Exhibit 99.3
STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT (the "Agreement") dated as of September
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30, 1999 between BARCLAYS CALIFORNIA CORPORATION, a California corporation (the
"Seller"), and TENFOLD CORPORATION, a Delaware corporation (the "Purchaser").
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WHEREAS, the Seller is a member of a group of majority-owned
affiliated corporations and other entities the ultimate parent of which is
Barclays PLC (such group, the "Barclays Group" and each such member, a "Barclays
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Group Member");
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WHEREAS, the Seller owns all of the issued and outstanding shares of
capital stock (the "Shares") of The LongView Group, Inc., a Massachusetts
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corporation ("LongView");
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WHEREAS, Barclays Bank PLC owns all of the ordinary shares (the "UK
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Shares") of LongView UK Ltd., a corporation organized under the laws of England
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and Wales ("LongView UK");
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WHEREAS, the Purchaser wishes to purchase from the Seller, and the
Seller wishes to sell to the Purchaser, the Shares and the UK Shares (as defined
below), on the terms and subject to the conditions set forth herein; and
WHEREAS, the Seller is purchasing from the Purchaser a multi-project,
worldwide, fully-paid, nonrefundable perpetual license to the Universal
Application and TenFold Componentware pursuant to a Master Software License and
Services Agreement dated as of the date hereof (the "Master License Agreement"),
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for $4 million in cash.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and undertakings of the parties hereto, and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and subject to the conditions hereof, the parties hereto
agree as follows:
ARTICLE I
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PURCHASE AND SALE OF SECURITIES
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1.1 Signing. This signing of this Agreement was held at the offices
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of the Seller at 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, or at such other
location as the parties agreed, on September 30, 1999 (the "Signing").
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1.2 Purchase and Sale of Shares. Upon the terms and subject to the
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conditions of this Agreement, effective as of the Closing (as defined below),
the Seller hereby sells, transfers, and assigns to the Purchaser, and the
Purchaser hereby purchases, accepts and assumes, all of the Shares and the UK
Shares, free and clear of all liens, claims, rights, charges, options, rights of
third parties, encumbrances, security interests or other restrictions or
limitations of any nature whatsoever ("Liens"), as well as all rights
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appurtenant thereto.
1.3 Delivery of and Purchase Price for the Shares; Escrow. (a) To
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facilitate the Closing, the Purchaser and the Seller have entered into an escrow
agreement, the form of which is attached hereto as Exhibit A (the "Escrow
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Agreement"), with Chase Manhattan Bank, N.A., a national banking association,
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acting as escrow agent (the "Escrow Agent").
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(b) Contemporaneously with the execution of this Agreement, the
Seller has deposited the Shares and the UK Shares (as defined in Section
2.3(b)), in genuine and unaltered form, duly endorsed for transfer to or
accompanied by executed stock powers or stock transfer forms in the name of the
Purchaser, with any requisite stock transfer tax stamps, into escrow pursuant to
the Escrow Agreement; provided, that, notwithstanding the deposit of the Shares
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and the UK Shares into escrow, title to the Shares and the UK Shares shall
remain with the Seller until the Closing.
(c) Contemporaneously with the execution of this Agreement, and in
full payment for the Shares effective as of the Closing, the Purchaser has
deposited the following consideration (the "Purchase Price") into escrow
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pursuant to the Escrow Agreement; provided, that, notwithstanding the deposit of
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the Purchase Price into escrow, title to the Purchase Price shall remain with
the Purchaser until the Closing:
(i) U.S. $10,000,000, in immediately available funds; and
(ii) A promissory note in the amount of U.S. $12,000,000, the
form of which is attached hereto as Exhibit B (the "Promissory Note").
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(d) The Escrow Agreement, Promissory Note and all other documents,
agreements, deeds, assignments, endorsements, certificates and instruments
(including instruments of transfer) executed or delivered by a party in
connection with the transactions contemplated hereby are hereinafter
collectively referred to as the "Ancillary Agreements" of such party.
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1.4 Other Deliveries at Signing. Prior to or contemporaneously with
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the execution of this Agreement, the following have been delivered and accepted
by the parties:
(a) The Seller has delivered to the Purchaser (i) a certified copy of
resolutions of the Seller's Board of Directors authorizing the execution,
delivery and performance of this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby, (ii) certified copies of the
Articles of Incorporation and By-laws of the Longview Entities, (iii) an
incumbency certificate of the persons signing this Agreement and the Ancillary
Agreements on behalf of the Seller, and (iv) resignations of each of the
following individuals: Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxx
Xxxxx, and Xxxxx Xxxxx and any other officer or director of either of the
LongView Entities who is an employee, officer or director of the Seller or any
other Barclays Group Member, effective as of the Closing. The Seller has also
delivered to Purchaser a true and correct copy of an extract of the minutes of
the Executive Committee of Barclays PLC approving the sale by the Seller of the
Shares to the Purchaser.
(b) The Purchaser has delivered to the Seller a certified copy of
resolutions of the Purchaser's Board of Directors authorizing the execution,
delivery and performance of this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby,
together with an incumbency certificate of the persons signing this Agreement
and the Ancillary Agreements on behalf of the Purchaser.
(c) The Seller has delivered to the Purchaser, effective as of the
Closing Date, waivers from those Barclays Group Members to whom intercompany
obligations are owed by the LongView Entities, waiving the amounts referred to
in Section 4.3 of this Agreement.
1.5 Closing. (a) The obligation of the Purchaser to purchase the
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Shares and of the Seller to sell the Shares is subject only to the termination
or expiration of the waiting period applicable to the sale and purchase of the
Shares under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR Act"), without
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material objection from either the U.S. Federal Trade Commission (the "FTC") or
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the U.S. Department of Justice (the "DOJ") that has not been fully satisfied.
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(b) The parties agree that the forgoing condition shall be satisfied
upon the first to occur of (i) the posting of notice of early termination or
expiration of the waiting period on either the FTC's or the DOJ's website or
(ii) receipt by either the Seller or the Purchaser of written notification of
termination or expiration of the waiting period from the FTC or DOJ, in each
case without objection from either the FTC or DOJ that has not been fully
satisfied (the first of such to occur, the "Termination/Expiration Notice").
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(c) Each party agrees to notify promptly the other party if it
receives any communication from the FTC or the DOJ regarding the transactions
contemplated hereby. Upon receipt by either the Seller or the Purchaser of the
Termination/Expiration Notice, the Seller and the Purchaser shall immediately
execute and deliver to the Escrow Agent a notice in the form of Exhibit A to the
Escrow Agreement (directing the Escrow Agent to release the Shares and the UK
Shares to the Purchaser and the Purchase Price to the Seller). The parties agree
that if a duly executed notice in the form of Exhibit A to the Escrow Agreement
has not been delivered to the Escrow Agent within 12 hours of either party's
receipt of the Termination/Expiration Notice pursuant to Sections 1.5(b)(i) or
1.5(b)(ii), either the Seller or the Purchaser shall have the right to execute
and deliver to the Escrow Agent and the other party a notice in the form of
Exhibit B to the Escrow Agreement (directing the Escrow Agent to release the
Shares and the UK Shares to the Purchaser and the Purchase Price to the Seller).
(d) If either the FTC or the DOJ raises an objection to the sale and
purchase of the Shares and the UK Shares contemplated hereby, the parties shall
promptly consult with each other in good faith regarding whether to restructure,
proceed with or abandon the sale, in light of the nature of the objection
raised. In the event the parties agree to abandon the sale, the Seller and
Purchaser shall execute and deliver to the Escrow Agent a notice in the form of
Exhibit C to the Escrow Agreement (directing the Escrow Agent to return the
Shares and the UK Shares to the Seller and the Purchase Price to the Purchaser).
(e) The time (if any) at which the Escrow Agent releases the Shares
and the UK Shares to the Purchaser and the Purchase Price to the Seller is
hereinafter referred to as the "Closing" and the date on which the Closing
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occurs is hereinafter referred to as the "Closing Date."
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1.6 Commercially Reasonable Efforts. Each party shall use its
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commercially reasonable efforts to satisfy the condition set forth in Section
1.5(a) and otherwise to consummate the transactions contemplated by this
Agreement as expeditiously as possible.
1.7 Further Assurances. Each party shall, at the request of the
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other party, at any time and from time to time following the Closing promptly
execute and deliver, or cause to be executed and delivered, to such requesting
party all such further instruments and take all such further action as may be
reasonably necessary or appropriate to more effectively transfer, assign,
convey, grant and confirm to the Seller and the Purchaser, or to perfect or
record the Seller's and the Purchaser's title to or interest in, or to enable
the Seller and the Purchaser to possess and use, the Promissory Note and the
Shares and the UK Shares, respectively, or otherwise to confirm or carry out the
provisions of and transactions contemplated by this Agreement.
ARTICLE II
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REPRESENTATIONS AND WARRANTIES OF SELLER
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The Seller represents and warrants to the Purchaser that:
2.1 Due Organization, Etc. Each of LongView and LongView UK (each, a
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"LongView Entity" and, together, the "LongView Entities") and the Seller is a
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corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation with full power and authority to own,
lease and operate its assets and to carry on its business as now conducted. The
Purchaser has been furnished true, correct and complete copies of the Articles
of Incorporation, By-laws or other documents of organization of each of the
LongView Entities, copies of which are attached as Schedule 2.1. Copies of all
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minutes of, or the unanimous consents in lieu thereof, the meetings of the
stockholders and board of directors (and any committee thereof) of each of the
Longview Entities have been made available to Purchaser by Seller and are true,
complete and accurate records of all such meetings and consents that have been
held or given by them. All amendments to, and articles of merger, certificates
of designation and other filings with respect to, the articles of incorporation
of the LongView Entities were made in accordance with the articles of
incorporation of the applicable LongView Entity (as in effect before the
amendment of the articles or filings with respect thereto), and the By-laws of
the applicable LongView Entity and all requirements of applicable law (including
the giving of proper notice of dissenter's and/or appraisal rights in connection
with any such amendment or other actions requiring such notice), without
violation of any preemptive or other rights, and each of the LongView Entities
at all times has otherwise complied with its articles of incorporation and By-
laws as in effect at the applicable time.
2.2 Due Authority; No Breach. The Seller has all requisite power and
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authority to enter into this Agreement and each of the Ancillary Agreements and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and each of the Ancillary Agreements and the
consummation of the transactions provided for hereby and thereby have been duly
authorized by the Board of Directors of the Seller and the Executive Committee
of Barclays PLC and no other proceeding on the part of the Seller or any
other Barclays Group Member is necessary to authorize the execution or delivery
of this Agreement or the Ancillary Agreements or the consummation of any of the
transactions contemplated hereby or thereby. Each of this Agreement and the
Ancillary Agreements has been duly executed and delivered by the Seller and,
assuming due execution and delivery by the Purchaser, constitutes a legal, valid
and binding obligation of the Seller enforceable against it in accordance with
the terms thereof, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in an
action at law or a suit in equity). Neither the execution and delivery of this
Agreement or any Ancillary Agreement, the performance by the Seller of its
obligations hereunder or thereunder nor the consummation of the transactions
provided for hereby or thereby does or will:
(i) conflict with or violate any provision of the Certificate of
Incorporation, By-laws or any other document of organization of the Seller or
either of the LongView Entities;
(ii) except as set forth on Schedule 2.2(ii), violate, conflict with
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or result in the breach or termination of, or otherwise give any other person or
entity the right to accelerate, renegotiate or terminate or receive any payment,
or require any consent, or constitute a default, event of default (or an event
which with notice, lapse of time, or both, would constitute a default or event
of default), under the terms of, any Material Contracts (as defined in Section
2.7), or any permits, authorizations, approvals, registrations or licenses
granted by or obtained from any governmental, administrative or regulatory
authority ("Permits"), to which the Seller or either of the LongView Entities is
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a party or by which any of them or their respective securities, properties or
businesses are bound, other than consents which shall have been obtained on or
before the Closing Date;
(iii) result in the creation of any Liens upon the Seller's or
either of the LongView Entities' respective securities, properties or
businesses;
(iv) constitute a violation by the Seller or either of the LongView
Entities of any laws, rules, ordinances or regulations of any governmental,
administrative or regulatory authority ("Laws") or any judgments, orders,
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decrees, injunctions, rulings or awards of any court, arbitrator or other
judicial authority or any governmental, administrative or regulatory authority
("Judgments"); or
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(v) require any consent, approval, waiver, order or authorization
of, or registration, declaration or filing with, any federal, state, local or
foreign governmental or regulatory authorities (each, an "Authority") on the
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part of the Seller or either of the LongView Entities, other than (A) those
which shall have been obtained on or before the Closing Date and (B) the pre-
merger notification requirements of the HSR Act.
2.3 Capitalization. (a) The entire authorized capital stock of
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LongView consists of 5,000,000 shares of common stock, no par value per share,
of which 3,608,000 shares are issued and outstanding. All of the Shares are duly
authorized, validly issued, fully paid and nonassessable. The Seller has good
and marketable title to, and is the lawful record owner of, all of the Shares,
free and clear of any Liens. Immediately following the delivery of the Shares by
the Escrow Agent to the Purchaser on the Closing Date, the Purchaser shall have
good and marketable title to the Shares, free and clear of any Liens.
(b) The entire authorized capital stock of LongView UK consists of
300,000 ordinary shares, all of which are issued and outstanding. All of the UK
Shares are duly authorized, validly issued, fully paid and nonassessable.
Barclays Bank PLC has good and marketable title to, and is the lawful record
owner of, all of the UK Shares, free and clear of any Liens. Immediately
following the delivery of the UK Shares by the Escrow Agent to the Purchaser on
the Closing Date, the Purchaser shall have good and marketable title to the UK
Shares, free and clear of any Liens.
(c) There are not authorized or outstanding any subscriptions,
options, conversion rights, warrants or other agreements, securities or
commitments of any nature whatsoever (whether oral or written and whether firm
or conditional) obligating either of the LongView Entities to issue, deliver or
sell, or cause to be issued, delivered or sold, any authorized or outstanding
shares of the capital stock of any class or series, or any securities
convertible into or exchangeable for shares of capital stock of any class or
series, of either of the LongView Entities or obligating either of the LongView
Entities to grant, extend or enter into any such agreement or commitment.
(d) There are no outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the LongView Entities or the
Shares or the UK Shares. There are no voting trusts, proxies or any other
agreements or understandings with respect to the voting of any of the capital
stock of either of the LongView Entities; and neither of the LongView Entities
is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire the Shares or the UK Shares or any other securities
of any kind or class of either of the LongView Entities.
(e) The corporate record books (including the stock records) of each
of the LongView Entities are complete, accurate and up to date in all material
respects with all necessary signatures and set forth all meetings and actions
taken by the shareholders and directors of each of the LongView Entities as
required by law or the By-laws of the LongView Entities and all transactions
involving the Shares or the UK Shares.
2.4 Equity Investments. Other than the UK Shares, neither of the
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LongView Entities owns any shares of or equity or other investment interest,
either of record, beneficially or equitably, in any association, partnership,
joint venture or other legal entity.
2.5 Qualification. Each of the LongView Entities is duly qualified
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and licensed to do business as a foreign corporation, and is in good standing,
in each jurisdiction where the character of the properties it owns, operates or
holds under lease or the nature of its activities make such qualification
necessary, except where the failure to be so qualified has not and would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the business prospects, results of operations, properties
(including intangible properties), assets, liabilities or financial condition of
the LongView Entities taken as a whole (a "Material Adverse Effect"). Schedule
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2.5 lists the jurisdictions in which each of the LongView Entities is qualified
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to do business as a foreign corporation.
2.6 Title to Property; Condition; Sufficiency. (a) Neither of the
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LongView Entities owns any real property. Schedule 2.6 lists all real property
leased, occupied or used by either of the LongView Entities. Except as set
forth on Schedule 2.6, each of the LongView Entities has (i) with respect to the
real property that is leased by it, a valid and subsisting leasehold estate,
free and clear of all Liens, and (ii) with respect to all other assets owned by
it, good and marketable title, in each instance free and clear of all Liens
(other than purchase money security interests granted in the ordinary course of
business in each case in an amount less than $10,000).
(b) Except as listed on Schedule 2.6, the properties and other assets
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owned or leased by the LongView Entities are in good operating condition and
repair and include all properties and other assets reasonably necessary for the
conduct of the business and activities conducted by the LongView Entities as of
the date hereof.
2.7 Contracts. (a) Schedule 2.7(a) sets forth a list of all of the
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agreements, contracts and arrangements to which either of the LongView Entities
is a party or by which any of its assets or properties are bound or affected and
that are material to the condition (financial or otherwise), assets, business or
future prospects of the LongView Entities taken as a whole including, without
limitation, (i) agreements relating to capital expenditures or the acquisition
of tangible or intangible property involving amounts in excess of $50,000, (ii)
contracts or agreements prohibiting or limiting the ability of either of the
LongView Entities (A) to engage in any line of business, (B) to compete with any
individual, corporation, partnership, firm, joint venture, association, joint-
stock company, trust, unincorporated organization, Authority or other entity
(each, a "Person"), or (C) to carry on or expand the nature of geographical
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scope of its business, (iii) contracts, agreements or purchase orders with any
supplier, other than purchase orders in the ordinary course of business, (iv)
contracts or agreements relating to present or ongoing software development or
maintenance and support, as well as contracts or agreements relating to past
software development or maintenance and support entered into by either LongView
Entity on or after September 1, 1998, (v) licenses granted by either of the
LongView Entities to any Person, (vi) contracts or agreements that reasonably
may be expected to involve future obligations or benefits in excess of $50,000,
(vii) contracts or agreements with the Seller or any other member of the
Barclays Group, (viii) loan agreements, letters of credit, guarantees or
agreements evidencing indebtedness for borrowed money of either of the LongView
Entities, (ix) leases of real property, (x) contracts or agreements with current
employees, consultants or independent contractors, as well as contracts or
agreements with former employees, consultants or independent contractors entered
into by either LongView Entity on or after September 1, 1998, (xi) powers of
attorney, (xii) other than as set forth above, contracts or agreements entered
into outside the course of ordinary business, and (xiii) product or service
warranties or other similar undertakings (all such agreements, contracts and
arrangements, the "Material Contracts"). The Seller has made available to the
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Purchaser a copy of each Material Contract.
(b) Each Material Contract is a legal, valid and binding agreement of
such LongView Entity, enforceable against it in accordance with its terms, and
will continue as such following the Closing, and to the knowledge of each of the
Seller and the LongView Entities is a legal, valid and binding agreement of each
other party thereto, enforceable in accordance with its terms (in each case,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity
(regardless of whether enforcement is sought in an action at law or a suit in
equity)). Except as set forth on Schedule 2.7(b), no party to any Material
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Contract has given any notice of termination, nor does the Seller or either of
the LongView Entities have any reason to believe that such a notice will be
given.
(c) Except as set forth on Schedule 2.7(c), no default or event of
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default has occurred with respect to either LongView Entity and, to the
knowledge of each of the Seller and the LongView Entities, there exists no
condition or event which, after notice or lapse of time or both, would
constitute a default by either of the LongView Entities under such Material
Contract, or would give to any other Person any rights of termination,
cancellation or acceleration of any performance required thereunder or result in
the creation of any Lien or any additional or changed obligation of either of
the LongView Entities. Neither LongView Entity has waived any material right
under or with respect to any of the Material Contracts.
(d) Except as set forth on Schedule 2.7(d), to the knowledge of each
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of the Seller and the LongView Entities, none of the other parties to the
Material Contracts is in default thereunder, nor is either of the LongView
Entities or the Seller aware of any event which, with the passage of time, the
giving of notice or both, would constitute a default under such Material
Contract by such other party.
(e) Except as set forth in Schedule 2.7(e), neither of the LongView
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Entities has provided or entered into any loans of money or property to the
officers or employees of either of the LongView Entities, excluding travel and
similar advances made in the ordinary course of business.
2.8 Insurance. Schedule 2.8 hereto contains a complete and correct
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list of all insurance policies (excluding any insurance described on Schedule
2.14(a)) maintained by either of the LongView Entities or by any Person for the
benefit of the LongView Entities. With respect to each insurance policy
maintained by either LongView Entity, the Seller has made available to the
Purchaser a schedule of required premiums under each such policy and complete
and correct copies of all such policies together with all riders and amendments
thereto. Attached to Schedule 2.8 is a summary of any policy maintained by any
Person other than a LongView Entity for the benefit of either LongView Entity.
Such policies are in full force and effect, and all premiums due thereon have
been paid. The applicable LongView Entity has complied in all material respects
with the provisions of such policies. No notice has been received canceling or
threatening to cancel or refusing to renew any of such insurance. Except for the
policy described in the attachment to Schedule 2.8, the rights of the insured
under such policies will not be terminated or adversely affected by the Closing
or the consummation of the other transactions contemplated hereby. To the
knowledge of each of the Seller and the LongView Entities, there is currently no
basis for any insurance claim by either of the LongView Entities.
2.9 Intellectual Property. (a) Schedule 2.9(a) lists all items of
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computer software, trademarks, trade names, fictitious names, service marks,
patents and copyrights in which either of the LongView Entities has an interest,
other than third party software that is subject to a shrink-wrap license, and
lists the nature of that interest (collectively, the "Intellectual Property").
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Each LongView Entity owns or holds all of the rights to use, license and
commercialize the Intellectual Property in the manner currently used, licensed
or commercialized
by such LongView Entity. To the knowledge of each of the Seller and the LongView
Entities, none of the Intellectual Property nor any of the products or services
sold or provided by either of the LongView Entities nor any of the processes
used or the business practices followed by either of the LongView Entities
infringes or has infringed upon any trademark, trade name, fictitious name,
service xxxx, patent, copyright or other intellectual property right of any
Person, or constitutes misappropriation of trade secrets. The Intellectual
Property constitutes all intellectual property necessary for the conduct
immediately following the Closing of the business of the LongView Entities in
all material respects as conducted as of the date hereof. Neither of the
LongView Entities is obligated to pay any license fee, royalty or other payment
with respect to any of the Intellectual Property, except as disclosed on
Schedule 2.9(a). To the knowledge of each of the Seller and the LongView
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Entities, no Person is producing, providing, selling or using products or
services that would constitute an infringement of any of the Intellectual
Property or a misappropriation of trade secrets in any of the Intellectual
Property.
(b) Schedule 2.9(b) identifies all Intellectual Property developed by
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or on behalf of or otherwise owned by, or licensed to third Persons by, either
of the LongView Entities (the "Proprietary IP"). Except as set forth on
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Schedule 2.9(b), the LongView Entities own the trademarks, trade names,
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fictitious names, services marks, patents, copyrights, trade secrets and other
intellectual property included in the Proprietary IP free and clear of all
Liens. Except as disclosed on Schedule 2.9(b), no Person (including the Seller)
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other than the LongView Entities has any (i) ownership interest in the
Proprietary IP, (ii) right to use the Proprietary IP or (iii) right to prevent
the LongView Entities from using, licensing, creating derivative works of and
commercializing any of the Proprietary IP in the manner the LongView Entities
are currently using, licensing, creating derivative works of and commercializing
such Proprietary IP or have committed to do so.
(c) Schedule 2.9(c) identifies all computer software and other
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products (including maintenance and support services) that are marketed,
offered, licensed, sublicensed, sold, distributed or commercialized by or on
behalf of the LongView Entities (including products for which either LongView
Entity may have a contingent obligation to market, offer, license, sublicense,
sell, distribute or commercialize) (the "Software Products"). Except as set
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forth on Schedule 2.9(c), LongView owns the intellectual property in and the
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right, directly and indirectly, to copy, publish, distribute, create derivative
works of, run, perform, license and commercialize the Software Products. For all
the Software Products for which LongView does not own the intellectual property,
LongView has valid and fully paid for all software and other licenses necessary
for the past and current use, licensing, creation of derivative works and
commercialization of the Software Products by the Long View Entities.
(d) Except as set forth on Schedule 2.9(d), the Software Products are
designed to be used prior to, during and after the calendar year 2000 A.D., and
will operate during each such time period without error relating to date data,
specifically including any error relating to, or the product of, date data that
represents or references different centuries or more than one century, including
the fact that the year 2000 is a leap year ("Y2K Compliant"); provided, that it
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is understood and agreed that any failure to comply with the conditions set
forth herein that results from non-compliant hardware, operating system
software, or third-party software products that are not Software Products shall
not constitute a breach by the Seller of the representation and warranty herein.
(e) Except as set forth on Schedule 2.9(e), the Software Products
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developed by either LongView Entity have been developed in a workmanlike manner.
(f) Each LongView Entity shall have at Closing the source code of all
versions currently utilized by such LongView Entity and installations of its
Software Products. The Seller has made available to the Purchaser copies of all
license agreements for any computer programs licensed from the Seller or third
Persons and used by the LongView Entities, other than computer programs that are
subject to a shrink-wrap license.
(g) The LongView Entities have fully paid for all licenses for third
party software that is subject to a shrink-wrap license used in the internal
operations of the LongView Entities, including the licenses appropriate for the
actual number of current and past users of such software. All such licenses are
valid and enforceable against the respective LongView Entity and, to the
knowledge of the Sellers and each LongView Entity, are valid and enforceable
against each other party thereto.
2.10 Government Permits. Each LongView Entity holds all Permits from
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an Authority that are necessary or required for the conduct of its business as
currently conducted, other than those the failure of which to obtain have not
had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. All such Permits are listed on Schedule
2.10 are valid and in full force and effect, and no proceeding is pending, or,
to the knowledge of each of the Seller and the Long View Entities, threatened,
to modify, suspend, revoke or otherwise limit any of such Permits and no action
by any Authority has been taken or, to the knowledge of each of the Seller and
the LongView Entities, is threatened, in connection with the expiration,
revocation, modification or renewal of any of such Permits which if successful
would reasonably be expected to have a Material Adverse Effect.
2.11 Taxes and Tax Returns. (a) Each LongView Entity has filed on a
---------------------
timely basis all returns (including information returns) and reports of all
Taxes (as defined below) required to be filed by it and has timely given and
delivered all Tax notices, accounts and information required to be given by it
in respect of Taxes for which it may be liable. To the knowledge of each of the
Seller and the LongView Entities, all information provided in such returns,
reports, notices, accounts and information was, when filed or given, complete
and accurate in all material respects. Except as set forth on Schedule 2.11(a),
----------------
all Taxes required to be paid by either of the LongView Entities that were or
are due and payable have been paid. Adequate provisions in accordance with
applicable generally accepted accounting principles consistently applied have
been made in the LongView Entities' Financial Statements (as defined in Section
2.12) for the payment of all Taxes for which such LongView Entity may be liable
for the periods covered thereby that were not yet due and payable as of the
dates thereof, regardless of whether the liability for such Taxes is disputed.
(b) Except as set forth in Schedule 2.11(b), to the knowledge of each
----------------
of the Seller and the LongView Entities, there are (i) no pending or threatened
audits, investigations, claims, suits or other proceedings for or relating to
any Taxes for which either of the LongView Entities may become, directly or
indirectly, liable; (ii) no material deficiencies for Taxes of the LongView
Entities have been claimed, proposed or assessed by any taxing or other
governmental authority; (iii) no matters under discussion by the LongView
Entities with any governmental
authorities with respect to Taxes that could result in any additional amount of
Taxes of the LongView Entities; (iv) no extension of a statute of limitations
(whether arising by reason of a waiver, claim for refund, or otherwise) relating
to Taxes of the LongView Entities in effect nor any requests for such are
pending; (v) no requests for rulings or determinations in respect of Taxes of
either of the LongView Entities pending with any governmental Authority; and
(vi) no examinations completed with respect to either LongView Entity's Tax
returns that were filed on or after January 1, 1993 and before the Closing Date.
(c) The Seller has furnished or made available to the Purchaser
complete and accurate copies of all returns and reports of all Taxes filed by
the LongView Entities on or prior to the date hereof. Except as set forth on
Schedule 2.11(c), each of the LongView Entities has collected or withheld all
----------------
Taxes that it is required to collect or withhold. Except as set forth on
Schedule 2.11(c), upon consummation of the transactions contemplated hereby,
neither of the LongView Entities will be a party to or bound by any Tax
indemnity, Tax sharing or Tax allocation agreement (whether written or unwritten
or arising under operation of federal law as a result of being a member of a
group filing consolidated tax returns, under operation of certain state laws as
a result of being a member of a unitary group or under comparable laws of other
states or foreign jurisdictions), or any other contractual obligation to pay the
Tax obligations of another person or to pay Tax obligations relating to
transactions of another person.
(d) LongView has never elected to be treated as an S corporation
pursuant to section 1362(a) of the Code. LongView has never been a party to any
transaction intended to qualify under Code section 355 or any corresponding
provision of state law. The Seller is a United States person within the meaning
of the Code. LongView does not have and has not had a permanent establishment in
any foreign country, as defined in any applicable tax treaty or convention
between the United States of America and such foreign country, and LongView has
not engaged in a trade or business within any foreign country. Except for an
establishment in the United Kingdom, LongView UK does not have and has not had a
permanent establishment in any foreign country, as defined in any applicable tax
treaty or convention between the United States of America and such foreign
country, and LongView UK has not engaged in a trade or business within any
country except Great Britain. All material elections with respect to the Taxes
of the LongView Entities made during the fiscal years ending January 31, 1996,
1997 and 1998 and August 31, 1998 and December 31, 1998 are reflected on their
respective Tax returns for such periods, copies of which have been provided or
made available to the Purchaser. After the date of this Agreement, no material
election with respect to Taxes will be made without the prior written consent of
the Purchaser, which consent will not be unreasonably withheld or delayed.
Neither of the LongView Entities is a party to any joint venture, partnership or
other arrangement or contract that could be treated as a partnership for United
States federal income tax purposes. Neither of the Longview Entities will be
required to include any material adjustment in taxable income for any Tax period
(or portion thereof) beginning after the Closing Date pursuant to Code section
481 or 263A or any comparable provision under state or foreign Tax law as a
result of transactions, events, or accounting methods employed prior to the
Closing Date.
(e) "Tax" and "Taxes" shall mean (i) all taxes, assessments, levies,
--- -----
imposts, duties, fees, withholdings, or other similar governmental charges,
including, without limitation, income taxes, franchise taxes, transfer taxes or
fees, sales taxes, excise taxes, ad valorem taxes,
withholding taxes, minimum taxes and social security taxes, and (ii) any
interest, penalties or additions to tax imposed on a Tax described in clause (i)
hereof, imposed by any national, regional, local or foreign government or
subdivision or agency of any of the foregoing.
2.12 Financial Statements; Liabilities. (a) The Seller has furnished
---------------------------------
the Purchaser with the LongView Entities' financial statements and balance
sheets listed on and attached to Schedule 2.12 (the "Financial Statements").
------------- --------------------
Each of the Financial Statements and notes thereto has been prepared from the
books and records of the LongView Entities in accordance with the generally
accepted accounting principles, practices and methods applicable to the
applicable LongView Entity, applied on a consistent basis (except as otherwise
disclosed therein) and presents fairly the financial condition and results of
operations of the applicable LongView Entity as of the respective dates and for
the periods specified therein except, in the case of interim financial
statements, for normal year-end audit adjustments.
(b) Neither of the LongView Entities has any liabilities or
obligations of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, which are of a type required to be reflected
on, or described in a footnote to, an audited balance sheet prepared under the
generally accepted accounting principles, practices or methods applicable to
such LongView Entity, except to the extent specifically disclosed or provided
for in the applicable Financial Statement or incurred since the date of such
Financial Statement in the ordinary and usual course of business consistent with
past practices, except as set forth on Schedule 2.12(b).
----------------
(c) The books of account and other records of the LongView Entities
are complete and correct and have been maintained in accordance with sound
business practices.
2.13 Absence of Certain Changes and Events. Except as permitted by
-------------------------------------
Section 4.3 or set forth on Schedule 2.13, since August 31, 1999 through the
-------------
date hereof, each of the LongView Entities has conducted its business only in
the ordinary and usual course consistent with past practice and no event or
development has occurred that has had or would be reasonably expected to have a
Material Adverse Effect. Without limiting the generality of the first sentence
of this Section 2.13, except as permitted by Section 4.4 or set forth on
Schedule 2.13, since August 31, 1999 through the date hereof, neither of the
-------------
LongView Entities has:
(a) Authorized for issuance, issued, delivered or sold any debt or
equity securities, or altered the terms of any outstanding securities issued by
it;
(b) Declared, paid or set aside for payment any dividend or other
distribution (whether in cash, stock or property or otherwise) in respect of any
shares of capital stock, or redeemed, purchased or otherwise acquired such
shares, any securities convertible into or exchangeable for such shares or any
options, warrants or other rights to purchase or subscribe to any of the
foregoing;
(c) Paid, discharged or satisfied any liability or obligation or
forgiven or otherwise cancelled any debt or claims or waived any rights (whether
accrued, absolute, contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary and usual course of business and consistent with
past practice, of liabilities or obligations shown or
reflected on the Financial Statements or incurred in the ordinary and usual
course of business since August 31, 1999;
(d) Except in the ordinary and usual course of business and
consistent with past practice, permitted or allowed any assets (whether real,
personal or mixed, tangible or intangible) to be subjected to any Lien (other
than purchase money security interests granted in the ordinary course of
business);
(e) Written off as uncollectible any notes or accounts receivable
other than in immaterial amounts or in the ordinary and usual course of business
consistent with past practice;
(f) Cancelled or waived any claims or rights of value or sold,
transferred, distributed or otherwise disposed of any assets other than in the
ordinary and usual course of business and consistent with past practice;
(g) Granted any increase in the compensation of any officer,
director, employee or agent, whether now or hereafter payable, or granted any
severance or termination pay in respect of any such person, or entered into or
varied the terms of any employment agreement with any such person or adopted,
amended in any material respect or terminated any Benefit Plan under ERISA (as
defined in Section 2.15), non-ERISA arrangement, bonus, profit sharing or other
employee benefit plan, agreement or arrangement of general applicability for the
benefit of its officers, directors or employees;
(h) Made any material capital expenditure or material commitment for
additions to property or equipment or other capital expenditures, or leased or
agreed to lease any material assets;
(i) Made any material change in any method of accounting or keeping
its books of account or accounting practices, except as required as a result of
changes in the generally accepted accounting practices applicable to such
LongView Entity;
(j) Incurred any material indebtedness for borrowed money or any
other material obligation or liability other than liabilities incurred in the
ordinary and usual course of business consistent with past practice;
(k) Amended its Articles of Incorporation, By-laws or other
organizational documents;
(l) Suffered any strike or other material employment-related problem;
(m) Suffered any loss of any key employee or key customer;
(n) Commenced or terminated any line of business;
(o) Amended or given any consents under any Material Contracts;
(p) Taken any action or omitted to take any action that is reasonably
likely to result in the occurrence of, or agreed or committed to do, any of the
foregoing (other than as expressly contemplated by this Agreement).
2.14 Employment Matters. (a) Schedule 2.14(a) sets forth a complete
------------------ ----------------
list of each material plan, program, arrangement or agreement that is an
employment, consulting or deferred compensation agreement, or an executive
compensation, bonus, employee pension, profit-sharing, savings, retirement,
stock option, stock purchase, severance pay, life, health, disability or
accident insurance plan, or vacation, or other employee benefit plan, program,
arrangement, agreement or commitment, including, without limitation, any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (each such plan, a "Benefit
----- -------
Plan"), to the extent such Benefit Plan is maintained for the benefit of current
----
or former officers or employees of a LongView Entity (each such Benefit Plan, a
"Schedule 2.14 Plan"). Except as set forth on Schedule 2.14, neither LongView
------------------ -------------
Entity has any binding commitment to create any additional material Benefit Plan
or to modify or change any existing Schedule 2.14 Plan.
(b) Except as set forth in Schedule 2.14, with respect to each
Schedule 2.14 Plan, (i) all material payments due from either of the LongView
Entities to date have been made and all material amounts properly accrued to
date as liabilities of the applicable LongView Entity that have not been paid
have been properly recorded on the books of such LongView Entity, (ii) each
LongView Entity has complied in all material respects with, and each such
Schedule 2.14 Plan complies in all material respects with, currently applicable
provisions of all applicable Laws (including, without limitation and to the
extent applicable, ERISA and the Internal Revenue Code of 1986, as amended (the
"Code")), (iii) there are no material actions, suits or claims pending (other
----
than routine claims for benefits) or, to the knowledge of each of the Seller and
the LongView Entities, threatened with respect to any such Schedule 2.14 Plan or
against the assets of any such Schedule 2.14 Plan and (iv) each Schedule 2.14
Plan which is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service.
(c) No Schedule 2.14 Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured) with respect to
any current or former employee of the applicable LongView Entity beyond their
retirement or other termination of service (other than (i) coverage mandated by
applicable Law, (ii) retirement or death benefits under any employee pension
plan, (iii) disability benefits under any employee welfare plan that have been
fully provided for by insurance or otherwise, (iv) deferred compensation
benefits accrued as liabilities on the books of LongView or (v) benefits in the
nature of severance pay).
(d) No Schedule 2.14 Plan is a Benefit Plan subject to Title IV of
ERISA.
(e) With respect to each Schedule 2.14 Plan, the Seller has made
available to the Purchaser, if applicable, true and complete copies of: (a) the
most recent versions of all plan documents and all amendments thereto; (b) all
trust instruments and insurance contracts; (c) the last two Forms 5500 filed
with the Internal Revenue Service; (d) the most recent actuarial report and
financial statement; (e) the most recent summary plan description; (f) any and
all forms filed
with the PBGC; and (g) the most recent determination letter issued by the
Internal Revenue Service.
(f) Neither LongView Entity has violated any material provision of
any Law or arbitration award of any court, arbitrator or any government agency
regarding the terms and conditions of employment of employees, former employees
or prospective employees or other labor related matters, including, without
limitation, Laws and awards relating to discrimination, fair labor standards and
occupational health and safety, wrongful discharge or violation of the personal
rights of employees, former employees or prospective employees.
(g) There is no labor strike, dispute, organizing effort, slowdown or
stoppage actually pending or, to the knowledge of the Seller and the LongView
Entities, threatened against or involving either of the LongView Entities, or
collective bargaining agreement to which either of the LongView Entities has
been a party in the past five years.
(h) Neither LongView Entity is a party to any collective bargaining
agreement and there are no labor unions or other organizations representing,
purporting to represent, or to the knowledge of each of the Seller and the
LongView Entities, attempting to represent any employee of either of the
LongView Entities.
2.15 Employment, Severance and Termination Agreements, Etc. Schedule
----------------------------------------------------- --------
2.15 lists all employment, severance, "golden parachute" or termination or
----
compensation agreements, arrangements or understandings of either of the
LongView Entities with any present director, officer, employee, consultant or
group of employees of such LongView Entity, other than agreements (listed on
Schedule 2.15) terminable by the applicable LongView Entity at will without
-------------
expense or liability to such LongView Entity. Except as set forth on Schedule
2.15, none of the agreements, arrangements or understandings listed on Schedule
2.15 provides for payments by either of the LongView Entities in connection with
any change in control of a LongView Entity, and no payment amount will be become
due from either of the LongView Entities to any current or former employee,
consultant, officer or director of such LongView Entity solely as a result of
the transactions contemplated by this Agreement. The Seller has delivered to the
Purchaser a true and complete list of all of the officers, senior managers and
directors of each of the LongView Entities, specifying their respective office
and annual rate of compensation, and a true and complete list of the respective
employees of the LongView Entities employed as of September 23, 1999, setting
forth each such employee's compensation and date of hire. Except as disclosed in
Schedule 2.14 or 2.15, the LongView Entities have no material obligations,
---------------------
contingent or otherwise with respect to employees employed by either of the
LongView Entities: (i) under any employment contract, agreement, commitment,
undertaking or understanding, plan, program, policy or arrangement; (ii) under
any bonus, incentive or deferred compensation contract, agreement, commitment,
undertaking or understanding, plan, program, policy or arrangement (including
one for severance or other payments conditioned upon a change of control of the
LongView Entities); (iii) under any pension, profit-sharing, stock purchase or
any other such plan, program or arrangement; or (iv) under any arrangement that
has resulted or could result in the payment of any "excess parachute payment" as
defined in Section 280G of the Code (without regard to subsection (b)(4)
thereof).
2.16 Litigation; Compliance with Law. (a) Except as set forth on
-------------------------------
Schedule 2.16 or Schedule 2.11(b), there is no judicial, administrative,
-------------
arbitral or alternative dispute resolution proceeding, suit or investigation
pending or, to the knowledge of each of the Seller and the LongView Entities,
threatened by or against a LongView Entity, including, without limitation, with
respect to or affecting the business or financial condition of either of the
LongView Entities, or the consummation of the transactions contemplated hereby.
Neither LongView Entity is a party to, or subject to the provisions of, any
Judgment. The Seller has made available to the Purchaser copies of all available
audit response letters received by or with respect to the LongView Entities for
the past five years. Neither of the LongView Entities has tendered the defense
of any claim to an insurance carrier.
(b) Except as set forth in Schedule 2.16(b), the business of each of
----------------
the LongView Entities is being conducted in compliance with all applicable Laws
and Judgments of any court or Authority, except for such noncompliance that,
individually and in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect.
2.17 No Brokers. No Person has acted on behalf of the Seller or
----------
either of the LongView Entities in connection with the transactions contemplated
by this Agreement in such manner as to give rise to any valid claim against the
Purchaser or either of the LongView Entities for any broker's or finder's fee or
similar compensation in connection with the transactions contemplated by this
Agreement.
2.18 Relationships with Related Persons. Except as set forth in
----------------------------------
Schedule 2.18, neither the Seller nor any other Barclays Group Member (other
-------------
than the LongView Entities) has any interest in any property used in or
pertaining to the business of the LongView Entities. Except as set forth in
Schedule 2.18, neither the Seller nor any other Barclays Group Member (other
-------------
than the LongView Entities) has had since September 1, 1998 (a) business
dealings (other than ordinary dealings among Barclays Group Members) or a
material financial interest in any transaction with either of the LongView
Entities or (b) engaged in the Business (as defined below) in competition with
either of the LongView Entities within the past two (2) years; provided, that
--------
the foregoing representation and warranty shall not apply to any computer
software developed and used by the Seller or any such subsidiary if in
connection with its business and operations and not developed, maintained, or
supported for the purpose of commercial resale or license. Except as set forth
in Schedule 2.7 or 2.18, neither the Seller nor any other Barclays Group Member
--------------------
(other than the LongView Entities) is a party to any contract with, or has a
claim or right against, either of the LongView Entities.
2.19 Bank Accounts. A list of all bank, money market, savings and
--------------
similar accounts and safe deposit boxes of each of the LongView Entities,
specifying the account numbers and the authorized signatories or persons having
access to them, has been made available to the Purchaser. No such account is
overdrawn or subject to any penalty. No draw on any such account has resulted in
an extension of credit to either of the LongView Entities that has not been
repaid.
2.20 Environmental Matters. Neither of the LongView Entities has ever
---------------------
generated, transported, used, stored, treated, disposed of or managed any
hazardous waste. No hazardous material has ever been or, to the knowledge of
each of the Seller and the LongView
Entities, is threatened to be spilled, released or disposed of by either
LongView Entity at any site presently or formerly owned, operated, leased or
used by either of the LongView Entities, or has ever come to be located in the
soil or groundwater at any such site as a result of any action by either
LongView Entity. To the knowledge of the Seller and each of the LongView
Entities, neither of the LongView Entities presently owns, operates, leases or
uses, nor has it previously owned, operated, leased or used any site on which
underground storage tanks are or at any time were located and used by either of
the LongView Entities and no lien has ever been imposed by any Authority on any
property, facility, machinery or equipment owned, operated, leased or used by
either of the LongView Entities in connection with the presence of any hazardous
material. Neither of the LongView Entities has ever entered into or been subject
to any judgment, consent decree, compliance order or administrative order with
respect to any environmental or health or safety matter or received any request
for information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any law relating to the environment or to
health and safety, and neither the Seller nor either of the LongView Entities
has any knowledge that any will be forthcoming.
2.21 Material Information. No representation or warranty by the
--------------------
Seller in this Agreement or in any Exhibit or Schedule furnished or to be
furnished to the Purchaser pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact,
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
2.22 No Other Representations. The Seller acknowledges that, except
------------------------
as set forth in Article III, the Purchaser has made no representation or
warranty whatsoever to the Seller.
2.23 Ownership of Barclays Global Investors. On the date hereof, the
--------------------------------------
Seller has good and marketable title to all of the issued and outstanding shares
of capital stock of Barclays Global Investors, N.A. ("BGI").
2.24 Xxxxxxx Xxxx Special Incentive. All amounts required to be paid
------------------------------
to Xxxxxxx X. Xxxx pursuant to that certain Equity Incentive Award Plan, dated
as of August 20, 1998, are obligations solely of BGI and not of either LongView
Entity.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to the Seller the
following:
3.1 Due Organization, Etc. The Purchaser is a corporation duly
---------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with full power and authority to own, lease
and operate its assets and to carry on its business as now conducted.
3.2 Due Authority; No Breach. The Purchaser has all requisite power
------------------------
and authority to enter into this Agreement and each of the Ancillary Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each of the Ancillary Agreements
and the consummation of the transactions provided for hereby and thereby have
been duly authorized by the Board of Directors of the Purchaser and no other
proceeding on the part of the Purchaser is necessary to authorize the execution
or delivery of this Agreement or the Ancillary Agreements or the consummation of
any of the transactions contemplated hereby or thereby. Each of this Agreement
and the Ancillary Agreements has been duly executed and delivered by the
Purchaser and, assuming due execution and delivery by the Seller, constitutes a
legal, valid and binding obligation of the Purchaser enforceable against it in
accordance with the terms thereof, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in an action at law or a suit in equity). Neither the
execution and delivery of this Agreement or any Ancillary Agreement, the
performance by the Purchaser of its obligations hereunder or thereunder nor the
consummation of the transactions provided for hereby or thereby does or will:
(i) conflict with or violate any provision of the Certificate of
Incorporation, By-laws or any other document of governance of the Purchaser;
(ii) violate, conflict with or result in the breach or termination
of, or otherwise give any other person or entity the right to accelerate,
renegotiate or terminate or receive any payment, or require any consent, or
constitute a default, event of default (or an event which with notice, lapse of
time, or both, would constitute a default or event of default), under the terms
of, any material contract, agreement, commitment, undertaking, lease, license,
mortgage, bond, note or other instrument or any Permit to which the Purchaser is
a party or by which it or its securities, properties or business are bound;
(iii) result in the creation of any Liens upon any of its securities,
properties or business;
(iv) constitute a violation by the Purchaser of any Law or Judgment;
or
(v) require any consent, approval, waiver, order or authorization
of, other than the pre-merger notification requirements of the HSR Act.
3.3 Investment. The Purchaser hereby confirms that the Shares and
----------
the UK Shares will be acquired for investment for the Purchaser's own account
and not with a view toward distribution within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"); provided, that it is understood that
-------------- --------
this representation and warranty is made without prejudice to the Purchaser's
right at all times to resell, transfer, or otherwise dispose of all or any part
of the Shares and the UK Shares pursuant to either registration or an exemption
from registration under the Securities Act.
3.4 No Brokers. No Person has acted on behalf of the Purchaser in
----------
connection with the transactions contemplated by this Agreement in such manner
as to give rise
to any valid claim against the Seller for any broker's or finder's fee or
similar compensation in connection with the transactions contemplated by this
Agreement.
3.5 Consolidated Balance Sheet. (a) The Purchaser has provided the
--------------------------
Seller with the consolidated balance sheet of the Purchaser as of August 31,
1999 (the "Purchaser Balance Sheet"), a copy of which is attached hereto as
-----------------------
Schedule 3.5(a). The Purchaser Balance Sheet has been prepared in accordance
---------------
with the generally accepted accounting principles, practices and methods
applicable to the Purchaser, applied on a consistent basis (except as otherwise
disclosed therein) and presents fairly the financial condition and results of
operations of the Purchaser as of August 31, 1999, except for normal year-end
audit adjustments.
(b) The Purchaser has no liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, and whether due or to become
due, which are of a type required to be reflected on an audited balance sheet
prepared under the generally accepted accounting principles, practices or
methods applicable to the Purchaser, except to the extent specifically provided
for in the Purchaser Balance Sheet or incurred since the date of the Purchaser
Balance Sheet in the ordinary and usual course of business consistent with past
practices, or as set forth on Schedule 3.5(b).
---------------
(c) As of the date hereof, the amount of unrestricted cash that the
Purchaser has on hand, net of all obligations under capital leases and notes
payable with a maturity of less than one year ("Net Cash"), is not materially
--------
different from the Net Cash derived from the entries on the Purchaser Balance
Sheet.
3.6 Material Information. No representation or warranty by the
--------------------
Purchaser in this Agreement or in any Exhibit or Schedule furnished or to be
furnished to the Seller pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact,
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
3.7 No Other Representations. The Purchaser acknowledges that,
------------------------
except as set forth in Article II, the Seller has made no representation or
warranty whatsoever to the Purchaser.
ARTICLE IV
----------
COVENANTS OF SELLER
-------------------
4.1 Notice of Certain Events. The Seller shall notify the
------------------------
Purchaser promptly of: (a) any event or condition that would cause any of the
representations and warranties made by the Seller contained herein no longer to
be complete and accurate as of any date on or before the Closing Date, (b) any
failure on the part of the Seller to comply with any of its covenants or
agreements contained herein at any time on or before the Closing Date and (c)
any notice of, or other communication relating to, a material default or other
event, which with notice or the lapse of time or both would become a material
default, received by the Seller or either of the LongView Entities subsequent to
the date of this Agreement and prior to the Closing, under any Material
Contract. No notice given pursuant to this Section 4.1 shall reduce in any way
the Seller's indemnification obligations under Article VI.
4.2 Ordinary Course of Business. During the period from the date
---------------------------
hereof until the Closing, except as specifically provided in Section 4.3 or
elsewhere in this Agreement or as otherwise consented to in writing by the
Purchaser (which consent will not be unreasonably withheld), the Seller will
cause each LongView Entity to:
(i) carry on its business only in the ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent with such business, use all reasonable best efforts to preserve
intact its present business organization, keep available the services of its
present employees and preserve its relationships with clients, suppliers,
customers, distributors and others having business dealings with it, perform its
obligations under all Material Contracts and Permits, conduct its business in
compliance with all applicable Laws and Judgments, maintain all assets other
than those disposed of in the ordinary course of business in good repair and
condition, maintain its books of account and records in the usual, regular and
ordinary manner, and preserve its good will and ongoing business;
(ii) not amend its Articles of Incorporation or By-laws;
(iii) not acquire, by merger, consolidation, purchase of stock or
assets or otherwise, any interest in any corporation, partnership, association
or other business organization or division thereof;
(iv) not alter its outstanding capital stock or equity interests or
declare, set aside, make or pay any dividend or other distribution in respect of
its capital stock or equity interests (in cash or otherwise), or purchase or
redeem any shares of its capital stock or equity interests;
(v) not issue or sell (or agree to issue or sell) any of its
capital stock or equity interests or any options, warrants or other rights to
purchase any such stock or interests or any securities convertible into or
exchangeable for such stock or interests;
(vi) not incur any indebtedness for borrowed money (including
through the issuance of debt securities) or vary the terms of any existing
indebtedness or guarantee or otherwise become liable for any material obligation
or liability;
(vii) not mortgage, pledge or subject to any Lien, any of its
properties;
(viii) not discharge or satisfy any material Lien or pay or satisfy
any material obligation or liability (fixed or contingent) or compromise, settle
or otherwise adjust any material claim or litigation or cancel or waive any
claims or rights of value;
(ix) not lease, acquire or dispose of any substantial assets or
rights, including without limitation any Proprietary IP; provided that LongView
--------
shall be entitled to grant licenses to the Proprietary IP in the ordinary course
of business;
(x) not make any change in its accounting procedures or practices
unless mandated by generally accepted accounting principles;
(xi) except as set forth on Schedule 4.2(xi) not to grant to any
officer, director, consultant or employee any increase or modification of
compensation or benefits, or any severance or termination pay, or make any loan
to or enter into any new employment agreement or arrangement with any such
person;
(xii) not adopt, enter into, amend in any material respect, announce
any intention to adopt or terminate, any Benefit Plan, program or arrangement of
general applicability;
(xiii) not reduce or eliminate any insurance coverage;
(xiv) not enter into any new Material Contract, or amend in any
material respect or grant any consent under any Material Contract;
(xv) not close any bank account;
(xvi) not write off as uncollectible any notes or accounts
receivable other than in immaterial amounts;
(xvii) not commence or terminate any line of business;
(xviii) not institute any judicial, administrative, arbitral or
alternative dispute resolution, proceeding, suit or investigation; and
(xix) not agree to take any of the actions set forth in the
foregoing subparagraphs (iii) through (xviii);
provided, however, that the Seller shall not be liable for any breach of this
-------- -------
Section 4.2 to the extent that the action of a LongView Entity resulting in such
breach was taken at the direction of the Purchaser or its representatives.
4.3 Intercompany Liabilities. Notwithstanding Section 4.2, the
------------------------
Seller shall be entitled to the proceeds of all receivables of the LongView
Entities' that relate to any period ending on or prior to the date of this
Agreement (the "Receivables") regardless of when the Receivables are actually
-----------
paid, including without limitation the Receivables listed on Schedule 4.3 (which
-------------
such Receivables listed thereon the Seller represents and warrants conform to
the definition of Receivables) and all cash received by the LongView Entities
prior to the Closing (other than cash received in respect of any receivable
relating to any period following the date hereof and any cash provided by the
Purchaser to either of the LongView Entities following the date hereof);
provided, that each of the LongView Entities otherwise conducts its business
--------
only in the ordinary course consistent with past practice and, specifically,
does not incur any debt, dispose of any other assets or otherwise raise cash
other than in the ordinary course of business; and provided further, that the
-------- -------
Seller shall not be entitled to any amount of cash and Receivables in excess of
the total amount of intercompany obligations owed by the LongView Entities to
the Seller and the other Barclays Group Members. The Purchaser shall cause each
LongView Entity
to exercise commercially reasonable efforts to collect any and all Receivables
remaining unpaid following the Closing and to remit at least monthly to the
Seller all payments received by either of the LongView Entities following the
Closing in respect of any Receivables; provided, that LongView shall not, and
--------
the Purchaser shall not cause LongView to, write off any Receivable following
the Closing unless LongView shall have first offered the Seller the opportunity
in writing to assume such Receivable and the Seller shall have not indicated its
desire to do so in writing within ten (10) business days after the date of such
notice.
4.4 Waiver of Intercompany Obligations. Effective as of the Closing,
----------------------------------
the Seller, acting on behalf of all of the Barclays Group Members, hereby waives
all amounts in the nature of intercompany obligations that are payable, due or
owing as of the Closing by either of the LongView Entities to any Barclays Group
Member. From and after the Closing, the Seller shall defend, indemnify and hold
harmless the Purchaser from and against all payments, damages, liabilities,
costs, expenses and obligations arising out of or in connection with any claim
by a Barclays Group Member with respect any such intercompany obligation to the
extent existing immediately following the Closing.
4.5 Access to Properties and Records. Between the date of this
--------------------------------
Agreement and the Closing Date, but subject to the confidentiality obligations
binding on Purchaser, the Seller shall cause each LongView Entity to (i) provide
to the Purchaser and its authorized representatives reasonable access to the
premises and operations of such LongView Entity during normal business hours and
on reasonable notice to the Seller, (ii) permit the Purchaser and their
authorized representatives to make such inspections of the premises and
operations as they may reasonably request and (iii) cause the officers and
employees of the LongView Entities to furnish to the Purchaser and its
authorized representatives such financial and operating data as they may from
time to time reasonably request. Neither the Purchaser nor any of its
authorized representatives shall (i) direct or instruct any of the officers or
employees to cause either of the LongView Entities to take any action listed in
Section 4.2, without the prior consent of the Seller or (ii) otherwise interfere
in any way with the conduct of such LongView Entity's business. Notwithstanding
the first sentence of this Section 4.5, neither the Seller nor either of the
LongView Entities shall be required to disclose any agreement executed in
connection with the acquisition by the Seller of LongView or investment in
LongView by any other entity to the extent such agreements do not contain any
information relevant to LongView's continuing operations. Upon the Closing, the
Seller shall deliver all books and records and any other assets of the LongView
Entities in its possession to the respective LongView Entity or to such other
Person identified in writing by the Purchaser to the Seller; provided, that the
--------
Seller may retain a copy of any such books and records that it deems reasonably
necessary to satisfy any applicable tax, accounting, legal or regulatory
obligations to which it is subject; provided, further, that the Seller shall
-------- -------
treat such books and records as confidential and shall not, and shall cause its
directors, officers, employees and representatives to not, use or disclose the
information contained therein except as (i) permitted hereunder or (ii) as may
be required by judicial or administrative process or applicable law or
regulation.
4.6 Acquisition Proposals. During the period from the date of this
---------------------
Agreement until the earlier of (i) October 15, 1999 and (ii) the Closing Date,
neither the Seller or LongView nor any of such entities' directors, officers,
employees, agents or representatives will (a) solicit or encourage, directly or
indirectly, any inquiries, discussions or proposals for, (b)
continue, propose or enter into negotiations looking toward, or (c) enter into
any agreement or understanding providing for, any acquisition of the capital
stock, assets or business of LongView (other than the transactions contemplated
hereby); nor shall any of such entities provide any information to any Person
(other than to the Purchaser and its representatives) for the purpose of
evaluating or determining whether to make or pursue any inquiries or proposals
with respect to any such transaction. The Seller will immediately advise the
Purchaser of, and communicate to the Purchaser the terms of, any such inquiry or
proposal that the Seller or LongView may receive or of which either of them may
become aware.
4.7 Non-Competition. (a) The Seller agrees that, during the one
---------------
year period commencing on the Closing Date, neither the Seller nor any of its
subsidiaries will, directly or indirectly, engage in the business of developing,
designing, manufacturing, producing, distributing, maintaining or supporting
computer software of a type owned by LongView or licensed by LongView to third
parties as of the Closing Date, in competition with LongView (the "Business");
--------
provided, however, that the foregoing covenant shall not apply to any computer
-------- -------
software developed by the Seller or any such subsidiary with the assistance of
the Purchaser; or any computer software used by the Seller or any such
subsidiary only in connection with its business and operations and not
developed, maintained, or supported for the purpose of commercial resale or
license, (ii) induce or attempt to induce any employee or independent contractor
of the LongView Entities to leave such LongView Entity, (iii) in any way
interfere with the relationship between either of the LongView Entities and any
of its employees or independent contractors, or (iv) induce or attempt to induce
any customer, supplier, licensee or business relation of the LongView Entities
to cease doing business with the LongView Entities, or in any way interfere with
the relationship between any customer, supplier, licensee or business
relationship of the LongView Entities.
4.9 Cooperation - Tax Returns and Audits. The Seller shall cooperate
------------------------------------
fully with the Purchaser in connection with the Purchaser's preparation and
filing of any tax return required to be filed in respect of any Tax imposed on
the LongView Entities for any taxable period that ends on or after the Closing
Date, or any audit examination or administrative or judicial proceeding by any
governmental taxing authority in respect of any Tax for any taxable period that
ends on or before the Closing Date. Such cooperation shall include, but is not
limited to, the furnishing or making available of relevant records, books of
account or other materials.
ARTICLE V
---------
COVENANTS OF PURCHASER; JOINT COVENANT
--------------------------------------
5.1 Provision of Balance Sheets; Notification of Reduction in Net
-------------------------------------------------------------
Cash.
----
(a) From the date hereof for so long as the Promissory Note is
outstanding, the Purchaser shall (i) provide to the Seller by facsimile
transmission on a monthly basis the Purchaser's consolidated balance sheet (the
"Monthly Balance Sheet") as of the end of each month on or before the fifteenth
---------------------
day following the end of the month to which such Monthly Balance Sheet pertains;
and (ii) notify the Seller by facsimile transmission within two days
following the end of any month in which the Promissory Note is outstanding if,
as of the end of the immediately preceding month, the Purchaser had on hand less
than $20 million in Net Cash. The Seller shall treat the Purchaser Balance Sheet
and all such Monthly Balance Sheets as well as any facsimile transmission sent
within such two day period as confidential and shall not, and shall cause its
directors, officers, employees and representatives to not, use or disclose the
information contained therein except (i) as permitted hereunder or in connection
with an action to enforce the Seller's rights under the Promissory Note or (ii)
as may be required by judicial or administrative process or applicable law or
regulation.
(b) The Purchaser shall send with each Monthly Balance Sheet by a
certificate in the form attached hereto as Exhibit D, whereby the Purchaser
---------
shall represent and warrant to the Seller (i) whether or not, as of the date of
such Monthly Balance Sheet, the Purchaser had on hand at least $24 million in
Net Cash if the date of such Monthly Balance Sheet falls at the end of the
calendar quarter or $20 million in Net Cash if the date of such Monthly Balance
Sheet does not fall at the end of the calendar quarter; (ii) that such Monthly
Balance Sheet has been prepared in accordance with the generally accepted
accounting principles, practices and methods applicable to the Purchaser,
applied on a consistent basis (except as otherwise disclosed therein) and
presents fairly the financial condition of the Purchaser as of the date of such
Monthly Balance Sheet, except for normal year-end audit adjustments; and (iii)
that, as of the date of such Monthly Balance Sheet, the Purchaser had no
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise, and whether due or to become due, which are of a type required to
be reflected on an audited balance sheet prepared under the generally accepted
accounting principles, practices or methods applicable to the Purchaser, except
to the extent provided for in such Monthly Balance Sheet, except for normal
year-end audit adjustments.
5.2 Notice of Certain Events. The Purchaser shall notify the Seller
------------------------
promptly of: (a) any event or condition that would cause any of the
representations and warranties made by the Purchaser contained herein no longer
to be complete and accurate as of any date on or before the Closing Date and (b)
any failure on the part of the Purchaser to comply with any of its covenants or
agreements contained herein at any time on or before the Closing Date. No notice
given pursuant to this Section 5.2 shall reduce in any way the Purchaser's
indemnification obligation under Article VI.
5.3 Severance Costs. The Purchaser hereby agrees to be responsible
---------------
for, and shall defend, indemnify and hold harmless the Seller and the other
Barclays Group Members from and against all payments, damages, liabilities,
costs, expenses and obligations arising out of or in connection with the
termination or resignation of any employee of either of the LongView Entities
following the Closing or, if any such action is taken pursuant to a written
instruction from the Purchaser, prior to the Closing, except for any such
payments, damages, liabilities, costs, expenses or obligations based on any
agreement, commitment or action taken prior to the Closing Date by any Barclays
Group Member that is not set forth in Schedule 2.14(a).
-----------------
5.4 Certain Leases. Unless the Purchaser shall have already done so
--------------
prior to the Closing, the Purchaser hereby assumes the obligations of the Seller
and any other Barclays Group Member, whether as lessee or guarantor, under each
lease of real property used in connection with LongView's business listed on
Schedule 2.6, effective as of the later of the Closing Date or the receipt of
any necessary consent under such lease. Upon the effectiveness of
any such consent, the Purchaser shall pay the Seller an amount equal to
$111,000, which represents the deposit in the amount of $111,000 maintained with
Fleet Bank listed on Schedule 2.7(a)(viii) securing the letter of credit
guaranteeing the performance of LongView's obligations under such lease. From
and after the Closing Date the Purchaser shall defend, indemnify and hold
harmless the Seller and such other Barclays Group Member from and against all
payments, damages, liabilities, costs, expenses and obligations arising out of
or in connection with the leases of real property listed on Schedule 2.6.
5.5 Fund Accounting Application. If the Seller or any other Barclays
---------------------------
Group Member shall retain the Purchaser or LongView to build a fund accounting
application, the Purchaser hereby agrees to use its commercially reasonable
efforts, and to cause LongView to use its commercially reasonable efforts, to
facilitate discussions between the Barclays Group and Xxxxx Systems Corporation
to explore the possibilities for outsourcing arrangements between the Barclays
Group and Xxxxx Systems Corporation.
5.6 Inclusion of an Icon. If LongView intends to offer a trade order
--------------------
management system that provides for the linking of users (including through any
version of the LandMark Application), it shall provide the Seller with advance
written notice thereof. At any time thereafter, upon the written request of the
Seller or any other Barclays Group Member, the Purchaser agrees to cause
LongView to include in the computer application controlling such trade order
management system an icon or other access mechanism that has the functionality
of linking to one Barclays Group Member any user that activates such access
mechanism, for purposes of executing trade orders; provided, that, in the event
--------
the access mechanism shall be an icon, the Barclays Group Member shall provide
such icon and any such icon shall be consistent with that provided by LongView
to its other customers within such trade management application; provided,
--------
further, that under no circumstances shall the Seller or any other Barclays
-------
Group Member have access to any confidential information of LongView or any user
of the trade order management system by reason of the inclusion of such icon or
other access mechanism in such system. The Purchaser agrees to cause LongView
(i) to provide the Seller with the notice referred to in the first sentence of
this Section 5.6 sufficiently in advance to permit the Seller a reasonable
opportunity to exercise its rights hereunder and (ii) to work in good faith with
the Seller or such other Barclays Group Member to help facilitate the
development by the Seller or such Member of such icon or other access mechanism.
Nothing contained in this Section 5.6 shall be construed to give the Seller or
any other Barclays Group Member rights greater than those granted to other
customers within such trade management application. The Seller acknowledges
that the user of the trade management application may be able to hide any icon
or other access mechanism that may be included.
5.7 LandMarkServiceBureau Executive Overview Fees. The Purchaser
---------------------------------------------
hereby waives payment from LongView, the Seller and the other Barclays Group
Members of a total of $100,000 in fees billed or otherwise billable to LongView,
the Seller or any other Barclays Group Member in connection with the Purchaser's
performance of the LandMarkServiceBureau Executive Overview, pursuant to a
Letter Agreement dated as of June 17, 1999 between the Seller and the Purchaser.
5.8 License to LandMark Application. As long as a Barclays Group
-------------------------------
Member is under a current support and maintenance agreement with LongView for
the LandMark Application, the Purchaser shall cause LongView to continue to
provide the Barclays Group with maintenance and any updates or new releases of
the LandMark Application (including version 3.0, which will incorporate LandMark
Classic and the LandMark List functionalities), when and if available, without
additional charge. Except as set forth in the preceding sentence, nothing in
this Agreement or the transactions contemplated hereby shall affect the existing
license to the LandMark Application, as set forth in that certain Licensing
Agreement dated as of May 1, 1998 between BGI and LongView.
5.9 Joint Covenant: Cash Incentive Bonus Plan. The Purchaser hereby
-----------------------------------------
agrees to cause LongView to pay to the employees of LongView, on or before
February 29, 2000 and as a payment under LongView's Cash Incentive Bonus Plan
for staff and management, an aggregate amount of at least $1,080,000, which
amount represents the amount accrued on the books of LongView through September
30, 1999, an amount that is based solely on the number of days and salaries that
persons currently employed by LongView have worked or will receive, as the case
may be, in the current calendar year, and which amount is to be allocated among
such employees in consultation with the President of LongView. The Seller
agrees to reimburse LongView for $1,080,000 immediately upon written
certification of LongView and the Purchaser to the Seller that the payments
referred to in the preceding sentence have been made.
5.10 Cooperation - Tax Returns and Audits. Purchaser shall cooperate
------------------------------------
fully with the Seller in connection with the Seller's preparation and filing of
any tax return required to be filed by the Seller in respect of any Tax imposed
on LongView for any taxable period that ends on or before the Closing Date, or
any audit examination or administrative or judicial proceeding by any
governmental taxing authority in respect of any Tax for any taxable period that
ends on or before the Closing Date. Such cooperation shall include, but is not
limited to, the furnishing or making available of records, books of account or
other materials of LongView.
5.11 Closing Date Payments. At Closing, the Purchaser shall pay to
---------------------
the Seller an amount equal to the sum of: (i) monthly rent paid by the Seller or
LongView (at a rate of $35,360.50 per month) in respect of any period from and
after the date hereof with respect to LongView's Boston offices listed on
Schedule 2.6(a), (ii) all expenses incurred with respect to LongView's employee
and contractor payroll, together with any and all related taxes and benefits
thereto, for all periods from and after the date hereof and (iii) an amount
equal to $14,445.21, in respect of LongView's payment to the New England
Aquarium in connection with LongView's planned LandMark Application users
conference.
ARTICLE VI
----------
TERMINATION OF REPRESENTATIONS AND WARRANTIES;
----------------------------------------------
INDEMNIFICATION
---------------
6.1 Termination of Representations and Warranties. All
---------------------------------------------
representations and warranties of the parties (other than the representations
and warranties set forth in the last sentence of Section 2.3(a) (good and
marketable title to all the Shares et al.), the last sentence of Section 2.3(b)
(good and marketable title to all the UK Shares et al.) and Section 2.11 shall
survive the Closing for a period of one year from and after the Closing Date
(the "Survival Period") and shall be of no further force or effect thereafter;
---------------
provided that if a claim for indemnification is made in connection with any
--------
representation or warranty before the termination of the Survival Period with
the provisions of Section 6.5, the Survival Period will be extended solely with
respect to such claim until the date of final determination of such claim. The
representations and warranties set forth in the last sentence of Section 2.3(a)
(good and marketable title to all the Shares et al.), the last sentence of
Section 2.3(b) (good and marketable title to all the UK Shares et al.) and
Section 2.11 and all covenants and agreements of the parties set forth in this
Agreement shall survive the Closing and continue in full force and effect
thereafter until such time as the applicable statute of limitations has run.
6.2 Indemnification by the Seller.
-----------------------------
(a) From and after the Closing Date and subject to the provisions of
this Article VI, the Seller shall indemnify, defend and hold harmless the
Purchaser and its officers, directors and employees and their respective
successors and permitted assigns, after taking into account recognized Tax
effects, from and against any and all actions, proceedings, costs, damages,
claims, liabilities (absolute and contingent), fines, penalties and payments
whatsoever (collectively, "Losses"), including reasonable counsel fees, that may
------
be asserted against or suffered by the Purchaser or its officers, directors and
employees and their respective successors and permitted assigns arising out of,
relating to or on account of (i) any breach of any representation, warranty,
covenant or agreement on the part of the Seller made in this Agreement or the
Ancillary Agreements or (ii) any claim against either of the LongView Entities
for unpaid sales or use Taxes relating to periods prior to the Closing Date.
Notwithstanding anything to the contrary in this Agreement, the Purchaser agrees
that the Seller shall have no obligation to indemnify the Purchaser for any
Losses arising out of, relating to or on account of (i) the failure of either of
the LongView Entities to have fully paid and valid licenses for third party
software that is subject to a shrink-wrap license used in the internal
operations of the LongView Entities, including the licenses appropriate for the
actual number of current and past users of such software and (ii) any of the
contingent Tax liabilities described in the second paragraph (Massachusetts
Sales and Use Tax Audit), third paragraph (New York State and City use Tax) and
fourth paragraph (City of Boston personal property Tax) of Schedules 2.11(a) and
2.11(b)(i)-(vi) hereto.
(b) Other than claims arising from or relating to breaches of any
covenant or agreement set forth in Section 4.4 or 5.9, the Seller's obligation
to indemnify the Purchaser for any Losses pursuant to Section 6.2(a) shall not
be effective until the aggregate amount of all such Losses for which the Seller
is liable to the Purchaser under Section 6.2(a) exceeds $250,000 (the "Basket"),
------
subject to Section 6.2(c); provided, that once the amount of Losses for which
--------
the Seller is liable under Section 6.2(a) exceeds the Basket, then the Purchaser
shall be entitled to indemnification for the total amount of its Losses in
excess of $125,000.
(c) Other than claims arising from or relating to breaches of any
covenant or agreement set forth in Section 4.4 or 5.9, in no event shall the
Seller's liability under this Section 6.2 exceed in the aggregate $1,500,000
(the "Maximum Amount").
--------------
6.3 Indemnification by the Purchaser.
--------------------------------
(a) From and after the Closing Date and subject to the provisions of
this Article VI, the Purchaser shall indemnify, defend and hold harmless the
Seller and its officers, directors and employees and their respective successors
and permitted assigns, after taking into account recognized Tax effects, from
and against any and all Losses, including reasonable counsel fees, that may be
asserted against or suffered by the Seller or its officers, directors and
employees or their successors and permitted assigns arising out of, relating to
or on account of any breach of any representation, warranty, covenant or
agreement on the part of the Purchaser made in this Agreement or the Ancillary
Agreements.
(b) Other than claims arising from or relating to breaches of any
covenant or agreement set forth in Section 4.3 or 5.3, the Purchaser's
obligation to indemnify the Seller for any Losses pursuant to Section 6.3(a)
shall not be effective until the aggregate amount of all such Losses for which
the Purchaser is liable to the Seller under Section 6.3(a) exceeds the Basket,
subject to Section 6.3(c); provided, that once the amount of Losses for which
the Purchaser is liable under Section 6.3(a) exceeds the Basket, then the Seller
shall be entitled to indemnification for the total amount of its Losses in
excess of $125,000.
(c) Other than claims arising from or relating to breaches of any
covenant or agreement set forth in Section 4.3 or 5.3, in no event shall the
Purchaser's liability under this Section 6.3 exceed in the aggregate the Maximum
Amount. It is understood and agreed by the parties that the amount due by the
Purchaser to the Seller pursuant to the Promissory Note shall be in no way
limited by the terms of this Section 6.3, including without limitation the
Maximum Amount.
6.4 Effect of Adjustment to Purchase Price. All amounts paid
--------------------------------------
pursuant to this Article VI by one party to another party (other than interest
payments) shall be treated by such parties as an adjustment to the Purchase
Price paid or received by such party, as the case may be.
6.5 Method of Asserting Claims, Etc. The party or parties making a
-------------------------------
claim under this Article VI is, for purposes of this Agreement, referred to as
the "Indemnified Party" and the party or parties against whom such claims are
-----------------
asserted under this Article is, for the purposes of this Agreement, referred to
as the "Indemnifying Party." All claims by an Indemnified Party under this
------------------
Agreement shall be asserted and resolved only as follows:
(a) In the event that (i) any claim or demand for which an
Indemnifying Party would be liable to an Indemnified Party hereunder is asserted
against or sought to be collected from such Indemnified Party by a third party
(such claim or demand, a "Third Party Claim") or (ii) any Indemnified Party
-----------------
hereunder should have a claim or demand against any Indemnifying Party hereunder
which does not involve a claim or demand being asserted against or sought to be
collected from it by a third party (such claim or demand a "Direct Claim"), the
------------
Indemnified Party shall with reasonable promptness notify in writing the
Indemnifying Party of such claim or demand and the amount or the estimated
amount thereof to the extent then feasible to determine (which estimate shall
not be conclusive of the final amount of such claim or demand) (a "Claim
-----
Notice"); provided, however, that any failure to give such notice will not waive
------ -------- -------
any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced.
(b) In the event of a Third Party Claim, the Indemnifying Party may,
and upon request of the Indemnified Party shall, retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and any
others the Indemnifying Party may designate in connection with such claim or
demand and shall pay the fees and disbursements of such counsel with regard
thereto. In the event an Indemnifying Party shall retain such counsel, an
Indemnified Party shall have the right to retain its own counsel, but the fees
and disbursements of the Indemnified Party's counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and such Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii)
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by such
counsel in such proceeding. It is understood that the Indemnifying Party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and disbursements of more than one firm
qualified in such jurisdiction to act as counsel for the Indemnified Party. No
Indemnifying Party shall be liable to an Indemnified Party for any settlement of
any action or claim without the consent of the Indemnifying Party, which consent
shall not be unreasonably withheld. The Indemnifying Party shall not, without
the prior written consent of the Indemnified Party, settle or compromise any
claim or consent to the entry of any judgment that does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect of such claim.
(c) In the event of a Direct Claim, if the Indemnifying Party
notifies the Indemnified Party within sixty (60) days of receipt of a Claim
Notice that it does not dispute such claim, the amount of such claim shall be
conclusively deemed a liability of the Indemnifying Party hereunder and shall be
paid to the Indemnified Party immediately.
6.6 Exclusive Remedy. The provisions of this Article VI shall
----------------
constitute the sole and exclusive remedy of the Purchaser, on the one hand, and
the Seller, on the other, for any Losses suffered by either of them on account
of any breach by the other of any representations, warranties, covenants or
agreements contained in this Agreement.
ARTICLE VII
-----------
TERMINATION
-----------
7.1 Termination. Subject to the provisions of Section 7.2, this
-----------
Agreement may be terminated at any time prior to the Closing Date by the mutual
written agreement of the Purchaser and the Seller. If the Closing has not
occurred on or before February 15, 2000 or such later time as may be mutually
agreed upon by the parties, then either party may terminate this Agreement upon
written notice to the other party. Upon termination of this Agreement, either
of the Seller and Purchaser may execute and deliver to the Escrow Agent a notice
in the form of Exhibit C to the Escrow Agreement (directing the Escrow Agent to
return the Shares and the UK Shares to the Seller and the Purchase Price to the
Purchaser).
7.2 Effect of Termination. If this Agreement is terminated and the
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transactions contemplated hereby are not consummated as provided above, this
Agreement shall become void and of no further force and effect, except for any
liability for any willful breach of a
covenant or agreement contained in this Agreement causing or permitting such
termination and except that the last sentence of Section 5.1(a) and Section 8.1
shall survive such termination.
ARTICLE VIII
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MISCELLANEOUS
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8.1 Costs and Expenses. Whether or not the transactions contemplated
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by this Agreement are consummated, each of the parties to this Agreement shall
bear its own expenses incurred in connection with the negotiation, preparation,
execution and closing of this Agreement and the transactions provided for
hereby; provided, that the parties will share equally in the Xxxx-Xxxxx-Xxxxxx
--------
filing fee.
8.2 Notices. Any notice, request, consent, approval or other
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document, instrument or communication that may be required or permitted to be
delivered or served hereunder shall be effective upon delivery and shall be in
writing and may be personally delivered, mailed by courier or sent by facsimile
and confirmed by telephone as follows (until notice of a change thereof is given
as provided herein):
If to the Seller:
Barclays California Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with copies to:
Barclays Global Investors, N.A.
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Chief Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Purchaser:
TenFold Corporation
000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with copies to:
Xxxxxxx Xxxxx & Xxxxxxx
000 X. Xxxx Xxxxxx, xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
8.3 Counterparts. This Agreement may be executed in counterparts,
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each of which shall, for all purposes, be deemed an original instrument.
8.4 Entire Agreement. This Agreement (including the Exhibits and
----------------
Schedules hereto, which are incorporated herein and made a part hereof), and the
Ancillary Agreements sets forth the entire understanding and agreement between
the parties as to the matters covered herein and supersedes and replaces any
other prior understanding, agreement or statement of intent, in each case,
written or oral, including without limitation the Letter of Intent dated as of
September 19, 1999 between the Purchaser and the Seller, and other
correspondence heretofore exchanged between the parties.
8.5 Transfer Taxes. The Seller shall be responsible for all sales,
--------------
stamp, conveyance, transfer, documentary, use, filing, value added and other
similar taxes and fees imposed with respect to the transfer of the Shares and
the UK Shares to be effected pursuant to this Agreement.
8.6 Captions. All headings contained in this Agreement are for
--------
convenience or reference only and shall not control or affect in any way the
meaning, construction or interpretation of any of the provisions hereof.
8.7 Public Announcements. For a period of three months following the
--------------------
date hereof, the Purchaser and the Seller shall provide each other with
reasonable advance notice and an advance copy of any public announcement or
other public disclosure such party proposes to make concerning the transactions
contemplated hereby, and the parties shall endeavor in good faith to reach
agreement on any issues either party may have with the content, form or timing
of any such public announcement or public disclosure. Notwithstanding the
foregoing, each party shall keep confidential and shall not make at any time
following the date hereof any disclosure whatsoever regarding the amount or form
of the consideration paid or to be paid by the Purchaser
to the Seller for the Shares and the UK Shares, unless and only to the extent
that a party determines that such disclosure (after making commercially
reasonable efforts to avoid such disclosure and after advising and consulting
with the other party about its intention to make, and the proposed contents of,
such disclosure), based on the advice of such disclosing party's counsel, is
required by applicable Law or regulations governing NASDAQ.
8.8 Governing Law; Dispute Resolution.
---------------------------------
(a) This Agreement shall be governed by the laws of the State of
California (without regard to the conflict of laws principles thereof) as to all
matters, including but not limited to matters of validity, construction, effect
and performance.
(b) Any legal disagreement, dispute, controversy or claim arising out
of or relating to this Agreement, the interpretation hereof, the relationship
contemplated hereby, or the breach, termination or invalidity hereof shall be
finally resolved by arbitration in San Francisco, California conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Arbitration under this
Section shall be initiated by written demand for arbitration specifying the
controversy or claim on which arbitration is sought, as well as the relief
requested. It is understood and agreed by the parties that it is not the
parties' intention to have the terms of this Section 8.8 apply in any manner to
any disagreement, dispute, controversy or claim arising out of or relating to
the Promissory Note.
(c) Arbitration shall be before a panel of three arbitrators, one of
whom shall be selected by each party to the dispute within 15 business days
following receipt by the respondent of the demand to arbitrate. The two
arbitrators appointed by the parties shall, within 15 business days of their
appointment, appoint a third, presiding arbitrator, who shall not be affiliated
with either of the arbitrators appointed by the parties or the parties
themselves. If either party fails to appoint an arbitrator, or the two
arbitrators appointed by the parties fail to appoint a presiding arbitrator
within the time limits specified herein, the American Arbitration Association
shall appoint such arbitrator in accordance with its rules. The arbitrators
shall, before accepting such appointment, agree to render their decision to the
parties in writing together with the underlying reasoning, including separate
statements of findings of facts and conclusions of law, no later than 60 days
after completion of hearings, but in no event later than 180 days from the date
of appointment of the last of the arbitrators to be appointed. The parties
agree to use all commercially reasonable efforts to assure that the arbitration
procedure set forth herein, once commenced, shall be completed as expeditiously
as possible. The decision of the arbitrators shall be final and binding upon
the parties and judgment upon the award rendered may be entered in any court
having jurisdiction thereof.
(d) This arbitration agreement is intended to be self-executing. The
expenses of arbitration shall be borne by the party against whom the decision is
rendered, or apportioned in accordance with the decision of the arbitrators in
the event of a compromise decision. All notices from one party to the other
relating to any arbitration hereunder shall be in writing and shall be effective
if given in accordance with the provisions of Section 8.2. Notwithstanding
anything to the contrary herein, the arbitration provisions set forth herein,
and any arbitration conducted thereunder, shall be governed exclusively by the
Federal Arbitration Act, Title 9,
United States Code and by the 1958 United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, to the exclusion of any state or
municipal law of arbitration.
(e) Notwithstanding anything contained in this Section 8.8, each
party shall have the right to institute judicial proceedings against another
party or any Person acting by, through or under such party in order to enforce
the instituting party's rights hereunder through specific performance,
injunction or similar equitable relief. Each party hereby submits to the
jurisdiction of the United States District Court for the Northern District of
California for purposes thereof. Each party hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to laying of the venue of any such suit, action or proceeding brought in
such Court and any claim that any such suit, action or proceeding brought in
such Court has been brought in an inconvenient forum. Each party hereby
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to its address designated in Section 8.2. Each party hereby
agrees that such service (x) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (y) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to it.
8.9 No Third Party Rights. Nothing herein express or implied is
---------------------
intended or shall be construed to confer upon or give any Person, other than the
parties hereto, any rights or remedies under or by reason of this Agreement.
8.10 Amendment and Waiver. This Agreement may be amended, modified or
--------------------
superseded, and any of the terms, covenants or conditions hereof may be waived,
at any time by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure at any time of
any party hereto to require performance by another party of any responsibility
or obligation provided for in this Agreement shall in no way affect the full
right to require such performance at any time thereafter, nor shall the waiver
by any party of a breach of any provision of this Agreement by another party
constitute a waiver of the responsibility or obligation itself.
8.11 Construction and Representation by Counsel. The parties hereto
------------------------------------------
represent that in the negotiation and drafting of this Agreement they have been
represented by and relied upon the advice of counsel of their choice. The
parties affirm that their counsel have had a substantial role in the drafting
and negotiation of this Agreement and, therefore, the rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any Exhibit or
Schedule attached hereto.
8.12 Severability. If any one or more of the provisions contained in
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this Agreement or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall not in any way be affected or impaired; provided, that the
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economic and legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. In the case of any such
invalidity, illegality or unenforceability, the parties hereto agree to use all
commercially
reasonable efforts to achieve the purpose of such provision by a new legally
valid and enforceable stipulation.
8.13 Dollars. All references in this Agreement to "Dollars" and "$"
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shall mean the lawful money of the United States.
8.14 Binding Effect; No Assignment. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement is not assignable without the
prior written consent of each of the parties hereto or by operation of law.
8.15 Knowledge For purposes of this Agreement, an individual will be
---------
deemed to have "knowledge" of a particular fact or other matter if such
individual is actually aware of such fact or other matter. A Person (other than
an individual) will be deemed to have "knowledge" of a particular fact or other
matter if any individual who is serving on the date hereof as a director,
officer, partner, executor, or trustee of such Person (or in any similar
capacity) has, or at any time had, knowledge of such fact or other matter.
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each
of the parties hereto as of the date first above written.
SELLER:
BARCLAYS CALIFORNIA CORPORATION
/s/ Xxxxxx X. Xxxxxxxx
----------------------
By: Xxxxxx X. Xxxxxxxx
Title: CHIEF ADMINISTRATIVE OFFICER
/s/ Xxxxxx X. Xxxxxx
---------------------
By: Xxxxxx X. Xxxxxx
Title: Secretary
PURCHASER:
TENFOLD CORPORATION
/s/ Xxxx X. Xxxxxxx
---------------------
By: Xxxx X. Xxxxxxx
Title: President & CEO
(Exhibits Omitted)
