EXHIBIT 2.1
DATED October 1, 2002
(1) USDATA CORPORATION,
(A DELAWARE CORPORATION)
- AND -
(2) XXXX XXXXXX XXXX AND XXXXX XXXX XXXXX
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AGREEMENT FOR THE ACQUISITION OF
WIZARD INFORMATION SYSTEMS LIMITED
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[XXXXXX, XXXXX LOGO]
0 Xxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Telephone: 000 0000 0000
Fax: 000 0000 0000
THIS AGREEMENT is made on October 1, 2002
BETWEEN
(1) USDATA CORPORATION, a Delaware corporation of 0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxx, XXX 75080-2759(the "BUYER");
and
(2) XXXX XXXXXX XXXX of Inglewood, 00 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxx XX00
0XX and XXXXX XXXX XXXXX of Highcroft, Bonnets Lane, Ifield, Crawley,
West Sussex RH11 ONY (Each a "SELLER" and together the "SELLERS")
RECITALS
(A) WIZARD INFORMATION SYSTEMS LIMITED, (registered number 03070795) whose
registered office is at 0 Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxx XX00 0XX (the "COMPANY") is a private company limited by shares
incorporated in England and Wales. The Sellers are the sole legal and
beneficial owners of the share capital of the Company.
(B) The Company is the sole shareholder of Wizard BV. The Company also owns
outstanding capital stock of Omega First and outstanding capital stock
of Wizard SARL (which remain to be registered in the name of the
Company pursuant to French law) (each as defined below) as set forth in
Section III below.
(C) The Buyer desires to purchase from the Sellers, and the Sellers desire
to sell to the Buyer, all of the issued and outstanding shares of the
Company (the "SHARES"), upon the terms set out in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, representations and
warranties, covenants, payments and actions herein provided, each intending to
be legally bound hereby, the Parties agree as follows:
DEFINITIONS
For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to below.
"ACCOUNTS" means the audited balance sheet and the
profit and loss account as at the Accounts
Date of each Company Group Member, together
with any notes, reports, statements or
documents included in or annexed to them.
"ACCOUNTS DATE" means 30 June, 2002 for the Company
and Wizard BV and means 31st March 2002 for
Wizard SARL.
"ACCOUNTS RECEIVABLE" means, as of any date, any trade accounts
receivable, notes receivable, bid,
performance, lease, utility or other
deposits, employee advances
and other miscellaneous receivables
associated with the Business, as indicated
by the context in which used, other than any
such items due from an Affiliate of the
Company or any of the Sellers.
"AFFILIATES" means, with respect to a particular Party,
Persons or entities controlling, controlled
by or under common control with that Party,
as well as any officers, directors and
majority-owned entities of that Party and of
its other Affiliates. For the purposes of
the foregoing, ownership, directly or
indirectly, of 50% or more of the voting
shares or other equity interest shall be
deemed to constitute control.
"AGREEMENT" means this Agreement and the schedules,
exhibits and Disclosure Letter hereto.
"APPLICABLE PROPORTIONATE
INTEREST" means, with respect to a particular Seller,
such Seller's proportionate ownership
interest in each of the Cash Purchase Price
and the Buyer Shares, as applicable.
"ASSETS" means all of the assets, properties,
goodwill and rights of every kind and
description, real and personal, tangible and
intangible, wherever situated and whether or
not reflected in any balance sheet of any
Company Group Member, that are owned or
possessed by any Company Group Member.
"BARCLAY'S RATE" the base rate of Xxxxxxx'x Bank Plc.
"BUSINESS" means the entire business, operations and
facilities of each Company Group Member.
"BUYER" is as defined above.
"BUYER SHARES" means up to 735,840 shares of the Common
Stock and up to 56,000 shares of the Series
B Preferred Stock of the Buyer comprising
the portion to be delivered as soon as
reasonably practicable after the Completion
Date (as described in Section 2.2(b)(ii)),
the Performance Portion of the Buyer shares
(as described in Section 2.3) and the
Retained Portion of the Buyer Shares (as
described in Section 2.4). In calculating
the numbers of Buyer Shares to be issued
pursuant to this Agreement, in each case the
Buyer shall not be obligated to issue
fractional shares of such
securities, and such entitlements shall be
rounded down to the nearest whole in each
case
"CASH PURCHASE PRICE" is defined in Section 2.2(a)(i).
"CLAIM NOTICE" is defined in Section 10.4(a).
"CLAIM RESPONSE" is defined in Section 10.4(a).
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMPLETION" is defined in Section 3.1.
"COMPLETION DATE" is defined in Section 3.1.
"COMPLETION PAYMENT" is defined in Section 2.2(b)(i).
"COMMON STOCK" means the common stock, par value $0.01 per
share, of the Buyer.
"COMPANY BALANCE SHEET" means collectively (but not consolidated),
the audited balance sheets of the Company
Group Members as of the Accounts Date.
"COMPANY GROUP" means collectively, Wizard SARL, Wizard BV
and the Company.
"COMPANY GROUP MEMBER" means individually, Wizard SARL, Wizard BV
and the Company.
"CONFIDENTIAL INFORMATION" means any confidential information of the
Company Group, including personnel
information, know-how and other technical
information, customer and client lists,
customer, client and supplier information,
advertising and marketing plans or systems,
distribution and sales methods or systems,
sales and profit figures.
"CONFIRMATION AGREEMENT" means that certain agreement between the
Company and Software Answers entered into on
the date hereof inter alia the prior
transfer to the Company by Software Answers
of certain intellectual property rights and
source code.
"CONSENT" is defined in Section 4.3.
"CONSTITUTIONAL DOCUMENTS" means an entity's certificate or articles of
incorporation, certificate defining the
rights and preferences of securities,
memorandum and articles of association of
organization, general or limited partnership
agreement, certificate of limited
partnership, joint venture agreement or
similar document governing the entity.
"CONTRACT" means any written or oral contract,
agreement, lease, instrument, or other
document or commitment, arrangement,
undertaking, practice or authorization that
is binding on any Person or its property
under applicable Law.
"COPYRIGHTS" means registered copyrights, copyright
applications and unregistered copyrights in
both published and unpublished works.
"COURT ORDER" means any judgment, decree, injunction,
order or ruling of any federal, provincial,
state, local or foreign court or
governmental, quasi-governmental or
regulatory body, commission, bureau, agency
or authority that is binding on any Person
or its property under applicable Law.
"DAMAGES" is defined in Section 10.1.
"DEFAULT" means (a) a breach, default or violation,
(b) the occurrence of an event that with or
without the passage of time or the giving of
notice, or both, would constitute a breach,
default or violation or cause an Encumbrance
to arise, or (c) with respect to any
Contract, the occurrence of an event that
with or without the passage of time or the
giving of notice, or both, would give rise
to a right of termination, renegotiation or
acceleration or a right to receive damages
on a payment of penalties.
"DISCLOSURE LETTER" means the letter from the Sellers to the
Buyer dated of like date hereof containing
information specific to disclosures against
the representations and warranties given by
the Sellers relating to the Company Group
pursuant to this Agreement, in the form
agreed between the Sellers and the Buyer and
delivered to the Buyer on Completion.
"EMPLOYMENT AGREEMENTS" means the executive services agreements
being entered into as of the date hereof
between the
Company and each of J. Xxxxxx Xxxx and Xxxxx
X. Xxxxx, the form of which is attached
hereto at SCHEDULE B.
"ENCUMBRANCE" means any lien, mortgage, security interest,
pledge, restriction on transferability,
defect of title or other claim, charge or
encumbrance of any nature whatsoever on any
property or property interest, including any
restriction on the use, voting, transfer,
receipt of income or other exercise of any
attributes of ownership.
"ENVIRONMENTAL CONDITION" means any Release, condition or
circumstance, including the presence of
Hazardous Substances or underground
petroleum storage tanks, whether created by
the Company Group or any third party, at or
relating to any such property or premises
that does or may reasonably be expected to
(a) require investigation, abatement or
correction under an Environmental Law, (b)
give rise to any civil or criminal liability
under an Environmental Law, or (c) create a
public or private nuisance.
"ENVIRONMENTAL LAW" means any Law, Court Order or principle
of common law relating to human health,
worker safety or the environment.
"EU" means the European Union.
"EVENT" includes (without limitation) the death or
the winding up of any Person, and any act,
transaction or omission whatsoever, and any
reference to an Event occurring on or before
a particular date shall include events which
for tax purposes are deemed to have, or are
treated as having, occurred on or before
that date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"EXPIRATION DATE" is defined in Section 10.5.
"GAAP" means generally accepted accounting
principles as in effect from time to time in
the jurisdiction of incorporation of such
Company Group Member.
"GOVERNMENTAL ENTITY" is defined in Section 4.3.
"HAZARDOUS SUBSTANCE" means any toxic, carcinogenic or hazardous
gaseous, liquid or solid material or waste
that may or could pose a hazard to the
environment or human health or safety
including (i) any "hazardous substances" as
defined by the federal Comprehensive
Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601 et
seq., (ii) any "extremely hazardous
substance," "hazardous chemical," or "toxic
chemical" as those terms are defined by the
federal Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Sections 11001
et seq., (iii) any "hazardous waste," as
defined under the federal Solid Waste
Disposal Act, as amended by the Resource
Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq., (iv) any "pollutant,"
as defined under the federal Water Pollution
Control Act, 33 U.S.C. Sections 1251 et
seq., as any of such laws in clauses (i)
through (iv) may be amended from time to
time, (v) any regulated substance or waste
under any Environmental Laws.
"INDEMNIFIED BUYER PARTY" is defined in Section 10.1
"INDEMNIFIED PARTY" is defined in Section 10.4(a).
"INDEMNIFIED SELLING PARTY" is defined in Section 10.3.
"INDEMNITOR" is defined in Section 10.4(a).
"INTELLECTUAL PROPERTY" means any Copyrights and registrations or
applications for registration of Copyrights
in any jurisdiction, and any renewals or
extensions thereof, Patents, Patent rights,
Trademarks, technology rights and licenses,
Trade Secrets, franchises, software,
inventions, discoveries, know-how, formulae,
specifications and ideas, rights in research
and development, and commercially practiced
processes and inventions, whether patentable
or not in any jurisdiction and other
intellectual property, in each case, that
are owned by the Company or used in the
Business.
"INVENTORY" means all inventory, including raw
materials, supplies, packaging supplies,
work in process and finished goods.
"LAW" means any statute, law, regulation, order or
rule of any governmental or
quasi-governmental agency or body.
"LEASE" is defined in Section 5.8.
"LIABILITY" means any direct or indirect liability,
indebtedness, obligation, expense, claim,
loss, damage, deficiency, guaranty or
endorsement of or by any person, absolute or
contingent accrued or unaccrued, due or to
become due, liquidated or unliquidated.
"LIQUIDATED CLAIM NOTICE" is defined in Section 10.4(a).
"MANAGEMENT ACCOUNTS" the unaudited profit and loss, balance
sheet, debtor schedules, creditor schedules,
reports and similar information produced by
any Company Group Member since the relevant
Accounts Date and dated and signed by the
Parties hereto.
"MATERIAL ADVERSE EFFECT" means a material adverse effect (i) on the
Business, Assets, liabilities, condition
(financial or otherwise), liquidity,
products, competitive position, customers,
customer relations or results of operations
of the Company Group, (ii) on the ability of
such Company Group to perform its
obligations under this Agreement and the
Transaction Documents or (iii) on the
ability of the Parties to consummate the
Transactions contemplated hereby.
"MINOR CONTRACTS" is defined in Section 5.14(a).
"OMEGA FIRST" means Omega First Limited, a company
incorporated in England and Wales
(registered number 3215003) whose registered
office is at Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxxxx, XX00 0XX.
"ORDINARY COURSE" OR
"ORDINARY COURSE OF means the ordinary course of business that
is consistent with
BUSINESS" past practices.
"PARTIES" means the Buyer and the Sellers (each
individually a "PARTY").
"PATENT" means all patents together with any
extensions, reexaminations and reissues of
such patents, patents of addition, patent
applications, divisions,
continuations, continuations-in-part, and
any subsequent filings in any country or
jurisdiction claiming priority therefrom.
"PERMITS" means all governmental permits, licenses,
registrations, certificates of occupancy,
approvals and other Governmental Entity.
"PERSON" means any natural person, business trust,
corporation, partnership, limited liability
company, joint stock company,
proprietorship, association, trust, joint
venture, unincorporated association or any
other legal entity of whatever nature.
"PROCEEDING" means any action, arbitration,
administrative or other proceeding, criminal
prosecution or governmental investigation or
inquiry.
"PURCHASE PRICE" is defined in Section 2.2(a).
"REAL PROPERTY" is defined in Section 5.8.
"RELEASE" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal,
discharge, dispersal, or leaching of a
hazardous substance into the indoor or
outdoor environment, or into or out of any
property.
"RELIEF" includes, unless the context otherwise
requires, any allowance, credit, deduction,
exemption or set-off in respect of any Tax
or relevant to the computation profits or
gains for the purposes of any tax, or any
other saving of tax.
"RESPECTIVE AMOUNTS" means the proportion of all payments whether
by cash or otherwise and all liabilities of
the Sellers under this agreement due
respectively to or by Xxxx Xxxxxx Xxxx in
the amount of six elevenths of the total and
to or by Xxxxx Xxxx Xxxxx in the amount of
five elevenths of the total. All shares to
be awarded to each of the Sellers shall be
rounded down to the nearest whole number and
in no event shall the Buyer be obligated to
issue fractional shares of such securities.
"RESPONSE PERIOD" is defined in Section 10.4(a).
"SECURITIES ACT" means the US Securities Act of 1933, as
amended.
"SEC" means the US Securities and Exchange
Commission.
"SELLERS" is defined above.
"SERIES B PREFERRED STOCK" means the Series B preferred stock of the
Buyer, par value $0.01 per share.
"SOFTWARE ANSWERS" means a company incorporated in England and
Wales (registered number 01943210) whose
registered office is at 0 Xxxxxx Xxxxx,
Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxx XX00 0XX.
"SHARES" means those shares in the Company set out in
SCHEDULE A, being the entire issued share
capital of the Company and as defined in the
recitals.
"TAXES" means all taxes, duties, charges, fees,
levies or other assessment imposed by any
taxing authority including income, gross
receipts, value-added, excise, withholding,
personal property, real estate, sale, use,
ad valorem, license, lease, service,
severance, stamp, transfer, payroll,
employment, customs, duties, alternative,
add-on minimum, estimated and franchise
taxes (including any interest, penalties or
additions attributable to or imposed on or
with respect to any such assessment).
"TAXES ACT" means the (UK) Income and Corporation Xxxxx
Xxx 0000.
"TAX LIABILITY" means both a liability of a Company Group
Member to make or suffer an actual payment
of Tax (or an amount in respect of Tax) and
also:
(a) the loss, or the use or set off
against income, profits or gains
earned, accrued or received on or
before the Completion Date, of any
Relief which arises or would but
for such loss have arisen in
respect of an Event occurring or
period ending on or before
Completion Date which would (were
it not for the said loss, use or
set off) have been available to a
Company Group Member following
Completion and which was taken into
account in computing the provision
for deferred tax in the Company
Balance Sheet or in eliminating
such provision, or was taken into
account as an asset or otherwise
noted in the Company Balance Sheet;
and
(b) the use or set off of any Relief
which arises in respect of an Event
occurring or period ending after
Completion in circumstances where,
but for such use or set off, a
Company Group Member would have had
an actual Tax Liability in respect
of which the Buyer would have been
able to make a claim against the
Sellers under this Agreement; and
and, in any case falling within any of
paragraphs (a) and (b) above, the amount
that is to be treated for the purposes of
this Agreement as a Tax Liability of the
Company Group Member shall be determined as
follows:
(i) in a case which falls within
paragraph (a) or (b) above and
where the relief that is the
subject of the loss or which is
used or set off as mentioned in
those paragraphs is a deduction
from or offset against Tax, the Tax
Liability shall be the amount of
that Relief so lost, used or set
off; and
(ii) in a case which falls within
paragraph (a) or (b) above and
where the Relief that is the
subject of the loss or which is
used or set off as mentioned in
those paragraphs is a deduction
from or offset against income,
profits or gains, the Tax Liability
shall be, in the case of a Relief
which is used or set off, the
amount of Tax saved thereby and, in
the case of a Relief which is lost,
the amount of Tax which but for
such loss would have been saved by
virtue of the Relief so lost,
ignoring for this purpose the
effect of Reliefs (other than
deductions in computing profits for
the purpose of Tax) arising in
respect of an Event occurring or
period ending after the Completion
Date.
"TAX RETURN" means any return, declaration, report, claim
for refund, or information return or
statement relating to Taxes, including any
schedule or attachment thereto, and
including any amendment thereof.
"TRADE SECRETS" means all know-how, trade secrets,
Confidential Information, customer lists,
technical information, data, process
technology, plans, drawings, and blue
prints, owned, used or licensed (as licensor
or licensee) by the Company Group, except
for any such item that is generally
available to the public.
"TRADEMARKS" means registered trademarks, registered
service marks, trademark and service xxxx
applications and unregistered trademarks and
service marks, brand names, certification
marks, trade dress, goodwill associated with
the foregoing and registrations in any
jurisdictions of, and applications in any
jurisdiction to register, the foregoing,
including any extension, modification or
renewal of any such registration or
application.
"TRANSACTION DOCUMENTS" means this Agreement, the Employment
Agreements, the Stockholders Agreement and
such other documents or agreements executed
in connection herewith.
"TRANSACTIONS" means the purchase and sale of the Shares,
the issuance of the Buyer Shares and the
other transactions contemplated by the
Transaction Documents.
"UNLIQUIDATED CLAIM" is defined in Section 10.4(a).
"US" means the United States of America.
"US$" means United States dollars.
"VAT" means value added tax.
"WARRANTIES" means the representations and warranties set
out in Sections 4 and 5 (as made by the
Sellers and the Buyer) and Sections 4 and 7
(as made by the Buyer) (references to a
WARRANTY being construed accordingly).
"WIZARD SARL" means Wizard Systems SARL, a corporation
organized under the laws of France.
"WIZARD BV" means Wizard Information Systems BV, a
corporation organized under the laws of the
Netherlands.
In this Agreement, unless the context otherwise requires:
references to any document being in the "AGREED FORM" mean that document in
the form agreed and, for the purposes of identification only, signed or
initialled by or on behalf of the Sellers and the Buyer;
words denoting one gender include all other genders and words denoting the
singular include the plural and vice versa;
references to a person include individuals, bodies corporate,
unincorporated associations, partnerships, joint ventures and government
departments or agencies, and references to any of the same include the others;
references to a company include any company or other body corporate,
wherever incorporated or established; and
references to the Buyer includes its successors and assignees or
transferees.
References to Sections or Schedules are to clauses of, or schedules to,
this Agreement.
The headings to the Clauses are for convenience only and do not affect the
construction or interpretation of this Agreement.
Any statement which refers to the knowledge, information, belief or
awareness of the Sellers or any similar expression is deemed to include an
additional statement that it has been made after due and careful consideration
and after having made reasonable enquiry of persons having knowledge of the
relevant matters including, where appropriate, professional advisers.
PURCHASE AND SALE OF SHARES
Purchase and Sale.
Subject to the terms and conditions of this Agreement, at the Completion
(as defined in Section 3.1 below) each Seller agrees to sell, transfer and
deliver or cause to be sold, transferred and delivered to the Buyer with full
title guarantee all of the Shares hereto and the Buyer agrees to purchase the
Shares free and clear of all Encumbrances (whether known about or not) and with
each right now or which may at any time become attached to them.
Each Seller hereby irrevocably waives and undertakes to procure the waiver
of all rights of pre-emption and all other restrictions whatsoever on transfer
over or in respect of the Shares or any of them to which he may be entitled
under the articles of association of the Company or otherwise.
Purchase Price.
The total purchase price for the Shares payable to the Sellers equals the
sum of:
US$140,000 (the "CASH PURCHASE PRICE"); and
the Buyer Shares.
(together, the "PURCHASE PRICE").
The Buyer shall pay the Purchase Price as follows:
delivery at Completion of the Cash Purchase
Price (the "COMPLETION PAYMENT") to the
Sellers in the Respective Amounts;
delivery as soon as reasonably practicable
after the Completion Date of a portion of
the Buyer Shares in the aggregate amount of:
(a) 220,752 shares of Common Stock and (B)
16,800 shares of Series B Preferred Stock in
the Respective Amounts;
delivery of the Performance Portion of the
Buyer Shares, if any, in accordance with
Section 2.3 below in the Respective Amounts;
and
delivery of the Retained Portion of the
Buyer Shares, if any, in accordance with
Section 2.4 below in the Respective Amounts.
The payment of the cash obligations in Section 2.2(b)(i) above shall be
made by wire transfer of immediately available funds.
The Parties agree that the Sellers in their capacity as Directors of the
Company have taken advice with respect to this transaction from the Company
Group lawyers and accountants for the benefit of the Company and such advice
will therefore be to the benefit of the Buyer in future. Certain advice has also
been taken with respect to the Sellers' own affairs and this will be to the
benefit of both the Company and therefore the Buyer in future and to the
Sellers. Therefore the Parties have agreed that the Sellers will pay from their
own accounts to the advisors any sum in excess of L.5,250 for legal advice
expenses and accountancy and tax advice expenses incurred by the Sellers solely
in respect of personal advice relating to the transactions contemplated by this
Agreement.
Performance Portion of the Buyer Shares. The Sellers shall be entitled to
receive in the Respective Amounts the Performance Portion of the Buyer Shares in
the aggregate of a maximum of: (a) 257,544 shares of the Buyer's Common Stock;
and (b) 19,600 shares of the Buyer's Series B Preferred Stock (collectively, the
"PERFORMANCE PORTION" of the Buyer Shares) calculated based upon the Company's
percentage performance towards achieving its target gross revenue amount of
US$2,620,000 for the period from July 1, 2002 to March 31, 2003 (the "TARGET
AMOUNT"). The Performance Portion of the Buyer Shares shall be calculated on
March 31, 2003 (the "DETERMINATION DATE") and awarded in the Respective Amounts
to the Sellers within thirty days following the Determination Date. On the
Determination Date, the performance portion shall be calculated as follows:
for the determination of the Performance Portion of the Buyer Shares
payable in shares of Common Stock:
= X/Y * 257,544 shares of Common Stock
for the determination of the Performance Portion of the Buyer Shares
payable in shares of Preferred Stock:
= X/Y * 19,600 shares of Preferred Stock
Where
X = the actual gross revenue on the Determination Date as determined in
good faith by the Board of Directors of the Company; and
Y = the Target Amount, provided however that the fraction of X/Y shall
never be greater than 1.
The Performance Portion of the Buyer Shares shall be granted in equal
installments on each of the first three anniversaries of the Completion Date;
and, to the extent not yet granted, shall be forfeited in the event that the
Seller's employment with the Company terminates by resignation of such Seller or
by way of notice in writing from the Company following a breach or a termination
in accordance with section 10 of the relevant Seller's Employment Agreement. For
the avoidance of doubt, this will not include termination as a result of
redundancy, death, disability or ill health of the Seller or through the Seller
reaching retirement age at the age of 65.
Retained Portion of the Buyer Shares. The Sellers shall be entitled to
receive in the Respective Amounts the retained portion of the Buyer Shares in
the aggregate of a maximum of: (a) 257,544 shares of the Common Stock; and (b)
19,600 shares of Series B Preferred Stock (collectively, the "RETAINED PORTION
OF THE BUYER SHARES") which shall be granted in equal installments on each of
the first three anniversaries of the Completion Date and transferred on such
anniversary date; and, to the extent not yet granted, shall be forfeited in the
event that the Seller's employment with the Company terminates by resignation of
such Seller or by way of notice in writing from the Company following a breach
or a termination in accordance with section 10 of the relevant Seller's
Employment Agreement. For the avoidance of doubt, this will not include
termination as a result of redundancy, death, disability or ill health of the
Seller or through the Seller reaching retirement age at the age of 65.
Ungranted Shares. Notwithstanding anything set forth above, all ungranted
shares of the Company's Common Stock and Series B Preferred Stock awarded to a
Seller as part of the Performance Portion of the Buyer Shares and the Retained
Portion of the Buyer Shares shall be forfeited in the event that any of the
restrictive provisions set forth in Section 6 hereof and the restrictive
provisions in each such Seller's Employment Agreement are breached.
Sellers Directions as to Shares. The Sellers may direct that any shares due
to them hereunder shall be issued, transferred and delivered directly to any of
their Affiliates or former stockholders of the Company as the Sellers may
nominate from time to time in accordance with the terms and conditions set forth
in the Transaction Documents.
COMPLETION.
Location, Date. The Completion for the Transactions (the "COMPLETION")
shall be held at the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 0 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxx XX0X 0XX, on October 1, 2002. The date on which the Completion
occurs is referred to herein as the "COMPLETION DATE."
Deliveries. At the Completion:
the Buyer is paying the Cash Purchase Price to the Sellers in accordance
with Section 2.2;
the Buyer is delivering the Stockholders Agreement the Securityholder's
Certificate of the Sellers and the former stockholders of the Company, in the
forms attached hereto as SCHEDULES H AND I;
the Sellers are delivering duly executed transfers of the Shares in favour
of the Buyer together with the relevant share certificates (or an indemnity in a
form satisfactory to the Buyer in the case of any missing certificates);
the Parties are delivering to each other executed counterparts of the
Transaction Documents to the extent that the Parties are intended parties
thereto;
the Company is delivering evidence as set forth in SCHEDULE D in the form
and substance satisfactory to the Buyer of the sale and transfer by the Company
of all of the issued and outstanding shares of Software Answers to the Sellers;
the Sellers are delivering to the Buyer the resignations, dated as of the
Completion Date, of each officer and director of the Company, except for the
Sellers;
the Sellers are delivering evidence in the form and substance satisfactory
to the Buyer as set forth on Parts 1 and 2 of SCHEDULE G of the sale and
transfer of 100 of the shares of Wizard SARL to the Company and the ownership by
the Company of 100% of issued share capital of Wizard BV;
the Company is delivering evidence in the form and substance satisfactory
to the Buyer as set forth on SCHEDULE C hereto of the transfer of a portion of
the Company's stock ownership in Omega First to reduce the total amount of the
issued and outstanding capital stock of Omega First owned by the Company to not
greater than 19.99%;
the Sellers are delivering evidence in the form and substance satisfactory
to the Buyer as set forth on SCHEDULE E hereto of the Confirmation Agreement;
the Sellers are delivering evidence in the form and substance satisfactory
to the Buyer as set forth on SCHEDULE F hereto of the release of liens on the
Assets of Software Answers at or prior to the Completion Date;
the Sellers are delivering minutes of a board meeting of the Company at
which the directors:
authorise the execution and completion of the Agreement and the Transaction
Documents and all such other necessary actions to effectuate the terms and
conditions as contemplated in this Agreement and the Transaction Documents;
approve for registration the transfers of any Shares (subject only to the
transfers being subsequently presented duly stamped);
appoint the persons nominated by the Buyer as directors and secretary of
the Company with effect from the end of the board meeting; and
Parties also are delivering to each other such other documents and
instruments specified herein and such other items as may be reasonably
requested.
REPRESENTATIONS AND WARRANTIES OF THE PARTIES RELATING TO THEMSELVES.
Each Seller hereby represents and warrants, severally and not jointly,
as of the date hereof to the Buyer as follows:
Buyer Shares.
Such Seller is acquiring the Buyer Shares solely for investment purposes,
with no present intention of distributing or reselling any of the Buyer Shares
or any interest therein, other than through an authorized stock market or to the
offeror of a tendered offer for the Buyer. Such Seller acknowledges that as at
the Completion Date the Buyer Shares have not been registered under the
Securities Act.
Such Seller is aware of the applicable limitations under the Securities Act
relating to a subsequent sale, transfer, pledge, mortgage, hypothecation, gift,
assignment or other encumbrance of the Buyer Shares. Such Seller further
acknowledges that the Buyer Shares must be held indefinitely unless they are
subsequently registered under the Securities Act and applicable state securities
laws or an exemption from such registration is available.
Such Seller will not sell, transfer, pledge, donate, assign, mortgage,
hypothecate or otherwise encumber the Buyer Shares unless the Buyer Shares are
registered under the Securities Act or the Buyer is given an opinion of counsel
reasonably acceptable to the Buyer, that such registration is not required under
the Securities Act.
Such Seller realizes that there is no public market for the Buyer Shares,
that no market may ever develop for them, and that they have not been approved
or disapproved by the SEC, any state securities commission or any other
governmental agency.
Based on any other requests the Seller may have, such Seller acknowledges
that the Buyer has provided him or her or his or her adviser with adequate
access to financial and other information concerning the Buyer and the Buyer
Shares, and that such Seller or his or her adviser has had the opportunity to
ask questions of and receive answers from the Buyer concerning the Buyer Shares
and to obtain therefrom any additional information necessary to make an informed
decision regarding the acquisition of the Buyer Shares.
Such Seller represents that it or its adviser has such knowledge and
experience in financial and business matters that he or she is capable of
evaluating the merits and risks of the acquisition of the Buyer Shares.
Such Seller realizes that the Buyer is relying on the validity of these
representations and agreements contained herein and in the other Transaction
Documents in issuing the Buyer Shares to the Seller without registration under
the Securities Act or any state securities laws, except as set forth in the
Transaction Documents.
Such Seller has been advised that Buyer has timely filed its annual,
quarterly and special reports, proxy statements and other information with the
SEC, including all such filings as provided to the Sellers in the information
statement delivered to the Sellers prior to the date hereof and such Seller has
been advised that the Buyer's SEC filings are also available to the public from
commercial document retrieval services and at the web site maintained by the SEC
at xxx.xxx.xxx.
Authority; Execution and Delivery; Enforceability. The Parties have full
power and authority to execute this Agreement and the Transaction Documents to
which they are, or are specified to be, a party and to consummate the
Transactions and the other transactions contemplated hereby and thereby. The
Parties have duly executed and delivered this Agreement and at or prior to
Completion will have duly executed and delivered each Transaction Document to
which they are, or are specified to be, a party, and this Agreement constitutes,
and each Transaction Document to which they are, or are specified to be a party
will after Completion constitute, their legal, valid and binding obligations,
enforceable against them in accordance with their respective terms.
No Conflicts; Consents. The execution and delivery by the Parties of this
Agreement and of each Transaction Document to which they are a party will not
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any person under, or result in the creation of any Encumbrance
upon any of the material properties or assets of any Party under, any provision
of (i) any Contract by which any of their properties or assets are bound or (ii)
any Court Order applicable to such Party or its material properties or assets.
No consent, approval, license, permit, order or authorization ("CONSENT") of, or
registration, declaration or filing with, any government or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a "GOVERNMENTAL
ENTITY") is required to be obtained or made by or with respect to such Party in
connection with the execution, delivery and performance of this Agreement or any
Transaction Document or the consummation of the other transactions contemplated
hereby and thereby.
The Shares. Such Seller is the sole legal and beneficial owner of the
number of the Shares set forth next to such Seller's name on SCHEDULE A hereto
free and clear of all Encumbrances. Assuming each Seller has the full power,
right power and authority to be the lawful owner of such Shares, good and valid
title to the Shares will pass to the Buyer, free and clear of any Encumbrances,
other than those arising from acts of the Buyer or its Affiliates. Other than
this Agreement, such Shares are not subject to any voting trust agreement or
other Contract, including any Contract restricting or otherwise relating to the
voting, dividend rights or disposition of such Shares.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS RELATING TO THE COMPANY GROUP
The Sellers hereby jointly and severally represent and warrant to the Buyer
that, save as may be specifically, fully, fairly and accurately disclosed in the
Disclosure Letter, the representations and warranties set out in this Section 5
are true and accurate. Notwithstanding the joint and several liability of the
Sellers with respect to the representation and warranties set out in Section 5,
the maximum aggregate liability of each of the Seller pursuant to this Section 5
shall be limited to the maximum Respective Amount payable to him pursuant to
this Agreement.
Corporate Status. Each Company Group Member is a private limited company
duly organized, validly existing, in good standing under the Laws of the
jurisdiction in which such corporation was incorporated and has been in
continuous existence since incorporation. Each Company Group Member has full
corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to own,
lease or otherwise hold its properties and assets and to carry on its business
as presently conducted. Each Company Group Member is duly qualified and in good
standing to do business in each jurisdiction in which the conduct or nature of
its business or the ownership, leasing or holding of its properties makes such
qualification necessary. The Disclosure Letter lists, with respect to each
Company Group Member the name, jurisdiction of incorporation, officers and
directors and jurisdictions in which the Company is qualified to do business as
a foreign corporation. Each Company Group Member has delivered to the Buyer
current, correct and complete copies of each Company Group Member's
Constitutional Documents which are in full force and effect as of the date
hereof.
Authorization. Each Company Group Member has full corporate power and
authority to carry on the Business. Each Company Group Member has full power and
authority, including under its Constitutional Documents, to execute and deliver
this Agreement and any and all of the respective Transaction Documents to which
it is or will at the Completion become a party and to perform the Transactions
to be performed by it. Such execution, delivery and performance have
respectively been duly authorized by all necessary action.
Consents and Approvals. There are no Consents or approvals required for the
execution and delivery by any Company Group Member of the Transaction Documents
to which it is or will be a party, nor the performance of the Transactions
performed or to be performed by any Company Group Member, will require any
filing, Consent, renegotiation or approval, constitute a Default or cause any
payment obligation to arise under (a) any Law or Court Order to which any
Company Group Member is subject, (b) the Constitutional Documents or bylaws of
any Company Group Member or (c) any Contract, Permit or other document to which
any Company Group Member is a party or by which the properties or other assets
of any Company Group Member may be subject.
Capitalization and Share Ownership.
The total authorized share capital of the Company is 10,000,000 ordinary
shares of L.0.10 each, 1,175,000 of which are issued and outstanding on the date
hereof . The total capital stock of Wizard SARL is 50,000 shares of FF1 each all
of which are issued and outstanding on the date hereof. The total authorized
capital stock of the Wizard BV is 900 ordinary shares of Euro 100 each, 180
shares of which are issued and outstanding on the date hereof. The total
authorized share capital of Omega First is 62,000 shares of L.1.00 each 62,000
shares of which are issued and outstanding on the date hereof and 12,000 shares
of which are owned by the Company. There are no shares, equity securities,
options, warrants, calls, commitments or other rights of any character
(including conversion or preemptive rights) relating to the acquisition of any
issued or unissued capital stock or other securities of any Company Group
Member. All of the shares of each Company Group Member are duly and validly
authorized and issued, fully paid and non-assessable. Each Company Group Member
has complied with all applicable Laws in connection with the issuance of its
shares, and none of such shares were issued in violation of any Contract binding
upon any Company Group Member or any of their Affiliates. No Company Group
Member has any outstanding loan capital and there is no agreement, arrangement
or option under which any Person may now or at any time call for the creation,
allotment, issue, sale or transfer of any loan or share capital of a Company
Group Member to be put under option.
No Company Group Member owns, directly or indirectly, any share capital,
membership interest, partnership interest, joint venture interest or other
equity interest in any Person except as referred to herein.
Accounts
GENERAL
The Accounts have been prepared and audited on a proper and consistent
basis in accordance with all applicable laws and accounting standards,
principles, practices, policies and conventions generally accepted in the
jurisdiction of incorporation.
The Accounts have been prepared on bases consistent with the same bases
applied in the corresponding accounts for the preceding three financial years
(or for the period since the date of its incorporation where any Company Group
Member has traded for less than three years).
The Accounts show a true and fair view of the assets, liabilities and state
of affairs of each Company Group Member, and of the profits and losses of each
Company Group Member for the financial period ended on, the Accounts Date.
No Company Group Member is, or has during the five year period ended on the
Accounts Date been a party to any agreement, arrangement or transaction pursuant
to which each Company Group Member is or was entitled to receive a financial
advantage, or is or was obliged to incur or bear any costs, liabilities
(contingent or otherwise), risks or other expenditure of any nature (including,
without limitation, any "off balance sheet"
financing arrangements) which is not fully reflected in the Accounts or has not
been fully reflected in such Company Group Member's accounts for any relevant
period.
CONTENT OF ACCOUNTS
The Accounts of each Company Group Member include:
all fixed assets valued at cost less
depreciation since the date of acquisition
or current market value, if lower;
all stock (including raw materials and work
in progress) valued at the lower of cost and
net realisable value and the Accounts do not
attribute any value to any obsolete,
redundant or excess stock or to any
non-recoverable work in progress;
all slow moving stock and damaged stock at
an appropriate written down value;
all investments valued at the lower of cost
and net realisable value after making full
and proper provision for diminution in
value;
all debtors, prepayments and other current
assets valued at the lower of cost and net
realisable value after making full and
proper provision for all bad debts and
doubtful debts and all other amounts
considered to be irrecoverable;
all liabilities and all capital and
financial commitments (whether actual,
deferred, contingent, quantified, known or
unknown, disputed or otherwise and whether
of an occasional or seasonal nature) for
which it is, or may become, liable up to and
including the Accounts Date, and the
Accounts make full and proper provision or
reserve for all such liabilities and
commitments;
all Taxes which have been or may be assessed
on each Company Group Member or for which it
is, or may become, liable up to and
including the Accounts Date (whether actual,
deferred, contingent, quantified, disputed
or otherwise) and the Accounts make full and
proper provision for all Taxes, and for all
contingent or deferred liability to Taxes,
up to and including the Accounts Date; and
in the notes full details of any other
assets or liabilities included in the
Accounts.
DEPRECIATION
The bases and rates of depreciation and amortisation used in the
Accounts of each Company Group Member and for the preceding three financial
years (or for the period since the date of such Company Group Member's
incorporation where it has not traded for three financial years) are sufficient
to ensure that each fixed asset of each Company Group Member will be written
down to nil by the end of its useful life.
TREND OF PROFITS
The results shown by the Accounts of each Company Group Member for each
of the preceding three financial years, where such Company Group Member has
traded, have not been affected (except as disclosed in those accounts or in the
Disclosure Letter or which arises solely as a result of market conditions
generally affecting the sector in which the Company Group generates its business
as a whole) by any extraordinary, exceptional or non-recurring item, or by any
transaction of an unusual nature or entered into otherwise than on normal
commercial terms, or by any other factor rendering the profit or loss for all or
part of any period covered by those accounts unusually high or low.
ACCOUNTING RECORDS
All proper and necessary books of account, ledgers, registers and
records have been fully, properly and accurately kept and completed by each
Company Group Member and accurately present and reflect (in accordance with all
applicable laws and accounting standards, principles, practices, policies and
conventions generally accepted in such Company Group Member's jurisdiction of
incorporation) the assets and liabilities (actual and contingent) of each
Company Group Member and all transactions to which it has been a party and each
Company Group Member has operated adequate systems of financial control in
relation to its book keeping.
All of the books of account, ledgers, registers, records, data,
systems, controls and other information of each Company Group Member (recorded,
stored, maintained operated or held in whatever form or by whatever means) (and
including all means of access to all such information) are owned exclusively by,
and are in the possession of or under the direct control of that Company Group
Member.
SINCE THE ACCOUNTS DATE
Since the Accounts Date, save as specifically disclosed in the
Disclosure Letter:
each Company Group Member has carried on its
business in the ordinary and usual course
and in the same manner (as to nature, scope
and method) as in the past so as to maintain
it as a going concern;
there has been no adverse change in the
financial or trading position or prospects
of the Company Group Member;
there has been no reduction in the monthly
turnover (in terms of volume or value) or
gross or net profit margins of any Company
Group Member's business (or any material
part of that business) as compared with such
rates of
turnover and profitability for the
corresponding months in the financial year
ended on the Accounts Date;
there has been no material change in the
assets or liabilities (including contingent
liabilities) shown in the Accounts and there
has been no reduction in the value of the
net tangible assets of any Company Group
Member on the basis of the valuations used
in the Accounts;
there has been no material change in the
level of the stock (including raw materials
and work in progress) of Company Group
Members and the current level of stock is
adequate for each Company Group Member's
present requirements;
no items of stock included in the Accounts
have been disposed of for less than their
value as stated in the Accounts or now have
a net realisable value of less than their
value as stated in the Accounts;
no Company Group Member has other than in
the ordinary and usual course of its
business and for full value:
acquired or disposed of, or agreed
to acquire or dispose of, any
business or asset; or
incurred or assumed, or agreed to
incur or assume, any liability
(actual or contingent) or expense;
no Company Group Member has made or agreed
to make any payment or entered into or
agreed to enter into any agreement,
arrangement or transaction otherwise than in
the ordinary and usual course of trading and
for full value;
no Company Group Member has incurred, or
agreed to incur, any management, consultancy
or similar charges;
no Company Group Member has entered into, or
agreed to enter into, any commitments
involving capital expenditure exceeding
L.10,000 in the aggregate;
no debt or other receivable of a Company
Group Member has been written off, provided
against (in whole or in part), subordinated,
discounted, factored or sold (or in any such
case, agreed so to be), and there is no
indication that any debt or other receivable
now owing to a Company Group Member is bad
or doubtful (except to the extent reserved
for on such Company Group Member's financial
statements dated as of the Accounts Date);
all book debts shown in the Accounts have
been realised for an aggregate sum being not
less than that shown in the Accounts and no
provision or reserve included in the
Accounts has proved to any extent to be
inadequate and there are no matters or
circumstances which indicate that such
provision or reserve may prove to be
inadequate;
no Company Group Member has borrowed or
lent, or agreed to borrow or lend, any money
and no share or loan capital has been, or
agreed to be, created, issued, allotted,
redeemed, purchased or repaid by any Company
Group Member;
no Company Group Member's business has been
adversely affected by the loss of, or change
in terms of business with, (whether before
or after the Accounts Date) any contract or
customer or supplier or by any other factor
not affecting similar businesses and the
Sellers are not aware of any matters or
circumstances which may have an adverse
effect on any Company Group Member's
business;
no Company Group Member has declared, made
or paid a dividend or distribution (within
the meaning of the Taxes Act) except as
provided in the Accounts; and
neither the members of any Company Group
Member nor any class of them, has passed any
resolution.
MANAGEMENT ACCOUNTS
The Management Accounts have been prepared in a consistent manner and
on a basis consistent with that upon which the Accounts (and all management
accounts for each Company Group Member for the preceding twenty-four months
where applicable) were prepared.
So far as the Sellers are aware, the Management Accounts give a true
and fair view of the revenues and expenses of each Company Group Member's
affairs and of the results as at the date of such statement and are not
misleading in any material respect.
Title to Assets and Related Matters. The Company Group has good and
marketable title to, valid leasehold interests in or valid licenses to use, all
of the Assets reflected on the Company Balance Sheet, free from any
Encumbrances. Such use does not encroach on the property or rights of anyone
else. All Real Property of the Company Group and tangible personal property
included in the Assets are suitable for the purposes for which they are used, in
good working condition, reasonable wear and tear excepted.
Property. The Disclosure Letter accurately describes all property used
in the operation of the Business as well as any other property possessed or
leased by the Company Group and the improvements (including buildings and other
structures) located
on such property (collectively, the "REAL PROPERTY"), and lists any leases under
which any such Real Property is possessed (each a "LEASE" and collectively, the
"LEASES").
(a) Each Company Group Member has where so required in its possession
and control or unconditionally held to its order all the properly constituted
and stamped original documents of title and other documents and papers relating
to the Real Property.
(b) There are no outstanding actions, disputes, claims or demands
between any Company Group Member and any third party affecting the Real
Property.
(c) There is no outstanding notice or order (statutory or otherwise)
relating to the Real Property or any business carried on at, or the use of, the
Real Property. There are no planning, development or road proposals within the
vicinity of the Real Property which might affect the Real Property, or the
business carried on at, the Real Property. There are no circumstances likely to
lead to any such notices, orders or proposals being issued or made.
(d) All payments of rent and other sums due under the Lease have been
made to date.
(e) Declared alterations have been made to the Real Property at the
expense of any Company Group Member with all necessary consents and approvals as
set forth in the Disclosure Letter.
(f) The Company has not released any person from its obligation as
landlord under the Lease whether pursuant to Section 6 or 7 of the Landlord and
Tenant (Covenants) Xxx 0000 (hereinafter referred to as the "1995 ACT") or
otherwise nor has the Company received any application from any such person for
any such release.
(g) The Company has no existing or contingent liabilities (whether as
original tenant, subsequent assignee, or guarantor) (including, but not limited,
to any guarantee given pursuant to an authorised guarantee agreement, as defined
in the 1995 Act, or otherwise) in respect of any properties previously occupied
by it or in which it owned or held any interest including, without limitation,
leasehold premises assigned or otherwise disposed of.
(h) There is no outstanding liability for dilapidations as a result of
a breach of the repairing covenants, save normal obligations to refurbish the
Property on lease expiry to the original condition.
Environmental Matters. Each Company Group Member has complied with and the
Sellers are not aware of any previous breach of any legislation relating to
Environmental Law and neither any of the Company Group Members nor the Sellers
is aware of or involved in any actions, claims or proceedings (whether actual or
potential) in relation to such matters.
Intellectual Property.
The Company Group owns exclusively or has the right to use all Intellectual
Property and commercially available shrink-wrapped software that is material to
the operation of the Business as operated by the Sellers ("OWNED INTELLECTUAL
PROPERTY", "LICENSED INTELLECTUAL PROPERTY" or "SHRINK-WRAPPED SOFTWARE", as
applicable). The Disclosure Letter sets forth a true and complete list of all,
excepting shrink-wrapped licensed PC applications software, registered Patents
and patent applications, common law trademarks, Trademarks and trademark
applications Owned Intellectual Property, Licensed Intellectual Property and
Shrink-Wrapped Software owned by the Company Group and used in or held for use
applications by the Business and also sets forth a true and complete list of all
licenses of Intellectual Property to the Company Group used in or held for use
by the Business and licenses of Intellectual Property by the Sellers or the
Company Group to third parties that are material to the Business. The Owned
Intellectual Property, the Licensed Intellectual Property and (except as would
not have a Material Adverse Effect) Shrink-Wrapped Software collectively
constitute all of the Intellectual Property necessary for the continued
operation of the Business.
Except for such infringements as would not, individually or in the
aggregate, have a Material Adverse Effect: (i) the Intellectual Property does
not infringe upon the Intellectual Property rights of any third party; and (ii)
no written claim has been asserted on the Sellers or the Company Group Members
which is currently pending or, to the knowledge of the Sellers, threatened that
the use of such Intellectual Property in a manner consistent with past practice
does or may infringe upon the Intellectual Property rights of any third party.
The Company Group Members are the exclusive owners of the entire right,
title and interest in and to all Intellectual Property and are entitled to use
all Owned Intellectual Property, Licensed Intellectual Property and
Shrink-Wrapped Software in the continued operation of the Business in a manner
consistent in all material respects with past practice.
To the Sellers knowledge, the Sellers confirm that where Owned Intellectual
Property was developed by an employee in the course of employment no payment of
compensation under the Patents Act 1977 is due or payable.
Where any Owned Intellectual Property was developed by individuals other
than employees of any Company Group Member, the Sellers have obtained written
assignments to all assignable rights in such works.
So far as the Sellers are aware, no Person is engaging in any activity that
infringes upon the Intellectual Property of any Company Group Member. Except as
would not, individually or in the aggregate, have a Material Adverse Effect, the
consummation of the transactions contemplated by this Agreement will not result
in the termination or impairment of any of the Owned Intellectual Property,
Licensed Intellectual Property or Shrink-Wrapped Software.
Neither of the Sellers nor any Company Group Member is in breach of, or
default under, any material term of any license or sublicense of the Licensed
Intellectual Property or Shrink-Wrapped Software.
The computer system material to the Business being the system comprising
each Company Group Member's hardware, any and all software, third-party software
and Shrink-Wrapped Software (the "COMPUTER SYSTEM") has not during the twelve
months prior to the date of this Agreement, materially failed whether by reason
of programming or coding errors, equipment breakdown or for any reason such as
to cause a Material Adverse Effect.
The Disclosure Letter contains an accurate and comprehensive list of
software relating to the Computer System in relation to which the Company and/or
the Company Group is entitled to access source code under third party escrow
agreements, excluding shrink-wrap licensed PC applications software.
Accounts Receivable. The Accounts Receivable of each Company Group Member
as set forth on the Company Balance Sheet are bona fide Accounts Receivable
created in the ordinary course of business. Except for Accounts Receivable for
which reserves have been established as set forth on the Company Balance Sheet,
all of the Accounts Receivable are fully collectible within 90 days from the
respective dates of sale. The Sellers know of no facts or circumstances (other
than general economic conditions) that are likely to result in any material
decrease in the ability to collect such Accounts Receivable in excess of any
reserves therefor set forth on the Company Balance Sheet.
Taxes
Since the Accounts Date save as specifically set out in the Disclosure
Letter:
no Company Group Member has been involved in
any transaction which has given or may give
rise to a liability to Tax on any Company
Group Member (or would have given or might
give rise to such a liability but for the
availability of any Relief) other than Tax
in respect of normal trading income or
receipts of the Company Group Member
concerned arising from transactions entered
into by it in the ordinary course of
business;
except as disclosed in the Disclosure
Letter, no payment has been made by any
Company Group Member which will not be
deductible for the purposes of corporation
Tax (or any corresponding Tax on profits in
any relevant foreign jurisdiction), either
in computing the profits of that Company
Group Member or in computing the corporation
Tax or corresponding Tax chargeable on it;
no disposal has taken place or other event
occurred which has or may have the effect of
crystallising a liability to Tax
which, if such disposal or Event had been
planned or predicted at the Accounts Date,
should have been reflected in the provision
for deferred tax contained in the Company
Balance Sheet; and
no Event has occurred which has or may have
the effect of prejudicing any Relief taken
into account in computing or eliminating the
provision for deferred Tax contained in the
Company Balance Sheet.
Save as specifically set out in the Disclosure Letter, each Company Group
Member has duly, and within any appropriate time limits, made all returns, given
all notices and supplied all other information required to be supplied to all
relevant Governmental Entities and has maintained all records required to be
maintained for Tax purposes; all such information was and remains complete and
accurate in all material respects and all such returns and notices were and
remain complete and accurate in all material respects and were made on the
proper basis and do not, and so far as the Sellers are aware are not likely to,
reveal any transactions which may be the subject of any dispute with, or any
enquiry raised, by any Governmental Entity.
Save as specifically set out in the Disclosure Letter, no Company Group
Member is involved in any current dispute with any Governmental Entity or is or
has in the last six years been the subject of any investigation, audit or
non-routine visit by any Governmental Entity. So far as the Sellers are aware in
relation to each Company Group Member there is no planned investigation, audit
or non-routine visit by any Governmental Entity and there are no facts which
might cause such an investigation, audit or non-routine visit to be instituted.
Save as specifically set out in the Disclosure Letter, within the past six
years or since their respective dates of incorporation, no Company Group Member
nor any director or officer of any Company Group Member (in his capacity as
such) has paid or become liable to pay, and there are no circumstances by reason
of which it or they may become liable to pay to any Governmental Entity, any
penalty, fine, surcharge or interest in respect of Tax (including in respect of
any failure to make any return, give any notice or supply any information to any
relevant Governmental Entity, or any failure to keep or preserve any records or
to pay Tax on the due date for payment).
In relation to each Company Group Member, the Disclosure Letter gives full
details of:
all assessments to Tax made by any
Governmental Entity, and any determinations
or directions made by any Governmental
Entity of or in relation to amounts of Tax
or relevant to the calculation of Tax, which
are subject to appeal or have otherwise not
become final at the date hereof;
all payments of Tax, and claims for
Repayment of Tax, made in respect of any
period where the amount of the Tax in
question has not been finally agreed or
otherwise determined;
all determinations made under Xxxxxxx 00X xx
xxx Xxxxx Xxxxxxxxxx Xxx 0000; and
all directions reducing any amounts so
determined, pursuant to Section 41B of that
Act.
The Company is not a large company within the meaning of Regulation 3 of
The Corporation Tax (Instalment Payments) Regulations 1998.
The Disclosure Letter gives details of the rights of each Company Group
Member which have not, at the time of Completion, been exercised, to make any
claim for Relief or any election for a basis or method of Tax or type of Relief
and any rights to make an appeal against an assessment or an application for
postponement of any Tax.
Each Company Group Member has made all deductions and retentions of or on
account of Tax as it was or is obliged or entitled to make and all such payments
of or on account of Tax as should have been made to any Governmental Entity in
respect of such deductions or retentions.
No Company Group Member is liable for any Tax as the agent of any other
person or business, or constitutes a permanent establishment of any other
person, business or enterprise for any Tax Purpose.
All National Insurance contributions and sums payable to the Inland Revenue
under the P.A.Y.E. system and any amounts of a corresponding nature payable to
any foreign Governmental Entity due and payable by any Company Group Member up
to the date hereof have been paid and each Company Group Member has made all
such deductions and retentions as should have been made under Section 203 to
203J of the Taxes Act and all regulations made thereunder or under any
comparable laws or regulations of any relevant foreign jurisdiction.
So far as the Sellers are aware, if each Company Group Member disposed of
each of its assets (except trading stock and work-in-progress) for a
consideration equal to the book value of that asset as shown in or adopted for
the purposes of the Company Balance Sheet to a person not connected with it and
by way of bargain at arm's length, no liability to Tax would arise by reference
to any actual or deemed gain and no Company Group Member has acquired any such
asset (otherwise than from another Company Group Member) except by way of
bargain at arm's length and from an unconnected person.
So far as the Sellers are aware, if each Company Group Member disposed of
each of its assets, or of any pool of assets (that is to say all those assets
expenditure relating to which would be taken into account in computing whether a
balancing charge or corresponding Tax would arise on a disposal of any of those
assets) for a consideration
equal to their book value as shown in or adopted for the purpose of the Company
Balance Sheet, no balancing charge (or corresponding Tax of any relevant foreign
jurisdiction) would arise in respect of any such asset or pool of assets under
any legislation relating to capital allowances (or corresponding legislation of
the relevant foreign jurisdiction).
There has been no change in the ownership of any Company Group Member nor
any major change in the nature or conduct of any trade or business carried on by
any Company Group Member nor has any other Event or series of Events occurred
before Completion (including a significant increase in the amount of any Company
Group Member capital) which might cause the disallowance of the carry forward or
back of losses or expenses of management or excess charges.
No Company Group Member has made any transfers of value within Section 94
of the Inheritance Tax Xxx 0000.
No Company Group Member is, nor has at any time been a close investment
holding company as defined in Section 13A of the Taxes Act.
No Company Group Member has (made any loans to participators and
associates).
No Company Group Member has issued a relevant discounted security to which
paragraph 18 of Schedule 9 to the Finance Xxx 0000 (Discounted securities of
close companies) may apply.
Each Company Group Member is and has at all times been resident, for Tax
purposes, in its place of incorporation and is not and has not at any time been
treated as resident in any other jurisdiction for any Tax purpose (including any
double taxation arrangement). No Company Group Member is subject to Tax in any
jurisdiction other than its place of incorporation by virtue of having a
permanent establishment or other place of business in that jurisdiction.
All transactions between any Company Group Member have been in good faith
and the Sellers consider that they are on fully arm's length terms. So far as
the Sellers are aware, there are no known circumstances which could cause any
Governmental Entity to make any adjustment for tax purposes, or require any such
adjustment to be made, to the terms on which any such transaction is treated as
taking place, and no such adjustment has been made or attempted in fact.
Without prejudice to the generality of the preceding paragraph, no Company
Group Member is or in good faith expects to be treated as thinly capitalised for
any tax purpose. So far as the Sellers are aware, there are no circumstances
which could cause any Governmental Entity to deny relief for interest paid by
any Company Group Member, and no such relief has been denied in fact.
For the purposes of this paragraph (u) the expression "VAT LEGISLATION"
shall include the Value Added Tax Xxx 0000 and all other enactments in relation
to value added tax and all notices, provisions and conditions made or issued
thereunder including the terms of any agreement reached with H.M. Commissioners
of Customs and Excise or
any concession referred to in the Disclosure Letter. This paragraph (u) shall
apply, with appropriate modifications, to any equivalent sales or turnover tax
in any jurisdiction other than the UK to which any Company Group Member is
subject.
In relation to each Company Group Member:
it is registered for the purposes of VAT, has been so registered at all
times that it has been required to be registered by VAT Legislation;
such registration is not subject to any conditions imposed by or agreed
with H.M. Customs and Excise
it has complied fully with and observed in all material respects the terms
of VAT Legislation;
it has maintained and obtained at all times complete, correct and
up-to-date records, invoices and other documents (as the case may be)
appropriate or requisite for the purposes of VAT Legislation and has preserved
such records, invoices and other documents in such form and for such periods as
are required by VAT Legislation;
it obtains credit for all input tax paid or suffered by it;
it is not and has not been treated as a member of a group for the purposes
of VAT Legislation, and has not applied for such treatment;
it is not required to make payments on account of value added tax for which
it may become liable in a prescribed accounting period (pursuant to the Value
Added Tax (Payments on Account) Order 1993); and
it is not and has not been subject under VAT legislation to any penalty
liability notice, written warning of failure to comply, surcharge liability
notice or requirement to give security as a condition of making taxable
supplies.
In respect of each of the assets of each Company Group Member (if any)
which is a capital item for the purpose of Part XV of the Value Added Tax
Regulations 1995, the Disclosure Letter sets out accurately:
(i) the capital item affected;
the amount of the total input tax (within the meaning of the said
Regulations) which is subject to adjustment;
the percentage of that input tax which was reclaimable on the capital item
in the first interval applicable to it and any adjustments made or to be made
having regard to events occurred up to the date hereof;
the date of acquisition of the capital item and the number of intervals in
the adjustment period remaining from the date of this Agreement; and
full particulars of all matters to date relevant in determining any
adjustments.
All documents in the possession or under the control of each Company Group
Member or to the production of which any Company Group Member is entitled which
establish or are necessary to establish the title of any Company Group Member to
any asset, or by virtue of which any Company Group Member has any right, have
been duly stamped and any applicable stamp duties or similar duties or charges
in respect of such documents have been duly accounted for and paid.
All duties, fees and penalties payable in respect of the capital of each
Company Group Member (including any premium over nominal value at which any
share was issued) have been duly accounted for and paid, and there are no
circumstances under which any relief obtained against payment of any such amount
could be withdrawn.
Legal Proceedings and Compliance with Law.
There is no Proceeding that is pending or, to the Seller's knowledge,
threatened against or related to any Company Group Member. There has been no
Default under any Laws applicable to any Company Group Member, including
Environmental Laws, and no Company Group Member has received any notices from
any governmental entity regarding any alleged Defaults under any Laws. There has
been no Default with respect to any Court Order applicable to any Seller with
respect to the Company Group.
Without limiting the generality of Section 5.13(a) above, there has not
been any Environmental Condition (i) at the premises at which the Business has
been conducted by any Company Group Member or any predecessor thereof, (ii) at
any property owned, leased, occupied or operated at any time by the Company
Group, any Affiliate of the Company Group or any predecessor of any of them, or
(iii) at any property at which Hazardous Substances have been deposited or
disposed by, from or at the behest or direction of the Company Group, any
Affiliate of the Company Group or any predecessor of any of them, nor has the
Seller received written notice of any such Environmental Condition.
There are no written reports, studies or assessments in the possession or
control of the Company Group or any Affiliate thereof that relate to any
Environmental Condition.
There are no Permits that are required for the complete operation of the
Business as currently operated.
The occupancies and uses of the Real Property, as well as the development,
construction, management, maintenance, servicing and operation of the Real
Property, comply with all applicable Laws and are not in violation of any
thereof; and all certificate(s) of occupancy and all other Permits required by
applicable Law for the proper use and operation of the Real Property are in full
force and effect. All approvals, consents, Permits, utility installations and
connections required for the development, construction, maintenance, operation
and servicing of the Real Property have been granted, effected, or performed and
completed (as the case may be), and all fees and charges therefore have been
fully paid. None of Sellers has received written or oral
notice of, and do not otherwise have knowledge of, any violations, Proceedings
or judgments relating to zoning, building use and occupancy, traffic, fire,
health, sanitation, air pollution, ecological, environmental or other laws or
regulations, against, or with respect to, the Real Property.
The Company has not registered as a data user under the Data Protection Act
1998 (the "DPA") but has complied with the data protection principles set out
therein and no individual has claimed or will have a right to claim compensation
from the Sellers or the UK Company under the DPA.
Contracts.
The Disclosure Letter lists all outstanding Contracts (excepting sales
contracts of USDATA licensed software sold to USDATA clients) of the following
types to which a Company Group Member is a party or by which it is bound, except
for any Contract that may be terminated by a Company Group Member on less than
30 days' notice without any Liability as of the Completion Date:
Contracts with any present or former
shareholder, director, officer, employee,
partner or consultant of the Company Group
or Affiliate thereof, including all
employment agreements, consulting agreements
or collective bargaining agreements;
Contracts for the future purchase of, or
payment for, supplies or products, or for
the lease of any Asset from or the
performance of services by a third party,
that involve an amount in excess of L.5,000
in any individual case, or any Contracts for
the sale of products that involve an amount
in excess of L.5,000 with respect to any one
supplier or other party;
Contracts to sell or supply products or to
perform services that involve an amount in
excess of L.25,000 in any individual case;
Contracts to lease to or to operate for any
other party any Asset that involve an amount
in excess of L.5,000 in any individual case;
Any license, franchise, distributorship or
sales agency agreement or other similar
agreements, including those that relate in
whole or in part to any software, technical
assistance or other know-how used in the
past 24 months;
Any notes, debentures, bonds, conditional
sale agreements, equipment trust agreements,
letter of credit agreements, reimbursement
agreements, loan agreements or other
Contracts for the borrowing or lending of
money (including loans to or from officers,
directors, partners, Sellers or Affiliates
of the Company or any members of their
immediate families), agreements or
arrangements for a line of credit or for a
guarantee of, or other undertaking in
connection with, the indebtedness of any
Person or other legal entity;
Contracts for any capital expenditure or
leasehold improvement in excess of L.10,000
in the aggregate;
Any Contract under which a Company Group
Member has, directly or indirectly, made any
advance, loan, extension of credit or
capital contribution to, or other investment
in, any person (other than the Company) in
any case, which, individually, is in excess
of L.10,000;
Any Contracts under which any Encumbrance
exists with respect to any Assets; and
Any other Contracts (other than those
described in any of (i) through (ix) above)
not made in the ordinary course of business.
All Contracts required to be listed in the Disclosure Letter (the "COMPANY
CONTRACTS") are valid, binding and in full force and effect and are enforceable
by the relevant Company Group Member in accordance with their terms. If
requested by Buyer, the Sellers shall deliver to the Buyer complete and correct
copies of all such Company Contracts, together with all amendments thereto.
No Company Group Member is in Default under any Company Contract, where
such Default could result in a Liability on the part of the Company Group in
excess of L.2,000 in any individual case, and the aggregate Liabilities that
could result from all such Defaults do not exceed L.5,000. The Company Group has
not received any communication from, or given any communication to, any other
party indicating that the Company or such other party, as the case may be, is in
Default under any Company Contract.
Insurance. The Disclosure Letter lists all policies or binders of insurance
held by or on behalf of the Company Group, specifying with respect to each
policy the insurer, the amount of the coverage, the type of insurance, the
categories of risks insured (per the policy), the expiration date, the policy
number and any pending claims thereunder. There is no Default with respect to
any such policy or binder, nor has there been any failure to give any notice or
present any claim under any such policy or binder in a timely fashion or in the
manner or detail required by the policy or binder. There is no notice of
nonrenewal or cancellation with respect to, or disallowance of any claim under,
any such policy or binder that has been received by the Sellers.
Employee Relations. Each Company Group Member, save as set forth in the
Disclosure Letter, (a) is not a party to, involved in or, to Seller's knowledge,
threatened by any labour dispute or unfair labour practice charge, (b) is not
currently negotiating any collective bargaining agreement, and (c) has not made
arrangements with any labor union or employee association or made commitments to
or conducted negotiations with any labor union or employee association with
respect to any future agreements. The Company Group has not experienced any work
stoppage during the last three years. No trade union, council of trade unions,
employee bargaining agency or affiliated bargaining agent (a) holds bargaining
rights with respect to the Company Group's employees by way of certification,
interim certification, voluntary recognition, designation or successor rights or
(b) has applied to be certified as the bargaining agent of the Company Group's
employees. The Sellers have delivered to the Buyer a complete and correct list
of the names and salaries, bonus and other cash compensation of all employees of
each Company Group Member.
UK Pensions Arrangements.
(a) Save as described in employee conditions of employment for current
employees and National Insurance regulations and except as disclosed in the
Disclosure Letter, there is no claim for nor is the Company under any legal
obligation to pay or contribute towards any pension, death, ill-health or
disability benefits or make any other payment after death or retirement or in
respect of disability or otherwise to provide "relevant benefits" within the
meaning of Section 612 of the Taxes Act to or in respect of any employee or any
officer or employee or their dependencies and no proposal or announcement has
been made to any such person about the introduction, continuance, increase or
improvement of or the payment of a contribution towards any other pension,
death, ill-health or disability benefit (a "PENSION SCHEME").
(b) The Pension Scheme of the Company is a "Group Personal Pension
Plan" providing cash purchases of benefit and not "final salary" benefits
provided and administered by Gartmore and the documentation for which has been
delivered to the Buyer.
(c) All contributions to the Pension Scheme of the Company which are
payable by the Company in respect of those employees who are members of a
Pension Scheme and all contributions deducted from the pay of such employees
have been duly and promptly passed to the trustees of such Pension Scheme.
(d) The information provided to the Buyer regarding those employees
that are members of a Pension Scheme and all data and documentation regarding a
Pension Scheme that has been supplied to the Purchaser and/or its advisers are
true and up to date in all material respects and contain no material omissions.
(e) All contributions, insurance premiums, taxes and expenses due to
and in respect of a Pension Scheme by the Company have been duly paid (and where
applicable within the time limit prescribed under Section 49(8) of the Pensions
Act 1995)
and there are no such liabilities outstanding in respect of such Pension Scheme
at the date of this Agreement.
(f) Neither the Sellers nor the Company has received written notice
that any claims or complaints or reports to the Occupational Pensions Regulatory
Authority have been made or are pending or threatened in respect of the
provision of (or failure to provide) pension, lump sum, death, ill-health,
disability or accident benefits by the Company and, so far as each Seller is
aware, there is no fact or circumstance likely to give rise to such claims,
complaints or reports.
(g) The Company is not making and has not regularly made any ex gratia
non-contractual payments to any past or present officer or employee or any of
their dependents.
Corporate Records. The statutory registers of each Company Group Member
contain complete, correct and current copies of its Constitutional Documents and
of all minutes of meetings, resolutions and other proceedings of its board of
directors and shareholders. Statutory registers of the Company are complete,
correct and current.
Absence of Certain Changes. Except as set forth in the Disclosure Letter
and as contemplated by this Agreement, since the Accounts Date, the Business has
been conducted in the ordinary course and there has not been:
any material adverse change in the Assets, the operations, prospects or
condition (financial or otherwise) of the Business or each Company Group
Member's Liabilities;
any distribution or payment declared or made in respect of capital stock by
way of dividends, purchase or redemption of shares or otherwise;
any increase in the compensation payable or to become payable to any
director, officer, employee or agent, except for increases for non-officer
employees made in the ordinary course of business, nor any other change in any
employment or consulting arrangement;
any sale, assignment or transfer of Assets, or any additions to or
transactions involving any Assets, other than those made in the ordinary course
of business;
other than in the ordinary course of business, any waiver or release of any
claim or right or cancellation of any debt held;
any payments to any Seller or to any Affiliate thereof, other than wages
and reimbursements in accordance with past practices;
any change or amendment to any Company Group Member's Constitutional
Documents;
any sale, issuance or acquisition of equity securities or other securities
or any grant of options, warrants, calls or commitments of any kind with respect
thereto; or
any borrowings or incurrence of debt, or assumption of any additional
Liabilities or Encumbrances save normal variation in overdraft usage due to
fluctuations arising in the normal course of business;
any sale of any marketable securities owned by the Company Group; or
any other change that may have a Material Adverse Effect.
Previous Sales; Warranties. Neither the Sellers nor a Company Group Member
believe they breached any express or implied warranties in connection with the
sale or distribution of goods or the performance of services, except for
breaches that, individually and in the aggregate, are not material and are
consistent with past practice of the Business.
Customers and Suppliers. Each Company Group Member has used reasonable
business efforts to maintain, and currently maintains, good working
relationships with all of its customers and suppliers. The Disclosure Letter
contains a list of the names of each of the ten customers that, in the
aggregate, for the three years ending December 31, 1999, 2000 and 2001, were the
largest volume customers of products or services, or both, sold by any Company
Group Member. None of such customers has given the Sellers nor any Company Group
Member notice terminating, cancelling or threatening to terminate or cancel any
Contract or relationship with any Company Group Member except as may be noted on
such list. The Disclosure Letter also contains a list of the five suppliers of
any Company Group Member that, in the aggregate, for the years ending December
31, 1999, 2000 and 2001, were the largest dollar volume suppliers of supplies
used by the each such Company Group Member. None of such suppliers has given any
Company Group Member notice terminating, cancelling or threatening to terminate
or cancel any Contract or relationship with any Company Group Member.
Propriety of Past Payments. No shareholders, employees, officers or
directors of a Company Group Member has made, offered, accepted or received any
unlawful contribution, payment, gift, kickback, expenditure or other item of
value in respect of the Business or the Assets.
Finder's Fees. No Person retained by any Seller or any Company Group Member
is or will be entitled to any commission or finder's or similar fee in
connection with the Transactions.
Additional Information. The Disclosure Letter accurately lists the
following:
the names and addresses of every bank or other financial institution in
which any Company Group Member maintains an account (whether checking, saving or
otherwise), lock box or safe deposit box, and the account numbers and names of
Persons having signing authority or other access thereto;
the names of all Persons authorized to borrow money or incur or guarantee
indebtedness on behalf of the applicable Company Group Member;
the names of any Persons holding powers of attorney from the Company Group
and a summary statement of the terms thereof; and
all names under which the Company Group has conducted any part of the
Business or that it has otherwise used at any time during the past five years.
Accuracy of Information. No representation or warranty by any Seller in any
Transaction Document, and no information contained therein or otherwise
delivered by or on behalf of any Seller to the Buyer, in connection with the
Transactions, including the Accounts, Company Balance Sheet and the Disclosure
Letter and Schedules attached hereto, knowingly contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances under which such statements were made.
COVENANTS OF SELLERS AND THE COMPANY GROUP
Non-Competition. Each Seller understands that Buyer shall be entitled to
protect and preserve the going concern value of the Business to the extent
permitted by law and that Buyer would not have entered into this Agreement
absent the provisions of this Section 6.1 and, therefore, for the period ending
on the fourth anniversary of the Completion Date, such Seller shall not,
directly or indirectly:
engage in activities or businesses, or establish any new businesses, in any
country and/or place in the world where the Company was engaged in the research,
development, distribution, sale or supply of products that are in competition
with the Company ("COMPETITIVE ACTIVITIES"), including (i) selling goods or
services of the type sold by the Company, (ii) soliciting any customer or
prospective customer of the Company to purchase the goods or services sold by
the Company, from anyone other than Buyer and its Subsidiaries, and (iii)
owning, directly or indirectly, an economic interest in any business engaged in
Competitive Activities (iv) assisting any person in any way to do, or attempt to
do, anything prohibited by clause (i) or (ii) above;
perform any action, activity or course of conduct that is substantially
detrimental to the Business of the Company or business reputation, including (i)
soliciting, recruiting or hiring any employee of the Company or person who has
worked for the Company, (ii) soliciting or encouraging any employee of the
Company to leave the employment of the Company and (iii) disclosing or
furnishing to anyone any confidential information relating to any of the Company
or otherwise using such confidential information for its own benefit or the
benefit of any other person;
Section 6.1(a) shall be deemed not breached as a result of the ownership by
any Seller of less than an aggregate of 5% of any class of shares of a person
engaged, directly or indirectly, in Competitive Activities; provided, however,
that such stock is listed on a national securities exchange; and
Notwithstanding any other provision of this Agreement, it is understood and
agreed that the remedy of indemnity payments pursuant to Section 10 and other
remedies at law would be inadequate in the case of any breach of the covenants
contained in this Section
6.1. Buyer shall be entitled to equitable relief, including the remedy of
specific performance, with respect to any breach or attempted breach of such
covenants.
Confidentiality. Each Seller recognizes and acknowledges that, by reason of
his involvement with or employment in the Business, he has had access to Trade
Secrets relating to the Business. Each Seller acknowledges that such Trade
Secrets are a valuable and unique asset and covenants that, prior to the
Completion and indefinitely thereafter, no Seller shall divulge, communicate or
use in any way any such Trade Secrets for any reason whatsoever, unless such
information: (a) is in the public domain through no wrongful act of such Seller;
(b) has been rightfully received from a third party without restriction and
without breach of this Agreement; or (c) except as may be required to be
disclosed by applicable Law (in which event prompt notice of the same shall be
given to the Buyer and all efforts shall be made in cooperation with the Buyer
to limit such disclosure).
The terms of this Section 6.2 shall apply to each Seller and to any other
Person controlled by any Seller to the same extent as if he were a party hereto,
and each such Seller shall take whatever actions may be necessary to cause any
such Seller or Affiliate to adhere to the terms of this Section 6.2.
In the event of any breach or threatened breach by any Seller of any
provision of Section 6.2, the Buyer shall be entitled to injunctive or other
equitable relief, to restrain such party from using or disclosing any Trade
Secrets in whole or in part, or from engaging in conduct that would constitute a
breach of the obligations of a Seller under Section 6.2. Such relief shall be in
addition to and not in lieu of any other remedies that may be available,
including an action for the recovery of Damages.
Records. On the Completion Date, each Seller shall deliver or cause to be
delivered to Buyer at the premises all agreements, documents, books, records and
files, including records and files stored on computer disks or tapes or any
other storage medium, if any, in the possession of such Seller relating to the
Business.
Public Announcements. The Sellers shall consult with the Buyer before
issuing any press release or making any public statement with respect to this
Agreement and the Transaction, and, except as may be required by applicable Law,
none of the Sellers or the Company Group shall issue any such press release or
make any such public statement without the prior written consent of the Buyer.
REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer hereby represents and warrants to the Sellers as follows:
Corporate Status. The Buyer is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware and is
qualified to do business as a foreign corporation in any jurisdiction where such
corporation is required to be so qualified to avoid liability or disadvantage.
The Buyer has delivered to the Sellers current, correct and complete copies of
the Buyer's Constitutional Documents and bylaws, all of which are in full force
and effect as of the date hereof.
Authorization. The Buyer has the requisite corporate power and authority to
execute and deliver each Transaction Document to which it is a party and to
perform the Transactions performed or to be performed by it. Such execution,
delivery and performance by the Buyer has been duly authorized by all necessary
corporate action. The Transaction Documents executed and delivered by the Buyer
as of the date hereof have been duly executed and delivered by the Buyer and
constitute valid and binding obligations of the Buyer, enforceable against the
Buyer in accordance with their terms. Each Transaction Document to be executed
and delivered by the Buyer after the date hereof will have been duly executed
and delivered by the Buyer and will constitute a valid and binding obligation of
the Buyer, enforceable against the Buyer in accordance with its terms.
Consents and Approvals. Neither the execution and delivery by the Buyer of
the Transaction Documents to which it is a party, nor the performance of the
Transactions by the Buyer, will require any filing, consent or approval or
constitute a Default under (a) any Law or Court Order to which the Buyer is
subject, (b) the Constitutional Documents of the Buyer or (c) any Contract,
Government Permit or other document to which the Buyer is a party or by which
the properties or other assets of the Buyer may be subject.
COVENANTS OF THE BUYER
Public Announcements. The Buyer shall consult with the Sellers before
issuing any press release or making any public statement with respect to this
Agreement and the Transactions and, except as may be required by applicable Law,
the Buyer shall not issue any such press release or make any such public
statement without the prior written consent of the Sellers.
Registration of Buyer Shares. The Buyer shall deliver the initial Buyer
Shares to the Sellers as soon as reasonably practicable after the Completion
Date and shall cause to be registered only those the initial Buyer Shares
consisting of either Common Stock or shares of Series B Preferred Stock
converted into Common Stock as soon as reasonably practicable after the
Completion Date. Upon the granting, if any, of all or any portion of the
Performance Portion of the Buyer Shares and the Retained Portion of the Buyer
Shares, the Company shall issue and shall cause to be registered only those
initial Buyer Shares consisting of either Common Stock or shares of Series B
Preferred Stock converted into Common Stock as soon as reasonably practicable.
The certificate evidencing the Buyers Shares payable to the Seller in
consideration of the Buyer Shares may bear the following legends:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
A REGISTRATION STATEMENT UNDER SUCH ACT IN EFFECT WITH
RESPECT TO SUCH SECURITIES OR AN EXEMPTION FROM
REGISTRATION."
"THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER
WHO SO REQUESTS, A STATEMENT OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS."
TAX MATTERS
The Sellers jointly and severally agree to pay to the Buyer an amount equal
to any Tax Liability arising in respect of, by reference to or in consequence
of:
any income, profits or gains earned, accrued or received on or before the
Completion Date; and
any Event which occurs or occurred on or before the Completion Date.
No liability shall arise to the Sellers under Section 9.1 above to the
extent that either provision has been made for the relevant Taxes in the Company
Balance Sheet or the Tax arises in the ordinary course of business between the
Accounts Date and the Completion Date.
Any sums payable under this Section 9 shall be paid no later than 30 days
after demand is made therefor by the Buyer.
Section 338(g) Election. At or following Completion, if requested by the
Buyer, the Buyer and the Sellers shall join in making an election under Section
338(g) of the Code and any similar provision under any applicable state law (the
"ELECTION") with respect to the acquisition of the Shares. As soon as
practicable after Completion, the Sellers and the Buyer shall mutually prepare
any such forms, agreements, or additional data and materials required and shall
also co-operate with each other to take all actions necessary and appropriate
(including filing such additional forms, returns, elections, schedules and other
documents as may be required) to effect and preserve such Election in accordance
with the provisions of Section 338(g) of the Code and the regulations thereunder
(and comparable provisions of applicable state tax law) or any successor
provisions. The Buyer shall pay the reasonable costs and expenses of the Sellers
incurred in making such election.
INDEMNIFICATION
By the Sellers Jointly and Severally. Subject to Sections 10.4 and 10.5,
from and after the Completion Date, the Sellers, jointly and severally shall
indemnify and hold
harmless the Buyer and (if any) its successors and assigns, and its officers and
directors (each, an "INDEMNIFIED BUYER PARTY") from and against any liabilities,
claims, demands, judgments, losses, costs, damages, diminution in value or
expenses whatsoever (including reasonable attorneys', consultants' and other
professional fees and disbursements of every kind, nature and description
incurred by such Indemnified Buyer Party in connection therewith, (collectively,
"DAMAGES") that such Indemnified Buyer Party may sustain, suffer or incur and
that result from, arise out of or relate to (a) any breach of any of the
respective representations, warranties, covenants or agreements of the Sellers
or any Company Group Member contained in this Agreement, other than the
individual representations and warranties of the Sellers in Section 4 and the
individual covenants and agreements of each Seller elsewhere in this Agreement;
(b) by an Indemnified Buyer Party from any third party arising out of or
relating to ownership of Software Answers including in relation to the source
code and intellectual property rights licensed to the Company by Software
Answers; (c) any Environmental Condition existing on or prior to the Completion;
or (d) any Taxes (other than any stamp duty payable by the Buyer with respect of
the transfer by the Sellers of the Shares to the Buyer) which may become payable
by the Company with respect to the ownership of or sale of the Shares by the
Sellers or any previous owner of the Shares.
By the Buyer. From and after the Completion Date, the Buyer shall indemnify
and hold harmless the Sellers and their respective successors and assigns (if
any), and their respective officers or directors (each, an "INDEMNIFIED SELLING
PARTY") from and against any Damages that such Indemnified Selling Party may
sustain, suffer or incur and that result from, arise out of or relate to any
breach of any of the respective representations, warranties, covenants or
agreements of the Buyer contained in this Agreement.
Procedure for Claims.
Any Person that desires to seek indemnification under any part of this
Section 10 (each, an "INDEMNIFIED PARTY") shall give notice (a "CLAIM NOTICE")
to each Party responsible or alleged to be responsible for indemnification
hereunder (an "INDEMNITOR") prior to any applicable Expiration Date specified
below in Section 10.4. Such notice shall briefly explain the nature of the claim
and the parties known to be involved, and shall specify the amount thereof. If
the matter to which a claim relates shall not have been resolved as of the date
of the Claim Notice, the Indemnified Party shall estimate the amount of the
claim in the Claim Notice, but also specify therein that the claim has not yet
been liquidated (an "UNLIQUIDATED CLAIM"). If an Indemnified Party gives a Claim
Notice for an Unliquidated Claim, the Indemnified Party shall also give a second
Claim Notice (the "LIQUIDATED CLAIM NOTICE") within 60 days after the matter
giving rise to the claim becomes finally resolved, and the Liquidated Claim
Notice shall specify the amount of the claim. The Indemnitor to which a Claim
Notice is given shall respond to any Indemnified Party that has given a Claim
Notice (a "CLAIM RESPONSE") within 20 days (the "RESPONSE PERIOD") after the
later of (i) the date that the Claim Notice is given or (ii) if a Claim Notice
is first given with respect to an Unliquidated Claim, the date on which the
Liquidated Claim Notice is given. Any Claim Notice or Claim Response shall be
given in accordance with the notice requirements hereunder, and any Claim
Response shall specify whether or not the Indemnitor giving
the Claim Response disputes the claim described in the Claim Notice. If any
Indemnitor fails to give a Claim Response within the Response Period, such
Indemnitor shall be deemed not to dispute the claim described in the related
Claim Notice. If any Indemnitor elects not to dispute a claim described in a
Claim Notice, whether by failing to give a timely Claim Response or otherwise,
then the amount of such claim shall be conclusively deemed to be an obligation
of such Indemnitor.
If any Indemnitor shall be obligated to indemnify an Indemnified Party
hereunder, such Indemnitor shall pay to such Indemnified Party within 30 days
after the last day of the Response Period the amount to which such Indemnified
Party shall be entitled. If a Indemnified Buyer Party shall be the Indemnified
Party with respect to a claim under Section 10.1, the Indemnified Buyer Party
shall be entitled to payment directly from the Sellers. If there shall be a
dispute as to the amount or manner of indemnification under this Section 10, the
Indemnified Party may pursue whatever legal remedies may be available for
recovery of the Damages claimed from any Indemnitor. If any Indemnitor fails to
pay all or part of any indemnification obligation when due, then such Indemnitor
shall also be obligated to pay to the applicable Indemnified Party interest on
the unpaid amount for each day during which the obligation remains unpaid at an
annual rate equal to the Xxxxxxx'x Rate plus 5%, and the Xxxxxxx'x Rate in
effect on the first business day of each calendar quarter shall apply to the
amount of the unpaid obligation during such calendar quarter.
Claims Period. Any claim for indemnification under this Section 10 shall be
made by giving a Claim Notice under Section 10.3 on or before the applicable
"EXPIRATION DATE" specified below in this Section 10.4, or the claim under this
Section 10 shall be invalid. The following claims shall have the following
respective "EXPIRATION DATES": (a) the date that is 18 months following the
Completion Date --any claims that are not specified in any of the succeeding
clauses; (i) (b) the fourth anniversary of the Completion Date with respect to
any claim for Damages related to a breach of any covenant or agreement; and (c)
the seventh anniversary of the Completion Date with respect to any claim for
indemnification with respect to (i) a breach of the covenants, representations
and warranties concerning Taxes or (ii) any claim with respect to an
Environmental Condition whether based on a breach of a representation or
warranty or the indemnification for Environmental Conditions in clause (d) of
the first sentence of Section 10.1 or (ii) a breach of any representations or
warranties of a party to this Agreement that were made with an intent to mislead
or defraud or with a reckless disregard of the accuracy thereof;. If more than
one of such Expiration Dates applies to a particular claim, the latest of such
Expiration Dates shall be the controlling Expiration Date for such claim. So
long as an Indemnified Party gives a Claim Notice for an Unliquidated Claim on
or before the applicable Expiration Date, such Indemnified Party shall be
entitled to pursue its rights to indemnification under such Unliquidated Claim
and such Unliquidated Claim shall survive regardless of the date on which such
Indemnified Party gives the related Liquidated Claim Notice.
Limitation on Claims. Notwithstanding any other provision of this Section
10, except as provided below, (i) the Indemnified Buyer Party on the one hand,
and the Indemnified Selling Parties on the other hand, shall not be entitled to
indemnification hereunder with
respect to the breach of a representation, warranty covenant or agreement by any
Seller or by the Buyer, respectively, until the aggregate amount of all such
Damages exceed L.8,000 (the "BASKET") and then for the full extent of such
Damages (including the Basket amount) up to an aggregate amount, (A) in respect
of the Indemnified Selling Parties (i) $US 70,000 and (ii) 92.5% of the fair
market value of the initial portion of the Buyer Shares valued as of the
Completion Date and 50% of the fair market value (in aggregate, the "SELLERS
MAXIMUM DAMAGE") and (iii) 50% of the Performance Portion of the Buyer Shares
and retained portion of the Buyer Shares, in each case valued at the fair market
value of such Buyer Shares at the date of this Agreement and, (B) in respect of
the Indemnified Buyer Party, up to an aggregate amount of US$140,000. The
foregoing limitations with respect to the Maximum Damage shall not apply,
however, to (a) any breach of any Party's representations or warranties that
were made with an intent to mislead or defraud or with a reckless disregard of
the accuracy thereof, or (b) any Claim by any Party that can be based upon a
breach of a covenant or agreement as well as a breach of a representation or
warranty. Any amount due and payable by the Sellers to any Indemnified Buyer
Party shall be satisfied in cash and Buyer Shares valued at the fair market
value of such Buyer Shares at the date of this Agreement in the same proportion
of cash to shares as the total amount of cash paid to the total amount of Buyer
Shares earned or issued at the time of settlement or determination of the
relevant claim.
Third Party Claims. An Indemnified Party that desires to seek
indemnification under any part of this Section 10 with respect to any actions,
suits or other administrative or judicial proceedings (each, an "ACTION") that
may be instituted by a third party shall give each Indemnitor prompt notice of a
third party's institution of such Action. After such notice, any Indemnitor may,
or if so requested by such Indemnified Party, any Indemnitor shall, participate
in such Action or assume the defense thereof, with counsel satisfactory to such
Indemnified Party; provided, however, that such Indemnified Party shall have the
right to participate at its own expense in the defense of such Action; and
provided, further, that the Indemnitor shall not consent to the entry of any
judgment or enter into any settlement, except with the written consent of such
Indemnified Party (which consent shall not be unreasonably withheld). Any
failure to give prompt notice under this Section 10.6 shall not bar an
Indemnified Party's right to claim indemnification under this Section 10, except
to the extent that an Indemnitor shall have been harmed by such failure.
Sellers Undertaking. The Sellers shall not make any claim against any
officer or any employee of any Company Group Member with regard to any claim for
indemnification made by the Buyer hereunder.
Effect of Investigation or Knowledge. Any claim by a Indemnified Buyer
Party for indemnification shall not be adversely affected by any investigation
by or opportunity to investigate afforded to the Buyer. Each Party shall be
deemed to be relying on the representations and warranties of any other Party
set forth herein, regardless of any investigation or audit conducted before or
after the Completion Date or the decision of any Party to consummate the
Transactions contemplated hereby and complete the Completion.
Contingent Claims. Nothing herein shall be deemed to prevent an Indemnified
Party from making a claim hereunder for potential or contingent claims or
demands provided the Claim Notice sets forth the specific basis for any such
potential or contingent claim to the extent then feasible and the Indemnified
Party has reasonable grounds to believe that such a claim or demand may be made
and arbitration of other proceedings with respect to the actual claim are
commenced by the relevant Indemnified Party within six months of the relevant
Expiry Date for such claim.
Right of Set-Off.
Upon notice to Sellers specifying in reasonable detail the basis for such
set-off and upon receipt of an opinion of an Expert, duly delivered in
accordance with the provisions of Section 10.10 (b-d), Buyer may set-off any
amount to which Seller may be entitled against any amounts otherwise payable
under the Transaction Documents (including any unissued shares forming the
Retained Portion of the Buyer Shares and the Performance Portion of the Buyer
Shares. Notwithstanding that the Sellers may have otherwise become entitled to
be issued with such unissued Buyer Shares, the Sellers will forfeit the right to
receive such number of Buyer Shares (as determined by the fair market value of
such Buyer Shares at the date of this Agreement)) as equal the amount of the
relevant claim as determined pursuant to this section 10.10. Neither the
exercise nor failure to exercise such right of set-off by Buyer or to give a
notice of a Claim will constitute a waiver or election of remedies or limit (a)
Buyer's ability in any manner to enforce the terms and conditions of this
Agreement or (b) its rights of enforcement of any other remedies that may be
available to it.
With regard to the validity of such right of set-off, an expert opinion
shall be sought of a barrister called to the Bar more than five years previously
(the "EXPERT"). The Expert shall be appointed by the Buyer but subject to the
prior approval of the Sellers or, failing agreement by the Parties as to
appointment within 7 days after the date upon which a request to agree shall
have been made, by the Chairman for the time being the Bar Council or, if he
shall be unable or unwilling to make such appointment within 28 days from the
date of the request to him, the President of the Law Society upon the
application of either of the parties.
The Expert shall consider any written representation which either party may
choose to put forward received by him within such time limit as he may in his
absolute discretion determine and shall as a matter of urgency (and in any event
within not more than 56 days from the date of his appointment) state in writing
whether in his opinion it is more likely or less likely than not that a court or
tribunal of competent jurisdiction would uphold any right of set-off. If the
Expert states that in his opinion such could would more than likely not uphold
the right of set-off, he shall state in his opinion the likely amount of any
judgment on the basis of the information before him and without regard to any
other facts.
In stating his opinion, the Expert shall not give reasons and he shall act
as an expert and not as an arbitrator. His advice shall be final and binding
upon the parties and shall
not be subject to challenge in any way whatsoever. His fees shall be payable by
the parties in such proportions as he may consider appropriate in his absolute
discretion.
Mitigation of Loss. The Buyer agrees that, with respect to those of the
Warranties relating to the Accounts, if and to the extent that the Buyer
considers that the Company has a valid and reasonable claim against the
Company's auditors that they have been negligent with respect to the preparation
of the Accounts and is able to and does in fact recover an amount from such
auditors in respect of such claim, if and to the extent that the Buyer or the
Company makes actual recovery of any amounts from such auditors, the liability
of the Sellers shall be correspondingly reduced. Notwithstanding the provisions
of this section, the Sellers shall remain primarily liable for any breach of
Warranty.
GENERAL MATTERS
Contents of Agreement. This Agreement, together with the other Transaction
Documents, investigations and discussions sets forth the entire understanding of
the Parties with respect to the Transaction and supersedes all prior agreements
or understandings among the Parties regarding those matters.
Amendment, Parties in Interest, Assignment, Etc. This Agreement may be
amended, modified or supplemented only by a written instrument duly executed by
each of the Parties. If any provision of this Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs, legal
representatives, successors and permitted assigns of the Parties. Nothing in
this Agreement shall confer any rights upon any Person other than the Parties
and their respective heirs, legal representatives, successors and permitted
assigns, except as provided in Section 11. No Party shall assign this Agreement
or any right, benefit or obligation hereunder, except that the Buyer may assign
its obligations to any of its Affiliates provided the Buyer continues to be
responsible for all of its obligations hereunder. Any term or provision of this
Agreement may be waived at any time by the Party entitled to the benefit thereof
by a written instrument duly executed by such Party. Any statement qualified by
the expression "to the best knowledge of the Sellers or "so far as the Sellers
are aware" or any similar expression shall be deemed to include an additional
statement that it has been made after due and careful enquiry. The ejusdem
generis rule of construction does not apply to this Agreement and accordingly
the meaning of general words is not to be restricted by any particular examples
preceding or following those general words.
Notices.
Any notice to be given by any of the Parties shall be in writing sent by
registered first class post or internationally recognised courier service to the
relevant parties addresses as set out below, unless such address is changed by
notice to the other Party:
If to the Buyer:
USDATA Corporation
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, XX
Attention: Xxxxxx X. Merry
FAX: 000-000-0000
with a required copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esquire
FAX: 000-000-0000
If to the Sellers:
J. Xxxxxx Xxxx
Inglewood, 00 Xxxxxxxx Xxxx,
Xxxxxx Xxxxxx, XX00 0XX XX
Xxxxx X. Xxxxx
Highcroft, Bonnetts Lane
Ifield, Crawley, W. Sussex
RH 11 0NY, UK
with a required copy to
Xxxxxx'x Solicitors
0 Xxxxxxxxx
Xxxxxxxxxx
XX00 0XX
Attention: Xxxx Xxxxx
Unless the contrary is proved, any such notice or other document shall be
deemed to have been served if delivered, at the time of registered delivery.
In proving such service it shall be sufficient to prove that delivery was
made.
Further Assurances. At and after the Completion, the Parties shall execute
and deliver any and all documents and take any and all other actions that may be
deemed reasonably necessary by their respective counsel to complete the
Transaction.
Interpretation. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to any gender include all genders,
(c) "including" has the inclusive meaning frequently identified with the phrase
"but not limited to" and (d) references to "hereunder" or "herein" relate to
this Agreement. Any determination of whether a situation is "material" shall be
made by taking into account the effect of all other provisions of this Agreement
that contain a qualification with respect to materiality so that the
determination is made after assessing the aggregate effect of any related
situations. The Section and other headings contained in this Agreement are for
reference purposes only and shall not control or affect the construction of this
Agreement or the
interpretation thereof in any respect. Section, subclause, Schedule and Exhibit
references are to this Agreement unless otherwise specified. Each accounting
term used herein that is not specifically defined herein shall have the meaning
given to it under GAAP. Any reference to a Party's being satisfied with any
particular item or to a Party's determination of a particular item presumes that
such standard will not be achieved unless such Party shall be satisfied or shall
have made such determination in its sole or complete discretion. Where this
Agreement requires any party to be satisfied as to the form or content of any
document to be supplied by the other party the making of this agreement shall
signify that the form and content of such document has been agreed to the
satisfaction of the Parties hereto.
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be binding as of the date first written above, and all of
which shall constitute one and the same instrument. Each such copy shall be
deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.
Disclosure Letter. The Disclosure Letter attached hereto set forth all
disclosures made by the Sellers to the Buyer as required by this Agreement. For
the purposes of this Agreement, no disclosures other than those contained in the
Disclosure Letter shall be valid. The Warranties made by the Sellers contained
in Section 4 and 5 are subject to matters specifically, fully, fairly and
accurately disclosed by the Sellers in the Disclosure Letter.
Any items listed or described on the Disclosure Letter shall be listed or
described under a caption that specifically identifies the Section(s) of this
Agreement to which the item relates.
Governing Law. This Agreement shall be construed and enforced in accordance
with English law.
Jurisdiction. The Parties irrevocably agree that the courts of England are
to have non-exclusive jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement.
Judgment. The Parties irrevocably agree that a judgement in any Proceedings
brought in court shall be conclusive and binding upon either Party and may be
enforced whether against property, assets or otherwise howsoever in the courts
of any other jurisdiction.
Without prejudice to the generality of Section 11.9, the Parties
irrevocably waive any objection which they may have now or in the future to the
courts of England and Wales being nominated for the purpose of this Section on
the ground of venue or otherwise and agrees not to claim that any such court is
not a convenient or appropriate forum.
The Parties shall accept service at their addresses specified in this
Section 11 in relation to proceedings brought in England and Wales.
REMEDIES.
The indemnification rights under Section 10 are independent of and in
addition to such rights and remedies as the Parties may have at law or
in equity or otherwise for any misrepresentation, breach of warranty or
failure to fulfill any agreement or covenant hereunder on the part of
any Party and the Parties hereby reserve the, inter alia, right to seek
an injunction or bring proceedings for specific performance.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
as of the day and year first written above.
THE BUYER:
USDATA Corporation
By:
---------------------------------------
Name: Xxxxxx X. Merry
Title: Chief Executive Officer
SHAREHOLDERS:
------------------------------------------
J. Xxxxxx Xxxx
------------------------------------------
Xxxxx X. Xxxxx
SCHEDULE A
THE SHARES
NAME OF SHAREHOLDER CLASS OF SHARES NUMBER OF SHARES
------------------- ------------------------- ------------------------------
Xxxx Xxxxxx Xxxx Ordinary Shares of 640,909
L.0.10 each
Xxxxx Xxxx Xxxxx Ordinary Shares of Pound 534,091
L.0.10 each
SCHEDULE B
EMPLOYMENT AGREEMENTS
SCHEDULE C
OMEGA FIRST AGREEMENT
SCHEDULE D
SOFTWARE ANSWERS
ACQUISITION AGREEMENT
SCHEDULE E
CONFIRMATION AGREEMENT
SCHEDULE F
SOFTWARE ANSWERS RELEASE OF LIENS
SCHEDULE G
PART 1
WIZARD SARL
SCHEDULE G
PART 2
WIZARD BV
SCHEDULE H
STOCKHOLDERS AGREEMENT
SCHEDULE I
SECURITYHOLDER'S CERTIFICATE
EXHIBIT I
