair
competition with the Company or its affiliated entities or which induces any
customer of the Company or its affiliated entities to break a contract with the
Company or its affiliated entities.
(d) Continuation of Option Vesting upon Certain Events. In
connection with the commencement of Employee's employment with the Company,
Employee has been or will be granted an option to purchase up to 400,000 shares
of ILOG S.A. under its 1996 Stock Option Plan pursuant to an option agreement in
substantially the form attached hereto as Exhibit B (the "OPTION"). Upon
termination of Employee's employment for any reason, Employee shall have the
right to exercise, within 90 days of such termination, the portion of Employee's
Option that is then-exercisable pursuant to the terms and conditions of such
option agreement and such option plan; provided, however, that, notwithstanding
any term of such option agreement or such option plan to the contrary, if at any
time prior to such time as the Option becomes fully vested and exercisable,
either (X) the Company terminates Employee's employment with the Company without
Employee's consent other than for Cause or (Y) Employee dies or becomes Disabled
(as defined below) then, in each case, Employee's Option shall (i) continue to
vest until fully vested and (ii) continue to be exercisable to the extent
vested, in each case, as if Employee had remained alive, not Disabled and
employed by the Company throughout the term of the Option.
(e) Continuation of Salary, Bonus and Benefits upon
Termination without Cause. If the Company terminates Employee's employment with
the Company during the Default Term
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without Employee's consent other than for Cause, then, during the remaining
Default Term, the Company shall continue to pay Employee the annual Base Salary
and target Bonus in effect immediately prior to such termination and shall
continue to provide Employee with benefits substantially equivalent to those
being provided immediately prior to such termination.
(f) Definitions of Disability and Disabled. For purposes of
this Agreement, the terms "Disabled" and "Disability" shall refer to a state of
Employee's "permanent and total disability" as such term is defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended.
4. PROPRIETARY INFORMATION; NONINTERFERENCE. As a condition to the
effectiveness of this Agreement, Employee shall execute the Proprietary
Information and Invention Assignment Agreement attached hereto as Exhibit C.
5. MISCELLANEOUS.
(a) Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or upon the third day after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the Company or Employee at the addresses set forth on the signature
page of this Agreement, or at such other address as such party may designate by
ten (10) days advance written notice to the other party.
(b) Severability. Nothing in this Agreement shall be construed
so as to require the commission of any act contrary to law and wherever there is
any conflict between any provision of this Agreement and any law, statute,
ordinance, order or regulation, the latter shall prevail, but in such event any
provision of this Agreement shall be curtailed and limited only to the extent
necessary to bring it within applicable legal requirements. If any provision of
this Agreement should be held invalid or unenforceable, the remaining provisions
shall be unaffected by such a holding.
(c) Tax Matters. Employee has consulted Employee's own
independent tax and legal advisors with respect to the transactions contemplated
by this Agreement and is not relying in any respect on the Company or any
officer, employee, or other agent or representative of the Company to provide
any advice with respect to the federal, state, local or foreign tax consequences
of the transactions contemplated hereby. Employee alone will bear Employee's tax
consequences, if any, associated with the transactions contemplated hereby and
will not seek any reimbursement in connection with any such tax consequences
from the Company.
(d) Complete Agreement. This Agreement and the exhibits
attached hereto contain the entire agreement and understanding between the
parties relating to the subject matter hereof, and supersedes any prior
understandings, agreements, or representations by or between the parties,
written or oral, relating to the subject matter hereof.
(e) Successors and Assigns. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company by
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way of reorganization, merger or consolidation and any assignee of all or
substantially all of its business and assets, but except as to any such
successor or assignee of the Company, neither this Agreement nor any rights or
benefits hereunder may be assigned by the Company or Employee.
(f) Amendments. Notwithstanding anything to the contrary
contained in this Agreement, the parties to this Agreement may make any
modification or amendment to this Agreement only by a mutual agreement in
writing.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to contracts entered into and to be performed entirely within the
State of California.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the day and year first above written.
ILOG, INC.
By:
-----------------------------------
EMPLOYEE
--------------------------------------
(Signature)
Xxxxxx Xxxxx
--------------------------------------
(Print Name)
--------------------------------------
--------------------------------------
(Print Address)
--------------------------------------
(Print Telephone Number)
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Exhibit A
While Employee remains employed with the Company, Employee shall be eligible for
all benefits offered to Company employees generally, currently including Aetna
Medical HMO/PPO coverage, dental and vision insurance plans, Accidental Death &
Disability Insurance, Section 125 pre-tax medical and dependent care expense
reimbursement plan, and 401(k) plan. In addition, Employee shall be entitled to
paid vacation during each year of employment of the greater of (i) four weeks or
(ii) the then-current annual paid vacation allowed by the Company's standard
benefit policy (currently three weeks).
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Exhibit B
(Form of Option Agreement is Attached)
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ILOG S.A.
1996 STOCK OPTION GRANT AGREEMENT
PART I
NOTICE OF STOCK OPTION GRANT
Mr. Xxxxxx Xxxxx
You have been granted an Option to subscribe Shares of the
Company, subject to the terms and conditions of the 1996 Stock Option Plan, as
amended (the "Plan"), and this Option Agreement. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.
Grant Number: SO96/97/
Date of Grant: August 20, 1997
Vesting Commencement Date: August 20, 1997
Vesting period: Four years
Share Per Value: FF 4.00
Exercise Price per Share: FF 36.84
Total Number of Shares Granted: 400,000
Total Exercise Price: FF 14,376,000
Type of Option: Incentive Stock Option
Term/Expiration Date: Ten Years
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VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in
accordance with the following schedule:
25% of the Shares subject to the Option shall vest twelve
months after the Vesting Commencement Date, and 1/48 of the Shares subject to
the Option shall vest each month thereafter.
Except as may be provided in that certain Employment Agreement
by and between Optionee and ILOG, Inc. dated as of August 20, 1997 (the
"Employment Agreement"), vesting shall continue only during Optionee's
Continuous Status as a Beneficiary.
TERMINATION PERIOD:
Except as provided in the Employment Agreement, this Option
may be exercised for ninety (90) days after termination of the Optionee's
employment or term of office with the Company or an Affiliated Company as the
case may be. Upon the Death or Disability of the Optionee, this Option may be
exercised for such longer period as provided in the Plan or the Employment
Agreement. Save as provided in the Plan, in no event shall this Option be
exercised later than the Term/Expiration Date as provided above.
By his signature and the signature of the Company's
representative below, the Optionee and the Company agree that this Option is
granted under and, except to the extent inconsistent with the Employment
Agreement, governed by the terms and conditions of the Plan and this Option
Agreement. The Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had the opportunity to obtain advice of counsel prior to executing
this Option Agreement and fully understands all provisions of the Plan and
Option Agreement. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement which are not governed by
the Employment Agreement. The Optionee further agrees to notify the Company upon
any change in the residence address indicated below.
The Company and the Optionee recognize that the Plan has been
prepared both in the French and the English language. The French version is the
version that binds the parties, notwithstanding this, the English version
represents an acceptable translation and, consequently, no official translation
will be required for the interpretation of this agreement.
OPTIONEE: ILOG S.A.
____________________________________ _____________________________
Signature By:
Print Name
____________________________________
Residence Address
____________________________________
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ILOG S. A.
1996 STOCK OPTION GRANT AGREEMENT
PART II
TERMS AND CONDITIONS
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to subscribe the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the 1996 Stock Option Plan, as amended, which is incorporated
herein by reference. In the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Non-statutory Stock Option.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of Optionee's employment or
term of office, the exercisability of the Option is governed by the applicable
provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached hereto (the "Exercise Notice"), comprising
a share subscription form (bulletin de souscription) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company or its
designated representative or by facsimile message to be immediately confirmed by
certified mail to the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
151
No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law as set out under Section 14(a) of the Plan.
Upon the issuance of the Shares, the Optionee shall be
entitled to receive such Shares in the form of American Depositary Shares by
completing and signing the appropriate box of the Exercise Notice attached
hereto.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(1) wire transfer;
(2) check;
(3) delivery of a properly executed notice together with such
other documentation as the Administrator and the broker, if
applicable, shall require to effect exercise of the Option and
delivery to the Company of the sale or loan proceeds required
to pay the exercise price; or
(4) any combination of the foregoing methods of payment.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Terms of Option. Subject as provided in the Plan, this Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Option Agreement and the Employment Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. In the event of any
conflict between the provisions of this Option Agreement and the provisions of
the Employment Agreement, the Employment Agreement shall, to the extent of such
conflict, control. This Option Agreement is governed by the laws of the Republic
of France.
Any claim or dispute arising under the Plan or this Agreement shall be subject
to the exclusive jurisdiction of the Tribunal de Grande Instance of Creteil.
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CONSENT OF SPOUSE
(TO BE SIGNED BY RESIDENT OF CALIFORNIA AND
OTHER COMMUNITY PROPERTY STATES)
The undersigned spouse of Optionee has read and hereby
approves the terms and conditions of the Plan and this Option Agreement. In
consideration of the Company's granting his or her spouse the right to subscribe
Shares as set forth in the Plan and this Option Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan
and this Option Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under the Plan or this Option Agreement.
_________________________
Spouse of Optionee
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EXHIBIT A
ILOG S.A.
SOCIETE ANONYME HAVING A SHARE CAPITAL OF 24,798,780 FRANCS
REGISTERED OFFICE: []
1996 STOCK OPTION PLAN
EXERCISE NOTICE
(SHARE SUBSCRIPTION FORM)
ILOG S.A.
[]
Date:
Attention:
1. Exercise of Option. Effective as of today, , 199_, the
undersigned hereby elects to subscribe (______) shares (the "Shares")
of the Common Stock of ILOG S.A. (the "Company") under and pursuant to the
Company's 1996 Stock Option Plan (the "Plan") adopted by the Board of Directors
on May 30, 1996, as amended and the Stock Option Agreement dated ______________,
199_, (the "Option Agreement"). The subscription price for the Shares shall be
FF _____________________, as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full subscription price for the Shares.
3. Representation of Optionee. The Optionee acknowledges that Optionee
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company) of the Shares, the Optionee shall
have, as an Optionee, no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, except those
the Optionee may have as a shareholder of the Company. No adjustment will be
made
154
for rights in respect of which the record date is prior to the issuance date for
the Shares, except as provided in Section 11 of the Plan.
5. Tax Consultation. The Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's subscription or disposition
of the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the subscription or
disposition of the Shares. The Optionee is not relying on the Company for any
tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. Reference is made to that certain Employment
Agreement by and between Optionee and ILOG, Inc. dated as of August __, 1997
(the "Employment Agreement"). This Exercise Notice, the Plan the Option
Agreement and the Employment Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Purchaser. In the event of any conflict between the provisions of this Exercise
Notice and the provisions of the Employment Agreement, the Employment Agreement
shall, to the extent of such conflict, control. This Exercise Notice is governed
by the laws of the Republic of France.
This Exercise Notice is delivered in two originals, one of which shall be
returned to the Optionee.
Submitted by: Accepted by:
OPTIONEE(*) ILOG S.A.
___________________________________
Signature by:
___________________________________ Its: CEO
Print Name
ADDRESS: ADDRESS:
____________________________________ ILOG S.A.
---------------------------
(*) The signature of the Optionee must be preceded by the following manuscript
mention "accepted for formal and irrevocable subscription of __________Shares."
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EXHIBIT C
(Form of Confidential Information and Invention Assignment Agreement)
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EXHIBIT C
ILOG, INC.
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
As a condition of my employment with ILOG, INC., its subsidiaries,
affiliates, successors or assigns (together the "COMPANY"), and in consideration
of my employment with the Company and my receipt of the compensation now and
hereafter paid to me by Company, I agree to the following:
1. CONFIDENTIAL INFORMATION.
(a) COMPANY INFORMATION. I agree at all times during the term
of my employment and thereafter, to hold in strictest confidence, and not to
use, except for the benefit of the Company, or to disclose to any person, firm
or corporation without written authorization of the Company, any Confidential
Information of the Company. I understand that "CONFIDENTIAL INFORMATION" means
any Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
customer lists and customers (including, but not limited to, customers of the
Company on whom I called or with whom I became acquainted during the term of my
employment), markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed to me by the Company
either directly or indirectly in writing, orally or by drawings or observation
of parts or equipment. I further understand that Confidential Information does
not include any of the foregoing items which has become publicly known and made
generally available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.
(b) FORMER EMPLOYER INFORMATION. I agree that I will not,
during my employment with the Company, improperly use or disclose any
proprietary information or trade secrets of any former or concurrent employer or
other person or entity and that I will not bring onto the premises of the
Company any unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by such employer,
person or entity.
(c) THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third party.
2. INVENTIONS.
(a) INVENTIONS RETAINED AND LICENSED. I have attached hereto,
as Exhibit A, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by me prior to my
employment with CPLEX or the Company (collectively referred to
157
as "PRIOR INVENTIONS"), which belong to me, which relate to the Company's
proposed business, products or research and development, and which are not
assigned to the Company hereunder; or, if no such list is attached, I represent
that there are no such Prior Inventions. If in the course of my employment with
the Company, I incorporate into a Company product, process or machine a Prior
Invention owned by me or in which I have an interest, the Company is hereby
granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual,
worldwide license to make, have made, modify, use and sell such Prior Invention
as part of or in connection with such product, process or machine.
(b) ASSIGNMENT OF INVENTIONS. Save with respect to Inventions
(as defined herein) made by me in the course of research collaboration projects
with third party co-workers outside the scope of my employment with the
Company, which Inventions are inextricably interwoven with those of such third
party co-workers, I agree that I will promptly make full written disclosure to
the Company, will hold in trust for the sole right and benefit of the Company,
and hereby assign to the Company, or its designee, all my right, title, and
interest in and to any and all inventions, original works of authorship,
developments, concepts, improvements or trade secrets, whether or not
patentable or registrable under copyright or similar laws, which I may solely
or jointly conceive or develop or reduce to practice, or cause to be conceived
or developed or reduced in practice, during the period of time I am in the
employ of the Company (collectively referred to as "INVENTIONS"), except as
provided in Section 2(e) below. I further acknowledge that, except as provided
in Section 2(e) below, all original works of authorship which are made by me
(solely or jointly with others) within the scope of and during the period of my
employment with the Company and which are protectible by copyright are "works
made for hire," as that term is defined in the United States Copyright Act. For
purposes of this Section 2(b), I hereby undertake and agree that I will not
knowingly or intentionally embark on any new research collaboration projects
which would be outside of the scope of those undertaken by me as of the date
hereof without prior consultation with the Company.
(c) MAINTENANCE OF RECORDS. I agree to keep and maintain
adequate and current written records of all Inventions made by me (solely or
jointly with others) during the term of my employment with the Company. The
records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company. The records will be available to and
remain the sole property of the Company at all times.
(d) PATENT AND COPYRIGHT REGISTRATIONS. I agree to assist the
Company, or its designee, at the Company's expense, in every proper way to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If the Company is unable
because of my mental or physical incapacity or for any other reason to secure my
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original works
of authorship assigned to the Company as above, then I hereby irrevocably
designate and appoint the Company and its
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158
duly authorized officers and agents as my agent and attorney in fact, to act for
and in my behalf and stead to execute and file any such applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations thereon with the same legal force and
effect as if executed by me.
(e) EXCEPTION TO ASSIGNMENTS. I understand that the provisions
of this Agreement requiring assignment of Inventions to the Company do not apply
to any invention which qualifies fully under the provisions of California Labor
Code Section 2870 (attached hereto as Exhibit A1).
3. CONFLICTING EMPLOYMENT. I agree that, during the term of my
employment with the Company, I will not engage in any other employment,
occupation, consulting or other business activity directly related to the
business in which the Company is now involved or becomes involved during the
term of my employment, nor will I engage in any other activities that conflict
with my obligations to the Company provided, however, that the Company
recognizes and agrees to my continued academic association and activities with
respect to Rice University.
4. RETURNING COMPANY DOCUMENTS. I agree that, at the time of leaving
the employ of the Company, I will deliver to the Company (and will not keep in
my possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications, drawings
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any aforementioned items developed by me pursuant to my
employment with the Company or otherwise belonging to the Company, its
successors or assigns. In the event of the termination of my employment, I agree
to sign and deliver the "Termination Certification" attached hereto as Exhibit
B.
5. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ
of the Company, I hereby grant consent to notification by the Company to my new
employer about my rights and obligations under this Agreement.
6. REPRESENTATIONS. I agree to execute any proper oath or verify any
proper document required to carry out the terms of this Agreement. I represent
that my performance of all the terms of this Agreement will not breach any
agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any oral or written agreement in
conflict herewith.
7. ARBITRATION AND EQUITABLE RELIEF.
(a) ARBITRATION. Except as provided in Section 8(b) below, I
agree that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement, shall be
settled by arbitration to be held in Santa Xxxxx County, California, in
accordance with the rules then in effect of the American Arbitration
Association. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction. The
Company and I shall each pay one-half of the costs and expenses of such
arbitration, and each of us shall separately pay our counsel fees and expenses.
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159
(b) EQUITABLE REMEDIES. I agree that it would be impossible or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 1, 2, and 4 herein. Accordingly, I agree that if
I breach any of such Sections, the Company will have available, in addition to
any other right or remedy available, the right to obtain an injunction from a
court of competent jurisdiction restraining such breach or threatened breach and
to specific performance of any such provision of this Agreement.
8. GENERAL PROVISIONS.
(a) GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This
Agreement will be governed by the laws of the State of California. I hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in California for any lawsuit filed there against me by the Company
arising from or relating to this Agreement.
(b) ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding between the Company and me relating to the subject
matter herein and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this agreement,
will be effective unless in writing signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
(c) SEVERABILITY. If one or more of the provisions in this
Agreement are deemed void by law, then the remaining provisions will continue in
full force and effect.
(d) SUCCESSORS AND ASSIGNS. This Agreement will be binding
upon my heirs, executors, administrators and other legal representatives and
will be for the benefit of the Company, its successors, and its assigns.
Date: August__, 1997
___________________________________
Signature
Employee
____________________________
Witness
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Exhibit A to Xxxxxx Xxxxx Confidentiality Agreement
1. FORTRAN network extraction code written jointly over a period of several
years with Xxx Xxxxxx and Xxxxxxx X. Xxxxxxxxxx (University of Waterloo,
Canada).
2. LP code (with dense linear algebra) written in FORTRAN, the complete rights
to which were signed over to Shell Oil a number of years ago.
3. Network simplex code (in C) embedded in Chesapeake MIMI modules.
161
EXHIBIT A1
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."
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EXHIBIT B
ILOG, INC.
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I
failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to ILOG, Inc., its subsidiaries, affiliates, successors or
assigns (together, the "COMPANY").
I further certify that I have complied with all the terms of the
Company's Confidential Information and Invention Assignment Agreement signed by
me, including the reporting of any inventions and original works of authorship
(as defined therein), conceived or made by me (solely or jointly with others)
covered by that agreement.
I further agree that, in compliance with the Confidential Information
and Invention Assignment Agreement, I will preserve as confidential all trade
secrets, confidential knowledge, data or other proprietary information relating
to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of the Company or any of its
employees, clients, consultants or licensees.
I further agree that for twelve (12) months from this date, I will not
hire any employees of the Company and I will not solicit, induce, recruit or
encourage any of the Company's employees to leave their employment.
Date: __________________________
______________________________
(Employee's Signature)
______________________________
(Type/Print Employee's Name)
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EXHIBIT F
COPYRIGHT ASSIGNMENT
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COPYRIGHT ASSIGNMENT
THIS COPYRIGHT ASSIGNMENT is made as of the Effective Date set forth below by
and between CPLEX Optimization, Inc., a Texas corporation having a place of
business at___________ ("ASSIGNOR") and ILOG Inc., a California corporation
having a place of business at_____________________________ ("ASSIGNEE").
WHEREAS, ASSIGNOR entered into and Asset Purchase Agreement (the "Agreement"),
dated as of this ____ day of August, 1997 with, among others, ASSIGNEE,
providing for the purchase by ASSIGNEE from ASSIGNOR of all of the assets
ASSIGNOR; and
WHEREAS, ASSIGNOR is the owner of the all rights, including copyrights, in the
works listed in Attachment A ("Works"), including, but not limited to, the right
to recover for past infringement throughout the world;
WHEREAS, pursuant to the Agreement, ASSIGNEE is to acquire all rights, title and
interest in and to the Works throughout the world; and
WHEREAS, ASSIGNOR is willing to assign to ASSIGNEE all rights, title and
interest as ASSIGNOR may possess in and to the Works throughout the world.
NOW, THEREFORE, for and in consideration of the sum of One Dollar ($1.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, ASSIGNOR makes the following assignment and agrees as
follows:
1. ASSIGNMENT.
a. ASSIGNOR does hereby sell, assign, convey and transfer unto
ASSIGNEE, its successors and assigns, the entire right, title and interest,
anywhere in the universe, in and to the Works, and to any works from which the
Works are derived (including, without limitation, in and to all copyrights and
works protectable by copyright, whether now owned or hereafter created or
acquired, under the United States Copyright Act of 1976 or under any other
copyright law or similar law, statutory or common law, now or hereafter in force
and effect in the United States or any other countries or pursuant to any
treaties, covenants, or proclamations, with respect to the Works), and
including, without limitation, the right to xxx for and recover damages for any
past, present or future infringement of the Works, to have and to hold the same,
unto ASSIGNEE, its successors, assigns and nominees, for the full duration of
all such rights, and any renewals and extensions thereof, as fully and entirely
as the as the same would have been held by ASSIGNOR had this assignment and
transfer not been made.
b. ASSIGNOR agrees that ASSIGNEE shall have the rights to register its
claim(s) of copyright in the Works, in its name, in the Copyright Offices of the
United States and any and all other countries of the world.
c. ASSIGNOR further agrees to execute any other documentation and take
other actions, at ASSIGNEE's expense, as may be necessary to enable ASSIGNEE to
perfect and sustain its rights in and to the Works.
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d. ASSIGNOR hereby constitutes and appoints ASSIGNEE as ASSIGNOR's true
and lawful attorney in fact, with full power of substitution in ASSIGNOR's name
and stead, to take any and all steps, including proceedings at law, in equity or
otherwise, to execute, acknowledge and deliver any and all instruments and
assurances necessary or expedient in order to vest or perfect the aforesaid
rights and causes of action more effectively in ASSIGNEE or to protect the same
or to enforce any claim or right of any kind with respect thereto. This
includes, but is not limited to, any rights with respect to the copyrights that
may have accrued in ASSIGNOR's favor from the respective date of first creation
of any of the Works to the Effective Date of this Assignment. ASSIGNOR hereby
declares that the foregoing power is coupled with an interest and as such is
irrevocable.
2. MISCELLANEOUS. If any provision of this Assignment shall be adjudged by any
court of competent jurisdiction to be unenforceable or invalid, that provision
shall be limited or eliminated to the minimum extent necessary so that this
Assignment shall otherwise remain in full force and effect and enforceable. This
Assignment shall be deemed to have been made in, and shall be construed pursuant
to the laws of the State of California and the United States America without
regard to conflicts of laws provisions thereof.
IN WITNESS WHEREOF, ASSIGNOR has executed this Assignment as of the Effective
Date set forth below.
Effective Date: August ___, 1997.
ASSIGNOR
By: _______________________________
Signature
_______________________________
Printed Name
_______________________________
Title
ACKNOWLEDGMENT
State of California )
) ss.
County of ________ )
On this _____ day of August 1997, before me, the undersigned,
personally appeared _____________________, personally known to me or proved to
me on the basis of satisfactory evidence to be the person who executed this
instrument on behalf of the corporation named herein, and acknowledged that s/he
executed it in such representative capacity.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
___________________________________
Notary Public
My Commission Expires on___________
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SCHEDULE A
All of ASSIGNOR's right, title and interest of every kind and
nature, in and to the following computer programs, in source and object code
form and related documentation, including without limitation, any copyrights
therein and including all of the copyright registrations listed below:
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EXHIBIT G
TRADEMARK ASSIGNMENT
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TRADEMARK ASSIGNMENT
THIS TRADEMARK ASSIGNMENT is made as of the Effective Date set forth below by
and between CPLEX Optimization, Inc., a Nevada corporation having a place of
business at __________________________________________________________________
("ASSIGNOR") and ILOG Inc., a California corporation having a place of business
at _______________________________________________________________ ("ASSIGNEE").
WHEREAS, ASSIGNOR entered into and Asset Purchase Agreement (the "Agreement"),
dated as of this ____ day of August, 1997 with, among others, ASSIGNEE,
providing for the purchase by ASSIGNEE from ASSIGNOR of all of the assets
ASSIGNOR; and
WHEREAS, ASSIGNOR is the owner of the trademarks and trademark applications
listed in Attachment A ("Trademarks"), and all other rights appurtenant thereto,
including, but not limited to, all common law rights, trade name rights and the
right to recover for past infringement throughout the world;
WHEREAS, ASSIGNOR has acquired goodwill associated with and symbolized by the
Trademarks and has not abandoned the same;
WHEREAS, pursuant to the Agreement, ASSIGNEE is to acquire all rights, title and
interest in and to the Trademarks throughout the world; and
WHEREAS, ASSIGNOR is willing to assign to ASSIGNEE all rights, title and
interest as ASSIGNOR may possess in and to the Trademarks throughout the world.
NOW, THEREFORE, for and in consideration of the sum of One Dollar ($1.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, for and in consideration of the sum of One Dollar ($1.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged ASSIGNOR makes the following assignment and agrees as
follows:
1. ASSIGNMENT.
a. ASSIGNOR hereby assigns and sells to ASSIGNEE all of ASSIGNOR's
rights, title and interest in and to the Trademarks throughout the world,
together with the goodwill symbolized by the Trademarks; said rights, title and
interest include, without limitation, any and all causes of action heretofore
accrued in ASSIGNOR's favor for infringement of the aforesaid rights, to have
and to hold the same unto ASSIGNEE, its successors and assigns, for and during
the existence of the rights and all renewals thereof.
b. At any time, and from time to time hereafter, ASSIGNOR shall
forthwith, upon ASSIGNEE's written request, take any and all steps to execute,
acknowledge and deliver to ASSIGNEE any and all further instruments and
assurances necessary or expedient in order to vest the aforesaid rights in
ASSIGNEE and to facilitate ASSIGNEE's enjoyment and enforcement of said rights
and causes of action.
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c. ASSIGNOR hereby constitutes and appoints ASSIGNEE as ASSIGNOR's true
and lawful attorney in fact, with full power of substitution in ASSIGNOR's name
and stead, to take any and all steps, including proceedings at law, in equity or
otherwise, to execute, acknowledge and deliver any and all instruments and
assurances necessary or expedient in order to vest or perfect the aforesaid
rights and causes of action more effectively in ASSIGNEE or to protect the same
or to enforce any claim or right of any kind with respect thereto. This
includes, but is not limited to, any rights with respect to the Trademarks that
may have accrued in ASSIGNOR's favor from the respective date of first use of
any of the Trademarks to the Effective Date of this Assignment. ASSIGNOR hereby
declares that the foregoing power is coupled with an interest and as such is
irrevocable.
2. MISCELLANEOUS. If any provision of this Assignment shall be adjudged by any
court of competent jurisdiction to be unenforceable or invalid, that provision
shall be limited or eliminated to the minimum extent necessary so that this
Assignment shall otherwise remain in full force and effect and enforceable. This
Assignment shall be deemed to have been made in, and shall be construed pursuant
to the laws of the State of California and the United States America without
regard to conflicts of laws provisions thereof.
IN WITNESS WHEREOF, ASSIGNOR has executed this Assignment as of the Effective
Date set forth below.
Effective Date: August 20, 1997
CPLEX OPTIMIZATION, INC. (ASSIGNOR)
By: _______________________________
Signature
_______________________________
Printed Name
_______________________________
Title
ACKNOWLEDGMENT
State of Nevada )
) ss:
County of _____ )
On this __ day of August 1997, before me, the undersigned, personally
appeared ___________, personally known to me or proved to me on the basis of
satisfactory evidence to be the person who executed this instrument on behalf of
the corporation named herein, and acknowledged that s/he executed it in such
representative capacity.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
_______________________________________
Notary Public
My Commission Expires on_______________
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EXHIBIT A
Trademarks
CPLEX
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EXHIBIT H
INTERNET DOMAIN NAME TRANSFER AGREEMENT
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INTERNET DOMAIN NAME TRANSFER AGREEMENT
THIS INTERNET DOMAIN NAME TRANSFER AGREEMENT ("Agreement") is effective as of
August __, 1997 (the "Effective Date") by and between CPLEX Optimization, Inc.,
a Nevada corporation having a place of business at _________________________
________________ ("ASSIGNOR") and ILOG Inc., a California corporation having a
place of business at _____________________________________________ ("ASSIGNEE").
WITNESSETH:
WHEREAS, ASSIGNOR entered into and Asset Purchase Agreement (the "Asset Purchase
Agreement"), dated as of this ____ day of August, 1997 with, among others,
ASSIGNEE, providing for the purchase by ASSIGNEE from ASSIGNOR of all of the
assets ASSIGNOR; and
WHEREAS, ASSIGNOR registered with InterNIC the domain name XXXXX.XXX and
ASSIGNOR is the current owner of that name; and
WHEREAS, ASSIGNEE desires to obtain the XXXXX.XXX domain name and ASSIGNOR is
willing to transfer it to ASSIGNEE.
NOW THEREFORE, for and in consideration of the mutual representations, promises,
terms, and conditions contained herein and in the Asset Purchase Agreement, the
parties agree as follows:
1. ASSIGNOR hereby assigns to ASSIGNEE all right, title and interest
worldwide in and to the XXXXX.XXX domain name, together with any goodwill
associated therewith. ASSIGNOR represents and warrants that ASSIGNOR has the
full power to enter into and perform this Agreement.
2. ASSIGNOR agrees to immediately apply to InterNIC to transfer
ownership and management of XXXXX.XXX to ASSIGNEE or its designee pursuant to
the current procedures promulgated by InterNIC/Network Solutions, Inc. (the
"NIC") for modifying a domain record. Specifically, ASSIGNOR shall instruct the
NIC to change the billing name, technical contact, and administrative contact
for XXXXX.XXX ___________________.
3. ASSIGNOR shall provide or execute such other information or
documents, and send such electronic mail messages, as may be necessary to
accomplish the transfer of the
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domain name upon ASSIGNEE's reasonable request, and so that ASSIGNEE may take
control of the XXXXX.XXX domain immediately upon transfer by NIC.
4. ASSIGNOR represents and warrants, that to the best of its knowledge
there or no, and it knows of no basis for, disputes or challenges regarding its,
or ASSIGNEE's, use of the XXXXX.XXX domain name.
5. This Agreement will be governed by and construed in accordance with
the laws of the State of California applicable to contracts made and performed
in California by California residents.
IN WITNESS WHEREOF, ASSIGNOR has executed this Assignment as of the Effective
Date set forth above.
CPLEX OPTIMIZATION, INC. (ASSIGNOR)
By: _______________________________
Signature
_______________________________
Printed Name
_______________________________
Title
ILOG, INC. ("ASSIGNEE")
By: _______________________________
Signature
_______________________________
Printed Name
_______________________________
Title
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EXHIBIT I
CPLEX LICENSE AGREEMENT
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CPLEX LICENSE AGREEMENT
THIS AGREEMENT is made and entered into as of this ____ day of August, 1997 by
and between Xxxxxx Xxxxx ("Xxxxx"), an individual residing at ________________
__________________ and CPLEX Optimization, Inc. ("CPLEX"), a Nevada corporation
having a place of business at _______________________________________________
____________________ (together, the "Parties").
RECITALS
1. On March 1, 1989, Xxxxx and CPLEX entered into an agreement (the
"License Agreement") pursuant to which Xxxxx, among other things,
granted CPLEX an exclusive license to certain software known as
"CPLEX."
2. Pursuant to the License Agreement, Xxxxx agreed to transfer to CPLEX
all of his right, title and interest in the CPLEX software and related
intellectual property rights following the payment to Xxxxx of
royalties equal to $300,000.00.
3. The Parties wish to acknowledge and confirm that Xxxxx has received
such $300,000.00 and has transferred all of his right, title and
interest in and to the CPLEX software to CPLEX, and that CPLEX is the
sole and exclusive owner of such software and all associated
intellectual property rights.
4. The Parties anticipate that the assets and business of CPLEX will be
acquired by ILOG S.A. ("ILOG") and that the entering into of this
Agreement will be a condition precedent to ILOG's acquisition of
CPLEX's assets and business, a transaction from which Xxxxx will
benefit materially.
5. On the date hereof, Xxxxx and ILOG entered into an agreement (the
"Technology Access Letter") pursuant to which ILOG, as the successor to
CPLEX, will grant to Xxxxx certain access and rights to the CPLEX
software and technology as described therein.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definition of CPLEX Software. For the purposes of this Agreement, CPLEX
Software means: (i) the linear programming software, in object code and source
code form, known as "CPLEX" that was the subject of the License Agreement and
all related documentation, (ii) all updates, enhancements, additions to, and
derivatives of the CPLEX software as provided by Xxxxx to CPLEX pursuant to the
License Agreement, whether made by CPLEX or Xxxxx, (iii) all technology,
including know how, inventions (whether patentable or not), proprietary
algorithms and methods embodied in or by the CPLEX software, and (iv) all
intellectual property rights, including, without limitation, patent, copyright,
trademark and trade secret rights, embodied by, or associated with, any of the
foregoing.
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2. Acknowledgment. Xxxxx hereby acknowledges that, in accordance with the
License Agreement, he has received at least $300,000.00 in royalties with
respect to the CPLEX Software and that no further payments are due to him
pursuant to the License Agreement or otherwise with respect to the CPLEX
Software.
3. Assignment.
a. In consideration of $10 (the receipt of which is hereby
acknowledged) and other good and valuable consideration, Xxxxx hereby
irrevocably assigns and transfers to CPLEX all right, title and interest in and
to the CPLEX Software (including all intellectual property rights) throughout
the world, including without limitation, all causes of action (including the
right to seek damages for the infringement of any intellectual property rights
associated with the CPLEX Software) that accrued in favor of Xxxxx, and to hold
the same for the benefit of CPLEX (and its successors and assigns) as Xxxxx
would have had had this assignment not taken place.
b. Except as may be permitted pursuant to the License Agreement, Xxxxx
shall not retain in his possession, or use, any copy or version of the CPLEX
Software and shall not have, or retain any rights or licenses with respect to,
or in, the CPLEX Software. Without limiting the foregoing, Xxxxx shall not use
or disclose to any person any confidential information or trade secret embodied
in or by the CPLEX Software.
4. Further Actions. At any time, and from time to time hereafter, Xxxxx shall
forthwith, upon CPLEX's (or its successors' or assigns') written request and at
its expense, take any and all steps necessary to execute, acknowledge and
deliver to CPLEX (or its successors or assigns), any and all further instruments
and assurances necessary or expedient in order to invest all right, title and
interest in the CPLEX Software in CPLEX (or its successors or assigns) and to
facilitate CPLEX's (or its successors' and assigns') enjoyment and enforcement
of such rights.
5. Power of Attorney. Xxxxx hereby constitutes and appoints CPLEX as Xxxxx'x
true and lawful attorney-in-fact with full power of substitution in Xxxxx'x name
and stead at the expense of ILOG, to take any and all steps, including
proceedings at-law, in equity or otherwise, to execute, acknowledge and deliver
any and all documents, instruments and assurances necessary or expedient in
order to vest or perfect all rights in the CPLEX Software in CPLEX (or its
successors or assigns), to protect the same, or to enforce any claim or any
right of any kind with respect thereto. This includes, but is not limited to,
any rights with respect to the CPLEX Software that may have accrued in Xxxxx'x
favor at any time prior to the date of this Agreement. Xxxxx hereby declares
that the foregoing power is coupled with an interest and, as such, is
irrevocable.
6. Representations and Warranties. Xxxxx hereby represents and warrants that:
(i) he has not granted any third party any rights, interests or licenses in, or
with respect to, the CPLEX Software or any part thereof which derive as the
result of any instrument executed or act taken by Xxxxx; (ii) no third party has
any interest in, and there are no liens or encumbrances on, the CPLEX Software
or any rights
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associated with the CPLEX Software; (iii) the CPLEX Software, as
provided by Xxxxx to CPLEX, was an original work of Xxxxx exclusively and does
not misappropriate any third-party's trade secrets or infringe any third-party's
patents, copyrights, trademarks, trade secrets or other intellectual property
rights; (iv) he has the right and authority to enter into this Agreement; (v)
his entering into and performance under this Agreement will not violate any
agreement or understanding between Xxxxx and any third party or require any
payment to any third party; and (vi) CPLEX (or its successors and assigns) will
be able to use and exploit the CPLEX Software without restrictions or obligation
to any third party which derive as the result of any instrument executed or act
taken by Xxxxx.
7. Independent Contractors. The parties hereto are independent contractors and
are not partners, joint venturers or otherwise affiliated, and except as set
forth in Section 5, neither party has any right or authority to bind the other
in any way.
8. Assignment. CPLEX may assign or otherwise transfer this Agreement or any of
its rights, or delegate any of its obligations, under this Agreement without the
prior written consent of Xxxxx.
9. Notices. All notices, requests, demands and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given only if personally delivered, delivered by a
commercial rapid delivery courier service with tracking capabilities or mailed
by certified or registered mail, return receipt requested, costs and postage
prepaid, to a party at the address set forth above or such other address as a
party last provided to the other by written notice.
10. Amendment, Modification and Waiver. The failure of either party to enforce
its rights or to require performance by the other party of any term or condition
of this Agreement shall not be construed as a waiver of such rights or of its
right to require future performance of that term or condition. Any amendment or
modification of this Agreement or any waiver of any breach of any term or
condition of this Agreement must be in a writing signed by both parties in order
to be effective, and any such waiver shall not be construed as a waiver of any
continuing or succeeding breach of such term or condition, a waiver of the term
or condition itself or a waiver of any right under this Agreement.
11. Governing Law. This Agreement shall be governed and interpreted under the
laws of the State of California without regard to the conflicts of laws
provisions thereof.
12. Headings. Headings and captions are for convenience of reference only and
shall not be deemed to interpret, supersede or modify any provisions of this
Agreement.
13. Severability. In the event that any provision of this Agreement shall be
determined by a court of competent jurisdiction to be illegal or unenforceable,
that provision will be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect and
enforceable.
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14. Entire Agreement. Upon execution by both parties, this Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all discussions, negotiations, agreements and past
dealings, either oral or written, between or among the parties relating to the
subject matter hereof, including the License Agreement.
15. Nonexclusive Remedies. The rights and remedies of a party set forth herein
are not exclusive, the exercise thereof shall not constitute an election of
remedies and the aggrieved party shall in all events be entitled to seek
whatever additional remedies may be available in law or in equity.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have
executed this Agreement below.
Dr. Xxxxxx Xxxxx CPLEX Optimization, Inc.
______________________ by: ______________________________
Name:
Title:
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EXHIBIT J
TECHNOLOGY ACCESS LETTER
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[ON ILOG S.A. LETTERHEAD]
Dear Xx. Xxxxx:
In connection with the acquisition by ILOG S.A. (the "Company") of
substantially all of the assets of CPLEX Optimization, Inc. ("CPLEX") pursuant
to the Asset Purchase Agreement dated August 4, 1997 (the "Agreement"), and
because it is in the Company's and your best interests, I have summarized below
the terms and conditions of your continued access and rights to the CPLEX
software and technology.
1. Consistent with your employment with the Company, you will be
granted access to the source code for a period expiring on the latest of (x)
five years from the Closing Date (as defined under the Agreement) and (y) the
date of termination of your employment by the Company provided, however, that
should your employment be terminated for "cause" (as defined in your Employment
Agreement with the Company's Subsidiary) or by your voluntary resignation, then
your access to the source code shall be withdrawn.
2. Upon your written request made to the Company, the Company will
grant non-transferable object code licenses to academic institutions for
purposes of promotion of research and (a) regular updates will be made available
to such licensees for so long as your employment continues with Company; and (b)
a perpetual license of the current version of the software will be granted to
such licensees upon termination of your employment with the Company.
3. Upon your written request made to Company, an unlimited number of
non-transferable object code licenses will be granted to Rice University on the
same terms and subject to the same conditions as the academic licenses referred
to in 2 above provided, however, that such licenses are CPU specific, with
updates provided for the duration of your association with Rice. After
termination of your association with Rice, such licenses will be perpetual but
will be without any commitment to update.
4. You will be granted perpetual object code CPU specific licenses with
updates for a "modest" number of CPU's.
5. You will be granted perpetual access to the problem test bed. For
purposes of this paragraph "test bed" means the collection of proprietary
problems existing at the time of termination of your employment with Company.
Upon such termination, you will be entitled to retain a copy of the test bed.
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6. Non-CPU specific object code licenses will be granted for your two
TSP co-workers so long as they remain co-workers.
7. You will be entitled to give talks and teach classes related to the
CPLEX LP/MIP as you have done in the past provided that such discussions may not
relate to any products or derivative products beyond those that you would
otherwise have access to in accordance with the above provisions.
The above access and rights to CPLEX software and technology are
conditional upon the following:
a) such access and rights will be exercised in a manner consistent
with the protection of the Company's confidential information and the protection
of its intellectual property rights;
b) such access and rights will be used for academic research purposes
only and may not be used by you or licensed or otherwise used by or on behalf of
any third party for any commercial purpose; and
c) following the termination of your employment with the Company for
any reason you will be subject to the same confidentiality obligations as those
in force during your employment.
This letter is addressed to you personally and is not for the benefit
of any third party and does not of itself constitute the grant of a license.
Sincerely,
Chief Executive Officer
READ, UNDERSTOOD AND AGREED
_______________________________
Xxxxxx Xxxxx
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EXHIBIT K
INVESTMENT REPRESENTATIONS
183
INVESTMENT REPRESENTATION STATEMENT
ILOG S.A.
0, xxx xx Xxxxxx, XX 00
00000 Xxxxxxxx Cedex
Republic of France
In connection with the proposed issuance by ILOG S.A., a societe
anonyme organized under the laws of The Republic of France (the "COMPANY"), of
shares delivered in the form of American Depositary Shares, represented by
American Depositary Receipts (the "SECURITIES") pursuant to the Asset
Contribution Agreement which is part of the Asset Purchase Agreement dated
August __, 1997 (collectively, the "ASSET PURCHASE AGREEMENT") ________
______________________________________________________ ("PURCHASER") hereby
agrees, represents and warrants as follows:
1. Obtain Entirely for Own Account.
Beneficiary represents and warrants that Beneficiary is
obtaining the Securities solely for Beneficiary's own account for investment and
not with a view to or for sale or distribution of the Securities or any portion
thereof and not with any present intention of selling, offering to sell or
otherwise disposing of or distributing the Securities or any portion thereof.
Beneficiary also represents that the entire legal and beneficial interest of the
Securities is being purchased for, and will be held for the account of,
Beneficiary only and neither in whole nor in part for any other person or
entity.
2. Preexisting Relationship with Company; Financial and Business
Experiences; Accredited Investor. Beneficiary represents and warrants that
either (i) Beneficiary has a prior business and/or personal relationship with
the Company and/or its officers and directors, or (ii) by reason of
Beneficiary's business or financial experience or the business or financial
experience of Beneficiary's professional advisors who are unaffiliated with the
Company, and who are not compensated by the Company, Beneficiary has the
capacity to protect Beneficiary's own interests in connection with the purchase
of the Securities, or (iii) Beneficiary is an "accredited investor" within the
meaning of that term under Rule 501(a) of the Securities Act of 1933, as
amended.
3. Information Concerning Company.
Beneficiary represents and warrants that Beneficiary is
familiar with the Company's plans, operations and financial condition and that
Beneficiary has heretofore received all such infor mation as Beneficiary deems
necessary and appropriate to enable Beneficiary to evaluate the financial risk
inherent in making an investment in the Securities of the Company.
4. Economic Risk.
Beneficiary represents and warrants that Beneficiary realizes
that the receipt of the Securities will be a highly speculative investment and
that Beneficiary is able, without impairing Beneficiary's financial condition,
to hold the Securities for an indefinite period of time and to suffer a
complete loss of Beneficiary's investment.
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5. Restricted Securities.
Purchaser understands that:
(a) the transaction under which Beneficiary is obtaining the
Securities has not been registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and the Securities must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available;
(b) the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of its investment intent
as expressed herein; and that, in the view of the Securities and Exchange
Commission (the "SEC"), the statutory basis for such exemption may be
unavailable if this representation was predicated solely upon a present
intention to hold the Securities for the minimum capital gains period specified
under tax statutes, for a deferred sale, for or until an increase or decrease in
the market price of the Securities, or for a period of one year or any other
fixed period in the future;
(c) the Securities of the Company will be stamped with the
following legends restricting transfer:
i.THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND
ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT.
THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED
EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR (iii) PURSUANT TO
AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION, THAT SUCH REGISTRATION
OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.
ii. THE HOLDER WHOSE NAME APPEARS ON THIS CERTIFICATE
WAS AN AFFILIATE OF THE ISSUER ON THE DATE OF ISSUANCE HEREOF. SUCH SHARES MAY
NOT BE SOLD, EXCHANGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH RULE 144 OF THE SECURITIES ACT OF 1933, AS AMENDED.
(d) the Company will make a notation in its records of the
aforementioned restrictions on transfer and legends; and
(e) the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
registration is otherwise available, and the Company is under no obligation to
register the Securities except as provided in the Asset Purchase Agreement.
185
6. Disposition under Rule 144.
(a) Purchaser represents and warrants that Purchaser is
familiar with the provisions of Rule 144, promulgated under the Securities Act,
which, in substance, permits limited public resale of "restricted securities"
acquired, directly or indirectly, from the issuer thereof (or from an affiliate
of such issuer) in a non-public offering subject to the satisfaction of certain
conditions, including, among other things: (1) the availability of certain
public information about the Company; (2) the resale occurring not less than one
year after the party has purchased, and made full payment for, within the
meaning of Rule 144, the securities to be sold; and (3) in the case of an
affiliate, or of a non-affiliate who has held the securities less than two
years, the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified limitations
stated therein, if applicable.
(b) Purchaser further understands that at the time
Purchaser wishes to sell the Securities there may be no public market upon
which to make such a sale, and that, even if such a public market then exists,
the Company may not be satisfying the current public information requirements of
Rule 144, and that, in such event, Purchaser would be precluded from selling
the Securities under Rule 144 even if the one-year minimum holding period had
been satisfied.
(c) Purchaser further understands that in the event all of
the applicable requirements of Rule 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
7. Further Limitations on Disposition.
Without in any way limiting the representations set forth
above, Purchaser further agrees that Purchaser shall in no event make any
disposition of all or any portion of the Securities which Purchaser is
obtaining unless and until:
(a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said Registration Statement; or
(b) Purchaser shall have (i) notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition and (ii) if
reasonably requested by Company, furnished the Company with an opinion of
counsel acceptable to the Company to the effect that such disposition will not
require registration of such shares under the Securities Act.
Notwithstanding the foregoing, Purchaser agrees that
Purchaser shall not request that a transfer of the Securities be made in
reliance on Rule 144(k) or the legend referring to restrictions on
186
transfer under the Securities Act be removed in reliance on Rule 144(k) under
the Securities Act unless the Company is subject to the reporting requirements
under the Securities Exchange Act of 1934, as amended, and has been subject to
such reporting requirements for ninety (90) days prior to said request and that
prior to such time any transfer shall only be made as a private resale pursuant
to which the transferee shall acquire such shares subject to such legend.
Dated as of August 20, 1997
Very truly yours,
_________________________________
_________________________________
Print Name of Purchaser
_________________________________
Print Name of Authorized Signatory
(if Entity)
_________________________________
Address
_________________________________
ACCEPTED AND AGREED TO:
ILOG S.A.
_________________________________
_________________________________
Print Name of Authorized Signatory
_________________________________
Title
187
EXHIBIT L
OPINION OF XXXXXX AND XXXXXX
188
EXHIBIT L
[Letterhead of Xxxxxx & Xxxxxx, L.L.P.]
August __, 1997
ILOG S.A.
-------------------------
-------------------------
ILOG S.A.
-------------------------
-------------------------
Ladies and Gentlemen:
We have acted as special counsel to CPLEX Optimization, Inc., a Nevada
corporation ("New CPLEX"), CPLEX Optimization, Inc., a former Texas corporation
and the predecessor by merger of New CPLEX ("Old CPLEX"), and Xxxx X. Xxxx,
Xxxxx Xxxx and Xxxxxx Xxxxx, who at August 4, 1997 and at the time of the
consummation of the merger of Old CPLEX into New CPLEX (the "Reincorporation
Merger") constituted all of the shareholders of Old CPLEX, and who now
constitute, and at all times since the Reincorporation Merger have constituted,
all of the shareholders of New CPLEX (collectively, the "Shareholders"), in
connection with the negotiation, execution and delivery of, and the consummation
of the transactions contemplated in, (i) the Asset Purchase Agreement dated as
of August 4, 1997 (the "Purchase Agreement"), among ILOG S.A., a French societe
anonyme ("ILOG"), ILOG Inc., a California corporation and a wholly owned
subsidiary of ILOG ("ILOG, U.S."), Old CPLEX (whose rights and obligations under
the Purchase Agreement have been succeeded to by New CPLEX as a result of the
Reincorporation Merger), and the Shareholders, and (ii) the Asset Contribution
Agrement (contrat d' apport) dated August __, 1997 (the "Contribution
Agreement"), between CPLEX and, Old CPLEX. In this opinion:
189
ILOG S.A.
ILOG, Inc.
August __, 1997
Page 2
(i) the Purchase Agreement and the Contribution Agreement
are together referred to as the "Agreements";
(ii) ILOG and ILOG U.S. are together referred to as the
"Purchasers";
(iii) "Seller" refers to (x) Old CPLEX in respect of and at
all times up to the time of consummation of the Reincorporation Merger
and (y) New CPLEX in respect of and at all times from and after the time
of consummation of the Merger;
(iv) the instruments of transfer, conveyance, assignment
being executed and delivered by the Seller to the respective Purchasers
on the date hereof, pursuant to the Agreements, are collectively
referred to as the "Conveyance Documents";
(v) the Agreements and the Conveyance Documents are
collectively referred to as the "Transaction Documents"; and
(vi) capitalized terms used but not defined in this opinion
have the respective meanings assigned to them in the Purchase
Agreement.
The Agreements provide for the acquisition by the respective Purchasers
of substantially all of the assets of the Seller related to the Business, and
this opinion is being rendered pursuant to Section __ of the Agreement.
For purposes of rendering the opinions set forth herein, we have
examined the following:
(i) the Purchase Agreement and an English transaction of
the Contribution Agreement;
(ii) each of the Conveyance Documents;
(iii) the Articles of Incorporation and bylaws of Old CPLEX as
in effect at, and as amended through, the time of the consummation of
the Reincorporation Merger;
(iv) the Certificate of Incorporation and bylaws of New
CPLEX;
(v) the minute books and stock transfer records of each of
Old CPLEX and New CPLEX; and
190
ILOG S.A.
ILOG, Inc.
August __, 1997
Page 3
(vi) originals or copies of such certificates of public
officials and officers of the Seller, and such other documents, as we
have deemed necessary or appropriate as a basis for the opinions set
forth herein.
We have been engaged by the Seller and the shareholders solely to
represent them in connection with the transactions contemplated by the
Agreement (including the Reincorporation Merger), and you are advised that we
do not now and have never served as general counsel to the Seller or any of the
Shareholders or represented them on any other matters or in any other capacity
and we are not generally familiar with the affairs of the Seller or the
respective Shareholders.
In connection with rendering the opinions set forth herein, we have
assumed the genuineness of all signatures, the capacity of all natural persons,
the authenticity of all documents submitted to us as originals, and the
conformity to the original documents of documents submitted to us as certified
photostatic copies. As to certain factual matters relevant to the opinions
expressed herein, we have relied upon representation, of the Seller and the
Shareholders made in the Purchase Agreement and representations made in
certificates of officers of the Sellers, in each case without independently
investigating or verifying their accuracy.
With respect to all parties (other than the Seller and the
Shareholders) who have executed any of the Transaction Documents, we have
assumed that:
(i) such documents are legal, valid, binding and enforceable
in accordance with their terms as to each such party;
(ii) no such party is involved in any court, administrative
or other proceeding or subject to any order, writ, injunction or decree
which would prohibit the execution, delivery and performance of such
documents by such party; and
(iii) there is no requirement of consent, approval or
authorization by a person or governmental authority with respect to such
parties other than has been duly obtained.
We have also assumed the correctness of all statements set forth in
certificates or other written documents of state officials and certificates of
officers of the Seller, in each case without independently investigating or
verifying their accuracy. We further assume that (i) none of the parties upon
whom we have relied for purposes of this opinion has perpetrated a fraud on any
of the other parties to the transaction or any of the attorneys representing
any such parties, and (ii) neither Purchaser, no representative of either of
the Purchasers, nor any attorney representing either of the
191
ILOG S.A.
ILOG, Inc.
August __, 1997
Page 4
Purchasers has any opinion regarding the subject matter of this opinion which
is contrary to or inconsistent with any opinions expressed herein.
Based on the foregoing, and subject to the qualifications and
limitations hereinafter set forth, we are of the opinion that:
1. At the time of its execution of the Purchase Agreement and at
all times thereafter through the consummation of the Reincorporation Merger,
Old CPLEX was a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Texas, with full corporate power and
authority to own or lease and operate and use its assets and properties, to
carry on its business as then conducted, and execute, deliver and perform its
obligations under the Agreement.
2. New CPLEX is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Nevada, with full corporate
power and authority to own or lease and operate and use its assets and
properties, to carry on its business as now conducted and to perform its
obligations under the Transaction Documents.
3. At the time of its execution of the Purchase Agreement and at
all times thereafter through the consummation of the Reincorporation Merger,
Old CPLEX was qualified to do business and was in good standing as a foreign
corporation in the State of Nevada. Neither the location of its assets or
properties nor the nature of its operations requires New CPLEX to be qualified
to do business as a foreign corporation in any jurisdiction wherein failure to
be so qualified would have a Material Adverse Effect, provided, however, that
we express no opinion as to whether New CPLEX is required to be qualified to do
business as a foreign corporation in the State of New Jersey as a result of
facts which have been disclosed to the Purchasers by the Seller and the
Shareholders.
4. Based on our review of the stock transfer records of the
Seller, at the time of Old CPLEX's execution of the Purchase Agreement and at
all times thereafter through the consummation of the Reincorporation Merger,
the authorized capital stock of Old CPLEX consisted of 5,000 shares of Common
Stock, $1 par value per share, of which 1,095 shares were issued and
outstanding and owned of record (and, to our knowledge, beneficially) by the
Shareholders in the following amounts: Xxxx X. Xxxx, _______ shares; Xxxxx Xxxx
_______ shares; and Xxxxxx Xxxxx, _______ shares, and (ii) the authorized
capital stock of New CPLEX consists of 5,000 shares of Common Stock, $1 par
value per share, of which 1,095 shares are issued and outstanding and owned of
record by the Shareholders in the same proportions as they held the outstanding
shares of Common Stock of Old CPLEX at the time of consummation of the
Reincorporation Merger. To our knowledge, there are not outstanding any options,
warrants or similar rights to acquire capital stock of New CPLEX, and there
were not
192
ILOG S.A.
ILOG, Inc.
August __, 1997
Page 5
outstanding immediately prior to the Reincorporation Merger or at either the
date of execution of the Purchase Agreement or the date the Shareholders
approved the transactions contemplated in the Purchase Agreement, any options,
warrants or similar rights to acquire capital stock of Old CPLEX.
5. The execution, delivery and performance by Old CPLEX of the
Transaction Documents were duly and validly authorized by its Board of
Directors and approved by its shareholders as required by law and its Articles
of Incorporation and bylaws, and at the time of consummation of the
Reincorporation Merger, the Purchase Agreement constituted valid and binding
obligation of Old CPLEX enforceable against Old CPLEX in accordance with its
terms.
6. The Reincorporation Merger was effected in accordance with the
laws of the States of Texas and Nevada, and upon consummation of the
Reincorporation Merger, New CPLEX, by operation of law, succeeded to (i) all
business, assets and properties of Old CPLEX, including those to be sold,
transferred and conveyed to the respective Purchasers under the Agreements and
(ii) all of the other rights, benefits, obligations and liabilities of Old
CPLEX, including all rights, benefits, obligations and liabilities of Old CPLEX
created by or arising under the Purchase Agreement. By virtue and as a result
of the Reincorporation Merger, the Agreements became and are now valid and
binding obligations of New CPLEX enforceable against New CPLEX in accordance
with their terms.
7. All other corporate proceedings required to be taken on the
part of the Seller to authorize it to enter into and carry out its obligations
under the each of the Transaction Documents have been duly and properly taken.
8. The respective Conveyance Documents delivered by the Seller and
the respective Shareholders to the respective Purchasers have been duly
authorized, executed and delivered, are valid and binding obligations of the
Seller and the respective Shareholders in accordance with their respective
terms, and effectively vest in the respective Purchasers all right, title and
interest of the Seller in and to the assets, properties, rights and business of
the Seller purported to be assigned, transferred and conveyed thereby (it being
understood that we express no opinion as to the Seller's title to any such
assets, properties, rights and business), except that (i) we express no opinion
as to the validity or effectiveness of any assignment by the Seller of any
of its rights under any contract, license or agreement identified in Schedule
2.6 to the Purchase Agreement and with respect to which no consent to
assignment has been obtained from the other party or parties thereto and (ii)
as to Conveyance Documents assigning Seller Registered Intellectual Property to
a Purchaser, the effectiveness thereof is or may be subject to the filing
thereof with the United States Copyright Office, the United States Patent and
Trademark Office, or their respective equivalents in any relevant foreign
jurisdiction.
193
ILOG S.A.
ILOG, Inc.
August __, 1997
Page 3
9. Assuming the legal capacity of the respective Shareholders, the
Purchase Agreement is valid and binding obligation of the respective
Shareholders enforceable against them in accordance with their terms.
10. Neither the execution and delivery by the Seller or the
Shareholders of any of the Transaction Documents or the consummation of the
transactions contemplated thereby nor compliance with or fulfillment of the
terms, conditions and provisions thereof will (i) violate, conflict with,
result in a breach of the terms, conditions or provisions of, or constitute a
default, an event of default or an event creating rights of acceleration,
termination or cancellation or loss of rights under (a) the Articles of
Incorporation or Bylaws of the Seller, (b) to our knowledge, any material note,
instrument, agreement, mortgage, lease, license, franchise, permit or other
authorization, right, restriction or obligation to which the Seller or any
Shareholder is a party or to which its properties are subject or by which the
Seller or any Shareholder is bound (except in the case of any contract, license
or agreement identified on Schedule 2.6 to the Purchase Agreement and with
respect to which no consent to assignment has been obtained form the other
party or parties thereto), (c) any court order known to us to which the Seller
or any Shareholder is a party or by which the Seller or any Shareholder is
bound or (d) to our knowledge, any requirements of law known to us affecting
the Seller or any Shareholder or (ii) to our knowledge, require the approval,
consent (except as set forth in Schedule 2.6 to the Purchase Agreement),
authorization or act of, or the making by the Seller or any Shareholder of any
declaration, filing or registration with any persons.
11. To our knowledge, there are no claims, actions, suits,
investigations or proceedings, pending or threatened against the Seller or, to
the extent related to the Transaction Documents, against any Shareholder or
questioning the validity of any of the Transaction Documents or the right of
the Seller or any Shareholder to enter into any of the Transaction Documents,
or to consummate the transactions contemplated thereby, at law or equity, or
before any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
12. To our knowledge and except as disclosed in the Transaction
Documents, the Seller was not, immediately prior to the Closing, and, as a
result of the execution and delivery of the Transaction Documents or the
performance of Seller's obligations thereunder will not be, in violation of any
license, sublicense or other agreement relating to the Seller Intellectual
Property (except in the case of any contract, license or agreement identified
on Schedule 2.6 to the Purchase Agreement and with respect to which no consent
to assignment has been obtained form the other party or parties thereto). We
know of no facts that would render any of the Seller Intellectual Property
invalid in the hands of the Purchasers.
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ILOG S.A.
ILOG, Inc.
August __, 1997
Page 7
13. To our knowledge, no claims with respect to any Seller
Intellectual Property have been asserted or threatened by any person, nor do we
know of any grounds for any claims now or in the future (i) to the effect that
the Business as currently conducted infringes on or misappropriates any
Intellectual Property in which a third party has any rights or (ii) challenging
the ownership, validity or effectiveness of any of the Seller Intellectual
Property. To our knowledge, no Seller Intellectual Property is subject to (i)
Encumbrance or (ii) any outstanding order, judgment, decree, stipulation or
agreement restricting in any manner the licensing or exploitation thereof.
14. Assuming the legal capacity of Xxxxxx Xxxxx, the CPLEX License
Agreement is a valid and binding obligation of Xx. Xxxxx in accordance with its
terms and effectively vests in CPLEX all right, title and interest of Xx. Xxxxx
in and to the CPLEX Software (as that term is defined in the CPLEX License
Agreement) purported to be assigned, transferred and conveyed thereby (it being
understood that we express no opinion as to Xx. Xxxxx'x title to or rights in
the CPLEX Software).
This opinion is subject to and qualified in all respects by the
following:
(i) The enforceability of any document to which the Seller
or any Shareholder is a party may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and similar laws from time to time in effect and
affecting creditors' rights or the collection of obligations generally,
including, without limitation, laws generally defining and restricting
fraudulent conveyances, (ii) principles of equity, (iii) principles of public
policy, and (iv) requirements of commercial reasonableness and good faith;
provided, however, any of the limitations described in subparts (iii) and (iv)
of this paragraph will not, in our opinion, prohibit any party from the
ultimate realization of the practical benefits conferred by the document in
question.
(ii) We express no opinion as to the enforceability of the
indemnity and contribution provisions contained in the Registration Agreement
referred to in Section 6.11 of the Purchase Agreement.
(iii) We express no opinion as to the enforceability of any
choice of law provision applicable to issues under the Agreements or any of the
other Transaction Documents which concern the relative rights of the Seller and
the Shareholders, which rights may be governed by the corporate law of the
State of Nevada.
(iv) This opinion letter is limited to the matters expressly
stated herein, and no opinion other than the matters so expressly stated is
implied or may be inferred.
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ILOG S.A.
ILOG, Inc.
August __, 1997
Page 8
include constructive inquiry or imputed knowledge. We advise you that we have
made no independent investigation of the affairs of the Seller or the
Shareholders. We also have made no independent search of the records of any
judicial authority or governmental agency as to the existence of any actions,
suits, investigations or proceedings, provided we advise you that we have no
knowledge of any judgments that have been entered against the Seller or any
Shareholder.
These opinions expressed herein are limited to the United States
federal law, the General Corporation Law of Delaware, the Nevada Business
Corporation Act, and laws of the State of Texas, all as now in effect, and
references herein to any law, statute, rule, regulation, court, administrative
body or governmental body are to such as exist thereunder. We disclaim any
responsibility to inform you of any change thereto after the date hereof. No
opinion is expressed as to any matter that may be governed by the laws of
another jurisdiction or as to any laws of the States of Nevada or Delaware
other than those specifically referred to above. As to all matters involving
the [Business Corporation Act] of Nevada, we have, with your permission, relied
exclusively on the opinion of __________________________, a copy of which has
been delivered to you, and we believe that you are justified in relying
thereon.
This opinion is delivered to you at the request of the Seller and the
Shareholders in connection with the Agreements and is not to be used for any
purpose other than in consummating the transactions described in the
Agreements. This opinion may not be relied upon, circulated, quoted, in whole
or in part, or otherwise referred to in any report or document or furnished to
any other person without our prior written consent.
Very truly yours,
XXXXXX & XXXXXX, L.L.P.
196
EXHIBIT M
STOCK OPTION GRANT AND AGREEMENT
197
ILOG S.A.
1996 STOCK OPTION GRANT AGREEMENT
PART I
NOTICE OF STOCK OPTION GRANT
Mr./Ms.
------------------
You have been granted an Option to subscribe Shares of the
Company, subject to the terms and conditions of the 1996 Stock Option Plan, as
amended (the "Plan"), and this Option Agreement. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.
Grant Number: SO96/97/
Date of Grant: August ___, 1997
Vesting Commencement Date: August ___, 1997
Vesting period: Four years
Share Per Value: FF 4.00
Exercise Price per Share: FF
Total Number of Shares Granted:
Total Exercise Price: FF
Type of Option: Incentive Stock Option
Term/Expiration Date: Ten Years
198
VESTING SCHEDULE:
This Option may be exercised, in whole or in part, in
accordance with the following schedule:
25% of the Shares subject to the Option shall vest twelve
months after the Vesting Commencement Date, and 1/48 of the Shares subject to
the Option shall vest each month thereafter.
Except as may be provided in that certain Employment Agreement
by and between Optionee and ILOG, Inc. dated as of August 20, 1997 (the
"Employment Agreement"), vesting shall continue only during Optionee's
Continuous Status as a Beneficiary.
TERMINATION PERIOD:
Except as provided in the Employment Agreement, this Option
may be exercised for ninety (90) days after termination of the Optionee's
employment or term of office with the Company or an Affiliated Company as the
case may be. Upon the Death or Disability of the Optionee, this Option may be
exercised for such longer period as provided in the Plan or the Employment
Agreement. Save as provided in the Plan, in no event shall this Option be
exercised later than the Term/Expiration Date as provided above.
By his signature and the signature of the Company's
representative below, the Optionee and the Company agree that this Option is
granted under and, except to the extent inconsistent with the Employment
Agreement, governed by the terms and conditions of the Plan and this Option
Agreement. The Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had the opportunity to obtain advice of counsel prior to executing
this Option Agreement and fully understands all provisions of the Plan and
Option Agreement. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement which are not governed by
the Employment Agreement. The Optionee further agrees to notify the Company upon
any change in the residence address indicated below.
The Company and the Optionee recognize that the Plan has been
prepared both in the French and the English language. The French version is the
version that binds the parties, notwithstanding this, the English version
represents an acceptable translation and, consequently, no official translation
will be required for the interpretation of this agreement.
OPTIONEE: ILOG S.A.
-------------------------------
Signature By:
Print Name Title: CEO
-------------------------------
Residence Address
-------------------------------
-2-
199
ILOG S. A.
1996 STOCK OPTION GRANT AGREEMENT
PART II
TERMS AND CONDITIONS
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to subscribe the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the 1996 Stock Option Plan, as amended, which is incorporated
herein by reference. In the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Non-statutory Stock Option.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, disability or other termination of Optionee's employment or
term of office, the exercisability of the Option is governed by the applicable
provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached hereto (the "Exercise Notice"), comprising
a share subscription form (bulletin de souscription) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company or its
designated representative or by facsimile message to be immediately confirmed by
certified mail to the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
-2-
200
No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law as set out under Section 14(a) of the Plan.
Upon the issuance of the Shares, the Optionee shall be
entitled to receive such Shares in the form of American Depositary Shares by
completing and signing the appropriate box of the Exercise Notice attached
hereto.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(1) wire transfer;
(2) check;
(3) delivery of a properly executed notice together with
such other documentation as the Administrator and the broker,
if applicable, shall require to effect exercise of the Option
and delivery to the Company of the sale or loan proceeds
required to pay the exercise price; or
(4) any combination of the foregoing methods of payment.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Terms of Option. Subject as provided in the Plan, this Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Option Agreement and the Employment Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. In the event of any
conflict between the provisions of this Option Agreement and the provisions of
the Employment Agreement, the Employment Agreement shall, to the extent of such
conflict, control. This Option Agreement is governed by the laws of the Republic
of France.
Any claim or dispute arising under the Plan or this Agreement shall be subject
to the exclusive jurisdiction of the Tribunal de Grande Instance of Creteil.
-3-
201
CONSENT OF SPOUSE
(TO BE SIGNED BY RESIDENT OF CALIFORNIA AND OTHER COMMUNITY PROPERTY STATES)
The undersigned spouse of Optionee has read and hereby
approves the terms and conditions of the Plan and this Option Agreement. In
consideration of the Company's granting his or her spouse the right to subscribe
Shares as set forth in the Plan and this Option Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan
and this Option Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under the Plan or this Option Agreement.
---------------------------------------
Spouse of Optionee
-4-
202
EXHIBIT A
ILOG S.A.
SOCIETE ANONYME HAVING A SHARE CAPITAL OF 24,798,780 FRANCS
REGISTERED OFFICE: []
1996 STOCK OPTION PLAN
EXERCISE NOTICE
(SHARE SUBSCRIPTION FORM)
ILOG S.A.
[ ]
Date:
Attention:
1. Exercise of Option. Effective as of today, ________________ , 199_,
the undersigned hereby elects to subscribe (_____________ ) shares (the
"Shares") of the Common Stock of ILOG S.A. (the "Company") under and pursuant to
the Company's 1996 Stock Option Plan (the "Plan") adopted by the Board of
Directors on May 30, 1996, as amended and the Stock Option Agreement dated ,
199_, (the "Option Agreement"). The subscription price for the Shares shall be
FF ____________ , as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full subscription price for the Shares.
3. Representation of Optionee. The Optionee acknowledges that Optionee
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company) of the Shares, the Optionee shall
have, as an Optionee, no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, except those
the Optionee may have as a shareholder of the Company. No adjustment will be
made
203
for rights in respect of which the record date is prior to the issuance date for
the Shares, except as provided in Section 11 of the Plan.
5. Tax Consultation. The Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's subscription or disposition
of the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the subscription or
disposition of the Shares. The Optionee is not relying on the Company for any
tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. Reference is made to that certain Employment
Agreement by and between Optionee and ILOG, Inc. dated as of August __, 1997
(the "Employment Agreement"). This Exercise Notice, the Plan the Option
Agreement and the Employment Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Purchaser. In the event of any conflict between the provisions of this Exercise
Notice and the provisions of the Employment Agreement, the Employment Agreement
shall, to the extent of such conflict, control. This Exercise Notice is governed
by the laws of the Republic of France.
This Exercise Notice is delivered in two originals, one of which shall be
returned to the Optionee.
Submitted by: Accepted by:
OPTIONEE(*) ILOG S.A.
-------------------------------------------
Signature by:
------------------------------------------- Its: CEO
Print Name
ADDRESS: ADDRESS:
------------------------------------------- ILOG S.A.
---------------------------
(*) The signature of the Optionee must be preceded by the following
manuscript mention "accepted for formal and irrevocable subscription of
________________ Shares."
-2-
204
EXHIBIT O
OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX, P.C.
205
Exhibit O
[Form of WSGR Opinion]
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 6.13 of that
certain Asset Purchase Agreement dated August 4, 1997 (the "Asset Purchase
Agreement") among ILOG S.A., a societe anonyme (the "Company"), ILOG, Inc, a
California Corporation (the "Subsidiary") (the Company and the Subsidiary,
collectively, the "Purchasers"), CPLEX Optimization, Inc., a Nevada corporation
("Old CPLEX"), and Xxxx Xxxx, Xxxxx Xxxx and Xxxxxx Xxxxx (such individuals, the
"Shareholders"). Capitalized terms used herein shall have the same meanings
given to them in the Asset Purchase Agreement unless otherwise defined herein.
The term "Seller" as used herein shall refer to (i) Old CPLEX, in respect of and
at all times up to the time of consummation of the statutory merger (the
"Reincorporation Merger") pursuant to which Old CPLEX merged with and into CPLEX
Optimization, Inc., a Nevada corporation ("New CPLEX"), and (ii) New CPLEX, in
respect of and at all time from and after the time of consummation of the
Reincorporation Merger.
We have acted as U.S. counsel for the Company and the Subsidiary in
connection with the negotiation, execution and delivery of, and the consummation
of the transactions contemplated in: the Asset Purchase Agreement; the Asset
Contribution Agreement (contrat d'apport) by and between the Company, the Seller
and the Shareholders (the "Contribution Agreement"); and the Employment
Agreement of each Shareholder by and between such Shareholder and the Subsidiary
(the "Employment Agreements"). In connection with the employment of the
Shareholders by the Subsidiary, the Employment Agreements provide that the
Company will grant each Employee an option to purchase capital stock of the
Company (the "Options"). The Asset Purchase Agreement and the Contribution
Agreement are sometimes referred to collectively herein as the "Purchase
Agreements." The Purchase Agreements, the Employment Agreements, the Options and
the Promissory Notes are sometimes referred to collectively herein as the
"Transaction Documents." As such counsel, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the
purpose of rendering this opinion and we have examined originals, certified
copies, or copies otherwise identified to us as being true copies of the
originals, of the following:
(a) The Articles of Incorporation of Subsidiary as in effect on
the date hereof;
(b) The Bylaws of the Subsidiary as in effect on the date hereof;
(c) Minutes of the meetings of the Boards of Directors of the
Company and Subsidiary with respect to the transactions referred to in this
opinion; and
(d) the Purchase Agreement, an English translation of the Contribution
Agreement, and each of the Employment Agreements.
206
In addition, we have obtained from public officials and from officers
of the Company and of the Subsidiary such other certificates and assurances, and
we have examined such corporate records, other documents and questions of law as
we have considered necessary or appropriate for the purpose of rendering this
opinion.
In connection with such examination, we have assumed the genuineness of
all signatures on original documents, the authenticity of all documents
submitted to us as originals, the conformity to originals of all documents
submitted to us as copies thereof and, except as specifically covered in the
opinions set forth below, the due execution of all documents where due execution
and delivery are a prerequisite to effectiveness thereof.
In addition, we have assumed that each Transaction Document and each
instrument or agreement to be delivered thereunder has been duly authorized,
executed and delivered by all parties or signatories thereto (other than the
Company and the Subsidiary) and that the representations and warranties as to
factual matters made by the Company, the Subsidiary, the Seller and each of the
Shareholders in each of the Transaction Documents and pursuant thereto are
correct and complete. We have no reason to believe that we are not justified in
relying upon such representations and warranties.
As used in this opinion, the expressions "to our knowledge," "known to
us" and similar phrases with reference to matters of fact mean that, after an
examination of documents made available to us by the Company, and after
inquiries of officers of the Company, but without any further independent
factual investigation, we find no reason to believe that the opinions expressed
herein are factually incorrect. Further, the expressions "to our knowledge",
"known to us" and similar phrases with reference to matters of fact refer to the
current actual knowledge of the attorneys currently practicing in this firm who
have rendered legal advice to the Company in connection with the negotiation and
the preparation of one or more of the Transaction Documents. Except to the
extent expressly set forth herein or as we otherwise believe to be necessary to
our opinion, we have not undertaken any independent investigation to determine
the existence or absence of any fact, and no inference as to our knowledge of
the existence or absence of any fact should be drawn from our representation of
the Company or the rendering of the opinions set forth below.
The opinions hereinafter expressed are subject to the following
qualifications:
(i) We express no opinion as to the effect of
bankruptcy, insolvency, reorganization, arrangement, liquidation,
conservatorship, readjustment of debt, moratorium and other similar laws
relating to or affecting the rights of creditors;
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207
(ii) We express no opinion as to the effect of rules
of law governing specific performance, injunctive relief and other equitable
remedies (regardless of whether any such remedy is considered in a proceeding at
law or in equity);
(iii) We express no opinion as to the effect of
general principles of equity and similar principles, including, without
limitation, concepts of materiality, reasonableness, unconscionability, good
faith and fair dealing, and the effect of public policy; and
(iv) We express no opinion as to the enforceability
of any provision of any of the Transaction Documents relating to indemnification
or contribution to the extent that such provision may be subject to limitations
of public policy and the effect of applicable statutes and judicial decisions.
We are licensed to practice law only in the State of
California. The opinions expressed herein are limited in all respects to
existing laws of the State of California, the General Corporation Law of
Delaware and applicable federal laws of the United States. We have made no
inquiry into, and express no opinion with respect to the statutes, regulations,
treaties or common laws of France or any other nation, state or jurisdiction, or
the effect on the transactions contemplated in the Transaction Documents of
non-compliance under any such statutes, regula tions, treaties or common laws.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of California, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification, except for those failures to be so
qualified or in good standing which will not in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole;
2. The Subsidiary has requisite corporate power and authority to execute,
deliver and perform the Transaction Documents to which it is a party. The
execution, delivery and performance of the Transaction Documents to which the
Subsidiary is a party has been duly authorized and approved by all necessary
corporate action and no other corporate proceedings on the part of the
Subsidiary are necessary to authorize such Transaction Documents or the
transactions contemplated thereby.
3. To our knowledge, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, could have a
material adverse effect on the Company and its subsidiaries taken as
3
208
a whole, and to our knowledge, no such proceedings are threatened or
contemplated by governmental authorities or other third parties;
4. The issuance and delivery of the Consideration Shares and the Promissory
Notes by the Company to the Seller at the Closing, the payment of the Initial
Cash Price by the Subsidiary and the Company to the Seller at the Closing and
the execution and delivery of the other Transaction Documents by the Company and
the Subsidiary will not result in a breach or violation of any of the terms or
provisions of or constitute a default (or an event that with notice or lapse of
time, or both, would constitute a default) under the Subsidiary's Articles of
Incorporation or By-Laws or, to our knowledge, any indenture, mortgage, deed of
trust, note agreement, lease, franchise, permit, material contract or license or
other agreement, instrument or obligation known to us to which either Purchaser
is a party or by which either Purchaser or any of its respective properties is
or may be bound, or, to our knowledge, any law, order, rule, regulation,
judgment or decree known to us of any court or governmental agency or body
having jurisdiction over either Purchaser or any of its respective properties
or, to our knowledge, result in the creation or imposition of a lien, charge or
encumbrance upon any property or assets of the either Purchaser;
5. To our knowledge, no consent, approval, authorization, order, registration,
designation, declaration, filing, qualification, license or permit of any United
States court or any United States public, governmental administrative or
regulatory agency or body is required for the issuance and delivery of the
Consideration Shares or the Promissory Notes, for the execution, delivery and
performance of any of the Transaction Documents or for the consummation by the
Company and/or the Subsidiary of the transactions contemplated thereby, except
such as may be required under the Securities Act or the securities or "Blue Sky"
laws of applicable jurisdictions in connection with the issuance of the
Consideration Shares to Seller;
6. The Subsidiary is not in violation of its Articles of Incorporation or
Bylaws, or to our knowledge, in breach of or default with respect to any
provision of any agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument known to us which the Subsidiary is a
party or by which it or any of its properties may be bound or affected, except
where such default would not result in a material adverse effect on the Company
and its subsidiaries taken as a whole, and, to our knowledge the Subsidiary is
in compliance with all laws, rules, regulations, judgments, decrees, orders and
statutes of any court or jurisdiction to which they are subject, except where
noncompliance would not have a material adverse effect on the Company and its
subsidiaries taken as a whole;
7. Each Transaction Document to which Subsidiary is a party has been duly
authorized, executed and delivered by Subsidiary and, assuming the valid
authorization, execution and delivery of each such Transaction Document by the
Company, the Seller and the Shareholders, is a legal, valid and binding
obligation of Subsidiary, enforceable against Subsidiary in accordance with its
respective terms;
4
209
8. Assuming (i) that each Transaction Document to which the Company is a party
constitutes a valid and legally binding agreement as to matters of French law,
(ii) that neither any such Transaction Document nor any of the respective
transactions contemplated therein violates any provisions of French law, (iii)
that each such Transaction Document has been validly authorized, executed and
delivered by each of the Company, Seller and the Shareholders and (iv) that the
Company's statuts will not be violated by the Company's execution, delivery and
performance of any such Transaction Document or by the consummation of any of
the respective transactions contemplated thereby, then each such Transaction
Document is a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms;
9. Subject to the accuracy of the representations of Seller and the Shareholders
in the Transaction Documents, the offer and issuance of the Consideration Shares
to Seller constitutes a transaction exempt from the registration requirements of
Section 5 of the Securities Act.
This opinion is furnished to you by us as U.S. counsel to the
Purchasers in connection with the Purchase Agreement and the transactions
contemplated thereby. This opinion may not be relied upon by you for any other
purpose or made available to or relied upon by any other person or entity for
any purpose without our prior written consent.
Very truly yours,
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
5
210
EXHIBIT P
OPINION OF STIBBE SIMONT XXXXXXX DUHOT & XXXXXX
211
EXHIBIT P
[FORM OF XXXXXX OPINION]
Dear Sirs,
We have acted as French counsel to ILOG SA, a societe anonyme (the
"Company"), in relation to French law in connection with the negotiation,
execution of: (i) that certain Asset Purchase Agreement dated August 4, 1997
(the "Purchase Agreement") by and among the Company, ILOG, Inc., a wholly owned
subsidiary of the Company (the "Subsidiary"), CPLEX Optimization, Inc.
("Seller"), and Xxxx Xxxx, Xxxxx Xxxx and Xxxxxx Xxxxx (such three individuals,
the "Shareholders") and (ii) that certain Asset Contribution Agreement (contrat
d'apport) by and between the Company and the Seller and each Shareholder (the
"Contribution Agreement") and in connection with the consummation of the
transactions contemplated by the Purchase Agreement and the Contribution
Agreement (the Purchase Agreement and the Contribution Agreements, together, the
"Agreements"). This opinion is being furnished pursuant to Section __ of the
Purchase Agreement. All defined terms not defined herein shall, unless the
context otherwise requires, have the meanings ascribed to them in the Purchase
Agreement.
I. DOCUMENTS
For purposes of this opinion, we have examined the following documents:
1. a certified copy of the statuts of the Company adopted on October
17, 1996 and an extract (Form K-bis) of the Registre du Commerce et des Societes
of Creteil relating to the Company dated _________, 1997;
2. a certificat de non-faillite from the Registre du Commerce et des
Societes of Creteil relating to the Company dated ________;
3. copies of corporate documents of the Company relative to issue of
stock and options; and
4. all other relevant corporate documents of the Company, including
without limitation a copy of the minutes of the extraordinary general meeting of
the shareholders of the Company held on August __, 1997, issuing the
Consideration Shares, a copy of the report of the Board of Directors and of the
statutory auditors of the Company for such shareholders' meeting;
5. each Agreement, the stock option agreements entered into by and
between the Company and each Shareholder (the "Options"), (together the
"Transaction Documents"); and
212
6. such further documents and matters of law as we have considered
necessary or appropriate for the purposes of rendering this opinion.
II. ASSUMPTIONS
The opinions set out in this letter relate only to the laws of France
as in force at the date hereof and are based upon the following assumptions:
1. the genuineness of all signatures, stamps and seals, the
authenticity and completeness of all documents submitted to us as originals and
the completeness and conformity to the originals of all documents supplied to us
as certified or photostatic or faxed copies and the authenticity of the
originals of such documents;
2. the due authorization, execution and delivery of each of the
Transaction Documents by each of the parties thereto (except the Company) and
that performance thereof is within the capacity and powers of each of the
parties thereto (except the Company);
3. the absence of any other arrangement between any of the parties to
the Agreements which would modify or supersede any of the terms of any of the
said agreements;
4. the obligation of the Company contained in any Transaction Document
which is expressed to be or is in fact governed by the laws of the State of
Delaware are legal, valid, binding and enforceable obligations of the Company
under the laws referred to above.
II. OPINIONS.
The opinions set out in this letter relate only to French law. We have
made such examination of French law as in our judgment is necessary for the
purpose of this opinion. We do not, however, purport to be qualified to pass
upon, and we express no opinion herein as to the laws of any jurisdiction other
than those of France.
On the basis of such assumptions and subject to the reservations set
out below, we are of the opinion that:
1. The Company has been duly incorporated and is validly
existing as a corporation (societe anonyme) under the laws of the Republic of
France, with full power and authority (corporate and other) to conduct its
business as presently conducted and to enter into and perform its obligations
under the Transaction Documents;
2. The Company has an issued share capital as set forth in the
Transaction Documents, and all of the issued shares of capital stock of the
Company have been duly and validly issued and are fully paid; all of the
Consideration Shares to be issued by the Company to the Seller
213
pursuant to the Transaction Documents have been duly and validly issued,
delivered and fully paid as provided in the Transaction Documents; and all of
the shares of capital stock issuable upon the exercise of the Options (such
share, the "Option Shares") to be granted by the Company to the Shareholders in
connection with their employment with the Subsidiary will, when issued in the
manner provided in the Options, be duly and validly issued, delivered and fully
paid. The Options and the Company's other outstanding options to purchase shares
(options de souscription d'actions) in the Company have been duly and validly
authorized by the shareholders of the Company;
3. There are no preemptive rights to subscribe (droit
preferentiel de souscription) for the Consideration Shares, nor are there any
restrictions upon the voting or transfer of any of the Consideration Shares
pursuant to the Company's statuts other than as provided by law;
4. The Company has full corporate power and authority to enter
into the Promissory Notes and each of the Transaction Documents and to perform
its obligations thereunder (including to issue and deliver the Consideration
Shares and the Option Shares, to pay the Initial Cash Payment and to issue and
deliver the Promissory Notes and the Options); when required under French law,
each Transaction Document has been duly and validly authorized, executed and
delivered by the Company. Assuming the provisions of the Purchase Agreement
concerning the Contribution Agreement and the Options are valid and legally
binding under Delaware law, (i) each of the Transaction Documents (x)
constitutes a valid and legally binding agreement as to the matters of French
law addressed therein and (y) does not violate any provisions of French law and
(ii) the performance of the Company's obligations under the Promissory Notes
will not violate any provision of French law;
5. No consent, approval, authorization, order, registration,
designation, declaration, filing, qualification, license or permit of any French
court or any French public, governmental, administrative or regulatory agency or
body or any other person is required for the issuance and delivery of the
Consideration Shares by the Company to the Seller upon the Closing, for the
execution or delivery and performance by the Company of the Transaction
Documents, for the issuance of the Option Shares pursuant to the Options or for
the consummation by the Company of the transactions contemplated by the
Transaction Documents; provided however that a [declaration/letter of
information] to the French Ministry of the Economy, Finance and Budget will have
to be [made/sent] on closing;
6. The choice of Delaware law to govern the Promissory Notes
and some of the Transaction Documents is, under the laws of France, a valid
choice of law and any final judgment for a sum of money against the Company in
relation to the Transaction Documents or the Promissory Notes rendered by a
competent United States Federal or State court in the city of San Jose,
California would be recognized and enforced by the French courts, except (a) in
original actions brought in French courts, certain questions of procedural law
and, in certain events, questions of public policy, would be governed by French
law, and (b) a judgment of a United States court may not be enforceable in a
French court if such enforcement would violate French public policy or be
inconsistent with French procedural law; and service of process effected in the
manner set forth in
214
Section 11.6 of the Asset Purchase Agreement, assuming its validity under
Delaware law, will be effective, insofar as French law is concerned, to confer
valid personal jurisdiction over the Company.
The opinions expressed above are subject to the following reservations:
1. Where any party to a Transaction Document is vested with a
discretion, French law requires that such discretion is not abused;
2. Any enforcement against the Company may be limited by the provisions
of French law giving discretionary powers to the French courts such as the
discretion to limit or increase the amount of payments due under any penalty or
indemnity clause which, taking into consideration the respective positions of
the parties, is considered by such courts to be manifestly excessive or nominal,
and such as the discretion to grant a grace period of up to two years or to
reduce the rate of interest applicable to deferred payments;
3. We express no opinion as to the availability under French law or
before a French court of the enforcement of a performance obligation or any
other remedy other than those culminating in a judgment for the payment of
money;
4. This opinion is subject to the application of any applicable
bankruptcy, liquidation, winding-up, insolvency or similar laws affecting the
rights of creditors generally; and
5. Other than as expressly set forth above, no opinion is given hereby
in respect of the Transaction Documents, the rights and obligations which may
result therefrom, or the information contained therein or the measures taken or
able to be taken upon performance of the Transaction Documents other than
exclusively as to matters of French law.
We express no opinion as to any agreement, instrument or other document
other than as specified in this letter.
We are qualified to practice law in the Republic of France. We have
made no independent investigations of the laws of any jurisdiction other than
the laws in effect in the Republic of France as at the date hereof as a basis
for the opinions expressed herein. We do not express any opinion on the laws of
any jurisdiction other than the laws of the Republic of France.
This opinion is exclusively addressed to you, although copies may be
given to your legal advisers for information purposes. Accordingly, only you may
refer to the opinions expressed herein; this opinion may not be used for any
other purpose nor may it be communicated to any third party.
Very truly yours
215
SCHEDULE 1.1(b)
FIXED ASSETS
216
Schedule 1.1(b)
Seller's Fixed Assets
6/30/97
Date E&Y Accum. E&Y
Description Acquired Cost Depreciation Dock Value
----------- -------- ------ ------------ ----------
Computer Hardware - Xxxxx Xxxx 11/2/89 7,125 7,125 0
Hard Disk for DP386/25 11/29/89 965 965 0
Software - The Programmers Shop 3/30/89 1,195 1,195 0
Software - System Enhancement As 7/18/89 50 50 0
Software - PharLap Run-Time Lic 8/22/89 556 556 0
Xxxxx 0 + Quota 7/17/90 15,594 15,594 0
US Robotics Modem 8/16/90 805 805 0
Surge Protector 9/28/90 41 41 0
Software - Word 4, Excel, On Cue 3/30/91 550 550 0
3 Modular Office Workstations 10/23/91 3,929 3,929 0
Memory Expansion for Compaq 20 2/1/91 466 466 0
Macintosh IIsi Computer 2/3/91 3,959 3,959 0
Gator Box - Network Hardware 6/15/91 1,498 1,498 0
Sun SparcII Unix Computer 7/12/91 13,481 13,481 0
PC Printer for Dell 1/30/92 209 209 0
Filing Cabinet 5/6/92 218 218 0
------ ------ -----
At 6/30/92 50,641 50,641 0
150 MB QIC Tape Drive 10/29/92 1,655 1,655 0
Sun PC NFS Software 11/16/92 1,569 1,569 0
Apurnix 0 XX Xxxx Xxxxx 11/30/92 2,456 2,456 0
Watcom C Compiler 12/14/92 569 569 0
Purify Development 1/1/93 2,750 2,750 0
HP Memory 2/25/93 2,756 2,756 0
Rob Office Chair 2/25/93 536 465 71
Sun Spare 10 Update 4/15/93 10,782 10,782 0
Laser Printer 5/24/93 948 948 0
Sun Hard Drive 7/14/93 1,509 1,509 0
SGI Workstation 7/14/93 23,332 23,332 (0)
TI Laptop 7/20/93 3,579 3,579 0
Ethernet Adapter 7/30/93 290 290 0
PC NFS Software 7/30/93 354 354 0
Telabit T3000 Modem 8/31/93 635 635 (0)
R-Squared Modem 8/31/93 758 758 0
Dell Pentiun 1/13/94 4,580 4,580 0
Watcom Compiler 1/31/94 1,019 1,019 0
HQ Mac Due Dock 2/23/94 3,668 3,668 0
Dell 486 2/28/94 3,080 3,080 0
Visual Basic Compiler 2/28/94 419 419 0
Dell 466/SPS 4/29/94 4,590 4,590 0
HP Memory 6/15/94 2,507 2,507 0
FAX Machine 7/1/94 309 309 0
Office Chair 7/30/94 367 204 163
Power Mac 8/25/94 2,779 2,623 114
CD ROM 9/30/94 533 489 44
Laserjet Printer 1/17/95 2,933 2,363 570
Mac Ethernet Network 1/31/95 1,710 1,378 ?32
Parasoft Software 4/3/95 1,710 1,148 382
Power Mac 4/5/95 2,530 1,802 601
Apple Laserwriter 4/5/95 1,498 1,124 374
Microsoft Office 4/5/95 467 350 117
FAX Machine 4/10/95 285 214 71
Dell Pentium 5/2/95 3,521 2,543 978
Sharp Laser FAX 5/2/95 800 578 27?
Office Furniture 5/2/95 2,500 1,083 1,417
Laser Printer 5/16/95 855 594 261
Phone System 5/17/95 4,203 2,919 1,284
Note: Accumulated depreciation per FY was estimated based on the straight-line
method over a useful life of 3 years for computer equipment and purchased
software, and a useful life of 5 years for furniture and other equipment. This
is consistent with the depreciation method used by ILOG.
217
Office Furniture 5/25/95 6.258 2.608 3.650
Power Mac/Monitor 6/2/95 6.137 4.262 1.875
HON Chairs 6/26/95 1.251 500 751
FAX Modem 6/30/95 241 161 80
Tape Backup Xxxx 0/0/00 000 000 000
Xxxxxxxx Monitors 10/1/95 1,268 740 528
Chairs, Desk Pedestal 10/16/95 526 175 351
Claridge White Board/Panel 10/16/95 499 166 333
Guest Chairs 12/4/95 336 106 230
PC Monitor 12/28/95 2,117 1,058 1,058
Xxxxxxx XX00 2/16/96 6,692 2,974 3,718
Modem 2/29/96 408 181 227
Hard Drive 2/29/96 577 256 321
DEC Alpha 3000 3/18/96 7,500 3,125 4,375
DEC Monitor 4/17/96 348 135 213
DEC Alpha Kit 5/2/96 4,818 1,874 2,944
PC 5100 6XM 5/15/96 3,769 1,466 2,303
Windows NT Software 5/15/96 317 123 194
IBM Notepad PC 5/21/96 8,600 3,106 5,494
Tape Backup 6/17/96 272 91 181
------- ------- -------
153,648 117,468 36,080
At 6/30/96 204,189 168,109 36,080
Office Chairs 7/16/96 1,209 222 987
Macintosh 8/5/96 999 305 697
Laser Printer 8/5/96 2,113 646 1,467
Macintosh 8/5/96 3,339 1,020 2,319
Pentium Pro 200 8/30/96 4,479 1,244 3,235
Falcon Hard Drive 8/30/95 843 234 609
Falcon Hard Drive 9/18/96 834 208 626
VSPS10 9/18/96 1,805 451 1,354
Video Projector 9/18/96 3,924 981 2,943
Monitor 9/30/96 1,750 438 1,312
Technical Furniture 9/30/96 3,890 584 3,306
Hard Drive 10/16/00 000 00 278
2 Phones 10/16/96 402 89 313
Monitor 10/31/96 1,867 415 1,452
Sun Ultra 12/12/96 10,937 2,127 8,810
Quark Software 12/27/96 667 111 556
Macintosh 12/27/96 1,790 298 1,492
Modular Office Furniture 1/27/97 5,385 449 4,936
4 Oak Bookshelves TV 1/31/97 1,232 103 1,129
Panorama Server SWT 2/19/97 869 97 772
Conference Room Table 2/28/97 2,830 189 2,641
Alder Conference Room Chairs 2/28/97 2,675 178 2,497
Xxxxxx Xxxxx PC 3/1/97 3,056 340 2,716
RPG Monitor 3/28/97 660 55 605
Sun Solaris XXX NJ 4/1/97 1,716 143 1,573
Modular Office Furniture 4/15/97 9,970 498 9,472
BSD Server 5/29/97 1,270 35 1,235
Terry's Power Comp 5/29/97 2,082 58 2,024
Xxxxxx Office PC 5/29/97 4,725 131 4,594
REB Home Office Solaris System 6/16/97 5,533 0 5,533
------- ------- -------
83,208 11,728 71,480
------- ------- -------
TOTAL: 287,397 179,837 107,560
------- ------- -------
Note: Accumulated depreciation per EY was estimated based on the straight-line
method over a useful life of 3 years for computer equipment and purchased
software, and a useful life of 5 years for furniture and other equipment. This
is consistent with the depreciation method used by ILOG.
218
SCHEDULE 1.2
EXCLUDED ASSETS
219
SCHEDULE 1.2
EXCLUDED ASSETS
* All royalties accrued through the close date under CPLEX Value Added Reseller
Agreements
* Prepaid rent from close date to end of August
* Apple Macintosh computer
* Apple LaserWriter IINT
* Apple 21" B&W Monitor
* Lunchroom refrigerator
* Employees' personal artwork (which is all artwork except three framed boating
posters)
* Hewlett Packard HP9000/715/100 computer system and peripherals -- loaned
* Sun Microsystems Ultra-2 computer system and peripherals -- loaned
* SGI Power Challenge computer system and peripherals -- loaned
* SGI Origin 200 computer system and peripherals -- see schedule 2.6 -- loan
non-assignable
* Sun Ultra 3000 computer and peripherals -- see schedule 2.6 -- loan
non-assignable
* DEC 4100 computer system and peripherals -- see schedule 2.6 -- loan
non-assignable
* All rights under all policies of insurance insuring the Seller or its
properties or operations (including all causes of action or claims arising
thereunder) and all short-rate refunds with respect thereto
* All claims of the Seller for any refund of taxes of any kind
* All rights of the Seller under the Asset Purchase Agreement
220
SCHEDULE 2.3
OBLIGATIONS WITH RESPECT TO CAPITAL STOCK
None.
221
SCHEDULE 2.5
SECURITY INTERESTS, LIENS, ENCUMBRANCES, ETC.
None.
222
SCHEDULE 2.6
REQUIRED CONSENTS & ABSENCE OF CONFLICTS
223
SCHEDULE 2.6
REQUIRED CONSENTS
o Software License Agreement between American Telephone and Telegraph Company
and Seller effective June 1, 1992 related to AT&T Mathematical Programming
Languages and amendments and modifications to date.
o Sublicensing Agreement between American Telephone and Telegraph Company
effective June 1, 1992 related to AT&T Mathematical Programming Languages
and amendments and modifications to date.
o Loan of Products agreement between Digital Equipment Corporation and Seller
dated 1/30/97 related to the loan of a DEC 4100 computer system.
o Equipment loan agreement between Silicon Graphics and Seller dated March 10,
1997 related to loan of Origin 200 computer system.
o Equipment loan and software license agreement between Sun Microsystems and
Seller dated November 22, 1996 related to the loan of E3000 computer system.
224
SCHEDULE 2.17
SELLER'S INSURANCE POLICIES
225
Schedule 2.17
Seller's Insurance Polices
Company: Hartford Spectrum Business Insurance Policy
Policy #: 53 SBA EN1169
Expires: 6/15/98
Coverage: See attached certificate of insurance
226
--------------------------------------------------------------------------------
XXXXX CERTIFICATE OF INSURANCE PAYMENT DATE
07/25/97
--------------------------------------------------------------------------------
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER
OF INFORMATION ONLY AND CONFERS NO
Xxxx Renath Insurance RIGHTS UPON THE CERTIFICATE HOLDER.
THIS CERTIFICATE DOES NOT AMEND,
000 Xxxxx Xxxx, Xxxxx 0 XXXXXX XX ALTER THE COVERAGE AFFORDED
Xxxxxxx Xxxxxxx, XX 00000- BY THE POLICIES BELOW.
(000) 000-0000 ---------------------------------------
COMPANY
A ITT HARTFORD
--------------------------------------------------------------------------------
INSURED COMPANY
B
CPLEX ---------------------------------------
000 XXXXX XXXXX, XXXXX 000 COMPANY
C
XXXXXXX XXXXXXX XX 00000- ---------------------------------------
(000) 000-0000 COMPANY
D
--------------------------------------------------------------------------------
CONFIRMATION
--------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN
ISSUED TO THE INSURED NAME ABOVE FOR THE POLICY AS SO INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THE CERTIFICATE MAY BE ISSUED OR MAY
PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT
TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN
MAY HAVE BEEN REDUCED BY PAID CLAIMS.
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
CO POLICY EFFECTIVE POLICY EXPIRATION
LTR TYPE OF BUSINESS POLICY NUMBER DATE (MM/DD/YY) DATE (MM/DD/YY) LIMITS
------------------------------------------------------------------------------------------------------------------------------------
A GENERAL LIABILITY GENERAL AGGREGATE $2000000
----------------------------------
[X] COMMERCIAL GENERAL LIABILITY 53 SBA EM1169 06/15/97 06/15/98 PRODUCTS-COMP/OP AGG $2000000
----------------------------------
[ ][ ] CLAIMS MADE [X] OCCUR PERSONAL & ADV INJURY $1000000
----------------------------------
[ ] OWNERS & CONTRACTOR'S PROT EACH OCCURRENCE $1000000
----------------------------------
[ ] __________________________ PAC DAMAGE (Any one occ) $300000
----------------------------------
[ ] MED EXP (Any one person) $10000
------------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY / / / / COMBINED START LIMIT $
----------------------------------
[ ] ANY AUTO BODILY INJURY $
(Per person)
[ ] ALL OWNED AUTOS ----------------------------------
BODILY INJURY $
[ ] SCHEDULED AUTOS (Per accident)
----------------------------------
[ ] HIRED AUTOS PROPERTY DAMAGE $
----------------------------------
[ ] NON-OWNED AUTOS
[ ] __________________________
[ ]
------------------------------------------------------------------------------------------------------------------------------------
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
[ ] ANY AUTO / / / / ----------------------------------
OTHER THAN AUTO ONLY
[ ] __________________________ ----------------------------------
EACH ACCIDENT $
----------------------------------
[ ] AGGREGATE $
------------------------------------------------------------------------------------------------------------------------------------
EXPRESS LIABILITY EACH OCCURRENCE $
[ ] UMBRELLA FORM / / / / ----------------------------------
AGGREGATE $
----------------------------------
[ ] OTHER THAN UMBRELLA FORM $
------------------------------------------------------------------------------------------------------------------------------------
WORKERS COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY / / / / ----------------------------------
EACH ACCIDENT $
THE PROPRIETORY [ ] INCL ----------------------------------
PARTNERS/EXECUTIVE DISEASE - POLICY LIMIT $
OFFICES ARE [ ] EXCL ----------------------------------
DISEASE - EACH EMPLOYEE $
------------------------------------------------------------------------------------------------------------------------------------
A OTHER
BUS. PERSONAL PROPERTY 53 SBA EN1169 06/15/97 06/15/98 SPECIAL FORM $50,000
COMPUTERS SPECIAL FORM $100,000
------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
--------------------------------------------------------------------------------
CERTIFICATEHOLDERS CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED
POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUER'S
COMPANY WILL BE REQUIRED TO MAIL 30 DAYS
WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT, BUT FAILURE TO MAIL
SUCH NOTICE SHALL IMPOSE NO OBLIGATION
OR LIABILITY OF ANY KIND UPON THE
COMPANY, ITS AGENTS OR REPRESENTATIVES.
-----------------------------------------
AUTHORIZED REPRESENTATIVE
[SIG]
--------------------------------------------------------------------------------
227
SCHEDULE 2.18
MATERIAL CHANGES SINCE JUNE 30, 1997
228
Schedule 2.18
-------------
Material Changes
* None.
