EXHIBIT 10.31
[The Registrant shall furnish supplementally a copy of any omitted schedule to
the Commission upon request.]
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") is dated as of April
15, 1996, among SQLSoft, Inc., a Washington corporation ("SQLSoft"), and Applied
Relational Information Systems, Inc., a Washington corporation ("ARIS"; ARIS and
SQLSoft sometimes being collectively referred to herein as the "Constituent
Corporations"); and the shareholders of SQLSoft set forth on the signature page
hereto, who collectively own all of the issued and outstanding shares of the no
par value common stock of SQLSoft, and are sometimes individually referred to
herein as a "Shareholder", and collectively as "Shareholders".
Each of the Constituent Corporations has adopted the plan of merger
embodied in this Agreement, and the Constituent Corporations and their
respective boards of directors deem it advisable and in the best interest of
each of the Constituent Corporations that SQLSoft be merged with and into ARIS
pursuant to the applicable laws of the State of Washington and Section 368 of
the Internal Revenue Code of 1986, as amended. To facilitate the merger and
this Agreement, Shareholders have agreed to undertake certain obligations, as
further provided herein.
In consideration of the foregoing and the representations, warranties,
covenants and agreements herein contained, the parties agree to merge on the
terms and conditions herein provided:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein,
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shall have the following meanings:
"Balance Sheet" means the balance sheet of SQLSoft as compiled by
Xxxxx Xxxxxxxx with respect to the Business dated as of December 31, 1995 (the
"Balance Sheet Date"), a copy of which is attached as Exhibit B.
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"Business" means the computer training and education services and any
other business or services provided by SQLSoft.
"Employment Agreements" means the Employment Agreement to be entered
into between ARIS and each Shareholder, in the forms attached as Exhibit C.
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"Intellectual Property Right" means any trademark, service xxxx,
registration thereof or application therefor, tradename, invention, patent,
patent application, trade secret, know-how, copyright, copyright registration,
application for copyright registration, or any other similar type of proprietary
intellectual property right, in each case which is owned or licensed by SQLSoft
and used or held for use in the Business.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Materials" means any work of authorship, including literary works
(including computer programs), pictorial works, graphic works (including logos
and designs), motion pictures, sound recordings and audiovisual works,
regardless of the nature of the material objects such as courseware, documents,
manuscripts, periodicals, disks, memory storage devices, tapes, film, and
phonorecords in which the works are embodied, that has been created by or used
by SQLSoft or has been or is being used by or for SQLSoft or in connection with
the Business.
"Material Adverse Change" means a material adverse change in the
business, assets, condition (financial or otherwise), result of operations or
prospects of the Business taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), business, assets, results, operations or
prospects of the Business taken as a whole.
"Operative Agreements" means this Agreement, the Shareholder
Agreement, the Option Agreement, and the Employment Agreements.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, a trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Shareholder Agreement" means the Shareholder Agreement among ARIS,
the existing shareholders of ARIS, and the Shareholders, in the form of Exhibit
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D.
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(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
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ARIS Securities 6.01(b)
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Assets 5.08(c)
Clarity Securities 5.01(b)
Closing 4.01
Closing Date 4.01
Contracts 5.12
Effective Date 2.02
Financial Statements 5.06
Indemnified Party 12.03
Indemnifying Party 12.03
Loss 12.02
Merger 2.01
Other Consent 5.05
Permit 5.13
Permitted Lien 5.08
Real Property 5.08
Required Consent 5.05
SBA Approval 6.03
Transferred Employee 10.01
ARTICLE II
PLAN OF MERGER
Section 2.01. Merger . Upon the terms and subject to the conditions of
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this Agreement, SQLSoft shall be merged with and into ARIS in accordance with
the applicable laws of the State of Washington (the "Merger"). ARIS shall be
the surviving corporation and shall be governed by the laws of the State of
Washington.
Section 2.02 Effective Date. The "Effective Date" of the Merger shall be
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12:01 a.m., April 1, 1996.
Section 2.03 Share Conversion. On the Effective Date, by virtue of the
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Merger and without any action on the part of the holders thereof, all
outstanding shares of the common stock of SQLSoft, no par value per share,
shall be canceled, and, in exchange therefore, each Shareholder shall receive
10.12964 shares (rounded to the nearest whole share and subject to any
adjustment pursuant to Section 5.01(b) hereof), of the common stockno par value
per share, of ARIS, for each share of SQLSoft common stock held by such
Shareholder. As a result of the Merger, a total of 353,950 shares of ARIS no
par value common stock will be exchanged for 34,942 shares of the no par value
common stock of SQLSoft.
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ARTICLE III
EFFECT OF MERGER
Section 3.01 Rights, Privileges, Etc. On the Effective Date, ARIS,
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without further act, deed or other transfer, shall retain or succeed to, as the
case may be, and possess and be vested with all the rights, privileges,
immunities, powers, franchises and authority, of a public as well as of a
private nature, of the Constituent Corporations; all property of every
description and every interest therein and all debts and other obligations of or
belonging to or due to the Constituent Corporations on whatever account shall
thereafter be taken and deemed to be held by or transferred to, as the case may
be, or vested in ARIS without further act or deed; title to any real estate, or
any interest therein, vested in the Constituent Corporations shall not revert or
in any way be impaired by reason of the Merger; and all of the rights of
creditors of the Constituent Corporations shall be preserved unimpaired, and all
liens upon the property of the Constituent Corporations shall be preserved
unimpaired, and such debts, liabilities, obligations and duties of the
Constituent Corporations shall thenceforth remain with or attach to, as the case
may be, ARIS and may be enforced against it to the same extent as if all of such
debts, liabilities, obligations and duties had been incurred or contracted by
it.
Section 3.02 Articles of Incorporation and Bylaws. The Articles of
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Incorporation of ARIS as in effect on the Effective Date shall, from and after
the Effective Date, be and continue to be the Articles of Incorporation of ARIS
without change or amendment until thereafter amended in accordance with the
provisions thereof and applicable laws. The Bylaws of ARIS as in effect on the
Effective Date shall, from and after the Effective Date, be and continue to be
the Bylaws of ARIS without change or amendment until thereafter amended in
accordance with the provisions thereof, the Articles of Incorporation of ARIS
and applicable laws.
Section 3.03 Directors and Officers. The directors and officers of the
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surviving corporation shall be the persons listed on Exhibit E to this
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Agreement, until their successors shall have been elected and qualified.
Section 3.04 Further Action. From time to time, as and when requested by
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ARIS, or by its successors or assigns, any party hereto shall execute and
deliver or cause to be executed and delivered all such deeds and other
instruments, and shall take or cause to be taken all such further or other
actions, as ARIS, or its successors or assigns, may deem necessary or desirable
in order to vest in and confirm to ARIS, and its successors or assigns, title to
and possession of all the property, rights, privileges, powers and franchises
referred to herein and otherwise to carry out the intent and purposes of this
Agreement.
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ARTICLE IV
CLOSING
Section 4.01. Closing. The "Closing" of the Merger and the transactions
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contemplated thereby shall be May 1,1996 at 12:01a.m. (the "Closing Date") at
the principal offices of ARIS, or at such other time and place as SQLSoft and
ARIS may agree. At the Closing:
(a) Each Shareholder shall receive a share certificate representing
the number of shares of the common stock of ARIS set forth opposite their
respective names on the attached Exhibit F.
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(c) Shareholders shall enter into and deliver the Employment
Agreements to ARIS.
(d) Shareholders shall enter into the Shareholders Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF SQLSOFT AND SHAREHOLDERS
SQLSoft and each Shareholder represents and warrants to ARIS that:
5.01 Corporate Existence and Power; Capitalization. (a) SQLSoft is a
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corporation duly incorporated, validly existing and in good standing under the
laws of the state of Washington, and has all corporate power and all
governmental licenses, authorizations, consents, permits and approvals required
to carry on the Business as now conducted. SQLSoft is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities make such qualification necessary. SQLSoft has heretofore delivered
to ARIS true and complete copies of the certificate of incorporation and bylaws
of SQLSoft as currently in effect.
(b) The authorized capital of SQLSoft consists of 300,000 authorized
shares, no par value per share. As of the Closing date, there will be
outstanding 34,942 shares of the common stock of SQLSoft. All outstanding
shares of capital stock of SQLSoft have been duly authorized and validly issued
and are fully paid. Except as set forth in this Section, there are no
outstanding (i) shares of capital stock or other voting securities of SQLSoft,
(ii) securities of SQLSoft convertible into or exchangeable for share of capital
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stock or voting securities of SQLSoft or (iii) options or other rights to
acquire from SQLSoft, and there is no obligation for SQLSoft to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of SQLSoft (collectively, "SQLSoft
Securities"), other than the SQLSoft Securities to be issued to Xxxx Xxxxx and
Xxxxx Xxxxxxxx. There are no outstanding obligations of SQLSoft to issue or
deliver or to repurchase, redeem or otherwise acquire any SQLSoft Securities,
other than as set forth herein. Shareholders are and will be at the Closing the
record and beneficial owners of the common stock of SQLSoft, free and clear of
any Liens, and will transfer and deliver to ARIS at the Closing valid title to
such common stock free and clear of any Lien.
5.02 Corporate Authorization. The execution, delivery and
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performance by SQLSoft of this Agreement and the consummation by SQLSoft of the
transactions contemplated hereby are within SQLSoft's corporate powers and have
been duly authorized by all necessary corporate action on the part of the
SQLSoft. This Agreement constitutes a binding and valid agreement of SQLSoft.
5.03 Governmental Authorization. The execution, delivery and
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performance by SQLSoft of this Agreement require no action by or in respect of,
or filing with, any governmental body, agency, official or authority.
5.04 Noncontravention. The execution, delivery and performance by
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SQLSoft of this Agreement do not and will not (i) contravene or conflict with
the certificate of incorporation or bylaws of SQLSoft, (ii) assuming compliance
with the matters referred to in Section 5.03, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to SQLSoft or the
Business; (iii) assuming the obtaining of all Required and Other Consents,
constitute a default under or give rise to any right of termination,
cancellation, or acceleration of any right or obligation of ARIS or to a loss of
any benefit relating to the Business to which SQLSoft is entitled under any
provision of any agreement, contract or other instrument binding upon SQLSoft or
any license, franchise, permit or other similar authorization held by SQLSoft or
(iv) result in the creation or imposition of any Lien on any Asset, other than
the Permitted Liens.
5.05. Required and Other Consents. (a) Schedule 5.05(a) sets forth each
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agreement, contract or other instrument binding upon SQLSoft or any license,
franchise, permit or other similar authorization held by SQLSoft, requiring a
consent as a result of the execution, delivery and performance of this Agreement
or the Merger that if not received by the Closing Date may have a Material
Adverse Effect (each such consent, a "Required Consent" and together the
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"Required Consents").
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(b) Schedule 5.05(b) sets forth every other consent (each such
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Consent, an "Other Consent" and together the "Other Consents") under such
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agreements,
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contracts or other instruments or such licenses, franchises, permits or other
similar authorizations that is necessary with respect to the execution, delivery
and performance of this Agreement and the consummation of the Merger.
5.06. Financial Statements. The unaudited Balance Sheet and the related
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statements of income, cash flows and retained earnings for the Business taken as
a whole for the years ended December 31, 1995, December 31, 1994 and December
31, 1993, the projected balance sheet relating to the Business for the quarter
ending March 31, 1996, (collectively, the "Financial Statements") of the
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Business fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), the financial position of the Business taken as a whole as of
the dates thereof and its results of operations and cash flows for the periods
then ended.
5.07. Absence of Certain Changes. Since the Balance Sheet Date, SQLSoft
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has conducted the Business in the ordinary course consistent with past
practices, and there has not been:
(a) any Material Adverse Change or any event, occurrence, development
or state of circumstances or facts which could reasonably be expected to result
in a Material Adverse Change;
(b) any incurrence, assumption or guarantee by SQLSoft of any
indebtedness for borrowed money with respect to the Business other than in the
ordinary course of business and in amounts and on terms consistent with past
practices;
(c) any creation or assumption by SQLSoft of any Lien on any Asset
other than in the ordinary course of business consistent with past practices;
(d) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Business or any Asset which, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect;
(e) any transaction or commitment made, or any contract or agreement
entered into, by SQLSoft relating to the Business or any Asset (including the
acquisition or disposition of any assets) or any relinquishment by SQLSoft of
any contract or other right, in either case, material to the Business taken as a
whole, other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement;
(f) any change in any method of accounting or accounting practice by
SQLSoft with respect to the Business;
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(g) any (i) grant of any severance or termination pay to any employee
of the Business, (ii) entering into of any similar agreement (or any amendment
to any such existing agreement) with any employee of the Business, (iii)
increase in benefits payable under an existing severance or termination pay
policies or employment agreements or (iv) increase in compensation, bonus or
other benefits payable to employees of the Business; or
(h) any capital expenditure, or commitment for a capital expenditure,
or additions or improvements to property, plant and equipment.
5.08. Properties. (a) Schedule 5.08(a) correctly describes all real
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property used in the Business included in the Assets (the "Real Property"),
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which SQLSoft owns, leases or subleases, any title insurance policies and
surveys with respect thereto, and any Liens thereon, specifying in the case of
leases or subleases, the name of the lessor or sublessor, the lease term and
basic annual rent.
(b) Schedule 5.08(b) correctly describes all personal property used
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in the Business included in the Assets, including but not limited to the
Materials, equipment, furniture, vehicles, spare and replacement parts, and
other trade fixtures and fixed assets, which SQLSoft owns, leases or subleases,
and any Liens thereon, specifying in the case of leases or subleases, the name
of the lessor or sublessor, the lease term and basic annual rent.
(c) (i) SQLSoft has good and marketable, indefeasible, fee simple
title to, or in the case of leased Real Property has valid leasehold interests
in, all Assets (whether real, personal, tangible or intangible) reflected on the
Balance Sheet or acquired after the Balance Sheet Date (the "Assets"), except
for the properties and assets sold since the Balance Sheet Date in the ordinary
course of business consistent with past practices.
(ii) All leases of Real Property or personal property are in
good standing and are valid, binding and enforceable in accordance with their
respective terms, and there does not exist under any such lease of real property
or personal property any material default or any event which with notice or
lapse of time or both would constitute a material default.
(d) No Asset is subject to any Lien, except:
(i) Liens disclosed on the Balance Sheet;
(ii) Liens for taxes not yet due or being contested in good
faith (and for which adequate accruals or reserves have been established on the
Balance Sheet); or
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(iii) Liens which do not materially detract from the value of
such Asset as now used, or materially interfere with any present or intended use
of such Asset (clauses (i), (ii) and (iii) are, collectively, the "Permitted
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Liens").
5.09. Sufficiency of and Title to the Assets. The Assets constitute, and
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on the Closing Date will constitute, all of the assets or property used or held
for use in the Business. Upon consummation of the transactions contemplated
hereby, ARIS will have acquired good and marketable title in and to, or a valid
leasehold interest in, each of the Assets, free and clear of all Liens, except
for Permitted Liens.
5.10. No Undisclosed Material Liabilities. There are no liabilities of
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the Business of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability, other than (i) liabilities disclosed or provided for in
the Balance Sheet; and (ii) liabilities incurred in the ordinary course of
business consistent with past practice since the Balance Sheet Date, which in
the aggregate are not material to the Business, taken as a whole.
5.11. Litigation. Except as set forth on Schedule 5.11, there is no
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action, suit, investigation or proceeding (or any basis therefor) pending
against, or to the knowledge of SQLSoft, threatened against or affecting, the
Business or any Asset before any court or arbitrator or any governmental body,
agency or official which, if determined or resolved adversely in accordance with
the plaintiff's demands would reasonably be expected to have a Material Adverse
Effect or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated hereby.
5.12. Material Contracts. (a) Except for the Contracts disclosed in
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Schedule 5.12 or any other Schedule to this Agreement, with respect to the
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Business, SQLSoft is not a party to or subject to:
(i) any lease;
(ii) any contract for the purchase of materials, supplies,
goods, services, equipment or other assets;
(iii) any sales, distribution or other similar agreement
providing for the sale by SQLSoft of materials, supplies, goods, services,
equipment or other assets;
(iv) any partnership, joint venture or other similar contract
arrangement or agreement;
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(v) any contract relating to indebtedness for borrowed money
or the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by any asset);
(vi) any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by SQLSoft;
(vii) any agency, dealer, sales representative or other similar
agreement;
(viii) any contract or other document that substantially limits
the freedom of SQLSoft to compete in any line of business or with any
Person or in any area or which would so limit the freedom of the ARIS after
the Closing Date;
(ix) any contract or other document with respect to
confidential and proprietary information or other non-disclosure
obligations; or
(x) any other contract or commitment not made in the ordinary
course of business which is material to the Business taken as a whole.
(b) Each Contract disclosed in any Schedule to this Agreement or
required to be disclosed pursuant to Section 5.12(a) is a valid and binding
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agreement of SQLSoft and is in full force and effect, and neither SQLSoft nor,
to the knowledge of SQLSoft, any other party thereto is in default in any
material respect under the terms of any such Contract.
5.13. Licenses and Permits. Schedule 5.13 correctly describes each
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license, permit or other governmental authorization affecting, or relating in
any way to, the Business, together with the name of the government agency or
entity issuing such license or permit (the "Permits"). Such Permits are valid
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and in full force and effect and, assuming the related Required Consents and
Other Consents have been obtained prior to the Closing Date, are transferable by
SQLSoft. Except as set forth on Schedule 5.13, none of such Permits will,
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assuming the related Required Consents and Other Consents have been obtained
prior to the Closing Date, be terminated or impaired or become terminable as a
result of the transactions contemplated hereby, and upon consummation of such
transactions, ARIS, will have all of the right, title and interest therein.
5.14. Insurance Coverage. Schedule 5.14 lists all insurance policies
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covering the Assets, the operations of the Business and SQLSoft's employees
(including any professional liability and errors and omissions coverage with
respect to SQLSoft consultants), copies of which have been furnished to ARIS.
All premiums payable under all such policies and bonds have been paid and
SQLSoft is otherwise in full compliance with the terms and conditions of all
such policies.
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5.15. Compliance with Laws. SQLSoft is not in violation of any applicable
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provisions of any laws, statutes, ordinances or regulations applicable to the
conduct of the Business.
5.16. Inventories. The inventories set forth in the Balance Sheet were
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properly stated therein at the lesser of cost or fair market value determined in
accordance with generally accepted accounting principles consistently maintained
and applied by SQLSoft. Since the Balance Sheet Date, the inventories related
to the Business have been maintained in the ordinary course of business. All
such inventory is owned free and clear of all Liens.
5.17. Receivables. All accounts, notes receivable and other receivables
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(other than receivables collected since the Balance Sheet Date) reflected on the
Balance Sheet are, and all accounts and notes receivable arising from or
otherwise relating to the Business at the Closing Date will be, valid, genuine
and fully collectible in the aggregate amount thereof, subject to normal and
customary trade discounts, less any reserves for doubtful accounts recorded on
the Balance Sheet. All accounts, notes receivable and other receivables arising
out of or relating to the Business at the Balance Sheet Date have been included
in the Balance Sheet, and all accounts, notes receivable and other receivables
arising out of or relating to the Business at the Closing Date will be included
in the Closing Balance Sheet, in accordance with generally accepted accounting
principles applied on a consistent basis.
5.18. Intellectual Property. (a) Schedule 5.18 sets forth a list of all
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Intellectual Property Rights, specifying as to each, as applicable: (i) the
nature of such Intellectual Property Right; (ii) the owner of such Intellectual
Property Right; (iii) the jurisdictions by or in which such Intellectual
Property Right is recognized without regard to registration or has been issued
or registered or in which an application for such issuance or registration has
been filed, including the respective registration or application numbers; and
(iv) material licenses, sublicenses and other agreements as to which SQLSoft or
any of its affiliates is a party and pursuant to which any Person is authorized
to use such Intellectual Property Right, including the identity of all parties
thereto, a description of the nature and subject matter thereof, the applicable
royalty and the term thereof.
(b)(i) SQLSoft has not been sued or charged in writing with or been a
defendant in any claim, suit, action or proceeding relating to its business that
has not been finally terminated prior to the date hereof and that involves a
claim of infringement of any patents, trademarks, service marks or copyrights,
and (ii) SQLSoft has no knowledge of any other claim or infringement by SQLSoft,
and no knowledge of any continuing infringement by any other Person of any
Intellectual Property Rights.
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5.19. Employees. Schedule 5.19 sets forth a true and complete list of (a)
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the names, titles, annual salaries and other compensation of all employees of
the Business. None of such employees has indicated to SQLSoft that he intends
to resign or retire as a result of the transactions contemplated by this
Agreement.
5.20. Other Information. None of the documents or information delivered
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to ARIS in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading.
The financial projections relating to the Business delivered to ARIS constitute
SQLSoft's best estimate of the information purported to be shown therein, and
SQLSoft is not aware of any fact or information that would lead it to believe
that such projections are incorrect or misleading in any material respect.
5.21. Environmental Compliance. No notice, notification, demand, request
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for information, citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and no investigation or review is
pending, or to SQLSoft's knowledge, threatened by any governmental or other
entity (i) with respect to any alleged violation by SQLSoft of any environmental
law, ordinance, rule, regulation or order of any governmental entity in
connection with the conduct of the Business, (ii) with respect to any alleged
failure by SQLSoft to have any environmental permit, certificate, license,
approval, registration or authorization required in connection with the conduct
of the Business.
5.22 Purchase for Investment. The Shareholders are receiving the shares of
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common stock of ARIS in connection with the Merger for investment for their own
account and not with a view to, or for sale in connection with, any distribution
thereof.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF XXXX
XXXX hereby represents and warrants to SQLSoft that:
6.01. Organization and Existence; Capitalization. (a) ARIS is a
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corporation duly incorporated, validly existing and in good standing under the
laws of the State of Washington and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
(b) At Closing, the authorized capital of ARIS consists of 4,000,000
authorized shares, no par value per share. As of the date hereof, there were
outstanding
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3,383,500 shares of the common stock of ARIS, plus stock options to purchase an
aggregate of 81,000 shares of ARIS common stock. All outstanding shares of
capital stock of ARIS have been duly authorized and validly issued and are fully
paid. Except as set forth in this Section, there are no outstanding (i) shares
of capital stock or other voting securities of ARIS, (ii) securities of ARIS
convertible into or exchangeable for share of capital stock or voting securities
of ARIS or (iii) options or other rights to acquire from ARIS, and there is no
obligation for ARIS to issue any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of ARIS
(collectively, "ARIS Securities"). There are no outstanding obligations of the
ARIS to issue or deliver or to repurchase, redeem or otherwise acquire any ARIS
Securities. At Closing, ARIS shares of common stock issued to Shareholders
shall be free and clear of any Liens, and Shareholders shall be be the record
and beneficial owners of such ARIS common stock.
6.02. Corporate Authorization. The execution, delivery and performance by
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ARIS of this Agreement and the consummation by ARIS of the transactions
contemplated hereby are within the corporate powers of ARIS and have been duly
authorized by all necessary corporate action on the part of ARIS. This
Agreement constitutes a valid and binding agreement of ARIS.
6.03. Governmental Authorization. The execution, delivery and performance
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by ARIS of this Agreement require no action by or in respect of, or filing with,
any governmental body, agency, official or authority other than approval of the
Small Business Administration with respect to ARIS's continued qualification
after the Closing Date under the Minority Small Business and Capital Ownership
Development Program, Sections 8(a) and 7(j) of the Small Business Act, 15 U.S.C.
637(a) and 637(j), as amended ("SBA Approval").
6.04. Non-Contravention. The execution, delivery and performance by ARIS
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of this Agreement do not and will not (i) contravene or conflict with the
certificate of incorporation or bylaws of ARIS or (ii) assuming compliance with
the matters referred to in Section 6.03, contravene or conflict with any
provision of any law, regulation, judgment, injunction, order or decree binding
upon ARIS.
ARTICLE VII
COVENANTS OF SQLSOFT AND SHAREHOLDERS
SQLSoft and each Shareholder agrees that:
7.01. Conduct of Business. From the date hereof until the Closing Date,
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SQLSoft shall conduct the Business in the ordinary course consistent with past
practice,
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use its best efforts to preserve intact the business organizations and
relationships with third parties and keep available the services of the present
employees of the Business.
7.02. Access to Information. From the date hereof until the Closing Date,
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SQLSoft (a) will give ARIS, its counsel, financial advisors, auditors and other
authorized representatives full access to the offices, properties, books and
records of SQLSoft relating to the Business, (b) will furnish to ARIS, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Business as
such Persons may reasonably request and (c) will instruct the employees, counsel
and financial advisors of SQLSoft to cooperate with ARIS in its investigation of
the Business; provided that no investigation pursuant to this Section shall
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affect any representation or warranty given by SQLSoft hereunder; and provided
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further that any investigation pursuant to this Section shall be conducted in
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such manner as not to interfere unreasonably with the conduct of the business of
SQLSoft.
7.03. Notices of Certain Events. SQLSoft shall promptly notify ARIS of:
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(i) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
Merger or the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Merger or the
transactions contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to
or involving or otherwise affecting SQLSoft or the Business that, if
pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 5.11 or that relate to the Merger or the
consummation of the transactions contemplated by this Agreement.
ARTICLE VIII
COVENANTS OF XXXX
XXXX agrees that:
8.01. Confidentiality. Prior to the Closing Date and after any
---------------
termination of this Agreement, ARIS will hold, and will use their best efforts
to cause their respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless compelled to
disclose by judicial or administrative process or
Page 14
by other requirements of law, all confidential documents and information
concerning the Business or SQLSoft furnished to ARIS in connection with the
transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis to ARIS, (ii) in the public domain through no fault of ARIS or (iii) later
lawfully acquired by ARIS from sources other than SQLSoft; provided that ARIS
--------
may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such Person are informed
by ARIS of the confidential nature of such information and are directed by ARIS
to treat such information confidentially. The obligation of ARIS to hold any
such information in confidence shall be satisfied if ARIS exercises the same
care with respect to such information as ARIS would take to preserve the
confidentiality of its own similar information.
ARTICLE IX
COVENANTS OF ALL PARTIES
The parties hereto agree that:
9.01. Best Efforts; Further Assurances. Subject to the terms and
--------------------------------
conditions of this Agreement, each party will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. SQLSoft, Shareholders and ARIS
each agree to execute and deliver such other documents, certificates, agreements
and other writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and to vest in ARIS good and marketable title to
the Assets.
ARTICLE X
EMPLOYEES
10.01. Employees and Offers of Employment. On the Effective Date, ARIS
----------------------------------
shall offer employment to all active employees of the Business as set forth on
Schedule 5.19, at such compensation, including incentive compensation, as may be
-------------
agreed between the parties, provided, that ARIS may terminate at any time after
--------
the Effective Date the employment of any employee who accepts such offer, except
as specifically provided under the terms of any Shareholder's Employment
Agreement. Any such offers shall be at such salary or wage and benefit levels
and on such other terms and conditions as ARIS shall in its sole discretion deem
appropriate. The employees who accept and commence employment with ARIS are
hereinafter collectively referred to as the "Transferred
Page 15
Employees." SQLSoft and Shareholders will not take any action which would
impede, hinder, interfere or otherwise compete with ARIS's effort to hire any
Transferred Employees. ARIS shall not assume responsibility for any Transferred
Employee until such employee commences employment with ARIS.
ARTICLE XI
CONDITIONS TO CLOSING
11.01. Conditions to the Obligations of Each Party. The obligations of
-------------------------------------------
ARIS and SQLSoft to consummate the Closing are subject to the satisfaction of
the following conditions:
(a) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall (i) prohibit the consummation of the
Closing or (ii) restrain, prohibit or otherwise interfere with the
effective operation or enjoyment by ARIS of all or any material portion of
the Business.
(b) All actions by or in respect of or filings with any governmental
body, agency, official or authority required to permit the consummation of
the Closing shall have been obtained.
11.02. Conditions to Obligation of ARIS. The obligation of ARIS to
--------------------------------
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a)(i) SQLSoft and each Shareholder shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date, (ii) the representations and warranties of
SQLSoft and each Shareholder contained in this Agreement and in any certificate
or other writing delivered by SQLSoft or any Shareholder pursuant hereto,
disregarding all qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, shall be true at and as of the Closing
Date, as if made at and as of such time with only such exceptions as would not
in the aggregate reasonably be expected to have a Material Adverse Effect and
(iii) ARIS shall have received a certificate signed by the President of SQLSoft
to the foregoing effect.
(b) No court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, restraining or prohibiting the consummation of the Closing or the
effective operation by ARIS of the Assets after the Closing Date, and no
proceeding challenging this Agreement or the transactions contemplated hereby or
seeking to prohibit, alter, prevent or materially delay the Closing shall have
been instituted by any Person before any court, arbitrator or governmental body,
agency or official and be pending.
Page 16
(c) ARIS shall have received an opinion of SQLSoft's counsel dated
the Closing Date to the effect specified in Sections 5.01 through 5.04 and 5.11.
In rendering such opinion, such counsel may rely upon certificates of public
officers, copies of which shall be contemporaneously delivered to ARIS, and as
to matters of fact, upon certificates of officers of SQLSoft.
(d) SQLSoft shall have received all Required Consents and all
consents, authorizations or approvals from the governmental agencies referred to
in Section 5.03(a), in each case in form and substance reasonably satisfactory
to ARIS, and no such consent, authorization or approval shall have been revoked.
(e) ARIS shall have received all documents it may reasonably request
relating to the existence of SQLSoft and the authority of SQLSoft for this
Agreement, all in form and substance satisfactory to ARIS.
11.03. Conditions to Obligation of SQLSoft. The obligation of SQLSoft to
-----------------------------------
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a)(i) ARIS shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the Closing
Date, and (ii) the representations and warranties or other writing delivered by
ARIS pursuant hereto shall be true in all material respects at and as of the
Closing Date, as if made at and as of such time.
(b) ARIS shall have received all consents, authorizations or
approvals from governmental agencies referred to in Section 6.03, and no such
consent, authorization or approval shall have been revoked.
(c) SQLSoft shall have received all documents it may reasonably
request relating to the existence of ARIS and the authority of ARIS for this
Agreement, all in form and substance satisfactory to SQLSoft.
ARTICLE XII
SURVIVAL; INDEMNIFICATION
12.01. Survival. The covenants, agreements, representations and
--------
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall survive the Closing until the third anniversary of the Closing Date or
until expiration of the applicable statutory period of limitations (giving
effect to any waiver, mitigation or extension thereof), if later.
Page 17
Notwithstanding the preceding sentence, any covenant, agreement, representation
or warranty in respect of which indemnity may be sought under Section 12.02 or
12.03 shall survive the time at which it would otherwise terminate pursuant to
the preceding sentence, if notice of the inaccuracy or breach thereof giving
rise to such right to indemnity shall have been given to the party against whom
such indemnity may be sought prior to such time.
12.02. Indemnification. (a) SQLSoft and each Shareholder, jointly and
---------------
severally, hereby indemnifies ARIS against and agrees to hold it harmless from
any and all damage, loss, liability and expense (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any action, suit or proceeding) (collectively, "Loss")
incurred or suffered by ARIS arising out of any misrepresentation or breach of
warranty, covenant or agreement made or to be performed by SQLSoft or any
Shareholder pursuant to this Agreement.
(b) ARIS hereby indemnifies SQLSoft against and agrees to hold it
harmless from any and all Loss incurred or suffered by SQLSoft arising out of
any misrepresentation or breach of warranty, covenant or agreement made or to be
performed by the ARIS pursuant to this Agreement.
12.03. Procedures. The party seeking indemnification under Section 12.02
----------
(the "Indemnified Party") agrees to give prompt notice to the party against whom
indemnity is sought (the "Indemnifying Party") of the assertion of any claim, or
the commencement of any suit, action or proceeding in respect of which indemnity
may be sought under such Section; provided however, that no Indemnified Party
----------------
shall seek indemnification until the aggregate of all claims for which
indemnification is sought exceeds $50,000.00. The Indemnifying Party may, and
at the request of the Indemnified Party shall, participate in and control the
defense of any such suit, action or proceeding at its own expense. The
Indemnifying Party shall not be liable under Section 12.02 for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder.
ARTICLE XIII
TERMINATION
13.01. Grounds for Termination. This Agreement may be terminated at any
-----------------------
time prior to the Closing:
(i) by mutual written agreement of SQLSoft and ARIS;
Page 18
(ii) by either SQLSoft or ARIS if the Closing shall not have been
consummated on or before May 1, 1996, unless otherwise extended by the
written agreement of the parties; or
(iii) by either SQLSoft or ARIS if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses
(ii) or (iii) shall give notice of such termination to the other party.
13.02. Effect of Termination. If this Agreement is terminated as
---------------------
permitted by Section 13.01, such termination shall be without liability of
either party (or any shareholder, director, officer, employee, agent, consultant
or representative of such party) to the other party to this Agreement; provided
--------
that if such termination shall result from the willful failure of either party
to fulfill a condition to the performance of the obligations of the other party
or to perform a covenant of this Agreement or from a willful breach by either
party to this Agreement, such party shall be fully liable for any and all Losses
incurred or suffered by the other party as a result of such failure or breach.
The provisions of Section 12.02 shall survive any termination hereof pursuant to
Section 13.01.
ARTICLE XIV
MISCELLANEOUS
14.01. Notices. All notices, requests and other communications to either
-------
party hereunder shall be in writing and shall be given and deemed effective as
of the date of delivery if delivered by overnight courier, certified or
registered mail, facsimile or other means which provide evidence of receipt, or
three days after deposit into the mail for items sent by regular mail, if sent
to the following:
if to ARIS, to:
Xxxx Song, President
ARIS Corporation
0000 Xxxx Xxxx Xxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Phone: 000-000-0000
Telecopy: 000-000-0000
Page 19
if to SQLSoft, to:
Xxxxxxx Xxxxxxx
0000 000/xx/ Xxxxxx XX, Xxxxx X-000
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxxx Wonder, Esq.
Xxxxxxx & Xxxxxxxxx
000 000/xx/ Xxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Phone: 000-000-0000
Telecopy: 000-000-0000
14.02. Amendments; No Waivers. (a) Any provision of this Agreement may
----------------------
be amended or waived prior to the Closing Date if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by the all of
the parties hereto, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall nay
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
14.03. Expenses. Except as otherwise provided herein, all costs and
--------
expenses incurred in connection with this Agreement through the close of
business March 31, 1996, shall be paid by the party incurring such cost or
expense.
14.04. Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that neither party may assign, delegate or
--------
otherwise transfer any of its rights or obligations under this Agreement without
the consent of the other party hereto.
14.05. Governing Law. This Agreement shall be construed in accordance
-------------
with the laws of the State of Washington.
14.06. Counterparts; Effectiveness. This Agreement may be signed in any
---------------------------
number of counterparts, each of which shall be an original, with the same effect
as if the
Page 20
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
14.07. Entire Agreement. The Operative Agreements constitute the entire
----------------
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either party
hereto. Neither this Agreement nor any provision hereof is intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
14.08. Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
APPLIED RELATIONAL SQLSoft, INC.
INFORMATION SYSTEMS, INC.
By /s/ Xxxx Song By /s/ Xxxxxxx Xxxxxxx
-------------------------- --------------------------------
Xxxx Song, President Xxxxxxx Xxxxxxx, President
Page 21
SHAREHOLDERS:
/s/ Xxxxxxx Xxxxxxx
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XXXXX XXXXXXX
/s/ Xxxx Xxxxx
------------------------------
XXXX XXXXX
/s/ Xxxx Xxxxxxxxxx
------------------------------
XXXX XXXXXXXXXX
/s/ Xxxxx Xxxxxxxx
------------------------------
XXXXX XXXXXXXX
/s/ Xxxx Xxxxx
------------------------------
XXXX XXXXX
