EXHIBIT 99.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND AMONG
DIVINE, INC.
AND
CERTAIN DOMESTIC SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HERETO
AS SELLERS
AND
DS&MS NEWCO, INC.
AS PURCHASER
AND
GOLDEN GATE PRIVATE EQUITY, INC.
AS GUARANTOR
DATED AS OF
APRIL 9, 2003
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................6
SECTION 1.1 DEFINITIONS. .....................................................6
SECTION 1.2 ADDITIONAL DEFINITIONS............................................15
SECTION 1.3 HEADINGS..........................................................15
SECTION 1.4 SCHEDULES... .....................................................15
SECTION 1.5 REFERENCES TO ARTICLES, ETC.......................................15
SECTION 1.6 REFERENCES TO "HEREIN," ETC.......................................15
ARTICLE II PURCHASE AND SALE OF THE ASSETS; PURCHASE PRICE....................15
SECTION 2.1 PURCHASE AND SALE OF THE ASSETS...................................15
SECTION 2.2 EXCLUDED ASSETS...................................................17
SECTION 2.3 ASSUMPTION OF LIABILITIES.........................................19
SECTION 2.4 EXCLUDED LIABILITIES..............................................20
SECTION 2.5 PURCHASE PRICE................................................. ..21
SECTION 2.6 ALLOCATION OF THE PURCHASE PRICE..................................21
SECTION 2.7 FOREIGN SUBSIDIARIES..............................................21
ARTICLE III THE CLOSING..................................................... .22
SECTION 3.1 TIME AND PLACE OF CLOSING........................................ 22
SECTION 3.2 DELIVERIES AT CLOSING.............................................22
SECTION 3.3 ASSIGNMENT OF ASSIGNED CONTRACTS, ETC.............................23
SECTION 3.4 SALES, USE AND OTHER TAXES........................................23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS......................24
SECTION 4.1 ORGANIZATION......................................................24
SECTION 4.2 POWER AND AUTHORITY...............................................24
SECTION 4.3 NO VIOLATION......................................................24
SECTION 4.4 ACTIONS...........................................................25
1
SECTION 4.5 COMPLIANCE WITH LAWS..............................................25
SECTION 4.6 TITLE TO PROPERTY.................................................25
SECTION 4.7 APPROVALS.........................................................25
SECTION 4.8 BROKER'S OR FINDER'S FEES.........................................25
SECTION 4.9 REAL PROPERTY.....................................................26
SECTION 4.10 "AS IS" TRANSACTION..............................................26
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.....................26
SECTION 5.1 ORGANIZATION AND GOOD STANDING....................................27
SECTION 5.2 POWER AND AUTHORITY...............................................27
SECTION 5.3 NO VIOLATION......................................................27
SECTION 5.4 APPROVALS.........................................................27
SECTION 5.5 SOLVENCY; AVAILABILITY OF FUNDS...................................27
SECTION 5.6 AFFILIATED AND ASSOCIATED PERSONS.................................28
SECTION 5.7 BROKER'S OR FINDER'S FEES.........................................28
ARTICLE VI COVENANTS OF THE SELLERS...........................................28
SECTION 6.1 CONDUCT OF BUSINESS...............................................28
SECTION 6.2 ACQUISITION PROPOSALS.............................................29
SECTION 6.3 ACCESS TO THE SELLERS.............................................29
SECTION 6.4 NOTIFICATION OF CERTAIN MATTERS...................................30
SECTION 6.5 AVOIDANCE ACTIONS.................................................30
SECTION 6.6 BANKRUPTCY COURT FILINGS..........................................30
SECTION 6.7 CHANGE OF NAME....................................................30
SECTION 6.8 SATISFACTION OF CONDITIONS........................................30
SECTION 6.9 POST-CLOSING CASH RECEIPTS........................................30
SECTION 6.10 AUCTION..........................................................31
ARTICLE VII COVENANTS OF THE PURCHASER........................................31
2
SECTION 7.1 NO INTERFERENCE WITH BANKRUPTCY CASE..............................31
SECTION 7.2 ADEQUATE ASSURANCE................................................31
SECTION 7.3 NOTIFICATION OF CERTAIN MATTERS...................................31
SECTION 7.4 SATISFACTION OF CONDITIONS........................................32
SECTION 7.5 ASSETS COVERED BY MSB LIABILITIES.................................32
ARTICLE VIII AGREEMENTS OF PURCHASER AND SELLER...............................32
SECTION 8.1 XXXX-XXXXX-XXXXXX COOPERATION.....................................32
SECTION 8.2 EMPLOYEES.........................................................32
SECTION 8.3 RESTRICTED ASSETS.................................................33
SECTION 8.4 TEMPORARY SERVICES AGREEMENT......................................33
ARTICLE IX CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS................33
SECTION 9.1 REPRESENTATIONS AND WARRANTIES....................................33
SECTION 9.2 PERFORMANCE.......................................................33
SECTION 9.3 NO ORDER..........................................................33
SECTION 9.4 SALE PROCEDURES/BANKRUPTCY COURT ORDERS...........................34
SECTION 9.5 EXPIRATION OF THE HSR ACT WAITING PERIOD..........................34
SECTION 9.6 MSB LIABILITIES...................................................34
SECTION 9.7 ADJUSTED ACCOUNTS RECEIVABLE......................................34
SECTION 9.8 NO MATERIAL ADVERSE CHANGE........................................34
ARTICLE X CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS....................35
SECTION 10.1 REPRESENTATIONS AND WARRANTIES...................................35
SECTION 10.2 PERFORMANCE......................................................35
SECTION 10.3 NO ORDER.........................................................35
SECTION 10.4 BANKRUPTCY COURT ORDERS..........................................35
SECTION 10.5 EXPIRATION OF THE HSR ACT WAITING PERIOD.........................36
ARTICLE XI COVENANTS AND AGREEMENTS SUBSEQUENT TO THE CLOSING.................36
SECTION 11.1 BOOKS AND RECORDS; ACCESS........................................36
3
SECTION 11.2 FURTHER ASSURANCES...............................................36
ARTICLE XII TERMINATION.......................................................37
SECTION 12.1 TERMINATION......................................................37
SECTION 12.2 EFFECT OF TERMINATION............................................38
ARTICLE XIII MISCELLANEOUS....................................................39
SECTION 13.1 PUBLIC ANNOUNCEMENTS.............................................39
SECTION 13.2 AMENDMENT; WAIVER................................................39
SECTION 13.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES....................39
SECTION 13.4 FEES AND EXPENSES................................................40
SECTION 13.5 NOTICES..........................................................40
SECTION 13.6 ASSIGNMENT.......................................................41
SECTION 13.7 GOVERNING LAW; CONSENT TO JURISDICTION...........................41
SECTION 13.8 WAIVER OF JURY TRIAL.............................................42
SECTION 13.9 ENTIRE AGREEMENT.................................................43
SECTION 13.10 SEVERABILITY....................................................43
SECTION 13.11 NO THIRD PARTY BENEFICIARIES....................................43
SECTION 13.12 COUNTERPARTS....................................................43
SECTION 13.13 GUARANTEE.......................................................43
4
ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (the "AGREEMENT"), dated as of April 9,
2003 (the "EXECUTION DATE"), is entered into by and among divine, inc., a
Delaware corporation ("PARENT") and certain of its domestic subsidiaries set
forth on the signature pages hereto ("SUBSIDIARIES" and together with Parent,
the "SELLERS"), dS&MS Newco, Inc., a corporation formed pursuant to the laws of
the Cayman Islands (the "PURCHASER") and, for purposes of Section 13.13 hereof,
Golden Gate Private Equity, Inc., a Delaware corporation ("GOLDEN GATE").
W I T N E S S E T H
WHEREAS, the Sellers are engaged in (i) the business of building,
hosting, managing, monitoring, and securing clients' critical applications by
offering design and engineering of managed hosting solutions; installation,
configuration, and testing of hardware and software systems; ongoing
maintenance, back-ups, and upgrades; performance and security monitoring; and
technical support, including, without limitation, with respect to each of the
products listed on EXHIBIT A attached hereto under the caption "Managed Services
Products" (the "MANAGED SERVICES BUSINESS"), (ii) the business of deploying
software solutions that focus on collaboration, workflow and relationship and
content management such as voice-based customer contract tools, auto-response
applications, telephony webinars (Web-based seminars), secured messaging, team
interaction, content acquisition, organization and management, content delivery
and training programs, and integrated software installation services through the
divine Professional Services Group, including, without limitation, with respect
to each of the products listed on EXHIBIT A hereto under the caption "SSO
Products" (the "SOFTWARE SERVICES BUSINESS") and (iii) all other businesses and
operations of the Sellers (the Managed Services Business, the Software Services
Business and the other operative businesses of the Sellers are hereinafter
referred to as the "BUSINESS");
WHEREAS, each Seller is a debtor and a debtor in possession in a case
(the "BANKRUPTCY CASE") filed in the United States Bankruptcy Court for the
District of Massachusetts, Eastern Division (the "BANKRUPTCY COURT") under
Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101, et
seq. (the "BANKRUPTCY CODE") on February 25, 2003 (the "PETITION DATE").
WHEREAS, upon the terms and subject to the conditions set forth
herein, the Sellers desire to transfer, sell, convey, assign and deliver to the
Purchaser, and the Purchaser desires to acquire from Sellers, substantially all
of the assets of the Sellers primarily used in the Business, and Purchaser
desires to assume certain liabilities of the Sellers primarily incurred in
connection with the Business in accordance with the terms and subject to the
conditions of this Agreement (the "PROPOSED Transaction"); and
WHEREAS, the parties desire to consummate the Proposed Transaction,
including (i) the sale of the Transferred Assets to the Purchaser pursuant to
Sections 363(b), (f) and (m) of the Bankruptcy Code, free and clear of all Liens
except Assumed Liabilities and Permitted Exceptions, and (ii) the assignment by
the Sellers and the assumption by the
5
Purchaser, pursuant to Section 365 of the Bankruptcy Code, of all Assigned
Contracts to be assigned to the Purchaser under this Agreement, as promptly as
practicable after the Bankruptcy Court enters an order approving the Proposed
Transaction (the "SALE APPROVAL ORDER").
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The following terms, as used in this
Agreement, shall have the following meanings:
"Accounts Receivable" shall mean all accounts receivable of the
Sellers as of the Closing Date to the extent relating to the Business, including
any unbilled accounts receivable of the Sellers as of the Closing Date.
"Acquisition Documents" shall mean, collectively, this Agreement, the
Xxxx of Sale and the Assignment and Assumption Agreement and all agreements,
instruments, certificates and other documents executed and delivered in
connection herewith or contemplated hereby.
"Action" shall mean any claim, dispute, demand, cause of action or
action asserted in any arbitration, litigation, adversary proceeding, mediation,
suit, investigation or other proceeding and any appeal therefrom.
"Adjusted Accounts Receivable" shall mean (i) the $43,033,080 of gross
billed and unbilled outstanding domestic accounts receivable as of 12:01 am
Eastern Time on March 18, 2003, PLUS (ii) any new billed domestic accounts
receivable (without duplication to unbilled accounts receivable included in
clauses (i) or this clause (ii)) and any new unbilled domestic accounts
receivable, in each case, that accrued at any time during the period from March
18, 2003 through the Business Day prior to the Closing Date, all as determined
in accordance with GAAP, MINUS (iii) the amount of cash collections during the
period from March 18, 2003 through the Business Day prior to the Closing Date
with respect to the accounts receivable described in clauses (i) and (ii).
"Adjustment Amount" shall mean 25% of the amount by which the MSB
Liabilities are less than $8,000,000 as of the Effective Time. The Adjustment
Amount shall be calculated after giving effect to any payments made to reduce
the MSB Liabilities on or prior to the Effective Time, including any such
payments made, at the sole discretion of the Sellers, with the proceeds of the
Purchase Price contemporaneously with the Effective Time.
"Affiliate" shall mean, with respect to any Person, any Person which,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common
6
control with, such Person. As used in this definition, the term "control"
(including the terms "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct the management
policies of such Person, whether through the voting power of outstanding
securities, by contract or otherwise.
"Agreement" shall mean this
Asset Purchase Agreement and shall include
all of the Schedules and Exhibits attached hereto.
"Allocation" shall have the meaning ascribed to such term in Section
2.6 hereof.
"Alternative Transaction" shall mean any transaction occurring after
the Execution Date involving the consummation of the sale pursuant to Section
363(b) of the Bankruptcy Code or otherwise with respect to any of (i) the entire
Business, (ii) the Managed Services Business or (iii) the Software Services
Business, in any such case, by the Sellers to a purchaser other than the
Purchaser and/or one or more of its Affiliates at any time during the pendency
of the Bankruptcy Case or thereafter.
"Approval" shall mean any approval, authorization, consent, license,
franchise, order or permit of or by, notice to, or filing or registration with,
a Person.
"Assets" shall mean both the Transferred Assets and the Excluded
Assets.
"Assigned Contracts" shall mean (i) all Contracts listed on Schedule
1.1(a) and (ii) to the extent assignable, all Contracts set forth on Schedule
1.1(b). The Purchaser shall have the right, by written notice delivered to the
Sellers, at any time during the period from and after the date hereof through
12:01 pm Eastern Time on the Bid Date (or such later date on or prior to the
Closing Date as may be mutually agreed upon by the Purchaser and the Sellers),
to delete any Contract (including any lease of real property or any capital
equipment lease obligation or debt obligation set forth on Schedule 2.3(a)(iii))
from Schedule 1.1(a) or Schedule 1.1(b) hereof and Schedule 2.3(a)(iii) hereof
(it being understood that any such Contract deleted by the Purchaser from such
schedules through such date may subsequently be rejected by the Sellers in the
Bankruptcy Case). The Purchaser shall also have the right by written notice
delivered to the Sellers, at any time during the period from and after the date
hereof through and including twenty (20) Business Days after the Closing Date,
to add (x) any Contract that is not a Restricted Contract to Schedule 1.1(a)
hereof and (y) any Contract that is a Restricted Contract to Schedule 1.1(b)
hereof (excluding, in each case, employment agreements to which any Seller is a
party), PROVIDED, in each case, that such Contract has not been previously
rejected in the Bankruptcy Case, and PROVIDED FURTHER that (a) the Sellers'
obligation with respect to any Contract so added shall be limited to filing a
motion with the Bankruptcy Court to approve the transfer of such Contract to the
Purchaser and using reasonable best efforts to effectuate such transfer and (b)
to the extent such Contract is added after the Closing Date, the Purchaser shall
pay all amounts which may be payable pursuant to Section 365(b) of the
Bankruptcy Code on account of the assignment and assumption of such Contract.
Schedules 1.1(a) and 1.1(b) also include the estimated amounts (as of the date
hereof) of all amounts which may be payable pursuant to
7
Section 365(b) of the Bankruptcy Code on account of the assumption and
assignment of any Assigned Contract.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement, substantially in the form attached hereto as EXHIBIT B.
"Assumed Liabilities" shall have the meaning ascribed to such term in
Section 2.3 hereof.
"Auction Time" shall mean 9:00 am Eastern Time on Monday, April 14,
2003 or, if the Bankruptcy Court delays the date of the Auction (as defined in
the Sales Procedure Order), 9:00 am Eastern Time on such later date as the
Auction is held (it being understood that the Sellers have requested an
extension of the Auction Time in a motion filed with the Bankruptcy Court on
April 8, 2003).
"Bankruptcy Case" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Bankruptcy Code" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Bankruptcy Court" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Bankruptcy Court Orders" shall mean the Sale Procedures Order and the
Sale Approval Order.
"Beneficiaries" shall have the meaning ascribed to such term in
Section 13.13(a) hereof.
"Beneficiary" shall have the meaning ascribed to such term in Section
13.13(a) hereof.
"Bid Date" shall mean Friday, April 11, 2003 or, if the Bankruptcy
Court extends the Bid Deadline (as defined in the Sale Procedures Order) beyond
April 11, 2003, it shall mean the date of the Bid Deadline (it being understood
that the Sellers have requested an extension of the Bid Date in a motion filed
with the Bankruptcy Court on April 8, 2003).
"Xxxx of Sale" shall mean the xxxx of sale transferring to the
Purchaser the Transferred Assets, substantially in the form attached hereto as
EXHIBIT C.
"Books and Records" shall have the meaning ascribed to such term in
Section 2.1(f) hereof.
"Break-Up Fee" shall mean cash in an amount equal to $1,140,000.
8
"Business" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Business Day" shall mean a day that is not a Saturday, a Sunday or a
day on which banks in the State of
Illinois are required or authorized to close
for regular banking business.
"Claims" shall mean all claims, causes of action, choses in action,
rights of recovery and rights of set-off of whatever kind or description against
any person or entity.
"Closing" shall mean the consummation of the transactions contemplated
by this Agreement.
"Closing Date" shall mean (i) the later of (A) the Business Day that
is three (3) Business Days after the date that all the conditions to Closing
described in Article IX and Article X hereof have been fully satisfied or waived
by the appropriate party or parties or (B) the Business Day that is ten (10)
Business Days after the Auction (as defined in the Sale Procedures Order) or
(ii) such other date as the Purchaser and the Sellers may mutually agree upon.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Committee" shall mean the Official Committee of Unsecured Creditors
in the Bankruptcy Case.
"Contract" shall mean each instrument, contract, license and other
agreement, including real property leases, operating leases, capital leases,
unexpired leases of personal property and other leases, in each case primarily
relating to the Business, to which any Seller is a party or by which it or any
of the Transferred Assets is bound.
"Deposit" shall have the meaning ascribed to such term in Section 2.5
hereof.
"Drop Dead Date" shall have the meaning ascribed to such term in
Section 12.1(f) hereof.
"d/W-H" shall have the meaning ascribed to such term in Section 2.2(b)
hereof.
"Effective Time" shall mean 12:01 a.m. on the Closing Date.
"Eligible Employee" shall mean any individual in the employment of any
Seller with respect to the Business as of the Effective Time.
"Environmental Laws" shall mean Laws relating to the protection of the
environment and/or human health and safety from environmental effects or to the
generation, management, removal, remediation, emission, discharge, control,
processing, use, treatment, storage, disposal, transport, release, recycling, or
handling of Hazardous Materials.
9
"Environmental Permits" shall mean all permits, licenses,
authorizations, registrations and other governmental consents required under
Environmental Laws.
"Equipment" shall mean each item of machinery, equipment and fixture
owned by any Seller as of the Execution Date, or any subsequent replacements or
additions thereto in each case which has been or is now primarily used by any
Seller in connection with the Business.
"Escrow Account" shall have the meaning set forth in the Escrow
Agreement.
"Escrow Agent" means U.S. Bank, N.A.
"Escrow Agreement" shall mean the Escrow Agreement, dated as of the
date hereof, entered into by and among the Purchaser, Parent and Escrow Agent.
"Excluded Assets" shall have the meaning ascribed to such term in
Section 2.2 hereof.
"Excluded Liabilities" shall have the meaning ascribed to such term in
Section 2.4 hereof.
"Execution Date" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Executory Contracts" shall mean all Contracts to which any Seller is
a party that constitute "executory contracts" as such term is used in Section
365 of the Bankruptcy Code.
"Expense Reimbursement" shall have the meaning ascribed to such term
in Section 12.2(c) hereof.
"Final Order" shall mean an order, judgment or other decree, the
operation or effect of which has not been reversed, stayed, modified or amended,
and which is no longer subject to appeal, certiorari proceeding, or other
proceeding for review or rehearing and as to which no appeal, certiorari
proceeding or other proceeding for review or rehearing shall then be pending.
"Foreign Subsidiaries" shall have the meaning ascribed to such term in
Section 2.7 hereof.
"Foreign Subsidiary" shall have the meaning ascribed to such term in
Section 2.7 hereof.
"Foreign Subsidiary Option" shall have the meaning ascribed to such
term in Section 2.7 hereof.
"GAAP" shall mean generally accepted accounting principles in the
United States.
10
"Golden Gate" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Governmental Authority" shall mean any foreign, federal, state, local
or other governmental, administrative or regulatory authority, body, agency,
court, tribunal or similar entity including any arbitrator or arbitration panel,
including, without limitation, the Bankruptcy Court.
"Guaranteed Obligations" shall have the meaning ascribed to such term
in Section 13.13(a) hereof.
"Guaranty" shall have the meaning ascribed to such term in Section
13.13(a) hereof.
"Hazardous Materials" means any substance: (i) the presence of which
requires or may require investigation, remediation, monitoring or control of any
kind under any Environmental Laws; or (ii) which is or becomes regulated or
defined as "hazardous waste," "hazardous material," "hazardous substance,"
"friable asbestos," "radioactive material," "radioactive waste," "low-level
radioactive waste," "oil," "petroleum," "petroleum products," "polychlorinated
biphenyls," "volatile organic compounds" (including those that are airborne) or
"wastewater" under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"
Illinois Court" shall have the meaning ascribed to such term in
Section 13.7(c) hereof.
"Intellectual Property" shall mean all of the following whether
patented or patentable or not and whether or not such items have been reduced to
written, computer-readable or other tangible form and irrespective of where any
of the same were issued, are pending or exist that are owned by, issued to or
licensed by any Seller and that primarily relate to the Business: United States
and foreign patents of any description, and applications therefor, utility
models and utility model applications (whether owned or licensed), including any
equivalents, divisionals, continuations, continuations-in-part, re-issues,
registrations, additions or extensions thereof, as well as any further patents,
patent applications, utility models and utility model applications (whether
owned by or licensed); United States (federal, state and common law) and foreign
trademarks and other trade names, service marks, logos, labels, trade dress,
advertising and package designs, and other trade rights (and all goodwill
associated with the foregoing), whether or not registered and all applications
therefor; United States and foreign copyrights, whether or not registered and
all applications therefor (including copyrights in computer software and
computer software documentation, source code and systems documentation), all
other rights relating to computer software, Web sites, domain name
registrations, know-how, trade secrets, business leads, research and results
thereof, technology, techniques, data, methods, processes, instructions,
drawings and specifications, inventions, discoveries, improvements, designs,
processes, formulae, recipes, shop rights and license agreements and other
agreements
11
of every kind and character relating to any of the foregoing, and all claims and
causes of action relating to any of the foregoing, including all claims or
causes of action for past infringement, and all other intellectual property
rights of any kind or nature.
"Inventory" shall mean all inventories owned by any Seller wherever
located that primarily relate to the Business. For purposes hereof, inventories
shall include packaging, finished goods, raw materials, supplies, work in
process, spare parts and other miscellaneous items of tangible property normally
considered a part of "inventory" under GAAP.
"knowledge" means (i) with respect to Sellers, the actual knowledge,
without independent investigation, of each of the executive officers of Sellers,
and (ii) with respect to the Purchaser, the actual knowledge, without
independent investigation, of each officer of Purchaser.
"Law" shall mean any law, statute, rule, regulation, ordinance,
standard, requirement, administrative ruling, order or process promulgated by
any Governmental Authority as in effect from time to time (including, without
limitation, any zoning or land use law or ordinance, building code,
Environmental Law, securities, blue sky, civil rights or occupational health and
safety law or regulation and any court, administrative agency or arbitrator's
order or process).
"Liability" shall mean any debt, liability, commitment and guaranty,
warranty or obligation of any kind, character or nature whatsoever, whether
known or unknown, secured or unsecured, accrued, fixed, absolute, potential,
contingent or otherwise, and whether due or to become due.
"Lien" shall have the meaning assigned to such term under Section
101(37) of the Bankruptcy Code.
"Managed Services Business" shall have the meaning ascribed to such
term in the recitals to this Agreement.
"Material Adverse Change" shall mean a material adverse change in (i)
the Business or the Transferred Assets, (ii) the properties, business, results
of operations or condition of the Sellers, (iii) the ability of the Sellers to
consummate the Proposed Transaction contemplated by this Agreement or (iv) the
ability of the Purchaser or the Purchaser's Affiliates to operate the Business
of the Sellers (other than the Excluded Assets) after the Closing Date in
substantially the same manner as they were operated prior to the occurrence of a
Material Adverse Change of the type described in clauses (i) and (ii) above;
PROVIDED, HOWEVER, that any material adverse change resulting from (a) changes
in the technology managed services or software services industries generally
(which changes do not affect the Business disproportionately), (b) changes in
the economy generally in the United States, Canada, Europe or Asia (which
changes do not affect the Business disproportionately), or (c) changes directly
caused by the transactions contemplated by this Agreement, shall not constitute
a Material Adverse Change.
12
"MSB Liabilities" shall have the meaning ascribed to such term in
Section 2.3(a)(iii) hereof.
"Non-Disclosure Agreement" shall have the meaning ascribed to such
term in Section 6.2 hereof.
"Other Personalty" shall mean all personal property (including parts,
furniture and furnishings), other than Equipment, Intellectual Property and
Inventory, owned, held or leased by any Seller, in each case that primarily
relates to the Business.
"Parent" shall have the meaning ascribed to such term in the preamble
to this Agreement.
"Permitted Exceptions" means imperfections of title, restrictions or
encumbrances, if any, that (a) do not materially impair the use and operation of
such asset in the Business as currently conducted or (b) are caused solely by
the Purchaser.
"Person" shall mean any individual, general or limited partnership,
corporation, limited liability company, association, business trust, joint
venture, Governmental Authority, business entity or other entity of any kind or
nature.
"Petition Date" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Proposed Transaction" shall have the meaning ascribed to such term in
the recitals to this Agreement.
"Purchase Price" shall have the meaning ascribed to such term in
Section 2.5 hereof.
"Purchaser" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Real Property" shall have the meaning ascribed to such term in
Section 4.9 hereof.
"Representative" shall mean, with respect to a Person, any employee,
officer, director, stockholder, partner, accountant, attorney, investment
banker, broker, finder, investor, subcontractor, consultant or other authorized
agent or representative of such Person.
"Restricted Assets" shall have the meaning ascribed to such term in
Section 3.3 hereof.
"Restricted Contract" shall mean any Contract which, notwithstanding
the provisions of Sections 363 and 365 of the Bankruptcy Code, if Transferred
without the Approval of the non-debtor party thereto, would (i) result in
excusing the non-debtor party thereto from
13
accepting performance from the Purchaser, (ii) constitute a breach thereof or
(iii) in any way affect the rights of any Seller or the Purchaser, as the case
may be, thereunder.
"RoweCom" shall have the meaning ascribed to such term in Section
2.2(b) hereof.
"Sale Approval Order" shall have the meaning ascribed to such term in
the recitals to this Agreement. The Sale Approval Order shall be substantially
similar in form and substance to the sale approval order attached hereto as
EXHIBIT D.
"Sale Procedures Motion" shall mean the Sellers' motion filed with the
Bankruptcy Court seeking entry of the Sale Procedures Order.
"Sale Procedures Order" shall mean the order of the Bankruptcy Court
entered on March 20, 2003 with respect to approving the Break-Up Fee and over
bidding procedures.
"Schedules" means the schedules annexed hereto and made a part hereof.
"Sellers" shall have the meaning ascribed to such term in the preamble
to this Agreement.
"Software Services Business" shall have the meaning ascribed to such
term in the recitals to this Agreement.
"Tax" shall mean any federal, state, province, local or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" shall mean any return, report, declaration, claim for
refund, estimate, election, or information statement or return relating to any
Tax, including any schedule or attachment thereto, and any amendment thereof.
"Temporary Services Agreement" shall have the meaning ascribed to such
term in Section 8.4 hereof.
"Transfer" shall mean any sale, transfer, conveyance, assignment,
delivery or other disposition, and "Transfer" or "Transferred," used as a verb,
shall each have a correlative meaning.
"Transferred Assets" shall have the meaning ascribed to such term in
Section 2.1 hereof.
"Transferred Facilities" shall mean the facilities identified on
Schedule 2.1(h).
14
SECTION 1.2 ADDITIONAL DEFINITIONS. In addition to the foregoing
defined terms, other capitalized terms appearing in this Agreement shall have
the respective meanings ascribed to such terms where they first appear in the
text of this Agreement.
SECTION 1.3 HEADINGS. The headings contained in this Agreement are
for convenience of reference only and shall not constitute a part hereof or
define, limit or otherwise affect the meaning of any of the terms or provisions
hereof.
SECTION 1.4 SCHEDULES. Unless the context otherwise requires, all
capitalized terms used in the Schedules shall have the respective meanings
assigned in this Agreement. No reference to or disclosure of any item or other
matter in the Schedules shall be construed as an admission or indication that
such item or other matter is material or that such item or other matter is
required to be referred to or disclosed in the Schedules. No disclosure in the
Schedules relating to any possible breach or violation of any agreement, law or
regulation shall be construed as an admission or indication that any such breach
or violation exists or has actually occurred. Any information, item or other
disclosure set forth in any Schedule shall be deemed to have been set forth in
all other applicable Schedules if the relevance of such disclosure to such other
Schedules is reasonably apparent from the facts specified in such disclosure.
SECTION 1.5 REFERENCES TO ARTICLES, ETC. All references herein to
Articles, Sections, Exhibits and Schedules shall be to Articles and Sections of
and Exhibits and Schedules to this Agreement.
SECTION 1.6 REFERENCES TO "HEREIN," ETC. As used in this Agreement,
the words "herein," "hereof," "hereby" and "hereunder" shall refer to this
Agreement as a whole, and not to any particular section, provision or
subdivision of this Agreement.
ARTICLE II
PURCHASE AND SALE OF THE ASSETS;
PURCHASE PRICE
SECTION 2.1 PURCHASE AND SALE OF THE ASSETS. Except for the Excluded
Assets set forth in Section 2.2 below, at and as of the Effective Time, the
Sellers shall Transfer to the Purchaser, and the Purchaser shall purchase and
accept from the Sellers, free and clear of all Liens to the maximum extent
provided in the Sale Approval Order, all of the Sellers' right, title and
interest in and to the following assets (the "TRANSFERRED ASSETS"):
(a) the Accounts Receivable, a recent summary schedule of which
is attached hereto as Schedule 2.1(a) (it being understood that such
schedule does not reflect Accounts Receivable as of the Closing Date that
will be included in the Transferred Assets);
(b) the Equipment and Other Personalty whether located at the
Transferred Facilities of the Sellers or elsewhere;
15
(c) the Intellectual Property primarily used in the Business,
including, without limitation, the patented or registered Intellectual
Property set forth on Schedule 2.1(c) and pending patent applications or
other applications for the registration of Intellectual Property;
(d) all Inventory, a recent summary schedule of which is attached
hereto as Schedule 2.1(d) (it being understood that such schedule does not
reflect Inventory as of the Closing Date that will be included in the
Transferred Assets);
(e) all rights of the Sellers under Assigned Contracts;
(f) originals or copies of all books, financial and other records
and information which has been reduced to written, recorded or encoded
form, in each case to the extent related to the Business (collectively, the
"BOOKS AND RECORDS");
(g) licenses and permits primarily used in the operation of the
Business, to the extent transferable;
(h) subject to the Purchaser's right to reject any lease of Real
Property in accordance with the terms of this Agreement, owned and leased
Real Property primarily used in the operation of the Business, each parcel
of which is set forth on Schedule 2.1(h);
(i) any warranties of third parties on any Transferred Assets;
(j) all prepaid expenses, security deposits and other credits
owed to the Sellers from third parties, to the extent primarily related to
the Transferred Assets;
(k) all rights and incidents under policies, contracts or
arrangements related to insurance of any Seller to the extent related to
Assumed Liabilities or Transferred Assets and to the extent transferable
(it being understood that (i) such policies will be cancelled at Closing
(except the Lloyd's of London patent enforcement insurance policy which
shall be transferred to the Purchaser) and the Sellers will be entitled to
any refunds upon such cancellation and (ii) the Sellers' directors and
officers insurance policies will constitute Excluded Assets in all
respects);
(l) all right, title and interest of the Sellers in the divine
Interventures, inc. and the Viant Ventures, Inc. capital investment
portfolios, whether or not any Contract related thereto purports to
restrict the transferability of the same, to the extent transferable under
the Bankruptcy Code free of such restrictions (it being understood that the
Sellers shall use their reasonable best efforts to obtain any necessary
Approvals to effect such transfers and in the event such assets cannot be
transferred, then the Sellers shall continue to hold such assets in trust
for the exclusive benefit of the Purchaser, and immediately following the
receipt by the Sellers of any proceeds or other item of value with respect
to any such assets, the Sellers shall immediately turn over the same to the
Purchaser in the same form as received), and the non-core patent
portfolios;
16
(m) all rights and claims of the Sellers of every kind and
description under all non-disclosure, confidentiality, non-competition,
non-solicitation, assignment of invention and other agreements of a
comparable nature with (i) all present and former employees of the Sellers
other than Eligible Employees who are hired by the Purchaser to the extent
such agreements relate to the Transferred Assets and (ii) all Eligible
Employees who are hired by the Purchaser whether or not such agreements
relate to the Transferred Assets; and
(n) all other assets primarily related to the Business, other
than any Excluded Assets.
SECTION 2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained herein, including in Section 2.1 above, the Sellers shall retain all
of their right, title and interest in and to, and shall not Transfer to the
Purchaser, the foregoing (collectively, the "EXCLUDED ASSETS"):
(a) all cash, cash equivalents and marketable securities,
including, but not limited to, any and all cash, check, money order, wire
transfer or other deposits of the Sellers received prior to the Effective
Time and deposited into the bank or other deposit accounts of the Sellers
prior to the Effective Time, whether or not such deposits have cleared;
(b) any tangible or intangible assets of RoweCom, Inc., a
Delaware corporation ("ROWECOM") and divine/Xxxxxxxx-Xxxx, Inc., an
Illinois corporation ("D/W-H") and their respective direct or indirect
subsidiaries;
(c) all Contracts that are not Assigned Contracts;
(d) all prepaid expenses, security deposits and other credits
owed to the Sellers from third parties, to the extent not primarily related
to the Transferred Assets;
(e) all intercompany rights or obligations between any Sellers;
(f) all rights and incidents under policies, contracts or
arrangements other than as set forth in Section 2.1(k) above;
(g) all rights, demands, Claims, and Actions of Sellers (except
to the extent related to a Transferred Asset or an Assumed Liability);
(h) all defenses, Claims, counter-Claims, rights or offset and
other Actions against any Person asserting or seeking to enforce any
Liability against the Sellers, to the extent such Liability is not assumed
by the Purchaser pursuant to this Agreement;
(i) any intracompany or Affiliate receivables, advances or
indebtedness of any Seller;
(j) any rights of any Seller under this Agreement;
17
(k) subject to Section 6.5 hereof, any avoidance or similar
Actions, including but not limited to Actions under sections 544, 545, 547,
548, 550 and 553 of the Bankruptcy Code;
(l) any income tax refunds or credits arising out of the
operation of the Business prior to the Closing Date;
(m) any bids received from any other Person in connection with
the proposed sale of the Business or the Transferred Assets and any
analyses prepared by or on behalf of Sellers of any bids for the Business
or any materials relating to the negotiations with any potential bidder;
(n) any Books and Records related to the Sellers' employees the
Transfer of which would conflict with any confidentiality or privacy
obligation of the Sellers under applicable Law;
(o) any assets of any employee benefit plan of any Seller and any
rights under any such plan or any contract, agreement or arrangement
between any employee or consultant and Sellers;
(p) all rights of the Sellers under the agreements set forth on
Schedule 2.2(p) under which the counterparty or counterparties agree not to
compete with the Business or agree to keep confidential information
regarding the Business, but only to the extent such agreements are not
assignable to the Purchaser as a matter of law under the Bankruptcy Code;
(q) except as set forth in Section 2.7 below, the capital stock
of any subsidiary of any Seller;
(r) assets primarily relating to the Net Unlimited business of
the Sellers;
(s) any professional retainer fees previously paid by the
Sellers;
(t) the assets listed on Schedule 2.2(t) which includes certain
computers and related information technology necessary to wind-up the
Bankruptcy Case;
(u) all employment agreements to which any Seller is a party;
PROVIDED that to the extent any benefit of a nature described in Section
2.1(m) arising under any such employment agreement is transferable to the
Purchaser without the consent of the employee (notwithstanding the fact
that such employment agreements will not be assumed by or assigned to the
Purchaser, and are intended to be rejected by the Sellers in the Bankruptcy
Case), then such benefit shall be included in the Transferred Assets;
(v) any monies escrowed by customers of RoweCom; and
(w) all bank and other deposit accounts of the Sellers.
18
SECTION 2.3 ASSUMPTION OF LIABILITIES.
(a) Subject to the terms and conditions of this Agreement, at and as
of the Effective Time, the Purchaser shall assume and agree to pay, perform,
discharge and satisfy when due in accordance with their terms the following
Liabilities:
(i) Liabilities under any of the Assigned Contracts accruing,
arising out of or relating to periods after the Effective Time;
(ii) any amount which may be payable pursuant to Section 365(b)
of the Bankruptcy Code on account of the assumption and assignment of any
Assigned Contract shall be borne 25% by the Purchaser and 75% by the
Sellers;
(iii) other than any item described in this Section 2.3(a)(iii)
which the Purchaser elects to delete from Schedule 1.1(a) and Schedule
2.3(a)(iii), by written notice delivered to the Sellers, at any time during
the period from and after the date hereof through 12:01 pm Eastern Time on
the Bid Date (or such later date on or prior to the Closing Date as may be
mutually agreed upon by the Purchaser and the Sellers), those capital
equipment lease obligations of the Managed Services Business and debt
obligations under outstanding promissory notes of the Managed Services
Business identified on Schedule 2.3(a)(iii) (excluding all amounts which
may be payable pursuant to Section 365(b) of the Bankruptcy Code on account
of the assumption and assignment of any such capital lease obligations and
debt obligations and giving effect to any reduction to any such obligations
occurring on or prior to the Effective Time) (the "MSB LIABILITIES") (it
being expressly understood that the Sellers may renegotiate the terms of or
prepay any of the MSB Liabilities on or prior to the Effective Time
(including with proceeds of the Purchase Price) so long as the payment
terms of the MSB Liabilities after the Effective Time resulting from any
such renegotiation or prepayment are no less favorable than those in
existence as of the date hereof, and so long as (A) the weighted average
interest rate and the weighted average life to maturity of the MSB
Liabilities as of the Effective Time do not exceed the weighted average
interest rate and the weighted average life to maturity of the MSB
Liabilities as of the date hereof and (B) the restructuring of the MSB
Liabilities will not require the Purchaser to make any additional cash
payments in connection therewith (other than payments in respect of amounts
which may be payable pursuant to Section 365(b) of the Bankruptcy Code on
account of the assumption and assignment of any such capital lease or debt
obligation in accordance with Section 2.3(a)(ii) hereof) other than with
respect to the principal of, or interest on, such Liabilities which comply
with the requirements of clause (A) above);
(iv) any Liabilities for accrued vacation with respect to
Eligible Employees who are hired by the Purchaser at the Effective Time or
within 30 days following the Closing Date;
19
(v) except for any items specifically excluded pursuant to
Section 2.4 (iii) hereof, any unpaid post-Petition Date accounts payable of
the Sellers incurred in the ordinary course of business in an amount not to
exceed $2,000,000 in the aggregate; and
(vi) any Liabilities covered by warranties assigned to the
Purchaser pursuant to Section 2.1(i) of this Agreement.
(The Liabilities described in the foregoing clauses (i), (ii), (iii),
(iv), (v) and (vi) are collectively defined herein as the "ASSUMED
LIABILITIES").
(b) From the date hereof through the Closing Date, Sellers shall
use reasonable best efforts to obtain settlements or stipulations (but
without any obligation of any Seller to pay any amount in respect of such
settlements, except as specified in Section 2.3(a) hereof) with any party
that objects to the assumption and assignment of an Assigned Contract or
any related cure amount. Notwithstanding any provision contained herein to
the contrary, from and after the date hereof through the Closing Date: (i)
the Sellers will not reject, without the prior consent of the Purchaser,
any Executory Contract other than (A) those Executory Contracts which are
currently subject to motions pending before the Bankruptcy Court as of the
date hereof and (B) Contracts that are Excluded Assets and (ii) the Sellers
will consult with the Purchaser with respect to the restructuring of, and
negotiations with respect to the amount of cure costs to be paid in respect
of, any Assigned Contract (including, without limitation, any such Assigned
Contract described in Section 2.3(a)(iii) hereof).
SECTION 2.4 EXCLUDED LIABILITIES. Except for the Assumed Liabilities,
the Purchaser shall not assume, and shall have no liability or obligation for
any other Liabilities of the Sellers including, without limitation (except to
the extent included in the Assumed Liabilities) any Liability arising out of, or
related to, any (i) employee of the Sellers (other than pursuant to Section
2.3(a)(iv) above), including any Liability with respect to any key employee
retention plans; (ii) any severance payable to any employee of the Business
(other than any such person who accepts employment with the Purchaser); (iii)
any costs or expenses incurred in connection with, or related to, the
administration of the Bankruptcy Case, including without limitation, any accrued
professional fees and expenses of the Sellers' attorneys, accountants, financial
advisors and other professional advisors related to the Bankruptcy Case; (iv)
Liabilities arising under any and all Contracts of the Sellers which are not
Assigned Contracts; (v) Liabilities to the extent relating to the Excluded
Assets; (vi) except as set forth in Section 2.3, Liabilities for any capital
leases or indebtedness for borrowed money of any kind or nature; (vii) any
royalties related to any period of time prior to the Petition Date; (viii) any
income Taxes of any kind or nature; (ix) intercompany payables, intercompany
loans or other intercompany liabilities of any kind or nature; (x) any
pre-Closing litigation, claim or assessment, breach of contract, breach of
warranty, tort, infringement, violation of law or environmental matters arising
from circumstances or events prior to the Closing Date, in each case, of any
kind or nature and whether related to the Business or otherwise and regardless
of when commenced; or (xi) any Liabilities arising out of or related to any
outstanding checks or other cash payments (whether paid by check, wire transfer
or otherwise) issued, made or drawn on any bank or other deposit
20
accounts of the Sellers at any time, including any Liabilities with respect to
cash overdrafts on such accounts (collectively, the "EXCLUDED LIABILITIES").
SECTION 2.5 PURCHASE PRICE. In consideration for the Transferred
Assets, the Purchaser shall pay to the Sellers by wire transfer of immediately
available funds Thirty-Eight Million Dollars ($38,000,000) plus the Adjustment
Amount payable at Closing, as the same may be adjusted pursuant to Section 9.6
or Section 9.7 hereof (the "PURCHASE PRICE"). Upon the execution and delivery of
this Agreement by the parties hereto, the Purchaser shall deposit $2,850,000
into the Escrow Account. Upon entry by the Bankruptcy Court of the Sale Approval
Order approving the sale and transfer of the Transferred Assets to the
Purchaser, the Purchaser shall deposit an additional $950,000 into the Escrow
Account (the funds deposited into the Escrow Account, together with any accrued
interest thereon after the date hereof, are collectively referred to as the
"DEPOSIT"). Upon termination of this Agreement for any reason other than as set
forth in the following sentence, immediately following such termination, the
Purchaser and Parent shall execute joint written instructions to the Escrow
Agent instructing the Escrow Agent to return the Deposit to the Purchaser. If
this Agreement is terminated as a result of the Purchaser's material breach of
its obligations under this Agreement, and the Sellers are not in material breach
of their obligations under this Agreement, immediately following such
termination, the Purchaser and Parent shall execute joint written instructions
to the Escrow Agent instructing the Escrow Agent to return the Deposit to the
Sellers. If this Agreement is terminated as set forth in the preceding sentence,
the Deposit shall be paid to the Sellers as liquidated damages, it being agreed
that such payment of the Deposit shall constitute full payment for any and all
damages suffered by the Sellers by reason thereof and that the Sellers shall
have no rights to or claims for damages from the Purchaser or any of its
Affiliates other than the right to the Deposit. Each of the parties agree in
advance that the Sellers' actual damages would be difficult to ascertain and
that the amount of liquidated damages to be paid to the Sellers is a fair and
equitable amount to compensate the Sellers for damages sustained from
termination of this Agreement in the circumstances specified above.
Simultaneously with the consummation of the Proposed Transaction contemplated
hereby, the Purchaser and Parent shall execute joint written instructions to the
Escrow Agent instructing the Escrow Agent to wire the Deposit to an account
designated by the Sellers on the Closing Date.
SECTION 2.6 ALLOCATION OF THE PURCHASE PRICE. No later than three (3)
Business Days prior to the Closing Date, the parties will mutually agree upon an
allocation of the total Purchase Price for the Transferred Assets (including the
cash purchase price and the assumption of the Assumed Liabilities) and, if
applicable, any Foreign Subsidiary, pursuant to Section 1060 of the Code and the
regulations thereunder (the "ALLOCATION"). The Purchaser and the Sellers agree
to use such Allocation in filing all required forms under Section 1060 of the
Code and not take any position inconsistent with such Allocation upon any
examination of any such Tax Return, in any refund claim or in any tax
litigation.
SECTION 2.7 FOREIGN SUBSIDIARIES. Effective as of the Closing Date, at
the option of the Purchaser as may be determined in its sole discretion, the
Sellers shall, or shall cause their respective Affiliates to (or, in the case of
the U.K. and Spanish business operations, shall cause Xxxxxxx Xxxxxxxx, or take
such other appropriate steps, to) (the "FOREIGN SUBSIDIARY
21
OPTION") Transfer to the Purchaser or to one or more of its designated
Affiliates, the capital stock of any of the foreign subsidiaries listed on
EXHIBIT E attached hereto (any of the foregoing foreign subsidiaries which the
Purchaser so elects to acquire individually referred to herein as a "FOREIGN
SUBSIDIARY", and collectively as the "FOREIGN SUBSIDIARIES"); PROVIDED that the
Purchaser must exercise the Foreign Subsidiary Option, if at all, no later than
30 days following the Closing Date. In connection therewith, immediately prior
to any such Transfer, all intercompany receivables, payables, loans and
investments and any other intercompany accounts of any type or nature between
any Seller or any of its Affiliates that are controlled by any Seller and not
subject to any insolvency or similar proceeding, on the one hand, and the
Foreign Subsidiary(ies) the stock of which is the subject of such Transfer, on
the other hand, shall be settled, cancelled or otherwise terminated or
eliminated (it being understood that the Sellers will determine, in their sole
discretion, the method of such termination or elimination).
ARTICLE III
THE CLOSING
SECTION 3.1 TIME AND PLACE OF CLOSING. If all the conditions to
Closing set forth in this Agreement have been satisfied or waived in writing
prior to such date, the Closing shall take place at 10:00 a.m.,
Illinois time,
on the Closing Date at the offices of Xxxxxx & Xxxxxxx
Illinois LLC, 000 Xxxxx
Xxxxxx Xxxxx, Xxxxx Xxxxx Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, or at such other
time or place as may be mutually agreed upon by the parties hereto. The Closing,
the Transfer of the Transferred Assets, the effectiveness of the documents,
agreements and certificates delivered in accordance with this Agreement, and the
consummation of the transactions contemplated hereby shall be deemed to occur at
the Effective Time.
SECTION 3.2 DELIVERIES AT CLOSING.
(a) DELIVERIES BY PURCHASER. At the Closing, the Purchaser shall
deliver to the Sellers the following:
(i) a wire transfer of the Purchase Price (less the amount of the
Deposit if the Deposit is wired by the Escrow Agent to an account
designated by the Sellers on the Closing Date);
(ii) the Assignment and Assumption Agreement;
(iii) the Temporary Services Agreement;
(iv) a certificate of an executive officer of the Purchaser to
evidence compliance with the conditions set forth in Sections 10.1 through
10.2 hereof and any other certificates to evidence compliance with the
conditions set forth in Article X hereof as may be reasonably requested by
the Sellers or their counsel;
22
(v) any cure costs advanced by the Sellers on or prior to the
Closing Date that would otherwise have constituted Assumed Liabilities
pursuant to Section 2.3(a)(ii) hereof; and
(vi) such other documents as Sellers' counsel may reasonably
request that are customary for a transaction of this nature and necessary
to evidence or consummate the transactions contemplated by this Agreement.
(b) DELIVERIES BY THE SELLERS. At the Closing, the Sellers (or
their Affiliates, if applicable) shall deliver to the Purchaser the
following:
(i) the Xxxx of Sale;
(ii) the Assignment and Assumption Agreement;
(iii) the Temporary Services Agreement;
(iv) a certificate of an executive officer of each Seller to
evidence compliance with the conditions set forth in Sections 9.1 through
9.2 hereof and any other certificates to evidence compliance with the
conditions set forth in Article IX hereof as may be reasonably requested by
the Purchaser or its counsel; and
(v) such other documents as Purchaser's counsel may reasonably
request that are customary for a transaction of this nature and necessary
to evidence or consummate the transactions contemplated by this Agreement.
SECTION 3.3 ASSIGNMENT OF ASSIGNED CONTRACTS, ETC. Anything contained
herein to the contrary notwithstanding, this Agreement shall not effect the
Transfer of any Assigned Contract listed on Schedule 1.1(b) or any claim, right,
or benefit arising thereunder or resulting therefrom, if, notwithstanding the
provisions of Sections 363 and 365 of the Bankruptcy Code, a Transfer thereof,
without the Approval of the non-debtor party thereto, would excuse the
non-debtor party thereto from accepting performance from the Purchaser,
constitute a breach thereof or in any way affect the rights of any Seller or the
Purchaser, as the case may be, thereunder (collectively, "RESTRICTED ASSETS").
Any Transfer to the Purchaser of any Restricted Asset which shall,
notwithstanding the provisions of Sections 363 and 365 of the Bankruptcy Code,
require the Approval of any non-debtor party for such Transfer as aforesaid
shall be made subject to such Approval being obtained.
SECTION 3.4 SALES, USE AND OTHER TAXES. Any sales, use, purchase,
transfer, stamp, or documentary stamp Taxes which may be payable by reason of
the sale of the Transferred Assets or, if applicable, the capital stock of any
Foreign Subsidiary, under this Agreement for the transactions contemplated
herein and any and all claims, charges, interest or penalties assessed, imposed
or asserted in relation to any such Taxes, shall be the responsibility and
obligation of and timely paid by the Purchaser, it being agreed that the Sellers
shall use commercially reasonable best efforts to obtain a waiver of such Taxes
to the extent permitted
23
under the Bankruptcy Code. In no event shall any party to this Agreement be
responsible for the income taxes of any other party that arise as a consequence
of the transactions consummated hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As an inducement to the Purchaser to enter into this Agreement, the
Sellers, jointly and severally, represent and warrant as of the date hereof and
as of the Closing Date as follows:
SECTION 4.1 ORGANIZATION. Except as set forth on Schedule 4.1, each
Seller is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and except as affected by
the pendency of the Bankruptcy Cases, has the requisite power and authority to
own, operate and lease its properties and assets and to conduct the Business as
it is now being owned, operated, leased and conducted.
SECTION 4.2 POWER AND AUTHORITY. (i) Each Seller has the requisite
corporate power and authority to execute and deliver this Agreement and the
other Acquisition Documents to which it is a party and, subject to the entry of
the Sale Approval Order by the Bankruptcy Court, perform its obligations
hereunder and thereunder and consummate the transactions contemplated hereby and
thereby, (ii) the execution and delivery by each Seller of this Agreement and
the other Acquisition Documents to which it is a party, the performance of its
obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate actions on the part of each Seller and by the Bankruptcy
Court, and (iii) subject to the entry of the Sale Approval Order by the
Bankruptcy Court, this Agreement and each other Acquisition Document to which
each Seller is a party will constitute, upon the mutual execution and delivery
thereof, the legal, valid and binding obligation of each Seller, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors generally and by general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Notwithstanding any provision contained in this Agreement to
the contrary, the Sellers' obligations to pay the Break-up Fee in accordance
with the terms of this Agreement and the Sellers' obligations to pay the Expense
Reimbursement in accordance with the terms of this Agreement, upon the mutual
execution and delivery of this Agreement by the parties hereto, constitutes the
legal, valid and binding obligation of each Seller.
SECTION 4.3 NO VIOLATION. Neither the execution and delivery by any
Seller of this Agreement or any of the other Acquisition Documents to which it
is a party, the performance by it of its obligations hereunder or thereunder,
nor the consummation by it of the transactions contemplated hereby or thereby,
will (i) contravene any provision of the certificate of incorporation and bylaws
of any Seller; (ii) result in the creation or imposition of any Lien upon any of
the properties or assets of any Seller, or (iii) violate, conflict with or
require any Approval, other than entry of the Sale Approval Order by the
Bankruptcy Court, under, any Law
24
or any judgment, decree or order of any Governmental Authority to which any
Seller is subject or by which it or any of its assets or properties are bound,
except in the case of this clause (iii) any such violation which would not
reasonably be expected to result in a Material Adverse Change.
SECTION 4.4 ACTIONS. Except (i) as set forth on Schedule 4.4 and (ii)
for Actions filed in the Bankruptcy Court with respect to the Bankruptcy Case,
there is no Action pending or, to the knowledge of each Seller, threatened in
writing, against any Seller (a) before any Governmental Authority relating to
the Business or any Transferred Asset or any Environmental Laws, or (b) that
questions or challenges the validity of this Agreement or the other Acquisition
Documents or any action taken or proposed to be taken by each Seller pursuant
hereto or thereto or in connection with the transactions contemplated hereby or
thereby, and, to Sellers' knowledge, no condition exists which could reasonably
be expected to lead to any such Actions, except in the case of clause (a) only,
any such matter which would not reasonably be expected to result in a Material
Adverse Change.
SECTION 4.5 COMPLIANCE WITH LAWS. Except (i) as set forth on Schedule
4.5, (ii) as would not reasonably be expected to result in a Material Adverse
Change, and (iii) as excused by the Bankruptcy Code or in connection with the
Bankruptcy Cases, (a) no Seller is in violation of any Laws relating to the
Business or the Transferred Assets, (b) no Seller has been notified in writing
or has knowledge that it has been charged with or threatened in writing with,
any charge concerning any violation of any provision of any Law relating to the
Business or the Transferred Assets that has not already been resolved, and (c)
no Seller is in violation of, or in default under, and no event has occurred
which, with the lapse of time or the giving of notice, or both, would result in
the violation of or default under, the terms of any judgment, decree, order,
injunction or writ of any Governmental Authority relating to the Transferred
Assets or the Business.
SECTION 4.6 TITLE TO PROPERTY. Except as set forth on Schedule 4.6,
Seller has, and at the Closing will transfer to the Purchaser, good and
marketable title to, or a valid leasehold interest in, all of the Transferred
Assets free and clear of all Liens (other than Permitted Exceptions).
SECTION 4.7 APPROVALS. Except (i) for Approval of the Bankruptcy
Court, (ii) for Approval under the HSR Act, if applicable, (iii) for consents
required to assign the Restricted Assets, and (iv) as set forth on Schedule 4.7,
no material Approval of any Governmental Authority or other Person is required
to be made, obtained or given by or with respect to any Seller in connection
with the execution or delivery by each Seller of this Agreement and the other
Acquisition Documents to which it is a party, the performance by it of its
obligations hereunder or thereunder or the consummation by it of the
transactions contemplated hereby or thereby, including without limitation the
Transfer of the Transferred Assets to the Purchaser.
SECTION 4.8 BROKER'S OR FINDER'S FEES. Except as set forth on Schedule
4.8, the Sellers have not authorized any Person to act as broker, finder,
banker, consultant,
25
intermediary or in any other similar capacity which would entitle such Person to
any investment banking, brokerage, finder's or similar fee in connection with
the transactions contemplated by this Agreement or any of the other Acquisition
Documents.
SECTION 4.9 REAL PROPERTY. Schedule 2.1(h) sets forth the street
address of each parcel of real property (the "REAL PROPERTY") primarily relating
to the Business leased or subleased by each Seller and the name of the lessor or
sublessor. Sellers do not own any real property that is primarily used in
connection with the Business.
SECTION 4.10 "AS IS" TRANSACTION. The Purchaser hereby acknowledges
and agrees that, except as otherwise expressly provided in this Agreement, each
Seller makes no representations or warranties whatsoever, express or implied,
with respect to any matter relating to the Business or the Transferred Assets
or, if applicable, the Foreign Subsidiaries (including, without limitation,
income to be derived or expenses to be incurred in connection with the
Transferred Assets or, if applicable, the Foreign Subsidiaries, the physical
condition of any personal property comprising a part of the Transferred Assets,
or, if applicable, owned by the Foreign Subsidiaries, or which is the subject of
any Assigned Contract or assigned lease to be assumed by the Purchaser at the
Closing, the environmental condition or other matter relating to the physical
condition of any real property or improvements which are the subject of any
assigned lease to be assumed by the Purchaser at the Closing, the zoning of any
such real property or improvements, the value or transferability of the
Transferred Assets (or any portion thereof), or, if applicable, the Foreign
Subsidiaries, the terms, amount, validity or enforceability of any Assumed
Liabilities, the merchantability or fitness of the Transferred Assets (or any
portion thereof for any particular purpose, or any other matter or thing
relating to the Business or the Transferred Assets or any portion thereof or, if
applicable, the Foreign Subsidiaries). Without in any way limiting the
foregoing, each Seller hereby disclaims any warranty (express or implied) of
merchantability or fitness for any particular purpose as to any portion of the
Transferred Assets. The Purchaser further acknowledges that the Purchaser has
conducted an independent inspection and investigation of the physical condition
of the Transferred Assets and, if applicable, the Foreign Subsidiaries, and all
such other matters relating to or affecting the Transferred Assets and, if
applicable, the Foreign Subsidiaries, as the Purchaser deemed necessary or
appropriate and that in proceeding with its acquisition of the Transferred
Assets and, if applicable, the Foreign Subsidiaries, the Purchaser is doing so
based solely upon such independent inspections and investigations, but subject
to the satisfaction or waiver of the closing conditions specified herein.
Accordingly, if the Closing occurs, the Purchaser will accept the Transferred
Assets at the Closing and, if applicable, the Foreign Subsidiaries at or after
the Closing "AS IS," "WHERE IS," and "WITH ALL FAULTS."
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to each Seller to enter into this Agreement,
Purchaser hereby represents and warrants as of the date hereof and as of the
Closing Date as follows:
26
SECTION 5.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to own, operate and lease its properties and assets and to conduct its
business as they are now being owned, operated, leased and conducted. Purchaser
is duly qualified or licensed to do business as a foreign corporation and is in
good standing in every jurisdiction where such qualification is material to the
Business.
SECTION 5.2 POWER AND AUTHORITY. The Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and the
other Acquisition Documents, perform its obligations hereunder and thereunder
and consummate the transactions contemplated hereby and thereby. The execution
and delivery by the Purchaser of this Agreement and the other Acquisition
Documents to which it is a party, the performance by it of its obligations
hereunder and thereunder and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate actions on the part of the Purchaser. This Agreement and each other
Acquisition Document to which the Purchaser is a party will constitute upon the
mutual execution and delivery thereof the legal, valid and binding obligation of
the Purchaser, enforceable against it in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar Laws now or hereafter in effect relating to creditors' rights generally
and subject to general principles of equity.
SECTION 5.3 NO VIOLATION. Neither the execution and delivery by the
Purchaser of this Agreement or any of the other Acquisition Documents to which
it is a party, the performance by it of its obligations hereunder or thereunder,
nor the consummation by it of the transactions contemplated hereby or thereby,
will (i) contravene any provision of the certificate of incorporation and bylaws
of the Purchaser; (ii) result in the creation or imposition of any Lien upon any
of the properties or assets of the Purchaser, or (iii) violate, conflict with or
require any Approval, other than Approval by the Bankruptcy Court and pursuant
to the HSR Act, if required, under, any Law or any judgment, decree or order of
any Governmental Authority to which the Purchaser is subject or by which it or
any of its assets or properties are bound, except in the case of this clause
(iii) any such violation which would not reasonably be expected to result in a
Material Adverse Change.
SECTION 5.4 APPROVALS. Except as set forth on Schedule 5.4 and under
the HSR Act, if applicable, and other than Approval by the Bankruptcy Court, no
Approval of any Governmental Authority or other Person is required to be made,
obtained or given by or with respect to the Purchaser in connection with the
execution or delivery by it of this Agreement and the other Acquisition
Documents, the performance by it of its obligations hereunder or thereunder or
the consummation by it of the transactions contemplated hereby or thereby,
except for any such Approval which could not adversely impact the Purchaser's
ability to perform its obligations under this Agreement.
SECTION 5.5 SOLVENCY; AVAILABILITY OF FUNDS.
27
(a) As of the Closing and immediately after consummating the Proposed
Transaction and the other transactions contemplated by the Acquisition
Documents, the Purchaser will not (i) be insolvent (either because its
financial condition is such that the sum of its debts is greater than the
fair value of its assets or because the present fair value of its assets
will be less than the amount required to pay its probable Liability on its
debts as they become absolute and matured), (ii) have unreasonably small
capital with which to engage in its business, including the Business or
(iii) have incurred or plan to incur debts beyond its ability to repay such
debts as they become absolute and matured.
(b) The Purchaser has cash available on hand, permitted borrowing
capacity under existing facilities or firm financing commitments that
together are sufficient funds to enable it to pay the Purchase Price in
full at Closing and consummate the transactions contemplated under the
Acquisition Documents.
SECTION 5.6 AFFILIATED AND ASSOCIATED PERSONS. As of the date hereof,
there are no officers, directors, employees or Affiliates of any Seller that are
assisting, advising, affiliated with, participating with or otherwise associated
with the Purchaser or any Affiliate of the Purchaser (including as current or
prospective equity-holders or co-investors in or with the Purchaser or its
Affiliates) in connection with the Proposed Transaction by reason of any
arrangement in place as of the date hereof, other than any assistance, advice,
participation or association which results from ordinary course business
contacts between the Purchaser and the Sellers and their respective officers,
directors, employees or affiliates as a result of the contemplated sale of the
Business.
SECTION 5.7 BROKER'S OR FINDER'S FEES. Neither the Purchaser nor any
of its Affiliates has authorized any Person to act as broker, finder, banker,
consultant, intermediary or in any other similar capacity which would entitle
such Person to any investment banking, brokerage, finder's or similar fee in
connection with the transactions contemplated by this Agreement or any of the
other Acquisition Documents, except where any fee or payment due such persons
would be solely the obligation of the Purchaser or its Affiliates.
ARTICLE VI
COVENANTS OF THE SELLERS
The Sellers hereby covenant and agree that, subject to the orders and
direction of the Bankruptcy Court and except as otherwise consented to in
writing by the Purchaser or as otherwise contemplated by this Agreement, from
and after the Execution Date until the Closing:
SECTION 6.1 CONDUCT OF BUSINESS. Each of the Sellers shall, subject to
the requirements and obligations under the Bankruptcy Code, (i) use commercially
reasonable efforts consistent with practices of a similarly situated
debtor-in-possession to conduct the Business in the ordinary course consistent
with past practice, (ii) use commercially reasonable efforts consistent with
reasonable business practices of a similarly situated debtor-in-possession to
preserve intact its business organizations and relationships with employees and
persons having dealings with it; (iii) not institute any new methods of
accounting that will vary from the
28
methods used by the Sellers as of the date of this Agreement; (iv) continue to
operate the Sellers' billing and collection policies and procedures with respect
to the Business consistent with the reasonable business practices of a similarly
situated debtor-in-possession, but in any event consistent with the Sellers'
historical billing and collection policies and procedures with respect to the
Business, and in no event will the Sellers grant any discounts or other similar
incentives to encourage customers to accelerate payment of billed or unbilled
accounts receivable other than in the ordinary course of business consistent
with past practice; (v) maintain its Books and Records in accordance with the
reasonable business practices of a similarly situated debtor-in-possession;
PROVIDED, that, subject to Section 2.3(b), the foregoing shall not prevent the
Sellers from rejecting Contracts that are not Assigned Contracts being assumed
by the Purchaser hereunder; (vi) Transfer any material Transferred Assets,
except for sales of inventory and services in the ordinary course of business in
a manner consistent with past practice; (vii) except for contemplated employee
retention plans, not increase, except pursuant to existing contracts or
established practice, the salary, compensation or benefits payable to any
employees, directors or consultants or modify, establish or enter into any
employee benefit plan; and (viii) continue to operate the Sellers' accounts
payable and payment policies and procedures with respect to the Business
consistent with the reasonable business practices of a similarly situated
debtor-in-possession, and, to the extent reasonably practicable, consistent with
Seller's historical accounts payable and payment policies and procedures with
respect to the Business.
SECTION 6.2 ACQUISITION PROPOSALS. Anything herein to the contrary
notwithstanding, at or prior to a hearing in the Bankruptcy Court on the Sale
Approval Motion, the Sellers may furnish a copy of this Agreement (including the
schedules and exhibits attached hereto) and other information concerning the
Business to any qualified Person in order to permit such Person to determine
whether to make a higher and better offer for the Transferred Assets at such
hearing or at such time prior to the hearing as the Bankruptcy Court may direct
and the Sellers and their Representatives may solicit, encourage and negotiate
with any Persons to make offers for the Transferred Assets at or prior to such
hearing, as the case may be; provided, that all potential bidders agree to be
subject to substantially the same restrictions and limitations on the use of
such information as those imposed on the Purchaser. Any other prospective
purchaser or Person who receives proprietary information regarding the Sellers
shall also agree to execute a separate non-disclosure agreement in form and
substance similar to the Non-Disclosure Agreement entered into by and between
the Purchaser and Parent on February __, 2003 (the "NON-DISCLOSURE AGREEMENT")
or the form of Non-Disclosure Agreement attached hereto as EXHIBIT F.
SECTION 6.3 ACCESS TO THE SELLERS. The Sellers shall use reasonable
efforts to afford the Purchaser and its Representatives reasonable access during
normal business hours throughout any period from and after the date hereof until
the Closing Date, to the Books and Records, files, pleadings, data base,
documents, properties, facilities and employees of the Sellers relating to the
Business or the Transferred Assets, as the Purchaser may reasonably request;
provided that such reasonable access shall not unduly interfere with Sellers'
ongoing business, operational or Bankruptcy Case obligations.
29
SECTION 6.4 NOTIFICATION OF CERTAIN MATTERS. Each of the Sellers shall
give prompt notice to the Purchaser of (i) the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be materially untrue
or inaccurate, (ii) any failure of any Seller to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it hereunder and (iii) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would reasonably be expected to have a
Material Adverse Change; PROVIDED, HOWEVER, that the delivery of any notice
pursuant to this Section 6.4 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION 6.5 AVOIDANCE ACTIONS. Notwithstanding any provision to the
contrary contained in this Agreement, in no event shall any Seller or any of its
Affiliates pursue any avoidance or similar Action, including but not limited to
any Action under Sections 544, 545, 547, 548, 550 or 553 of the Bankruptcy Code,
against any party to any Assigned Contract with respect to the payment of any
amounts previously paid under such Assigned Contract.
SECTION 6.6 BANKRUPTCY COURT FILINGS. From and after the date hereof
and until the earlier of the consummation of the Proposed Transaction and the
termination of this Agreement pursuant to its terms, the Sellers and their
attorneys and other advisors shall cooperate with the Purchaser, and keep the
Purchaser and its attorneys reasonably apprised of all matters with respect to
the Bankruptcy Case, including without limitation, by providing the Purchaser
and its attorneys with a copy of any substantive motion or other pleadings or
filings to be made with the Bankruptcy Court with respect to, or related to, the
Proposed Transaction (including without limitation, a reasonable opportunity to
review and comment on the same), and reasonable advance notice of any motion to
assume or reject any Contract.
SECTION 6.7 CHANGE OF NAME. Within five (5) Business Days of the entry
by the Bankruptcy Court of the Sale Approval Order, the Sellers shall file a
motion with the Bankruptcy Court to change the names of the Sellers which
include the names "divine" or "Data Return" to names which do not include the
names "divine" or "Data Return", and shall cause their Affiliates (other than
the Foreign Subsidiaries) to do the same; and neither the Sellers nor any of
their Affiliates shall make any further use of the "divine" or "Data Return"
names or any derivatives thereof, except to the extent necessary to wind up
their respective affairs.
SECTION 6.8 SATISFACTION OF CONDITIONS. From and after the date hereof
until the Closing Date, each Seller will, and will use its reasonable best
efforts to cause each of its Affiliates to, use its reasonable best efforts to
perform, comply with and fulfill all obligations, agreements, covenants and
conditions required by this Agreement to be performed, complied with or
fulfilled by any of them prior to or as of the Closing Date.
SECTION 6.9 POST-CLOSING CASH RECEIPTS. No later than the Effective
Time, Sellers shall instruct each of their banks to transfer all lock-box or
other cash receipts received on account of any Transferred Asset after the
Effective Time directly to Purchaser's bank accounts. From and the Effective
Time, all cash receipts and other cash collections
30
received by Sellers with respect to the Transferred Assets (other than receipts
or collections relating to Excluded Assets) shall be held in trust for the
exclusive benefit of Purchaser, shall be segregated from the other funds of
Sellers, and shall promptly (but in no event later than two Business Days
following the receipt thereof), be paid over to Purchaser.
SECTION 6.10 AUCTION. In the event the Auction is not held on April
14, 2003, the Sellers will use their reasonable best efforts to hold the Auction
as soon thereafter as reasonably practicable on such date that is ordered by the
Bankruptcy Court.
ARTICLE VII
COVENANTS OF THE PURCHASER
The Purchaser hereby covenants and agrees that, except as otherwise
consented to in writing by the Sellers, from and after the Execution Date until
the Closing:
SECTION 7.1 NO INTERFERENCE WITH BANKRUPTCY CASE. So long as the Sale
Procedures Motion or the Sale Approval Motion shall be pending and the Purchaser
has not terminated this Agreement pursuant to Section 12.1, the Purchaser shall
not acquire whether directly or indirectly any Claim against or Liability of the
Sellers nor cooperate with, induce or support any entity (other than the
Sellers) in the acquisition of any Claim against or Liability of the Sellers, in
the formation of a plan of reorganization in the Bankruptcy Case, in the
objection to the Sale Procedures Motion or the Sale Approval Motion, or in
seeking the appointment of a Chapter 11 trustee or examiner or the conversion of
the Bankruptcy Case to a case under Chapter 7 of the Bankruptcy Code.
SECTION 7.2 ADEQUATE ASSURANCE. Purchaser shall be responsible for
providing evidence and argument in support of the Sale Approval Motion in order
to establish its ability to provide "adequate assurance of future performance"
(within the meaning of Section 365(f)(2)(B) of the Bankruptcy Code) of any
Contract identified as an Assigned Contract. The Sellers agree to use their
reasonable best efforts to cooperate with the Purchaser in the presentation of
such evidence and argument. The Bankruptcy Court's refusal to approve the
assumption by the Purchaser of any Contract on the grounds that "adequate
assurance of future performance" by the Purchaser of such Contract has not been
provided shall not constitute (i) a failure of the condition precedent described
in Section 9.4(b) hereof or (ii) grounds for termination pursuant to Section
12.1(b) hereof.
SECTION 7.3 NOTIFICATION OF CERTAIN MATTERS. The Purchaser shall give
prompt notice to the Sellers of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be materially untrue
or inaccurate, (ii) any failure of the Purchaser to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it hereunder and (iii) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which is or would reasonably be expected to
result in a material adverse change in the ability of the Purchaser to
consummate the Proposed Transaction; PROVIDED,
31
HOWEVER, that the delivery of any notice pursuant to this Section 7.3 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
SECTION 7.4 SATISFACTION OF CONDITIONS. From and after the date hereof
until the Closing Date, the Purchaser will, and will use its reasonable best
efforts to cause each of its Affiliates to, use its reasonable best efforts to
perform, comply with and fulfill all obligations, agreements, covenants and
conditions required by this Agreement to be performed, complied with or
fulfilled by any of them prior to or as of the Closing Date.
SECTION 7.5 ASSETS COVERED BY MSB LIABILITIES. In the event Purchaser
elects to delete any Contract or debt obligation set forth on Schedule
2.3(a)(iii) from Schedule 1.1(a) and Schedule 2.3(a)(iii) pursuant to the second
sentence of the definition of Assigned Contracts, then Purchaser agrees that it
will not (and that it will cause its Affiliates not to) (i) enter into any new
arrangement on or prior to the Closing Date and for a period of 120 days
thereafter to purchase, lease or otherwise use the assets covered by such
Contract or debt obligation and (ii) on or prior to the Closing Date and for a
period of 120 days thereafter, enter into any arrangement with the other party
to any such Contract or, if applicable, the lender under such debt obligation
(or any of their respective Affiliates) to purchase or lease any assets
replacing the assets that were covered by the Contract or debt obligation that
was deleted from Schedule 1.1(a).
ARTICLE VIII
AGREEMENTS OF PURCHASER AND SELLER
SECTION 8.1 XXXX-XXXXX-XXXXXX COOPERATION. To the extent applicable,
the Purchaser and the Sellers shall cooperate with each other (at the sole cost
and expense of each party hereto) to comply with, and provide the information
required by, the pre-merger notification and waiting period rules of the HSR
Act, if necessary, in any Federal Trade Commission regulations, and in any
provisions or regulations of or relating to the Xxxxxxx Act. In that connection,
the Purchaser and the Sellers shall use diligent efforts to make their joint
pre-merger notification filing with the Federal Trade Commission, if necessary,
no later than three (3) days following the date (if any) that the Purchaser (as
is required under the HSR Act) reasonably determines that such a filing is
required. The Purchaser shall bear the Sellers' cost of any filing fee in
connection with such filing.
SECTION 8.2 EMPLOYEES. Purchaser shall have the right, but not the
obligation, to make offers of employment to the employees of the Sellers set
forth on Schedule 8.2 engaged in the Business, subject to the consummation of
the transactions contemplated in this Agreement. The terms of employment offered
to such employees of the Sellers set forth on Schedule 8.2 shall be at
substantially similar salary levels to those currently enjoyed by such
employees, and with such other terms and conditions of employment to be
determined by the Purchaser. The Purchaser shall be permitted to conduct
employee interviews for purposes of making such hiring decisions after providing
the Sellers with two (2) business days notice of the employees the Purchaser
intends to interview.
32
SECTION 8.3 RESTRICTED ASSETS. The Purchaser and the Sellers shall
utilize their reasonable best efforts to obtain the Approvals of third parties
as required to validly Transfer the Restricted Assets.
SECTION 8.4 TEMPORARY SERVICES AGREEMENT. Promptly following the
Execution Date, the parties will negotiate in good faith to finalize a form of
temporary services agreement (the "TEMPORARY SERVICES AGREEMENT") to be executed
and delivered at the Closing by Purchaser, on the one hand, and Sellers (and/or
one or more Affiliates of Sellers), on the other hand. The Temporary Services
Agreement will contain terms and conditions customary for a transaction of this
nature and will provide, among other things, that at no cost to the Sellers (i)
the Purchaser (or one or more Affiliates) will provide (a) use of limited office
space, equipment and operating systems and (b) access to necessary records to
the Sellers until the conclusion of the Bankruptcy Case and (ii) the Purchaser
will permit certain financial personnel who accept an offer of employment from
Purchaser (any such persons to be identified in the Temporary Services
Agreement), to spend approximately 25% of their office time conducting the
necessary actions to wind up the Bankruptcy Case; it being agreed that it shall
not be deemed to be a breach of the Temporary Services Agreement in the event
Purchaser eliminates any office locations, disposes of any equipment, fails to
make an offer of employment to any such financial personnel or such financial
personnel otherwise cease to be employed by Purchaser.
ARTICLE IX
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
The obligations of the Purchaser to purchase and accept transfer and
delivery of the Transferred Assets are subject to the satisfaction on or, where
appropriate, prior to, the Closing Date, of the following conditions, except to
the extent that any such condition may have been waived in writing by the
Purchaser on or prior to the Closing Date:
SECTION 9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Sellers contained in Article IV of this Agreement shall have
been true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date (except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date), except, in each case, where the
failure of such representations and warranties to be true and correct would not
result in a Material Adverse Change.
SECTION 9.2 PERFORMANCE. The Sellers shall have performed and complied
in all material respects with the covenants and obligations required by this
Agreement to be performed or complied with by the Sellers at or prior to the
Closing Date.
SECTION 9.3 NO ORDER. No order, statute, rule, regulation, executive
order, injunction, stay, decree, directive, or restraining order shall have been
enacted, entered, promulgated or enforced by any court of competent jurisdiction
or Governmental Authority that would (i) prevent the consummation of any of the
transactions contemplated by this Agreement
33
or (ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, nor shall any such injunction, judgment,
order, decree, ruling or charge be in effect. No Action shall be pending before
any Governmental Authority or before any arbitral body wherein an unfavorable
injunction, judgment, order, decree, ruling, directive or charge would (x)
prevent consummation of any of the transactions contemplated by this Agreement
or (y) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation.
SECTION 9.4 SALE PROCEDURES/BANKRUPTCY COURT ORDERS.
(a) The Sale Procedures Order shall have been entered.
(b) The Sale Approval Order shall have been entered and shall be in
full force and effect on the Closing Date; PROVIDED that approval by the
Bankruptcy Court of the following conditions shall not be a condition
precedent to the Purchaser's obligations to consummate the Proposed
Transaction: (i) that certain Conclusion of Law set forth in Section II,
Part E of the form Sale Approval Order, (ii) the first sentence of the
ordering provision set forth in Section III, Part D of the form Sale
Approval Order, (iii) the ordering provision set forth in Section III, Part
E of the form Sale Approval Order, (iv) the ordering provision set forth in
Section III, Part F of the form Sale Approval Order, (v) the last sentence
of the ordering provision set forth in Section III, Part H of the form Sale
Approval Order, (vi) the last sentence of the ordering provision set forth
in Section III, Part L of the form Sale Approval Order, (vii) the ordering
provision set forth in Section III, Part O of the form Sale Approval Order,
(viii) the ordering provision set forth in Section III, Part P of the form
Sale Approval Order and (ix) the ordering provision set forth in Section
III, Part T of the form Sale Approval Order.
SECTION 9.5 EXPIRATION OF THE HSR ACT WAITING PERIOD. The applicable
waiting period, if any, required under the HSR Act with respect to the Proposed
Transaction shall have expired or been terminated.
SECTION 9.6 MSB LIABILITIES. The amount of the MSB Liabilities shall
not exceed $8,000,000; PROVIDED, HOWEVER, that this Section 9.6 shall not apply
if the Sellers agree to reduce the Purchase Price by an amount equal to 75% of
the amount by which the amount of the MSB Liabilities exceed $8,000,000.
SECTION 9.7 ADJUSTED ACCOUNTS RECEIVABLE. As of the Effective Time,
the Adjusted Accounts Receivable shall be no less than $38,350,000, PROVIDED,
HOWEVER, that this Section 9.7 shall not apply if the Sellers agree to reduce
the Purchase Price by an amount equal to the amount by which the amount of the
Adjusted Accounts Receivable is less than $38,350,000.
SECTION 9.8 NO MATERIAL ADVERSE CHANGE. No Material Adverse Change
shall have occurred after the date of this Agreement.
34
ARTICLE X
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
The obligations of the Sellers to sell, transfer and deliver the
Transferred Assets are subject to the satisfaction on or, where appropriate,
prior to the Closing Date, of the following conditions, except to the extent
that any such condition may have been waived in writing by the Sellers on or
prior to the Closing Date:
SECTION 10.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchaser contained in Article V of this Agreement shall have
been true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date (except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date), except, in each case, where the
failure of such representations and warranties to be true and correct would not
adversely impact the Purchaser's ability to perform its obligations under this
Agreement.
SECTION 10.2 PERFORMANCE. The Purchaser shall have performed and
complied in all material respects with the covenants and obligations required by
this Agreement to be performed or complied with by the Purchaser at or prior to
the Closing Date.
SECTION 10.3 NO ORDER. No order, statute, rule, regulation, executive
order, injunction, stay, decree, directive, or restraining order shall have been
enacted, entered, promulgated or enforced by any court of competent jurisdiction
or Governmental Authority that would (i) prevent the consummation of any of the
transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, nor shall any such injunction, judgment, order, decree, ruling or
charge be in effect. No Action shall be pending before any Governmental
Authority or before any arbitral body wherein an unfavorable injunction,
judgment, order, decree, ruling, directive or charge would (x) prevent
consummation of any of the transactions contemplated by this Agreement or (y)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation.
SECTION 10.4 BANKRUPTCY COURT ORDERS.
(a) The Sale Approval Order shall have been entered, PROVIDED that
approval by the Bankruptcy Court of the following conditions shall not be a
condition precedent to the Sellers' obligations to consummate the Proposed
Transaction: (i) that certain Conclusion of Law set forth in Section II,
Part E of the form Sale Approval Order, (ii) the first sentence of the
ordering provision set forth in Section III, Part D of the form Sale
Approval Order, (iii) the ordering provision set forth in Section III, Part
E of the form Sale Approval Order, (iv) the ordering provision set forth in
Section III, Part F of the form Sale Approval Order, (v) the last sentence
of the ordering provision set forth in Section III, Part H of the form Sale
Approval Order, (vi) the last sentence of the ordering provision set forth
in Section III, Part L of the form Sale Approval Order, (vii) the ordering
provision set forth in Section III, Part O
35
of the form Sale Approval Order, (viii) the ordering provision set
forth in Section III, Part P of the form Sale Approval Order and (ix) the
ordering provision set forth in Section III, Part T of the form Sale
Approval Order.; and
(b) The Sale Procedures Order shall have been entered.
SECTION 10.5 EXPIRATION OF THE HSR ACT WAITING PERIOD. The applicable
waiting period, if any, required under the HSR Act with respect to the Proposed
Transaction shall have expired or been terminated.
ARTICLE XI
COVENANTS AND AGREEMENTS SUBSEQUENT TO THE CLOSING
SECTION 11.1 BOOKS AND RECORDS; ACCESS. After the Closing Date, the
Purchaser shall not destroy or otherwise dispose of any original Books and
Records in its possession as of the Closing Date relating to the Business or the
Transferred Assets prior to the Closing or the Assumed Liabilities without first
offering to surrender such Books and Records to the Sellers, upon ninety (90)
days written notice and shall maintain such Books and Records in good condition
in a reasonably accessible location. In addition, after the Closing Date the
Purchaser shall afford the Sellers and their representatives, successors and
assigns, including, without limitation, any successor trustee or any other
person created or appointed by the Bankruptcy Court pursuant to a plan of
reorganization, reasonable access to their books, records, personnel, offices
and other information with respect to the Business that is necessary for the
purpose of obtaining information related to the Bankruptcy Case, winding up the
Bankruptcy Case, taxes and other reasonable business purposes and shall
cooperate with Sellers with respect to such matters without cost or charge to
the Sellers (except that the Sellers shall bear any out-of-pocket costs incurred
in connection therewith).
SECTION 11.2 FURTHER ASSURANCES. In addition to the actions,
documents, files, pleadings and instruments specifically required to be taken or
delivered by this Agreement or the other Acquisition Documents, whether on or
before or from time to time after the Closing, and without further
consideration, each party hereto shall make reasonable best efforts to, and
shall use their reasonable best efforts to cause their respective Affiliates to,
take such other actions, and execute and/or deliver such other documents, data,
pleadings, files, information and instruments, as the other party hereto or its
counsel may reasonably request in order to effectuate and perfect the
transactions contemplated by this Agreement and the other Acquisition Documents,
including without limitation, such actions as may be necessary to Transfer to
the Purchaser and to place the Purchaser in possession or control of, all of the
rights, properties, assets and businesses intended to be sold, Transferred,
conveyed, assigned and delivered hereunder, or to assist in the collection of
any and all such rights, properties and assets or to enable the Purchaser to
exercise and enjoy all rights and benefits of the Sellers with respect thereto.
36
ARTICLE XII
TERMINATION
SECTION 12.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by the mutual written consent of the Purchaser and the Sellers;
(b) by the Purchaser upon written notice in the event of a material
breach of any covenant or agreement to be performed or complied with by the
Sellers, or in the event of a material breach of any representation or
warranties of the Sellers, pursuant to the terms of this Agreement or any
of the Acquisition Documents, which breach would result in a condition to
Closing set forth in Article IX hereof becoming incapable of fulfillment or
cure (which condition has not been waived by the Purchaser in writing)
prior to the Drop Dead Date;
(c) by the Sellers upon written notice in the event of a material
breach of any covenant or agreement to be performed or complied with by the
Purchaser, or in the event of a material breach of any representation or
warranties of the Purchaser, pursuant to the terms of this Agreement or any
of the Acquisition Documents, which breach would result in a condition to
Closing set forth in Article X hereof becoming incapable of fulfillment or
cure (which condition has not been waived by the Sellers in writing) prior
to the Drop Dead Date;
(d) by either the Purchaser or the Sellers if any Governmental
Authority having competent jurisdiction shall have issued a final,
non-appealable order, decree, ruling or injunction (other than a temporary
restraining order), or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement or
the other Acquisition Documents; PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 12.1(d) shall not be available
to any party who shall not have complied with its obligations, if any,
under Articles VI, VII or VIII, as the case may be, to avoid the entry of
such order, decree, ruling or injunction;
(e) by the Sellers or the Purchaser upon the Approval by the
Bankruptcy Court of an Alternative Transaction;
(f) by either the Sellers or the Purchaser if (i) the Bankruptcy Court
has not entered the Sale Approval Order on or before May 2, 2003 or (ii)
the Closing shall not have occurred on or before May 30, 2003 (the "DROP
DEAD DATE"); PROVIDED, HOWEVER, that the right to terminate this Agreement
under this Section 12.1(f) shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the
cause of, or shall have resulted in, the failure of the Closing to occur on
or prior to such date (for purposes of this subsection (f) the failure or
refusal by any party to provide any waiver that under the terms hereof may
be given or withheld in such party's discretion shall not be deemed a
failure to fulfill any obligation under this Agreement); and
37
(g) by the Purchaser if Approvals to the Transfer of the Assigned
Contracts listed on Schedule 12.1(g) to the Purchaser on the Closing Date
have not been obtained (on terms and conditions no less favorable than
those in existence as of the date hereof) from the non-debtor parties
thereto (excluding any such Assigned Contracts with respect to which a
binding determination by the Bankruptcy Court that such Approval is not
required has been obtained) on or prior to 5:00 pm Eastern Time on the Bid
Date; PROVIDED that the Purchaser shall not have the right to terminate
this Agreement pursuant to this Section 12.1(g) after 5:00 pm Eastern Time
on the Bid Date.
SECTION 12.2 EFFECT OF TERMINATION.
(a) In the event of the termination of this Agreement under Section
12.1, except with respect to this Section 12.2, Section 13.1, Section 13.2,
Section 13.3, Section 13.4 and Sections 13.7 through 13.12 hereof, (i) this
Agreement shall forthwith become void, and (ii) subject to the provisions
of Sections 12.2(b) and (c) below, there shall be no liability on the part
of the Sellers, the Purchaser or any of their respective Representatives.
(b) Notwithstanding the provisions of Section 12.2(a) above, but
subject to Section 2.5 and the provisions set forth therein with respect to
liquidated damages, if this Agreement is terminated pursuant to Section
12.1(b) or 12.1(c), this Section 12.2 shall not relieve the breaching party
from Liabilities to the non-breaching party(ies) arising from any breach of
this Agreement.
(c) Notwithstanding the provisions of Section 12.2(a) above, if (y)
there is a termination of this Agreement pursuant to Section 12.1(e) and
the Purchaser is not in material breach of this Agreement or any other
Acquisition Document, the Sellers shall immediately, upon the consummation
of any Alternative Transaction that is approved by the Bankruptcy Court,
pay to GGC Administration, L.L.C. ("GGC Administration"), an Affiliate of
the Purchaser, the Break-Up Fee, as an administrative expense of the
Sellers' Bankruptcy Case, in lieu of any losses the Purchaser may suffer,
and not as a penalty, as the Purchaser's sole and exclusive remedy as a
result of such a termination (it being understood that the Purchaser shall
be entitled to the Break-Up Fee on a maximum of one occasion) or (z) this
Agreement is terminated after the Bid Date for any reason other than (i) as
contemplated in clause (y) above, (ii) as a result of the Sellers' material
breach of this Agreement or any other Acquisition Document or (iii) as a
result of the Purchaser's material breach of this Agreement or any other
Acquisition Document, the Sellers shall immediately, upon the consummation
of any Alternative Transaction that is approved by the Bankruptcy Court at
any time during the six (6) month period following such termination of this
Agreement, pay to GGC Administration, an amount equal to the lesser of (A)
the Purchaser's reasonable documented out-of-pocket expenses incurred in
connection with the transactions contemplated by this Agreement and (B)
$250,000 (the "EXPENSE REIMBURSEMENT"), as an administrative expense of the
Sellers' Bankruptcy Case, in lieu of any losses the Purchaser may suffer,
and not as a penalty, as the Purchaser's sole and exclusive remedy as a
result of such a termination (it being understood that the Purchaser shall
be entitled to the Expense Reimbursement on a maximum of one occasion). GGC
Administration is an intended third
38
party beneficiary of the provisions of this Section 12.2(c), and may
enforce the same as if it were a party to this Agreement. Nothing in this
Section 12.2(c) is intended or shall be construed as a limitation on the
Sellers' liability to Purchaser in the event the Sellers' materially breach
this Agreement or any other Acquisition Document, and in its discretion,
the Bankruptcy Court may order the Sellers' to specifically perform the
Proposed Transaction.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 PUBLIC ANNOUNCEMENTS. Other than oral statements made in
the Bankruptcy Court, the Purchaser and the Sellers shall consult with each
other before issuing any press release or making any public statement or other
public communication with respect to this Agreement or the Proposed Transaction
(including any written statements made in the Bankruptcy Court or in pleadings
filed therein relating to this Agreement or the Proposed Transaction). The
Purchaser and the Sellers shall not issue any such press release or make any
such public statement or public communication without the prior written consent
of the other party, which shall not be unreasonably withheld or delayed;
PROVIDED, HOWEVER, that a party may, with the prior consent of the other party
(which consent shall not be unreasonably withheld or delayed), issue such press
release or make such public statement as may, upon the advice of counsel, be
required by applicable Law, any Governmental Authority with competent
jurisdiction or any listing agreement with any national securities exchange, so
long as the other party is given an opportunity to review and comment on any
such press release or public statement. Notwithstanding any provision to the
contrary in this Agreement, the Sellers or the Purchaser may disclose the
existence, terms and conditions and a copy of this Agreement or any other
Acquisition Document to the Bankruptcy Court, to any Representative of the
Sellers or the Purchaser and to other Persons as permitted by Section 6.2
hereof.
SECTION 13.2 AMENDMENT; WAIVER. Neither this Agreement, nor any of the
terms or provisions hereof, may be amended, modified, supplemented or waived
except by a written instrument signed by all of the parties hereto (or, in the
case of a waiver, by the party granting such waiver). No waiver of any of the
terms or provisions of this Agreement shall be deemed to be or shall constitute
a waiver of any other term or provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver. No failure of a party hereto
to insist upon strict compliance by another party hereto with any obligation,
covenant, agreement or condition contained in this Agreement shall operate as a
waiver of, or estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of a party
hereto, such consent shall be given in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 13.2.
SECTION 13.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Sellers set forth in Article IV hereof and
the Purchaser set forth in Article V hereof shall not survive the Closing.
39
SECTION 13.4 FEES AND EXPENSES. Except as otherwise expressly provided
in this Agreement, each of the parties hereto shall bear and pay all fees, costs
and expenses incurred by it or any of its Affiliates in connection with the
origin, preparation, negotiation, execution and delivery of this Agreement and
the other Acquisition Documents and the transactions contemplated hereby or
thereby (whether or not such transactions are consummated) and the performance
of their respective obligations under this Agreement, including, without
limitation, any fees, expenses or commissions of any of its Representatives,
none of which shall be included in the Assumed Liabilities.
SECTION 13.5 NOTICES.
(a) All notices, requests, demands and other communications required
or permitted under this Agreement shall be in writing and mailed or facsimiled
or delivered by hand or courier service:
(i) If to the Sellers, to:
divine, inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxx, General Counsel
With a copy, which shall not constitute notice, to:
Xxxxxx & Xxxxxxx
Illinois LLC
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
and
Xxxxx, Xxxxxxxx & White LLC
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxx and Xxxx Xxxxx
40
(ii) If to the Purchaser, to:
dS&MS Newco, Inc.
c/o Golden Gate Private Equity, Inc.
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Xxxxxxxx Xxxx or Xxxxxx Xxxxx
With a copy, which shall not constitute notice, to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx
(b) All notices and other communications required or permitted under
this Agreement which are addressed as provided in this Section 13.5 (i) if
delivered personally against proper receipt or by confirmed facsimile
transmission shall be effective upon delivery and (ii) if delivered (A) by
certified or registered mail with postage prepaid shall be effective five
(5) Business Days or (B) by Federal Express or similar courier service with
courier fees paid by the sender, shall be effective two (2) Business Days
following the date when mailed or couriered, as the case may be. Any party
hereto may from time to time change its address for the purpose of notices
to such party by a similar notice specifying a new address, but no such
change shall be deemed to have been given until it is actually received by
the party sought to be charged with its contents.
SECTION 13.6 ASSIGNMENT. This Agreement and all of the terms and
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Prior to the
Effective Time, neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by the Sellers or the Purchaser; provided
the Purchaser may assign any of its rights, interests or obligations to any of
its Affiliates, so long as the Purchaser remains the primary obligor hereunder
and so long as Golden Gate remains obligated under Section 13.13 with respect to
such assignee. Any assignment made in contravention of the terms of this Section
13.6 shall be void ab initio.
SECTION 13.7 GOVERNING LAW; CONSENT TO JURISDICTION.
(a) This Agreement and the legal relations among the parties hereto
shall be governed by and interpreted in accordance with, the laws of the
State of
Illinois applicable to agreements made and to be performed
entirely within such State.
41
(b) Until the entry of an order either closing or dismissing the
Bankruptcy Case, each party hereto (i) irrevocably elects as the sole
judicial forum for the adjudication of any matters arising under or in
connection with the Agreement, and consent to the exclusive jurisdiction
of, the Bankruptcy Court; (ii) expressly waives any defense or objection to
jurisdiction or venue based on the doctrine of forum non-conveniens; and
(iii) stipulates that the Bankruptcy Court shall have in personam
jurisdiction and venue over such party.
(c) After the entry of an order either closing or dismissing the
Bankruptcy Case, each party to this Agreement hereby irrevocably submits to
the exclusive jurisdiction of any
Illinois state or federal court sitting
or located in Xxxx County,
Illinois (an "
ILLINOIS COURT") in any Action
arising out of or relating to this Agreement or the other Acquisition
Documents, and each such party hereby irrevocably agrees that all claims in
respect of such Action shall be heard and determined in such Illinois
Court. Each party, to the extent permitted by applicable Laws, hereby
expressly waives any defense or objection to jurisdiction or venue based on
the doctrine of forum non conveniens, and stipulates that any Illinois
Court shall have in personam jurisdiction and venue over such party for the
purpose of litigating any dispute or controversy between the parties
arising out of or related to this Agreement or the other Acquisition
Documents. In the event any party shall commence or maintain any Action
arising out of or related to this Agreement in a forum other than an
Illinois Court, the other party shall be entitled to request the dismissal
or stay of such Action, and each such party stipulates for itself that such
Action shall be dismissed or stayed. To the extent that any party to this
Agreement has or hereafter may acquire any immunity from jurisdiction of
any Illinois Court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, each such party hereby
irrevocably waives such immunity.
(d) After the entry of an order either closing or dismissing the
Bankruptcy Case, each party irrevocably consents to the service of process
of any of the Illinois Courts in any such Action by any means permitted by
the rules applicable in such Illinois Court including, if permissible,
personal delivery of the copies thereof or by the mailing of the copies
thereof by certified mail, return receipt requested, postage prepaid, to it
as its address specified in accordance with Section 13.5 above, such
service to become effective upon the earlier of (i) the date ten (10)
calendar days after such mailing or (ii) any earlier date permitted by
applicable Law.
SECTION 13.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER ACQUISITION
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS
42
AGREEMENT AND THE OTHER ACQUISITION AGREEMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.8.
SECTION 13.9 ENTIRE AGREEMENT. This Agreement, the other Acquisition
Documents and the Non-Disclosure Agreement embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
hereto, their respective Affiliates or any of the Representatives of any of them
with respect thereto. There are no agreements, covenants or undertakings with
respect to the subject matter of this Agreement, the other Acquisition Documents
and the Non-Disclosure Agreement other than those expressly set forth or
referred to herein or therein and no representations or warranties of any kind
or nature whatsoever, express or implied, are made or shall be deemed to be made
herein by the parties hereto except those expressly made in this Agreement, the
other Acquisition Documents and the Non-Disclosure Agreement.
SECTION 13.10 SEVERABILITY. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term and/or provision
hereof. In the event that any term or provision of this Agreement shall be
determined to be unenforceable, invalid or illegal in any respect, such
unenforceability, invalidity or illegality shall not affect any other term or
provision hereof, but this Agreement shall be construed as if such
unenforceable, invalid or illegal term or provision had never been contained
herein. Moreover, if any term or provision of this Agreement shall for any
reason be held to be excessively broad as to time, duration, activity, scope or
subject, the parties request that it be construed, by limiting and reducing it,
so as to be enforceable to the fullest extent permitted under applicable Law.
SECTION 13.11 NO THIRD PARTY BENEFICIARIES. Except as and to the
extent otherwise provided herein, nothing in this Agreement is intended, nor
shall anything herein be construed, to confer any rights, legal or equitable, in
any Person other than the parties hereto and their respective successors and
permitted assigns.
SECTION 13.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which,
when taken together, shall constitute one and the same instrument.
SECTION 13.13 GUARANTEE.
(a) Golden Gate hereby, unconditionally and irrevocably, guarantees
(this "GUARANTY") by way of an independent obligation to the Sellers (each
Seller referred to herein individually as a "BENEFICIARY" and collectively
referred to herein as "BENEFICIARIES") (i) the due, prompt and faithful
performance by the Purchaser of all undertakings, obligations, required
acts and performances of the Purchaser to such Beneficiaries under or
arising out of this Agreement, and (ii) the due and punctual payment of all
amounts due and payable by the Purchaser to such Beneficiaries under or
arising out of this Agreement after the date hereof,
43
when and as the same shall arise and become due and payable in
accordance with the terms of and subject to the conditions contained in
this Agreement (the "GUARANTEED OBLIGATIONS").
(b) This is a guaranty of payment and performance and not of
collection only. If for any reason whatsoever the Purchaser shall fail or
be unable to perform or comply with any of its Guaranteed Obligations,
Golden Gate will promptly upon receipt of notice thereof from the
Beneficiaries entitled to such performance or payment forthwith (i) pay or
cause to be paid in lawful money of the United States the unpaid Guaranteed
Obligations then due and payable to each such Beneficiary (at the place
specified and in the amounts and to the extent required of the Purchaser
under this Agreement) and (ii) perform or comply with the Guaranteed
Obligations for which performance or compliance is due or cause such
Guaranteed Obligations to be performed or complied with (such performance
or compliance as required of Purchaser under this Agreement).
(c) Golden Gate shall remain obligated hereunder notwithstanding that,
without any reservation of rights against Golden Gate and without notice to
or further assent by Golden Gate, any demand for payment of any of the
Guaranteed Obligations made by the Beneficiaries may be rescinded by the
Beneficiaries and any of the Guaranteed Obligations continued, and the
Guaranteed Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right
of offset with respect thereto, if any, may, from time to time, in whole or
in part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Beneficiaries, and this Agreement
and any other documents executed and delivered in connection therewith may
be amended, modified, supplemented or terminated, in whole or in part.
(d) Golden Gate waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or
proof of reliance by the Beneficiaries upon this Guaranty or acceptance of
this Guaranty; the Guaranteed Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty; and
all dealings between the Purchaser and Golden Gate, on the one hand, and
the Beneficiaries, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guaranty.
Golden Gate agrees that (i) any notice provided under this Agreement to the
Purchaser (including any demand for payment or notice of default or non
payment) shall be deemed to constitute notice to Golden Gate for purposes
hereof and (ii) any knowledge of the Purchaser shall be deemed knowledge of
Golden Gate for purposes hereof. Nothing in this Section 13.13 shall be
deemed to constitute a waiver of, or prevent Golden Gate from asserting,
any valid defense that may be asserted by the Purchaser. Golden Gate waives
any defense whatsoever to the performance of the Guaranteed Obligations
that would not constitute a valid defense by the Purchaser. Golden Gate
understands and agrees that this Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment and performance
without regard to (x) the validity or enforceability of this Section 13,13,
or (y) any other circumstance whatsoever (with or without notice to or
knowledge of the Purchaser or Golden Gate) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Purchaser
for the Guaranteed Obligations, or of Golden
44
Gate under this Guaranty in bankruptcy or any similar proceedings. When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against Golden Gate, the Beneficiaries may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Purchaser or any other Person or
against any collateral security or guaranty for the Guaranteed Obligations
or any right of offset with respect thereto, and any failure by the
Beneficiaries to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Purchaser or any other Person
or to realize upon any such collateral security or guaranty or to exercise
any such right of offset, or any release of the Purchaser or any other
Person or any such collateral security, guaranty or right of offset, shall
not relieve Golden Gate of any obligation or liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Beneficiaries against Golden Gate. For
the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
(e) This Guaranty shall continue to be effective, or be reinstated, as
the case may be, if at any time payment, or any part thereof, of any of the
Guaranteed Obligations is rescinded or must otherwise be restored or
returned by the Beneficiaries upon any insolvency, bankruptcy, dissolution,
liquidation or reorganization involving the Purchaser or Golden Gate, or
upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Purchaser or Golden
Gate or any substantial part of its property, or otherwise, all as though
such payments had not been made.
(f) Golden Gate shall pay reasonable out-of-pocket attorneys' fees,
reasonable out-of-pocket costs and other expenses of each of the
Beneficiaries expended or incurred in enforcing this Guaranty against
Golden Gate with respect to any claim against the Purchaser in which the
Beneficiaries are the prevailing party, whether or not legal action is
instituted, including, without limitation, all fees, costs and expenses
incurred in connection with any insolvency, bankruptcy, reorganization,
arrangement or other similar proceedings involving the Purchaser or Golden
Gate which in any way affect the exercises by any Beneficiary of any of its
rights and/or remedies hereunder.
(g) This Section 13.13 shall terminate at the Effective Time, and
shall be subject in all respects to the liquidated damages provisions of
Section 2.5.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
45
IN WITNESS WHEREOF, the parties hereto have caused this
Asset Purchase
Agreement to be duly executed as of the day and year first above written.
SELLERS
divine, inc.
Air Divine, Inc.
Data Return Corporation
databites, inc.
Delano Technology Corp.
Denali, Inc.
divine Global Services, Inc.
divine international, inc.
divine interVentures, Inc.
divine Ireland, Inc.
divine Managed Services, Inc.
divine software, inc.
divine Synchrony Communications, Inc.
divine/Emicom, Inc.
eprise Corporation
Eprise Securities Corp.
eShare Communications, Inc.
Folio Corporation
Futuretense Corporation
Global Recall, Inc.
iCentral, Inc.
Inventions, Inc.
LOTN, Inc.
Melita Finance, Inc.
Melita Intellectual Property, Inc.
Open Market Securities Corporation
Open Market, Inc.
Xxxxxxxxxxx.xxx, Inc.
Perceptual Robotics, Inc.
Retrieval Technologies, Inc.
RWT Corporation
SafeMaker (Europe), Inc.
SageMaker, Inc.
SM2 Holding Corp.
smallwonders software!, inc.
SMI Holding Corp.
Softmetric, Inc.
Venture Capital Unlimited Acquisition Sub, Inc.
Viant Corporation
Waypoint Software Corporation
By: /s/ XXXX XXXXXXXX
-------------------------------
Name: Xxxx Xxxxxxxx
Title:
S-1
divine technology ventures
By: divine, inc., its general partner
By: /s/ XXXX XXXXXXXX
-------------------------------
Name:
Title:
S-2
PURCHASER
dS&MS Newco, Inc.
a corporation formed pursuant to the laws of the
Cayman Islands
By: /s/ XXXXX XXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxx
Title: President
GUARANTOR
Golden Gate Private Equity, Inc.
a Delaware corporation
By: /s/ XXXXX XXXXXXX
-------------------------------
Name:
Title:
S-3
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A Managed Service Products and SSO Products
EXHIBIT B Form of Assignment and Assumption Agreement
EXHIBIT C Form of Xxxx of Sale
EXHIBIT D Form of Sale Approval Order
EXHIBIT E Foreign Subsidiaries
EXHIBIT F Form of Non-Disclosure Agreement
SCHEDULES
Schedule 1.1(a) Assigned Contracts (must be assigned)
Schedule 1.1(b) Assigned Contracts (to the extent assignable)
Schedule 2.1(a) Summary of Accounts Receivable
Schedule 2.1(c) Registered Intellectual Property
Schedule 2.1(d) Summary of Inventory
Schedule 2.1(h) Owned & Leased Real Property
Schedule 2.2(p) Non-competition and Confidentiality Agreements
that are not assignable
Schedule 2.2(t) Bankruptcy Related Windup Assets
Schedule 2.3(a)(iii) Capital Equipment Lease Obligations and Debt
Obligations of the Managed Services Business
Schedule 4.1 Good Standing Exceptions
Schedule 4.4 Actions
Schedule 4.5 Compliance with Laws
Schedule 4.6 Title to Property
Schedule 4.7 Seller Approvals
Schedule 4.8 Broker's or Finder's Fees
Schedule 8.2 Employees of Sellers Eligible to be Hired by
Purchaser
Schedule 12.1(g) Material Contracts Requiring Consent Prior to
Closing
EXHIBIT A
MANAGED SERVICES PRODUCTS
All Assets Principally Related to the divine Managed Services (dMS) Business
SSO PRODUCTS
PRODUCT LINE POINT PRODUCTS ACQUIRED FROM
------------ -------------- -------------
CIM Internet Velocity Marketing Delano Technologies
CIM Internet Xpressions Eshare
CIM Internet Net Agent Eshare
CIM Internet Universal View Synchrony
CIM Telephony Conversations Eshare
CIM Telephony eCollections Eshare
CIM Telephony ExChange Eshare
CIM Telephony Softmetrics Softmetric
Collaboration Showcase LiveOnTheNet
Collaboration Opinionware Opinionware
Collaboration MindAlign Parlano
Collaboration True Look Perceptual Robotics (PRI)
ECM Participant Server Eprise
ECM Content Server Open Market
ECM Athena Mindwrap
EXHIBIT B
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, divine, inc., a Delaware corporation ("PARENT") and
certain domestic subsidiaries set forth on the signature page hereto
("SUBSIDIARIES" and together with Parent, the "SELLERS"), do hereby assign,
grant, bargain, sell, convey and transfer to dS&MS Newco, Inc., a corporation
formed pursuant to the laws of the Cayman Islands (the "PURCHASER"), all of
Sellers' right, title and interest to the Contracts listed on SCHEDULE I
attached hereto together with all amendments, waivers, supplements and other
modifications of and to such agreements, contracts, licenses and other
instruments through the date hereof (collectively, the "ASSIGNED CONTRACTS").
Upon the execution and delivery hereof, in consideration of the
foregoing assignment and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Purchaser hereby absolutely and
unconditionally assumes all duties, obligations and liabilities in respect of
the Assumed Liabilities (as such term is defined in Section 2.3(a) of the
Purchase Agreement), including, without limitation the Assigned Contracts, and
agrees to be bound by the terms, conditions and covenants thereof, and to
perform all duties and obligations of Sellers thereunder.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in that certain
Asset Purchase Agreement, dated as of
April __, 2003, by and among Sellers and Purchaser (the "PURCHASE AGREEMENT").
This Assignment and Assumption Agreement shall be binding upon the
successors and assigns of the parties.
[SIGNATURE PAGE FOLLOWS]
Assignment and Assumption of Contract Rights
Executed this __ day of ________, 2003.
SELLERS:
divine, inc.
Air Divine, Inc.
Data Return Corporation
databites, inc.
Delano Technology Corp.
Denali, Inc.
divine Global Services, Inc.
divine international, inc.
divine interVentures, Inc.
divine Ireland, Inc.
divine Managed Services, Inc.
divine software, inc.
divine Synchrony Communications, Inc.
divine/Emicom, Inc.
eprise Corporation
Eprise Securities Corp.
eShare Communications, Inc.
Folio Corporation
Futuretense Corporation
Global Recall, Inc.
iCentral, Inc.
Inventions, Inc.
LOTN, Inc.
Melita Finance, Inc.
Melita Intellectual Property, Inc.
Open Market Securities Corporation
Open Market, Inc.
Xxxxxxxxxxx.xxx, Inc.
Perceptual Robotics, Inc.
Retrieval Technologies, Inc.
RWT Corporation
SafeMaker (Europe), Inc.
SageMaker, Inc.
SM2 Holding Corp.
smallwonders software!, inc.
SMI Holding Corp.
Softmetric, Inc.
Venture Capital Unlimited Acquisition Sub, Inc.
Viant Corporation
Waypoint Software Corporation
By:
------------------------------
Name:
Title:
Assignment and Assumption of Contract Rights
S-1
divine technology ventures
By: divine, inc., its general partner
By:
------------------------------
Name:
Title:
Assignment and Assumption of Contract Rights
S-2
PURCHASER
dS&MS Newco, Inc.
a corporation formed pursuant to the laws of the
Cayman Islands
By:
------------------------------
Name:
Title:
Assignment and Assumption of Contract Rights
S-3
SCHEDULE I
THE ASSIGNED CONTRACTS
Assignment and Assumption of Contract Rights
EXHIBIT C
FORM OF
XXXX OF SALE
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, divine, inc., a Delaware corporation ("PARENT") and
certain domestic subsidiaries set forth on the signature pages hereto
("SUBSIDIARIES" and together with Parent, the "SELLERS"), do hereby grant,
bargain, transfer, sell, assign, convey and deliver to dS&MS Newco, Inc., a
corporation formed pursuant to the laws of the Cayman Islands (the "PURCHASER"),
all right, title and interest in and to the Transferred Assets as such term is
defined in the
Asset Purchase Agreement, dated as of April __, 2003 (the "
ASSET
PURCHASE AGREEMENT"), by and among Sellers and Purchaser. Capitalized terms used
but not defined herein shall have the meanings ascribed to such terms in the
Asset Purchase Agreement.
This Xxxx of Sale is being executed and delivered by Sellers as of the
__ day of ________, 2003 pursuant to the terms of the
Asset Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
Xxxx of Sale
Executed this ___ day of _________, 2003.
SELLERS
divine, inc.
Air Divine, Inc.
Data Return Corporation
databites, inc.
Delano Technology Corp.
Denali, Inc.
divine Global Services, Inc.
divine international, inc.
divine interVentures, Inc.
divine Ireland, Inc.
divine Managed Services, Inc.
divine software, inc.
divine Synchrony Communications, Inc.
divine/Emicom, Inc.
eprise Corporation
Eprise Securities Corp.
eShare Communications, Inc.
Folio Corporation
Futuretense Corporation
Global Recall, Inc.
iCentral, Inc.
Inventions, Inc.
LOTN, Inc.
Melita Finance, Inc.
Melita Intellectual Property, Inc.
Open Market Securities Corporation
Open Market, Inc.
Xxxxxxxxxxx.xxx, Inc.
Perceptual Robotics, Inc.
Retrieval Technologies, Inc.
RWT Corporation
SafeMaker (Europe), Inc.
SageMaker, Inc.
SM2 Holding Corp.
smallwonders software!, inc.
SMI Holding Corp.
Softmetric, Inc.
Venture Capital Unlimited Acquisition Sub, Inc.
Viant Corporation
Waypoint Software Corporation
By:
------------------------------
Name:
Title:
Xxxx of Sale
S-1
EXHIBIT C
divine technology ventures
By: divine, inc., its general partner
By:
------------------------------
Name:
Title:
Xxxx of Sale
EXHIBIT D
FORM OF SALE APPROVAL ORDER
SEE ATTACHED
UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
EASTERN DIVISION
IN RE: CHAPTER 11
DIVINE, INC., ET AL.,1 CASE NOS. 03-11472-JNF AND
DEBTORS. 03-11474-JNF THROUGH
03-11478-JNF
03-12681-JNF THROUGH
03-12715-JNF
(JOINTLY ADMINISTERED)
ORDER AUTHORIZING THE DEBTORS TO (A) SELL SUBSTANTIALLY ALL OF THEIR ASSETS, (B)
ASSUME AND ASSIGN CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES, (C)
CONSUMMATE CERTAIN OTHER RELATED TRANSACTIONS CONTEMPLATED UNDER THE PURCHASE
AGREEMENT, AND (D) WAIVE THE TEN-DAY STAY OTHERWISE APPLICABLE TO SALES OF
ESTATE PROPERTY AND THE ASSIGNMENT OF EXECUTORY CONTRACTS
This matter coming to be heard on the Motion (the "Sale Motion")2 of the
above-captioned debtors and debtors-in-Possession (collectively, the "Debtors"
or "Sellers") for entry of an Order Authorizing the Debtors to (A) Sell
Substantially All of Their Assets, (B) Assume and Assign Certain Executory
Contracts and Unexpired Leases, (C) Consummate Certain Other Related
Transactions Contemplated Under the Asset Purchase
-----------------------
1 The Debtors are the following entities: divine, Inc., Open Market, Inc.,
divine Managed Services, Inc., Data Return Corporation, Viant Corporation,
eShare Communications, Inc., Delano Technology Corp., divine technology
ventures, iCentral, Inc., Inventions, Inc., divine/Emicom, Inc., SageMaker,
Inc., Waypoint Software Corporation, Preceptual Robotics, Inc., divine
Global Services, Inc., eprise Corporation, Denali, Inc., Melita Finance,
Inc., SMI Holding Corp., Retrieval Technologies, Inc., divine
international, Inc., divine software, inc., Xxxxxxxxxxx.xxx, Inc., Melita
Intellectual Property, Inc., smallwonders software!, inc., Open Market
Securities Corporation, Futuretense Corporation, RWT Corporation, LOTN,
Inc., Eprise Securities Corp., SafeMaker (Europe), Inc., Global Recall,
Inc., databites, inc., divine interVentures, Inc., divine Ireland, Inc.,
Folio Corporation, Venture Capital Unlimited Acquisition, divine Synchrony
Communications, Inc, Softmetric, Inc., Air Divine, Inc. and SM2 Holding
Corp. [NOTE: THIS FOOTNOTE ASSUMES THAT COURT GRANTS PENDING MOTION TO
BRING "SECONDARY DEBTORS" INTO SALE PROCESS.]
2 Capitalized terms not defined herein shall have the meanings ascribed to
them in the Sale Motion or in the Purchase Agreement.
Agreement, dated as of April __, 2003, by and among the Sellers, DS&MS NEWCO,
INC., a corporation formed pursuant to the laws of the Cayman Islands and Golden
Gate Private Equity, Inc., a Delaware corporation (the "Purchase Agreement"),
and (D) Waive The Ten-Day Stay Otherwise Applicable To Sales Of Estate Property
And The Assignment Of Executory Contracts, seeking, INTER ALIA, authority to
sell and assign (the "Sale") substantially all assets of the Sellers, to the
dS&MS Newco, Inc. or one or more of its affiliates (the "Purchaser"), free and
clear of liens, claims and encumbrances, pursuant to 11 U.S.C. Sections 105,
363, 365 and 1146(c) and Rules 2002(a)(2), 6004(a), (b), (c) and (e), 6006(a),
and 9014 of the Federal Rules of Bankruptcy Procedure; the Transferred Assets
and the Assigned Contracts (collectively, the "Assets") as defined in the
Purchase Agreement and attached hereto as Exhibit A and incorporated herein; the
Court having previously entered its Order dated March 26, 2003 (the "Sale
Procedures Order"), approving notice, bidding and sale procedures for the Sale
of the Assets (the "Sale Procedures"); all parties in interest having been
heard, or having had the opportunity to be heard, regarding approval of the
Purchase Agreement, and the transactions contemplated thereby (the
"Transactions"); the Court having considered the Sale Motion, any objections
filed thereto, the statements of counsel and any testimony or offer of proof as
to testimony that may have been presented at the hearing held before this Court
on ______________, 2003 (the "Sale Hearing"), including the testimony of
______________ [name], ______________ [office held] of ______________ [debtor],
and the affidavit of ______________ [name], ______________ [office held] of
______________ [debtor], and ______________ [other forms of evidence presented];
and the Court being fully advised in the premises, and after due deliberation
and
-2-
cause appearing therefore, the Court hereby makes the following Findings of
Fact and Conclusions of Law.3
I.
FINDINGS OF FACT
A. BASIS FOR SECTION 363 SALE
1. Time is of the essence in consummating the Sale. Accordingly, to
maximize the value of the Assets, it is essential that the sale of the Assets
occur within the time constraints set forth in the Purchase Agreement.
2. The Assets are property of the Debtors' estates and title thereto is
vested in the Debtors' estates.
B. NOTICE OF SALE OF THE ASSETS
3. Pursuant to the Certificate of Service of Notice of the Hearing and Sale
filed by the Debtors on March 21, 2003, written notice ("Notice") of the Sale
Hearing was transmitted to: (i) the United States Trustee, (ii) the Official
Committee of Unsecured Creditors, (iii) the Massachusetts Department of Revenue,
(iv) all known creditors, (v) the parties on official 2002 service list, (vi)
all potential purchasers known by the Debtors, and (vii) the Purchaser and its
counsel. On April 4, 2003, written notice and a statement of the cure amount was
transmitted to parties to Assigned Contracts which the Debtors' intend to assume
and assign as part of the sale.
-----------------------
3 The Court's statements from the bench setting forth additional Findings of
Fact and Conclusions of Law in open Court at the Hearing on the Sale Motion
are expressly incorporated by reference into this Order and made a part
hereof. The Findings of Fact and Conclusions of Law contained herein
constitute the findings of fact and conclusions of law required to be
entered by this Court with respect to the Motion pursuant to Rule 52 of the
Federal Rules of Civil Procedure, as made applicable herein by Rules 7052
and 9014 of the Federal Rules of Bankruptcy Procedure.
-3-
4. The Notice was adequate and sufficient under the circumstances of these
Chapter 11 cases and this proceeding and such Notice complied with the various
applicable requirements of the Bankruptcy Code and the Federal Rules of
Bankruptcy Procedure.
C. GOOD FAITH OF PURCHASER
5. The Purchaser is purchasing the Assets in good faith and is a good faith
purchaser within the meaning of Section 363(m) of the Bankruptcy Code, and is
therefore entitled to the protection of that provision, and otherwise has
proceeded in good faith in all respects in connection with this proceeding in
that: (a) the Purchaser recognized that the Debtors were free to deal with any
other party interested in acquiring the Assets; (b) the Purchaser complied with
the provisions in the Sale Procedures Order; (c) the Purchaser in no way induced
or caused the Chapter 11 filing of the Debtors; (d) all payments to be made by
the Purchaser and other agreements or arrangements entered into by the Purchaser
in connection with the Transactions have been disclosed; and (e) the negotiation
and execution of the Purchase Agreement and any other agreements or instruments
related thereto was in good faith and represented arms'-length dealings between
parties represented by sophisticated legal counsel.
6. The Purchaser has not acted in violation of Section 363(n) of the
Bankruptcy Code by any action or inaction.
D. COMPETING OFFERS
7. [No Qualified Overbid was received by the Debtors pursuant to the Sale
Procedures.] [Although the Debtors did receive certain offers, such offers did
not constitute Qualified Overbids pursuant to the Sale Procedures.] [Although
the Debtors received one or more Qualified Overbids pursuant to the Sale
Procedures, the Purchaser offered the highest and
-4-
best Bid at the Auction, and the Debtors have determined that the Purchaser is
the Successful Bidder.]
E. APPROVAL OF THE SALE MOTION
8. The Purchaser is a third-party purchaser unrelated to the Debtors.
9. The purchase terms, as set forth in the Purchase Agreement, are fair and
reasonable under the circumstances of this Chapter 11 case and this proceeding.
10. The Sale Motion should be approved as it is in the best interests of
the Debtors, the Debtors' estates, the Debtors' creditors and parties in
interest.
11. The Purchase Agreement represents a fair and reasonable offer under the
circumstances of this Chapter 11 case and this proceeding. The consideration
payable for the Assets by the Purchaser is fair and reasonable.
12. The Purchaser has available all necessary cash and other resources
required to consummate the Purchase Agreement in accordance with its terms.
F. EXECUTORY CONTRACTS
13. With respect to those agreements listed on Schedule 1.1(a) and Schedule
1.1(b) to the Purchase Agreement as having a cure claim of zero ($0.00), as of
the date hereof, Sellers are not in default under the terms of such agreements.
14. With respect to those agreements listed on Schedule 1.1(a) and Schedule
1.1(b) to the Purchase Agreement as having a cure claim of greater than zero
($0.00), that the payment, on or before the closing date of the transactions
contemplated under the Purchase Agreement, of the cure amount listed on Exhibit
[___] attached hereto will be deemed to have cured all defaults,
-5-
claims and breaches of any kind or nature whatsoever, whether monetary,
non-monetary or otherwise, if any, with respect to such agreement, and all
actual pecuniary losses, if any, that have resulted from any defaults, claims or
breaches under such agreement, existing as of the date hereof.
15. The Debtors have provided adequate assurance of the Purchaser's future
performance to the non-debtor counterparties to the Assigned Contracts to be
assigned to the Purchaser in connection with the Purchase Agreement, and the
assumption and assignment of such agreements satisfies the requirements of
Sections 363, 365(b)(1), 365(b)(3) and 365(f) of the Bankruptcy Code, as
applicable.
G. THE BUSINESS
16. Those of the Debtors' employees who are to be retained by the Purchaser
are being hired under new employment contracts or other arrangements to be
entered into or to become effective at or after the time of the closing.
17. No common identity of incorporators, directors or stockholders exists
between the Purchaser and the Debtors. The Purchaser is not holding itself out
to the public as a continuation of the Debtors.
18. The Purchaser is not purchasing all of the Debtors' assets. The
Purchaser is not purchasing any Excluded Assets.
19. The Transactions are not being entered into fraudulently. The Sale has
been properly noticed.
-6-
H. MISCELLANEOUS
20. To the extent any Findings of Facts set forth in this Section I
constitute Conclusions of Law, the Court so concludes.
II.
CONCLUSIONS OF LAW
The Court hereby enters the following Conclusions of Law:
A. JURISDICTION, FINAL ORDER AND STATUTORY PREDICATES
1. The Court has jurisdiction to hear and determine the Sale Motion and to
grant the relief requested in the Sale Motion pursuant to 28 U.S.C. Section
157(b)(1) and 1334(b). Venue of these cases and the Sale Motion in this district
is proper under 28 U.S.C. Section 1408 and 1409.
2. This Order constitutes a final and appealable order within the meaning
of 28 U.S.C. Section 158(a). To any extent necessary under Bankruptcy Rule 9014
and Rule 54(b) of the Federal Rules of Civil Procedure as made applicable by
Rule 7054 of the Federal Rules of Bankruptcy Procedure, the Court expressly
finds that there is no just reason for delay in the implementation of this
Order, and expressly directs entry of judgment as set forth herein.
3. This proceeding is a "core proceeding" within the meaning of 28 U.S.C.
Sections 157(b)(2)(A), (N) and (O).
4. The statutory predicates for the Sale Motion are Sections 105, 363, 365
and 1146(c) of the Bankruptcy Code and Rules 2002, 6004, 6006, 9014 and 9019 of
the Federal Rules of Bankruptcy Procedure.
5. The proposed Sale constitutes a sale of property of the Debtors' estates
outside the ordinary course of business within the meaning of Section 363(b) of
the Bankruptcy Code.
-7-
6. The Sale of the Assets contemplated by the Sale Motion outside of a plan
of reorganization does not impermissibly restrict the rights of the Debtors'
creditors or impermissibly dictate the terms of any Chapter 11 plan.
7. The Transaction contemplated by the Purchase Agreement is determined to
be in furtherance of the Debtors' Chapter 11 case and under or in contemplation
of the Debtors' Chapter 11 plan.
B. SECTION 363 SALE
8. The Debtors (a) have full corporate power and authority to execute the
Purchase Agreement and all other documents contemplated thereby and the sale of
the Assets by the Debtors have been duly and validly authorized by all necessary
corporate action of the Debtors, (b) have all of the corporate power and
authority necessary to consummate the Transactions contemplated by the Purchase
Agreement, (c) have taken all corporate action necessary to authorize and
approve the Purchase Agreement and the consummation by the Debtors of the
Transactions contemplated thereby, and (d) no consents or approvals, other than
those expressly provided for in the Purchase Agreement, are required for the
Debtors to consummate such Transactions.
9. The Purchaser would not have entered into the Purchase Agreement and
would not consummate the Transactions, thus adversely affecting the Debtors, the
Debtors' estates, the Debtors' creditors and parties in interest, if (a) the
Sale to the Purchaser and the assignment of the Assigned Contracts to the
Purchaser was not free and clear of all Liens (other than Liens arising under
the MSB Liabilities) of any kind or nature whatsoever, or (b) if the Purchaser
-8-
would, or in the future could, be liable for any of the Liens (other than Liens
arising under the MSB Liabilities), including, without limitation, the Excluded
Liabilities.
10. The provisions of Section 363(f) of the Bankruptcy Code have been
satisfied.
11. Those (i) holders of Liens and (ii) non-debtor parties to Assigned
Contracts which did not object, or which withdrew their objections, to the Sale
or the Sale Motion are deemed to have consented pursuant to Section 363(f)(2) of
the Bankruptcy Code.
12. Those holders of Liens (other than Liens arising under the MSB
Liabilities) and non-debtor parties to Assigned Contracts which did object fall
within one or more of the other subsections of Section 363(f) of the Bankruptcy
Code and are adequately protected by having their Liens, if any, attach to the
cash proceeds of the Sale ultimately attributable to the property against or in
which they claim a Lien.
13. Given all of the circumstances of this Chapter 11 case and the adequacy
and fair value of the purchase price under the Purchase Agreement, the proposed
Sale of the Assets to the Purchaser constitutes a reasonable and sound exercise
of the Debtors' business judgment and should be approved.
C. SECTION 365 ASSUMPTION AND ASSIGNMENT
14. The Assigned Contracts set forth on Schedule 1.1(a) of the Purchase
Agreement, upon assignment of such Assigned Contracts pursuant to the Purchase
Agreement and the terms of this Order, shall be, and shall be deemed to be,
valid and binding and in full force and effect, not susceptible of being
terminated based upon events or circumstances preceding the date of this
-9-
Order, with the Purchaser being substituted and replaced instead of the Debtors
thereunder as of the closing, and enforceable in accordance with their terms.
15. With respect to the Assigned Contracts set forth on Schedule 1.1(b) of
the Purchase Agreement, upon the Debtors' receipt of consents to assignment by
the non-debtor parties thereto, the Debtors are authorized to assign such
agreements in accordance with the Purchase Agreement and, upon such assignment,
such Assigned Contracts shall be, and shall be deemed to be, valid and binding
and in full force and effect, not susceptible of being terminated based upon
events or circumstances preceding the date of this Order, with the Purchaser
being substituted and replaced instead of the Debtors thereunder as of the
closing, and enforceable in accordance with their terms (including the terms of
any consents provided by third parties and approved by the Debtors and the
Purchaser).
D. RETENTION OF JURISDICTION
16. It is necessary and appropriate for the Court to retain jurisdiction
to, INTER ALIA, interpret and enforce the terms and provisions of this Order and
the Purchase Agreement and to adjudicate, if necessary, any and all disputes
concerning the assumption and assignment of the Assigned Contracts, any right,
title, (alleged) property interest, including ownership claims, relating to the
Assets and the proceeds thereof, as well as the extent, validity and priority of
all Liens relating to the Assets.
E. NO LIABILITY
17. The Purchaser does not constitute a successor to the Debtors or the
Debtors' estates. The Transactions do not amount to a consolidation, merger or
DE FACTO merger of the Purchaser and the Debtors or the Debtors' estates.
-10-
18. The Purchaser is not merely a continuation of the Debtors or the
Debtors' estates, there is not substantial continuity between the Purchaser and
the Debtors, and there is no continuity of enterprise between the Debtors and
the Purchaser.
F. MISCELLANEOUS
19. To the extent any Conclusions of Law set forth in this Section II
constitute Findings of Fact, this Court so finds.
III.
BASED ON THE FOREGOING FINDINGS OF FACT AND CONCLUSIONS OF LAW, IT IS HEREBY
ORDERED, ADJUDGED AND DECREED, EFFECTIVE IMMEDIATELY, AS FOLLOWS:
A. The relief requested in the Sale Motion is granted and approved in all
respects. The Purchase Agreement, the Transactions and the Sale are hereby
approved in all respects.
B. The Debtors are authorized and directed to take any and all actions
necessary or appropriate to (i) consummate the Sale of the Assets to the
Purchaser (including, without limitation, to convey to the Purchaser any and all
of the Assets intended to be conveyed) and the closing of the Transactions in
accordance with the Sale Motion, the Purchase Agreement and this Order; and (ii)
perform, consummate, implement and close fully the Purchase Agreement together
with all additional instruments and documents that may be reasonably necessary
or desirable to implement the Purchase Agreement.
C. Upon the closing, the Assets (other than the Assets underlying the MSB
Liabilities) transferred, sold and delivered to the Purchaser shall be free and
clear of any lien (as
-11-
defined in the Bankruptcy Code) (statutory or otherwise) whether xxxxxx or
inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed,
recorded or unrecorded, contingent or non-contingent, material or non-material,
known or unknown (collectively, "Liens") of any person or entity that encumber
or relate to or purport to encumber or relate to the Assets.
D. The Purchaser is not a successor to the Debtors or the Debtors' estates
by reason of any theory of law or equity. The Purchaser shall not assume or in
any way be liable for any liability or obligation of the Debtors or the Debtors'
estates, except as otherwise expressly provided in the Purchase Agreement.
E. Effective on the date of entry of this Order, except as otherwise
expressly provided in the Purchase Agreement, all entities, including, but not
limited to, the Debtors, their creditors, employees, former employees and
shareholders, administrative agencies, governmental departments, secretaries of
state, federal, state and local officials maintaining any authority relating to
Environmental Laws, and their respective successors or assigns, shall be
permanently and forever barred, restrained and enjoined from commencing or
continuing in any manner any action or other proceeding of any kind against the
Purchaser as alleged successor or otherwise with respect to any Liens (other
than Liens arising under the MSB Liabilities) arising out of or related to the
Transactions.
F. Each and every term and provision of the Purchase Agreement, together
with the terms and provisions of this Order, shall be binding in all respects
upon, the Debtors, the Debtors' estates, their creditors, shareholders, all
entities and third parties, administrative agencies, governmental departments,
secretaries of state, federal, state and local officials, maintaining any
authority relating to environmental laws, and their respective successors or
-12-
assigns, including, but not limited to all non-debtor parties to the Assigned
Contracts which may be assigned to the Purchaser under the Purchase Agreement
and any persons asserting any Lien against or interest in the Debtors' estates
or any of the Assets to be sold and assigned to the Purchaser, irrespective of
any action commenced which contests the Debtors' authority to sell and assign
the Assets or which seeks to enjoin such Sale and/or assignment.
G. Except as otherwise expressly provided in the Purchase Agreement or this
Order, all entities holding Liens (other than Liens arising under the MSB
Liabilities) of any kind and nature be and hereby are barred from asserting such
Liens against the Purchaser and/or the Assets and, effective upon the transfer
of the Assets to the Purchaser, such Liens shall attach to the proceeds of the
Sale with the same force, validity, priority and effect, if any, as the Liens
formerly and against the Assets.
H. This Order: (i) is and shall be effective as a determination that, upon
closing, all Liens (other than Liens arising under the MSB Liabilities) existing
as to the Assets conveyed to the Purchaser have been and hereby are adjudged and
declared to be unconditionally released, discharged and terminated as against
the Assets, and (ii) shall be binding upon and govern the acts of all entities,
including, all filing agents, filing officers, title agents, title companies,
recorders of mortgages, recorders of deeds, registrars of deeds, administrative
agencies or units, governmental departments or units, secretaries of state,
federal, state and local officials and all other persons and entities who may be
required by operation of law, the duties of their office, or contract, to
accept, file, register or otherwise record or release any documents or
instruments, or who may be required to report or insure any title or state of
title in or to any of the Assets conveyed to the Purchaser. All Liens (other
than Liens arising under the MSB Liabilities) of record as of the date of this
Order shall be forthwith removed and stricken as against the Assets.
-13-
All such persons and entities described above in this paragraph are authorized
and specifically directed to strike all such recorded Liens (other than Liens
arising under the MSB Liabilities) against the Assets from their records,
official and otherwise.
I. The Debtors are hereby authorized, in accordance with Sections 365(b)(1)
and (f)(2) of the Bankruptcy Code, to: (i) assume the Assigned Contracts; (ii)
sell, assign and transfer to the Purchaser, each of the Assigned Contracts in
each case free and clear of all Liens (other than Liens arising under the MSB
Liabilities); and, (iii) execute and deliver to the Purchaser, such assignment
documents as may be necessary to sell, assign and transfer the Assigned
Contracts.
J. With respect to the Assigned Contracts: (i) the Assigned Contracts shall
be transferred and assigned to, and following the closing of the Sale remain in
full force and effect for the benefit of, the Purchaser in accordance with their
respective terms, notwithstanding any provision in any such Assigned Contract
(including those of the type described in Sections 365(b)(2) and (f) of the
Bankruptcy Code) that prohibits, restricts, or conditions such assignment or
transfer and, pursuant to Section 365(k) of the Bankruptcy Code, the Debtors
shall be relieved from any further liability with respect to the Assigned
Contracts after such assignment to and assumption by the Purchaser; (ii) each
Assigned Contract is an executory contract of the Debtors under Section 365 of
the Bankruptcy Code; (iii) the Debtors may assume each Assigned Contract in
accordance with Section 365 of the Bankruptcy Code; (iv) the Debtors may assign
each Assigned Contract in accordance with Sections 363 and 365 of the Bankruptcy
Code and any provisions in any Assigned Contract that prohibit or condition the
assignment of such Assigned Contract or allow the party to such Assigned
Contract to terminate, recapture, impose any penalty, condition renewal or
extension, or modify any term or condition upon the assignment of
-14-
such Assigned Contract, constitute unenforceable anti-assignment provisions
which are void and of no force and effect; (v) all other requirements and
conditions under Section 363 and 365 of the Bankruptcy Code for the assumption
by the Debtors and assignment to the Purchaser of each Assigned Contract have
been satisfied and (vi) upon closing, in accordance with Sections 363 and 365 of
the Bankruptcy Code, the Purchaser shall be fully and irrevocably vested in all
right, title and interest of each Assigned Contract.
K. There shall be no rent accelerations, assignment fees, increases
(including advertising rates) or any other fees charged to the Purchaser as a
result of the assumption, assignment and sale of the Assigned Contracts. The
validity of the assumption, assignment and sale to the Purchaser shall not be
affected by any dispute between any Debtor or their affiliates and another party
to an Assigned Contract regarding the payment of any amount, including any cure
amount under the Bankruptcy Code. The Assigned Contracts, upon assignment to the
Purchaser, shall be deemed valid and binding, in full force and effect in
accordance with their terms.
L. Pursuant to Sections 105(a), 363 and 365 of the Bankruptcy Code, all
parties to the Assigned Contracts are forever barred and enjoined from raising
or asserting against the Purchaser any assignment fee, default, breach or claim
or pecuniary loss, or condition to assignment, arising under or related to the
Assigned Contracts existing as of the closing or arising by reason of the
closing. Any party that may have had the right to consent to the assignment of
its Assigned Contract is deemed to have consented to such assignment for
purposes of Section 365(e)(2)(A)(ii) of the Bankruptcy Code and otherwise if it
failed to object to the assumption and assignment.
-15-
M. All provisions of this Order regarding Assigned Contracts shall apply to
Executory Contracts on Schedule 1.1(b) to the Purchase Agreement only to the
extent that any necessary consents are obtained in accordance with the Purchase
Agreement.
N. Except with respect to cure amounts required to be paid by the Purchaser
under the Purchase Agreement, to the extent that the Debtors fail to pay any
cure amounts as determined by the Court to be properly due and owing by the
Debtors, and the Purchaser elects to pay such cure amounts, all such cure
amounts paid by the Purchaser shall constitute allowed administrative expense
claims under Section 503 of the Bankruptcy Code and shall be, at the Purchaser's
election, (i) immediately payable if and when any such obligations of the
Debtors arise under the Purchase Agreement or (ii) credited against any amounts
owed by the Purchaser to the Debtors.
O. If any person or entity which has filed statements or other documents or
agreements evidencing Liens (other than Liens arising under the MSB Liabilities)
on, or interests in, the Assets shall not have delivered to the Debtors prior to
the closing, in proper form for filing and executed by the appropriate parties,
termination statements, instruments of satisfaction, releases of liens and
easements, and any other documents necessary for the purpose of documenting the
release of all Liens (other than Liens arising under the MSB Liabilities) which
the person or entity has or may assert with respect to the Assets, the Debtors
are hereby authorized and directed to execute and file such statements,
instruments, releases and other documents on behalf of such person or entity
with respect to such Assets.
P. Any and all Assets in the possession or control of any person or entity,
including, without limitation, any former vendor, supplier or employee of the
Debtors (a) shall be
-16-
transferred to the Purchaser free and clear of the Liens (other than Liens
arising under the MSB Liabilities) and (b) shall be delivered at the closing to
the Purchaser unless, pursuant to the Purchase Agreement, such person, entity,
vendor, supplier or employee may retain temporary possession or control of any
of such Assets, in which case the possession of such item shall be delivered to
the Purchaser at such time as is designated by the Purchaser, consistent with
the Purchase Agreement.
Q. Nothing contained in any order of any type or kind entered in this
Chapter 11 case or any related proceeding subsequent to entry of this Order, nor
in any Chapter 11 plan confirmed in this Chapter 11 case, shall conflict with or
derogate from the provisions of the Purchase Agreement or the terms of this
Order. Further, the provisions of this Order and any actions taken pursuant
hereto shall survive the entry of an order which may be entered confirming any
plan of reorganization or liquidation for the Debtors or the conversion of the
Debtors' cases from Chapter 11 to cases under Chapter 7 of the Bankruptcy Code.
R. This Court retains jurisdiction to: (i) interpret, implement and enforce
the terms and provisions of this Order (including the injunctive relief provided
in this Order) and the terms of the Purchase Agreement, all amendments thereto
and any waivers and consents thereunder and of each of the agreements executed
in connection therewith; (ii) protect the Purchaser, or any of the Assets, from
and against any of the Liens; (iii) compel delivery of all Assets to the
Purchaser; (iv) resolve any disputes arising under or related to the Purchase
Agreement, the Sale or the Transactions, the Purchaser's peaceful use and
enjoyment of the Assets; (v) adjudicate all issues concerning (alleged)
pre-closing Liens and any other (alleged) interest(s) in and to the Assets,
including the extent, validity, enforceability, priority and nature of all such
(alleged) Liens and any other (alleged) interest(s); (vi) adjudicate any and all
issues and/or disputes
-17-
relating to the Debtors' right, title or interest in the Assets and the proceeds
thereof, the Sale Motion and/or the Purchase Agreement; and (vii) adjudicate any
and all remaining issues concerning the Debtors' right and authority to assume
and assign the Assigned Contracts and the Purchaser's rights and obligations
with respect to such assignment and the existence of any default under any
Assumed Contract.
S. No bulk sales law or any similar law of any state or other jurisdiction
shall apply in any way to the Transactions.
T. The Sale to the Purchaser is a prerequisite to the Debtors' ability to
confirm and consummate a plan or plans of reorganization or liquidation. The
Sale is a sale in contemplation of a plan and, accordingly, the transfer of the
Assets to the Purchaser and the Transactions are exempt under Section 1146(c) of
the Bankruptcy Code from any transfer, sales, stamp or similar tax in all
necessary jurisdictions related to the Sale to the Purchaser.
U. This Order and the Purchase Agreement shall be binding in all respects
upon all creditors (whether known or unknown) of any Debtor, all non-debtor
parties to the Assigned Contracts, all successors and assigns of the Purchaser,
the Debtors and their affiliates and subsidiaries, the Assets, and any
subsequent trustees appointed in the Debtors' Chapter 11 case or upon a
conversion to Chapter 7 under the Bankruptcy Code and shall not be subject to
rejection.
V. The failure specifically to include any particular provisions of the
Purchase Agreement in this Order shall not diminish or impair the efficacy of
such provision, it being the intent of the Court that the Purchase Agreement and
each and every provision, term, and condition thereof be and, therefore is
authorized and approved in its entirety.
-18-
W. The stay of orders authorizing the (i) use, sale or lease of property as
provided for in Rule 6004(g) of the Federal Rules of Bankruptcy Procedure and
(ii) assignment of an executory contract or unexpired lease as provided for in
Rule 6006(d) of the Federal Rules of Bankruptcy Procedure shall not apply to
this Order, and this Order shall be effective and enforceable immediately upon
entry.
X. The Purchaser may consummate the Transactions at any time after entry of
this Order by waiving any and all closing conditions in favor of the Purchaser
set forth in the Purchase Agreement that have not been satisfied and by
proceeding to close the Transactions without any notice to the Court and/or any
party in interest.
Y. The provisions of this Order are non-severable and mutually dependent.
[The balance of this page has been left blank intentionally and the signature
page follows immediately hereafter.]
-19-
Dated: ___________________, 2003 ENTERED:
------------------------------------
Order prepared by:
Xxxxxxx X. Xxxxxx, Esq. (BBO #345620)
Xxxxx X. Xxxxx, Esq. (BBO #629984)
Xxxxxxxx X. Xxxxxx (BBO #641490)
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY AND POPEO, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-and-
J. Xxxxxxx Xxxxx, Esq. (Illinois ARDC No. 6202585)
Xxxxxxx X. Xxxxx, Esq. (Illinois ARDC No. 6230396)
Xxxx X. Xxxxxxx, Esq. (Illinois ARDC No. 6274230)
XXXXXX & XXXXXXX ILLINOIS LLC
Sears Tower, Suite 5800
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR DEBTORS AND DEBTORS-IN-POSSESSION
Approved as to Form and Content:
------------------------------------- ----------------------------------====--
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx (IL ARDC No. 6211317)
Xxxxx X. Xxxxx XXXXXXXX & XXXXX
XXXXX, XXXXXX & XXXX, LLP 000 Xxxx Xxxxxxxx Xxxxx
301 Commerce, Suite 1700 Xxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxx, XX 00000 Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000 COUNSEL TO PURCHASER
COUNSEL TO THE OFFICIAL COMMITTEE
OF UNSECURED CREDITORS
-20-
EXHIBIT E
FOREIGN SUBSIDIARIES
SUBSIDIARY JURISDICTION OF INCORPORATION SELLER
---------- ----------------------------- ------
divine international, Inc. Delaware divine, inc.
divine India Ltd. (f/k/a India divine Global Services
Westbound Consulting PVT., Ltd.)
divine Korea (f/k/a Denalii South Korea Denalii, Inc.
Korea)
Emicom (Israel) Israel divine/Emicom, Inc.
Silverprime Ltd. England divine, inc. or Xxx Xxxxxxxx o/b/o
divine, inc.
SORA Labs Spain divine, inc. or Xxx Xxxxxxxx o/b/o
divine, inc.
SUBSIDIARIES OF DIVINE INTERNATIONAL, INC.
SUBSIDIARY (STATUS) JURISDICTION OF INCORPORATION PARENT
------------------- ----------------------------- ------
divine Global Holding GmbH Switzerland divine international, Inc.
(holding company)
divine GmbH (active) Germany divine Global Holding GmbH
divine France SAS (active) France divine Global Holding GmbH
divine Pacific Pty. Ltd. (active) Australian divine Global Holding GmbH
divine KK (active) Japan divine Global Holding GmbH
divine Singapore Pte. Ltd. Singapore divine Global Holding GmbH
(active)
divine Nordic AS (active) Norway divine Global Holding GmbH
divine Solutions GmbH Switzerland divine Global Holding GmbH
(dormant)
Open Market Italy s.r.l. Italy divine Global Holding GmbH
(dormant)
Open Market UK Ltd. (dormant) United Kingdom divine Global Holding GmbH
divine Solutions Ltd. (dormant) United Kingdom divine Global Holding GmbH
divine Solutions Netherlands BV Netherlands divine Global Holding GmbH
(dormant)
eshare Technologies Ltd. United Kingdom divine Global Holding GmbH
(dormant)
eshare Technologies SARL France eshare Technologies Ltd.
(dormant)
Global Recall, Ltd. (dormant) United Kingdom divine Global Holding GmbH
Global Recall, Inc. (dormant) Delaware Global Recall, Ltd.
Global Recall Ltd. Computing United Kingdom Global Recall, Ltd.
(dormant)
Xxxx of Sale
EXHIBIT F
FORM OF
NON-DISCLOSURE AGREEMENT
THIS NONDISCLOSURE AGREEMENT (the "AGREEMENT") is entered into as of March
__, 2003, by and between divine, inc., a Delaware corporation and a
debtor-in-possession in a case filed in the United States Bankruptcy Court for
the District of Massachusetts, Eastern Division (the "BANKRUPTCY COURT") under
Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101, et
seq., on February 25, 2003 ("DIVINE") and ______________, a ________ corporation
(the "COMPANY").
WHEREAS, divine and one or more of its subsidiaries has already disclosed,
and/or will be disclosing (the "DISCLOSING PARTY"), to the Company (the
"RECEIVING PARTY") certain solicited and/or unsolicited information regarding
Disclosing Party and its businesses, operations, financial condition, customers,
assets and liabilities (the "INFORMATION"); and
WHEREAS, Disclosing Party is disclosing the Information to Receiving Party
so that Receiving Party may evaluate the merits of a potential transaction with
Disclosing Party (the "PERMITTED PURPOSE").
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. RESTRICTIONS ON USE AND DISCLOSURE. Receiving Party shall not use any portion
of the Information in any manner or for any purpose other than as is necessary
and/or appropriate in connection with the Permitted Purpose. Furthermore, at all
times that Receiving Party is in possession of Information, Receiving Party
shall (a) safeguard the Information from unauthorized use and disclosure; (b)
disclose the Information to no one other than employees or advisors of Receiving
Party on a need to know basis in order to perform the Permitted Purpose; and (c)
advise all such employees and advisors of their obligations with respect to the
Information and be responsible for their breach of this Agreement.
Notwithstanding the foregoing, Information shall not include information which
(i) is or becomes generally known or available to the public (through no fault
of Receiving Party or its employees or advisors); (ii) is in Receiving Party's
possession prior to its disclosure by Disclosing Party to Receiving Party; (iii)
subsequently comes into Receiving Party's possession through channels
independent of Disclosing Party (provided Receiving Party is unaware that such
channels are legally prohibited from disclosing the information); (iv) is
independently developed by Receiving Party; or (v) is released or disclosed by
Receiving Party in accordance with a valid order of a court or government
agency, provided Receiving Party (x) promptly notifies Disclosing Party of such
order, and (y) reasonably cooperates with Disclosing Party (at Disclosing
Party's expense) in obtaining a protective order of reasonable scope with
respect to the order requiring such release or public disclosure.
2. OWNERSHIP OF INFORMATION. All Information shall remain the sole and exclusive
property of Disclosing Party and shall be returned to Disclosing Party or
destroyed upon request of Disclosing Party. Nothing in this Agreement shall be
construed as granting to or conferring upon Receiving Party any rights by
license or otherwise in the Information.
3. NO REPRESENTATIONS OR WARRANTIES. Receiving Party acknowledges that neither
it nor any of its representatives or advisors are entitled to rely on the
accuracy or completeness of any Information and that Receiving Party shall be
entitled to rely solely on such representations and warranties regarding
Information as may be made to Receiving Party in any definitive written
agreement, if any, relating to a potential transaction that may be entered into
between the parties to this Agreement, subject to the terms and conditions of
such definitive written agreement. For the purposes of this
Agreement, the term "DEFINITIVE WRITTEN AGREEMENT" shall not include an executed
letter of intent or any other preliminary written agreement, nor does it include
any written or verbal acceptance of an offer or bid on the part of Receiving
Party.
4. NO SOLICITATION. Receiving Party and its representatives (nor any person
acting on behalf of or in concert with Receiving Party or it representatives)
shall not, for a period of one (1) year after the date of this Agreement,
solicit or cause to be solicited the employment of any person who is employed by
Disclosing Party or any of it subsidiaries; PROVIDED, HOWEVER, that this Section
4 shall not prohibit general solicitation or advertisement programs that are not
specifically targeted at such persons.
5. NO COMMITMENT. Receiving Party hereby acknowledges and agrees that (a)
Disclosing Party is actively involved in evaluating potential transactions and
business opportunities with many parties and may consider a transaction with one
or more parties other than Receiving Party, (b) until a definitive written
agreement regarding a potential transaction has been executed by Receiving Party
and Disclosing Party and/or one or more of its subsidiaries, and until such
definitive written agreement has been approved by the Bankruptcy Court (and then
only to the extent specifically set forth therein), no contract or agreement
providing for a potential transaction shall be deemed to exist between
Disclosing Party and Receiving Party and (c) neither Disclosing Party nor any of
Disclosing Party's or its subsidiaries' representatives are under any legal
obligation or have any liability to Receiving Party or its representatives and
advisors of any nature whatsoever with respect to a potential transaction by
virtue of this Agreement or otherwise.
6. THIRD PARTY BENEFICIARIES. Receiving Party hereby agrees and acknowledges
that this Agreement is being entered into by Receiving Party on behalf of itself
and its affiliates, subsidiaries and divisions and that they shall be third
party beneficiaries hereof, having all rights to enforce this Agreement.
Receiving Party further agrees that, except for such parties, nothing herein
expressed or implied is intended to confer upon or give any rights or remedies
to any person under or by reason of this Agreement.
7. MISCELLANEOUS. No failure or delay by Disclosing Party in exercising any
right, power or privilege hereunder shall operate as or constitute a waiver of
any such rights, powers or privileges and all waivers are required to be in a
writing signed by Disclosing Party. In the event of Receiving Party's threatened
or actual breach of this Agreement, Receiving Party acknowledges that Disclosing
Party shall suffer irreparable harm as result thereof and shall be entitled to
all equitable remedies, including immediate injunctive and other equitable
relief. In the event any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable, the enforceability of the remainder
of this Agreement shall not be affected. This Agreement contains the full and
complete understanding of the parties with respect to the subject matter of this
Agreement and supersedes all prior representations and understandings between
the parties concerning the same subject matter whether oral or written. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois, without regard to conflicts of law principles. This Agreement
may be signed and delivered by facsimile and in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall be
deemed to constitute a single agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE TO FOLLOW.]
The parties hereto have executed this Agreement as of the date first set
forth above.
divine, inc. as Disclosing Party Dated:
---------------------------
By:
------------------------------
Name:
---------------------------
Title:
----------------------------
[Company] as Receiving Party Dated:
---------------------------
By:
------------------------------
Name:
---------------------------
Title:
----------------------------
EXHIBIT A
Purchase Agreement
