1
==============================================================================
Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and among
JDA Software Group, Inc., a Delaware corporation,
as "Purchaser"
and
Intactix International, Inc., a Delaware corporation,
as "Seller"
and
Pricer AB, a Swedish corporation,
as "Parent"
Dated as of February 24, 2000
==============================================================================
1
2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered
into as of February 24, 2000 by and among JDA Software Group, Inc., a Delaware
corporation ("Purchaser"), Intactix International, Inc., a Delaware corporation
("Seller"), and Pricer AB, a Swedish corporation ("Parent").
RECITALS
A. Seller and its direct and indirect subsidiaries set forth on
Schedule A attached hereto (each an "Intactix Subs" and collectively the
"Intactix Subs") are engaged in, among other things, the business of developing,
marketing, selling and supporting merchandise shelf space planning, floor space
planning, assortment optimization and planogramming software products to
customers in the retail industry and in the consumer packaged goods industry
(collectively, the "Business");
B. Seller and each of the Intactix Subs desire to sell, assign,
transfer and convey to Purchaser and certain of its direct and indirect
subsidiaries set forth on Schedule B attached hereto (each a "JDA Sub" and
collectively the "JDA Subs"), and Purchaser desires to purchase and acquire from
Seller, and to cause the JDA Subs to acquire from the Intactix Subs, all of the
assets of Seller and/or the Intactix Subs relating to the operation of the
Business, and in connection therewith, Purchaser has agreed to assume, and has
agreed to cause the JDA Subs to assume, certain of the liabilities of Seller and
the Intactix Subs, respectively, relating to the Business, all on the terms set
forth herein (collectively, the "Acquisition").
NOW, THEREFORE, in consideration of the representations, warranties and
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth or referenced below:
1.1 "Accounts Receivable" shall mean any and all accounts receivable
and notes receivable of or amounts owing or payable to Parent, Seller or any
Intactix Sub, billed or unbilled, related to the Assets as of the Closing Date.
1.2 "Acquisition" shall have the meaning set forth in Recital B hereof.
1.3 "Affiliate" of a Person shall mean any other Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such Person. For purposes of this definition,
"control" of a Person shall mean the ownership or control of more than fifty
percent (50%) of the voting securities of such Person or the power, by
2
3
contract or otherwise, to designate a majority of the members of the board of
directors (or in the case of unincorporated entities, persons exercising similar
functions).
1.4 "Affiliate Distributor Agreements" shall mean those distributor and
other agreements listed on Schedule 1.4 of the Seller Disclosure Schedule
attached hereto pursuant to which Parent, Seller or any Intactix Sub has granted
Parent, Seller or any Intactix Sub, or any Affiliate of Parent, Seller or any
Intactix Sub, with distributor rights for any Product within a particular
territory.
1.5 "Assets" shall have the meaning set forth in Section 2.2 hereof.
1.6 "Assumed Contracts" shall mean the Leases, Equipment Leases, Third
Party In-Licenses, Third Party Distributor Agreements, Vehicle Leases and the
Customer License Agreements.
1.7 "Assumed Liabilities" shall have the meaning set forth in Section
2.4(a) hereof.
1.8 "Business" shall have the meaning set forth in Recital A hereof.
1.9 "Business Records" shall mean any and all books, records, files,
drawings, documentation, data, customer list or information of Parent, Seller
and/or any Intactix Sub that have been or now are used exclusively in the
Business or are related exclusively to the Assets or the Assumed Liabilities,
together with all customer records related to the Customer License Agreements, a
copy of Seller's and each Intactix Sub's software bug and tracking system with
respect to the Products and, to the extent allowed by applicable law, all files
and records related to the Employees and Consultants.
1.10 "Closing" shall have the meaning set forth in Section 3.1 hereof.
1.11 "Closing Date" shall have the meaning set forth in Section 3.1
hereof.
1.12 "COBRA" shall mean the provisions for the continuation of health
care enacted by the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, as set forth in the Code and ERISA, and any amendments thereto and
successor provisions thereof, including any regulations promulgated under the
applicable provisions of the Code and ERISA.
1.13 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
1.14 "Competitor Retail Software Vendor" shall mean (i) any software
vendor who derives 50% or more of its total revenues from the retail industry or
consumer packaged goods industry, and (ii) those Persons listed on Schedule 1.14
attached hereto.
1.15 "Consultants" shall mean those (i) independent contractors and
(ii) individuals supplied by third parties who are currently providing, or have
provided during the past 12 months, Parent, Seller and/or any Intactix Sub with
consulting services related to or in connection with the Business listed on
Schedule 1.15 of the Seller Disclosure Schedule.
3
4
1.16 "Contracts" shall mean all written contracts, agreements and
arrangements pursuant to which Parent, Seller and/or any Intactix Sub enjoys any
right or benefit or undertakes any obligation related to the Business or the
Products.
1.17 "Covenant Not to Compete" shall mean, collectively, the covenants
of Parent and Seller set forth in Section 10.5 hereof and the covenants
prohibiting or restricting business activities of any Intactix Sub subsequent to
the Closing Date set forth in a Business Transfer Agreement duly executed by
such Intactix Sub and Purchaser and/or any JDA Sub in connection with the
Acquisition.
1.18 "Customer License Agreements" shall mean those license agreements
entered into with end users of the Products pursuant to which Seller or any
Intactix Sub enjoys any right or benefit or undertakes any obligation related to
any of the Products, or pursuant to which Seller or any Intactix Sub has granted
a third party the right to use any Product.
1.19 "Deferred Revenue" shall mean license fees and maintenance revenue
under those Customer License Agreements listed on Schedule 1.19 of the Seller
Disclosure Schedule that has not yet been recognized under GAAP because
outstanding obligations have not been fulfilled as of the Closing Date.
1.20 "Dollars" or "dollars" shall mean the lawful currency of the
United States of America.
1.21 "Employees" shall mean those employees of Seller or any Intactix
Sub including both active employees (including light duty employees) and
inactive employees (including employees on a leave of absence, sick leave, short
or long term disability or worker's compensation disability on the Closing Date)
who work in the Business as of the Closing Date. Schedule 1.21 of the Seller
Disclosure Schedule sets forth a list of Employees as of December 31, 1999.
1.22 "Encumbrances" shall mean any and all restrictions on or
conditions to transfer or assignment, claims, liabilities, liens, pledges,
mortgages, restrictions, and encumbrances of any kind, whether accrued,
absolute, contingent or otherwise affecting the Assets.
1.23 "Equipment Leases" shall mean those equipment leases listed on
Schedule 1.23 of the Seller Disclosure Schedule.
1.24 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.25 "Escrow Fund" shall have the meaning set forth in Section 2.7
hereof.
1.26 "Escrow Fund Agreement" shall mean that certain Escrow Fund
Agreement, in the form attached hereto as Exhibit A, to be executed by the
parties at the Closing.
1.27 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended to date.
4
5
1.28 "Excluded Assets" shall have the meaning set forth in Section 2.3
hereof.
1.29 "Excluded Liabilities" shall have the meaning set forth in Section
2.4(c) hereof.
1.30 "Excluded Liabilities Insurance Policy" shall mean the insurance
policy issued by Gulf Underwriters Insurance Company, which is attached hereto
as Exhibit C, the premium for which has been paid in full.
1.31 "Facilities" shall mean those office facilities or other real
property that are currently owned or leased by Parent, Seller, any Intactix Sub
or any Affiliate of Parent, Seller or any Intactix Sub, and used exclusively in
connection with the operation of the Business.
1.32 "Financial Statements" shall have the meaning set forth in Section
4.12(a) hereof.
1.33 "GAAP" shall mean generally accepted accounting principles, as in
effect in the United States from time to time, consistently applied.
1.34 "Governmental Entity" shall mean any domestic or foreign,
national, federal, state, regional, provincial, local or municipal governmental
authority, department, commission, board, service, agency, political
subdivision, court or tribunal, or other instrumentality.
1.35 "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended from time to time.
1.36 "Indemnification Claim" shall have the meaning set forth in
Section 12.4(b) hereof.
1.37 "Indemnitor" and "Indemnitee" shall have the respective meanings
set forth in Section 12.4(a) hereof.
1.38 "Intangibles" shall mean guarantees, rights, warranties, claims,
chooses in action, causes of action, demands, rights of recovery, suits,
covenants not to compete and other rights in favor of Parent, Seller and/or any
Intactix Sub relating exclusively to the Assets.
1.39 "Intellectual Property" means trade secrets, patents, inventions,
trademarks, trade names, trade styles, service marks, copyrights, including
registered copyrights and applications for any of the foregoing.
1.40 "Knowledge" or "Known" when used (a) with reference to Parent,
Seller or any Intactix Sub shall mean the current actual Knowledge of any of the
persons listed on Schedule 1.40(a) of the Seller Disclosure Schedule and (b)
with reference to Purchaser or any JDA Sub , it shall mean the current actual
Knowledge of the officers of Purchaser or such JDA Sub listed on Schedule
1.40(b) of the Purchaser Disclosure Schedule.
1.41 "Laws or Decrees" shall mean all applicable foreign, national,
federal, state, regional, provincial, local or municipal laws, ordinances,
codes, rules, statutes, regulations and all orders, writs, injunctions, awards,
judgments or decrees, including any E.U. directives, as amended as of the date
hereof.
5
6
1.42 "Liability" shall mean any direct or indirect liability,
indebtedness, obligation, guarantee or endorsement, whether known or unknown,
whether accrued or unaccrued, whether absolute or contingent, whether due or to
become due, or whether liquidated or unliquidated, of Seller and/or any Intactix
Sub relating to the Business or the Assets.
1.43 "Leases" shall mean all of the Facilities leases listed on
Schedule 1.43 of the Seller Disclosure Schedule.
1.44 "Licensed Intellectual Property" means the Intellectual Property
licensed to Parent, Seller and/or any Intactix Sub in connection with the
Business, any of the Assets or any of the Products.
1.45 "Losses" shall mean any loss, demand, action, cause of action,
assessment, damage, liability, cost or expense, including without limitation,
interest, penalties and reasonable attorneys' and other professional fees and
expenses incurred in the investigation, prosecution, defense or settlement
thereof or in asserting any rights hereunder, but excluding any consequential
damages related thereto other than consequential damages actually awarded to a
third party as a result of a claim by such third party against a party hereto.
1.46 "Material Adverse Change" shall mean any material adverse change
in the operations, properties, financial condition, results of operations or
prospects of the Business or any material adverse change in the Assets or the
Assumed Liabilities, taken as a whole.
1.47 "Material Adverse Effect" shall mean any material adverse effect
on the operations, properties, financial condition results of operations or
prospects of the Business or any material adverse effect on the Assets or the
Assumed Liabilities, taken as a whole.
1.48 "Negotiation Period" shall have the meaning set forth in Section
12.4(d) hereof.
1.49 "New Purchaser Consultants" shall mean the Consultants who are
engaged by Purchaser or any JDA Sub from and after the Closing Date.
1.50 "New Purchaser Employees" shall mean the Employees who accept
employment with, or whose employment is assumed by, Purchaser or any JDA Sub
effective as of the Closing Date, as described in Section 10.1 hereof.
1.51 "Non-Standard Customer License Agreement" means any Customer
License Agreement that differs in any material substantive respect from the form
of Customer License Agreement which Seller has represented to Purchaser is
typically used in the license of Products in furtherance of the Business and
which is attached hereto as Exhibit B (the "Standard Customer License
Agreement"). By way of example and not limitation it shall be deemed a material
substantive difference if a particular Customer License Agreement contains
different provisions as to product warranties, indemnification, scope of
license, dispute resolution, or liability limitations.
1.52 "Permits" shall mean all licenses, permits, consents,
authorizations, certificates, exemptions, registrations, franchises, variances,
waivers and other approvals required to carry on
6
7
the Business or relating to the Products under any applicable Laws or Decrees of
any Governmental Entity, which are listed on Schedule 1.52 of the Seller
Disclosure Schedule.
1.53 "Permitted Encumbrances" shall mean (a) liens for current taxes
which are not past due, and liens described in any schedule hereto which secure
Assumed Liabilities, (b) easements, covenants, rights-of-way or other similar
restrictions and imperfections of title reasonably acceptable to counsel to
Purchaser, (c) liens of mechanics, materialmen, laborers, warehousemen, carriers
and other similar common law or statutory liens arising in the ordinary course
of business which are not yet due and payable or, if due and payable, have been
adequately bonded or are being contested in good faith, (d) Customer License
Agreements, (e) Affiliate Distributor Agreements, (f) Third Party Distributor
Agreements, (g) liens in favor of the lessors of equipment leased pursuant to
the Equipment Leases and (h) as listed on Schedule 1.53 of the Seller Disclosure
Schedule.
1.54 "Person" shall mean an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a Governmental Entity.
1.55 "Products" shall mean those Software Programs listed on Schedule
1.55 of the Seller Disclosure Schedule.
1.56 "Purchase Price" shall have the meaning set forth in Section 2.5
hereof.
1.57 "Purchaser Losses" shall have the meaning set forth in Section
12.2(a) hereof.
1.58 "SEC" shall mean the Securities and Exchange Commission of the
United States of America.
1.59 "Securities Act" shall mean the Securities Act of 1933, as amended
to date.
1.60 "Seller Disclosure Schedule" shall mean a schedule delivered by
Seller to Purchaser on the date hereof which sets forth the exceptions to the
representations and warranties contained in Article IV hereof and certain other
information called for by Article IV hereof and the other provisions of this
Agreement. From time to time prior to the Closing, and excluding Schedule 4.12
of the Seller Disclosure Schedule, Seller will promptly supplement or amend the
Seller Disclosure Schedule with respect to any matter which would make any
representation or warranty set forth in Article IV hereof inaccurate if updated
immediately prior to the Closing or as is necessary to correct any information
in the Seller Disclosure Schedule or in any representation or warranty of Seller
made in Article IV hereof. For purposes of determining the fulfillment of the
conditions set forth in Section 9.3(a) hereof as of the Closing and the accuracy
of the representations and warranties contained in Article IV hereof if the
Closing does not occur, the Seller Disclosure Schedule shall be deemed to
include only that information contained therein on the date of this Agreement
and shall be deemed to exclude any information contained in any subsequent
supplement or amendment thereto. However, for purposes of determining the
accuracy of the representations or warranties of the Seller contained in Article
IV hereof or the liability of Parent and Seller with respect thereto under
Section 12.2 hereof should the Closing occur, the Seller Disclosure Schedule
shall be deemed to include all information contained in any
7
8
subsequent supplement or amendment thereto. Schedule 4.12 may not be updated,
modified or supplemented after the date hereof.
1.61 "Seller Intellectual Property" shall mean all Intellectual
Property owned by Seller and/or any Intactix Sub, or otherwise licensed to
Seller and/or any Intactix Sub pursuant to Third Party In-Licenses, and used by
Seller and/or any Intactix Sub to develop, sell, market, distribute, operate or
incorporate into the Products, including, without limitation, patents, patent
applications, patent rights, trademarks, trademark applications and
registrations, trade names, service marks, service xxxx applications and
registrations, copyrights, copyright registrations, know-how, licenses, trade
secrets, proprietary processes and formulae, all source and object code,
algorithms, architecture, structure, display screens, layouts, processes,
inventions, development tools and all documentation and media constituting,
describing or relating to the above, including, without limitation, manuals,
memoranda and records.
1.62 "Seller Losses" shall have the meaning set forth in Section 12.3
hereof.
1.63 "Seller Software Programs" shall mean those Software Programs
listed on Schedule 1.63 of the Seller Disclosure Schedule owned by Seller and/or
any Intactix Sub and incorporated into, or required for the ordinary use of, the
Products.
1.64 "Software Programs" shall mean software programs, including any
available (a) source code (in all forms), object code, program descriptions,
databases, interfaces, modifications and updates, (b) documentation relating to
the foregoing, and (c) disks, tapes and other tangible embodiments of the
foregoing.
1.65 "Tangible Assets" shall mean those tangible assets owned or used
by Seller and/or any Intactix Sub in connection with the Business, including
without limitation, computers, telecom equipment, furniture, fixtures and
vehicles.
1.66 "Tax" shall mean any and all taxes whether direct or indirect,
charges, fees, duties, levies or other assessments including, but not limited
to, income, profits, gross receipts, capital gains taxes, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, business license, occupation,
value added, goods and service, alternative or add-on minimum, estimated, or
other tax or governmental charge of any kind whatsoever, imposed by any
Governmental Entity and including any interest, penalty, or addition thereto,
whether disputed or not, arising from or otherwise relating to the operation of
the Business or the Assets.
1.67 "Tax Return" shall mean any return, declaration, report,
estimates, claim for refund, or information return or statement or other
document filed or required to be filed relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.
1.68 "Third Party Distributor Agreements" shall mean those distributor
and other agreements listed on Schedule 1.68 of the Seller Disclosure Schedule
pursuant to which Seller or any Affiliate of Seller has granted a third party
with the distribution rights for any Product within a particular territory.
8
9
1.69 "Third Party In-Licenses" shall mean those licenses and other
agreements with third parties listed on Schedule 1.69 of the Seller Disclosure
Schedule pursuant to which Parent, Seller and/or any Intactix Sub is licensed or
otherwise authorized by such third parties to develop, sell, market, distribute,
operate or incorporate Third Party Software Programs into the Products.
1.70 "Third Party Software Programs" shall mean those Software Programs
owned by third parties and licensed to Seller and/or any Intactix Sub pursuant
to the Third Party In-Licenses listed on Schedule 1.70 of the Seller Disclosure
Schedule.
1.71 "Transferred Intellectual Property" means (a) all trademarks,
service marks and trade names of Seller and/or any Intactix Sub listed on
Schedule 1.71 of the Seller Disclosure Schedule which are or have been used in
connection with the Products; (b) all copyrights to the Seller Software Programs
listed on Schedule 1.63 of the Seller Disclosure Schedule which are incorporated
into the Products ; and (c) all other Intellectual Property owned by Seller
and/or any Intactix Sub listed on Schedule 1.71 of the Seller Disclosure
Schedule.
1.72 "Vehicle Leases" shall mean those vehicle leases listed on
Schedule 1.72 of the Seller Disclosure Schedule.
1.73 "Year 2000 Compliant" shall mean, as to any computer system
software program, the ability to (i) receive, record, store, process, calculate,
manipulate and output dates from and after January 1, 2000, time periods that
include January 1, 2000, including leap year calculations and information that
is dependent on or relates to such dates or time periods, in the same manner and
with the same accuracy, functionality, data integrity and performance as when
dates or time periods prior to January 1, 2000 are involved, (ii) able to store
and output date information in a manner that is unambiguous as to century and
(iii) able to respond to two-digit year input so as to accurately resolve any
ambiguity as to century in a disclosed, defined, pre-determined manner that is
practicable and efficient.
1.74 "Working Capital" shall mean the amount of current assets
(calculated in accordance with GAAP, but excluding amounts advanced from/to
Parent from/to Seller) of Seller and the Intactix Subs minus the amount of
current liabilities (calculated in accordance with GAAP, but excluding amounts
advanced from/to Seller from/to Parent, income taxes payable and accrued
severance liabilities not assumed by Purchaser pursuant to Section 10.1 hereof)
of Seller and the Intactix Subs. For illustrative purposes, the calculation of
Working Capital is set forth as Schedule 1.74 to the Seller Disclosure Schedule.
1.75 "Other Defined Terms." Each of the terms set forth below is
defined in the section of this Agreement set forth opposite such term:
-----------------------------------------------------------------------------
TERM SECTION WHERE DEFINED
-----------------------------------------------------------------------------
Agreement Pre-Recital
-----------------------------------------------------------------------------
Assumed Employee Plans Section 10.1(d)
-----------------------------------------------------------------------------
Benefit Obligations Section 4.10(h)
-----------------------------------------------------------------------------
9
10
-----------------------------------------------------------------------------
TERM SECTION WHERE DEFINED
-----------------------------------------------------------------------------
Big Five Section 2.6(b)
-----------------------------------------------------------------------------
Xxxx of Sale, Assignment and Assumption Agreement Section 9.2(f)
-----------------------------------------------------------------------------
Broadview Section 2.4(c)
-----------------------------------------------------------------------------
Broadview Indemnity Obligation Section 2.4(c)
-----------------------------------------------------------------------------
Business Transfer Agreement(s) Section 9.2(g)
-----------------------------------------------------------------------------
Closing Statement Section 2.6(a)
-----------------------------------------------------------------------------
Closing Working Capital Section 2.6(a)
-----------------------------------------------------------------------------
Confidential Information Section 10.7(a)
-----------------------------------------------------------------------------
Continuing Employment Liabilities Section 2.4(a)
-----------------------------------------------------------------------------
Corresponding Intactix Sub Section 2.1(b)
-----------------------------------------------------------------------------
Corresponding JDA Sub Section 2.1(b)
-----------------------------------------------------------------------------
Date Section 11.6
-----------------------------------------------------------------------------
Defenses and Claims Section 2.4(b)
-----------------------------------------------------------------------------
Disclosing Party 10.7(a)
-----------------------------------------------------------------------------
Dispute Notice Section 2.6(b)
-----------------------------------------------------------------------------
DOJ Section 8.2
-----------------------------------------------------------------------------
Employee Plans Section 4.10(e)
-----------------------------------------------------------------------------
Environmental and Safety Requirements Section 4.20
-----------------------------------------------------------------------------
Escrow Agent Section 12.7
-----------------------------------------------------------------------------
Escrow Period Section 12.8
-----------------------------------------------------------------------------
Existing Stay-Put Agreements Section 2.3
-----------------------------------------------------------------------------
Expenses Section 11.7
-----------------------------------------------------------------------------
Expiration Date Section 6.6
-----------------------------------------------------------------------------
Foreign Antitrust Filings Section 8.2
-----------------------------------------------------------------------------
Former CEO Litigation Liability Section 2.4(c)
-----------------------------------------------------------------------------
French Litigation Liability Section 2.4(c)
-----------------------------------------------------------------------------
FTC Section 8.2
-----------------------------------------------------------------------------
HSR Filings Section 8.2
-----------------------------------------------------------------------------
Indemnification Cap Section 12.10
-----------------------------------------------------------------------------
Intactix Australia Schedule A
-----------------------------------------------------------------------------
Intactix Canada Schedule A
-----------------------------------------------------------------------------
Intactix France Schedule A
-----------------------------------------------------------------------------
Intactix Germany Schedule A
-----------------------------------------------------------------------------
Intactix Holland Schedule A
-----------------------------------------------------------------------------
Intactix Hong Kong Schedule A
-----------------------------------------------------------------------------
Intactix Italy Schedule A
-----------------------------------------------------------------------------
Intactix Japan Schedule A
-----------------------------------------------------------------------------
Intactix Malaysia Schedule A
-----------------------------------------------------------------------------
Intactix South Africa Schedule A
-----------------------------------------------------------------------------
Intactix Spain Schedule A
-----------------------------------------------------------------------------
Intactix UK Schedule A
-----------------------------------------------------------------------------
Intactix Worldwide Schedule A
-----------------------------------------------------------------------------
10
11
-----------------------------------------------------------------------------
TERM SECTION WHERE DEFINED
-----------------------------------------------------------------------------
International Employee Plan Section 4.10(e)
-----------------------------------------------------------------------------
JAMS Section 13.10(a)
-----------------------------------------------------------------------------
JDA Australia Schedule B
-----------------------------------------------------------------------------
JDA Canada Schedule B
-----------------------------------------------------------------------------
JDA France Schedule B
-----------------------------------------------------------------------------
JDA Germany Schedule B
-----------------------------------------------------------------------------
JDA Holland Schedule B
-----------------------------------------------------------------------------
JDA Hong Kong Schedule B
-----------------------------------------------------------------------------
JDA Italy Schedule B
-----------------------------------------------------------------------------
JDA Japan Schedule B
-----------------------------------------------------------------------------
JDA Malaysia Schedule B
-----------------------------------------------------------------------------
JDA South Africa Schedule B
-----------------------------------------------------------------------------
JDA Spain Schedule B
-----------------------------------------------------------------------------
JDA UK Schedule B
-----------------------------------------------------------------------------
Parent Pre-Recital
-----------------------------------------------------------------------------
Parent Compliance Certificate Section 9.3(a)
-----------------------------------------------------------------------------
Purchaser Pre-Recital
-----------------------------------------------------------------------------
Purchaser Compliance Certificate Section 9.2(a)
-----------------------------------------------------------------------------
Purchaser Floor Section 12.3(b)
-----------------------------------------------------------------------------
Purchaser Group Section 12.2(a)
-----------------------------------------------------------------------------
Purchaser Losses Section 12.2(a)
-----------------------------------------------------------------------------
Recipient 10.7(a)
-----------------------------------------------------------------------------
Seller Pre-Recital
-----------------------------------------------------------------------------
Seller 401(k) Plan Section 10.1(d)
-----------------------------------------------------------------------------
Seller Compliance Certificate Section 9.3(a)
-----------------------------------------------------------------------------
Seller Floor Section 12.2(b)
-----------------------------------------------------------------------------
Seller Group Section 12.3(a)
-----------------------------------------------------------------------------
Shareholder Litigation Liability Section 2.4(c)
-----------------------------------------------------------------------------
Standard Customer License Agreement Section 1.51
-----------------------------------------------------------------------------
Taxation Requirements Section 4.10(g)
-----------------------------------------------------------------------------
Third Party Claim Section 12.5
-----------------------------------------------------------------------------
Transaction Agreements Section 4.4
-----------------------------------------------------------------------------
XXXX Section 4.10(b)
-----------------------------------------------------------------------------
U.S. Employee Plan Section 4.10(e)
-----------------------------------------------------------------------------
ARTICLE II
PURCHASE AND SALE OF ASSETS;
ASSUMPTION OF LIABILITIES
2.1 Purchase and Sale of Assets and Assumption of Assumed Liabilities.
Upon the terms and subject to the conditions set forth in this Agreement,
effective as of the Closing Date:
11
12
(a) Seller agrees to sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser agrees to purchase and acquire from Seller, all of
Seller's right, title and interest in and to the Assets, free and clear of all
Encumbrances except Permitted Encumbrances;
(b) Seller agrees to cause each Intactix Sub to sell, assign,
transfer, convey and deliver to each JDA Sub set forth opposite such Intactix
Sub on Schedule 2.1(b) of the Seller Disclosure Schedule (the "Corresponding
Intactix Sub") and Purchaser agrees to cause each JDA Sub to purchase and
acquire from each Intactix Sub set forth opposite such JDA Sub on Schedule
2.1(b) (the "Corresponding JDA Sub"), all of such Intactix Sub's right, title
and interest in and to the Assets, free and clear of all Encumbrances except
Permitted Encumbrances;
(c) Seller agrees to assign to Purchaser and to cause each
Intactix Sub to assign to each Corresponding JDA Sub, and Purchaser agrees to
assume from Seller and to cause each JDA Sub to assume from each Corresponding
Intactix Sub, the Assumed Liabilities; and
(d) Seller agrees to assign to Purchaser and to cause each
Intactix Sub to assign to each Corresponding JDA Sub, and Purchaser shall
assume, subject to Section 10.4 hereof from Seller and cause each JDA Sub to
assume from each Corresponding Intactix Sub, all of the rights and obligations
of Seller and each Intactix Sub under the Assumed Contracts.
In connection with the Acquisition, on the Closing Date, Seller shall
take (and shall cause the Intactix Subs to take) any and all actions that may be
required, or reasonably requested by Purchaser or any JDA Sub, to transfer title
to all of the Assets, free and clear of all Encumbrances (except Permitted
Encumbrances), to Purchaser and/or the Corresponding JDA Sub. Seller shall make
and Parent and Seller shall cause each Intactix Sub to make the Assets available
to Purchaser and the JDA Subs on the Closing Date, and Seller shall further
deliver, and Parent and Seller shall cause each Intactix Sub to deliver, to
Purchaser and each JDA Sub, as appropriate, proper assignments, bills of sale,
conveyances and other instruments of sale and/or transfer in forms reasonably
satisfactory to counsel to Purchaser in order to convey to Purchaser or the
Corresponding JDA Sub, as appropriate, title to all Assets, free and clear of
all Encumbrances (except Permitted Encumbrances), as well as such other
instruments of sale and/or transfer as counsel to Purchaser may reasonably
request (whether at or after the Closing) to evidence and effect the
Acquisition. Parent and Seller agree that, to the extent any Assets are owned or
held by any Intactix Sub or other Affiliate of Seller or Purchaser, Parent and
Seller shall also cause title to such Assets to be transferred and assigned to
Purchaser or the Corresponding JDA Sub, as appropriate, free and clear of all
Encumbrances (except Permitted Encumbrances), on the Closing Date.
2.2 Assets. As used in this Agreement, the term "Assets" means all of
Seller's and Intactix Subs' right, title and interest in and to all properties,
assets and rights of any kind, whether tangible or intangible, real or personal,
owned by Seller or any Intactix Sub on the Closing Date (other than the Excluded
Assets), including, without limitation, the following:
(a) All Products;
(b) All Accounts Receivable
12
13
(c) All rights and benefits of Seller and any Intactix Sub under
the Assumed Contracts;
(d) All Transferred Intellectual Property;
(e) All Intangibles;
(f) All Permits;
(g) All Assumed Employee Plans;
(h) All Business Records;
(i) All inventories;
(j) All Tangible Assets;
(k) All prepaid expenses of the Business; and
(l) All cash, cash equivalents, and all bank accounts and lock
boxes and all similar accounts and amounts therein and rights related thereto,
owned by or held for the benefit of Seller or any Intactix Sub.
2.3 Excluded Assets. Seller and each Intactix Sub shall retain all of
their right, title and interest in and to, and neither Purchaser nor any JDA Sub
shall acquire any interest in the following (collectively referred to herein as
the "Excluded Assets"): (i) all Contracts other than the Assumed Contracts,
including without limitation those Contracts listed on Schedule 2.3 of the
Seller Disclosure Schedule by and between Employees of Seller or an Intactix Sub
with Seller or such Intactix Sub providing, inter alia, for certain incentives
for such Employees to continue their employment with Seller or such Intactix Sub
(the "Existing Stay-Put Agreements"), (ii) all Employee Plans other than Assumed
Employee Plans and (iii) the rights of Seller and each Intactix Sub under the
Transaction Agreements.
2.4 Assumption of Liabilities.
(a) Subject to and upon the terms and conditions of this
Agreement, effective as of the Closing Date, Purchaser agrees to assume from
Seller and to cause each JDA Sub to assume from the Corresponding Intactix Sub,
and Purchaser agrees to pay, perform and discharge and to cause each JDA Sub to
pay, perform and discharge, according to their terms only the following
Liabilities of Seller and each Corresponding Intactix Sub, respectively (the
"Assumed Liabilities"):
(i) subject to Section 10.4 hereof, Liabilities arising under
the Assumed Contracts excluding (A) any Liabilities arising from the failure of
the current version of any Product or any current design of Product version not
yet released to be Year 2000 Compliant, and (B) any Liabilities arising from the
failure of any prior versions of the Products to be Year 2000 Compliant, except
if such Products have been modified after the Closing Date by Purchaser or
Persons expressly authorized by Purchaser;
13
14
(ii) Liabilities with respect to the Deferred Revenue;
(iii) Liabilities with respect to the New Purchaser Employees
arising after the Closing Date, except as otherwise provided for in Section 10.1
hereof ("Continuing Employment Liabilities");
(iv) subject to the provisions of Section 10.1(d) hereof,
Liabilities with respect to the Assumed Employee Plans;
(v) Liabilities arising after the Closing Date with respect
to the Vehicle Leases;
(vi) Liabilities represented by trade payables of Seller and
each Intactix Sub that are not more than thirty (30) days past due on the
Closing Date;
(vii) Liabilities arising from, or incurred in connection
with, acts or omissions occurring after the Closing Date with respect to the
Assets or the Business;
(viii) Liabilities directly related to warranty and
maintenance obligations under the Customer License Agreements and the Third
Party Distributor Agreements;
(ix) Liabilities with respect to Taxes other than (i) Taxes
accruing for periods or portions thereof occurring on or before the Closing Date
which are related to income, profits, gross receipts, or capital gains, and (ii)
Taxes accruing for periods or portions thereof occurring on or before the
Closing Date which are more than thirty (30) days past due (other than Taxes
which Seller or Parent is contesting in good faith) in each case other than
taxes referred to in Section 10.8 hereof; and
(x) Liabilities with respect to Leases not more than thirty
(30) days past due on the Closing Date.
(b) Nothing herein shall be deemed to deprive Purchaser or any JDA
Sub, or any Affiliate of Purchaser or any JDA Sub, of any defenses, set-offs or
counterclaims which Seller or any Intactix Sub may have had, or which Purchaser,
any JDA Sub, or any Affiliate of Purchaser or any JDA Sub, shall have with
respect to any of the Assumed Liabilities (the "Defenses and Claims"). Effective
as of the Closing, Seller agrees to assign, transfer and convey to Purchaser and
to cause each Intactix Sub to assign, transfer and convey to the Corresponding
JDA Sub, all Defenses and Claims and agrees to cooperate with Purchaser and each
JDA Sub (at Purchaser's expense) to maintain, secure, perfect and enforce such
Defenses and Claims, including the execution of any documents, the giving of any
testimony or the taking of any such other action as is reasonably requested by
Purchaser or any JDA Sub in connection with such Defenses and Claims.
(c) Except as expressly set forth in Section 2.4(a) above, neither
Purchaser nor any JDA Sub shall assume or become liable or obligated in any way,
and Parent, Seller and each Intactix Sub shall retain and remain solely liable
for and obligated to pay, perform and discharge all debts, expenses, accounts
payable, contracts, agreements, commitments, obligations, claims, suits and
other liabilities of any nature whatsoever, whether or not related to
14
15
the Business or the Assets, whether known or unknown, accrued or not accrued,
fixed or contingent, current or arising hereafter, including, without
limitation, any of the following (collectively referred to herein as "Excluded
Liabilities"):
(i) Any Liability for unpaid Taxes that are not Assumed
Liabilities and are applicable to periods prior to the Closing Date (with
respect to the Business, the Assets, the Employees or otherwise).
(ii) Any Liability arising in connection with or related to
(a) that certain pending litigation styled Xxxx X. Xxxxx, Xxxxx X. Xxxx and Xxxx
Xxxxxxxxxxxx v. Broadview International, L.L.C., f/k/a/ Broadview Associates
L.L.C., Pricer Aktiebolag (pub) (a/k/a Pricer AB) and Xxxx Xxxxxxxxxx, pending
in the United States District Court for the Northern District of Texas, and any
related claims that may hereafter arise related thereto against Parent, Seller,
the Intactix Subs and any other parties (the "Shareholder Litigation
Liability"), together with any related indemnification by Seller, including
without limitation, the indemnification in favor of Broadview Associates L.L.C.
("Broadview") pursuant to the letter agreement, dated January 23, 1997, between
Seller and Broadview and the letter agreement, dated June 2, 1997, between
Seller and Broadview (the "Broadview Indemnity Obligations"), (b) that certain
litigation styled M. Emmanuel Rilhac v. Intactix International, Inc. and any
related claims that may hereafter arise related thereto against Parent, Seller,
the Intactix Subs and any other parties (the "French Litigation Liability") and
(c) that certain pending litigation styled Xxxxx Xxxx v. Intactix International,
Inc., pending in the District Court of Dallas County, Texas, 191st Judicial
District, Cause No. DV99-2725, and any related claims that may hereafter arise
related thereto against Parent, Seller, the Intactix Subs and any other parties
(the "Former CEO Litigation Liability");
(iii) Any Liabilities represented by trade payables of Seller
or any Intactix Sub that is more than thirty (30) days past due on the Closing
Date;
(iv) Any Liability of Parent, Seller or any Intactix Sub
arising in connection with or related to Existing Stay-Put Agreements; and
(v) Any Liability arising after the Closing Date but relating
to or arising out of acts or omissions of Parent, Seller or any Intactix Sub
before the Closing Date with respect to Employees.
2.5 Purchase Price. The aggregate purchase price for the Assets is
Twenty Million Five Hundred Thousand Dollars ($20,500,000) (the "Purchase
Price"), which, except as provided in Sections 2.6 and 2.7 hereof and subject to
adjustment as herein provided, Purchaser shall pay to Seller, or as directed in
writing by Seller at least forty-eight (48) hours prior to Closing, in
immediately available funds at the Closing by wire transfer to an account or
accounts designated in writing to Purchaser by Parent. Notwithstanding the
foregoing, a portion of the allocated Purchase Price for the Assets of Ice
France, shall be deposited into an escrow and paid to Seller in accordance with
French law.
15
16
2.6 Purchase Price Adjustment.
(a) On or before the thirtieth day after Closing, Purchaser shall
prepare and deliver to Parent and Seller a statement, together with supporting
schedules (collectively the "Closing Statement") setting forth, in detail, the
calculation of Working Capital as of the close of business on the date
immediately preceding the Closing Date ("Closing Working Capital"), which shall
be certified by the Chief Financial Officer of Purchaser as being prepared in
accordance with the definition of Working Capital as set forth herein and GAAP
and which shall exclude any short-term liabilities of Seller that Purchaser or
any JDA Sub is not assuming. Parent and Seller and their auditors or other
representatives shall be provided an opportunity to participate in the
procedures performed in connection with preparation of the Closing Statement.
Immediately following delivery of the Closing Statement, Purchaser shall make
available, and shall cause their auditors to make available, all records, work
papers and employees at their expense reasonably requested by Parent and Seller
in connection with their review of the Closing Statement.
(b) The Closing Statement, subject to any adjustments agreed to by
Parent and Seller, shall be used for determining any post-Closing adjustments to
the Purchase Price, unless Seller provides Purchaser with a notice of dispute (a
"Dispute Notice") within thirty (30) days of receipt of the Closing Statement.
If a Dispute Notice is given, Purchaser and Seller shall promptly meet in good
faith to attempt to resolve any issues, and if any issues are unresolved within
fifteen (15) days of the Dispute Notice having been given, the unresolved issues
shall be submitted to an independent auditor, who shall be a "Big Five" auditing
firm with no material existing relationship to Purchaser or Seller and if
Purchaser and Seller are unable to agree on its identity, it shall be designated
by agreement of the parties' current auditors. The independent auditor selected
shall be directed to issue a final and binding decision as to the matters in
dispute within thirty (30) days of its engagement. The fees and expenses of the
independent auditor shall be divided equally between the parties.
(c) The Closing Statement in the form accepted by Parent and
Seller, or determined by the independent auditor, shall be used to adjust the
Purchase Price in the manner set forth in Section 2.6(d) or Section 2.6(e) of
this Agreement. Any payments provided for in Section 2.6(d) or Section 2.6(e)
hereof shall be made within five (5) business days of Parent's and Seller's
acceptance of the Closing Statement or the independent auditor's decision. The
full force and effect of the representations and warranties contained herein
shall not be diminished by the Closing Statement, the acceptance thereof by
Parent and Seller or the decision of the independent auditor.
(d) If the Closing Working Capital is less than Nine Hundred
Nineteen Thousand Five Hundred Dollars ($919,500), Seller shall pay Purchaser an
amount equal to the difference. Purchaser may, at its option, recover such
amount from the Escrow Fund pursuant to the procedures set forth in the Escrow
Fund Agreement.
(e) If the Closing Working Capital is greater than Nine Hundred
Nineteen Thousand Five Hundred Dollars ($919,500), Purchaser shall pay Seller an
amount equal to the difference.
16
17
2.7 Escrow Fund. On the Closing Date, Purchaser will withhold from the
Purchase Price and deposit into escrow for and on behalf of Seller and each
Intactix Sub (on a pro rata basis in accordance with the allocation of Purchase
Price set forth on Schedule 2.8) the sum of Two Million Five Hundred Fifty
Thousand Dollars ($2,550,000) in cash (the "Escrow Fund"). The Escrow Fund shall
be held as collateral for Seller's, Parent's and each Intactix Sub's
indemnification obligations pursuant to Article XII of this Agreement, the
Business Transfer Agreements and the Escrow Fund Agreement to be executed and
delivered by the parties at the Closing.
2.8 Allocation. Purchaser, Parent and Seller agree to allocate and to
cause the Purchaser Subs and the Intactix Subs to allocate the Purchase Price
(and all other capitalizable costs) among the Seller, each Intactix Sub and the
Assets for all purposes in accordance with an allocation schedule to be agreed
upon by the parties hereto, each JDA Sub and each Intactix Sub and to be
attached hereto as Schedule 2.8 on or before the Closing Date. Unless compelled
by any Governmental Entity, neither Purchaser, Parent nor Seller shall take, nor
shall they permit any JDA Sub or any Intactix Sub to take, any position for
purposes of any federal, state, provincial or local income tax with respect to
the allocation of the Purchase Price which is inconsistent with such allocation.
ARTICLE III
THE CLOSING
3.1 The Closing. The consummation of the Acquisition will take place at
a closing to be held at the offices of Xxxx Xxxx Xxxx & Freidenrich LLP, 000
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 (the "Closing") on the third
business day following the date on which all of the conditions set forth in
Article IX hereof are satisfied or waived, or at such other time as may be
agreed to in writing by the parties to this Agreement (the "Closing Date").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as otherwise set forth in the Seller Disclosure Schedule, Seller
and Parent hereby jointly and severally represents and warrants, to Purchaser,
as set forth below:
4.1 Organization. Seller is a corporation validly incorporated, validly
in existence and in good standing under the laws of the jurisdiction of
Delaware. Each of the Intactix Subs is a duly formed and validly existing legal
entity in good standing or its local equivalent, if applicable, under the laws
of the jurisdiction of its organization. Seller and each Intactix Sub is duly
qualified or licensed to do business as a foreign corporation in each state of
the United States or other jurisdiction in which it is required to be so
qualified or licensed, except in states and other jurisdictions in which the
failure to be so qualified or licensed, in the aggregate, would not have a
Material Adverse Effect.
4.2 Ownership. All of the outstanding equity securities of Seller are
owned and all voting power related thereto is held by Parent. All of the
outstanding equity interests in each Intactix
17
18
Sub except Intactix France are owned and all voting power related thereto is
held by Seller. All of the outstanding equity interests of Intactix France are
owned and all voting power related thereto is held by Intactix Worldwide.
4.3 Subsidiaries. Except as listed on Schedule 4.3 of the Seller
Disclosure Schedule, neither Seller nor any Intactix Sub owns any equity
interest, directly or indirectly, in any corporation, partnership, limited
liability company, joint venture, business, trust or other entity, whether or
not incorporated other than an Intactix Sub.
4.4 Authorization. This Agreement, the Escrow Agreement, the Xxxx of
Sale, Assignment and Assumption Agreement and the Business Transfer Agreements
(collectively, the "Transaction Agreements") have been, or upon their execution
and delivery hereunder will have been, duly and validly executed and delivered
by Parent, Seller and each Intactix Sub (to the extent each is a party thereto)
and constitute, or upon such execution and delivery will constitute, valid and
binding agreements of Parent, Seller and each Intactix Sub, respectively,
enforceable against Parent, Seller and each Intactix Sub in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles or the exercise of judicial
discretion in accordance with such principles. Parent, Seller and each Intactix
Sub has all requisite power and authority to execute and deliver the Transaction
Agreements to which each is party and, at the time of the Closing, will have all
requisite power and authority to carry out the transactions contemplated in this
Agreement and the other Transaction Agreements. All requisite corporate,
partnership, board of director, shareholder or other action on the part of
Parent, Seller and each Intactix Sub has been taken to authorize the execution
and delivery of the Transaction Agreements to which each is party.
4.5 No Conflicts; Consents. The execution and delivery of the
Transaction Agreements by Parent, Seller and each Intactix Sub do not, and the
consummation of the transactions contemplated herein and therein and compliance
with the provisions hereof and thereof will not, conflict with, result in a
breach of, constitute a default (with or without notice or lapse of time, or
both) under or violation of, or result in the creation of any lien, charge or
Encumbrance pursuant to, (a) any provision of any charter document of Parent,
Seller or any Intactix Sub, (b) any Law or Decree or (c) any provision of any
agreement, instrument or understanding to which Parent, Seller or any Intactix
Sub is a party or by which any Parent, Seller or any Intactix Sub or any
properties or assets of Parent, Seller or any Intactix Sub is bound or affected,
nor will such actions give to any other Person or entity any interests or rights
of any kind, including rights of termination, acceleration or cancellation, in
or with respect to any of the Assets or the Assumed Liabilities. Except as
listed on Schedule 4.5 of the Seller Disclosure Schedule, no consent of any
third party or any Governmental Entity is required to be obtained on the part of
any Parent, Seller or any Intactix Sub to permit the consummation of the
transactions contemplated in the Transaction Agreements.
4.6 Title to Assets; Entire Business. Seller and each Intactix Sub has
good and valid title to all of the Assets it is conveying pursuant to this
Agreement and the Business Transfer Agreements, free and clear of all
Encumbrances except for Permitted Encumbrances. At the Closing, Seller will
sell, convey, assign, transfer and deliver to Purchaser, and will cause each
Intactix Sub to sell, convey, assign, transfer and deliver to the Corresponding
JDA Sub, good and
18
19
valid title and all right and interest of Seller and such Intactix Sub in and to
all of the Assets, free and clear of any Encumbrances, except for Permitted
Encumbrances.
4.7 Tangible Assets. The Tangible Assets and the Facilities have been
maintained and repaired by Seller and/or each Intactix Sub in the ordinary
course of business and are in such condition and repair, reasonable wear and
tear excepted, as is suitable for the purposes for which they are presently used
by the Seller and/or such Intactix Sub. No Intactix Sub owns any "United States
real property interests" within the meaning of Section 897 of the Code. No
further representation is made concerning the physical condition of any Tangible
Assets. Except as otherwise provided in this Agreement, the Tangible Assets are
being acquired by Purchaser and the JDA Subs "AS IS AND WHERE IS" as of the
Closing Date. EXCEPT AS SET FORTH EXPRESSLY IN THIS AGREEMENT, PARENT AND SELLER
DISCLAIM ANY EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO THE TANGIBLE ASSETS,
INCLUDING IMPLIED WARRANTIES OF FITNESS, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
4.8 Litigation and Claims. Except as listed on Schedule 4.8 of the
Seller Disclosure Schedule, there are no claims, actions, suits, proceedings or
investigations in progress or pending before any Governmental Entity, against or
relating to Seller, any Intactix Sub, the Business, the Assets or the Assumed
Liabilities, nor, to Parent's or Seller's Knowledge, is there any threat
thereof. Neither Parent, Seller nor any Intactix Sub is party to or subject to
any decree, order or arbitration award (or agreement entered into in any
administrative, judicial or arbitration proceeding with any Governmental Entity)
with respect to or affecting the Business, the Assets or the Assumed
Liabilities.
4.9 Compliance with Laws and Regulations; Governmental Licenses, Etc.
Parent, Seller and each Intactix Sub is in compliance with all applicable Laws
or Decrees with respect to or affecting the Business, the Assets or the Assumed
Liabilities, including, without limitation, Laws or Decrees relating to
anticompetitive or unfair pricing or trade practices, false advertising,
consumer protection, export or import controls, occupational health and safety,
equal employment opportunities, fair employment practices, and sex, race,
religious and age discrimination. Neither Seller nor any Intactix Sub is subject
to any order, injunction or decree issued by any Governmental Entity which could
impair the ability of Seller to consummate the transactions contemplated herein.
Schedule 1.52 of the Seller Disclosure Schedule contains a complete and accurate
list of all Permits necessary for Purchaser and each JDA Sub to operate the
Business after the Closing Date in substantially the same manner as Seller and
the Intactix Subs have operated such businesses prior to the Closing Date,
except where the failure to have such a Permit would not have a Material Adverse
Effect, and Seller and each Intactix Sub is in compliance with all Permits in
all material respects. Purchaser hereby waives compliance by Seller and each
Intactix Sub with all applicable bulk transfer, bulk sales and similar laws and
requirements of all jurisdictions in connection with the transactions
contemplated hereby, and Parent and Seller shall indemnify Purchaser for any
Loss suffered by Purchaser as a result of such non-compliance under the
indemnity provisions of ARTICLE XII hereof.
19
20
4.10 Labor Matters.
(a) Schedule 1.21 of the Seller Disclosure Schedule sets forth a
true and complete list of all Employees of Seller and any Intactix Sub,
indicating their position and base salary. Schedule 1.15 of the Seller
Disclosure Schedule sets forth a true and complete list of all the Consultants.
(b) Seller and each Intactix Sub are in compliance with respect to
its Employees and Consultants with all currently applicable Laws or Decrees and
its own policies with respect to or affecting employment, employment practices,
discrimination in employment, terms and conditions of employment, wages, hours
and occupational safety and health and employment practices, equal opportunity,
civil rights, labor relations, payroll taxes, any federal, state, provincial or
local human rights act and immigration and are not engaged in any unfair labor
practice. Except as disclosed on Schedule 4.10(b) of the Seller Disclosure
Schedule, neither Seller nor any Intactix Sub has received any written notice
from any Governmental Entity and, to the Knowledge of Parent and Seller, there
has not been asserted before any Governmental Entity, any current claim, action
or proceeding to which Seller or any Intactix Sub is a party relating to the
Employees and there is neither pending nor, to the Knowledge of Parent and
Seller, has there been threatened in writing, any investigation or hearing to
which Seller or any Intactix Sub is a party relating to the Employees of Seller
or any Intactix Sub arising out of or based upon any such Laws or Decrees. There
is no pending claim against Seller or any Intactix Sub relating to the Employees
of Seller or any such Intactix Sub under any workers' compensation plan or
statute. Seller and each Intactix Sub is in compliance with and not in violation
of any agreements and/or arrangements with any Consultant. No Intactix Sub has a
local works council. Where required under local law, Seller or the relevant
Intactix Sub will have, prior to the Closing Date, properly notified, or where
appropriate consulted or negotiated with, the local works council, union, labor
board, employees, employee representatives, or relevant government agency
concerning the transactions contemplated by this Agreement, including without
limitation, any notifications required under the Transfer of Undertakings
(Protection of Employment) Regulations 1981 ("TUPE").
(c) Except as set forth on Schedule 4.10(c) of the Seller
Disclosure Schedule, neither Parent, Seller nor any Intactix Sub has given to or
received from any Employee notice of termination of employment with an effective
date on or after the Closing Date. Other than as described on Schedule 4.10(c)
of the Seller Disclosure Schedule, the consummation of the transactions
contemplated in this Agreement will not entitle any Employee to any severance
pay, change in control, unemployment compensation or any similar type of other
payment, or accelerate the time of payment or vesting, or increase the amount of
any compensation or benefit due to an Employee. Except as set forth on Schedule
4.10(c) of the Seller Disclosure Schedule, neither Seller nor any Intactix Sub
is party to, bound by or obligated under any labor, collective bargaining, union
or similar agreements or arrangements with respect to the Employees of Seller or
any Intactix Sub.
(d) There is not occurring or, to the Knowledge of Parent or
Seller, threatened, any strike, slow-down, picket, work stoppage or other
concerted action by any union or other group of employees or other persons
against the Business. To the Knowledge of Parent and Seller, (i) there has been
no union or other labor organization or attempt to organize any of
20
21
the Employees of Seller or any Intactix Sub during the two (2) year period
preceding the date hereof and (ii) such an effort is not pending.
(e) Schedule 4.10(e) of the Seller Disclosure Schedule contains a
complete and accurate list of all of Seller's and each Intactix Sub's material
contracts, agreements, plans, and commitments with respect to its Employees
pertaining to terms of employment, compensation, bonuses, profit sharing,
securities purchases, securities repurchases, options, deferred compensation
arrangements or plans, commissions, incentives, loans or loan guarantees,
severance pay or benefits, use of Business property, noncompetition and other
restrictive covenants, and related matters. Schedule 4.10(e) of the Seller
Disclosure Schedule sets forth a complete and accurate list of all bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance, pension, profit-sharing, retirement, health, welfare,
insurance, compensation, superannuation, phantom stock or stock equivalent,
thirteenth month, hospitalization, medical, dental, vision, vacation, sick pay,
disability, termination indemnity, redundancy pay, educational assistance,
holiday pay, housing assistance, moving expense reimbursement, fringe benefit or
other employee benefit plans, agreements programs, funds, policies or contracts
(whether written or unwritten) for the benefit of current or former Employees,
current or former Consultants and their respective beneficiaries and dependents,
of Seller and each Intactix Sub which are currently maintained by Parent,
Seller, any Intactix Sub or by a subsidiary of Seller or any Intactix Sub, or
with respect to which Parent, Seller or any Intactix Sub or any subsidiary of
Seller or any Intactix Sub currently has or in the future may have any material
liability or obligation to contribute or to make payments, regardless of whether
it is private, governmental, mandated under local law, funded, unfunded,
financed by insurance, contributory or non-contributory (collectively, the
"Employee Plans"). Except as set forth in Schedule 4.10(e) of the Seller
Disclosure Schedule, all Assumed Employee Plans (as defined herein) may be
assigned to and assumed by Purchaser in connection with the Acquisition. Each
Employee Plan, and each Employee Plan that has been adopted or maintained by
Parent, Seller or any Intactix Sub, whether informally or formally, for the
benefit of Employees, and their respective beneficiaries and dependents, outside
the United States ("International Employee Plan") has been established,
maintained and administered in material compliance with its terms and conditions
and with the requirements prescribed by any and all Laws or Decrees that are
applicable to such Employee Plan. Employee Plans that are not International
Employee Plans shall be referred to as "U.S. Employee Plans." Except for the
Seller Dental Plan, no U.S. Employee Plan has unfunded liabilities, that as of
the Closing, will not be offset by insurance or fully accrued.
(f) With respect to the Business and except as set forth on
Schedule 4.10(f) of the Seller Disclosure Schedule, no U.S. Employee Plan is an
"employee pension benefit plan", as defined in Section 3(2) of ERISA, (i) in
respect of which Seller or any Intactix Sub is an "employer" or a "substantial
employer", as defined in Sections 3(5) and 4001(a)(2), respectively, of ERISA,
(ii) with respect to which Seller or any Intactix Sub is a "party in interest"
within the meaning of Section 3(14) of ERISA, or (iii) in respect to which
Purchaser or any JDA Sub is assuming any liability or will be liable to make
contributions to or for the payment of benefits. Neither Seller nor any Intactix
Sub is or was a party to, and none of its operations is or has ever been covered
by or (x) any pension plan subject to Title IV of ERISA or Section 412 of the
Code, (y) any "multi-employer plan" as such term is defined in Section 3(37) or
Section 4001(a)(3) of ERISA.
21
22
(g) Each Employee Plan has been operated in compliance with its
terms and in compliance with the requirements prescribed by any and all
applicable Laws or Decrees with respect thereto including, without limitation,
requirements prescribed by statute or regulation which must be satisfied as a
prerequisite to an Employee Plan being treated as "qualified" or "approved" for
the tax benefits afforded by such statute or regulation or which must be
satisfied to avoid the imposition of any tax or penalty on the trustee of an
Employee Plan or on Parent, Seller, any Intactix Sub or the Business (such
requirements are collectively referred to herein as the "Taxation
Requirements"). With respect to each U.S. Employee Plan: (i) there has been no
prohibited transaction as such terms is defined in Section 406 of ERISA or 4975
of the Code; (ii) all contributions required have been paid or accrued; (iii)
all requisite governmental reports have been properly and timely filed and all
required notices to employees have been distributed; (iv) there is no liability
or penalty under Sections 4976 through 4980 of the Code or Title I of ERISA with
respect to any U.S. Employee Plan, Parent, Seller and each Intactix Sub has
performed all material obligations required to be performed by it under, is not
in default under or in violation of, and Seller has no Knowledge of any default
or violation by any other party to, any of the Employee Plans nor Knowledge of
any material claim (other than routine claim for benefits) or dispute in respect
of an Employee Plan. Each Employee Plan intended to be treated as "qualified"
under 401(a) of the Code has received a favorable determination from the
Internal Revenue Service as to its qualified status under the Code, including
all amendments to the Code effected by the Tax Reform Act of 1986 and subsequent
legislation, or has remaining a period of time under applicable regulations in
which to apply for such a letter and make any retroactive amendments necessary
to obtain a favorable determination.
(h) All employer and Employee contributions which are due and
owing as of the Closing Date with respect to each Employee Plan have been or
will be made in accordance with local law and past practice. Any "Benefit
Obligations" (as hereinafter defined) under any Employee Plan as of the Closing
Date have been appropriately reflected on the books and records of such plan
sponsor in accordance with local law, past practice and generally accepted
accounting principles in the local jurisdiction except for amounts which would
not have a Material Adverse Effect. Except as set forth on Schedule 4.10(h) of
the Seller Disclosure Schedule, all Benefit Obligations under any International
Employee Plan providing retirement or pension benefits as of the Closing Date
will be, on the Closing Date, fully covered by plan assets, cash, insurance
contracts, special assets or other provisions established for this purpose
except for amounts which would not have a Material Adverse Effect. For purposes
of this Agreement, the term "Benefit Obligations" means the actual liability to
provide all current and projected benefits to Employees, their dependents and
beneficiaries, under an Employee Plan, regardless of whether an amount less than
such actual liability is reported on the employer's financial statements under
applicable tax or accounting rules. For example, the "Benefit Obligations" of an
unfunded book reserve pension plan in Germany is greater than the amount
credited to the employer's bookkeeping reserve.
(i) Seller has delivered to Purchaser correct and complete copies
of all plan documents, summary plan descriptions, material communications to
Employees, and related trust agreements, administrative agreements, compliance
and nondiscrimination testing, insurance contracts and other funding agreements
which implement or pertain to any Employee Plan. Seller has also delivered to
Purchaser, with respect to each Employee Plan subject to ERISA
22
23
reporting requirements, copies of Form 5500 reports (including all attachments)
for the preceding five years.
(j) Except as set forth on Schedule 4.10(j) of the Seller
Disclosure Schedule or as required by applicable Laws or Decrees, no Employee
Plan provides funded or unfunded retiree medical, health, life insurance or
other welfare-type benefits for Employees, former employees, their spouses or
dependents.
(k) Except as set forth on Schedule 4.10(k) of the Seller
Disclosure Schedule, to the Knowledge of Seller, there has been no amendment to,
written interpretation of, or announcement (whether or not written) relating to,
any change in employee participation or coverage under, any Employee Plan, that
is not reflected in the text of such Employee Plan.
(l) Except as set forth on Schedule 4.10(l) of the Seller
Disclosure Schedule, to the Knowledge of Seller, no condition exists that would
prevent the amendment or termination of any Employee Plan with respect to any
Employee without material liability to Purchaser.
(m) Except as set forth on Schedule 4.10(m), no action, suit,
proceeding, hearing or investigation with respect to the administration or the
investment of the assets of any Employee Plan (other than routine claims for
benefits) is pending or to the Knowledge of Seller and each Ice Sub threatened,
and neither Seller nor any Intactix Sub has any Knowledge of any basis for any
such action, suit, proceeding, hearing or investigation.
(n) With respect to each U.S. Employee Plan, Seller and each
Intactix Sub have compiled with (i) the applicable health care continuation and
notice provisions of COBRA and the regulations thereunder; (ii) the applicable
requirements of the Family and Medical Leave Act of 1993 and the regulations
thereunder; (iii) the applicable requirements of the Health Insurance
Portability and Accountability Act of 1996 and the regulations thereunder and
(iv) the applicable requirements of the Cancer Rights Act of 1998 except to the
extent that such failure to comply would not in the aggregate, have a Material
Adverse Effect.
4.11 Tax Matters.
(a) Tax Returns. All Tax Returns required to be filed by Parent,
Seller and each Intactix Sub with respect to the Business have been duly filed
on a timely basis, and such Tax Returns are complete and accurate in all
material respects. All Taxes owed by Parent, Seller or any Intactix Sub with
respect to the Business (whether or not shown on any Tax Return) have been paid.
No claim has ever been made by any Governmental Entity in a jurisdiction where
Seller and/or any Intactix Sub does not file Tax Returns that the Business is or
may be subject to taxation by that jurisdiction. There are no liens or security
interests on any of the Assets or other assets of the Business with respect to
Taxes, other than liens for Taxes not yet due and payable.
(b) Other Compliance Requirements. With respect to the Business,
Seller and each Intactix Sub has withheld and paid all Taxes required to have
been withheld and paid and complied with all information reporting and backup
withholding requirements, including maintenance of required records in respect
thereto, in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
23
24
(c) No Tax Audits and No Tax Deficiencies. Except as set forth in
Schedule 4.11(c) of the Seller Disclosure Schedule, neither Seller's nor any
Intactix Sub's Tax Returns are currently under audit by any Governmental Entity,
nor, to Seller's Knowledge, is any such audit, pending or threatened.
4.12 Financial Statements.
(a) Schedule 4.12 of the Seller Disclosure Schedule contains
copies of (i) Seller's consolidated and consolidating unaudited balance sheets
pertaining to the Business as of December 31, 1999 and consolidated and
consolidating unaudited statements of operations pertaining to the Business for
the year then ended (collectively, the "Financial Statements"). The Financial
Statements have been prepared in accordance with GAAP, and present fairly the
financial position of the Business as of their respective dates and the results
of operations of the Business for the periods indicated.
(b) There is no material debt, liability, or obligation of any
nature pertaining to the Business, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not reflected or reserved
against in the Financial Statements, except for those (i) that have been
incurred after December 31, 1999 or (ii) that are not required by GAAP to be
included in a balance sheet or the notes thereto. All debts, liabilities, and
obligations incurred after December 31, 1999 were incurred in the ordinary
course of business.
4.13 Absence of Certain Changes or Events. Since December 31, 1999,
Seller and each Intactix Sub has conducted the Business in the ordinary and
usual course and, without limiting the generality of the foregoing, has not:
(a) suffered any Material Adverse Change;
(b) suffered any damage, destruction or loss, whether or not
covered by insurance, having a Material Adverse Effect;
(c) granted any increase in the compensation payable or to become
payable by Seller or any Intactix Sub to any Employee or Consultant except those
occurring in the ordinary course of business, consistent with such Seller's past
practices with respect to the Business;
(d) made any change in the accounting methods or practices Seller
or any Intactix Sub follows relating to the Business, whether for financial or
tax purposes, or any change in depreciation or amortization policies or rates
adopted therein;
(e) granted or renewed any exclusive license or agreement with
respect to the Seller Intellectual Property used in the Products;
(f) incurred any liabilities relating to the Business except in
the ordinary course of business and consistent with past practice which would be
required to be disclosed in financial statements prepared in accordance with
GAAP;
24
25
(g) permitted or allowed any of the Assets to be subjected to any
Encumbrance of any kind (other than a Permitted Encumbrance) other than in the
ordinary course of business consistent with past practices;
(h) made any material amendment to, waived any rights under or
terminated any Contract or any other agreement which is listed on the Seller
Disclosure Schedule;
(i) incurred any contingent liability as guarantor or otherwise
with respect to the obligations of others other than in the ordinary course,
consistent with past practices of the Business; or
(j) agreed to take any action described in this Section 4.13 or
outside of its ordinary course of business or which would constitute a breach of
any of the representations or warranties of Parent or Seller contained in this
Agreement.
4.14 Intellectual Property; Proprietary Rights.
(a) Schedule 1.69 and Schedule 1.71 of the Seller Disclosure
Schedule set forth a complete and accurate list of:
(i) all registered and unregistered trademarks, service marks
and tradenames which are used in connection with the Products; and
(ii) all registered and unregistered copyrights in the Seller
Software Programs which are incorporated into or used in connection with the
Products.
(b) Schedules 1.63 and 1.70 of the Seller Disclosure Schedule set
forth a complete and accurate list of all Seller Software Programs and Third
Party Software Programs, respectively, incorporated into, or required for
ordinary use of, the Products.
(c) Except as listed on Schedule 4.14(c) of the Seller Disclosure
Schedule, the Transferred Intellectual Property and the Licensed Intellectual
Property comprise all the material intellectual property rights necessary to
conduct the Business as conducted by Seller prior to the Closing Date.
(d) No claims have been asserted against Seller or any Intactix
Sub (and to the Knowledge of Parent and Seller there are no claims threatened to
be asserted against Seller or any Intactix Sub) by any person challenging
Seller's or any Intactix Sub's use or distribution of any Seller Intellectual
Property used by Seller or any Intactix Sub in the Business or in connection
with the Products (including, without limitation, technology licensed under the
Third Party In-Licenses) or challenging or questioning the validity of,
effectiveness of, or full performance by Seller or any Intactix Sub of its
obligations under any license or agreement relating thereto (including, without
limitation, the Third Party In-Licenses). Neither Parent nor Seller has
Knowledge of any valid basis for any claim of the type specified in the
immediately preceding sentence.
25
26
(e) To the Knowledge of Parent and Seller, none of the
Intellectual Property embodied in a Product, as applicable, infringes on the
rights of, or constitutes misappropriation of any proprietary information or
intangible or intellectual property right of any third party.
(f) Except for the Affiliate Distributor Agreements set forth on
Schedule 1.4 of the Seller Disclosure Schedule and the Third Party Distributor
Agreements set forth on Schedule 1.68 of the Seller Disclosure Schedule, neither
Seller nor any Intactix Sub has granted any third party any right to
manufacture, reproduce, distribute, market or exploit any of the Products.
(g) All designs, drawings, technical specifications, source code,
object code, design documents, documentation, flow charts and diagrams
incorporating, embodying or reflecting any of the Products at any stage of their
development were written, developed and created solely and exclusively by (i)
employees of Seller and/or an Intactix Sub or (ii) third parties who assigned
ownership of any and all of their rights arising out of, related to or resulting
from their development and creative efforts to Seller and/or an Intactix Sub in
valid and enforceable agreements. (h) Seller and each Intactix Sub has at all
times used legally sufficient and commercially reasonable efforts to protect its
trade secrets used in the Business or the Products.
(i) To the Knowledge of Parent and Seller, no Employee or
Consultant is in violation of any term of any employment or consulting contract,
as applicable, or any other contract or agreement relating to the relationship
of any such person with Seller, any Intactix Sub or any other party, because of
the nature of the Business.
(j) Except as disclosed on Schedule 4.14(j) of the Seller
Disclosure Schedule, each person currently or formerly employed or engaged as a
Consultant by Seller or any Intactix Sub that has or had access to confidential
information of Seller or any Intactix Sub relating to the Products has executed
a confidentiality and non-disclosure agreement sufficient to protect the trade
secret status of the Transferred Intellectual Property. Except as disclosed on
Schedule 4.14(j) of the Seller Disclosure Schedule, each person currently or
formerly employed or engaged as a Consultant by Seller or any Intactix Sub who
developed or was responsible for developing Intellectual Property has executed
an agreement sufficient to cause the assignment to Seller or such Intactix Sub
of any and all intellectual property developed by such employees, former
employees or independent consultants and relating, directly or indirectly, to
the Products. To the Knowledge of Parent and Seller, neither the execution or
delivery of such agreements, nor the carrying on of the Business as employees or
consultants, as applicable, by such persons, nor the conduct of the Business, as
currently conducted, from and after the Closing Date, will conflict with or
result in a breach of the terms, conditions or provisions of or constitute a
default under any contract, covenant or instrument under which any of such
persons is obligated.
(k) Each of the Products is Year 2000 Compliant, and each other
Seller Software Program incorporated into, or required for the ordinary use of,
any Product is Year 2000 Compliant. To the Knowledge of Parent and Seller,
neither Seller nor any Intactix Sub is using the services or software of any
third party whose systems or code is not Year 2000 Compliant where such
circumstances might have a Material Adverse Effect.
26
27
(l) Except as set forth in Schedule 4.14(l) of the Seller
Disclosure Schedule, no product liability or warranty claim with respect to any
Product has been communicated to Seller or any Intactix Sub or overtly
threatened in writing against Seller or any Intactix Sub nor to Seller's
Knowledge is there any specific situation, set of facts or occurrence that
provides a basis for any such claim.
(m) Schedule 4.14(m) of the Seller Disclosure Schedule contains an
accurate list of all material errors in any of the Products Known to Parent and
Seller.
4.15 Contracts and Arrangements.
(a) Schedules 4.15(a)(i), 1.43, 1.68, 1.69, and 1.72 of the Seller
Disclosure Schedule contain a complete and accurate list of all Non-Standard
Customer License Agreements, Leases, Third Party Distributor Agreements, Third
Party In-Licenses, and Vehicle Leases, respectively, and Seller has delivered to
Purchaser true and complete copies of all such written Contracts. Schedule
4.15(a)(ii) of the Seller Disclosure Schedule sets forth a true, complete and
accurate list of all customers of each of Seller and each Intactix Sub who are
currently on maintenance under the Customer License Agreements and designates
each such customer as a customer of Seller and/or each Intactix Sub, as
applicable.
(b) Each of the Assumed Contracts is valid, binding and in full
force and effect and enforceable by Seller or any Intactix Sub party thereto in
accordance with its terms, except as enforcement may be limited by general
equitable principles and the exercise of judicial discretion in accordance with
such principles. Neither Seller, any Intactix Sub nor, to Parent's or Seller's
Knowledge, any other party, is in default under any Assumed Contract, and there
are no existing disputes or claims of default relating thereto, or any facts or
conditions Known to Parent or Seller which, if continued, will result in a
default or claim of default thereunder, which default could reasonably be
expected to have a Material Adverse Effect. Seller and each Intactix Sub, as
applicable, have obtained, or will obtain prior to Closing, all necessary
consents to the assignment of the Leases to Purchaser and each Corresponding JDA
Sub. Parent and/or Seller have provided Purchaser with copies of the Standard
Customer License Agreement used by each of Seller and each Intactix Sub and,
except for those Nonstandard Customer License Agreements listed on Schedule
4.15(a)(i) of the Seller Disclosure Schedule all Customer License Agreements are
identical in all material substantive respects to such Standard Customer License
Agreement (which are attached to this Agreement as Exhibit B).
(c) All arrangements, understandings, relationships and
agreements, written or oral, between Seller, any Intactix Sub or any Affiliates
of Seller or any Intactix Sub related to the Business, the Assets or the
Products (including the purchase and sale of components, supply arrangements,
distribution arrangements, and the development and design of Products or related
Seller Intellectual Property) are listed in Schedule 4.15(c) of the Seller
Disclosure Schedule.
4.16 Insurance. Seller and each Intactix Sub currently maintains, and
has at all times prior to the date of this Agreement maintained, liability,
casualty, property loss and other insurance coverages upon the Assets and with
respect to the operation of the Business in such amounts, of such kinds and with
such carriers as are generally deemed appropriate and sufficient
27
28
for companies of similar size to Seller or such Intactix Sub and engaged in
similar types of business and operations.
4.17 Brokers. There is no broker, finder, investment banker or other
person, other than Xxxxxx Bros., whose fees are to be paid by Parent, Seller or
any Intactix Sub, who would have any valid claim against any of the parties to
this Agreement for a commission or brokerage fee or payment in connection with
this Agreement or the transactions contemplated herein as a result of any
agreement of, or action taken by, Parent, Seller or any Intactix Sub.
4.18 Warranties and Service Payment Obligations. To the Knowledge of
Parent and Seller, the Customer License Agreements and the Third Party
Distributor Agreements contain all of the written product warranties and
warranty agreements Seller and each Intactix Sub has provided to any customer.
Schedule 4.15(a)(ii) and Schedule 4.18 of the Seller Disclosure Schedule set
forth a complete and accurate list of all agreements pursuant to which Seller or
any Intactix Sub is obligated to provide service or support services with
respect to the Products. No agreement for the sale, license, service, support or
maintenance of the Products obligates Seller or any Intactix Sub to provide any
material change in functionality or other alternations in the performance of the
Products or to provide new products or technology.
4.19 Business Records. The Business Records to be delivered to
Purchaser are complete and accurate in all material respects and accurately
reflect in all material respects all actions and transactions referred to in
such Business Records. As of the Closing, Seller and each Intactix Sub shall
have delivered all copies of any Business Records, and shall retain no copies of
any customer lists.
4.20 Environmental and Safety Matters.
(i) The Seller and each Intactix Sub has complied with and is
currently in compliance with all Environmental and Safety Requirements, and
neither the Seller nor any Intactix Sub has received any written notice, report
or information regarding any violations of or any liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) or corrective, investigatory or
remedial obligations arising under Environmental and Safety Requirements which
relate to the Seller or any Intactix Sub, the Business, the Assets or any
properties or facilities related thereto.
(ii) Without limiting the generality of the foregoing, the
Seller and each Intactix Sub have obtained and complied with, and are currently
in compliance with, all permits, licenses and other authorizations that may be
required pursuant to any Environmental and Safety Requirements for the occupancy
of their properties or facilities or the operation of their businesses. A list
of all such permits, licenses and other authorizations is set forth on Schedule
4.20 of the Seller Disclosure Schedule.
(iii) Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement shall impose any obligations on the
Seller or any Intactix Sub or otherwise for site investigation or cleanup, or
notification to or consent of any government agencies or third parties under any
Environmental and Safety Requirements (including, without limitation, any so
called "transaction-triggered" or "responsible property transfer" laws and
regulations).
28
29
(iv) None of the following exists at any property or facility
owned, occupied or operated by the Seller or any Intactix Sub: (a) underground
storage tanks; (b) asbestos-containing materials in any form or condition; (c)
materials or equipment containing polychlorinated biphenyls; or (d) landfills,
surface impoundments or other disposal areas.
(v) Neither Seller nor any Intactix Sub has treated, stored,
disposed of, arranged for or permitted the disposal of, transported, handled or
released any substance (including, without limitation, any hazardous substance)
or owned, occupied or operated any facility or property (and no such property or
facility is contaminated by any such substance) in a manner that has given or
could give rise to liabilities including any liability for response costs,
corrective action costs, personal injury, natural resource damages, property
damage or attorneys fees or any investigative, corrective or remedial
obligations pursuant to any Environmental and Safety Requirements.
(vi) Without limiting the generality of the foregoing, no
facts, events or conditions relating to the past or present properties,
facilities or operations of Seller or any Intactix Sub shall prevent, hinder or
limit continued compliance with Environmental and Safety Requirements, give rise
to any corrective, investigatory or remedial obligations pursuant to
Environmental and Safety Requirements or give rise to any other liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise) pursuant to
Environmental and Safety Requirements (including, without limitation, those
liabilities relating to onsite or offsite releases or threatened releases of
hazardous materials, substances or wastes, personal injury, property damage or
natural resource damage).
(vii) Seller and/or any Intactix Sub has not, either
expressly or by operation of law, assumed or undertaken any liability or
corrective, investigatory or remedial obligation of any other Person relating to
any Environmental and Safety Requirements.
(viii) No environmental lien has attached to any property
owned, leased or operated by Seller or any Intactix Sub.
(ix) "Environmental and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law, in
each case concerning public health and safety, worker health and safety and
pollution or protection of the environment (including, without limitation, all
those relating to the presence, use, production, generation, handling,
transport, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control or cleanup of any
hazardous or otherwise regulated materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals,
petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or
radiation).
29
30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as otherwise set forth in the Purchaser Disclosure Schedule
provided to Parent, a copy of which is attached as Schedule V, Purchaser hereby
represents and warrants to Parent and Seller that:
5.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to carry on its businesses as now
conducted. Each JDA Sub is, or will be prior to the Closing Date, an entity duly
organized, validly existing and in good standing or its local equivalent, if
applicable, under the laws of the jurisdiction of its organization and has, or
will have as of the Closing date, full corporate power and authority to carry on
its businesses as now, or as of the Closing Date, conducted.
5.2 Power, Authorization and Validity. Purchaser and each JDA Sub have,
or will have as of the Closing Date, the right, power, legal capacity and
authority to enter into and perform their respective obligations under
Transaction Agreements to which each is or will be a party. The execution and
delivery of the Transaction Agreements to which Purchaser and any JDA Sub is or
will be a party have been, or will be as of the Closing Date, duly and validly
approved and authorized by the board of directors or other governing body of
Purchaser or such JDA Sub, as applicable. No other authorization or approval,
governmental or otherwise, is necessary in order to enable Purchaser or any JDA
Sub to enter into and to perform the terms of Transaction Agreements to which
each is a party, except for (a) filings under applicable securities laws and (b)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the laws of each jurisdiction
in which Purchaser or such JDA Sub conducts, or will conduct as of the Closing
Date, any business or owns any property or assets. This Agreement is, and the
other Transaction Agreements to which Purchaser and each JDA Sub are or will be
party, when executed and delivered by Purchaser and each JDA Sub party thereto,
shall be, the valid and binding obligations of Purchaser and each such JDA Sub,
enforceable in accordance with their respective terms, subject to (i) laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
5.3 No Violation of Existing Agreements. Neither the execution and
delivery of the Transaction Agreements to which Purchaser and each JDA Sub are
party, nor the consummation of the transactions contemplated herein or therein
will conflict with, or result in a material breach or violation of, any
provision of Purchaser's or any JDA Sub's charter documents as currently in
effect, any material instrument or contract to which Purchaser or any JDA Sub is
a party or by which Purchaser or any JDA Sub is bound, or any Law or Decree
applicable to Purchaser or any JDA Sub. Neither the execution and delivery of
the Transaction Agreements to which Purchaser and each JDA Sub is party, nor the
consummation of the transactions contemplated herein or therein, will have a
material adverse effect on the operations, assets, or financial condition of
Purchaser or any JDA Sub.
30
31
5.4 Compliance With Other Instruments and Laws. Neither Purchaser nor
any JDA Sub is in violation of (a) in any material respect any provisions of its
respective charter documents as currently in effect or (b) in any material
respect any applicable Law or Decree.
5.5 Litigation. There is no suit, action, proceeding, claim or
investigation pending or, to Purchaser's Knowledge, threatened against Purchaser
or any JDA Sub before any court or administrative agency or which questions or
challenges the validity of any of the Transaction Agreements, or any of the
transactions contemplated herein or therein, which could have a material adverse
effect on the operations, assets or financial condition of Purchaser or any JDA
Sub.
5.6 Brokers. There is no broker, finder, investment banker or other
person, other than Bank of America Securities, who would have any valid claim
against any of the parties to this Agreement for a commission or brokerage fee
or payment in connection with this Agreement or the transactions contemplated
herein as a result of any agreement of, or action taken by, Purchaser or any JDA
Sub.
5.7 Availability of Funds. Purchaser has sufficient funds on hand, or
access to sufficient funds, to consummate the transactions contemplated hereby
without any financing whatsoever.
ARTICLE VI
PRE-CLOSING COVENANTS OF PARENT AND SELLER
6.1 Advice of Changes. During the period on and from the date of this
Agreement through and including the Closing Date, Parent and Seller agree to and
will promptly notify Purchaser in writing of (a) any event occurring subsequent
to the date of this Agreement that would render any representation or warranty
of Parent or Seller contained in this Agreement, if made on or as of the date of
that event or the Closing Date, untrue or inaccurate in any material respect and
(b) any Material Adverse Change.
6.2 Conduct of Business. During the period on and from the date of this
Agreement through and including the Closing Date, Seller will conduct and Parent
and Seller will cause each Intactix Sub to conduct the Business in the ordinary
course of business consistent with past practices and Seller will use and Seller
and Parent will cause each Intactix Sub to use reasonable commercial efforts to
retain its Employees and the Consultants, to protect and preserve the Assets,
and to maintain and to preserve intact Seller's relationships and each Intactix
Sub's relationships with its respective independent contractors, licensors,
suppliers, vendors, representatives, distributors, other customers and all
others with whom it deals, all in accordance with the ordinary course of
business consistent with past practices. Without limiting the generality of the
foregoing, during the period on and from the date of this Agreement through and
including the Closing Date, Seller will not and Parent and Seller will not
permit any Intactix Sub without the prior written consent of Purchaser, to;
(a) mortgage, pledge, subject to a lien, or grant a security
interest in, or suffer to exist or otherwise encumber, any of the Assets;
31
32
(b) sell, dispose of or license any of the Assets to any Person,
except in the ordinary course of business consistent with past practices;
(c) fail to maintain the Tangible Assets and all Facilities in
good working condition and repair according to the standards each has maintained
up to the date of this Agreement, subject only to ordinary wear and tear;
(d) fail to pay and discharge any trade payables relating to the
Products or the Business in accordance with past practices;
(e) enter into any agreement or arrangement to pay any bonus,
increased salary, or special remuneration to any Employees or Consultants, as
applicable;
(f) change accounting methods relating to or affecting the Assets,
Assumed Liabilities or the Business;
(g) amend, terminate or waive any material rights under any
Assumed Contract, except in the ordinary course of business consistent with past
practices;
(h) waive or release any material right or claim relating to any
Assets, except in the ordinary course of business consistent with past
practices;
(i) enter into any agreements, or other obligations or commitments
relating to the Business, except on commercially reasonable terms in the
ordinary course of business consistent with past practices;
(j) fail to comply in any material respect with any Law or Decree
applicable to the Business;
(k) take any action to terminate or modify, or permit the lapse of
termination of, the present insurance policies and coverages of Seller or any
Intactix Sub relating to or applicable to Seller, any Intactix Sub, the Business
or the Assets;
(l) incur, with respect to the Business or the Assets, any
Liabilities other than Liabilities incurred in the ordinary course of business
consistent with past practices;
(m) make any effort to collect or accelerate the collection of
payment of any Accounts Receivable except in the ordinary course of business in
accordance with past practice; or
(n) agree to do any of the things described in the preceding
clauses of this Section 6.2.
6.3 Access to Information. Until the Closing, Parent and Seller will
allow and will cause each Intactix Sub to allow Purchaser and its agents
reasonable access upon reasonable notice and during normal working hours to the
Business Records and Facilities relating to the Assets and all aspects of the
Business and its financial and legal affairs. Until the Closing, Parent and
Seller shall cause its accountants to cooperate with Purchaser and its agents in
making available all
32
33
financial information regarding Parent, Seller and each Intactix Sub requested,
including without limitation the right to examine all working papers pertaining
to all Financial Statements prepared or audited by such accountants. Purchaser
may not communicate with any employee of Parent, Seller, any Intactix Sub, or
any Affiliates of Parent, Seller or any Intactix Sub without the prior consent
of Parent, which shall not be unreasonably withheld.
6.4 Satisfaction of Conditions Precedent. Subject to Section 8.2
hereof, each of Parent and Seller will use and will cause each Intactix Sub to
use its reasonable commercial efforts to satisfy or cause to be satisfied all
the conditions precedent to the Closing, and to cause the transactions
contemplated in this Agreement to be consummated. Notwithstanding the foregoing
or Section 8.1 hereof, except for the fees to be paid by Parent or Seller for
its filing of premerger notification and report forms under the HSR Act, if any,
neither Parent nor Seller shall have any obligation to commence any litigation
or pay any fee or offer or grant any other financial accommodation to any third
party for the purpose of obtaining any consent or authorization or pay any costs
and expenses of any third party resulting from the process of obtaining any
consent or authorization.
6.5 Source Code Escrows. Without limiting the general obligations of
Parent and Seller set forth in Section 8.1 hereof, Parent and Seller will use
and will cause each Intactix Sub to use its reasonable commercial efforts to
obtain consent to the Acquisition and any required contractual assignments from
each of Kmart, Wal-Mart and American Stores such that any Seller source code
placed in escrow pursuant to agreements with such customers will not be released
as a result of the Acquisition. Notwithstanding the foregoing, neither Parent
nor Seller shall have any obligation to commence any litigation or pay any fee
or offer or grant any other financial accommodation to such customers for the
purpose of obtaining such consents or assignments.
6.6 Exclusive Dealings. During the period on and including the date of
this Agreement through and including the Closing Date, or such earlier date as
Purchaser and Parent mutually agree to discontinue efforts to consummate the
Acquisition or this Agreement is terminated pursuant to Article XI hereof (the
"Expiration Date"), (a) neither Parent, Seller nor any Intactix Sub will, and
each of Parent and Seller will use its reasonable commercial efforts to assure
and to cause each Intactix Sub to assure that the officers, directors, employees
and agents do not on their behalf, without the express written consent of
Purchaser, take any action to solicit, initiate, seek, encourage, respond to or
support any inquiry, proposal or offer from, furnish any information to, or
participate in any negotiations with, any corporation, partnership, person or
other entity or group (other than discussions with Purchaser and the JDA Subs)
regarding any sale, license or other disposition (however structured) of the
Assets or any portion thereof (other than an immaterial portion thereof which is
disposed of in the ordinary course of business) to any person other than
Purchaser and the JDA Subs, (b) Seller shall terminate or suspend and cause each
Intactix Sub to terminate and suspend any such negotiations in progress as of
the date hereof and (c) Parent and Seller shall promptly and shall cause each
Intactix Sub to promptly (but in any event within four business days) notify
Purchaser regarding any contact by any third party regarding any offer, proposal
or written request for information regarding any such acquisition. Each of
Parent and Seller represents and warrants that Parent, Seller and each Intactix
Sub has the legal right to terminate or suspend any such pending negotiations.
33
34
ARTICLE VII
PRE-CLOSING COVENANTS OF PURCHASER
7.1 Advice of Changes. Purchaser will promptly notify Parent and Seller
in writing of any event occurring subsequent to the date of this Agreement that
would render any representation or warranty of Purchaser contained in this
Agreement, if made on or as of the date of that event or the Closing Date,
untrue or inaccurate in any material respect.
7.2 Satisfaction of Conditions Precedent. Subject to Section 8.2 of
this Agreement, Purchaser will use its reasonable commercial efforts to satisfy
or cause to be satisfied all the conditions precedent to the Closing hereunder,
and to cause the transactions contemplated herein to be consummated, and,
without limiting the generality of the foregoing, to obtain all consents,
amendments and authorizations of Governmental Entities and third parties and to
make all filings with, and give all notices to, third parties which may be
necessary or reasonably required on its part in order to effect the transactions
contemplated herein.
ARTICLE VIII
MUTUAL COVENANTS
8.1 Regulatory Filings; Consents; Reasonable Efforts. Subject to the
terms and conditions of this Agreement, each of Seller, Purchaser and Parent
shall use its reasonable commercial efforts to (a) make all necessary filings
with respect to the Acquisition and this Agreement, if any, under the Securities
Act, the Exchange Act and applicable blue sky or similar securities laws and
obtain required approvals and clearances with respect thereto and supply all
additional information requested in connection therewith, (b) make required or
advisable premerger notification or other appropriate filings with Governmental
Entities, if any, and, subject to Section 8.2 of this Agreement, obtain required
approvals and clearances with respect thereto and supply all additional
information requested in connection therewith, (c) obtain all consents, waivers,
approvals, authorizations and orders required in connection with the
authorization, execution and delivery of this Agreement and the other
Transaction Agreements and the consummation of the Acquisition and (d) take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated in this Agreement as promptly as practicable.
Notwithstanding the foregoing, except for the fees to be paid by each party for
its filing of premerger notification and report forms under the HSR Act, if any,
which fee will be paid by and the responsibility of each such party, no party
shall have any obligation to commence any litigation or pay any fee or offer or
grant any other financial accommodation to any third party for the purpose of
obtaining any such consent or authorization or pay any costs and expenses of any
third party resulting from the process of obtaining any such consent or
authorization.
8.2 HSR Filings. Seller, Purchaser and Parent shall make (or shall
cause its respective "ultimate parent entities" as defined under the HSR Act to
make) and shall cause the JDA Subs and the Intactix Subs to make any and all
required governmental filings including filings required under the HSR Act ("HSR
Filings") and similar legislation in the countries of domicile of each of the
Intactix Subs with respect to the transactions contemplated in this Agreement
and
34
35
the other Transaction Agreements. Neither Parent, Seller nor Purchaser shall
be obligated to respond to any requests for additional information or
documentation from the Department of Justice ("DOJ"), the Federal Trade
Commission ("FTC") or any other Governmental Entity, as applicable. Neither
Seller, Purchaser nor Parent shall be required hereunder to divest itself of any
assets, properties or businesses, and neither Seller, Purchaser nor Parent shall
be required to consent to any modification or amendment of this Agreement if
requested by DOJ, FTC or any other Governmental Entity, as applicable. In the
event an action is instituted by DOJ, FTC or any other Governmental Entity, as
applicable, challenging the Acquisition as violative of applicable antitrust
laws or an investigation is commenced, neither Seller, Purchaser nor Parent
shall be obligated to resist or resolve such action or investigation. Seller and
Parent will notify Purchaser and Purchaser will notify Parent and Seller of all
correspondence, filings or communications between such party and its
representatives, on the one hand, and DOJ, FTC or any other Governmental Entity,
as applicable, on the other hand, with respect to the Transaction Agreements and
the transactions contemplated herein and therein. Seller and Parent will furnish
and will cause each Intactix Sub to furnish Purchaser, and Purchaser will
furnish and will cause each JDA Sub to furnish Parent and Seller with such
necessary information and reasonable assistance as such other parties may
request in connection with the preparation of the HSR Filings and similar
filings required in the jurisdictions of domicile of each Intactix Sub ("Foreign
Antitrust Filings") to the extent required. Seller, Parent and Purchaser shall,
from time to time and on a reasonably timely basis, advise the other, of its
designated representatives, in reasonable detail of the status and progress of
Purchaser's or Sellers', as applicable, HSR Filings and Foreign Antitrust
Filings.
8.3 Further Assurances. Except as otherwise set forth in this
Agreement, prior to and following the Closing each party to this Agreement
agrees to cooperate fully with the other party and to execute and to cause its
subsidiaries and Affiliates to the extent necessary to execute such further
instruments, documents and agreements, and to give such further written
assurances, as may be reasonably requested by any other party to better evidence
and reflect the transactions described herein and in the other Transaction
Agreements and contemplated herein and therein and to carry into effect the
intent and purposes of this Agreement.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Each Party's Obligations. The respective obligations
of each party to this Agreement to consummate the transactions to be performed
by such party at the Closing are, at the option of such party, subject to the
satisfaction at or prior to the Closing of the following conditions:
(a) No Orders. No order shall have been entered, and not vacated,
by a court or administrative agency of competent jurisdiction, in any action or
proceeding which enjoins, restrains or prohibits the Acquisition or consummation
of any other transaction contemplated by the Transaction Agreements.
(b) Permits, Authorizations and Approvals. All material permits,
authorizations, approvals and orders required to be obtained under all
applicable Laws or
35
36
Decrees in connection with the transactions contemplated herein, including but
not limited to any applicable consent or termination of any applicable waiting
period under the HSR Act, shall have been obtained and shall be in full force
and effect at the Closing Date.
(c) No Litigation. There shall be no litigation pending or
threatened by any Governmental Entity in which (i) an injunction is or may be
sought against the Acquisition or any other transaction contemplated herein or
(ii) relief is or may be sought against any party hereto as a result of this
Agreement and in which, in the good faith judgment of the board of directors of
Purchaser, Parent and Seller (relying on the advice of its respective legal
counsel), such Governmental Entity has the probability of prevailing and such
relief would have a material adverse effect upon such party.
9.2 Conditions to Obligations of Parent and Seller. The obligations of
Parent and Seller to consummate the transactions to be performed by it at the
Closing are, at the option of Parent and Seller, subject to the satisfaction at
or prior to the Closing of the following additional conditions:
(a) Representations and Warranties. All of the representations and
warranties of Purchaser set forth in ARTICLE V hereof shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if such representations and warranties had been made at the Closing,
and Purchaser shall have delivered to Parent and Seller a certificate (the
"Purchaser Compliance Certificate") to such effect dated as of the Closing Date
and signed by the President or a Vice President of Purchaser.
(b) Performance. All of the terms, covenants and conditions of
this Agreement to be complied with and performed by Purchaser and each JDA Sub
at or prior to the Closing shall have been duly complied with and performed in
all material respects, and Purchaser shall have delivered to Seller the
Purchaser Compliance Certificate to such effect.
(c) Payment of Purchase Price. Purchaser shall have delivered the
Purchase Price net of the Escrow Fund to Seller and each Intactix Sub in
accordance with Sections 2.5 and 2.6 hereof and Schedule 2.8 hereof.
(d) Opinion of Counsel to Purchaser. Seller shall have received
from Xxxx Xxxx Xxxx & Freidenrich LLP, counsel to Purchaser, an opinion dated as
of the Closing Date and substantially in the form to be attached as Exhibit G
hereto and as is customary in transactions of this nature.
(e) Escrow Fund and Escrow Fund Agreement. Purchaser shall have
deposited the Escrow Fund with the Escrow Agent and shall have delivered to
Parent, Seller and each Intactix Sub a copy of the Escrow Fund Agreement, in the
form attached hereto as Exhibit A executed by Purchaser, each JDA Sub and the
Escrow Agent.
(f) Xxxx of Sale, Assignment and Assumption Agreement. Purchaser
shall have executed and delivered to Seller the Xxxx of Sale, Assignment and
Assumption Agreement, in the form attached hereto as Exhibit D (the "Xxxx of
Sale, Assignment and Assumption Agreement").
36
37
(g) Business Transfer Agreements. Purchaser shall have caused each
JDA Sub to execute and deliver to Corresponding Intactix Sub, a Business
Transfer Agreement in substantially the form attached hereto as Exhibit E with
such changes as may be required to reflect local Law requirements in each
applicable jurisdiction (each a "Business Transfer Agreement" and collectively
the "Business Transfer Agreements").
(h) Resale Certificates. Purchaser shall use reasonable efforts to
provide to Seller a resale certificate or similar certificate for each State in
which the Assets are situated. The resale certificate or similar certificate
shall meet the requirements under the law of the applicable State in which the
Assets are situated.
(i) Purchaser's Closing Deliverables. At the Closing, Purchaser
will deliver to Seller the following items:
(i) the Purchase Price via wire transfer in accordance with
Sections 2.5 and 2.6 hereof and Schedule 2.8 hereof;
(ii) the Purchaser Compliance Certificate in accordance with
Sections 9.2(a) and (b) hereof;
(iii) executed copies of the Escrow Fund Agreement, the Xxxx of
Sale, Assignment and Assumption Agreement and each of the Transaction Agreements
executed by Purchaser;
(iv) a certificate, signed by the Secretary of Purchaser,
certifying as to the truth and accuracy of, and attaching copies of, Purchaser's
certificate of incorporation, the bylaws and all board of directors resolutions
adopted in connection with the Acquisition; and
(v) copies of each Business Transfer Agreement executed by
the applicable JDA Sub and delivered to the Corresponding Intactix Sub; and
(vi) copies of each certificate, signed by the Secretary of
each JDA Sub, certifying as to the truth and accuracy of, and attaching copies
of, such JDA Sub's organizational documents and all board of directors and
shareholder resolutions adopted in connection with the Acquisition and delivered
to each Corresponding Intactix Sub;
(vii) the resale certificates in accordance with Section 9.2(h)
hereof;
(viii) the executed opinion of counsel in accordance with
Section 9.2(d) hereof; and
(ix) all other documents required to be delivered to Parent,
Seller and or each Intactix Sub by Purchaser or any JDA Sub on or before the
Closing Date under this Agreement.
9.3 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions to be performed by it at the Closing
are, at the option of Purchaser, subject to the satisfaction at or prior to the
Closing of the following additional conditions:
37
38
(a) Representations and Warranties. All the representations and
warranties of Parent and Seller set forth in ARTICLE IV hereof shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if such representations and warranties had been made at the
Closing, and Parent and Seller shall have delivered to Purchaser a certificate
(the "Parent Compliance Certificate" and the "Seller Compliance Certificate",
respectively) to such effect dated as of the Closing Date and signed by the
President or a Vice President of Parent and Seller, respectively.
(b) Performance. All of the terms, covenants and conditions of
this Agreement to be complied with and performed by Parent, Seller and each
Intactix Sub at or prior to the Closing shall have been duly complied with and
performed in all material respects, and Parent and Seller shall have delivered
to Purchaser the Parent Compliance Certificate and the Seller Compliance
Certificate, respectively, to such effect.
(c) Required Consents. Any and all (i) Government Entity consents
which are required to allow the consummation of the Acquisition and the other
transactions contemplated herein and (ii) consents to the assignment of the
Leases to Purchaser or each JDA Sub, as applicable, required by law, contract or
both, shall have been obtained and delivered to Purchaser.
(d) Opinion of Counsel to Parent and Seller. Purchaser shall have
received from Battle Xxxxxx LLP, counsel to Parent and Seller, and from such
foreign counsel as Purchaser and Seller shall agree, opinions dated as of the
Closing Date and substantially in the form to be attached as Exhibit F hereto
and as is customary in transactions of this nature.
(e) Material Adverse Change. There shall have been no Material
Adverse Change from December 31, 1999 through the Closing Date.
(f) Escrow Fund Agreement. Parent, Seller and each Intactix Sub
shall have executed and delivered to Purchaser the Escrow Fund Agreement in the
form attached hereto as Exhibit A.
(g) Xxxx of Sale, Assignment and Assumption Agreement. Parent and
Seller shall have executed and delivered to Purchaser the Xxxx of Sale,
Assignment and Assumption Agreement in the form attached hereto as Exhibit D.
(h) Business Transfer Agreements. Parent and Seller shall have
caused each Intactix Sub to execute and deliver to Corresponding JDA Sub, a
Business Transfer Agreement in substantially the form attached hereto as Exhibit
E with such changes as may be required to reflect local Law requirements in each
applicable jurisdiction.
(i) Excluded Liabilities Insurance Policy. Seller shall have
delivered to Purchaser the Excluded Liabilities Insurance Policy.
(j) Financial Statements. Seller shall have delivered to
Purchaser, within 12 calendar days of the date hereof, a consolidated balance
sheet of Seller and the Intactix Subs as of December 31, 1999, and a
consolidated statement of operations and cash flows of Seller and the Intactix
Subs for the fiscal year ended December 31, 1999, together with notes thereto
38
39
(collectively, the "Closing Financial Statements"), prepared in accordance with
Seller's accounting policies consistently applied and GAAP. The Closing
Financial Statements shall have been audited by KPMG. The audit report of KPMG
accompanying the Closing Financial Statements may include a "going concern"
explanatory paragraph. The Closing Financial Statements shall not disclose any
matter which is adverse to the business, financial condition or results of
operations of Seller or the Intactix Subs, except for intangibles and such
matters which have previously been explicitly disclosed to Purchaser either in
(i) the Financial Statements or (ii) the Seller Disclosure Schedule as delivered
on the date hereof without regard to any subsequent modifications or
disclosures. In addition, the dollar amounts appearing next to the Captions
"Total Current Assets", "Total Current Liabilities", "Accounts Receivable Net of
Allowances", "Deferred Income" and "FFE" on the balance sheet and "Total
Revenues" and "Total Operating Expenses" on the statement of operations included
in the Closing Financial Statements shall not vary adversely from the target
dollar amounts indicated in the following table next to such captions by more
than the indicated permissible variance percentage.
CAPTION TARGET DOLLAR AMOUNT PERMISSIBLE VARIANCE PERCENTAGE
Total Current Assets 7,507.7 2% below
Total Current Liabilities 6,588.2 2% above
Accounts Receivable Net of Allowances 5,208.3 4% below
Deferred Income 4,193.4 1% below
FFE 1,795.1 1% below
Total Revenues 23,746.1 1% below
Total Operating Expenses and Cost of 25,248.2 1% above
Goods Sold
9.4 Sellers' Closing Deliverables. At the Closing, Seller will deliver
to Purchaser the following items:
(i) the Assets by making the Assets available to Purchaser at
their present locations;
(ii) a Seller Compliance Certificate in accordance with Sections
9.3(a) and (b) hereof;
(iii) all required consents in accordance with Section 9.3(c)
hereof;
39
40
(iv) the executed opinion of counsel in accordance with Section
9.3(d) hereof;
(v) an executed copy of a Xxxx of Sale, Assignment and Assumption
Agreement, the Escrow Fund Agreement and each of the Transaction Agreements
executed by Seller;
(vi) a certificate, signed by the Secretary of Seller, certifying
as to the truth and accuracy of, and attaching copies of all board of directors
and stockholder resolutions adopted in connection with the Acquisition;
(vii) copies of each Business Transfer Agreement executed by the
applicable Intactix Sub and delivered to Corresponding JDA Sub;
(viii) Intactix Sub, certifying as to the truth and accuracy of, and
attaching copies of, such Intactix Sub's organizational documents and all board
of directors and shareholder resolutions adopted in connection with the
Acquisition and delivered to each Corresponding JDA Sub; and
(ix) a duly executed affidavit certifying that Seller is not a
foreign person within the meaning of Section 1445 of the Code;
(x) the Excluded Liabilities Insurance Policy which Purchaser
acknowledges has been delivered; and
(xi) all other documents required to be delivered to Purchaser on
or before the Closing Date under the provisions of this Agreement.
9.5 Parents' Closing Deliverables. At the Closing, Parent will deliver
to Purchaser the following items:
(i) the Parent Compliance Certificate in accordance with Sections
9.3(a) and (b) hereof;
(ii) the executed opinion of counsel in accordance with Section
9.3(d) hereof;
(iii) a certificate, signed by the Secretary of Parent, certifying
as to the truth and accuracy of, and attaching copies of all board of directors
resolutions adopted in connection with the Acquisition; and
(iv) all other documents required to be delivered to Purchaser on
or before the Closing Date under the provisions of this Agreement.
40
41
ARTICLE X
POST-CLOSING MATTERS
10.1 New Purchaser Employees.
(a) Employment Offers.
(i) Except as provided on Schedule 10.1(a)(i), as of the
Closing Date, Purchaser and each JDA Sub shall employ (where employment
continues by operation of law) or, where employment does not continue by
operation of law, shall offer employment to, each Employee listed on Schedule
10.1(a) on terms and conditions, including position, pay and benefits, which are
substantially similar in the aggregate to the terms and conditions, including
position, pay and benefits, provided such employee by Seller or such Intactix
Sub, as applicable, immediately prior to the Closing Date. Each such Employee
who continues in employment by operation of law or who accepts an offer of
employment pursuant to this Section 10.1 is hereafter referred to as a "New
Purchaser Employee." In no event shall Purchaser be required to maintain any
benefits or pay other forms of compensation for any specified period following
the Closing Date or to continue the employment of any New Purchaser Employee
(ii) Except as set forth in Section 10.1(a)(iii) hereof,
Seller shall indemnify and hold harmless (in accordance with and subject to the
provisions of ARTICLE XII hereof) Purchaser, and any JDA Sub, for any Losses as
a result of any salary, sales commissions, bonus compensation, payroll taxes,
contributions to Employee Plans, fringe benefits, vacation pay, compensation, or
other benefits or amounts under any Employee Plan or otherwise due and payable
as of Closing Date with respect to any former Employee whose employment
terminated for any reason prior to the Closing Date.
(iii) Seller agrees to use its reasonable commercial efforts
and Parent and Seller agree to cause each Intactix Sub to use its reasonable
commercial efforts to retain each Employee set forth on Schedule 10.1(a) up to
the Closing Date and assist Purchaser or the applicable JDA Sub in securing or
assuming (as the case may be) the employment of each of such Employees after the
Closing. Seller shall not transfer and Parent and Seller shall not permit any
Intactix Sub to transfer any Employee listed on Schedule 10.1(a) to an
assignment unrelated to the Business prior to Closing without the prior written
consent of Purchaser. Parent or Seller shall notify Purchaser promptly if,
notwithstanding the foregoing, any Employee terminates his or her employment
with Seller or an Intactix Sub, as applicable, prior to the Closing Date or
submits his or her resignation to terminate employment effective after the
Closing Date. Except where an Employee's employment continues by operation of
law, Seller shall terminate and Parent and Seller shall cause each Intactix Sub
to terminate the employment of each Employee immediately upon the Closing Date,
and Seller shall not pay any severance and Parent and Seller shall not permit
any Intactix Sub to pay any severance to any Employee so terminated unless
required to do so by law and as disclosed on Schedule 4.10(c) of the Seller
Disclosure Schedule. Where any Employee does not become an employee of Purchaser
or a JDA Sub by operation of law as a result of the Acquisition, Seller or each
Intactix Sub, as applicable, will prepare letters of termination and all other
documentation required by company policies or applicable law with respect to
terminating Employees and deliver such documentation to Purchaser prior to the
41
42
Closing Date. Purchaser shall be primarily responsible for communications with
all Employees regarding the termination of their employment with Seller or an
Intactix Sub, as applicable, and whether they will be employed with Purchaser or
any JDA Sub; provided, that Purchaser will preclear all Employee contacts
through Xxxxxx Xxxxxxxx. Purchaser shall assume and become obligated to pay the
following Liabilities relating to Employees: (i) Taxes (including without
limitation payroll taxes but excluding income taxes) accrued on or prior to the
Closing Date and not more than thirty (30) days' past due and reflected in the
calculation of Closing Working Capital as reflected in the Closing Statement;
(ii) salary, sales commissions, and bonus compensation accrued on or prior to
the Closing Date and reflected in the calculation of Closing Working Capital;
(iii) vacation pay accrued on or prior to the Closing Date and not more than
thirty (30) days past due and reflected in the calculation of Closing Working
Capital; and (iv) other Liabilities related to the Employees reflected in the
calculation of Working Capital (other than the $725,000 reflected on Schedule
1.74 hereto as Severance Accrual). All other obligations of Seller and each
Intactix Sub with respect to Employees through the Closing Date shall remain the
sole obligations of Seller and each Intactix Sub, as applicable
(iv) Notwithstanding anything in this Agreement to the
contrary, any Employee who works in the United States under a valid U.S. Visa
issued by the U.S. Department of Justice shall not become a New Purchaser
Employee until such Employee has obtained a new U.S. Visa naming Purchaser as
the employer; provided, however, that Purchaser shall diligently pursue an
application for such U.S. Visa.
(b) Employment Taxes.
(i) Seller shall be and shall cause each Intactix Sub to be
solely responsible for filing all employee related Tax Returns with respect to
such persons attributable to periods of employment or service with Seller or
such Intactix Sub prior to the Closing Date. Seller shall provide and shall
cause each Intactix Sub to provide Purchaser and each Corresponding JDA Sub with
access to all books and records and copies of all Tax filings related to
employment Taxes paid with respect to any New Purchaser Employees for the period
from January 1, 2000 through the Closing Date.
(ii) Purchaser shall be and shall cause each JDA Sub to be
solely responsible for any withholding or employment Taxes with respect to any
of the New Purchaser Employees employed by Purchaser or such JDA Sub,
respectively, following the Closing Date, which accrue or become payable during
the period of such person's employment or service with Purchaser or such JDA
Sub, or arise out of the termination of such person's employment or service with
Purchaser or such JDA Sub. Purchaser shall be responsible and shall cause each
JDA Sub to be responsible for filing all tax returns with respect to such
persons attributable to periods of employment or service with Purchaser or such
JDA Sub.
(c) Compensation; Contractual Obligations. Parent and Seller shall
be and shall cause each Intactix Sub to be jointly and severally liable for and
obligated to pay and shall indemnify and hold Purchaser, each JDA Sub and any
Affiliates of Purchaser and/or any JDA Sub harmless, in accordance with and
subject to the provisions of ARTICLE XII hereof, from any and all liabilities
with respect to (A) any of Parent's or Seller's obligations under this Section
10.1, or (B) any claims or obligations arising out of the employment of any
person by Parent,
42
43
Seller and any Intactix Sub for the period ending on the Closing Date, whether
for salary, wages, bonuses, commissions, severance, accrued vacation, vacation
pay, sick pay or otherwise and not arising out of the Acquisition or the
termination of such Employee's employment in connection with the Acquisition.
Purchaser shall be and shall cause each JDA Sub to be jointly and severally
liable for and obligated to pay and shall indemnify and hold Parent, Seller and
each Intactix Sub and any Affiliates of Parent, Seller or any Intactix Sub
harmless, in accordance with and subject to provisions of ARTICLE XII hereof,
from any and all liabilities with respect to (X) any of Purchaser's or any JDA
Sub's obligations under this Section 10.1, or (Y) any claim by any Employee to
the extent arising out of the Acquisition or the termination of such Employee's
employment in connection with the Acquisition.
(d) Seller Employee Plans.
(i) With respect to Employees based in the United States: The
parties intend that Purchaser shall be treated as a "successor employer" to
Seller within the meaning of Proposed Treasury Regulation Section 54.4980B-2.
With respect to all New Purchaser Employees, Purchaser shall offer health care
coverage to such employees that is substantially similar in the aggregate to the
health care coverage such employees had prior to the Acquisition. The parties
intend that no COBRA continuation coverage shall be available to the New
Purchaser Employees as a result of the Acquisition. To the extent required by
law and provided that Seller does not maintain any group health plan in the
United States after the Closing Date, Purchaser shall make COBRA continuation
coverage available under an Assumed Employee Plan or one of its group health
plans to those Employees who do not become New Purchaser Employees upon the
Acquisition and to any other persons who are qualified beneficiaries receiving
COBRA continuation coverage under a group health plan of Seller at the Closing
Date or eligible to elect COBRA continuation coverage on the Closing Date.
(ii) As soon as practicable prior to the Closing Date, but in
no event less than one day prior to the Closing Date, Seller shall adopt all
corporate resolutions necessary to terminate the qualified retirement plan
maintained by the Seller (the "Seller 401(k) Plan"), effective no later than one
day prior to the Closing Date. Seller shall also adopt such amendments to the
Seller 401(k) Plan as are necessary to assure that said plan retains its
tax-qualified status through the date of its termination. As soon as practicable
prior to the Closing Date, Seller shall contribute to the Seller 401(k) Plan all
contributions, including but not limited to employee deferrals and related
matching contributions, required or necessary under the terms of said plan to
provide for benefits accrued as of the date of the termination of the Seller
401(k) Plan. Seller shall, if practicable and if not, Purchaser shall notify all
employees of the termination of the Seller 401(k) Plan. Purchaser shall permit
direct rollovers of distributions from the Seller 401(k) Plan into its qualified
retirement plan, including direct rollovers in kind of any participant loans
from the Seller 401(k) Plan if the transfer of the loans is administratively
feasible. In no event shall the Seller 401(k) Plan be an Assumed Employee Plan.
Seller will cooperate with Purchaser and cause all necessary and proper
documents to be executed. Purchaser shall be obligated at its expense to
administer the termination of the Seller 401(k) Plan, including drafting
necessary amendments, submission of the Seller 401(k) Plan for a determination
letter, distributing account balances and filing all necessary documents and
returns with the Internal Revenue Service.
43
44
(iii) As of the Closing Date, Purchaser or the appropriate JDA
Sub shall assume the Employee Plans listed on Schedule 10.1(d)(iii) of the
Seller Disclosure Schedule which they are required under the laws of the
applicable jurisdictions to continue or assume or which they, with the consent
of Seller and the Intactix Subs, as appropriate, have agreed to continue or
assume (the "Assumed Employee Plans"). Seller and the Intactix Subs agree to do
all things reasonably necessary to accomplish the continuation or assumption of
the Assumed Employee Plans, including, with respect to private plans, the
transfer to Purchaser or the designated JDA Sub of cash, insurance contracts and
other assets to fully fund the Benefit Obligations of the Sellers under such
plans as of the Closing Date, and shall not withhold their consent if such
Employee Plans are capable, under the laws of the applicable jurisdictions, of
being continued or assumed.
(iv) Parent and Seller shall, or shall cause an Intactix Sub
to, indemnify, save and hold harmless, in accordance with and subject to the
provisions of ARTICLE XII hereof, Purchaser and the JDA Subs from and against
any and all Losses arising under:
(A) any Employee Plan, other than any Assumed Employee
Plan, regardless of whether the Losses relate to or arise out
of conditions, events or transactions which exist or occur
prior to, on or after the Closing Date; and
(B) any Assumed Employee Plan, to the extent such Losses
relate to or arise out of conditions, events or transactions
which exist or occur on or prior to the Closing Date.
Purchaser shall, or shall cause a JDA Sub to, indemnify, save
and hold harmless, in accordance with and subject to the
provisions of ARTICLE XII hereof, Seller and the Intactix Subs
from and against any and all Losses related to Assumed
Employee Plans, to the extent such Losses relate to or arise
out of conditions, events or transactions which first exist or
occur following the Closing Date.
(e) No Solicitation or Hiring of Former Employees.
(i) Parent and Seller each agree and Parent and Seller agree
to cause each Intactix Sub to agree that, for a period of three (3) years after
the Closing Date, it shall not, and it shall not permit its subsidiaries and
Affiliates to, without first obtaining the written consent of Purchaser, which
consent may be withheld for any reason, directly or indirectly hire, solicit or
attempt to solicit any New Purchaser Employee or any other person who is
employed by Purchaser or any JDA Sub or the subsidiaries or Affiliates of
Purchaser or any JDA Sub in the Business to leave his or her employer or to
become an employee of Parent, Seller, any Intactix Sub, or any of subsidiaries
or Affiliates of Parent, Seller or any Intactix Sub.
(ii) Except as contemplated by this Agreement, Purchaser
agrees that, for a period of two (2) years after the Closing Date, it shall not,
and shall cause its subsidiaries and Affiliates not to, without first obtaining
the written consent of Parent, which consent may be withheld for any reason,
directly or indirectly solicit or attempt to solicit any person who is employed
by Parent or any of their respective subsidiaries or Affiliates to leave his or
her employer or to become an employee of Purchaser or any of its subsidiaries or
Affiliates.
44
45
(f) No Rights Conferred Upon Employees. Nothing in this Agreement
shall confer any rights or remedies on any Employee (including without
limitation any New Purchaser Employee) and no person (including without
limitation any New Purchaser Employee) shall be a person's beneficiary with
respect to any provision in this Agreement.
10.2 New Purchaser Consultants.
(a) Parent and Seller shall be jointly and severally responsible
for and obligated to pay, and shall cause each Intactix Sub to become jointly
and severally responsible for and obligated to pay, and shall indemnify and hold
and shall cause each Intactix Sub to indemnify and hold Purchaser, each JDA Sub
and any Affiliates of Purchaser and or any JDA Sub harmless, in accordance with
and subject to the provisions of ARTICLE XII hereof, from, any and all
liabilities with respect to New Purchaser Consultants for (A) payment for
services which were supplied to Parent, Seller and/or any Intactix Sub by such
persons prior to the Closing Date, (B) filing all tax returns required with
respect to such services, and (C) withholding or employment Taxes or benefits
under any Employee Plan which accrue or become payable with respect to such
services as a result of a determination by an appropriate Government Entity that
such individual is Parent's, Seller's or any Intactix Sub's employee under
applicable law.
(b) Purchaser shall be responsible and shall cause each JDA Sub to
be responsible for and obligated to pay, and shall indemnify and hold and cause
each JDA Sub to indemnify and hold harmless, in accordance with and subject to
the provisions of ARTICLE XII hereof, Parent, Seller and each Intactix Sub from,
any and all liabilities with respect to independent contractors or other
individuals provided by third parties whom Purchaser, any JDA Sub or any
Affiliate of Purchaser or any Intactix Sub engages to supply services for (A)
payment for services which are provided to Purchaser, any JDA Sub or any
Affiliate of Purchaser or any JDA Sub by such persons after the Closing Date,
(B) filing all tax returns required with respect to such services, and (C)
withholding or employment Taxes or benefits under any of Purchaser's Employee
Plans which accrue or become payable with respect to such services as a result
of a determination by an appropriate Government Entity that such individual is
Purchaser's employee under applicable Law.
10.3 Affiliate Distributor Agreements. Parent and Seller shall use and
shall cause each Intactix Sub to use reasonable commercial efforts to take such
actions as are necessary with respect to Affiliate Distributor Agreements in
order to terminate any such agreements with respect to any of the Products.
10.4 Obtaining Necessary Consents for Assignment of the Assumed
Contracts. To the extent not previously obtained prior to the Closing Date,
after the Closing Date Parent and Seller shall use and shall cause each Intactix
Sub to use reasonable commercial efforts to obtain any and all consents
necessary for the effective assignment to and assumption by Purchaser or the
applicable JDA Sub of the Assumed Contracts. Notwithstanding the foregoing,
"reasonable commercial efforts" shall not include any obligation on the part of
Seller or any Intactix Sub to pay any fee or offer or grant any other financial
accommodation to any third party for the purpose of obtaining any such consent
or pay any costs and expenses of any third party resulting from the process of
obtaining any such consent. All such consents shall be in writing in a form
45
46
reasonably acceptable to counsel to Purchaser and executed counterparts thereof
shall be delivered promptly to Purchaser. Seller shall not agree, and shall not
permit any Intactix Sub to agree, to any modification of any Assumed Contract in
the course of obtaining any such consent, where such modification would
materially and adversely effect Purchaser's or any JDA Sub's ability to continue
the Business as heretofore conducted. To the extent permitted by applicable law,
in the event consents to the assignment of such Assumed Contracts cannot be
obtained prior to the Closing Date, such Assumed Contracts shall be held, as and
from the Closing Date, by Seller or Intactix Sub party thereto in trust for
Purchaser or the Corresponding JDA Sub, and the covenants and obligations
thereunder (related to the Assets or Assumed Liabilities) shall be performed by
Purchaser or such Corresponding JDA Sub in such Seller's or such Intactix Sub's
name and all benefits and obligations existing thereunder (related to the
Business, Assets or Assumed Liabilities) shall be for Purchaser's or such
Corresponding JDA Sub's account (provided, however, that such performance by
Purchaser or such Corresponding JDA Sub shall be contingent on the passing of
all such benefits of such Assumed Contracts to Purchaser). Parent and Seller
shall take or cause to be taken, and shall cause each Intactix Sub to take or
cause to be taken, such actions in its name or otherwise as Purchaser or any JDA
Sub may reasonably request, at Purchaser's expense, so as to provide Purchaser
or the applicable JDA Sub with the benefits of the Assumed Contracts and to
effect collection of money or other consideration to become due and payable
under the Assumed Contracts, and Parent and Seller shall promptly pay over and
cause each Intactix Sub to promptly pay over to Purchaser or the applicable JDA
Sub all money or other consideration received by it in respect to all Assumed
Contracts. As of and from the Closing Date, each of Parent and Seller authorizes
and shall cause each Intactix Sub to authorize Purchaser, to the extent
permitted by applicable law and the terms of the Assumed Contracts, at
Purchaser's expense, to perform all the obligations and receive all the benefits
of Seller and each Intactix Sub under the Assumed Contracts (as they relate to
the Assets or the Assumed Liabilities) and appoints Purchaser and each
Corresponding JDA Sub its attorney-in-fact to act in its name and on its behalf
with respect thereto.
10.5 Covenant Not to Compete.
(a) For a period of three (3) years from the Closing Date, each of
Parent and Seller covenants and agrees that it will not and it will not permit
any Intactix Sub to engage in the Business.
(b) For a period of two (2) years from the Closing Date, each of
Parent and Seller covenants and agrees that it will not directly or indirectly
and it will not permit any Intactix Sub, or any Affiliate of Parent, Seller or
any Intactix Sub, to enter into any relationship with a Competitor Retail
Software Vendor involving development, marketing, selling or supporting
merchandise planning software products to customers in the retail or consumer
packaged goods industries directly competitive with the Products. To the full
extent of its legal right to do so, Parent and Seller shall require each
Intactix Sub and each Affiliate of Parent, Seller or any Intactix Sub to comply
with the foregoing provisions.
(c) To the fullest extent allowed under applicable law, the
restrictions set forth in this Section 10.5 shall be effective within all
cities, counties and states of the United States, and all other countries in
which Seller has engaged in licensing or sales activities or otherwise
46
47
conducted business or selling or licensing efforts during the two (2) year
period ending on the Closing Date.
(d) Nothing contained in this Section 10.5 shall prohibit Parent,
Seller and the Intactix Subs from owning up to two percent (2%) of the
outstanding shares of any class of equity securities of a corporation or other
entity engaged in any such prohibited activity whose securities are listed on a
national or international securities exchange or quoted daily in the
over-the-counter listings of The Wall Street Journal or from being acquired by
such a corporation or other entity.
(e) Each of Parent and Seller agrees that the terms and time
period provided for, and the geographical area encompassed by, the covenants
contained in this Section 10.5 are necessary and reasonable in order to protect
Purchaser and each Intactix Sub in the conduct of the Business and the
utilization of the Assets, tangible and intangible, including the goodwill of
Parent and Seller relating to the Business, acquired pursuant to this Agreement.
(f) If any court having jurisdiction at any time hereafter shall
hold any provision or clause of this Section 10.5 to be unreasonable as to its
scope, territory or term, and if such court in its judgment or decree shall
declare or determine that scope, territory or term which such court deems to be
reasonable, then such scope, territory or term, as the case may be, shall be
deemed automatically to have been reduced or modified to conform to that
declared or determined by such court to be reasonable.
(g) It is expressly agreed that monetary damages would be
inadequate to compensate Purchaser for any breach by Parent, Seller, any
Intactix Sub or any Affiliate of Parent, Seller or any Intactix Sub of the
covenants as set forth in this Section 10.5 and, accordingly, that in the event
of any breach or threatened breach by any such party of any such covenant,
Purchaser and each JDA Sub will be entitled to seek and obtain preliminary and
permanent injunctive relief in any court of competent jurisdiction, in addition
to any other remedies at law or in equity to which Purchaser may be entitled.
The provisions of this Section 10.5 are in addition to and not in lieu of any
similar agreements or covenants in any Business Transfer Agreement.
(h) The provisions of this Section 10.5 shall terminate and be of
no further force and effect upon the closing of any (A) merger or consolidation
of Seller or Parent in which the holders of capital stock of Seller or Parent,
as applicable, immediately prior to such merger or consolidation fail to hold at
least 50% of the voting power of the capital stock of the surviving entity
following such transaction, or (B) the sale of all or substantially all of the
assets of Parent.
10.6 Access to Business Records. From and after the Closing Date,
Purchaser shall use ordinary care to maintain the Business Records acquired by
it pursuant hereto and, damage by fire or other casualty or accident excepted,
shall not for a period of six (6) years after the Closing Date destroy or
dispose of any such Business Records unless it shall first have notified Parent
of its intention to do so and shall have afforded Parent an opportunity to take
possession thereof. Parent and Seller shall have the right to retain a copy of
the Business Records, except for the customer lists. Similarly, from and after
the Closing Date, Parent and Seller shall use ordinary care to maintain its copy
of the Business Records and of any records relating to the
47
48
Business not transferred to Purchaser or any Intactix Sub and, protect all such
Business Records and other records relating to the Business not transferred from
damage by fire or other casualty or accident and shall not for a period of six
(6) years after the Closing Date destroy or dispose of any such records unless
it shall first have notified Purchaser of its intention to do so and shall have
afforded Purchaser an opportunity to take possession thereof. From and after the
Closing Date, each party shall afford the other access to all preclosing
Business Records and other information acquired or retained by it pursuant
hereto, including data processing information, upon reasonable notice during
ordinary business hours for all reasonable business purposes, and each party
shall permit the other party to make copies of any such records and retain
possession of such copies. Parent and Seller shall use and shall cause each
Intactix Sub to use and Purchaser shall use and cause each JDA Sub to use
reasonable care to maintain the confidentiality of the Business Records in the
possession of such party pursuant to the terms and subject to the conditions set
forth in Section 10.7 hereof.
10.7 Confidentiality.
(a) Definition. As used in this Agreement, the term "Confidential
Information" shall mean any trade secrets and other confidential or proprietary
business, technical, personnel or financial information, in written, graphic,
oral or other tangible or intangible forms, including but not limited to
specifications, samples, records, data, computer programs, drawings, diagrams,
models, customer names, business or marketing plans, studies, analysis,
projections and reports, communications by or to attorneys (including
attorney-client privileged communications), memos and other materials prepared
by attorneys or under their direction (including attorney work product), and
software systems and processes. Any information which is not readily available
to the public shall be considered to be a trade secret and confidential and
proprietary, even if it is not specifically marked as such, unless the
disclosing party ("Disclosing Party") advises the other party ("Recipient")
otherwise in writing.
(b) Non-Disclosure Obligation. Each Recipient shall treat as
confidential all Confidential Information of the Disclosing Party and shall not
disclose any such Confidential Information conveyed to the Recipient from any
source prior to the Closing. It is expressly understood and agreed that any such
Confidential Information conveyed to Recipient is intended for the Recipient's
internal use only to perform Recipient's obligations hereunder, and shall be
protected by the Recipient with the same diligence, care, and precaution (but in
no event less than reasonable care) that the Recipient uses to protect its own
Confidential Information. Both parties agree not to disclose the specific
contents or provisions of this Agreement without the prior express written
consent of the other party, except as required under applicable law or stock
exchange requirements. Either party may disclose Confidential Information of the
other party to third parties provided that: (i) the disclosure of such
Confidential Information is pursuant and necessary to the performance of the
Recipient's obligations under this Agreement, and (ii) such third party agrees
to be bound by the provisions of this Section 10.7.
(c) Exceptions to Confidentiality Obligation. No party shall have
any obligation with respect to disclosure and use of information to the extent
such information:
(i) Is or becomes generally available to the public other
than as a consequence of a breach of an obligation of confidentiality by the
Recipient;
48
49
(ii) Is made public by the Disclosing Party;
(iii) Is independently developed by Recipient;
(iv) Is received from a third party independent of either
party without breaching an obligation of confidentiality; or
(v) Is required to be disclosed by operation of law.
(d) Injunctive Relief. Purchaser, Parent and Seller agree that it
would be extremely difficult to measure the amount of damages to the other party
from a breach or a threatened breach of any covenant contained in this Section
10.7, and that money damages would be an inadequate remedy, and that in such
event the damaged party shall be entitled to temporary and permanent injunctive
relief to restrain the other party from such breach or threatened breach. In the
event that any covenant made in this Section 10.7 shall be more restrictive than
permitted by applicable law, it shall be limited to the extent which it is
permitted. Nothing in this Section 10.7 shall be construed as preventing either
party from pursuing any and all remedies available for a breach or threatened
breach of a covenant made in this Section 10.7, including the recovery of
monetary damages from the other party (and/or its employees).
(e) Ownership of Confidential Information. Except as otherwise
provided for in this Agreement, Recipient agrees that all Confidential
Information acquired by Recipient's personnel, by Recipient or its employees,
subcontractors or agents hereunder shall be and shall remain the Disclosing
Party's exclusive property
10.8 Tax Liability. Seller shall pay all transfer, sales, use, value
added taxes or other transfer taxes relating to the transfer of the Assets to
Purchaser at the Closing; provided, however, Purchaser shall reimburse Parent or
Seller for fifty percent (50%) of all transfer, sales, use, value added taxes or
other transfer taxes relating to the transfer of the Assets to Purchaser at the
Closing.
10.9 Tax Returns. Parent and Seller will be responsible and will cause
each Intactix Sub to be responsible for the preparation and filing of all Tax
Returns for Taxes accrued by Parent, Seller and each Intactix Sub, respectively,
for any period ending before the Closing Date. Parent and Seller will make and
will cause each Intactix Sub to make all payments required with respect to any
such Tax Return; provided however, that Purchaser will reimburse Seller and will
cause each JDA Sub to reimburse each Corresponding Intactix Sub concurrently
therewith to the extent any payment Seller or such Intactix Sub is making
relates to the Taxes accrued for any period commencing on and after the Closing
Date. Purchaser will be responsible and will cause each JDA Sub to be
responsible for the preparation and filing of all Tax Returns for Taxes accruing
on and after the Closing Date. Purchaser will make all payments and will cause
each JDA Sub to make all payments required with respect to any such Tax Return;
provided, however, that Parent and Seller will reimburse Purchaser and will
cause each Intactix Sub to reimburse each Corresponding JDA Sub concurrently
therewith to the extent any payment Purchaser or such Corresponding JDA Sub,
respectively, is making relates to the Taxes accrued for any period ending
before the Closing Date.
49
50
10.10 Source Code. After the Closing Date, Parent and Seller shall
cooperate and shall cause each Intactix Sub to cooperate with Purchaser and each
JDA Sub, and shall use reasonable commercial efforts to locate and shall cause
each Intactix Sub to use reasonable commercial efforts to locate all copies of
the Source Code for each of the Products and prepare a definitive list setting
forth the location and the Person who is in possession of each such copy.
10.11 Communications Plan; Press Release. Purchaser, Parent and Seller
shall use their respective reasonable commercial efforts to carry out the
communications plan as agreed to between the parties as of the date of this
Agreement with respect to communications to their respective customers,
suppliers, employees, investors and strategic partners concerning the
transactions contemplated hereby. Upon the Closing, each of Purchaser and Parent
shall issue a press release concerning the Acquisition which press release shall
be approved as to form and content by each party, which approvals shall be
timely delivered and shall not be unreasonably withheld.
10.12 Post Closing Access. For purposes of facilitating the closing up
and winding down of any entities, operations or assets of Parent or Seller
relating to the Business and not acquired hereunder by Purchaser, Purchaser
shall provide representatives of Parent or Seller with access, at reasonable
times, for reasonable duration and following reasonable notice, to the Business
Records and former Employees hired by Purchaser or any of the JDA Subs.
10.13 Further Assurances of Parent and Sellers. Parent and Seller
shall, from time to time, at the request of Purchaser, and without further
consideration, execute and deliver such instruments of transfer, conveyance and
assignment in addition to those delivered pursuant to Sections 2.1 and 9.3
hereof, and take such other actions, as may be reasonably necessary to assign,
transfer, convey and vest in Purchaser, and to put Purchaser and each JDA Sub in
possession of, the Assets.
10.14 Further Assurances of Purchaser. Purchaser shall, from time to
time at the request of Parent, and without further consideration, execute and
deliver such instruments of assumption, and take such other action, as may be
reasonably necessary to effectively confirm the assumption by Purchaser and each
Intactix Sub of the Assumed Liabilities.
10.15 Additional Covenants of Purchaser.
(a) Purchaser shall complete and shall cause each JDA Sub, as
applicable, to complete consulting and implementation services
obligations and work in process under any Assumed Contract as
of the Closing Date.
(b) Purchaser shall fulfill and shall cause each JDA Sub to
fulfill the maintenance obligations of Seller and each
Corresponding Intactix Sub, respectively, under the Assumed
Contracts.
50
51
ARTICLE XI
TERMINATION OF AGREEMENT
11.1 Termination by Mutual Consent. This Agreement may be terminated at
any time before the Closing Date, by the mutual written consent of Purchaser,
Parent and Seller, approved by their respective boards of directors.
11.2 Termination for Cause by Purchaser. This Agreement may be
terminated at any time before the Closing Date by Purchaser upon written notice
to Seller, specifying the basis for such termination, if (a) Seller shall have
breached in any material respect any of its respective covenants or agreements
contained in this Agreement, (b) any representation or warranty of Seller
contained in this Agreement or in any certificate, schedule or exhibit delivered
by Seller pursuant to this Agreement shall have become materially inaccurate or
(c) the Closing shall not have occurred on or before April 30, 2000 because a
condition to Purchaser's obligations to close set forth in Sections 9.1 or 9.3
of this Agreement shall not have been fulfilled; provided, however, that
Purchaser's action or failure to act has not been a principal cause of or
resulted in the failure of such condition and such action or failure to act by
Purchaser constitutes a breach of this Agreement.
11.3 Termination for Cause by Parent or Seller. This Agreement may be
terminated at any time before the Closing Date by Parent or Seller upon written
notice to Purchaser, specifying the basis for such termination, if (a) Purchaser
shall have breached in any material respect any of its covenants or agreements
contained in this Agreement, (b) any representation or warranty of Purchaser
contained in this Agreement or in any certificate, schedule or exhibit delivered
by Purchaser pursuant to this Agreement shall have become materially inaccurate,
or (c) the Closing shall not have occurred on or before April 30, 2000 because a
condition to Seller's obligations to close set forth in Sections 9.1 or 9.2 of
this Agreement shall not have been fulfilled; provided, however, that Seller's
action or failure to act has not been a principal cause of or resulted in the
failure of such condition and such action or failure to act by Seller
constitutes a breach of this Agreement.
11.4 Termination for Illegality. This Agreement may be terminated at
any time before the Closing Date by either Purchaser or Seller if a court of
competent jurisdiction or other Governmental Entity shall have issued a final
order, decree or ruling, or taken any other action, or failed to grant its
consent, having the effect of permanently restraining, enjoining or otherwise
prohibiting the Acquisition, and all appeals with respect to such order or
action have been exhausted or the time for appeal of such order, decree, ruling,
action or consent shall have expired.
11.5 Termination for Reasons Other than Cause or Illegality. This
Agreement may be terminated at any time before the Closing Date by either
Purchaser or Parent for reasons other than those set forth in Sections 11.2,
11.3 or 11.4; provided, however, that (a) if the Purchaser terminates this
Agreement pursuant to this Section 11.5, Purchaser shall be obligated to
promptly remit a cash payment or wire transfer immediately available funds to
Parent in the amount of $2.5 million, and (b) if the Parent or Seller terminates
this Agreement pursuant to this Section
51
52
11.5, Parent shall be obligated to promptly remit a cash payment or wire
transfer immediately available funds to Purchaser in the amount of $2.5 million.
11.6 Notice of Termination; Effect of Termination. Any termination of
this Agreement pursuant to Section 11.1 hereof shall become effective at the
time Purchaser, Parent and Seller mutually agree to terminate this Agreement.
Any termination of this Agreement pursuant to Section 11.4 above will be
effective immediately upon the delivery of written notice by the terminating
party to the other party to this Agreement in accordance with Section 13.11 of
this Agreement. Any termination of this Agreement pursuant to Sections 11.2 or
11.3 hereof will be effective upon the date (the "Date") five (5) days after the
delivery of written notice by the terminating party to the other parties to this
Agreement in accordance with Section 13.11 of this Agreement, unless prior to
the Date such material breach of a covenant or agreement made by the
nonterminating party, such inaccuracy of a representation or warranty made by
the nonterminating party and/or such failure of a condition to the terminating
party's obligations to close has been cured. Any termination of this Agreement
pursuant to Section 11.5 of this Agreement will be effective immediately upon
receipt by the nonterminating party of the cash payment contemplated by Section
11.5 of this Agreement. In the event of the termination of this Agreement
pursuant to Section 11.1 through Section 11.5 of this Agreement, this Agreement
shall be of no further force or effect, and no party to this Agreement shall
have any liability to any other party with respect to this Agreement; provided,
however, that (a) this Section 11.6, Section 11.7 hereof and ARTICLE XIII
(General) hereof shall survive the termination of this Agreement, (b) such
termination of this Agreement shall not affect the respective obligations of the
parties set forth in Section 10.7 hereof, all of which obligations shall survive
the termination of this Agreement in accordance with the terms and conditions
set forth in such Section and (c) no party to this Agreement shall be relieved
from liability for any material and willful (i) inaccuracy of any representation
and warranty made by such party in this Agreement or in any certificate,
schedule or exhibit delivered pursuant to this Agreement or (ii) breach of any
covenant or agreement made by such party set forth in this Agreement. Nothing
herein shall be deemed to require any party to terminate this Agreement rather
than to proceed with the Closing if a condition precedent to the obligations of
such party to close has not been fulfilled.
11.7 Fees and Expenses. Parent shall pay all amounts payable in respect
of legal, accounting and financial advisory services provided by outside
advisors and other out-of-pocket expenses incurred by Parent and Seller.
Purchaser shall pay all amounts payable in respect of its legal, accounting and
financial advisory services provided by outside advisors and other out-of-pocket
expenses incurred by Purchaser incident to the negotiation, preparation and
carrying out of this Agreement and the other Transaction Agreements and the
transactions contemplated herein and therein (with respect to each party,
"Expenses") whether or not the transactions contemplated in this Agreement are
consummated. If this Agreement is terminated pursuant to Section XI of this
Agreement, then each party to this Agreement shall pay its own Expenses.
ARTICLE XII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
12.1 Survival of Representations and Warranties. The representations
and warranties made by Parent, Seller and Purchaser herein, or in any
certificate, schedule or exhibit delivered
52
53
pursuant hereto, shall in no manner be limited by any investigation of the
subject matter thereof made by or on behalf of either party or by the waiver or
satisfaction of any condition to closing and shall survive the Closing and
continue in full force and effect for a period of:
(a) The longer of (i) two (2) years from the Closing Date or (ii)
the period from the Closing Date until thirty (30) days after the expiration of
the applicable statutes of limitation, in the case of the representations and
warranties in Sections 4.6, 4.11, 4.14, 4.20 and all other representations and
warranties in Article IV to the extent that they relate to Tax matters,
Environmental or Safety Requirements or to title or free and clear ownership of
the Assets; and
(b) Two (2) years from the Closing Date in the case of
representations and warranties that are not specified in sub-paragraph (a)
above; provided, however, that the representations and warranties set forth in
Sections 4.1, 4.4, 5.1 and 5.2 of this Agreement shall survive for an unlimited
period of time.
The obligations of Parent and Seller to indemnify members of the
Purchaser Group (as defined below) for any Purchaser Losses (as defined below)
is subject to the condition that Parent and Seller shall have received an
Indemnification Claim (as defined below) for all Purchaser Losses for which
indemnity is sought on or before the expiration date for the applicable
representation or warranty set forth in Section 12.1(a) or (b) hereof. The
obligation of Purchaser to indemnify members of the Seller Group for Seller
Losses is subject to the condition that Purchaser or any JDA Sub shall have
received an Indemnification Claim for all Seller Losses for which indemnity is
sought on or before the expiration date for the applicable representation set
forth in Section 12.1(a) or (b) hereof.
12.2 Indemnification by Parent and Seller.
(a) General. Subject to the terms and conditions of this ARTICLE
XII, each of Parent and Seller agrees jointly and severally to indemnify, defend
and hold harmless Purchaser, its stockholders, officers, directors, employees
and attorneys, all subsidiaries and affiliates of Purchaser (including the JDA
Subs), and the respective officers, directors, employees and attorneys of such
entities (all such persons and entities being collectively referred to as the
"Purchaser Group") from, against, for and in respect of any and all Losses
asserted against, relating to, imposed upon or incurred by Purchaser and/or any
other member of the Purchaser Group by reason of, resulting from, based upon or
arising out of any of the following (collectively, "Purchaser Losses"):
(i) the breach, inaccuracy, untruth or incompleteness of any
representation or warranty of Parent or Seller contained in or made pursuant to
this Agreement or any certificate or schedule delivered by Parent or Seller in
connection herewith;
(ii) the breach or nonperformance of any covenant or agreement
of Parent or Seller contained in or made pursuant to any Transaction Agreement
to be performed by Parent or Seller on or prior to the Closing Date;
(iii) any Excluded Liability;
53
54
(iv) any of the matters set forth in the Indemnification
Schedule attached hereto, to the extent therein set forth; or
(v) any breach by Parent or Seller of this ARTICLE XII.
(b) Indemnity Limits. Neither Parent nor Seller shall be required
to indemnify Purchaser and any other member of the Purchaser Group for any
Purchaser Losses under Section 12.2(a) hereof until the aggregate amount of all
Purchaser Losses under all individual Indemnification Claims shall exceed One
Hundred Thousand Dollars ($100,000) (the "Seller Floor"), and then Parent and
Seller shall be obligated to indemnify Purchaser and any other member of the
Purchaser Group only for Purchaser Losses which exceed the Seller Floor. In
addition, except as set forth in the following sentence, the aggregate liability
of Parent, Seller and the Intactix Subs for all Purchaser Losses shall not
exceed twenty percent (20%) of the Purchase Price, as such Purchase Price may be
adjusted pursuant to Section 2.6 hereof. Notwithstanding the foregoing, the
aggregate liability of the Parent, Seller and the Intactix Subs for Purchaser
Losses arising from or related to: (i) Excluded Liabilities, (ii) the breach,
inaccuracy, untruth or incompleteness of any representation or warranty of
Parent or Seller contained in Sections 4.6, 4.11, 4.14, or 4.20 hereof, or (iii)
Item 9 of the Indemnification Schedule shall not be subject to the limitations
contained in this Section 12.2(b).
(c) Sole Remedy. Purchaser hereby acknowledges and agrees that its
sole and exclusive remedy with respect to any and all Purchaser Losses shall be
pursuant to the indemnification provisions set forth in this Section 12.2. In
furtherance of the foregoing and except as set forth in the next succeeding
sentence, Purchaser hereby waives, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action, other than
those based upon or relating to Purchaser's rights under this ARTICLE XII,
against Parent and Seller or any of their respective Affiliates relating to any
Purchaser Loss. Notwithstanding the foregoing, nothing in this Section 12.2
shall limit, in any manner, any remedy at law or in equity which Purchaser or
any of its Affiliates shall be entitled against Seller or Parent (i) under
Section 10.5(g) hereof or Section 10.7(d) hereof, (ii) in connection with claims
under the Excluded Liabilities Insurance Policy or (iii) as a result of any
willful fraud or intentional misrepresentation by Seller or Parent.
12.3 Indemnification by Purchaser.
(a) Subject to the terms and conditions of this ARTICLE XII,
Purchaser agrees to indemnify, defend and hold harmless Parent and Seller, and
each or Parent's and Seller's officers, directors, employees and attorneys, all
subsidiaries and affiliates, and the respective officers, directors, employees
and attorneys of such entities (all such persons and entities being collectively
referred to as the "Seller Group") from, against, for and in respect of any and
all Losses asserted against, relating to, imposed upon or incurred by Parent,
Seller and/or any other member of the Seller Group by reason of, resulting from,
based upon or arising out of any of the following (collectively, "Seller
Losses"):
54
55
(i) the breach, inaccuracy, untruth or incompleteness of any
representation or warranty of Purchaser contained in or made pursuant to this
Agreement or any certificate or schedule delivered by Purchaser in connection
herewith;
(ii) the breach or nonperformance of any covenant or agreement
of Purchaser contained in or made pursuant to any Transaction Agreement;
(iii) any Assumed Liability; or
(iv) any and all Losses imposed upon or incurred by any member
of the Seller Group arising out of Purchaser's or any JDA Sub's infringing
conduct relating to the Products subsequent to the Closing Date; provided that
Purchaser will not be obligated to indemnify any member of the Seller Group
under this Section for any liability arising from either Parent or Seller's
misconduct.
(b) Except as set forth in the next succeeding sentence, Purchaser
shall not be required to indemnify Parent, Seller and/or any other member of the
Seller Group for any Seller Losses until the aggregate amount of all Seller
Losses under all individual Indemnification Claims shall exceed One Hundred
Thousand Dollars ($100,000) (the "Purchaser Floor"), and then Purchaser will be
obligated to indemnify Parent, Seller and/or any other member of the Seller
Group only for Seller Losses which exceed the Purchaser Floor. Notwithstanding
the foregoing, an indemnification claim arising out of or based upon Purchaser's
obligations set forth in Section 10.1(a)(iii) hereof shall not be limited to
amounts in excess of the Purchaser Floor as set forth in the preceding sentence.
(c) The provisions of Section 12.3(b) above shall not limit, in
any manner, Purchaser's obligation to indemnify members of the Seller Group for
any breach of any covenant or agreement of Purchaser to be performed by
Purchaser following the Closing Date, including, without limitation, Purchaser's
obligation to perform and discharge or cause the performance and discharge of
all Assumed Liabilities, and to perform Purchaser's obligations arising under
the Transaction Agreements.
(d) Each of Parent and Seller hereby acknowledges and agrees that
its sole and exclusive remedy with respect to any and all Seller Losses shall be
pursuant to the indemnification provisions set forth in this Section 12.3. In
furtherance of the foregoing, Parent and Seller hereby waive, to the fullest
extent permitted under applicable law, any and all rights, claims and causes of
action, other than those based upon or relating to Parent's and Seller's rights
under this ARTICLE XII against Purchaser or any of its respective Affiliates
relating to any Seller Loss; provided however, that nothing in this Section 12.3
shall limit, in any manner, any remedy at law or in equity which Parent or
Seller or any Affiliates thereof shall be entitled against Purchaser or any
Affiliate (i) under Section 10.7(d) hereof or (ii) as a result of any willful
fraud or intentional misrepresentation by Purchaser.
12.4 Procedures for Indemnification.
(a) As used in this ARTICLE XII, the term "Indemnitor" means the
party against whom indemnification hereunder is sought, and the term
"Indemnitee" means the party seeking indemnification hereunder.
55
56
(b) A claim for indemnification hereunder (an "Indemnification
Claim," including for these provisions, an Infringement Claim) shall be made by
Indemnitee by delivery of a written notice to Indemnitor requesting
indemnification and specifying the basis on which indemnification is sought in
reasonable detail (and shall attach relevant documentation related to the
Indemnification Claim), the amount of the asserted Purchaser Losses or Seller
Losses, as the case may be, and, in the case of a Third Party Claim, containing
(by attachment or otherwise) such other information as Indemnitee shall have
concerning such Third Party Claim.
(c) If the Indemnification Claim involves a Third Party Claim,
then the procedures set forth in Section 12.5 hereof shall be observed by
Indemnitee and Indemnitor.
(d) If the Indemnification Claim involves a matter other than a
Third Party Claim (as defined below), Indemnitor shall have thirty (30) days to
object to such Indemnification Claim by delivery of a written notice of such
objection to Indemnitee specifying in reasonable detail the basis for such
objection. Failure to timely so object shall constitute a final and binding
acceptance of the Indemnification Claim by Indemnitor, and the Indemnification
Claim shall thereafter be paid by Indemnitor in accordance with Section 12.4(e)
hereof. If an objection is timely delivered by Indemnitor and the dispute is not
resolved within twenty (20) business days from the delivery of such objection
(the "Negotiation Period"), such dispute shall be resolved by arbitration in
accordance with the provisions of Section 13.10 hereof.
(e) Upon determination of the amount of an Indemnification Claim,
whether by (i) an agreement between Indemnitor and Indemnitee, (ii) an
arbitration award or (iii) a final judgment (after expiration of all periods for
appeal of such judgment) or other final nonappealable order, Indemnitor shall
pay the amount of such Indemnification Claim by check or wire transfer within
ten (10) days of the date such amount is determined.
12.5 Defense of Third Party Claims. Should any claim be made, or suit
or proceeding (including, without limitation, a binding arbitration or an audit
by any taxing authority) be instituted against Indemnitee which, if prosecuted
successfully, would be a matter for which Indemnitee is entitled to
indemnification under this Agreement (a "Third Party Claim"), the obligations
and liabilities of the parties hereunder with respect to such Third Party Claim
shall be subject to the following terms and conditions:
(a) Indemnitee shall give Indemnitor written notice of any such
claim promptly after receipt by Indemnitee of notice thereof. Any delay in
giving notice hereunder which does not materially prejudice Indemnitor, shall
not affect Indemnitee's rights to Indemnification hereunder. Indemnitor may, at
its option, (i) undertake control of the defense thereof by counsel of its own
choosing reasonably acceptable to Indemnitee or (ii) decline to assume control
of but participate in the defense thereof provided that such participation by
Indemnitee shall be at its own expense. Indemnitee may participate in the
defense through its own counsel at its own expense. The assumption of the
defense of any Third Party Claim by Indemnitor shall not be an acknowledgment by
Indemnitor that such Third Party Claim is subject to indemnification under the
provisions of this ARTICLE XII and that such provisions are binding on
Indemnitor. If, however, Indemnitor fails or refuses to undertake the defense of
such Third Party Claim within ten (10) days after written notice of such claim
has been delivered to
56
57
Indemnitor by Indemnitee, Indemnitee shall have the right to undertake the
defense, compromise and, subject to Section 12.6 hereof, settlement of such
Third Party Claim with counsel of its own choosing. In the circumstances
described in the preceding sentence, Indemnitee shall, promptly upon its
assumption of the defense of such Third Party Claim, make an Indemnification
Claim as specified in Section 12.4(b) hereof which shall be deemed an
Indemnification Claim that is not a Third Party Claim for the purposes of the
procedures set forth herein. Failure of Indemnitee to furnish written notice to
Indemnitor of a Third Party Claim shall not release Indemnitor from Indemnitor's
obligations hereunder, except to the extent Indemnitor is prejudiced by such
failure.
(b) Indemnitee and Indemnitor shall cooperate with each other in
all reasonable respects in connection with the defense of any Third Party Claim,
including making available records relating to such claim and furnishing
employees of Indemnitee as may be reasonably necessary for the preparation of
the defense of any such Third Party Claim or for testimony as witness in any
proceeding relating to such claim.
12.6 Settlement of Third Party Claims. No settlement by Indemnitee of a
Third Party Claim shall be made without the prior written consent by or on
behalf of Indemnitor, which consent shall not be unreasonably withheld or
delayed. If Indemnitor has assumed the defense of a Third Party Claim as
contemplated by Section 12.5(a) hereof, no settlement of such Third Party Claim
may be made by Indemnitor without the prior written consent by or on behalf of
Indemnitee, which consent shall not be unreasonably withheld or delayed. In the
event of any dispute regarding the reasonableness of a proposed settlement, the
party that will bear the larger financial loss resulting from such settlement
shall make the final determination in respect thereto, which determination shall
be final and binding on all involved parties.
12.7 Escrow Fund. On the Closing Date, the Escrow Fund shall be
deposited by Purchaser with an escrow agent to be selected by Purchaser and
subject to the approval of Seller which approval shall not be unreasonably
withheld (the "Escrow Agent"), and the Escrow Fund shall be governed by and
administered according to the terms and conditions of this Agreement and the
Escrow Fund Agreement. Each of Parent and Seller acknowledges and agrees that
the Escrow Fund is not Purchaser's sole and exclusive remedy or source of
satisfaction for Seller's indemnification obligations pursuant to this ARTICLE
XII.
12.8 Escrow Period. The period commencing on the Closing Date and
ending on the second anniversary of the Closing Date shall be referred to as the
"Escrow Period."
12.9 Procedure for Claims Relating to Excluded Liabilities.
Notwithstanding any other provision of this Article XII to the contrary,
Purchaser agrees that any Indemnification Claim, to the extent based upon or
relating to Excluded Liabilities within the coverage provisions of the Excluded
Liabilities Insurance Policy, shall be made as follows:
(i) Purchaser may submit any deductible, retention or like
amount under the Excluded Liabilities Insurance Policy for recovery from Seller
or Parent, or from the Escrow Fund pursuant to the provisions of the Escrow Fund
Agreement;
(ii) Purchaser shall submit any amounts in excess of the
amounts described in clause (i) above for recovery pursuant to the Excluded
Liabilities Insurance Policy;
57
58
(iii) Purchaser may submit a claim for any amounts constituting
a Specified Loss as defined in Section 10 of the Excluded Liabilities Insurance
Policy not recovered by Purchaser from Insurer within one hundred twenty (120)
days from the date an Indemnification Claim is properly submitted to the Insurer
under the Excluded Liabilities Insurance Policy for recovery from Seller or
Parent, or from the Escrow Fund pursuant to the provisions of the Escrow Fund
Agreement; and
(iv) Any party submitting any claim under the Excluded
Liabilities Insurance Policy shall concurrently provide notice thereof to the
other parties in accordance with Section 13.11 hereof.
12.10 Indemnification Cap. Notwithstanding anything to the contrary in
this Agreement, the aggregate liabilities of Parent, Seller and the Intactix
Subs for all Purchaser Losses shall not exceed the Purchase Price, as such
Purchase Price may be adjusted pursuant to Section 2.6(d) hereof (the
"Indemnification Cap"). Except as set forth in the following sentence, in
determining whether the Indemnification Cap has been reached, all payments made
by Parent, Seller and any Intactix Sub directly to any member of the Purchaser
Group shall be taken into account. In addition to the foregoing, in determining
whether the Indemnification Cap has been reached relative to an Indemnification
Claim based upon or arising out of the Excluded Liabilities set forth in
Sections 2.4(c)(i) - 2.4(c)(v) hereof, payments made to any member of the
Purchaser Group pursuant to the Excluded Liabilities Insurance Policy shall also
be taken into account.
ARTICLE XIII
GENERAL
13.1 Governing Law. It is the intention of the parties hereto that the
laws of the State of Delaware (irrespective of its choice of law principles)
shall govern the validity of this Agreement, the construction of its terms, and
the interpretation and enforcement of the rights and duties of the parties
hereto.
13.2 Assignment; Binding upon Successors and Assigns. No party hereto
may assign any of its rights or obligations hereunder without the prior written
consent of the other party, which consent shall not be unreasonably withheld;
provided, however, that Purchaser may assign its rights under this Agreement (a)
to any majority-owned subsidiary of Purchaser, provided that Purchaser
guarantees the obligations of such subsidiary hereunder or (b) to any successor
of Purchaser through any merger or consolidation, or purchase of all or
substantially all of Purchaser's stock or all or substantially all of
Purchaser's assets. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns.
13.3 Severability. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be held to be
invalid or unenforceable, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall be interpreted so as best
to reasonably effect the intent of the parties hereto. The parties further agree
to replace such invalid or unenforceable provision of this Agreement with a
valid and
58
59
enforceable provision which will achieve, to the extent possible, the economic,
business and other purposes of the invalid or unenforceable provision.
13.4 Entire Agreement. This Agreement and the exhibits and schedules
hereto, constitute the entire understanding and agreement of the parties hereto
with respect to the subject matter hereof and thereof and supersede all prior
and contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto.
13.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
13.6 Expenses. The parties shall each pay their own Expenses incurred
incident to the negotiation, preparation and carrying out of this Agreement and
the transactions contemplated herein, whether or not the transactions
contemplated herein are consummated. All transfer Taxes and duties related to
the transfer of the Assets shall be divided evenly between Purchaser and Seller.
13.7 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party shall be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy shall not preclude the exercise of any other.
13.8 Amendment and Waivers. Any term or provision of this Agreement may
be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed to constitute
a waiver of any other default or any succeeding breach or default.
13.9 Waiver. Each party hereto may, by written notice to the others:
(a) waive any of the conditions to its obligations hereunder or extend the time
for the performance of any of the obligations or actions of the others, (b)
waive any inaccuracies in the representations of the others contained in this
Agreement or in any documents delivered pursuant to this Agreement, (c) waive
compliance with any of the covenants of the others contained in this Agreement
or (d) waive or modify performance of any of the obligations of the others. No
action taken pursuant to this Agreement, including without limitation any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, condition or agreement contained herein. Waiver of the breach of any
one or more provisions of this Agreement shall not be deemed or construed to be
a waiver of other breaches or subsequent breaches of the same provisions.
13.10 Arbitration.
(a) If any dispute relating to this Agreement arises between the
parties, and no agreement relating to such dispute can be reached after good
faith negotiation, either Purchaser, Parent or Seller may, by written notice to
the other, demand arbitration of the matter unless the
59
60
amount of the Loss is at issue in pending litigation with a third party, in
which event arbitration shall not be commenced until such amount is ascertained
or both parties agree to arbitration; and in either such event the matter shall
be settled by arbitration conducted by one arbitrator. Purchaser, Parent and
Seller shall agree on the arbitrator, provided that if Purchaser, Parent and
Seller cannot agree on such arbitrator, either Purchaser or Seller can request
that the Judicial Arbitration and Mediation Services ("JAMS") select the
arbitrator. The arbitrator shall set a limited time period and establish
procedures designed to reduce the cost and time for discovery while allowing the
parties an opportunity, adequate in the sole judgment of the arbitrator, to
discover relevant information from the opposing parties about the subject matter
of the dispute. The arbitrator shall rule upon motions to compel or limit
discovery and shall have the authority to impose sanctions, including attorneys'
fees and costs, to the same extent as a court of competent law or equity, should
the arbitrator determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. Subject to the foregoing, the arbitration shall proceed under the
rules of the American Arbitration Association. The decision of the arbitrator
shall be written, shall be in accordance with applicable law and with this
Agreement, and shall be supported by written findings of fact and conclusion of
law which shall set forth the basis for the decision of the arbitrator. The
decision of the arbitrator as to the validity and amount of any claim shall be
binding and conclusive upon the parties to this Agreement.
(b) Judgment upon any award rendered by the arbitrator may be
entered in any court having jurisdiction. Any such arbitration shall be held in
Phoenix, Arizona under the commercial rules then in effect of the American
Arbitration Association. The non-prevailing party to an arbitration shall pay
its own expenses, the fees of the arbitrator, any administrative fee of JAMS,
and the expenses, including attorneys' fees and costs, reasonably incurred by
the other party to the arbitration.
13.11 Notices. All notices and other communications hereunder will be
in writing and will be deemed given (a) upon receipt if delivered personally (or
if mailed by registered or certified mail), (b) the day after dispatch if sent
by overnight courier, (c) upon dispatch if transmitted by telecopier or other
means of facsimile transmission (and confirmed by a copy delivered in accordance
with clause (a) or (b)), properly addressed to the parties at the following
addresses:
Parent or Seller: Pricer AB
Kristallen
S-754-51
Uppsala, Sweden
Facsimile No.: (000) 00 00 00 0000
with copies to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
60
61
Purchaser: 00000 X. 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx, General Counsel
Facsimile No.: (000) 000-0000
with a copy to: Xxxx Xxxx Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Either party may change its address for such communications by giving
notice thereof to the other party in conformity with this Section.
13.12 Construction and Interpretation of Agreement.
(a) This Agreement has been negotiated by the parties hereto and
their respective attorneys, and the language hereof shall not be construed for
or against either party by reason of it having drafted such language.
(b) The titles and headings herein are for reference purposes only
and shall not in any manner limit the construction of this Agreement, which
shall be considered as a whole.
(c) As used in this Agreement, any reference to any state of
facts, event, change or effect being "material" with respect to any entity means
a state of facts that is material to the current or expected condition
(financial or otherwise), properties, assets, liabilities, business, operations
or prospects of such entity. Whenever the term "enforceable in accordance with
its terms" or like expression is used in this Agreement, it is understood that
excepted therefrom are any limitations on enforceability under applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting the enforcement of creditor's rights.
13.13 No Joint Venture. Nothing contained in this Agreement shall be
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party shall have
the power to control the activities and operations of any other and their status
is, and at all times, will continue to be, that of independent contractors with
respect to each other. No party shall have any power or authority to bind or
commit any other. No party shall hold itself out as having any authority or
relationship in contravention of this Section.
13.14 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor shall be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, partner of any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof shall be personal solely between the parties
to this Agreement.
61
62
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of February 24, 2000.
"PURCHASER" "SELLER"
JDA SOFTWARE GROUP, INC. INTACTIX INTERNATIONAL, INC.
a Delaware corporation a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- -------------------------------
Title: Cheif Executive Officer Title: President and CEO
------------------------------ ----------------------------
"PARENT"
PRICER AB
a Swedish corporation
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------
Title: President and CEO
------------------------------
(Signature Page to Asset Purchase Agreement)
63
SCHEDULE 1.74
SELLER
WORKING CAPITAL
DECEMBER 31, 1999
(IN THOUSANDS)
Cash 8170
Less: Advance from Parent (a) (6,618.0)
Trade Receivables 5,866.6
Allow. For Doubtful Accts. (658.3)
Un-Billed Software 237.6
Other Receivables (b) 130.4
Prepaid Expenses 339.8
Inventories 39.0
------
Total Current Assets 7,507.7
------
Accounts Payable 854.6
Accrued Payables (c) 754.0
Deferred Income 4,193.4
Other Liabilities (d) 1,511.2
Less: Severance Accrual (e) (725.0)
------
Total Current Liabilities 6,588.2
------
Working Capital 919.5
======
(a) Amount advanced to Seller from Parent for intercompany interest that was
paid in January 2000. This amount will not be included in the calculation of
Closing Working Capital.
(b) Employee advances, rent owed by sub-tenant, VAT, other.
(c) Commissions/bonuses, vacation pay, professional fees, car lease
cancellations.
(d) Payroll taxes, sales tax, VAT, Software lease.
(e) This amount will not be included in the calculation of Closing Working
Capital.
64
EXHIBITS AND SCHEDULES
EXHIBIT DESCRIPTION
------- -----------
A Escrow Fund Agreement
B Standard Customer License Agreement
C Excluded Liabilities Insurance Policy
D Xxxx of Sale, Assignment and Assumption Agreement
E Business Transfer Agreements
F Legal Opinion of Counsel to Parent and Seller
G Legal Opinion of Counsel to Purchaser
SCHEDULE TITLE
-------- -----
A Seller and Indirect Subsidiaries
B Purchaser and Indirect Subsidiaries
1.4 Affiliate Distributor Agreements
1.14 Competitor Retail Software Vendor
1.15 Consultants
1.19 Deferred Revenue
1.21 Employees
1.23 Equipment Leases
1.40(a) Parent's and Seller's Knowledge
1.40(b) Purchaser's Knowledge
1.43 Leases
1.52 Permits
1.53 Permitted Encumbrances
1.55 Products
1.63 Seller Software Programs
1.68 Third Party Distributor Agreements
1.69 Third Party In-Licenses
1.70 Third Party Software Programs
1.71 Transferred Intellectual Property
1.72 Vehicle Leases
1.74 Working Capital
2.1(b) Corresponding Jewel/Intactix Subs
2.3 Excluded Contracts
2.8 Purchase Price Allocation
4.3 Subsidiaries
4.5 Conflicts and Required Consents
4.8 Litigation and Claims
4.10(b) Employee Litigation Matters
4.10(c) Employee Termination Matters
4.10(e) Employment Contracts and Employee Benefits
4.10(f) Employee Pension Benefit Plans
4.10(h) Benefit Obligations
4.10(j) Medical and Welfare Benefits
1
65
4.10(k) Changes to Employee Plans
4.10(l) Conditions Preventing Amendment or Termination of Employee
Plans
4.10(m) Employee Benefit Actions
4.11(c) Tax Returns
4.12 Financial Statements
4.14(c) Exceptions to Intellectual Property Rights
4.14(j) Consultant Access to Confidential Information
4.14(l) Product Liability and Warranty Claims
4.14(m) Product Errors
4.15(a)(i) Non-Standard Customer License Agreements
4.15(a)(ii) Customer Maintenance List
4.15(c) Affiliate Arrangements
4.18 Warranties and Service Payment Obligations
4.20 Environmental and Safety Permits, Licenses and Other
Obligations
V Purchaser Disclosure Schedule
10.1(a) Employment Offers
10.1(a)(i) Exceptions to Employment Offers
10.1(a)(ii) Severance Obligations
10.1(a)(iii) Employee Benefits Reimbursement
10.1(d)(v) Assumed Employee Plans
2
66
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.................................................................. 2
1.1 "Accounts Receivable"................................................ 2
1.2 "Acquisition"........................................................ 2
1.3 "Affiliate".......................................................... 2
1.4 "Affiliate Distributor Agreements"................................... 3
1.5 "Assets"............................................................. 3
1.6 "Assumed Contracts".................................................. 3
1.7 "Assumed Liabilities"................................................ 3
1.8 "Business"........................................................... 3
1.9 "Business Records"................................................... 3
1.10 "Closing"............................................................ 3
1.11 "Closing Date"....................................................... 3
1.12 "COBRA".............................................................. 3
1.13 "Code"............................................................... 3
1.14 "Competitor Retail Software Vendor".................................. 3
1.15 "Consultants"........................................................ 3
1.16 "Contracts".......................................................... 4
1.17 "Covenant Not to Compete"............................................ 4
1.18 "Customer License Agreements"........................................ 4
1.19 "Deferred Revenue"................................................... 4
1.20 "Dollars" or "dollars"............................................... 4
1.21 "Employees".......................................................... 4
1.22 "Encumbrances"....................................................... 4
1.23 "Equipment Leases"................................................... 4
1.24 "ERISA".............................................................. 4
1.25 "Escrow Fund"........................................................ 4
1.26 "Escrow Fund Agreement".............................................. 4
1.27 "Exchange Act"....................................................... 4
1.28 "Excluded Assets".................................................... 5
1.29 "Excluded Liabilities"............................................... 5
1.30 "Excluded Liabilities Insurance Policy".............................. 5
1.31 "Facilities"......................................................... 5
1.32 "Financial Statements"............................................... 5
1.33 "GAAP"............................................................... 5
1.34 "Governmental Entity"................................................ 5
1.35 "HSR Act"............................................................ 5
1.36 "Indemnification Claim".............................................. 5
1.37 "Indemnitor" and "Indemnitee"........................................ 5
1.38 "Intangibles"........................................................ 5
1.39 "Intellectual Property".............................................. 5
1.40 "Knowledge" or "Known"............................................... 5
1
67
TABLE OF CONTENTS
-----------------
(continued)
PAGE
1.41 "Laws or Decrees".................................................... 5
1.42 "Liability".......................................................... 6
1.43 "Leases"............................................................. 6
1.44 "Licensed Intellectual Property"..................................... 6
1.45 "Losses"............................................................. 6
1.46 "Material Adverse Change"............................................ 6
1.47 "Material Adverse Effect"............................................ 6
1.48 "Negotiation Period"................................................. 6
1.49 "New Purchaser Consultants".......................................... 6
1.50 "New Purchaser Employees"............................................ 6
1.51 "Non-Standard Customer License Agreement"............................ 6
1.52 "Permits"............................................................ 6
1.53 "Permitted Encumbrances"............................................. 7
1.54 "Person"............................................................. 7
1.55 "Products"........................................................... 7
1.56 "Purchase Price"..................................................... 7
1.57 "Purchaser Losses"................................................... 7
1.58 "SEC"................................................................ 7
1.59 "Securities Act"..................................................... 7
1.60 "Seller Disclosure Schedule"......................................... 7
1.61 "Seller Intellectual Property"....................................... 8
1.62 "Seller Losses"...................................................... 8
1.63 "Seller Software Programs"........................................... 8
1.64 "Software Programs".................................................. 8
1.65 "Tangible Assets".................................................... 8
1.66 "Tax"................................................................ 8
1.67 "Tax Return"......................................................... 8
1.68 "Third Party Distributor Agreements"................................. 8
1.69 "Third Party In-Licenses"............................................ 9
1.70 "Third Party Software Programs"...................................... 9
1.71 "Transferred Intellectual Property".................................. 9
1.72 "Vehicle Leases"..................................................... 9
1.73 "Year 2000 Compliant"................................................ 9
1.74 "Working Capital".................................................... 9
1.75 "Other Defined Terms."............................................... 9
ARTICLE II PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES..................... 11
2.1 Purchase and Sale of Assets and Assumption of Assumed Liabilities... 11
2.2 Assets.............................................................. 12
2.3 Excluded Assets..................................................... 13
2
68
TABLE OF CONTENTS
-----------------
(continued)
PAGE
2.4 Assumption of Liabilities........................................... 13
2.5 Purchase Price...................................................... 15
2.6 Purchase Price Adjustment........................................... 16
2.7 Escrow Fund......................................................... 17
2.8 Allocation.......................................................... 17
ARTICLE III THE CLOSING............................................................... 17
3.1 The Closing......................................................... 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER................................... 17
4.1 Organization........................................................ 17
4.2 Ownership........................................................... 17
4.3 Subsidiaries........................................................ 18
4.4 Authorization....................................................... 18
4.5 No Conflicts; Consents.............................................. 18
4.6 Title to Assets; Entire Business.................................... 18
4.7 Tangible Assets..................................................... 19
4.8 Litigation and Claims............................................... 19
4.9 Compliance with Laws and Regulations; Governmental Licenses, Etc.... 19
4.10 Labor Matters....................................................... 20
4.11 Tax Matters......................................................... 23
4.12 Financial Statements................................................ 24
4.13 Absence of Certain Changes or Events................................ 24
4.14 Intellectual Property; Proprietary Rights........................... 25
4.15 Contracts and Arrangements.......................................... 27
4.16 Insurance........................................................... 27
4.17 Brokers............................................................. 28
4.18 Warranties and Service Payment Obligations.......................... 28
4.19 Business Records.................................................... 28
4.20 Environmental and Safety Matters.................................... 28
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER................................. 30
5.1 Organization and Good Standing...................................... 30
5.2 Power, Authorization and Validity................................... 30
5.3 No Violation of Existing Agreements................................. 30
5.4 Compliance With Other Instruments and Laws.......................... 31
5.5 Litigation.......................................................... 31
5.6 Brokers............................................................. 31
5.7 Availability of Funds............................................... 31
ARTICLE VI PRE-CLOSING COVENANTS OF PARENT AND SELLER................................. 31
6.1 Advice of Changes................................................... 31
3
69
TABLE OF CONTENTS
-----------------
(continued)
PAGE
6.2 Conduct of Business................................................. 31
6.3 Access to Information............................................... 32
6.4 Satisfaction of Conditions Precedent................................ 33
6.5 Source Code Escrows................................................. 33
6.6 Exclusive Dealings.................................................. 33
ARTICLE VII PRE-CLOSING COVENANTS OF PURCHASER........................................ 34
7.1 Advice of Changes................................................... 34
7.2 Satisfaction of Conditions Precedent................................ 34
ARTICLE VIII MUTUAL COVENANTS......................................................... 34
8.1 Regulatory Filings; Consents; Reasonable Efforts.................... 34
8.2 HSR Filings......................................................... 34
8.3 Further Assurances.................................................. 35
ARTICLE IX CONDITIONS TO CLOSING...................................................... 35
9.1 Conditions to Each Party's Obligations.............................. 35
9.2 Conditions to Obligations of Parent and Seller..................... 36
9.3 Conditions to Obligations of Purchaser.............................. 37
9.4 Sellers' Closing Deliverables....................................... 39
9.5 Parents' Closing Deliverables....................................... 40
ARTICLE X POST- CLOSING MATTERS....................................................... 41
10.1 New Purchaser Employees............................................. 41
10.2 New Purchaser Consultants........................................... 45
10.3 Affiliate Distributor Agreements.................................... 45
10.4 Obtaining Necessary Consents for Assignment of the Assumed Contracts 45
10.5 Covenant Not to Compete............................................. 46
10.6 Access to Business Records.......................................... 47
10.7 Confidentiality..................................................... 48
10.8 Tax Liability....................................................... 49
10.9 Tax Returns......................................................... 49
10.10 Source Code......................................................... 50
10.11 Communications Plan; Press Release.................................. 50
10.12 Post Closing Access................................................. 50
10.13 Further Assurances of Parent and Sellers............................ 50
10.14 Further Assurances of Purchaser..................................... 50
10.15 Additional Covenants of Purchaser................................... 50
ARTICLE XI TERMINATION OF AGREEMENT................................................... 51
11.1 Termination by Mutual Consent....................................... 51
11.2 Termination for Cause by Purchaser.................................. 51
4
70
TABLE OF CONTENTS
-----------------
(continued)
PAGE
11.3 Termination for Cause by Parent or Seller........................... 51
11.4 Termination for Illegality.......................................... 51
11.5 Termination for Reasons Other than Cause or Illegality.............. 51
11.6 Notice of Termination; Effect of Termination........................ 52
11.7 Fees and Expenses................................................... 52
ARTICLE XII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION............... 52
12.1 Survival of Representations and Warranties.......................... 52
12.2 Indemnification by Parent and Seller................................ 53
12.3 Indemnification by Purchaser........................................ 54
12.4 Procedures for Indemnification...................................... 55
12.5 Defense of Third Party Claims....................................... 56
12.6 Settlement of Third Party Claims.................................... 57
12.7 Escrow Fund......................................................... 57
12.8 Escrow Period....................................................... 57
12.9 Procedure for Claims Relating to Excluded Liabilities............... 57
12.10 Indemnification Cap................................................. 58
ARTICLE XIII GENERAL.................................................................. 58
13.1 Governing Law....................................................... 58
13.2 Assignment; Binding upon Successors and Assigns..................... 58
13.3 Severability........................................................ 58
13.4 Entire Agreement.................................................... 59
13.5 Counterparts........................................................ 59
13.6 Expenses............................................................ 59
13.7 Other Remedies...................................................... 59
13.8 Amendment and Waivers............................................... 59
13.9 Waiver.............................................................. 59
13.10 Arbitration......................................................... 59
13.11 Notices............................................................. 60
13.12 Construction and Interpretation of Agreement........................ 61
13.13 No Joint Venture.................................................... 61
13.14 Absence of Third Party Beneficiary Rights........................... 61
5
