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EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
BY AND AMONG
XXXXXXXXX RESEARCH, INC.,
XXXX XXXXXXXX
AND
XXXXXXX XXXXX
Dated as of November 15, 1999
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TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE OF THE SHARES...........................................1
SECTION 1.1 Basic Transaction......................................1
SECTION 1.2 Purchase Price.........................................1
SECTION 1.3 The Closing............................................2
SECTION 1.4 Material Adverse Effect................................3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS.............................3
SECTION 2.1 Sellers................................................3
SECTION 2.2 Authority..............................................3
SECTION 2.3 Noncontravention.......................................3
SECTION 2.4 The Shares.............................................4
SECTION 2.5 Insolvency Matters.....................................4
SECTION 2.6 Regulation D Matters...................................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.....................5
SECTION 3.1 Organization and Qualification and Other Equity
Interests..............................................6
SECTION 3.2 [Intentionally Omitted]................................6
SECTION 3.3 Memorandum and Articles of Association.................6
SECTION 3.4 Capitalization.........................................6
SECTION 3.5 No Conflict; Required Filings and Consents.............7
SECTION 3.6 Compliance, Permits....................................7
SECTION 3.7 Financial Accounts.....................................8
SECTION 3.8 Absence of Certain Changes or Events...................9
SECTION 3.9 Pooling Matters........................................9
SECTION 3.10 No Undisclosed Liabilities...........................10
SECTION 3.11 Absence of Litigation................................10
SECTION 3.12 Employee Matters.....................................10
SECTION 3.13 Labor Matters........................................11
SECTION 3.14 Restrictions on Business Activities..................12
SECTION 3.15 Title to Property....................................12
SECTION 3.16 Taxes................................................12
SECTION 3.17 Environmental Matters................................17
SECTION 3.18 Intellectual Property................................18
SECTION 3.19 Insurance............................................20
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SECTION 3.20 Accounts Receivable..................................20
SECTION 3.21 [Intentionally Omitted]. ............................20
SECTION 3.22 Change in Control Payments...........................20
SECTION 3.23 Expenses.............................................20
SECTION 3.24 Insolvency Matters...................................21
SECTION 3.25 Predecessor Status, etc..............................22
SECTION 3.26 Delinquent and Wrongful Acts.........................22
SECTION 3.27 Transactions with Affiliates.........................22
SECTION 3.28 Full Disclosure......................................22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER..............................22
SECTION 4.1 Organization and Qualification; Subsidiaries..........22
SECTION 4.2 Charter and By-Laws...................................23
SECTION 4.3 Authority Relative to this Agreement..................23
SECTION 4.4 No Conflict, Required Filings and Consents............23
SECTION 4.5 SEC Filings; Financial Statements.....................24
SECTION 4.6 Absence of Litigation.................................24
SECTION 4.7 Brokers...............................................24
SECTION 4.8 Full Disclosure.......................................25
SECTION 4.9 Authorization and Reservation of Buyer Common Stock...25
SECTION 4.10 No Adverse Change....................................25
ARTICLE V
CONDUCT OF BUSINESS PENDING THE CLOSING..................................25
SECTION 5.1 Conduct of Business by the Company Pending the
Closing...............................................25
SECTION 5.2 No Solicitation.......................................27
ARTICLE VI
ADDITIONAL AGREEMENTS....................................................28
SECTION 6.1 Access to Information; Confidentiality................28
SECTION 6.2 Consents; Approvals; Further Actions..................28
SECTION 6.3 Notification of Certain Matters.......................28
SECTION 6.4 [Intentionally Omitted]...............................29
SECTION 6.5 Public Announcements..................................29
SECTION 6.6 Conveyance Taxes......................................29
SECTION 6.7 Pooling Accounting Treatment..........................29
SECTION 6.8 Listing of Buyer Common Stock.........................29
SECTION 6.9 Pooling Restrictions..................................29
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ARTICLE VII
CONDITIONS TO CLOSING....................................................31
SECTION 7.1 Conditions to Obligation of Each Party to Closing.....31
SECTION 7.2 Additional Conditions to Obligations of Buyer.........31
SECTION 7.3 Additional Conditions to Obligation of the Sellers....33
ARTICLE VIII
TERMINATION..............................................................34
SECTION 8.1 Termination...........................................34
SECTION 8.2 Effect of Termination.................................34
SECTION 8.3 Fees and Expenses.....................................35
ARTICLE IX
INDEMNIFICATION..........................................................35
SECTION 9.1 Survival of Representations and Warranties............35
SECTION 9.2 Indemnification by the Sellers........................36
SECTION 9.3 Indemnification by the Buyer..........................36
SECTION 9.4 Third Person Claims...................................36
SECTION 9.5 Limitations on Indemnification........................38
SECTION 9.6 Adjustment of Buyer Common Stock......................38
SECTION 9.7 No Contribution.......................................38
SECTION 9.8 No Offset Against Wages...............................38
SECTION 9.9 Sole and Exclusive Remedy.............................38
ARTICLE X
GENERAL PROVISIONS.......................................................39
SECTION 10.1 Survival,Etc.........................................39
SECTION 10.2 Notices..............................................39
SECTION 10.3 Certain Definitions..................................40
SECTION 10.4 Amendment............................................40
SECTION 10.5 Waiver...............................................40
SECTION 10.6 Headings.............................................40
SECTION 10.7 Severability.........................................41
SECTION 10.8 Entire Agreement.....................................41
SECTION 10.9 Assignment...........................................41
SECTION 10.10 Parties in Interest.................................41
SECTION 10.12 Failure or Indulgence Not Waiver; Remedies
Cumulative..........................................41
SECTION 10.13 Brokers.............................................42
SECTION 10.14 Governing Law.......................................42
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SECTION 10.15 Counterparts........................................42
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EXHIBIT LIST
Exhibit A Disclosure Letter
Exhibit 7.2(g) Form of Employment Agreement
Exhibit 7.2(h) Form of Noncompetition Agreement
Exhibit 7.2(i) Form of Option Exchange and Cancellation Agreement
Exhibit 7.2(j) Form of Release
Exhibit 7.3(f) Form of Registration Right Agreement
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is dated as of November 15, 1999 (this
"AGREEMENT"), among Xxxxxxxxx Research, Inc., a Delaware corporation (the
"BUYER"), and Xxxx Xxxxxxxx and Xxxxxxx Xxxxx (each a "SELLER" and collectively
the "SELLERS").
RECITALS
WHEREAS, the Buyer is a corporation organized and existing under the
laws of the State of Delaware;
WHEREAS, the Sellers are the beneficial owners and registered holders
of all of the issued shares (the "SHARES") in the capital of Xxxxxxxx Research
Limited, a limited liability company registered in England and Wales (with
registration number 3400112) (the "COMPANY");
WHEREAS, the Buyer desires to purchase the Shares from the Sellers, and
the Sellers desire to sell the Shares to the Buyer; and
WHEREAS, the payments provided for herein and the agreements set forth
herein constitute good and valuable consideration to the Sellers and the Sellers
acknowledge that the Buyer is relying upon the promises and indemnities made by
the Sellers herein as a material inducement to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
SECTION 1.1 Basic Transaction. Each of the Sellers hereby agrees to
sell to the Buyer, and the Buyer hereby agrees to purchase from the Sellers, at
the Closing, subject to and upon the terms and conditions contained herein, all
of the Shares held by such Seller.
SECTION 1.2 Purchase Price. The aggregate purchase price (the "PURCHASE
PRICE") which the Buyer shall pay for all of the Shares and the Company Option
(defined below), and in consideration of the agreements and covenants of the
Sellers contained herein, is $19,000,000 payable as provided below:
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(a) At the Closing, the Buyer shall issue to each of the Sellers in
respect of each Share held by such Seller the number of shares of common stock,
$0.01 par value per share, of the Buyer ("BUYER COMMON STOCK") equal to the
quotient of (x) $19,000,000 divided by the average of the closing prices of
Buyer Common Stock on the Nasdaq National Market (as reported in the Eastern
edition of THE WALL STREET JOURNAL) during the period of 30 trading days ending
on the second trading day immediately preceding the Closing Date (the "CLOSING
AVERAGE PRICE") DIVIDED BY (y) the sum of the number of Shares outstanding on
the Closing Date plus the number of Option Shares (defined below) for which the
Company Option (as defined below) would otherwise be exercisable upon
consummation of the transaction contemplated hereby.
(b) STOCK OPTIONS. At the Closing, Buyer will, in exchange for and in
respect of the option (the "COMPANY OPTION") to acquire shares (the "Option
Shares") of the Company held by Xxxxxx Xxxxxx pursuant to the Share Option
Agreement between the Company and Dowson (the "DOWSON AGREEMENT"), issue,
pursuant to the Amended and Restated Xxxxxxxxx Research, Inc. 1996 Equity
Incentive Plan (the "Equity Incentive Plan"), an option (the "NEW OPTION") to
acquire the number of shares of Buyer Common Stock equal to the product of (i)
the quotient of (x) $19,000,000 DIVIDED BY the Closing Average Price, DIVIDED BY
(y) the sum of the number of Shares outstanding on the Closing Date plus the
number of Option Shares for which the Company Option would otherwise be
exercisable upon consummation of the transaction contemplated hereby MULTIPLIED
BY (ii) the number of Option Shares for which the Company Option would otherwise
be exercisable upon consummation of the transactions contemplated hereby. The
exercise price per share of Buyer Common Stock (increased to the nearest whole
cent) issuable upon exercise of the New Option shall be equal to the aggregate
exercise price for the Company Option divided by the number of shares of Buyer
Common Stock into which the New Option will be exercisable as of the Closing
Date, subject to the terms and conditions of the Equity Incentive Plan.
SECTION 1.3 The Closing. The closing of the purchase and sale of the
Shares and the other transactions contemplated hereby (the "CLOSING") shall take
place at the offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, or at such other place as may be agreed to by the Buyer and
the Sellers, on November 15, 1999 or on such date not later than December 1,
1999 as may be agreed to by the Buyer and the Sellers (the "CLOSING DATE").
(a) At the Closing:
(i) the Sellers shall deliver, and shall cause the Company to
deliver, to the Buyer the various certificates, instruments and
documents referred to in Section 7.2 below;
(ii) the Buyer shall deliver to the Sellers the various
certificates, instruments and documents referred to in Section 7.3
below;
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(iii) the Sellers will deliver to the Buyer stock certificates
representing the Shares, accompanied by duly executed stock transfer
forms which effectively transfer beneficial ownership of the Shares to
Buyer; and
(iv) the Buyer shall deliver to the Sellers the Buyer Common
Stock issuable at the Closing, as required by Section 1.2(a).
SECTION 1.4 Material Adverse Effect. When used in connection with the
Company, or Buyer or any of its subsidiaries, as the case may be, the term
"MATERIAL ADVERSE EFFECT" means any change, effect or circumstance that,
individually or when taken together with all other such changes, effects or
circumstances that have occurred prior to the date of determination of the
occurrence of the Material Adverse Effect, (a) is or is likely to be materially
adverse to the business, properties, assets (including intangible assets),
prospects, financial condition or results of operations of the Company or Buyer
and its subsidiaries, as the case may be, in the case of the Buyer taken as a
whole, or (b) is or is delaying or preventing or is reasonably likely to delay
or prevent, the consummation of the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby represents and warrants to the Buyer, as to
himself but not as to any other Seller as follows:
SECTION 2.1 Sellers. Such Seller is an individual residing at the
address indicated on the signature page hereto.
SECTION 2.2 Authority. Such Seller has full power and authority to
execute and deliver this Agreement and to perform his obligations hereunder.
Such Seller has the right to transfer legal and beneficial title to the Shares
indicated on the signature page hereto. This Agreement has been duly and validly
executed and delivered by such Seller and, assuming the due authorization,
execution and delivery by the other parties hereto, constitutes the valid and
legally binding obligation of such Seller, enforceable against such Seller in
accordance with its terms. Such Seller need not give any notice to, make any
filing with or obtain any authorization, consent or approval of any government
or governmental agency or any other third party in order to consummate the
transactions contemplated by this Agreement.
SECTION 2.3 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statue, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which such Seller is
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subject or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel or require any notice under any
agreement, contract, lease, license, instrument or other legally binding
arrangement to which such Seller is a party or by which he is bound or to which
any of his assets is subject.
SECTION 2.4 The Shares. Such Seller is the registered holder of and
owns beneficially that number and type of the issued Shares of the Company
indicated below his name on the signature page hereto, free and clear of any
restrictions on transfer (other than restrictions under applicable securities
laws), mortgages, pledges, liens, encumbrances, charges, security interests,
options, warrants, purchase rights, contracts, commitments, equities, claims and
demands ("LIENS"). Such Seller is not a party to any option, warrant, purchase
right or other contract or commitment that could require such Seller to sell,
transfer or otherwise dispose of any capital stock of the Company (other than
this Agreement). Such Seller is not a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any capital stock of
the Company.
SECTION 2.5 Insolvency Matters.
(a) No bankruptcy order has been made in respect of such Seller or a
petition for such an order presented.
(b) No application has been made in respect of such Seller for an
interim order under Section 253 Insolvency Act.
(c) Such Seller is not unable to pay or to have no reasonable prospect
of being able to pay any debt as those expressions are defined in Section 268
Insolvency Act.
(d) No person has been appointed by the court to prepare a report in
respect of such Seller under Section 273 Insolvency Act.
(e) No interim receiver has been appointed of the property of such
Seller under Section 286 Insolvency Act.
(f) No unsatisfied judgment is outstanding against such Seller.
SECTION 2.6 Regulation D Matters.
(a) Such Seller is an "accredited investor" within the meaning of Rule
501(a) of Regulation D ("Regulation D") promulgated under the Securities Act of
1933, as amended (the "SECURITIES ACT").
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(b) Such Seller has sufficient knowledge and experience in financial
and business matters and is capable of evaluating the merits and risks of an
investment in Buyer Common Stock.
(c) Such Seller is acquiring the Buyer Common Stock for investment for
his own account and not with a view to, or for resale in connection with, any
unregistered distribution thereof and has no present intention to sell, convey,
dispose of or otherwise distribute any interest in or risk related to the Buyer
Common Stock issued hereunder except pursuant to an effective registration
statement or in a manner consistent with the requirements of the Securities Act
and the specific exemption from the registration requirements of the Securities
Act relied upon by Buyer. Such Seller understands that the Buyer Common Stock he
shall receive has not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Act which depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein.
(d) Such Seller confirms that he understands and has fully considered
for purposes of this investment the risks of this investment and that (i) this
investment is suitable only for an investor who is able to bear the economic
consequences of losing his entire investment, (ii) the Buyer Common Stock is a
speculative investment which involves a high degree of risk of loss by the
undersigned of his investment therein, and (iii) there are substantial
restrictions on the transferability of the Buyer Common Stock, and accordingly,
it may not be possible for the undersigned to liquidate his investment in the
case of emergency.
(e) Such Seller confirms that he is able (i) to bear the economic risk
of this investment, (ii) to hold the Buyer Common Stock for a substantial period
of time, and (iii) presently to afford a complete loss of his investment.
(f) Such Seller confirms that he and his representatives and advisors
have been given the opportunity to ask questions of, and to receive answers
from, persons acting on behalf of the Buyer concerning the terms and conditions
of the transactions contemplated by this Agreement and the business and
prospects of the Buyer, and to obtain any additional information, to the extent
such persons possess such information or can acquire it without unreasonable
effort or expense and without breach of confidentiality obligations, necessary
to verify the accuracy of the information set forth in Buyer's SEC Reports (as
defined below).
ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
Each of the Sellers, jointly and severally, makes the following
representations and warranties to Buyer:
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SECTION 3.1 Organization and Qualification and Other Equity Interests.
The Company is a limited company duly incorporated under English law and has the
requisite corporate power and authority necessary to carry on its business as it
is now being conducted. The Company is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not
reasonably be expected to have a Material Adverse Effect. The Company does not
have, and has never had, any Subsidiary, and, except as set forth in SECTION 3.1
of the Disclosure Letter attached hereto as EXHIBIT A (the "DISCLOSURE LETTER"),
the Company does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.
SECTION 3.2 [Intentionally Omitted].
SECTION 3.3 Memorandum and Articles of Association. Accurate
particulars of the Company are set out in SECTION 3.3 of the Disclosure Letter.
Attached to SECTION 3.3 are complete and correct copies of the Memorandum and
Articles of Association of the Company as amended to date. Such Memorandum and
Articles of Association are in full force and effect. The Company is not in
violation of any of the provisions of its Memorandum and Articles of
Association. The register of members and minute books previously made available
to the Buyer are complete and correct.
SECTION 3.4 Capitalization. The authorized share capital of the Company
consists of 100,000 ordinary shares (the "ORDINARY SHARES"), of which 10,000
shares are issued and outstanding. All of such shares have been validly issued
and fully paid and are held by the Sellers in the amounts specified below their
respective names on the signature pages hereto. No change in such capitalization
of the Company has occurred during the twenty-four-month period ending on the
date hereof. Except as described in SECTION 3.4 of the Disclosure Letter, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued share capital of
the Company or obligating the Company to issue or sell any share capital of, or
other equity interests in, the Company. Except as set forth in SECTION 3.4 of
the Disclosure Letter, the Company has never paid any dividends or redeemed any
shares of its capital stock. There are no obligations, contingent or otherwise,
of the Company to pay dividends or to repurchase, redeem or otherwise acquire
any share capital of the Company.
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SECTION 3.5 No Conflict; Required Filings and Consents.
(a) SECTION 3.5 of the Disclosure Letter includes a list of (i) all
loan agreements, indentures, mortgages, pledges, conditional sale or title
retention agreements, security agreements, equipment obligations, leases or
other similar obligations, guaranties, standby letters of credit, equipment
leases or lease purchase agreements or any similar agreement to which the
Company is a party or by which it is bound and (ii) all contracts, agreements,
commitments or other understandings or arrangements to which the Company is a
party or by which it or any of its properties or assets are bound or affected,
but excluding contracts, agreements, commitments or other understandings or
arrangements entered into in the ordinary course of business and involving, in
each case, payments or receipts by the Company of less than $10,000 in any
single instance but not more than $50,000 in the aggregate (collectively, the
"CONTRACTS").
(b) Except as set forth in Section 3.5(b) of the Disclosure Letter (i)
the Company has not breached, is not in default under, and has not received
written notice of any breach of or default under, any of the Contracts, (ii) to
the best knowledge of the Company or the Sellers, no other party to any of the
Contracts has breached or is in default of any of its obligations thereunder,
and (iii) each of the Contracts is in full force and effect, except in any such
case for breaches, defaults or failures to be in full force and effect that are
immaterial in amount and significance.
(c) The execution and delivery by the Sellers does not, and the
performance of this Agreement by the Sellers and the consummation of the
transactions contemplated hereby will not, (i) conflict with or violate the
Memorandum and Articles of Association of the Company, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree (collectively,
"LAWS") to which the Company is subject or by which any of its properties is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default
under), or impair the Company's rights or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Lien other
restriction on any of the properties or assets of the Company pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company is a party or
by which the Company or any of its properties is bound or affected, except in
any case for any such conflicts, violations, breaches, defaults or other
occurrences that could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.6 Compliance, Permits.
(a) The Company is not in conflict with, or in default or violation of
any Law applicable to the Company or by which any of its properties is bound or
affected.
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(b) The Company holds all permits, licenses, easements, variances,
exemptions, consents, certificates, orders and approvals from governmental
authorities which are necessary for the operation of the business of the Company
as it is now being conducted (collectively, the "COMPANY PERMITS"). The Company
is in compliance with the terms of the Company Permits, except where the failure
to so comply would not have a Material Adverse Effect.
SECTION 3.7 Financial Accounts.
(a) As used herein "Accounts" means the audited financial statements of
the Company, prepared in accordance with the Companies Acts, for the accounting
reference period ended on July 31, 1999 (the "ACCOUNTS DATE") each of which
financial statement comprises a balance sheet, profit and loss account, notes,
auditors' and directors' reports, a statement of the source and application of
funds or cash flow statement, a copy of which has for the purpose of
identification only been signed by the Sellers' accountants and delivered to the
Buyer and its legal counsel.
(b) The Accounts:
(i) were prepared in accordance with accountancy practices
generally accepted in the United Kingdom at the time they were audited
and commonly adopted by companies carrying on businesses similar to
those carried on by the Company;
(ii) are complete and accurate in all respects and in
particular include full provisions for bad and doubtful debts, for old
depreciated and unsaleable stock and for Taxation (as defined in
Section 3.16) on profits (whether of an income or capital nature)
relating to any period ending on or before the date to which they are
respectively made up;
(iii) show a true and fair view of the state of affairs of the
Company, at each accounting reference date to which the Accounts
relate; and
(iv) except as the Accounts expressly disclose, are not
affected by any unusual or non-recurring items.
(c) At the Accounts Date the Company did not have any liability
(whether actual, contingent, unquantified or disputed) or outstanding capital
commitment which is not adequately disclosed or provided for in the Accounts.
(d) The accounting records of the Company have been kept on a proper
and consistent basis, are up-to-date and contain complete and accurate details
of the business activities of the Company and of all matters required by the
Companies Acts to be entered in them.
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(e) An audited balance sheet of the Company as of the date of this
agreement and an audited profit and loss account of the Company for the period
from the Accounts Date up to the date of this agreement prepared on the same
policies, practices and bases as the Accounts would show that the net tangible
assets of the Company (after taking account of the profit or loss for the period
ending on the date of this agreement) would not be less than the net tangible
assets as at the Accounts Date shown in the Accounts and that the respective
levels of turnover (both by value and by volume) and the gross and net profit
margins were at least as high during the corresponding period in the preceding
year.
(f) Except as set forth in SECTION 3.7(f) of the Disclosure Letter, all
books debts shown in the Accounts have been realized for an aggregate sum not
being less than that shown in the Accounts and no indication has been received
that any debt now owing to the Company is bad or doubtful.
SECTION 3.8 Absence of Certain Changes or Events. Since the Accounts
Date, the Company has conducted its business in the ordinary course and there
has not occurred: (a) any Material Adverse Effect; (b) any amendments or changes
in the Memorandum and Articles of Association of the Company; (c) any damage to,
destruction or loss of any asset of the Company (whether or not covered by
insurance) that has had or is reasonably likely to have a Material Adverse
Effect; (d) any material change by the Company in its accounting methods,
principles or practices; (e) any material sale or revaluation by the Company of
any of its assets, including, without limitation, writing off notes or accounts
receivable other than in the ordinary course of business; (f) any sale of the
property or assets of the Company, except in the ordinary course of business;
(g) any termination, or modification, by any of the Company=s clients of its
business relationship with the Company or any receipt by the Company of notice
from any of its clients that it intends to, or is considering a termination or
material modification of its business relationship with the Company, other than
any such termination or modification that would not have a Material Adverse
Effect; or (h) any other action or event that would have required the consent of
Buyer pursuant to Section 5.1 had such action or event occurred after the date
of this Agreement.
SECTION 3.9 Pooling Matters. Except as set forth in SECTION 3.9 of the
Disclosure Letter, the Sellers represent and warrant as follows: (i) initial
contact made between the Sellers and Forrester with respect to the transaction
was on July 1, 1999, (ii) the Company is autonomous and has not been a
subsidiary or division of another company at any time during the two years
preceding the initiation date of the transaction contemplated hereby, (iii) at
the initiation date of the transaction contemplated hereby, neither the Company
nor any Seller had any investment or right to purchase an investment of any kind
in equity securities of Forrester, nor do any of them have any other business
relationship with Forrester, (iv) there were no changes in equity interests of
the Company during the two years preceding the initiation date of the
transaction, (v) the Company has not reacquired any of its ordinary shares for
the purposes of the transaction and none are planned during the period between
the date hereof and the Closing Date, (vi) the Company has not had any
significant disposals of assets during the
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two years preceding the initiation date and none are planned during the period
between the date hereof and the Closing Date and, (vii) none of the Sellers have
entered into any agreement that would restrict his voting rights with respect to
the Buyer Common Stock to be issued pursuant to this Agreement. The transaction
contemplated hereby is to be effected and completed at the Closing Date all as
set forth in this Agreement. The Sellers understand and acknowledge that the
accuracy of the representations in this Section may affect the ability of the
Buyer to account for the purchase of Shares as a pooling of interests. The
failure of this representation to be true and correct, shall, if the purchase of
the Shares is not able to be accounted for as a pooling of interests, constitute
a breach of this Agreement by the Company and the Sellers for the purposes of
Section 8.1(e).
SECTION 3.10 No Undisclosed Liabilities. To the best knowledge of the
Sellers, the Company has no liabilities or obligations of any nature (whether
known or unknown and whether absolute, accrued, contingent or otherwise), except
for liabilities or obligations (a) adequately reflected or reserved for in the
most recent Accounts, (b) current liabilities incurred since the Accounts Date
in the ordinary course of business consistent with past practice, or (c)
incurred in connection with this Agreement.
SECTION 3.11 Absence of Litigation. There are no claims, actions,
suits, proceedings or investigations pending or, to the best knowledge of the
Company or the Sellers, threatened against the Company or any properties or
rights of the Company before any federal, foreign, state or provincial court,
arbitrator or administrative, governmental or regulatory authority or body.
There are no claims pending or threatened against any of the Company or the
Sellers which would prevent or materially delay the consummation of the
transaction contemplated hereunder.
SECTION 3.12 Employee Matters.
(a) A list of the names, jobs and short details of the terms of
employment of every employee of the Company and the years of continuous service
for redundancy purposes of that employee are set out in SECTION 3.12(a) of the
Disclosure Letter.
(b) A list of the name, jobs and full details of the terms of
employment (including the emoluments) of every employee of the Company and of
every director who is also an employee (collectively "SENIOR EMPLOYEES") and the
years of continuous service for redundancy purposes of that employee, are set
out in SECTION 3.12(b)of the Disclosure Letter.
(c) Full particulars of the terms of all consultancy agreements with
the Company are contained in SECTION 3.12(c)of the Disclosure Letter.
(d) Full details of any benefit received by any Senior Employee
otherwise than in cash, and of any benefit received by any such employee in cash
which is related to sales,
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profits or performance, or which is otherwise variable (other than normal
overtime), are set out in SECTION 3.12(d)of the Disclosure Letter.
(e) Except as described in SECTION 3.12(e) of the Disclosure Letter and
except as may otherwise be provided in the Employment Agreements (as defined
below), any contract of employment with any director or employee to which the
Company is a party can be terminated by the Company without damages or
compensation (other than that payable by statute) by giving at any time only the
minimum period of notice applicable to that contract which is specified in
Section 86 of the Employment Rights Xxx 0000 of England and Wales.
(f) Except as set forth in SECTION 3.12(f) of the Disclosure Letter, no
director or employee of the Company has given notice terminating his contract of
employment or is under notice of dismissal and no amount due to or in respect of
any director or employee or former director or employee of the Company is in
arrears and unpaid other than his salary for the month current at the date of
this agreement.
(g) Except as set forth in SECTION 3.12(g) of the Disclosure Letter,
since the Accounts Date, no change has been made in the emoluments or other
terms of engagement of any directors or employee of the Company, and no such
change, and except for increases made in accordance with normal industry
practice no negotiation or request for such a change, is due or expected within
six months from the date of this agreement.
(h) Except in respect of any pension scheme described in SECTION
3.12(h) of the Disclosure Letter, the Company is not paying, and is not under
any liability (actual or contingent) to pay or secure (other than by payment of
employers' contributions under national insurance or social security
legislation), any pension or other benefit on retirement, death or disability or
on the attainment of a specified age or on the completion of a specified number
of year of service.
(i) Except as set forth in SECTION 3.12 (i) of the Disclosure Letter,
the Company has no outstanding undischarged liability to pay to any governmental
or regulatory authority in any jurisdiction any contribution, Taxation (as
defined in Section 3.16) or other impost arising in connection with the
employment or engagement of personnel by the Company.
(j) The Company has at all relevant times complied with all its
obligations under statute and otherwise concerning the health and safety at work
of its employees, and there are no claims capable of arising or threatened or
pending by any employee or third party in respect of any accident or injury
which are not fully covered by insurance.
SECTION 3.13 Labor Matters. (i) There are no controversies pending or,
to the best knowledge of the Company or the Sellers, threatened between the
Company and any of its employees; (ii) the Company is not a party to any
collective bargaining agreement or other labor union contract or similar
contract applicable to persons employed by the Company, nor
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does the Company or any Seller know of any activities or proceedings of any
labor union to organize any such employees; and (iii) neither the Company nor
any Seller has knowledge of any strikes, slowdowns, work stoppages, lockouts, or
threats thereof, by or with respect to any employees of the Company.
SECTION 3.14 Restrictions on Business Activities. Except for this
Agreement, or as set forth in Section 3.14 of the Disclosure Letter, to the best
of the Sellers' or the Company's knowledge, there is no agreement, judgement,
injunction, order or decree binding upon the Company or any other person which
has or could reasonably be expected to have the effect of prohibiting or
impairing any business practice of the Company as currently conducted or as
proposed to be conducted by the Company.
SECTION 3.15 Title to Property. The Company has good and marketable
title to all of its properties and assets, free and clear of all liens, charges
and encumbrances, except liens for taxes not yet due and payable and such liens
or other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby or
which would not have a Material Adverse Effect. SECTION 3.15 of the Disclosure
Letter sets forth a complete and correct list of all leases of real estate and
personal property (collectively "LEASES") to which the Company is a party. True
and complete copies of all Leases have been furnished to the Buyer. Except as
set forth in Section 3.15 of the Disclosure Letter, all of the Leases are in
good standing, valid and effective in accordance with their respective terms,
and there is not, to the knowledge of the Sellers and the Company, under any of
such leases, any existing default or event of default (or event which with
notice or lapse of time, or both, would constitute a default thereunder). Apart
from leases, the Company does not own any interest of any nature whatsoever in
any real property.
SECTION 3.16 Taxes. As used herein, "Tax/tax" or "Taxation" means and
includes all forms of taxation and statutory, governmental, supra-governmental,
state, principal, local governmental or municipal impositions, duties,
contributions and levies, in each case whether of the United Kingdom or
elsewhere and whenever imposed, and all penalties, charges, costs and interest
relating thereto and without limitation all employment taxes and any deductions
or withholdings of any sort;
(a) Except as set forth in SECTION 3.16(a) of the Disclosure Letter,
the Company has no liability in respect of Taxation (whether actual or
contingent) that is not fully disclosed or provided for in the Accounts and, in
particular, has no outstanding liability for:
(i) Taxation in any part of the world assessable or payable by
reference to profits, gains, income or distributions earned, received
or paid or arising or deemed to arise on or at any time prior to the
Accounts Date or in respect of any period starting before the Accounts
Date; or
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(ii) for purchase, value added, sales or other similar tax in
any part of the world referable to transactions effected on or before
the Accounts Date that is not provided for in full in the Accounts.
(b) The amount of the provision for deferred Taxation in respect of the
Company contained in the Accounts was, at the Accounts Date, adequate and fully
in accordance with accountancy practices generally accepted in the United
Kingdom and commonly adopted by companies carrying on businesses similar to
those carried on by the Company at the Accounts Date and, in particular, was in
accordance with SSAP 15 (or any replacement of it instituted by the Accounting
Standard Board prior to the Accounts Date).
(c) Except as set forth in SECTION 3.16(c) of the Disclosure Letter, if
all facts and circumstances which are now known to the Company or any of the
Sellers had been known at the time the Accounts were drawn up, the provision for
deferred Taxation that would be contained in the Accounts would be no greater
than the provision which is so contained.
(d) Except as set forth in SECTION 3.16(d) of the Disclosure Letter,
since the Accounts Date:
(i) the Company has not declared, made or paid any
distribution within the meaning of Section 209 ICTA 1988;
(ii) no accounting period of the Company has ended;
(iii) there has been no disposal of any asset (including
trading stock) or supply of any service or business facility of any
kind (including a loan of money or the letting, hiring or licensing of
any property whether tangible or intangible) in circumstances where the
consideration actually received or receivable for such disposal or
supply was less than the consideration which could be deemed to have
been received for tax purposes;
(iv) no event has occurred which will give rise to a tax
liability on the Company calculated by reference to deemed (as opposed
to actual) income, profits or gains or which will result in the Company
becoming liable to pay or bear a tax liability directly or primarily
chargeable against or attributable to another person, firm or company;
(v) no disposal has taken place or other event occurred which
will or may have the effect of crystallizing a liability to Taxation
which should have been but was not included in the provision for
deferred Taxation contained in the Accounts if such disposal or other
event had been planned or predicted at the Accounts Date;
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(vi) The Company has not made either any payment or incurred
any obligation to make a payment which will not be deductible in
computing trading profits for the purposes of corporation tax, or as a
management expense of an investment company;
(vii) the Company has not been a party to any transaction for
which any tax clearance provided for by statute has been or could have
been obtained; and
(viii) the Company has not paid or become liable to pay or
acted (directly or through an agent or other representative) in such
manner that it has incurred or will incur a liability to pay any
interest or penalty in connection with any tax or otherwise paid any
tax after its due date for payment or become liable to pay any tax the
due date for payment of which has passed or become prospectively liable
to pay any tax the due date for payment of which will be in the 30 days
after the date of this agreement.
(e) Except as set forth in SECTION 3.16(e) of the Disclosure Letter,
the Company has made or caused to be made all proper returns required to be
made, and has supplied or caused to be supplied all information required to be
supplied, to any revenue authority, including (but without limitation) the
Inland Revenue and HM Customs and Excise.
(f) Except as set forth in SECTION 3.16(f) of the Disclosure Letter,
there is no dispute or disagreement outstanding nor is any contemplated at the
date of this Agreement with any revenue authority regarding liability or
potential liability to any tax or duty (including in each case penalties or
interest) recoverable from the Company and, to the best knowledge of the
Sellers, there are no circumstances which make it likely that any such dispute
or disagreement will commence.
(g) Except as set forth in SECTION 3.16(g) of the Disclosure Letter,
the Company has sufficient records relating to past events, including any
elections made, to calculate with reasonable certainty the tax liability or
relief which would arise on any disposal or on the realization of any asset
owned at the Accounts Date by the Company or acquired by the Company since that
date but before completion.
(h) The Company has duly submitted all claims and disclaimers or
withdrawals of claims which have been assumed to have been made for the purposes
of the Accounts.
(i) The amount of tax chargeable on the Company during any accounting
period ending on or within six years before the Accounts Date has not, to any
material extent, depended on any concession, agreement, agreement or other
formal or informal arrangement with any revenue authority ("arrangements"),
including (but without limitation) the Inland Revenue or the Customs and Excise,
other than arrangements which are published by the relevant tax authority or
otherwise generally available to tax payers to whom such arrangements are
relevant.
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(j) The Company has not received any notice from any revenue authority,
including the Inland Revenue, which required or will or may require such member
to withhold tax from any payment made since the Accounts Date or which will or
may be made after the date of this agreement.
(k) The Company is not a "large company" within the meaning of
Regulation 3 of the Installment Payments Regulations.
(l) SECTION 3.16(l) of the Disclosure Letter contains full details of
all installment payments required to be made by the Company under the
Installment Payments Regulations since the Accounts Date and all of repayments
claimed by the Company under the Installment Payments Regulations since the
Accounts Date, all such payments or repayments have been duly made or received,
and the computation of each such payment or claim for repayment took full and
proper account of all relevant estimates and other information available to the
Company at the time when any such payment was required to be made or (as the
case may be) at the time when any such claim for repayment was submitted to the
Inland Revenue.
(m) The Company has sufficient books, documents, records and other
information to enable it promptly to comply in full with any notice served on it
under Regulations 10 or 11 of the Installment Payments Regulations in respect of
any accounting period commencing before Completion.
(n) Except as set forth in SECTION 3.16(n) of the Disclosure Letter, no
action has been taken by the Company before Completion such that the provisions
of Regulation 14 of the Installment Payments Regulations could have effect in
respect of the Company at any time.
(o) All documents which are required to be stamped and which are in the
possession of the Company or by virtue of which the Company has any right have
been duly stamped.
(p) Except as set forth in SECTION 3.16(p) of the Disclosure Letter,
since the Accounts Date the Company has not incurred any liability to stamp duty
reserve tax.
(q) Except as set forth in SECTION 3.16(q) of the Disclosure Letter,
the Company is registered for the purposes of VATA 1994 and has made, given,
obtained and kept in all material respects, complete, correct and up-to-date
returns, records, invoices and other documents appropriate or required for those
purposes and is not in arrears with any payments or returns due and has not been
required by the Commissioners of Customs and Excise to give security under
paragraph 4 of Schedule 11 VATA 1994.
(r) The Company has never been treated as a member of a group under
Section 43 VATA 1994 and no application has ever been made for the Company so to
be treated.
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(s) The Company has not, since the date 12 months before the Accounts
Date, been in default in respect of any prescribed accounting period as
mentioned in Section 59 or Section 59A VATA 1994.
(t) Full details of any claim made by the Company for bad debt relief
under Section 36 VATA 1994 have been disclosed in writing to the Buyer.
(u) The Company has not made an election to waive exemption in relation
to any land in accordance with paragraph 2 of Schedule 10 VATA 1994.
(v) SECTION 3.16(v) of the Disclosure Letter contains full details of
any assets of the Company to which the provisions of Part XV Value Added Tax
Regulations 1995 (the Capital Goods Scheme) apply and in particular:
(i) the identity (including, in the case of leasehold
property, the term of years), date of acquisition and cost of the
asset; and
(ii) the proportion of input tax for which credit has been
claimed (either provisionally or finally in a tax year and stating
which).
(w) The Company has not, at any time within the last six years, acted
as agent of any person not resident in the United Kingdom for the purposes of
Section 47 VATA 1994 or been appointed as a VAT representative of any person for
the purposes of Section 48 VATA 1994.
(x) All value added tax, import duty and other taxes or charges payable
to H.M. Customs and Excise upon the importation of goods and all excise duties
payable to H.M. Customs and Excise in respect of any assets (including trading
stock) imported, owned or used by the Company have been paid in full.
(y) On a disposal of all its assets by the Company:
(i) in the case of assets owned by the Company at the Accounts
Date, for a consideration equal to the value attributed to those assets
in preparing the Accounts; or
(ii) in the case of assets acquired since the Accounts Date,
for a consideration equal to the consideration given for those
acquisitions
then no liability or corporation tax on changeable gains would arise;
(z) Full particulars of each claim under Sections 152 or 153 TCGA 1992
made prior to the date of this agreement to which Section 154 TCGA 1992 applies
and which affects any asset which was owned by the Company on or after the
Accounts Date have (except where
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the held over gain is treated as having accrued prior to the Accounts Date) been
disclosed in writing to the Buyer.
(aa) Since 6 April 1965, the Company has not made repayment of share
capital to which Section 210(1) ICTA 1988 applies or issued any share capital or
other security as paid up otherwise than by the receipt of new consideration
within the meaning of Part VI ICTA 1988.
(bb) No part of the amount payable on redemption of any share capital
or security at part will be a distribution, as defined in ICTA 1988.
(cc) The Company is a close company as defined in ICTA 1988.
(dd) Neither the Company nor any Subsidiary has outstanding any loan to
which the provisions of Section 419 ICTA 1988 would apply (loans to
participators etc.).
(ee) The Company is not a close investment-holding company as defined
in Section 13A ICTA 1988.
(ff) To the best knowledge of the Sellers, the Company is not under any
obligation to make any future payment which will be prevented (whether on the
grounds of being a distribution or for any other reason) from being deductible
for corporation tax purposes, whether as a deduction in computing the profits of
a trade or as an expense of management or as a charge on income or as a
non-trading debit under Chapter II Part IV Finance Xxx 0000, by reason of any
statutory provision, other than Section 74(1)(f) ICTA 1988 (capital).
(gg) Except as set forth in SECTION 3.16(gg) of the Disclosure Letter,
the Company has made all deductions in respect, or on account, of any tax from
any payments made by it which it is obliged or entitled to make and has
accounted in full to the appropriate authority for all amounts so deducted.
(hh) The Company has not, at any time within the last six years,
acquired any asset from any other company which was, at the time of the
acquisition, a member of the same group of companies as that member for the
purposes of any tax.
(ii) The United Kingdom as the tax residence of the Company is the only
country whose tax authorities seek to charge tax on the worldwide profits or
gains of the Company and the Company has never paid tax on income profits or
gains to any tax authority in any other country.
SECTION 3.17 Environmental Matters. The Company: (i) has obtained all
approvals consents, authorizations, permits, licenses, permissions,
ratifications, waivers or exemptions, (collectively, the "ENVIRONMENTAL
APPROVALS") which are required to be obtained under all
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applicable laws (including common laws) or any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic materials or wastes
into ambient air, surface water, ground water, or land or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes by the Company or its respective agents ("ENVIRONMENTAL
LAWS"); (ii) is and has been in compliance with all terms and conditions of such
required Environmental Approvals, and also is and has been in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in applicable
Environmental Laws; and (iii) as of the date hereof, is not aware of nor has
received notice or communication of any past or present violations of
Environmental Laws or any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to give rise to any common
law or statutory liability, or otherwise form the basis of any claim, action,
suit or proceeding, against the Company based on or resulting from the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge or release into the
environment, of any pollutant, contaminant or hazardous or toxic material or
waste.
SECTION 3.18 Intellectual Property.
(a) Company Intellectual Property. The Company (i) has such right,
title and interest in and to the name under which it is incorporated as is
provided pursuant to the Company's registration as a limited liability company
under the laws of the United Kingdom; (ii) has received no notice of objections
to the Company's use of such name or any other name under which it conducts its
business; and (iii) has full rights to use each such name in the conduct of its
business in the United Kingdom as currently conducted. To the best knowledge of
the Sellers, no other Person has any right to use any such name in the conduct
of any similar business in the United Kingdom. Except as otherwise described in
SECTION 3.18 of the Disclosure Letter, the Company has all right, title and
interest in and to all (A) all inventions whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuance,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof; (B) all trademarks, service marks, trade dress, logos and trade names,
together with all adaptations, derivations, and combinations thereof and
including the goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; (C) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith; (D) all trade secrets and confidential business
information (including research and development, research reports and related
data, know-how, formulas, compositions, manufacturing and production processes
and techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals); (E) all computer software (including data and
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related documentation), except for computer software licensed from third
parties; (F) all other proprietary rights; and (G) all copies and tangible
embodiments thereof (in whatever form or medium) (the items described in clauses
(A) through (G) are referred to collectively as "INTELLECTUAL PROPERTY") used in
the conduct of its business and necessary for the ongoing conduct of such
business (the "COMPANY INTELLECTUAL PROPERTY"). SECTION 3.18(a) of the
Disclosure Letter lists all registered patents, trademarks, service marks,
copyrights and pending applications for the foregoing. To the best knowledge of
the Sellers, the Company has not interfered with, infringed upon,
misappropriated or violated any Intellectual Property rights of any third party,
and neither the Company, nor any of its directors or officers has ever received
any charge, complaint, claim, demand or notice alleging any such interference,
infringement, misappropriation or violation (including any claim that the
Company must license or refrain from using any Intellectual Property rights of
any third party). To the best knowledge of the Sellers, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with, any Company Intellectual Property. Except as disclosed in SECTION
3.18(a) of the Disclosure Letter, with respect to each item of Company
Intellectual Property: (A) the Company possesses all right, title and interest
in and to such item, free and clear of any Lien, license or other restriction;
(B) such item is not subject to any outstanding injunction, judgment, order,
decree, ruling or charge; (C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending, and the Company
has not received notice that any such action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is threatened, which
challenges the legality, validity, enforceability, use or ownership of such
item; and (D) the Company has never agreed to indemnify any person for or
against any interference, infringement, misappropriation or other conflict with
respect to such item.
(b) Licenses. SECTION 3.18(b) of the Disclosure Letter identifies (i)
each written license, sublicense, agreement or permission pursuant to which the
Company uses any Intellectual Property owned by a third party, except shrink
wrap software licenses (the "WRITTEN LICENSES") and (ii) each item of
Intellectual Property covered by the Written Licenses. The Sellers have
delivered to the Buyer true, correct and complete copies of all of the Written
Licenses, each as amended and in effect. With respect to each item of
Intellectual Property required to be identified on SECTION 3.18(b) of the
Disclosure Letter:
(A) the Written License covering such item is legal, valid,
binding, enforceable and in full force and effect;
(B) the Written License covering such item will continue to be
legal, valid, binding, enforceable and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby;
(C) the Company is not in material breach or default of the
Written License covering such item, and no event has occurred with
respect to the Company which with notice or the lapse of time would
constitute a material breach or default thereof or permit termination,
modification or acceleration thereunder;
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(D) to the best knowledge of the Sellers, no other party to
the Written License covering such item is in material breach or default
thereof, and no event has occurred which with notice or lapse of time
would constitute a material breach or default or permit termination,
modification or acceleration thereunder;
(E) neither the Company, nor, to the best knowledge of and the
Sellers, any other party to the Written License covering such item has
repudiated any provision thereof; and
(F) to the best knowledge of the Sellers, such item is not
subject to any material outstanding injunction, judgment, order,
decree, ruling or charge and no material action, suit, proceeding,
hearing, investigation, charge or complaint is pending, claimed,
demanded or threatened which challenges the legality, validity or
enforceability of such item.
SECTION 3.19 Insurance. SECTION 3.19 of the Disclosure Letter sets
forth a list of all fire and casualty, general liability, business interruption,
product liability, professional liability and sprinkler and water damage
insurance and other insurance policies maintained by the Company. All such
insurance is in character and amount at least equivalent to that carried by
persons engaged in similar businesses and subject to the same or similar perils
or hazards, and all such policies are with reputable insurance carriers, provide
full and adequate coverage for all normal risks incident to the business of the
Company and its respective properties and assets.
SECTION 3.20 Accounts Receivable. The accounts receivable of the
Company as reflected in the most recent Accounts, to the extent uncollected on
the date hereof and the accounts receivable reflected on the books of the
Company are valid and existing and represent monies due, and the Company has
made reserves adequate for receivables not collectible in the ordinary course of
business, and (subject to the aforesaid reserves) are subject to no refunds or
other adjustments and to no defenses, rights of setoff, assignments,
restrictions, encumbrances or conditions enforceable by third parties on or
affecting any thereof, except for such refunds, adjustments, defenses, rights of
setoff, assignments, restrictions, encumbrances or conditions as could not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.21 [Intentionally Omitted].
SECTION 3.22 Change in Control Payments. Except as set forth in SECTION
3.22 of the Disclosure Letter, the Company is neither a party nor subject to any
plan, program or agreement pursuant to which payments may be required or
acceleration of benefits may be required upon a change of control of the
Company.
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SECTION 3.23 Expenses. SECTION 3.23 of the Disclosure Letter sets forth
a description of all of the estimated expenses of the Company which the Company
expects to incur, or has incurred, in connection with the transactions
contemplated by this Agreement. SECTION 1.1
SECTION 3.24 Insolvency Matters.
(a) No order has been made and no resolution has been passed for the
winding up of the Company or for a provisional liquidator to be appointed in
respect of the Company and no petition has been presented and no meeting has
been convened for the purpose of winding up the Company.
(b) No administration order has been made and no petition for such an
order has been presented in respect of the Company.
(c) No receiver (which expression shall include an administrative
receiver) has been appointed in respect of the Company or all or any of its
assets.
(d) The Company is not insolvent, or unable to pay its debts within the
meaning of Section 123 Insolvency Act 1986 of England and Wales (the "INSOLVENCY
ACT"), or has stopped paying its debt as they fall due.
(e) No voluntary arrangement has been proposed under Section 1
Insolvency Act in respect of the Company.
(f) No event analogous to any of the foregoing has occurred in or
outside England.
(g) No unsatisfied judgment is outstanding against the Company.
(h) No guarantee, loan capital, borrowed money or interest is overdue
for payment, and no other obligation or indebtedness is outstanding which is
substantially overdue for performance or payment.
(i) No bankruptcy order has been made in respect of any of the Sellers
or a petition for such an order presented.
(j) No application has been made in respect of any of the Seller for an
interim order under Section 253 Insolvency Act.
(k) None of the Sellers are unable to pay or to have no reasonable
prospect of being able to pay any debt as those expressions are defined in
Section 268 Insolvency Act.
(l) No person has been appointed by the court to prepare a report in
respect of any of the Sellers under Section 273 Insolvency Act.
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(m) No interim receiver has been appointed of the property of any of
the Sellers under Section 286 Insolvency Act. (1)
SECTION 3.25 Predecessor Status, etc. Set forth in SECTION 3.25 of the
Disclosure Letter is a listing of all names of all predecessor companies of the
Company, including the names of any entities from whom the Company previously
acquired all or substantially all of the assets of such entity, or all or
substantially all of the assets of any division or line of business of such
entity. Except as disclosed in SECTION 3.25 of the Disclosure Letter, the
Company has not been a subsidiary or division of another corporation nor been a
part of an acquisition which was later rescinded. Except as set forth in SECTION
3.25 of the Disclosure Letter, neither the Company nor any of the Sellers has
owned any Buyer Common Stock nor has there been any sale or spin-off of
significant assets of the Company within the last two years other than in the
ordinary course of business.
SECTION 3.26 Delinquent and Wrongful Acts. The Company has not
committed or is liable for any criminal, illegal or unlawful act, and no claim
that it has or is remains outstanding against it.
SECTION 3.27 Transactions with Affiliates. Except as set forth in
SECTION 3.27 of the Disclosure Letter, neither any Seller nor any other
affiliate of the Company nor any member of the immediate family of any Seller or
any other affiliate of the Company (a) is a competitor, client or supplier of
the Company, (b) is a party to any Contract with the Company, (c) has any right
to or interest in any asset, tangible or intangible, which is used in the
operations of the Company or (d) has any indebtedness to or from the Company.
SECTION 3.28 Full Disclosure. No representation or warranty made by the
Sellers contained in this Agreement and no statement contained in any
certificate or schedule furnished or to be furnished by the Sellers to Buyer in,
or pursuant to the provisions of, this Agreement, including without limitation
the Disclosure Letter, contains or shall contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary, in the
light of the circumstances under which it was made, in order to make statements
herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer hereby represents and warrants to the Sellers that:
SECTION 4.1 Organization and Qualification; Subsidiaries. Each of Buyer
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority
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necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted. Each of
Buyer and its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.2 Charter and By-Laws. Buyer has heretofore furnished to the
Company a complete and correct copy of its Certificate of Incorporation and
Bylaws, as amended to date. Such Certification of Incorporation and By-Laws are
in full force and effect. Buyer is not in violation of any of the provisions of
its Certificate of Incorporation or By-Laws.
SECTION 4.3 Authority Relative to this Agreement. Buyer has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Buyer and
the consummation by Buyer of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of Buyer,
and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions contemplated thereby.
This Agreement has been duly and validly executed and delivered by Buyer and,
assuming the due authorization, execution and delivery by each of the other
parties hereto, constitutes a legal, valid and binding obligation of Buyer
enforceable against it in accordance with its terms.
SECTION 4.4 No Conflict, Required Filings and Consents.
(a) The execution and delivery of this Agreement by Buyer does not, and
the performance of this Agreement by Buyer will not, (i) conflict with or
violate the Certificate of Incorporation or By-Laws of Buyer, (ii) conflict with
or violate any law, rule, regulation, order, judgment or decree applicable to
Buyer or any of its subsidiaries or by which its or their respective properties
are bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or impair Buyer's or any of its subsidiaries' rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Buyer or
any of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Buyer or any of its subsidiaries is a party or by which
Buyer or any of its subsidiaries or its or any of their respective properties
are bound or affected, except in any such case for any such conflicts,
violations, breaches, defaults or other occurrences that could not reasonably be
expected to have a Material Adverse Effect.
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(b) The execution and delivery of this Agreement by Buyer does not, and
the performance of this Agreement by Buyer will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not have a Material Adverse Effect.
SECTION 4.5 SEC Filings; Financial Statements.
(a) Buyer has filed all forms, reports and documents required to be
filed with the Securities and Exchange Commission (the "SEC") and has heretofore
delivered to the Company, in the form filed with the SEC, (i) its Annual Report
on Form 10-K for the fiscal year ended December 31, 1998 (the "BUYER FORM
10-K"), (ii) its definitive proxy statement prepared in connection with its 1999
annual meeting of stockholders, (iii) all other reports or registration
statements filed by Buyer with the SEC since the date of the filing of the Buyer
Form 10-K, including without limitation, its Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, June 30 and September 30, 1999 and Current
Reports on Form 8-K, and (iv) all amendments and supplements to all such reports
and registration statements filed by Buyer with the SEC (collectively, the
"BUYER SEC REPORTS"). The Buyer SEC Reports (i) were prepared in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and applicable regulations thereunder and (ii)
did not at the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of Buyer's subsidiaries is required to file any forms, reports
or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Buyer SEC Reports has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto) and each fairly presents in all material respects the
consolidated financial position of Buyer and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
SECTION 4.6 Absence of Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the best knowledge of the Buyer,
threatened against the Buyer or any properties or rights of the Buyer before any
federal, foreign, state or provincial court,
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arbitrator or administrative, governmental or regulatory authority or body other
than such claims, actions, suits that could not reasonably be expected to have a
Material Adverse Effect.
SECTION 4.7 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission from the Buyer in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Buyer.
SECTION 4.8 Full Disclosure. No representation or warranty made by the
Buyer contained in this Agreement and no statement contained in any certificate
or schedule furnished or to be furnished by the Buyer to the Sellers in, or
pursuant to the provisions of, this Agreement contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make
such representation or warranty, in the light of the circumstances under which
it was made, not misleading.
SECTION 4.9 Authorization and Reservation of Buyer Common Stock. The
reservation and issuance of shares of Buyer Common Stock to be issued hereunder
hereby has been duly authorized by all necessary corporate action and, when
issued as contemplated by this Agreement, such shares of Buyer Common Stock will
be validly issued, fully paid and nonassessable.
SECTION 4.10 No Adverse Change. Since September 30, 1999, there has
been no material adverse change in the financial condition, results of
operations, assets, liabilities or business of Buyer and it subsidiaries, taken
as a whole other than general economic and securities market conditions.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE CLOSING
SECTION 5.1 Conduct of Business by the Company Pending the Closing. The
Sellers covenant and agree that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, unless Buyer shall otherwise agree in writing, the Sellers shall
cause the Company to, conduct its business only in, and the Sellers shall cause
the Company not to, take any action except in, the ordinary course of business
and in a manner consistent with past practice; and the Sellers shall cause the
Company to use all reasonable commercial efforts to preserve substantially
intact the business organization of the Company, to keep available the services
of the present officers, employees and consultants of the Company and to
preserve the present relationships of the Company with customers, suppliers and
other persons with which the Company has business relations. By way of
amplification and not limitation, except as contemplated by this Agreement, the
Sellers shall cause the Company not to, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, directly or
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indirectly do, or propose to do, any of the following without the prior written
consent of Buyer:
(a) amend or otherwise change the Memorandum or Articles of Association
of the Company; (1)
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company;
(c) sell, pledge, dispose of or encumber any assets (tangible or
intangible) of the Company except for (i) dispositions of obsolete or worthless
assets and (ii) sales of immaterial assets not in excess of $10,000 in the
aggregate;
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) amend the terms or change the period of exercisability
of, purchase, repurchase, redeem or otherwise acquire, any of its securities
including without limitation, Ordinary Shares or any option, warrant or right,
directly or indirectly, to acquire shares of Ordinary Shares, or propose to do
any of the foregoing;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof; (ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse or otherwise as an accommodation
become responsible for, the obligations of any person or, except in the ordinary
course of business consistent with past practice, make any loans or advances;
(iii) enter into or amend any material contract or agreement; (iv) authorize any
capital expenditures or purchase of fixed assets which are, in the aggregate, in
excess of $10,000 for the Company; or (v) enter into or amend any contract,
agreement, commitment or arrangement to effect any of the matters prohibited by
this Section 5.1(e);
(f) increase the compensation payable or to become payable to its
officers or employees, or grant any severance or termination pay to, or enter
into any employment or severance agreement with any director, officer or other
employee of the Company, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or
employees, except, in each case, as may be required by law;
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(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or
settle or compromise any material federal, state, local or foreign tax liability
or agree to an extension of a statute of limitations;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or reserved against in
the Accounts or incurred in the ordinary course of business and consistent with
past practice; or
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 5.1 (a) through (i) above, or any action which would make
any of the representations or warranties of the Sellers contained in this
Agreement untrue or incorrect or prevent the Sellers from performing or cause
the Sellers not to perform its covenants hereunder.
SECTION 5.2 No Solicitation.
(a) The Sellers shall not, and the Sellers shall cause the Company not
to, directly or indirectly, through any officer, director, employee,
representative or agent of the Company or any Seller, (i) solicit, initiate or
encourage the initiation of any inquiries or proposals regarding any merger,
sale of substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving the
Company other than the transactions contemplated by this Agreement (any of the
foregoing inquiries or proposals being referred to herein as an "ACQUISITION
PROPOSAL"), (ii) engage in negotiations or discussions concerning, or provide
any nonpublic information to any person relating to, any Acquisition Proposal or
(iii) agree to, approve or recommend any Acquisition Proposal.
(b) The Sellers shall and shall cause the Company to immediately notify
Buyer after receipt of any Acquisition Proposal, or any modification of or
amendment to any Acquisition Proposal, or any request for nonpublic information
relating to the Company in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company by any person or entity that
informs the Board of Directors of the Company that it is considering making, or
has made, an Acquisition Proposal. Such notice to Buyer shall be made orally and
in writing.
(c) The Sellers shall and shall cause the Company to immediately cease
and cause to be terminated any existing discussions or negotiations with any
persons (other than Buyer) conducted heretofore with respect to any of the
foregoing. The Sellers shall and shall cause
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the Company not to agree to release any third party from the confidentiality
provisions of any confidentiality agreement to which the Company is a party.
(d) The Sellers shall cause the Company to ensure that the officers,
directors, employees, representatives and agents of the Company and the Sellers
and any investment banker or other advisor or representative retained by the
Company or the Sellers are aware of the restrictions described in this Section
5.2.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Access to Information; Confidentiality. Upon reasonable
notice, and subject to reasonable confidentiality provisions, the Sellers shall
and shall cause the Company to afford to Buyer's officers, employees,
accountants, counsel and other representatives, reasonable access, during the
period from the date of this Agreement to the Closing, to all its properties,
books, contracts, commitments and records and, during such period, the Sellers
shall cause the Company to furnish promptly to Buyer all information concerning
its business, properties and personnel as Buyer may reasonably request, and
shall make available to Buyer the appropriate individuals (including attorneys,
accountants and other professionals) for discussion of its business, properties
and personnel as Buyer may reasonably request.
SECTION 6.2 Consents; Approvals; Further Actions. The Sellers and Buyer
shall each use their reasonable best efforts to obtain, and or the Sellers shall
cause the Company to obtain all consents, waivers, approvals, authorizations
(including, without limitation, all governmental and regulatory rulings and
approvals), and shall take or cause to be taken, all actions or cause to be
done, all other things necessary, and the Sellers and Buyer shall, and, before
the Closing the Sellers will cause the Company to, make all filings (including,
without limitation, all filings with governmental or regulatory agencies)
required in connection with the authorization, execution and delivery of this
Agreement by the Sellers and Buyer and the consummation by them of the
transactions contemplated hereby, in each case as promptly as practicable. The
Sellers and Buyer shall, and, before the Closing the Sellers will cause the
Company to, furnish promptly all information required to be included in any
application or other filing to be made pursuant to the rules and regulations of
any United States or foreign governmental body in connection with the
transactions contemplated by this Agreement.
SECTION 6.3 Notification of Certain Matters. Each of the Sellers shall
give prompt notice to Buyer, and Buyer shall give prompt notice to the Sellers,
of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
made by it contained in this Agreement to become materially untrue or
inaccurate, or (ii) any failure of it materially to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section shall not limit or otherwise affect the
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remedies available hereunder to the party receiving such notice; and provided
further that failure to give such notice shall not be treated as a breach of
covenant for the purposes of Sections 7.2(a) or 7.3(a) unless the failure to
give such notice results in material prejudice to the other party.
SECTION 6.4 [Intentionally Omitted].
SECTION 6.5 Public Announcements. The Buyer and the Sellers shall
consult with each other before issuing any press release with respect to the
transaction contemplated by this Agreement and shall not issue any such press
release or make any such public statement without the prior consent of the other
party, which shall not be unreasonably withheld; provided, however, that Buyer
may, without the prior consent of any of the Sellers, issue such press release
or make such public statement as may upon the advice of counsel be required by
law or the rules and regulations of the Nasdaq National Market if it has used
reasonable efforts to consult with the Sellers prior thereto.
SECTION 6.6 Conveyance Taxes. The Buyer and the Sellers shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated hereby that are
required or permitted to be filed at or before the Closing. Buyer shall pay all
UK stamp duty taxes for the transfer of the Shares to the Buyer.
SECTION 6.7 Pooling Accounting Treatment. Each of Buyer and the Sellers
agrees not to, and, before the Closing the Sellers agree to cause the Company
not to, take any action that to its knowledge could reasonably be expected to
adversely affect the ability of Buyer to treat the purchase of the Shares as a
pooling of interests, and each of Buyer and the Sellers agrees to, and, before
the Closing the Sellers agree to cause the Company to, take such action as may
be reasonably required to negate the impact of any past actions which to its
knowledge could reasonably be expected to adversely impact the ability of Buyer
to treat the purchase of the Shares as a pooling of interests. The taking by
Buyer, the Sellers or the Company of any action prohibited by the previous
sentence, or the failure of Buyer, the Sellers or the Company to take any action
required by the previous sentence, shall, if the purchase of the Shares is not
able to be accounted for as a pooling of interests, constitute a breach of this
Agreement by Buyer or the Sellers, as the case may be, for the purposes of
Section 8.1(e).
SECTION 6.8 Listing of Buyer Common Stock. Buyer shall cause the Buyer
Common Stock to be approved for quotation, upon official notice of issuance, on
the Nasdaq National Market.
SECTION 6.9 Pooling Restrictions.
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(a) The Buyer has informed the Sellers that it is a material factor to
the Buyer in entering into this Agreement that the transactions contemplated by
this Agreement be treated as a "pooling-of-interests" for accounting purposes.
Therefore, notwithstanding any other provision of this Agreement, prior to the
publication and dissemination by the Buyer of consolidated financial results
which include results of combined operations of the Company and the Buyer for at
least 30 days on a consolidated basis following the Closing Date, no Seller
shall sell or otherwise transfer or dispose of, or in any other way reduce his
risk relative to, any shares of the Buyer Common Stock received by him pursuant
hereto (including, by way of example and not limitation, engaging in put, call,
short-sale, straddle or similar market transactions). Accordingly, the
certificates evidencing the Buyer Common Stock to be received by the Sellers
will bear a legend substantially in the form set forth below:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED, AND XXXXXXXXX RESEARCH, INC. (THE "ISSUER")
SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED SALE, TRANSFER OR
ASSIGNMENT PRIOR TO THE PUBLICATION AND DISSEMINATION OF FINANCIAL
STATEMENTS BY THE ISSUER THAT INCLUDE THE RESULTS OF AT LEAST THIRTY
(30) DAYS OF COMBINED OPERATIONS OF THE ISSUER AND THE COMPANY ACQUIRED
BY THE ISSUER FOR WHICH THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED."
(b) The Buyer shall remove the forgoing legend from such certificates
(and any stop order placed with the transfer agent with respect thereto) upon
written request of the Sellers at any time after the requirements of Section 6.9
have been met.
(c) Each Seller covenants and agrees that he will jointly and severally
indemnify and hold harmless the Buyer from and after the Closing Date against
any and all losses, damages, liabilities, claims, deficiencies, costs, expenses
or expenditures resulting from a breach by either Seller of the restrictions set
forth in the this Section 6.9, or a breach of the Sellers' representations and
warranties set forth in this Agreement or in any document or certificate
delivered pursuant to this Agreement that relate specifically to the ability of
the Buyer to account for the transactions contemplated herein as
pooling-of-interests.
SECTION 6.10 SECURITIES ACT RESTRICTIONS.
(a) Each Seller understands that the shares of Buyer Common Stock being
issued to him pursuant to this Agreement are being issued pursuant to Regulation
D and that therefore, such Seller agrees to resell such Buyer Common Stock
pursuant to registration under the Securities Act or pursuant to an available
exemption from registration. Each Seller also agrees not to engage in hedging
transactions with regard to the Buyer Common Stock unless in compliance with the
Securities Act.
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(b) Certificates representing the Buyer Common Stock will bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION."
(c) The Buyer shall not register any sale, transfer or assignment of
the Buyer Common Stock not made in accordance with the provisions of Regulation
D, pursuant to registration under the Securities Act, or pursuant to an
available exemption from registration.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.1 Conditions to Obligation of Each Party to Closing. The
respective obligations of each party to consummate the purchase and sale of the
Shares at the Closing shall be subject to the satisfaction at or prior to the
Closing of the following conditions:
(a) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the purchase and sale of the Shares shall be in effect, nor
shall any proceeding brought by any administrative agency or commission or other
governmental authority or instrumentality, seeking any of the foregoing be
pending; and there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the sale
of the Shares, which makes the consummation of the sale of the Shares illegal;
and
(b) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by any governmental authority
or administrative agency before any governmental authority, administrative
agency or court of competent jurisdiction, nor shall there be in effect any
judgment, decree or order of any governmental authority, administrative agency
or court of competent jurisdiction, in either case, seeking to prohibit or limit
Buyer from exercising all material rights and privileges pertaining to its
ownership or operation of the Company following the Closing or the ownership or
operation by Buyer or any of its subsidiaries of all or a material portion of
the business or assets of Buyer or any of its subsidiaries, as a result of the
transactions contemplated by this Agreement.
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SECTION 7.2 Additional Conditions to Obligations of Buyer. The
obligation of Buyer to purchase the Shares at the Closing is also subject to the
following conditions:
(a) Representations and Warranties. The representations and warranties
of the Sellers contained in this Agreement shall have been true and correct at
and as of the date made and as of the Closing Date with the same effect as
though made on and as of the Closing Date. Buyer shall have received a
certificate to such effect signed by each of the Sellers;
(b) Agreements and Covenants. Each of the Sellers shall have performed
or complied with all agreements and covenants required by this Agreement to be
performed or complied with by the Sellers at or prior to the Closing, and Buyer
shall have received a certificate to such effect signed by each of the Sellers;
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by the
Sellers or the Company for the due authorization, execution and delivery of this
Agreement and the consummation by it of the transactions contemplated hereby
shall have been obtained and made by the Sellers or the Company;
(d) Proceedings Satisfactory. All actions, proceedings, instruments and
documents by the Sellers and the Company required to carry out this Agreement or
incidental hereto as they relate to the transactions contemplated by this
Agreement and all other related legal matters shall be reasonably satisfactory
to the Buyer and its counsel;
(e) No Material Adverse Effect. There shall not have occurred any
change which has resulted in a Material Adverse Effect and no event or
circumstances shall exist that may result in a Material Adverse Effect;
(f) Resignations. Resignations of each of the Sellers as directors of
the Company shall have been delivered to the Buyer;
(g) Employment Agreements. Each of Sellers and Xxxxxx Xxxxxx shall have
executed and delivered to the Company (with copies to the Buyer) an employment
agreement in substantially the form attached hereto as EXHIBIT 7.2(g)
(collectively, the "EMPLOYMENT AGREEMENTS");
(h) Noncompetition Agreements. Each of the Sellers and Xxxxxx Xxxxxx
shall have executed and delivered to Buyer and the Company a noncompetition
agreement in substantially the form attached hereto as EXHIBIT 7.2(h);
(i) Option Exchange and Cancellation Agreement. Xxxxxx Xxxxxx shall
have executed and delivered to Buyer and the Company an option exchange and
cancellation agreement in substantially the form attached hereto as EXHIBIT
7.2(i);
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(j) Opinion of Accountants. Buyer shall have received an opinion of
Xxxxxx Xxxxxxxx LLP, independent certified public accountants, to the effect
that the purchase of the Shares qualifies for pooling of interests accounting
treatment if consummated in accordance with this Agreement; (1)
(k) Release. Each of the Sellers shall have executed and delivered to
the Company (with copies to the Buyer) a release in substantially the form
attached hereto in EXHIBIT 7.2(k); and
(l) Related Transactions. All existing leases, agreements and
arrangements between the Company and any of the Sellers or any affiliate of any
of the Sellers shall either have been canceled or the terms thereof shall have
been renegotiated on a basis no less favorable to the Company than would be the
case if such transaction had been effected with an unrelated third party. The
Buyer shall have been satisfied that such leases, agreements and arrangements do
not affect its ability to account for this transaction or future acquisitions as
poolings of interest.
SECTION 7.3 Additional Conditions to Obligation of the Sellers. The
obligations of the Sellers to sell the Shares at the Closing are also subject to
the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Buyer contained in this Agreement shall have been true and correct as of
the date made and as of the Closing Date with the same effect as though made on
and as of the Closing Date. The Sellers shall have received a certificate to
such effect signed by the President and the Chief Financial Officer of the
Buyer;
(b) Agreements and Covenants. Buyer shall have performed or complied
with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing, and the Sellers shall have
received a certificate to such effect signed by the President or the Chief
Financial Officer of the Buyer;
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by the
Buyer for the authorization, execution and delivery of this Agreement and the
consummation by them of the transactions contemplated hereby shall have been
obtained and made by the Buyer; and
(d) Proceedings Satisfactory. All actions, proceedings, instruments and
documents by the Buyer required to carry out this Agreement or incidental hereto
as they relate to the transactions contemplated by this Agreement and all other
related legal matters shall be reasonably satisfactory to the Sellers and their
counsel.
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(e) Registration Rights Agreement. Buyer shall have executed and
delivered into a Registration Rights Agreement in substantially the form
attached hereto as EXHIBIT 7.3(e).
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written consent of the Buyer and the Sellers; or
(b) by either Buyer or the Sellers if the Closing shall not have been
consummated by December 1, 1999 (provided that the right to terminate this
Agreement under this Section 8.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before such date); or
(c) by either Buyer or the Sellers if a court of competent jurisdiction
or governmental, regulatory or administrative agency or commission shall have
issued a nonappealable final order, decree or ruling or taken any other action
having the effect of permanently restraining, enjoining or otherwise prohibiting
the purchase and sale of the Shares (provided that the right to terminate this
Agreement under this Section 8.1(c) shall not be available to any party who has
not complied with its obligations under Section 6.2 and such noncompliance
materially contributed to the issuance of any such order, decree or ruling or
the taking of such action); or
(d) by Buyer, (i) if any representation or warranty of or the Sellers
set forth in this Agreement shall be untrue when made, or (ii) upon a breach of
any covenant or agreement on the part of the Sellers set forth in this
Agreement, such that the conditions set forth in Section 7.2(a) or 7.2(b) would
not be satisfied (either (i) or (ii) above being a "TERMINATING BREACH"),
provided, that, if such Terminating Breach is curable prior to December 1, 1999
by the Sellers through the exercise of their or its reasonable best efforts and
for so long as the Sellers continue to exercise such reasonable best efforts,
Buyer may not terminate this Agreement under this Section 8.1(d); or
(e) by the Sellers, (i) if any representation or warranty of Buyer set
forth in this Agreement shall be untrue when made, or (ii) upon a breach by
Buyer of any covenant or agreement set forth in this Agreement, such that the
conditions set forth in Section 7.3(a) or 7.3(b) would not be satisfied (either
(i) or (ii) above being a "TERMINATING BREACH"), provided, that, if such
Terminating Breach is curable prior to December 1, 1999 by Buyer through the
exercise of its reasonable best efforts and for so long as Buyer continues to
exercise such reasonable best efforts, the Sellers may not terminate this
Agreement under this Section 8.1(e).
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SECTION 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, all obligations of the parties hereunder
shall terminate without any liability of any party to any other party (other
than with respect to the provisions of all of Articles 8 and 9, and Sections
10.1, 10.2, 10.7, 10.12 and 10.13, each of which shall survive any such
termination); provided, however, that no termination shall relieve any party
from any liability arising from or relating to breach prior to termination.
SECTION 8.3 Fees and Expenses. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses, whether or not the Closing occurs;
PROVIDED, HOWEVER, that the regular salary of employees of the Company who
worked on the transaction contemplated hereby payable in the ordinary course of
business and filing fees incurred by the Company, after the Closing, if any, to
change the name of the Company or to change the capitalization of the Company,
in each case after the Closing shall not be deemed to be expenses of the Sellers
for purposes of this Section 8.3. All legal, accounting, investment banking and
other fees and expenses typically borne by the Company and which are incurred by
the Company prior to the Closing (regardless of when accrued) in connection with
this Agreement and the transaction contemplated hereby shall be deemed to be
expenses of the Sellers,
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Survival of Representations and Warranties.
(a) The representations and warranties of the Sellers made in this
Agreement and in the documents and certificates delivered in connection herewith
shall survive the Closing for a period of one year from the Closing Date;
provided, however, that (i) the representations and warranties contained in
Sections 2.4, 2.5, 3.1, 3.3 and 3.4 shall survive indefinitely and (ii) the
representations and warranties that relate to Taxes, including without
limitation the representations and warranties set forth in Section 3.16, shall
survive until the expiration of the applicable statutes of limitations for such
Taxes (including any extensions thereof); provided, further, that
representations and warranties with respect to which a claim for indemnification
is made within the applicable survival period shall survive until such claim is
finally determined and paid.
(b) The representations and warranties of the Buyer made in this
Agreement and in the documents and certificates delivered in connection herewith
shall survive the Closing for a period of one year following the Closing Date,
provided, however, the representations and warranties contained in Sections 4.1,
4.2, 4.3 and 4.9 shall survive indefinitely; provided, further, that
representations and warranties with respect to which a claim for indemnification
is made within the applicable survival period shall survive until such claim is
finally determined and paid.
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(c) No claim for indemnification may be made with respect to a
representation and warranty after the expiration of the applicable survival
period, other than claims based on fraud.
SECTION 9.2 Indemnification by the Sellers. The Sellers, jointly and
severally, (each in his capacity as an indemnifying party, an "INDEMNIFYING
PARTY") covenants and agrees that he will indemnify, defend, protect, and hold
harmless the Buyer and the Company and each of their respective subsidiaries and
affiliates (each in its capacity as an indemnified party, an "INDEMNITEE") at
all times from and after the date of this Agreement from and against all claims,
damages, actions, suits, proceedings, demands, assessments, adjustments, costs
and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) (collectively "DAMAGES") incurred
by such Indemnitee as a result of or incident to:
(a) any breach of any representation or warranty of the Sellers set
forth herein or in any certificate or other document delivered in connection
herewith (as each such representation or warranty would read if all
qualifications as to materiality and knowledge were deleted therefrom) and any
misrepresentation in connection with this Agreement or the transactions
contemplated hereby;
(b) any breach or nonfulfillment by the Sellers, or any noncompliance
by the Sellers with, any covenant, agreement, or obligation contained herein or
in any certificate or other document delivered in connection herewith; and
(c) any Taxes of any kind arising out of activities of the Company
prior to the Closing Date or relating to or arising in connection with the
transfer of the Shares to the Buyer.
SECTION 9.3 Indemnification by the Buyer. The Buyer (in its capacity as
an indemnifying party, an "INDEMNIFYING PARTY") covenants and agrees that it
will indemnify, defend, protect and hold harmless each of the Sellers (each in
his capacity as an indemnified party, an "INDEMNITEE") at all times from and
after the date of this Agreement from and against all Damages incurred by such
Indemnitee as a result of or incident to:
(a) any breach of any representation or warranty of the Buyer set forth
herein or in any certificate or other document delivered in connection herewith
(as each such representation or warranty would read if all qualifications as to
materiality were deleted therefrom) and any misrepresentation in connection with
this Agreement or the transactions contemplated hereby; and
(b) any breach or nonfulfillment by the Buyer of, or noncompliance by
the Buyer with, any covenant, agreement or obligation contained herein or in any
certificate or other document delivered in connection herewith.
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SECTION 9.4 Third Person Claims. Promptly after an Indemnitee has
received notice of or has knowledge of any claim ("THIRD PARTY CLAIM") by a
person not a party to this Agreement (a "THIRD PERSON") or the commencement of
any action or proceeding by a Third Person, the Indemnitee shall, as a condition
precedent to a claim with respect thereto being made against an Indemnifying
Party, give the Indemnifying Party written notice of such claim or the
commencement of such action or proceeding; PROVIDED, HOWEVER, that the failure
to give such notice will not relieve such Indemnifying Party from liability
under this Section with respect to such claim, action or proceeding, except to
the extent that the Indemnifying Party has been actually prejudiced as a result
of such failure. Such notice shall state the nature and the basis of such claim
and a reasonable estimate of the amount thereof. The Indemnifying Party shall
have right to defend and settle, at its own expense and by its own counsel, any
such matter so long as (a) the Indemnifying Party notifies the Indemnitee in
writing within 15 days after the Indemnitee has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnitee against any
adverse consequences the Indemnitee may suffer as a result of, or relating to,
such Third Party Claim, (b) the Indemnifying Party provides the Indemnitee with
evidence reasonably acceptable to the Indemnitee that the Indemnifying Party
will have the financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (c) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable
relief, (d) settlement of, or an adverse judgment with respect to, the Third
Party Claim is not likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the Indemnified Party
or any of its subsidiaries, and (e) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently. If the Indemnifying Party
undertakes to defend or settle, it shall promptly notify the Indemnitee of its
intention to do so, and the Indemnitee shall cooperate with the Indemnifying
Party and its counsel in the defense thereof and in any settlement. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records or information reasonably requested
by the Indemnifying Party that are in the Indemnitee's possession or control.
Notwithstanding the foregoing, the Indemnitee shall have the right to
participate in any matter through counsel of its own choosing at its own expense
(unless there is a conflict of interest that prevents counsel for the
Indemnifying Party from representing Indemnitee, in which case the Indemnifying
Party will reimburse the Indemnitee for the expenses of its counsel); provided
that the Indemnifying Party's counsel shall always be lead counsel and shall
determine all litigation and settlement steps, strategy and the like. After the
Indemnifying Party has notified the Indemnitee of its intention to undertake to
defend or settle any such asserted liability, and for so long as the
Indemnifying Party diligently pursues such defense, the Indemnifying Party shall
not be liable for any additional legal expenses incurred by the Indemnitee in
connection with any defense or settlement of such asserted liability, except to
the extent such participation is requested by the Indemnifying Party or if there
is a conflict of interest that entitles Indemnitee to reimbursement as provided
above, in which events the Indemnitee shall be reimbursed by the Indemnifying
Party for reasonable additional legal expenses, out-of-pocket expenses and
allocable share of employee compensation incurred in connection with such
participation for any employee whose participation is so requested. If the
Indemnifying Party desires to accept a final and complete settlement of any such
Third Person claim and the Indemnitee unreasonably refuses to consent to such
settlement, then the Indemnifying Party's
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liability under this Section with respect to such Third Person claim shall be
limited to the amount so offered in settlement by said Third Person and the
Indemnitee shall reimburse the Indemnifying Party for any additional costs of
defense which it subsequently incurs with respect to such claim. If the
Indemnifying Party does not undertake to defend such matter to which the
Indemnitee is entitled to indemnification hereunder, or fails diligently to
pursue such defense, the Indemnitee may undertake such defense through counsel
of its choice, at the cost and expense of the Indemnifying Party, and the
Indemnitee may settle such matter, and the Indemnifying Party shall reimburse
the Indemnitee for the amount paid in such settlement and any other liabilities
or expenses incurred by the Indemnitee in connection therewith, provided,
however, that under no circumstances shall the Indemnitee settle any Third
Person claim without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld.
SECTION 9.5 Limitations on Indemnification.
(a) No Indemnified Party shall be entitled to indemnification under
this Article 9 for Damages for breaches of representations and warranties, other
than breach of any representation or warranty set forth in Section 3.9, until
the aggregate amount of such Damages incurred by such person or persons exceeds
$380,000 in which event such persons shall be entitled to indemnification only
for the aggregate cumulative amount of Damages above such limit;
(b) The maximum amount that any Seller shall individually be obligated
to pay to any Indemnified Party under this Article 9 for Damages for breaches of
representations and warranties, other than breach of any representation or
warranty set forth in Sections 2.4 or 3.9, shall be $5,700,000.
(c) Each Seller's liability for claims for indemnification under this
Article 9 for any breach of a representation or warranty set forth in Article 3
therefor shall be limited to 50% of the total amount of such claim.
SECTION 9.6 Adjustment of Buyer Common Stock. Each Seller shall pay all
claims for indemnification hereunder in shares of Buyer Common Stock to the
extent that he holds shares of Common Stock at the time (plus any dividends paid
on such shares between the Closing Date and the date of such payment). For
purposes of the indemnification payments, the Buyer Common Stock shall be valued
at the Closing Average Price. To the extent that the Sellers have insufficient
shares of Buyer Common Stock, the claim for indemnification shall be paid in
cash.
SECTION 9.7 No Contribution. The Sellers acknowledge and agree that
they shall not have and shall not exercise or assert any right of contribution,
indemnification, subrogation or other remedy or right against the Company in
connection with any indemnification, obligation or other liability to which they
may become subject under or in connection with this Agreement, or any
certificate or other document delivered in connection herewith.
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SECTION 9.8 No Offset Against Wages. The Buyer shall have no right of
offset of any claim for adjustment, or amounts payable by Sellers, under this
Article IX against any salary, wages or employee benefits payable to any Seller
pursuant to his Employment Agreement.
SECTION 9.9 Sole and Exclusive Remedy. Except as otherwise provided in
Section 6.9, the indemnification provided in this Article IV shall be the sole
and exclusive remedy available to any Indemnitee fee breach of representations
and warranties set forth in this Agreement.
ARTICLE X
GENERAL PROVISIONS
SECTION 9.10 Survival, Etc.
(a) The agreements set forth in Article 9 and Section 8.3 shall survive
independently.
(b) Any disclosure made with reference to one or more Sections of the
Seller Disclosure Letter shall be deemed disclosed only with respect to such
Section or Sections.
SECTION I.5 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
(a) If to the Buyer:
Xxxxxxxxx Research, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention:
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
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Telecopier No.: (000) 000-0000
(b) If to the Sellers, at such persons address shown on the signature
page hereto:
With a copy to:
OLSWANG
00 Xxxx Xxxx
Xxxxxx XX0X 0XX
Attention: Xxxxxxx Xxxxxx, Esq.
Telephone No.: 0000-000-0000
Telecopier No.: 0000-000-0000
SECTION 10.3 Certain Definitions. For purposes of this Agreement, the
term:
(a) "AFFILIATES" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person; including, without limitation, any
partnership or joint venture in which the first mentioned person (either alone,
or through or together with any other subsidiary) has, directly or indirectly,
an interest of 5% or more;
(b) "CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(c) "PERSON" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act); and
(d) "SUBSIDIARY" or "SUBSIDIARIES" of the Company, Buyer or any other
person means any corporation, partnership, joint venture or other legal entity
of which the Company, the Surviving Corporation, Buyer or such other person, as
the case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
SECTION 10.4 Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 10.5 Waiver. At any time prior to the Closing, any party hereto
may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with
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any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
SECTION 10.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
SECTION 10.8 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof.
SECTION 10.9 Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except that Buyer may assign all or any of its
rights hereunder to any wholly-owned subsidiary of the Buyer or by operation of
law provided that no such assignment shall relieve the Buyer of its obligations
hereunder and provided further that none of the Sellers' representations,
warranties, covenants or other obligations (including without limitation the
indemnification provisions of Article IX) under this Agreement may at any time
be assigned or transferred to, or be enforceable by, any person other than the
Buyer, a wholly-owned subsidiary of the Buyer or any other person specified in
Section 9.2.
SECTION 10.10 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, including, without limitation, by way of subrogation.
SECTION 10.11 Effect of Investigation; Best Knowledge.
(a) No investigation by the parties hereto in connection with this
Agreement or otherwise shall affect the representations and warranties of the
parties contained herein or in any certificate or other document delivered in
connection herewith and each such representation and warranty shall survive such
investigation.
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(b) When a representation or warranty contained herein or in any
certificate or other document delivered in connection herewith is made to the
"best knowledge" of a party, such party shall be deemed to know all facts and
circumstances that a reasonable investigation of the subject matter of such
representation or warranty would have revealed.
SECTION 10.12 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 10.13 Brokers. The Sellers shall pay all brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company or the
Sellers.
SECTION 10.14 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts
without giving effect to the conflict of laws principles thereof.
SECTION 10.15 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 10.16 Submission to Jurisdiction. Each of the Sellers and Buyer
(a) submits to the jurisdiction of any state or federal court sitting in The
Commonwealth of Massachusetts in any action or proceeding arising out of or
relating to this Agreement, (b) submits to the jurisdiction of any court sitting
in England in any action or proceeding arising out of or relating to this
Agreement, (c) agrees that all claims in respect of the action or proceeding may
be heard and determined in any such courts specified in clause (a) or clause (b)
of this Section 10.16 and (d) agrees not to bring any action or proceeding
arising out of or relating to this Agreement courts other than those specified
in clause (a) or clause (b) of this Section 10.16. Each of the Sellers and Buyer
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and any defense of improper venue. Each of the Sellers and
Buyer may make service on the other party by sending or delivering a copy of the
process to the entity to be served at the address and in the manner provided for
the giving of notices in Section 10.2. Nothing in this Section 10.16, however,
shall affect the right of any party to serve legal process in any other manner
permitted by law.
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IN WITNESS WHEREOF, the Buyer and the Sellers have caused this
Agreement to be executed as an instrument under seal as of the date first
written above.
XXXXXXXXX RESEARCH, INC.
/s/ Xxxxx X. Xxxxxx
By:__________________________________
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXX XXXXXXXX
/s/ Xxxx Xxxxxxxx
_____________________________________
Address:
No. of Ordinary Shares: 5,000
XXXXXXX XXXXX
/s/ Xxxxxxx Xxxxx
_____________________________________
Address:
No. of Ordinary Shares: 5,000
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EXHIBITS
Pursuant to Item 601(b)(2) of Regulation S-K, the exhibits to the Stock
Purchase Agreement have been omitted and the registrant agrees to furnish
supplementally a copy of such exhibits to the Commission upon request.
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