EXECUTION COPY
-------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
-------------------------------------------------------------------------------
BY AND BETWEEN
MANHATTAN ASSOCIATES, INC.
AND
XXXXXXXXX.XXX, INC.
DATED DECEMBER 13, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I. CLOSING............................................................................................1
1.1 Closing...................................................................................1
ARTICLE II. PURCHASE AND SALE.................................................................................1
2.1 Purchased Assets and Excluded Assets......................................................1
2.1.1. Purchased Assets...................................................................1
2.1.2. Excluded Assets....................................................................3
2.2 Purchase Price............................................................................4
2.3 Down Payment and Working Capital Funding..................................................4
2.4 No Liability for Stockholder Notes........................................................5
2.5 Potential Post-Closing Purchase Price Adjustment..........................................5
2.6 Purchase Price Allocation.................................................................5
ARTICLE III. LIABILITIES AND OBLIGATIONS......................................................................6
3.1 Obligations Assumed.......................................................................6
3.2 Liabilities and Obligations Not Assumed...................................................7
3.2.1. Generally..........................................................................7
3.2.2 Specifically.......................................................................7
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER..........................................................8
4.1 Organization and Qualification............................................................8
4.2 Certificate of Incorporation and Bylaws...................................................9
4.3 Authority Relative to This Agreement......................................................9
4.4 No Conflict; Required Filings and Consents................................................9
4.5 Permits; Compliance with Laws............................................................10
4.6 Financial Statements.....................................................................10
4.7 Absence of Certain Changes or Events.....................................................11
4.8 Employee Benefit Plans; Labor Matters....................................................12
4.9 Contracts................................................................................13
4.10 Litigation...............................................................................14
4.11 Environmental Matters....................................................................15
4.12 Intellectual Property....................................................................15
4.13 Taxes....................................................................................16
4.14 Insurance................................................................................17
4.15 Properties...............................................................................17
4.16 Brokers..................................................................................17
4.17 Certain Business Practices...............................................................17
4.18 Business Activity Restriction............................................................18
4.19 Export Control Laws......................................................................18
4.20 Interested Party Transactions............................................................18
4.21 Accounts Receivable......................................................................18
4.22 Customers and Suppliers..................................................................18
4.23 Non-Audit Activities.....................................................................18
4.24 Employee Complaints......................................................................19
4.25 Disclosure Controls......................................................................19
4.26 Business Information.....................................................................19
i
4.27 No Other Representations or Warranties...................................................19
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER...........................................................20
5.1 Organization; Good Standing..............................................................20
5.2 Articles of Incorporation and Bylaws.....................................................20
5.3 Authority Relative to This Agreement.....................................................20
5.4 No Conflict; Required Filings and Consents...............................................20
5.5 Brokers..................................................................................21
5.6 Sufficient Funds.........................................................................21
ARTICLE VI. COVENANTS........................................................................................21
6.1 Employees of the Business................................................................21
6.1.1 Hiring Employees..................................................................21
6.1.2 Medical and Dental Payments.......................................................21
6.1.3 Severance Pay and Outplacement Services...........................................21
6.1.4 Accrued Vacation & Sick Pay for Retained Employees................................22
6.1.5 401(k) Plan.......................................................................22
6.1.6 Service Credit....................................................................22
6.1.7 No Third-Party Beneficiaries......................................................22
6.1.8 Benefits..........................................................................23
6.1.9 No Employee Plan Liability........................................................23
6.2 Consents; Failure to Obtain Consents.....................................................23
6.3 Further Assurance........................................................................23
6.4 Tax Returns..............................................................................24
6.5 Proration................................................................................24
6.6 Transition Cooperation; Mail Received After Closing......................................24
6.7 Access to Books and Records..............................................................24
6.8 Confidentiality..........................................................................24
6.9 Public Announcements.....................................................................25
6.10 Sales and Transfer Tax Expenses..........................................................25
6.11 Change of Name...........................................................................25
6.12 Exclusivity..............................................................................25
6.13 Conduct of the Business..................................................................26
6.14 Marketing Representative Agreement.......................................................26
ARTICLE VII. CONDITIONS PRECEDENT; CLOSING DELIVERIES........................................................26
7.1 Conditions Precedent of Buyer............................................................26
7.2 Conditions Precedent of Seller...........................................................27
7.3 Deliveries by Seller.....................................................................27
7.4 Deliveries by Buyer......................................................................28
ARTICLE VIII. SURVIVAL; INDEMNIFICATION......................................................................28
8.1 Survival of Representations And Warranties...............................................28
8.2 Indemnification..........................................................................29
ARTICLE IX. TERMINATION......................................................................................31
9.1 Termination..............................................................................31
9.2 Effect of Termination....................................................................31
ARTICLE X. GENERAL PROVISIONS...............................................................................32
10.1 Limitation on Seller's Representations...................................................32
10.2 Schedules and Exhibits...................................................................32
ii
10.3 Notices..................................................................................32
10.4 Expenses.................................................................................34
10.5 Severability.............................................................................34
10.6 Assignment; Binding Effect; Benefit......................................................34
10.7 Incorporation of Exhibits................................................................34
10.8 Governing Law............................................................................34
10.9 Waiver of Jury Trial; Arbitration........................................................34
10.10 Headings; Interpretation.................................................................35
10.11 Counterparts.............................................................................35
10.12 Entire Agreement.........................................................................35
10.13 No Third-Party Beneficiaries.............................................................35
10.14 Amendments and Waivers...................................................................35
10.15 No Rule of Construction..................................................................35
iii
INDEX OF DEFINED TERMS
Defined Term Section
------------ -------
Additional Payment....................................................................... 2.2(d)
Agreement................................................................................ Preamble
Allocation............................................................................... 2.6
Assumed Obligations...................................................................... 3.1
Balance Sheet Date....................................................................... 4.6(a)(iii)
Break-Up Fee............................................................................. 9.2(b)
Business................................................................................. Preamble
Buyer.................................................................................... Preamble
Buyer Indemnified Party.................................................................. 8.2(a)
Buyer's 401(k) Plan...................................................................... 6.1.5
Closing.................................................................................. 1.1
Closing Date............................................................................. 1.1
Closing Payment.......................................................................... 2.2(a)
Code..................................................................................... 2.6
Confidential Business Information........................................................ 6.8
Contracts................................................................................ 2.1.1(i)
Down Payment............................................................................. 2.3(a)
Environmental Laws....................................................................... 4.11
ERISA.................................................................................... 4.8(a)
ERISA Affiliate.......................................................................... 4.8(a)
Escrow Agent............................................................................. 2.2(c)
Escrow Agreement......................................................................... 2.2(c)
Excluded Assets.......................................................................... 2.1.2
Excluded Obligations..................................................................... 3.2.2
Exclusivity Period....................................................................... 6.12(a)
Extension Period......................................................................... 2.3(a)
Financial Statements..................................................................... 4.6(a)(iii)
GAAP..................................................................................... 2.6
Hired Employee........................................................................... 6.1.1
ICGC..................................................................................... 3.1(c)
Indemnified Party........................................................................ 8.2(d)
Indemnifying Party....................................................................... 8.2(d)
Intellectual Property.................................................................... 4.12(a)
Xxxxxxx Employment Agreement............................................................. 2.1.2(f)
Xxxxxxx Note Receivable.................................................................. 2.1.2(e)
Licensed Intellectual Property........................................................... 4.12(c)
Loss..................................................................................... 8.2(a)
Material Adverse Effect.................................................................. 4.1(a)
Material Contracts....................................................................... 4.9
Named Customers.......................................................................... 2.1.1(j)
Non-Assignable Contract.................................................................. 6.2
Owned Software........................................................................... 2.1.1(d)
I-i
Permits.................................................................................. 2.1.1(o)
Person................................................................................... 3.2.2(b)
Purchase Price........................................................................... 2.2
Purchased Assets......................................................................... 2.1.1
Rules.................................................................................... 10.9(b)
Sabre.................................................................................... 2.2(b)
Sabre Note............................................................................... 2.2(b)
Seller................................................................................... Preamble
Seller Indemnified Party................................................................. 8.2(b)
Seller's 401(k) Plan..................................................................... 6.1.3
September 30 Balance Sheet............................................................... 4.6(a)(iii)
Software Programs........................................................................ 4.12(g)
Stockholder Notes........................................................................ 2.4
Subsidiary............................................................................... 4.1(b)
Sysco License Condition.................................................................. 2.5
Tax...................................................................................... 4.13(b)(i)
Tax Return............................................................................... 4.13(b)(ii)
Third-Party Claims....................................................................... 8.2(d)
Transferred Employees.................................................................... 6.1.5
Working Capital Payment.................................................................. 2.3(b)
Year 2000 Financial Statements........................................................... 4.6(a)(i)
Year-end Financial Statements............................................................ 4.6(a)(ii)
I-ii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of this
13th day of December, 2002, by and among Manhattan Associates, Inc., a Georgia
corporation ("Buyer"), and Xxxxxxxxx.xxx, Inc., a Delaware corporation
("Seller").
WHEREAS, on the terms and conditions hereof, Buyer wishes to purchase
from Seller and Seller wishes to sell, transfer, assign and deliver to Buyer,
substantially all of Seller's assets relating to Seller's business of providing
integrated logistics planning and execution solutions for shippers and carriers
(the "Business");
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements stated herein, and other
good and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged conclusively, the parties, intending to be legally bound,
agree as follows:
ARTICLE I.
CLOSING
1.1 Closing. The closing of the purchase and sale contemplated hereby
(the "Closing") will take place at the offices of Xxxxxx, Xxxxxxx & Xxxxxx,
L.L.P., in Atlanta, Georgia with an effective time for purposes hereunder of
5:00 p.m. (Atlanta Time) on December 31, 2002, provided that the fulfillment or
waiver (if permissible) by Seller and Buyer of the conditions to Closing set
forth in Article VII hereof shall have occurred, or on such other date or at
such other time as may be mutually agreed upon by Buyer and Seller (the
"Closing Date"). At the Closing, the parties will deliver or cause to be
delivered the funds, documents and certificates described in Article VII.
ARTICLE II.
PURCHASE AND SALE
2.1 Purchased Assets and Excluded Assets.
2.1.1. Purchased Assets. Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall sell, transfer, convey, assign
and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's
right, title and interest in and to the assets, properties and rights of the
Business listed below, other than the Excluded Assets, as the same shall exist
immediately prior to the Closing (collectively, the "Purchased Assets"):
(a) to the extent legally transferable, leases of real
property used in connection with the Business, including all options to renew
or extend the term of any real property leases or to purchase all or any part
of such real property;
(b) to the extent legally transferable, all leases of
personal property used in connection with the Business, including all options
to renew or extend the term of such personal property leases or to purchase all
or any part of such personal property;
(c) all of the machinery, equipment and vehicles used in
connection with the Business and all assignable warranties of third parties
with respect thereto, and further including without limitation such items
identified on Schedule 2.1.1(c);
(d) all software owned by Seller or under development by
Seller (collectively, the "Owned Software") and all data and documentation
owned by Seller, including prior versions and releases applicable to any
operating environment and in any format related to the Owned Software;
(e) all cash and cash equivalents on hand and in banks
(excluding the Closing Payment and except as provided in Sections 2.1.2(e) and
(g)), certificates of deposit, commercial paper, stocks, bonds and other liquid
investments of Seller;
(f) all outstanding accounts receivable, whether billed
or unbilled as of the Closing Date;
(g) all Intellectual Property owned by Seller, all goodwill
associated therewith and any other proprietary rights (including moral rights)
of Seller in the foregoing, and any copies and tangible embodiments of the
foregoing owned by Seller;
(h) all marketing material and marketing material
templates owned by Seller relating to the Business;
(i) all of Seller's rights existing under all supply and
distribution agreements and arrangements, sales and purchase agreements and
orders, license agreements, consulting agreements, confidentiality and
non-disclosure agreements, including without limitation such agreements with
current or prior customers and current or prior employees, agents, officers and
directors, and under all other contracts, agreements and arrangements relating
in all cases to the Business but excluding Xxxxxxx'x Employment Agreement (the
"Contracts");
(j) all lists and records pertaining to the accounts of
Seller's customers (the "Named Customers"), suppliers, distributors, personnel
and agents and all other books, ledgers, files, documents, correspondence and
business records relating to the Business and the Purchased Assets, including
without limitation, the equipment maintenance records but, notwithstanding the
foregoing, excluding all personnel records and other books, ledgers, files,
documents, correspondence and business records that Seller is prohibited by law
from transferring;
(k) subject to Section 6.6, all rights to receive mail
and other communications addressed to Seller and relating to the Named
Customers;
(l) all goodwill of the Business as a going concern and
associated with the items listed above;
(m) all prepaid rent, rent deposits and other prepaid
expenses of the Business;
(n) all of the sales and credit reports, supplier lists,
customer lists, distributor lists, bid and quote information, literature,
catalogs, brochures, advertising material and the like which are used in or
relate to the Business;
2
(o) to the extent legally transferable, all governmental
licenses, certificates, permits, franchises, approvals, authorizations,
exemptions, registrations, and rights ("Permits") of the Business; and
(p) except for the Excluded Assets, all other assets,
tangible or intangible, of every kind and nature used in connection with the
Business or the Purchased Assets including, without limitation, claims,
deposits, warranties, guarantees, refunds, causes of action, rights of
recovery, rights of set-off and rights of recoupment.
Notwithstanding anything to the contrary contained in this
Agreement, but subject in all cases to Section 6.8 hereof, Seller may retain
copies of any Contract, books, ledgers, files, correspondence and business
records or other document or materials of the Business.
2.1.2. Excluded Assets. Notwithstanding anything herein to
the contrary, the Purchased Assets shall not include, and Buyer will not
purchase, and Seller shall retain all of its right, title and interest in and
to, the following assets and properties of Seller listed (the "Excluded
Assets"):
(a) all refunds of Taxes to the extent that the Taxes
being refunded were an Excluded Obligation;
(b) all Tax Returns of Seller;
(c) any rights or benefits pursuant to any of Seller's
insurance policies (intercompany, self-insurance or otherwise) that do not
relate to the Purchased Assets or the Business;
(d) any causes of action, lawsuits, judgments, claims
and demands of any nature arising out of any of the Excluded Assets or Excluded
Obligations, whether arising by way of counterclaim or otherwise;
(e) the note receivable from Xxxx Xxxxxxx in the original
principal amount of $500,000 (the "Xxxxxxx Note Receivable") and any cash
proceeds paid with respect thereto;
(f) the Employment Letter dated August 21, 2001 for Xxxx
Xxxxxxx and the related Term Sheet and Terms of Employment dated March 6, 2000
for Xxxx Xxxxxxx, as amended (collectively, "Xxxxxxx'x Employment Agreement");
(g) Seller's Master Account, #1892020239, at Comerica Bank,
and all cash and cash equivalents deposited therein (plus all interest accrued
up until the Closing), but only to the extent that such cash and cash
equivalents represent (i) a portion of the Closing Payment, (ii) cash proceeds
of the Xxxxxxx Note Receivable, and (iii) any payments pursuant to Section
2.3(a); and
(h) those assets and properties listed on Schedule
2.1.2.
3
2.2 Purchase Price. In consideration of the sale and transfer by
Seller to Buyer of the Purchased Assets, Buyer shall assume the Assumed
Obligations pursuant to Section 3.1 and pay and deliver to Seller the purchase
price for the Purchased Assets (the "Purchase Price") as follows:
(a) At Closing, Buyer shall pay and deliver to Seller a cash
payment by wire transfer of same day funds to such account as Seller shall
designate by written notice to the Buyer in the aggregate amount of $20,068,055
less the amounts paid, escrowed or retained as provided in Subsections (b), (c)
and (d) below, less the Down Payment and any amounts paid by Seller from
September 30, 2002 through Closing as severance to Xxxx Xxxxxxx or for legal
fees or other expenses related to the negotiation, documentation and Closing of
the transaction contemplated by this Agreement (the "Closing Payment").
(b) At Closing, Buyer shall cause to be paid to Sabre Inc.
("Sabre") the remaining $5,500,000 principal amount of the promissory note (the
"Sabre Note") issued by Seller to Sabre, a copy of which is attached hereto as
Exhibit 2.2(b), plus, if the Closing shall have occurred after December 31,
2002 because Seller shall have intentionally caused the Closing hereunder not
to have occurred by December 31, 2002, all interest accruing on the Sabre Note
from January 1, 2003 through the Closing.
(c) At Closing, Buyer shall deposit $1,500,000 with X.X.
Xxxxxx Trust Company, N.A., or another escrow agent reasonably acceptable to
Seller and Buyer (the "Escrow Agent") pursuant to the Escrow Agreement, the
form of which is attached hereto as Exhibit 2.2(c) (the "Escrow Agreement").
(d) At Closing, if the Sysco License Condition (as defined in
Section 2.5) has not been satisfied on or prior to the Closing, Buyer shall
retain $500,000 (the "Additional Payment") subject to future payment to Seller
pursuant to Section 2.5 hereof.
2.3 Down Payment and Working Capital Funding.
(a) On the date of this Agreement, Buyer shall pay to Seller
the sum of $2,000,000 (the "Down Payment"), which amount shall be a
nonrefundable down payment toward the Purchase Price. If the Closing shall not
have occurred under this Agreement by December 31, 2002 (or such later date as
the parties may have agreed in writing) or this Agreement is terminated, Seller
shall be entitled to retain the Down Payment unless Seller shall have
intentionally caused the Closing hereunder not to have occurred by December 31,
2002 (or such later date as the parties may have agreed in writing), in which
case Seller shall repay the Down Payment to Buyer. If the Closing shall not
have occurred by December 31, 2002 solely as a result of an injunction,
judgment, or other order having been issued in any legal action or proceeding
instituted by a third party against the Purchased Assets, Seller or Buyer
arising by reason of the acquisition of the Purchased Assets pursuant to this
Agreement, which restrains, prohibits or invalidates the consummation of the
transactions contemplated by this Agreement, the date after which either party
may terminate this Agreement pursuant to Section 9.1(b) shall be automatically
extended for a period of 180 days (the "Extension Period"), provided, that
Buyer timely funds all working capital needs of Seller (including capital
expenditures, but excluding any payments as severance to Xxxx Xxxxxxx) during
the Extension Period. If Buyer
4
does not timely fund all such working capital needs of Seller during the
Extension Period as reasonably determined by Seller, Seller shall have the
right to terminate this Agreement and retain the Down Payment.
(b) On the date of this Agreement, Buyer shall pay to Seller
the sum of; $2,000,000 (the "Working Capital Payment") which Seller can use
from time to time between the date of this Agreement and the Closing to (i)
repay to ICG Holdings Inc. $700,000 (plus accrued interest) in indebtedness
borrowed by Seller from ICG Holdings Inc. on November 26, 2002 and December 10,
2002, and/or (ii) fund its working capital needs, including capital
expenditures of not more than $250,000 or such higher amount as may be agreed
in writing by Buyer, which agreement shall not be unreasonably withheld, but
excluding any payments of interest on indebtedness (other than interest
accruing on the Sabre Note through December 31, 2002) or any payments as
severance to Xxxx Xxxxxxx. If the Closing shall occur under this Agreement, the
unused portion of the Working Capital Payment shall be part of the Purchased
Assets. If the Closing shall not have occurred under this Agreement by December
31, 2002 or this Agreement is terminated and the Break-Up Fee (as defined in
Section 9.2(b)) is due and payable to Seller under Section 9.2(b), Seller shall
be entitled to retain the unused portion of the Working Capital Payment and
apply it against the Break-Up Fee (as defined in Section 9.2(b)). If this
Agreement is terminated by Seller pursuant to Section 2.3(a), Seller shall be
entitled to retain the unused portion of the Working Capital Payment. Under no
circumstances shall Buyer be entitled to the return of the portion of the
Working Capital Payment used by Seller in accordance with this Section 2.3(b).
2.4 No Liability for Stockholder Notes. Seller shall apply the Closing
Payment to the payment of principal and accrued interest under the notes (the
"Stockholder Notes") issued by Seller to ICG Holdings Inc. and Sands Brothers
Venture Capital LLC, copies of which are attached hereto as Exhibit 2.4.
2.5 Potential Post-Closing Purchase Price Adjustment. If the Sysco
License Condition is satisfied after the Closing, Buyer shall pay Seller the
Additional Payment as a portion of the Purchase Price. Buyer shall pay such
amount to Seller on the date on which the Sysco License Condition is satisfied
by wire transfer of same day funds to such account as Seller shall designate in
writing to Buyer. The "Sysco License Condition" means either (x) a license with
Sysco Corporation that provides for $1,500,000 or more in recognizable
(regardless of timing of the recognition) license revenue is included in the
Contracts or (y) the execution and delivery by Buyer and Sysco Corporation of
(A) a license with Sysco Corporation that provides for $1,500,000 or more in
recognizable (regardless of timing of the recognition) license revenue or (B)
an amendment or addendum to an existing license with Sysco Corporation such
that the existing license, as amended, provides for $1,500,000 or more in
recognizable (regardless of timing of the recognition) license revenue. In the
event the Sysco License Condition is not satisfied on or prior to the Closing,
Buyer shall use its reasonable best efforts to satisfy the Sysco License
Condition as promptly as practicable following the Closing.
2.6 Purchase Price Allocation. Buyer and Seller agree that the
Purchase Price (including any additional consideration paid to Seller pursuant
to Section 2.5) shall be allocated among the Purchased Assets, tangible and
intangible, on the basis of an allocation (the "Allocation") to be prepared by
Buyer and reasonably acceptable to Seller which (i) allocates a
5
portion of the Purchase Price to the fixed assets contained in the Purchased
Assets equal to the value of such fixed assets carried on the books of Seller
in accordance with generally accepted accounting principles ("GAAP"),
consistently applied, at the Closing, and (ii) allocates the remainder of the
Purchase Price to intangible assets and goodwill in proportions to be
determined by Buyer. Buyer and Seller may agree upon a different allocation of
the Purchase Price than set forth above, in which case such different
allocation shall be controlling. Buyer shall use its reasonable best efforts to
deliver to Seller the final version of the Allocation on or prior to January
15, 2003, and such final version of the Allocation shall become a part of this
Agreement for all purposes. Seller and Buyer agree to report, pursuant to
Section 1060 of the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder (collectively, the "Code"), if and when
required, the Allocation of the Purchase Price, as adjusted, among the
Purchased Assets in a manner entirely consistent with such Allocation in the
preparation and filing of all Tax Returns (including IRS form 8594). Neither
Seller nor Buyer will take any action that would call into question the bona
fides of such Allocation.
ARTICLE III.
LIABILITIES AND OBLIGATIONS
3.1 Obligations Assumed. As part of the consideration for the
Purchased Assets, and subject to Section 3.2, Buyer shall assume the following
liabilities and obligations of Seller (the "Assumed Obligations"), which Buyer
shall pay, perform, or discharge when due in accordance with their terms,
subject to any defenses or claimed offsets asserted in good faith against the
obligee to whom such liabilities or obligations are owed:
(a) all debts, liabilities and obligations that Buyer has assumed
or agreed to assume pursuant to this Agreement;
(b) all of the debts, liabilities and obligations of Seller
identified or provided for in the Financial Statements as set forth on Schedule
3.1(b);
(c) all of the debts, liabilities and obligations of Seller, in
accordance with the terms thereof, under or with respect to the Contracts,
including, without limitation, those arising in connection with any breach or
violation of any Contract by Seller prior to Closing, but excluding any
obligations or liabilities arising from or related to (i) the principal amount
of the Sabre Note, (ii) the Stockholder Notes, (iii) the Xxxxxxx Employment
Agreement, (iv) the Agreement for Services dated April 25, 2002 (the "ICGC
Agreement"), between Seller and ICG Commerce, Inc. ("ICGC") (except for the
existing engagements thereunder for Novartis Pharmaceuticals entered into on
August 8, 2002, Timken Steel entered into on August 8, 2002, and Xxxx entered
into on October 21, 2002) and (v) any contracts or agreements listed on
Schedule 3.1(c);
(d) all of the debts, liabilities and obligations of Seller for
inventory ordered by Seller in the ordinary course of business prior to the
Closing Date and delivered to Buyer after the Closing Date;
(e) all of the debts, liabilities and obligations of Seller which
relate to the Purchased Assets or the Business to the extent attributable to
occurrences or circumstances arising following the Closing;
6
(f) any sales or transfer Taxes that may be due from the sale of the
Purchased Assets pursuant to this Agreement, and any recording fees imposed
upon the transfer of the Purchased Assets hereunder and the filing of any
instruments;
(g) the following (and no other) liabilities and obligations with
respect to employees of Seller hired by Buyer in accordance with in Section
6.1:
(1) liabilities of Seller for wages or salary,
(2) liabilities of Seller for bonuses or commissions,
(3) liabilities of Seller for reasonable and customary
severance costs (including without limitation as a result of this transaction),
it being agreed that one week's pay per year of service, with a minimum payment
of two weeks pay and a maximum of six weeks pay is reasonable and customary,
(4) liabilities of Seller for workers' compensation, and
(5) liabilities of Seller for sick pay and vacation
accruals.
However, notwithstanding the foregoing, in no event shall any such liabilities
be assumed by Buyer to the extent that such liabilities arise as a result of
any claims by employees of Seller or any ERISA Affiliate (as defined in Section
4.8(a)(i) hereof) of Seller of age, sex, religious, disability, or other
unlawful discrimination by Seller or any ERISA Affiliate of Seller.
(h) any liability or obligation (contingent or otherwise) of Seller
arising out of any claim, litigation or proceeding either (i) threatened or
pending on or before the Closing Date or (ii) threatened or initiated after the
Closing Date to the extent based on or caused by any act or omission occurring,
or condition or circumstances existing, prior to the Closing Date, with respect
to the Purchased Assets, the Assumed Obligations or the Business;
(i) any liability for product sold or manufactured by Seller or any
service provided by Seller prior to the Closing in connection with the
Business, including all product liability and warranty claims and product
returns with respect thereto; and
(j) all accrued interest on the Sabre Note from September 30, 2002
until the Closing, which accrued interest Buyer shall to pay to Sabre at the
Closing.
3.2 Liabilities and Obligations Not Assumed.
3.2.1. Generally. Other than as specifically listed in
Section 3.1 above, Buyer shall assume no liability or obligation whatsoever of
Seller.
3.2.2 Specifically. Furthermore, except as specifically
listed in Section 3.1 above, Buyer expressly disclaims the assumption of, and
shall not assume, any liability of any type whatsoever of Seller or in
connection with any of Seller's assets or business operations including any
liability of Seller that becomes a liability of Buyer under any bulk transfer
law of any jurisdiction, under any common law doctrine of de facto merger or
successor liability, or
7
otherwise by operation of law, including without limitation the following (the
"Excluded Obligations"):
(a) Taxes. Except as provided in Sections 6.5 and 6.10, any and all
tax liabilities accruing on or before the Closing Date in connection with the
Business, any Purchased Asset, the Excluded Assets or otherwise, and any and
all tax liabilities accruing on or after the Closing Date in connection with
the ownership, operation or disposition of any Excluded Assets;
(b) Environmental. Any and all liabilities of Seller arising at or
before Closing from any noncompliance with any Environmental Law (as defined in
Section 4.11), and any and all liabilities of Seller in connection with any
claim by any person, entity or agency (a "Person") claiming to have suffered
any environmental damage or harm of any type, including any actual or alleged
damage or harm to groundwater, surface water, well water, ground, soil, or the
atmosphere, or otherwise;
(c) Personnel Related. Any and all employment or
personnel-related liabilities not specifically assumed under Sections 3.1 or
6.1 of this Agreement;
(d) Payables and Debt. Any account payable, indebtedness, letter
of credit, guaranty, note or obligation of Seller other than the obligations
specifically assumed under Section 3.1; or
(e) Litigation. Any liability or obligation (contingent or
otherwise) of Seller arising out of any claim, litigation or proceeding with
respect to the Excluded Assets.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the date of this Agreement, Seller represents and warrants to
Buyer the following:
4.1 Organization and Qualification.
(a) Seller has been duly organized and is validly existing and in good
standing under the laws of Delaware and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted. Seller is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
For purposes of this Agreement, "Material Adverse Effect" means a material
adverse effect on the financial condition or results of operations of the
Business, taken as a whole, other than with respect to any adverse effects
which directly or indirectly result from general economic conditions affecting
the Business or the industry in which the Business competes. Seller may, at its
option, include in the Schedules to this Agreement or elsewhere, items which
would not have a Material Adverse Effect within the meaning of the previous
sentence in order to avoid misunderstanding, and such inclusion shall not be
deemed to be an acknowledgment by Seller that such items would have a Material
Adverse Effect.
8
(b) Seller has no Subsidiaries and does not otherwise own or control,
directly or indirectly, any equity interest in any corporation, association or
other business entity except as set forth on Schedule 4.1. As used herein,
"Subsidiary" shall mean any corporation or other entity more than 50% of the
stock or other ownership interest of which (measured by virtue of voting
rights) is owned by Seller. Seller does not own any equity interest in any
partnership or joint venture arrangement or other business entity.
4.2 Certificate of Incorporation and Bylaws. The copies of Seller's
certificate of incorporation and bylaws attached hereto as Exhibit 4.2 are
true, complete and correct copies of Seller's current certificate of
incorporation and bylaws and are in full force and effect. Seller is not in
violation of any of the provisions of its certificate of incorporation or
bylaws.
4.3 Authority Relative to This Agreement. Seller has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Seller are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Seller and, assuming the due
authorization, execution and delivery by Buyer, constitutes the legal, valid
and binding obligation of Seller, enforceable against Seller in accordance with
its terms, subject to applicable laws of bankruptcy, insolvency or similar laws
relating to creditors' rights generally and to general principles of equity
(whether applied in a proceeding in law or equity).
4.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Seller does not,
and the performance by Seller of its obligations hereunder will not, assuming
that all consents, approvals, authorizations and permits described on Schedule
4.4(a) have been obtained and all filings and notifications described on
Schedule 4.4(a) have been made, (i) conflict with or violate any provision of
the certificate of incorporation or bylaws of Seller, (ii) conflict with or
violate any law applicable to Seller or by which any property or asset of
Seller is bound or affected or (iii) result in any breach of or constitute a
default (or an event which with the giving of notice or lapse of time or both
could reasonably be expected to become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Seller
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Seller is
a party or by which any property or asset of Seller is bound, except, in the
case of the foregoing clauses (ii) and (iii), for any such conflict, violation,
breach, default, right or lien or other encumbrance which would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) Except as provided on Schedule 4.4(b), the execution and delivery
of this Agreement by Seller does not, and the performance by Seller of its
obligations hereunder will not, require any consent, approval, authorization or
permit of, or filing by Seller with or
9
notification by Seller to, any governmental entity which, if not obtained or
made, would, individually or in the aggregate, have a Material Adverse Effect.
4.5 Permits; Compliance with Laws. Seller is in possession of all
Permits necessary for Seller to own, lease and operate its properties or to
produce, store, distribute and market its products or otherwise to carry on the
Business as it is now being conducted, and, as of the date of this Agreement,
none of the Permits has been suspended or cancelled nor is any such suspension
or cancellation pending or, to the knowledge of Seller, threatened, except for
such Permits for which the failure to possess or the suspension or termination
of which would not, individually or in the aggregate, have a Material Adverse
Effect. Seller is not in conflict with, or in default or violation of, (i) any
law applicable to Seller or by which any property or asset of Seller is bound
or affected or (ii) any Permits, except for such conflict, default or violation
which would not have a Material Adverse Effect. Seller has not received from
any governmental entity any written notification with respect to possible
conflicts, defaults or violations of laws.
4.6 Financial Statements.
(a) Seller has delivered to Buyer true, complete and correct
copies of the following financial statements:
(i) audited statements of income, cash flows and
stockholders' equity of Seller for the fiscal year ended December 31, 2000, and
an audited balance sheet of Seller as at December 31, 2000, together with the
related notes and schedules, if any (such audited balance sheet, statements of
income, cash flows and stockholders' equity and the related notes and schedules
are referred to herein as the "Year 2000 Financial Statements");
(ii) unaudited statements of income, cash flows and
stockholders' equity of Seller for the fiscal year ended December 31, 2001 and
an unaudited balance sheet of Seller as at December 31, 2001 (such balance
sheet, statements of income, cash flows and stockholders' equity are referred
to herein, together with the Year 2000 Financial Statements, as the "Year-end
Financial Statements"); and
(iii) unaudited statements of income, cash flows and
stockholders' equity of Seller for the nine-month period ended September 30,
2002 and an unaudited balance sheet (the "September 30 Balance Sheet") of
Seller as of September 30, 2002 (the "Balance Sheet Date") (such balance sheet,
statements of income, cash flows and stockholders' equity are referred to
herein, together with the Year-end Financial Statements, as the "Financial
Statements").
(b) Except as set forth on Schedule 4.6(b) or on the September 30
Balance Sheet, Seller has no liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that is, in the aggregate, material
to the Business and that would be required to be reflected on a balance sheet
or in notes thereto prepared in accordance with GAAP, except for immaterial
liabilities or obligations incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date and except for
liabilities and obligations arising under the terms of Contracts not yet
required to be performed. All reserves established by Seller and set forth in
the Financial Statements are in accordance with GAAP, consistently applied. On
the Balance Sheet Date, there were no material loss contingencies (as such term
is used in Statement of
10
Financial Accounting Standard No. 5) that are not adequately provided for in
the September 30 Balance Sheet.
4.7 Absence of Certain Changes or Events. Except as set forth on
Schedule 4.7, since the Balance Sheet Date, Seller has conducted its businesses
only in the ordinary course consistent with past practice. Without limiting the
generality of the foregoing, except as set forth on Schedule 4.7, since the
Balance Sheet Date:
(a) There has been no Material Adverse Effect;
(b) Neither the business, properties nor assets of Seller have
suffered a loss (whether or not covered by insurance), as the result of fire,
explosion, earthquake, accident, labor trouble, condemnation or taking of
property by any governmental entity, flood, windstorm, pestilence, embargo,
riot, act of God or the public enemy, any other casualty or similar event or
any other cause, which loss has, will have or could reasonably be expected to
have a Material Adverse Effect;
(c) Seller has not declared or paid any dividend or other
distribution (whether in cash, stock, or property or any combination thereof)
in respect of any capital stock of Seller;
(d) Seller has not purchased, redeemed or otherwise acquired (or
committed itself to purchase, redeem or acquire), directly or indirectly, any
capital stock or other security of Seller;
(e) Seller has not made any acquisition of all or any part of the
assets, properties, capital stock or business of any other entity, other than
inventory, equipment and supplies acquired in the ordinary course of business
consistent with past practice;
(f) Seller has not, except in the ordinary course of business
consistent with past practice, sold or otherwise disposed of any material
assets of Seller;
(g) Seller has not sold, assigned, transferred, conveyed or licensed,
or committed itself to sell, assign, transfer, convey or license, any
Intellectual Property (as defined in Section 4.12), other than in the ordinary
course of business;
(h) Seller has not waived or released any right or claim of
material value to its business, including any write-off or other compromise of
any material account receivable of Seller;
(i) Seller has not paid, directly or indirectly, any of its material
liabilities before the same became due in accordance with its terms or
otherwise than in the ordinary course of business consistent with past
practice;
(j) Seller has not made any payment or commitment to pay any
severance or termination pay to any employee of Seller;
(k) Seller has not made any wage or salary increase or bonus, or
increase in any other direct or indirect compensation for or to any employee,
officer, director, consultant, agent or
11
other representative, other than to non-officers or non-director employees,
consultants, agents or other representatives in the ordinary course of business
consistent with past practices;
(l) Seller has not made any loan or advance to any of its equity
owners, officers, directors, employees, consultants, agents or other
representatives (other than travel advances made in the ordinary course of
business), or made any other loan or advance otherwise than in the ordinary
course of business consistent with past practice;
(m) Seller has not pledged or otherwise, voluntarily or involuntarily,
encumbered any of its assets or properties, except for liens for current taxes
which are not yet delinquent or which are being contested in good faith and
purchase-money liens arising out of the purchase or sale of products made in
the ordinary and usual course of business and in any event not in excess of
$25,000 for any single item or $100,000 in the aggregate;
(n) Seller has not materially changed any of its accounting
methods, principles, procedures or practices;
(o) Seller has not materially changed any of its business
policies or practices, including advertising, marketing, pricing, purchasing,
personnel, sales or budget policies; and
(p) Seller has not entered into any agreement to do any of the
foregoing.
4.8 Employee Benefit Plans; Labor Matters.
(a) (i) No Purchased Asset is subject to any lien, restriction or
other adverse right relating to any "employee benefit plan" (as such term is
defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that would affect in any manner whatsoever Buyer's right, title and
interest in, or Buyer's right to use or enjoy (free and clear of any lien or
restriction), any Purchased Assets, any Assumed Obligation or any aspect of the
Business. "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with Seller is, or at any time for which any
relevant statute of limitations remains open was, treated as a single employer
pursuant to sections 414(b), (c), (m) or (o) of the Code.
(ii) Neither Seller nor any ERISA Affiliate has maintained,
contributed to, or incurred any liability or obligation with respect to, any
employee pension benefit plan subject to Title IV of ERISA or section 412 of
the Code, including any "multi-employer plan" (as defined in ERISA), nor to any
"multiple employer welfare arrangement" (as defined in ERISA) that could
reasonably be expected by reason of the transactions contemplated by this
Agreement to become a liability of Buyer or to attach to any asset to be
acquired by Buyer hereunder.
(iii) With respect to the Seller's 401(k) Plan described in
Section 6.1.5 hereof, (A) the Plan has been maintained in all material respects
in accordance with ERISA, the applicable provisions of the Code and all other
applicable law; and (B) the Plan has received a determination letter from the
Internal Revenue Service to the effect that it is qualified under section
401(a) of the Code, and Seller is not aware of any facts occurring since the
date of that letter that could reasonably be expected to adversely affect the
qualified status of that Plan.
12
(iv) Neither Seller nor any ERISA Affiliate maintains any
employee welfare benefit plan that provides medical or life insurance following
an employee's termination of employment, other than as required by section
4980B of the Code.
(b) Seller is not a party to any collective bargaining or other labor
union contract applicable to persons employed by Seller, and no collective
bargaining agreement is being negotiated by Seller. As of the date of this
Agreement, there is no labor dispute, strike or work stoppage against Seller
pending or, to the knowledge of Seller, threatened that may interfere with the
business activities of Seller. Except as set forth on Schedule 4.8(b), as of
the date of this Agreement, to the knowledge of Seller, neither Seller nor any
of its representatives or employees has committed any unfair labor practice in
connection with the operation of the Business, and there is no charge or
complaint against Seller by the National Labor Relations Board or any
comparable governmental entity pending or threatened in writing.
(c) Except as set forth on Schedule 4.8(c), Seller is in
compliance in all material respects with all currently applicable laws and
regulations respecting employment, discrimination in employment, terms and
conditions of employment, wages, hours and occupational safety and health and
employment practices. Except as set forth on Schedule 4.8(c) there are no
controversies pending or, to the knowledge of Seller, threatened, between
Seller and any of its employees, which controversies have or could reasonably
be expected to result in an action, suit, proceeding, claim, arbitration or
investigation before any agency, court or tribunal, foreign or domestic, and
there are no existing factors or circumstances that could reasonably be
expected to result in such an action, suit, proceeding, claim, arbitration or
investigation. To the knowledge of Seller no employees of Seller are in
violation of any term of any employment contract, patent disclosure agreement,
noncompetition agreement, or any restrictive covenant to a former employer
relating to the right of any such employee to be employed by Seller because of
the nature of the business conducted or presently proposed to be conducted by
Seller or to the use of trade secrets or proprietary information of others.
Except as set forth on Schedule 4.8(c), Seller has not received since October
1, 2002, any written or, to Seller's knowledge, oral notice that any such
employee intends to terminate his or her employment with Seller.
4.9 Contracts. Set forth on Schedule 4.9 is a list of the following
written agreements, instruments, guaranties, or commitments to which Seller is
a party or by which or to which any of the assets of Seller are bound or
subject, in effect on the date hereof (collectively, the "Material Contracts"),
true and complete copies of which have been provided or made available to
Buyer:
(a) distributor, sales, marketing, vendor, advertising, financial
advisory, broker-dealer, agency or manufacturer's representative contracts
involving more than $20,000;
(b) continuing contracts for the purchase or provision of materials,
supplies, equipment or services involving in the case of any such contract more
than $20,000 over the life of the contract;
(c) contracts that expire, or may be renewed at the option of any
Person other than the Seller so as to expire, more than one year after the date
of this Agreement and involving more than $20,000 in the aggregate;
13
(d) trust indentures, mortgages, promissory notes, loan agreements or
other contracts for the borrowing of money, any currency exchange, commodities
or other hedging arrangement or any leasing transaction of the type required to
be capitalized in accordance with GAAP;
(e) contracts for capital expenditures in excess of $20,000 in
the aggregate;
(f) contracts currently in effect that were entered into in the
ordinary course of business and that involve the payment or receipt of
consideration in excess of $50,000;
(g) contracts for the sale of any assets or properties of Seller or
for the grant to any Person any preferential rights to purchase any assets or
properties of Seller, other than in the ordinary course of business;
(h) contracts establishing joint ventures or partnerships;
(i) contracts containing any obligations or liabilities of any
kind to holders of capital stock of the Seller as such;
(j) contracts relating to the acquisition by Seller of any
operating business or any capital stock of any other Person;
(k) contracts requiring the payment to any Person of any override
or similar commission or fee;
(l) contracts with any current or former officer, director, employee,
consultant, agent, representative or equity owner, including any employment,
consulting or deferred compensation agreement and any executive compensation,
bonus or incentive plan agreement;
(m) agreements of guarantee, support, indemnification, assumption or
endorsement of, or any similar commitment with respect to, the obligations,
liabilities (whether accrued, absolute, contingent or otherwise) or
indebtedness of any other Person; or
(n) contracts that were not made in the ordinary course of
business and that are material to Seller taken as a whole.
Seller is not in violation of or in default under (nor has
there occurred any event that with the giving of notice or the expiration of
any cure period would result in such a violation of or default under) any
Material Contract, except for such violations or defaults which would not,
individually or in the aggregate, have a Material Adverse Effect. Each Material
Contract is in full force and effect and is a legal, valid and binding
obligation of Seller and, to the knowledge of Seller, each of the other parties
thereto, enforceable in accordance with its terms, in each case, subject to
applicable laws of bankruptcy, insolvency or similar laws relating to
creditors' rights generally and to general principles of equity (whether
applied in a proceeding in law or equity).
4.10 Litigation. Except as set forth on Schedule 4.10, there is no
material suit, claim, action, proceeding or investigation pending or, to the
knowledge of Seller, threatened against Seller and, to the knowledge of Seller,
after diligent inquiry down to the level of vice president, Seller has not
received any written or oral claim that could reasonably be expected to result
in
14
such a suit, claim, action, proceeding or investigation. Seller has not
received any written or, to the knowledge of Seller, oral notice that could
reasonably be expected to result in the denial of insurance coverage under
policies issued to Seller in respect of such suits, claims, actions,
proceedings and investigations. Seller is not subject to any outstanding
material order, writ, injunction or decree.
4.11 Environmental Matters. Except as could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, (i)
Seller is in substantial compliance with all federal, state, local and foreign
statutes, laws, ordinances, regulations, rules, notices, permits, judgments,
orders and decrees applicable to it or any of its properties, assets,
operations and businesses relating to the protection of the environment
("Environmental Laws"); (ii) all past noncompliance of Seller with
Environmental Laws has been resolved without any pending, ongoing or future
obligation, cost or liability; and (iii) Seller has not released a Hazardous
Waste, Hazardous Material or Hazardous Substance (as defined in any
Environmental Law) at, or transported a Hazardous Material to or from, any real
property currently leased or occupied by Seller, in violation of any
Environmental Law.
4.12 Intellectual Property.
(a) As used in this Agreement, "Intellectual Property" shall mean all
patents, trademarks, trade names, service marks, trade dress, Internet domain
name registrations, copyrights and any renewal rights therefor, trade secrets,
know-how, computer software programs or applications in both source and object
code form, technical documentation of such software programs, registrations and
applications for any of the foregoing that are used in the Business and/or in
any product, technology or process (i) currently manufactured, published,
marketed, sold or owned by Seller, or (ii) previously or currently under
development for possible future manufacturing, publication, marketing or other
use by Seller.
(b) Schedule 4.12(b) contains a true and complete list of all of the
following items of Intellectual Property owned by Seller: patents, patent
applications, trademark registrations, trademark applications, other material
trademarks, trade names, service xxxx registrations, service xxxx applications,
other material service marks, Internet domain name registrations and copyright
registrations and applications.
(c) To Seller's knowledge, the Intellectual Property consists solely
of items and rights which are: (i) owned by Seller; (ii) in the public domain;
or (iii) used by Seller pursuant to a valid license (the "Licensed Intellectual
Property"), the parties, date, term and subject matter of each such license
agreement (each, a "License Agreement") being set forth on Schedule 4.12(c).
Seller has all rights in the Intellectual Property necessary to carry out
Seller's current activities (and had all rights necessary to carry out its
former activities at the time such activities were being conducted), including
without limitation, to the extent required to carry out such activities, rights
to make, use, reproduce, modify, adopt, create derivative works based on,
translate, distribute (directly and indirectly), transmit, display and perform
publicly, license, rent and lease and, other than with respect to the Licensed
Intellectual Property or Intellectual Property in the public domain, assign and
sell, the Intellectual Property.
15
(d) To Seller's knowledge, the operation of the Business as currently
conducted does not infringe on any copyright, trade secret, trademark, service
xxxx, trade name, trade dress, logo, mask work or patent of any Person. No
written or, to the knowledge of Seller, oral claims (i) challenging the
validity, effectiveness or, other than with respect to the Licensed
Intellectual Property, ownership by Seller of any of the Intellectual Property,
or (ii) to the effect that Seller's operation of the Business infringes or will
infringe on any intellectual property or other proprietary right of any Person
have been asserted or, to the knowledge of Seller, are threatened by any
Person, nor are there, to Seller's knowledge, any valid grounds for any bona
fide claim of any such kind. To Seller's knowledge, all registered, granted or
issued patents, trademarks, Internet domain name registrations and copyrights
owned by Seller are enforceable and subsisting. To the knowledge of Seller,
there is no unauthorized use, infringement or misappropriation of any of the
Intellectual Property by any third-party, employee or former employee.
(e) All personnel, including employees, agents, consultants and
contractors, who have contributed to or participated in the conception and
development of the Intellectual Property on behalf of Seller, have executed
nondisclosure and proprietary rights assignments agreements, the form of which
is set forth on Schedule 4.12(e).
(f) Seller is not, nor as a result of the execution or delivery of
this Agreement, or performance of Seller's obligations hereunder, will Seller
be, in violation of any license, sublicense, agreement or instrument to which
Seller is a party or otherwise bound, nor will execution or delivery of this
Agreement, or performance of Seller's obligations hereunder, cause the
diminution, termination or forfeiture of any Intellectual Property, except as
will not have, individually or in the aggregate, a Material Adverse Effect.
(g) Schedule 4.12(g) contains a true and complete list of all of the
software programs owned by Seller (the "Software Programs"). Except as set
forth on Schedule 4.12(g), and except to the extent that such Software Programs
incorporate Licensed Intellectual Property, Seller owns full and unencumbered
right and good and marketable title to the Software Programs free and clear of
all mortgages, pledges, liens, security interests, conditional sales
agreements, encumbrances or charges of any kind, except for Seller's licensing
of Software Programs in the ordinary course of business.
(h) Except for escrow agreements in the ordinary course of business,
the source code and system documentation relating to the Software Programs (i)
have been disclosed by Seller only to personnel who have a "need to know" the
contents thereof in connection with the performance of their duties to Seller
and who are bound by an appropriate confidentiality agreement or arrangement,
and (ii) have not been disclosed to any third party.
4.13 Taxes.
(a) Seller has timely filed all material Tax Returns that it was
required to file. All such Tax Returns have been true and complete in all
material respects. All Taxes owed by Seller (whether or not shown or required
to be shown on any Tax Return) have been paid. No claim has ever been made in
writing by an authority in a jurisdiction where Seller does not file Tax
Returns that Seller is or may be subject to taxation in such jurisdiction.
Seller has withheld and
16
paid all material Taxes required to have been withheld and paid in connection
with any amounts paid or owing to any employee, independent contractor,
creditor or stockholder, or other third party, and all Forms W-2 and 1099
required with respect thereto have been properly completed and timely filed in
all material respects. There is no material dispute or claim concerning any Tax
liability of Seller (A) raised by any authority in writing or (B) of which
Seller has knowledge. Seller has not waived any statute of limitations in
respect of Taxes nor agreed to any extension of time with respect to a Tax
assessment or deficiency. Except as set forth on Schedule 4.13, Seller is not a
party to any Tax allocation or sharing agreement pursuant to which Buyer could
have any liability following Closing.
(b) For purposes of this Section:
(i) "Tax" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, windfall profits, custom duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value-added,
alternative, or other tax of any kind whatsoever, whether computed on a
separate or consolidated, unitary, or combined basis or in any other manner,
including any interest, penalty, or addition thereto, whether disputed or not
and including any obligation to indemnify or otherwise assume or succeed to the
Tax liability of any other Person.
(ii) "Tax Return" means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
4.14 Insurance. Seller is presently insured, and during each of the
past three calendar years has been insured, against such risks as companies
engaged in a similar business would, in accordance with good business practice,
customarily be insured. The policies of fire, theft, liability and other
insurance maintained with respect to the assets or businesses of Seller provide
adequate coverage against loss.
4.15 Properties. Seller has good and marketable title, free and clear
of all material liens, to all its material properties and assets, whether
tangible or intangible, real, personal or mixed, reflected in the September 30
Balance Sheet as being owned by Seller as of the date thereof, other than (i)
any properties or assets that have been sold or otherwise disposed of in the
ordinary course of business since the Balance Sheet Date, (ii) liens disclosed
in the notes to such financial statements, (iii) liens arising in the ordinary
course of business after the Balance Sheet Date and (iv) liens disclosed on
Schedule 4.15. All buildings, and all fixtures, equipment and other property
and assets that are material to Seller's Business on a consolidated basis, held
under leases or sub-leases by Seller are held under valid instruments
enforceable in accordance with their respective terms, subject to applicable
laws of bankruptcy, insolvency or similar laws relating to creditors' rights
generally and to general principles of equity (whether applied in a proceeding
in law or equity). Substantially all of Seller's equipment in regular use has
been reasonably maintained and is in serviceable condition, reasonable wear and
tear excepted.
17
4.16 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with this
Agreement based upon arrangements made by or on behalf of Seller.
4.17 Certain Business Practices. Neither Seller nor, to the knowledge
of Seller, any director, officer, agent or employee of Seller (in his or her
capacity as such) has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or
(iii) made any other unlawful payment.
4.18 Business Activity Restriction. There is no non-competition or
other similar agreement, commitment, judgment, injunction, order or decree to
which Seller is a party or subject to that has or could reasonably be expected
to have the effect of prohibiting or impairing the conduct of the Business by
Seller as currently conducted. Seller has not entered into any agreement under
which Seller is restricted from selling, licensing or otherwise distributing
any of its technology or products to, or providing services to, customers or
potential customers or any class of customers, in any geographic area, during
any period of time or in any segment of the market or line of business.
4.19 Export Control Laws. Seller has conducted its export transactions
in accordance with applicable provisions of United States export control laws
and regulations, including but not limited to the Export Administration Act and
implementing Export Administration Regulations, except for such violations
which would not have, individually or in the aggregate, a Material Adverse
Effect.
4.20 Interested Party Transactions. Except as disclosed on
Schedule 4.20, no executive officer, director or equity owner of Seller has
engaged in any business dealings with Seller.
4.21 Accounts Receivable. All accounts receivable of Seller that are
reflected on the September 30 Balance Sheet and on the accounting records of
Seller as of October 31, 2002, represent valid obligations arising from sales
actually made or services actually performed in the ordinary course of
business. Except as set forth on Schedule 4.21, unless paid prior to the
Closing Date, such accounts receivable are, as of October 31, 2002, reasonably
current (meaning not more than approximately 60 days past the date of
invoicing) and reasonably anticipated to be collectible net of the allowances
or reserves shown on the consolidated balance sheet of the Seller reported in
the Financial Statements or on the accounting records of Seller as of October
31, 2002. Schedule 4.21 sets forth an aged list of accounts receivable of
Seller as of September 30, 2002.
4.22 Customers and Suppliers. Except as set forth on Schedule 4.22,
Seller has received no written, or to the best of Seller's knowledge, oral
notice from any customer or supplier of Seller that the relationship of such
customer or supplier is not a good commercial working relationship. Except as
set forth on Schedule 4.22, no material customer or supplier has cancelled or
otherwise terminated, or to Seller's knowledge, threatened to cancel or
otherwise terminate, its relationship with Seller since December 31, 2001.
Except as set forth in the
18
Material Contracts, Seller has no agreements or arrangements establishing,
creating or relating to any rebate, promotion or other allowance that involves
any obligation or liability to any customer that is material or outside the
ordinary course of business.
4.23 Non-Audit Activities. Except as set forth on Schedule 4.23,
during its current fiscal year, Seller has not received from KPMG Peat Marwick
LLP, or Ernst & Young, LLP any non-audit related services, including but not
limited to (a) bookkeeping services; (b) financial information systems design
and implementation consulting services; (c) appraisal or valuation services
(including fairness opinions); (d) actuarial services; (e) internal audit
services; (f) any management or human resource functions; (g) broker-dealer,
investment advisor or other investment banking services; (h) legal services;
(i) tax-related services; or (i) other expert services unrelated to the
auditing service.
4.24 Employee Complaints. Except as set forth on Schedule 4.24, since
July 29, 2002, Seller has not discharged, demoted, suspended, threatened,
harassed or in any other manner discriminated against any employee (i) who had
previously submitted to his or her supervisor or anyone else in a position of
authority with Seller any written, or to the best of Seller's knowledge, oral
complaint, concern or allegation regarding any alleged unlawful or unethical
conduct by Seller or its employees relating to accounting, internal accounting
controls or auditing matters, or (ii) who has provided information to, or
otherwise assisted any investigation by, any law enforcement, regulatory or
other governmental authority or a member of the United States Congress. Since
July 29, 2002, no employee of Seller (i) has submitted to his or her supervisor
or to someone else in a position of authority any written, or to the best of
Seller's knowledge, oral complaint, concern or allegation regarding any alleged
unlawful or unethical conduct by Seller or its employees relating to
accounting, internal accounting controls or auditing matters or (ii) has
provided information to, or otherwise assisted any investigation by, any law
enforcement, regulatory or other governmental authority or a member of the
United States Congress.
4.25 Disclosure Controls. Seller has adequate internal guidelines,
controls and procedures designed to ensure that material information regarding
Seller's operations and financial condition is accumulated and communicated to
Seller's management, including its principal executive and financial officers.
4.26 Business Information. The Pipeline Report attached hereto as
Schedule 4.26 represents known active interactions with prospective customers
regarding the potential sale of Seller's software and services. This report in
no way represents or guarantees that such prospective customers will choose to
purchase software or services from Seller or its successors.
4.27 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, and any amendment,
supplementation, modification, certification or document made or delivered
pursuant to the express provisions of this Agreement, neither Seller nor any
other Person makes any express or implied representation or warranty on behalf
of Seller, and Seller hereby disclaims any such representation or warranty
whether by Seller or any of its officers,
19
directors, employees, agents or representatives or any other Person, with
respect to the execution and delivery of this Agreement or the transactions
contemplated hereby, notwithstanding the delivery or disclosure to Buyer or any
of its officers, directors, employees, agents or representatives or any other
Person of any documentation or other information by Seller or any of its
officers, directors, employees, agents or representatives or any other Person
with respect to any one or more of the foregoing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
As of the date of this Agreement, Buyer represents and warrants to
Seller the following:
5.1 Organization; Good Standing. Buyer has been duly organized and is
validly existing and in good standing under the laws of Georgia and has the
requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted.
5.2 Articles of Incorporation and Bylaws. The copies of Buyer's
articles of incorporation and bylaws attached hereto as Exhibit 5.2 are true,
complete and correct copies thereof. Such articles of incorporation and bylaws
are in full force and effect. Buyer is not in violation of any of the
provisions of its articles of incorporation or bylaws.
5.3 Authority Relative to This Agreement. Buyer has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Buyer and the
consummation by Buyer of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Buyer are necessary to authorize this
Agreement or to consummate such transactions. This Agreement has been duly
executed and delivered by Buyer and, assuming the due authorization, execution
and delivery by Seller, constitutes the legal, valid and binding obligation of
Buyer enforceable against Buyer in accordance with its terms, subject to
applicable laws of bankruptcy, insolvency or similar laws relating to
creditors' rights generally and to general principles of equity (whether
applied in a proceeding in law or equity).
5.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Buyer does not,
and the performance by Buyer and of its obligations hereunder will not, (i)
conflict with or violate any provision of the articles of incorporation or
bylaws of Buyer, (ii) assuming that all consents, approvals, authorizations and
permits described on Schedule 5.4 have been obtained and all filings and
notifications described on Schedule 5.4 have been made, conflict with or
violate any law applicable to Buyer or (iii) result in any breach of or
constitute a default (or an event which with the giving of notice or lapse of
time or both could reasonably be expected to become a default) under, or give
to others any right of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or other encumbrance on any property or
asset of Buyer pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation,
which conflict, violation, breach or default would have a material adverse
effect on the financial condition, results of operations or prospects of Buyer.
20
(b) The execution and delivery of this Agreement by Buyer does not,
and the performance by Buyer of its obligations hereunder will not, require any
consent, approval, authorization or permit of, or filing by Buyer with or
notification by Buyer to, any governmental entity, except as disclosed on
Schedule 5.4.
5.5 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this
Agreement based upon arrangements made by or on behalf of Buyer.
5.6 Sufficient Funds. Buyer has sufficient immediately available funds
to pay in full the Purchase Price and any adjustments pursuant to Section 2.5
hereof and will have such immediately available funds on the Closing Date.
ARTICLE VI.
COVENANTS
6.1 Employees of the Business.
6.1.1 Hiring Employees. Prior to the Closing Date, Seller
will provide Buyer and its representatives reasonable access to all personnel
files for the employees engaged in the Business other than those for which any
employee's consent is required by law. Seller will use its best efforts to
obtain such consent, but shall in no case be obliged to make any payment, or
provide any consideration, to obtain such consent. At the Closing, Buyer will
extend offers of employment to the employees of Seller listed on Schedule 6.1.1
attached hereto (the "Hired Employees." Those employees of Seller not listed on
Schedule 6.1.1 are the "Retained Employees"). Seller will use its best efforts
to cause the Hired Employees (i) to receive notice that their employment with
Seller will terminate on the Closing Date and (ii) to accept such employment as
offered by Buyer. Buyer shall be entitled to specify the terms of such
employment, in its discretion. Seller will release the Hired Employees from any
confidentiality, non-solicitation or non-competition agreement to which such
Hired Employees and Seller and/or an ERISA Affiliate of Seller are the only
parties, to the extent necessary to enable the Hired Employees to perform their
services for Buyer.
6.1.2 Medical and Dental Payments. Buyer agrees that, within
10 business days of receipt of reasonably satisfactory documentation of such
expenses, it will reimburse Seller or its designee for all medical and dental
expenses attributable to any of Seller's employees that, as of the Closing, are
incurred but not reported, and will reimburse Seller or its designee for a pro
rata portion of any stop-loss insurance premium required to be paid by Seller
or its designee for the period from the date of this Agreement through the
Closing Date, provided that such reimbursement shall in no event exceed that
amount of such incurred but not reported expenses set out on Schedule 3.1(b)
plus the pro-rata portion of the stop-loss premium described above, and further
provided, that no such medical and dental expense amount shall be reimbursed to
the extent that Seller or any ERISA Affiliate of Seller is reimbursed for such
medical or dental expense through a policy of stop-loss insurance.
6.1.3 Severance Pay and Outplacement Services. Buyer
agrees that within 10 business days of receipt of reasonably satisfactory
documentation of such expenses, Buyer will
21
reimburse Seller or its designee for all reasonable and customary severance
payments made by Seller or its designee to any Retained Employees, it being
agreed that the severance amounts payable under the employment agreements
between Seller and each of Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx
are reasonable and customary and will be reimbursed to the extent these
individuals are Retained Employees, and that with respect to the other Retained
Employees, payment of one week's pay per year of service plus continuation of
medical and dental coverage by payment of the premiums required for
continuation coverage under section 4980 of the Code during the severance
period (i.e., such period being one week per year of service), with a minimum
of two weeks pay and a maximum of six weeks pay per Retained Employee, is
reasonable and customary. Buyer also agrees that within 10 business days of
receipt of reasonably satisfactory documentation of such expense, Buyer will
reimburse Seller or its designee for all reasonable and customary outplacement
service costs incurred by or on behalf of any Retained Employee, provided such
costs are incurred no later than six months after Closing. However,
notwithstanding the foregoing, in no event shall Buyer reimburse Seller or its
designee for any liabilities and obligations under Xxxxxxx'x Employment
Agreement.
6.1.4 Accrued Vacation & Sick Pay for Retained Employees.
Buyer agrees that within 10 business days of receipt of reasonable satisfactory
documentation of such expenses, Buyer will reimburse Seller or its designee for
an amount equivalent to the aggregate amount of untaken vacation (valued based
upon compensation) of Seller's Retained Employees as of the Closing. However,
notwithstanding the foregoing, in no event shall Buyer reimburse Seller or its
designee for any liabilities and obligations under Xxxxxxx'x Employment
Agreement.
6.1.5 401(k) Plan. Buyer will cause the Manhattan Associates
401(k) Plan and Trust (the "Buyer's 401(k) Plan") to accept the rollover, by
direct or indirect rollover, as selected by each Hired Employee which accepts
Buyer's offer of employment (each, a "Transferred Employee"), of that portion
of the Transferred Employees' accounts in the Internet Capital Group 401(k)
Plan ("Seller's 401(k) Plan") that constitutes an "eligible rollover
distribution" as that term is defined by section 402(c)(4) of the Code,
provided that at the time a Transferred Employee elects such a rollover that
Transferred Employee is employed by Buyer. Any such rollover will be effected
in cash and, as applicable, any notes evidencing loans from the Seller's 401(k)
Plan to the Transferred Employee electing such rollover. Buyer or Buyer's
401(k) Plan may condition the rollover of any loan note on the Hired Employee's
willingness to execute a novation of such note, recognizing Buyer's 401(k) Plan
as the obligee under such note. Buyer and Seller will, and will cause the
trustees of their respective 401(k) plans to, cooperate with each other with
respect to the rollover of the eligible rollover distribution portions of the
Transferred Employees' account balances in the Seller's 401(k) Plan to the
Buyer's 401(k) Plan.
6.1.6 Service Credit. Buyer shall grant the Hired Employees
credit under all Employee Benefit Plans (as defined in ERISA ss.3(3))
maintained by Buyer for which the Hired Employees become eligible, for service
with Seller (and any other entity to the extent credit has heretofore been
granted by the equivalent Seller's plan) to the same extent as such service
would be credited had it been performed for Buyer, so that the Hired Employees
shall receive credit for service with Seller (and any other entity to the
extent credit has heretofore been granted by the Sellers' 401(k) Plan) for
purposes of eligibility to participate and vesting under Buyer's Employee
Benefit Plans. Further, the Hired Employees shall have their service with
Seller
22
credited by Buyer for purposes of vacation benefits, the "Xxxxxxx gifts" length
of service awards, and eligibility to receive matching contributions under the
Buyer's 401(k) Plan.
6.1.7 No Third-Party Beneficiaries. The provisions of this
Agreement are for the benefit of Buyer and Seller only, and no employee of
Seller or any other Person shall have any rights hereunder. Nothing herein
expressed or implied shall confer upon any employee of Seller, any other
employee or legal representatives or beneficiaries of any thereof any rights or
remedies, including any right to employment or continued employment for any
specified period, of any nature or kind whatsoever under or by reason of this
Agreement, or shall cause the employment status of any employee to be other
than terminable at will.
6.1.8 Benefits. Hired Employees shall be treated under all
benefit plans and programs of Seller as having terminated their employment with
Seller on the Closing Date. This Section 6.1.8 shall not be construed to reduce
or eliminate any service credit granted under Section 6.1.6.
6.1.9 No Employee Plan Liability. Except as specifically
assumed under Section 3.1 or except for those specific payment or reimbursement
obligations of Buyer to Seller pursuant to this Section 6.1, Buyer assumes no
liabilities for benefits, costs or expenses or otherwise under, or with respect
to, any employee benefit plan (as defined in ERISA ss.3(3)) or any other plan,
program or arrangement providing remuneration or benefits to employees or their
dependents or beneficiaries that Seller or any ERISA Affiliate of Seller
sponsors or maintains or to which Seller or any ERISA Affiliate of Seller
contributes, or to which Seller or any ERISA Affiliate of Seller has any
outstanding, present or future obligations.
6.2 Consents; Failure to Obtain Consents. Prior to Closing, Seller
will, upon request of Buyer, use its reasonable commercial efforts to obtain
any consents required in connection with the transactions contemplated that
have not been obtained prior to Closing. Nothing in this Agreement shall be
construed as an attempt by Seller to assign or transfer to Buyer pursuant to
this Agreement any Contract, Permit or Intellectual Property right included in
the Purchased Assets (i) which is by its terms or by law nonassignable without
the consent of any other party or parties, unless such consent or approval
shall have been given, or (ii) as to which all the remedies for the enforcement
thereof available to Seller would not by law pass to Buyer as an incident of
the assignments provided for by this Agreement (a "Non-Assignable Contract").
In the event any consent to the assignment of a Non-Assignable Contract is
required in connection with the transactions contemplated hereby and has not
been obtained as of the Closing, then until such consent is obtained, Seller
and Buyer shall cooperate in any arrangement reasonably satisfactory to the
parties designed to afford Buyer the benefits thereof. Buyer shall perform, or
reimburse to Seller the actual reasonable cost of performing, the obligations
of Seller under such Non-Assignable Contracts. The parties hereto agree that
Seller shall not be deemed to be in breach of this Agreement as a result of its
failure to transfer to Buyer at Closing any Non-Assignable Contract not listed
on Schedule 7.1(d) and, accordingly, Buyer shall not be excused from its
obligation to effect the Closing.
6.3 Further Assurance. Seller shall execute and deliver to Buyer,
at Closing or thereafter, any other instrument which may be requested by Buyer
and which is reasonably appropriate to perfect or evidence any of the sales,
assignments, assumptions, transfers,
23
conveyances, undertakings or agreements contemplated by this Agreement or to
transfer any Purchased Assets identified after Closing. Buyer shall execute and
deliver to Seller, at Closing or thereafter, any other instrument which may be
requested by Seller and which is reasonably appropriate to perfect or evidence
any of the sales, assignments, assumptions, transfers, conveyances,
undertakings or agreements contemplated by this Agreement or to assume any
Assumed Obligations identified after Closing.
6.4 Tax Returns. Seller shall duly file or cause to be filed all Tax
Returns related to Taxes of any nature with respect to the Business or the
Purchased Assets for all periods ending on or prior to the Closing Date and pay
all Taxes due with respect to such periods. Buyer shall duly file or cause to
be filed all Tax Returns related to Taxes of any nature with respect to the
Business or the Purchased Assets for all periods ending after the Closing Date
and pay all Taxes due with respect to such periods.
6.5 Proration. Notwithstanding anything herein to the contrary, any
taxes imposed on the Purchased Assets and other expense items such as utilities
and similar expenses with respect to the Purchased Assets that relate to a
period beginning before the Closing Date and ending after the Closing Date
shall be apportioned as of the Closing Date such that Seller shall be liable
for (and shall reimburse Buyer to the extent that Buyer shall have paid) that
portion of such Taxes and other expense items relating to, or arising in
respect to, periods on or prior to the Closing Date and Buyer shall be liable
for (and shall reimburse Seller to the extent Seller shall have paid) that
portion of such Taxes and other expense items relating to, or arising in
respect to, periods after the Closing Date. All amounts to be prorated will be
prorated as of the Closing Date and appropriate settlement made within 30 days
after such final determination. The parties shall agree upon a closing
statement reflecting any such prorations to be made at the Closing and
satisfactory mechanisms for final reconciliation of proration of amounts
determined after the Closing.
6.6 Transition Cooperation; Mail Received After Closing. Seller agrees
to reasonably cooperate with Buyer to facilitate the transfer of all utilities
into Buyer's name, including the transfer of the local telephone number,
electrical service, water and sewage. Following the Closing, Buyer may receive
and open all mail addressed to Seller which on it face relates to the Business
or the Purchased Assets, and, to the extent that such mail and the contents
thereof relate to the Business or the Purchased Assets or the Assumed
Obligations, deal with the contents thereof at its discretion. Buyer shall
promptly notify Seller and provide Seller the originals of any mail that on its
face obliges Seller to take any action or indicates that action may be taken
against Seller and any mail applicable solely to Seller, the Excluded Assets or
the Excluded Obligations.
6.7 Access to Books and Records. From and after the Closing, each of
the parties shall, upon reasonable prior notice, make the books and records of
the Business relating to the period prior to the Closing available to the other
party for any business purpose consistent with applicable law. The inspecting
party may make copies of such books and records at its expense. The parties
agree to use commercially reasonable best efforts to maintain the records and
files relating to the Business prior to the Closing for a minimum of four years
from the Closing Date, except as agreed by the parties. Without limiting the
generality of the foregoing, Buyer acknowledges that Seller will require, and
Buyer agrees to provide to Seller, access to the books
24
and records of the Business relating to periods prior to the Closing Date to
prepare the Tax Returns described in Section 6.4.
6.8 Confidentiality. Seller will treat and hold as confidential all
confidential information concerning the Business ("Confidential Business
Information"), and shall refrain from using any of the Confidential Business
Information except in connection with this Agreement or as may be required to
be disclosed by applicable law or administrative or legal process or pursuant
to any securities exchange rules. "Confidential Business Information" shall not
include any information which (i) is already generally available to the public
or (b) is lawfully disclosed to Seller by a third party who at the time of such
disclosure was not bound by any confidentiality agreement. In the event that
Seller is requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential Business Information,
Seller will notify Buyer promptly of the request or requirement so that Buyer
may seek an appropriate protective order or waive compliance with the
provisions of this Section. If, in the absence of a protective order or the
receipt of a waiver hereunder, Seller is, on the advice of counsel, compelled
to disclose any Confidential Business Information to any tribunal or else stand
liable for contempt, Seller may disclose the Confidential Business Information
to the tribunal; provided, however, that Seller shall use its commercially
reasonable best efforts to obtain, at the reasonable request of Buyer, an order
or other assurance that confidential treatment will be accorded to such portion
of the Confidential Business Information required to be disclosed as Buyer
shall designate.
6.9 Public Announcements. Neither Buyer nor Seller shall make any
press release or public announcement concerning the existence of this Agreement
or the transactions contemplated hereby, except with the consent of the other
party hereto or as may be required by applicable law as reasonably advised in
writing by outside counsel to the disclosing party; provided, however, that in
advance of any such disclosure, the disclosing party shall have given the other
party not less than 24 hours advance notice of the proposed disclosure and
shall have consulted with such other party about the legal requirement of
disclosure and its content.
6.10 Sales and Transfer Tax Expenses. If the transactions contemplated
by this Agreement are not exempt from sales or transfer Taxes, Buyer shall pay
such Taxes and any and all recording fees imposed upon the transfer of the
Purchased Assets hereunder and the filing of any instruments.
6.11 Change of Name. At the Closing, Seller shall execute documents to
change its corporate name to a name dissimilar (in Buyer's reasonable judgment)
to "Xxxxxxxxx.xxx, Inc." and promptly thereafter shall file any necessary
documents to effect such name change. Seller agrees not to use in the future
the name "Xxxxxxxxx.xxx, Inc." or any other name that is, in the Buyer's
reasonable judgment substantially similar thereto.
6.12 Exclusivity.
(a) For a period beginning on the date hereof and ending on the
earlier of the Closing Date or the date of termination of this Agreement (the
"Exclusivity Period"), Seller shall not (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person
25
relating to the acquisition of all or substantially all of the Business or the
Purchased Assets (including any acquisition structured as a merger or exchange)
or (ii) participate in any negotiations or discussions regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person in favor of any such
acquisition. Seller will promptly notify Buyer if any Person makes any proposal
or offer with respect to any of the foregoing.
(b) Buyer agrees that, during the Exclusivity Period, neither Buyer
nor any of its representatives will solicit, encourage, initiate or participate
in any negotiations or discussions with respect to any offer or proposal to
acquire all or substantially all of the capital stock or assets of any business
or entity that offers products or services substantially similar to those
offered by Seller, whether by purchase of assets, exclusive license, joint
venture formation, purchase of stock, business combination or otherwise.
6.13 Conduct of the Business. During the period from the date of this
Agreement and continuing until the earlier of the Closing or the termination of
this Agreement pursuant to its terms, Seller agrees, except to the extent that
Buyer shall otherwise consent in writing (which consent shall not be
unreasonably withheld or delayed), to carry on its business in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted, to use all commercially reasonable efforts consistent with past
practices and policies to preserve the Business, not to provide any increased
compensation or make any severance payment to any to any executive officer and
not to enter into any material contract.
6.14 Marketing Representative Agreement. Buyer shall promptly
negotiate in good faith with ICGC to enter into a Marketing Representative
Agreement substantially in the form attached hereto as Exhibit 6.14, with such
additional terms and conditions as Buyer and ICGC shall agree, on or before the
Closing.
ARTICLE VII.
CONDITIONS PRECEDENT; CLOSING DELIVERIES
7.1 Conditions Precedent of Buyer.
The obligations of Buyer to effect the Closing under this
Agreement are subject to the satisfaction of each of the following conditions,
unless waived by Buyer in writing to the extent permitted by applicable law:
(a) Seller shall have performed and complied in all material
respects with all covenants under this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Seller shall have delivered to
Buyer a certificate to that effect.
(b) No injunction, judgment, or other order shall have been
issued in any legal action or proceeding instituted by a third party against
the Purchased Assets, Seller or Buyer arising by reason of the acquisition of
the Purchased Assets pursuant to this Agreement, which restrains, prohibits or
invalidates the consummation of the transactions contemplated by this
Agreement, and Seller shall have delivered to Buyer a certificate to that
effect (provided that such certificate shall not include certification
regarding legal actions or proceedings against Buyer).
26
(c) Seller shall have procured all of the consents,
approvals and waivers of third parties or any regulatory body or authority
listed on Schedule 7.1(c)
(d) All documents required to be executed or delivered at
Closing by Seller pursuant to this Agreement shall have been so executed or
delivered.
(e) There has occurred no events which, individually or
in the aggregate, have had a Material Adverse Effect.
(f) Buyer shall have received a certificate executed in the
name of and on behalf of Seller by each of the Chief Executive Officer and the
Chief Financial Officer of Seller, in their capacity as officers and not in
their capacity as individuals, to the effect that the Financial Statements
fairly represent in all material respects the financial position of Seller and
the results of operations and cash flows as of and for the periods indicated,
except that the Financial Statements do not reflect the effect of push down
entries related to Internet Capital Group, Inc.'s acquisition of a controlling
interest in Seller in August 2001 and any impairment charges related to fixed
or intangible assets.
7.2 Conditions Precedent of Seller. The obligations of Seller to
effect the Closing under this Agreement are subject to the satisfaction of each
of the following conditions, unless waived by Seller in writing to the extent
permitted by applicable law:
(a) The representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date as though made at and as of that time other than such
representations and warranties as are specifically made as of another date, and
Buyer shall have delivered to Seller a certificate to that effect.
(b) Buyer shall have performed and complied in all material
respects with all covenants under this Agreement to be performed or complied
with by it at or prior to the Closing Date, and Buyer shall have delivered to
Seller a certificate to that effect.
(c) No injunction, judgment, or other order shall have been
issued in any legal action or proceeding instituted by a third party against
the Purchased Assets, Seller or Buyer arising by reason of the acquisition of
the Purchased Assets pursuant to this Agreement, which restrains, prohibits or
invalidates the consummation of the transactions contemplated by this
Agreement, and Buyer shall have delivered to Seller a certificate to that
effect (provided that such certificate shall not include certification
regarding legal actions or proceedings against Seller).
(d) Buyer shall have procured all of the consents, approvals
and waivers of third parties or any regulatory body or authority listed on
Schedule 7.2(d).
(e) All documents required to be executed or delivered at
Closing by Buyer pursuant to this Agreement shall have been so executed or
delivered.
7.3 Deliveries by Seller. At the Closing, Seller will deliver or
will cause to be delivered to Buyer:
27
(a) A Xxxx of Sale, Assignment and Assumption Agreement in the form
attached as Exhibit 7.3(a) evidencing transfer from Seller to Buyer of the
Purchased Assets;
(b) Good standing certificates, or certificates of existence where
applicable, relating to Seller from the State of Delaware and each other
jurisdiction in which the Seller is qualified to conduct the Business;
(c) An Amendment to Terms of Employment executed by Seller and
Xxxx Xxxxxxx, substantially in the form attached hereto as Exhibit 7.3(c);
(d) An executed copy of the Escrow Agreement;
(e) An opinion of counsel to Seller, substantially in the form
attached hereto as Exhibit 7.3(e);
(f) A Secretary's Certificate of Seller attesting to the incumbency of
the officers executing this Agreement, resolutions authorizing the transaction
and other certificates and agreements delivered by Seller at Closing; and
(g) The executed consents, approvals and waivers described on
Schedule 7.1(c) hereto.
7.4 Deliveries by Buyer. At the Closing, Buyer will deliver or
cause to be delivered to Seller:
(a) A Xxxx of Sale, Assignment and Assumption Agreement in the form
attached as Exhibit 7.3(a) evidencing assignment from Seller to Buyer of the
Assumed Obligations;
(b) A good standing certificate relating to Buyer from the State
of Georgia;
(c) An executed copy of the Escrow Agreement;
(d) A Secretary's Certificate of Buyer attesting to the incumbency of
the officers executing this Agreement, resolutions authorizing the transaction
and the other certificates and agreements delivered by Buyer at the Closing;
(e) An opinion of counsel to Buyer substantially in the form
attached hereto as Exhibit 7.4(e);
(f) The Closing Payment in immediately available funds; and
(g) Evidence of payment of the principal amount of the Sabre Note
pursuant to Section 2.2(b) and the accrued interest on the Sabre Note from
September 30, 2002 until the Closing.
ARTICLE VIII.
SURVIVAL; INDEMNIFICATION
28
8.1 Survival of Representations And Warranties. The representations
and warranties of Seller and Buyer contained in Article IV and Article V of
this Agreement shall survive the Closing until the date two years after the
Closing Date; provided, however, that (i) the representations and warranties
contained in Section 4.13 (Taxes) shall survive until 30 calendar days after
the expiration of the applicable statute of limitations governing such claims
and (ii) the representations and warranties contained in Section 4.12
(Intellectual Property) shall survive until the date three years after the
Closing Date. If written notice of a claim has been given prior to the
expiration of the applicable representations and warranties, then the relevant
representations and warranties shall survive as to such claim, until such claim
has been finally resolved.
8.2 Indemnification.
(a) Indemnification by Seller. Buyer and its affiliates, officers,
directors, employees, agents, successors and assigns (each a "Buyer Indemnified
Party") shall be indemnified and held harmless by Seller for any and all
liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including, without limitation, reasonable attorneys'
and consultants' fees and expenses) actually suffered or incurred by them, net
of any insurance proceeds and other recoveries and reimbursements from third
Persons actually received by them (it being specifically agreed that they are
under no obligation to pursue any such insurance proceeds or other recoveries
or reimbursements) but excluding punitive damages and consequential damages
which are not directly related to the matter giving rise to the predicate
liability (hereinafter a "Loss"), arising out of or resulting from (a) the
breach of any representation or warranty made by Seller under Article IV hereof
(so long as the particular representation or warranty survives the Closing and
the Buyer Indemnified Party makes a claim for indemnification prior to
expiration of such representation or warranty), (b) fraud or (c) the Excluded
Obligations. In addition, for a period of one year from the Closing Date, the
Buyer Indemnified Parties shall be indemnified and held harmless by Seller for
all Losses arising out of or resulting from the operation of the Business as
currently conducted infringing on any copyright, trade secret, trademark,
service xxxx, trade name, trade dress, logo, mask work or patent of any Person.
Notwithstanding anything herein to the contrary, Seller shall have no liability
to indemnify or hold harmless any Buyer Indemnified Party until the aggregate
Losses incurred by Buyer Indemnified Parties exceed $200,000, and then only to
the extent such Losses exceed $200,000. Notwithstanding any other provision to
the contrary, in no event will Seller's liability for Losses exceed $6,000,000;
provided however, such limitation on maximum liability shall not apply in cases
of fraud or willful or grossly negligent misrepresentation.
(b) Indemnification by Buyer. Seller and its affiliates, officers,
directors, employees, agents, successors and assigns (each a "Seller
Indemnified Party") shall be indemnified and held harmless by Buyer for any and
all Losses, arising out of or resulting from (a) the breach of any
representation or warranty made by Buyer under Article V hereof (so long as the
particular representation or warranty survives the Closing and the Seller
Indemnified Party makes a claim for indemnification prior to expiration of such
representation or warranty), and (b) the Assumed Obligations. Notwithstanding
anything herein to the contrary, Buyer shall have no liability to indemnify or
hold harmless any Seller Indemnified Party until the aggregate Losses incurred
by Seller Indemnified Parties exceed $200,000, and then only to the extent such
Losses exceed $200,000. Notwithstanding any other provision to the contrary, in
no event will Buyer's liability
29
for Losses exceed $6,000,000; provided however, such limitation on maximum
liability shall not apply in cases of fraud or willful or grossly negligent
misrepresentation.
(c) Indemnification Procedures. A party seeking indemnification
pursuant to Section 8.2(a) or (b) (an "Indemnified Party") shall give prompt
notice to the other party from whom such indemnification is sought (the
"Indemnifying Party") of any matter which an Indemnified Party has determined
has given or could give rise to a right of indemnification under this Agreement
stating the amount of the Loss, if known, and method of computation thereof,
and containing a reference to the provisions of this Agreement in respect of
which such right of indemnification is claimed or arises. The obligations and
liabilities of the Indemnifying Party under this Article VIII with respect to
Losses arising from claims of any third party which are subject to the
indemnification provided for in this Article VIII ("Third-Party Claims") shall
be governed by and contingent upon the following additional terms and
conditions: if an Indemnified Party shall receive notice of any Third-Party
Claim, the Indemnified Party shall give the Indemnifying Party notice of such
Third-Party Claim within 15 days of the receipt by the Indemnified Party of
such notice; provided, however, that the failure to provide such notice shall
not release the Indemnifying Party from any of its obligations under this
Article VIII except to the extent the Indemnifying Party is materially
prejudiced by such failure. At its option, the Indemnifying Party shall be
entitled to assume and control the defense of such Third-Party Claim on behalf
of the Indemnified Party at its expense and through counsel of its choice if it
gives notice of its intention to do so to the Indemnified Party within ten days
of the receipt of such notice from the Indemnified Party; provided, however,
that, if the Indemnified Party shall have been advised in writing by outside
counsel that there exists or is reasonably likely to exist a conflict of
interest that would make it inappropriate for the same counsel to represent
both the Indemnified Party and Indemnifying Party, then the Indemnified Party
shall be entitled to retain its own counsel, in each jurisdiction for which
outside counsel advises the Indemnified Party in writing that outside counsel
is necessary to avoid a conflict of interest, at the expense of the
Indemnifying Party. The assumption of the defense of a Third-Party Claim by the
Indemnifying Party shall not be construed as an acknowledgment that the
Indemnifying Party is liable to indemnify the Indemnified Party in respect of
the Third-Party Claim, nor shall it constitute a waiver by the Indemnifying
Party of any defenses it may assert against the Indemnified Party's claim for
indemnification. In the event the Indemnifying Party exercises the right to
undertake any such defense against any such Third-Party Claim on behalf of the
Indemnified Party as provided above, the Indemnified Party shall cooperate with
the Indemnifying Party in such defense and make available to the Indemnifying
Party, at the Indemnifying Party's expense, all witnesses, pertinent records,
materials and information in the Indemnified Party's possession or under the
Indemnified Party's control relating thereto as is reasonably required by the
Indemnifying Party. Similarly, in the event the Indemnified Party is, directly
or indirectly, conducting the defense against any such Third-Party Claim, the
Indemnifying Party shall cooperate with the Indemnified Party in such defense
and make available to the Indemnified Party, at the Indemnifying Party's
expense, all such witnesses, records, materials and information in the
Indemnifying Party's possession or under the Indemnifying Party's control
relating thereto as is reasonably required by the Indemnified Party. No
Third-Party Claim may be settled by the Indemnifying Party without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. In the event that it is ultimately determined that the
Indemnifying Party is not obligated to indemnify, defend or hold the
Indemnified Party harmless from and against the Third-Party Claim, the
Indemnified Party shall reimburse the Indemnifying
30
Party for any and all costs and expenses (including, without limitation,
reasonable attorneys' fees and costs of suit) incurred by the Indemnifying
Party in its defense of the Third-Party Claim.
(d) Escrow Agreement. Amounts due under Section 8.2(a) shall first be
satisfied from the amounts deposited with the Escrow Agent under the Escrow
Agreement; provided, however, that depletion of such amounts shall not affect
nor limit Seller's indemnification obligations under Section 8.2(a).
(e) Sole Remedy. The indemnification provided for in this Article
VIII, subject to the limitations set forth herein, shall be the sole and
exclusive post-Closing remedy for Losses available to any Indemnified Party
with respect to the subject matter of this Agreement; provided, however, that
this limitation of remedies shall not apply in cases of fraud or willful or
grossly negligent misrepresentation.
ARTICLE IX.
TERMINATION
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer or Seller if the Closing shall not have occurred
on or prior to December 31, 2002 (or such later date as the parties may have
agreed in writing);
(c) by Buyer or Seller if a court of competent jurisdiction
or governmental authority shall have issued an order, decree or ruling or taken
any other action, in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and nonappealable; or
(d) by Seller in accordance with Section 2.3(a).
9.2 Effect of Termination.
(a) In the event of termination of this Agreement pursuant to Section
9.1, all obligations of the parties hereto under this Agreement shall terminate
and there shall be no liability or obligation on the part of Seller or Buyer to
any other party hereto, except (i) that the obligations of the parties under
Section 6.9 (Public Announcements), Section 10.4 (Expenses) and Section 10.8
(Governing Law) of this Agreement shall remain in full force and effect, (ii)
that such termination shall not relieve any party of any liability for any
breach of this Agreement, (iii) as provided in Section 2.3 hereof and (iv) as
provided in Section 9.2(b) below.
(b) In the event that this Agreement is terminated pursuant to Section
9.1(b) (unless Seller shall have intentionally caused the Closing hereunder not
to have occurred by December 31, 2002 (or such later date as the parties may
have agreed in writing) or unless such Closing shall not have occurred by such
date (as it may be extended) solely as a result of an injunction, judgment, or
other order having been issued in any legal action or proceeding instituted by
a
31
third party against the Purchased Assets, Seller or Buyer arising by reason of
the acquisition of the Purchased Assets pursuant to this Agreement, which
restrains, prohibits or invalidates the consummation of the transactions
contemplated by this Agreement, in which case the date after which either party
may terminate this Agreement pursuant to Section 9.1(b) shall be automatically
extended for a period of 180 days), Buyer shall promptly, but in no event later
than 5 business days after the date of such termination, pay Seller a fee (the
"Break-Up Fee") equal to $2,000,000 (less any amounts retained by Seller and
applied against the Break-Up Fee in accordance with Section 2.3(b) hereof),
payable by wire transfer of same day funds.
ARTICLE X.
GENERAL PROVISIONS
10.1 Limitation on Seller's Representations. Buyer acknowledges and
agrees that it has had, or will have prior to the Closing, adequate opportunity
to investigate and inspect the condition of the Purchased Assets and Buyer is
purchasing the Purchased Assets in their "AS IS, WHERE IS CONDITION WITH ALL
FAULTS, INCLUDING BUT NOT LIMITED TO BOTH LATENT AND PATENT DEFECTS" except as
otherwise expressly set forth in Article IV of this Agreement. EXCEPT AS
EXPRESSLY SET FORTH TO THE CONTRARY IN THIS AGREEMENT, NO WARRANTIES, EXPRESS
OR IMPLIED, ARE MADE BY SELLER OR ANY OF ITS AFFILIATES CONCERNING SUCH ITEMS,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. Buyer has investigated and has knowledge of operative or
proposed governmental laws and regulations to which the Purchased Assets are or
may be subject and Buyer is purchasing the Purchased Assets upon the basis of
its review and determination of the applicability and effect of such laws and
regulations. Except as otherwise expressly set forth in Article IV of this
Agreement (including the disclosure schedules with respect thereto) and except
for fraud, Buyer acknowledges that Seller expressly disclaims any
representations or warranties of any kind or nature, express or implied, as to
the condition (financial or otherwise), value or quality of the products,
assets or properties of the Business. Buyer further acknowledges that neither
Seller nor any other Person has made any representation or warranty, expressed
or implied, as to the accuracy or completeness of any information regarding
Seller, the Business, the Purchased Assets or the Assumed Obligations not
included in this Agreement, and neither Seller nor any other Person will have
or be subject to any liability to Buyer or any other Person resulting from the
distribution to Buyer or its representatives (including, without limitation,
its counsel, accountants, or advisors), or Buyer's use of, any information not
included in Article IV including, without limitation, any offering memorandum,
brochure or other publication or any business plan, projections, estimates, or
budgets heretofore delivered to or made available to Buyer or its
representatives (including, without limitation, its counsel, accountants, or
advisors) of future revenues, expenses or expenditures, or future results of
operations of the Business, or any other document or information provided to
Buyer or its representatives (including, without limitation, its counsel,
accountants, or advisors) in connection with the sale of the Business, the
Purchased Assets or the Assumed Obligations.
10.2 Schedules and Exhibits. Matters reflected in the Schedules and
Exhibits hereto are not necessarily limited to matters required by this
Agreement to be disclosed herein or therein. Such additional matters are
provided for informational purposes only.
32
10.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or facsimile, by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.3:
if to Buyer:
Manhattan Associates, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Telecopier: 000-000-0000
with copies to:
Xxxxx X. Xxxxxxxx, Esq.
Manhattan Associates, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: 000-000-0000
and
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Telecopier: 000-000-0000
if to Seller:
Xxxxxxxxx.xxx, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Telecopier: 000-000-0000
33
with copies to:
Internet Capital Group, Inc.
000 Xxxxx Xxxx Xxxxx
Xxxxxxxx 000
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Nassau, Esq.
Telecopier: 000-000-0000
and
Dechert
Xxxx Atlantic Tower, 40th Floor
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Telecopier: 000-000-0000
10.4 Expenses. Except as otherwise provided herein, expenses,
including the fees of any attorneys, accountants, investment bankers or others
engaged by a party, incurred in connection with this Agreement and the
transactions contemplated hereby, shall be paid by the party incurring such
expenses whether or not the transactions contemplated by this Agreement are
consummated.
10.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner to the fullest extent permitted by applicable law.
10.6 Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party hereto. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Notwithstanding anything contained in this Agreement to the contrary, nothing
in this Agreement, expressed or implied, is intended to confer on any Person
other than the parties hereto or their respective successors and permitted
assigns any rights or remedies under or by reason of this Agreement.
10.7 Incorporation of Exhibits. The Schedules and Exhibits attached
hereto and referred to herein are hereby incorporated herein and made a part of
this Agreement for all purposes as if fully set forth herein.
34
10.8 Governing Law. The validity, interpretation and performance of
this Agreement and any dispute connected herewith shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflicts of laws principles.
10.9 Waiver of Jury Trial; Arbitration.
(a) Each party hereto hereby irrevocably waives all right to trial by
jury in any proceeding (whether based on contract, tort or otherwise) arising
out of or relating to this Agreement or any transaction or agreement
contemplated hereby or the actions of any party hereto in the negotiation,
administration, performance or enforcement hereof.
(b) Settlement of disputes arising under this Agreement shall be
resolved by arbitration. Arbitration shall be by a single arbitrator
experienced in the matters at issue and selected by Buyer and Seller in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). The arbitration shall be held in such place in the
New York, New York, metropolitan area as may be specified by the arbitrator (or
any place upon which Seller, Buyer and the arbitrator may agree), and shall be
conducted in accordance with the Rules and (regardless of any other choice of
law provision in this Agreement) the United States Arbitration Act (9 U.S.C.
ss. 1-16) to the extent not inconsistent with this Agreement. The decision of
the arbitrator shall be in writing and final and binding as to any matters
submitted under this Section; and, if necessary, any decision may be entered in
any court of record having jurisdiction over the subject matter or over the
party against whom the judgment is being enforced. The determination of which
party (or combination of them) shall bear the costs and expenses of such
arbitration proceeding shall be determined by the arbitrator. The arbitrator
shall have the discretionary authority to award that all or a part of the
reasonable attorneys' fees of one party in connection with the arbitration
shall be reimbursed by another party.
10.10 Headings; Interpretation. The descriptive headings contained
in this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement
10.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
10.12 Entire Agreement. This Agreement (including the Exhibits and
Schedules) constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings among the parties with respect thereto.
10.13 No Third-Party Beneficiaries. No Person not a party to this
Agreement shall have rights under this Agreement as a third-party beneficiary
or otherwise.
10.14 Amendments and Waivers. This Agreement may be amended by Buyer
and Seller by an instrument in writing signed on behalf of Buyer and Seller.
Any term or provision of this Agreement may be waived in writing at any time by
the party that is entitled to the benefits thereof.
35
10.15 No Rule of Construction. All of the parties hereto have been
represented by counsel in the negotiations and preparation of this Agreement;
therefore, this Agreement will be deemed to be drafted by each of the parties
hereto, and no rule of construction will be invoked respecting the authorship
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal on the date first above written.
MANHATTAN ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Senior Vice President and
Chief Financial Officer
-------------------------------------
[SEAL]
XXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
--------------------------------------
Title: President and Chief Executive
Officer
-------------------------------------
[SEAL]
36
EXHIBIT 2.2(C)
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of December 31, 2002 (the "Agreement"), by
and among Manhattan Associates, Inc., a Georgia corporation ("Buyer"),
Xxxxxxxxx.xxx, Inc., a Delaware corporation ("Seller"), and X.X. Xxxxxx Trust
Company, National Association, as escrow agent ("Escrow Agent").
WITNESSETH:
WHEREAS, Buyer and Seller are parties to that certain Asset Purchase
Agreement, dated as of December 13, 2002 (the "Purchase Agreement"), pursuant
to which Seller has agreed to sell, and Buyer has agreed to purchase,
substantially all of the assets of Seller (the "Asset Purchase"); and
WHEREAS, it is contemplated under the Purchase Agreement that, at the
Closing (as defined in the Purchase Agreement), Buyer will deposit or cause to
be deposited into escrow with Escrow Agent $1,500,000 in cash (the "Escrow
Amount"), which amount is to be held and disbursed by Escrow Agent in
accordance with the provisions of this Agreement; and
WHEREAS, Escrow Agent is willing to act as Escrow Agent hereunder.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements contained herein and intending to be legally bound hereby, the
parties hereby agree as follows:
1. Interpretation and Definitions. Seller and Buyer are executing and
delivering this Agreement pursuant to the Purchase Agreement and this Agreement
is the Escrow Agreement referred to therein. The provisions of this Agreement
shall not in any event be construed so as to enlarge or diminish the rights of
Seller or Buyer under the Purchase Agreement. Each term which is defined in the
Purchase Agreement and which is used but not defined herein shall have the
meaning ascribed to such term in the Purchase Agreement.
2. Appointment of Escrow Agent. Buyer and Seller hereby appoint
Escrow Agent to serve as, and Escrow Agent hereby agrees to act as, escrow
agent upon the terms and subject to the conditions of this Agreement.
3. Establishment of the Escrow Fund. Pursuant to Section 2.2(c) of the
Purchase Agreement, Buyer has delivered via wire transfer to Escrow Agent on
the date hereof the Escrow Amount and Escrow Agent shall hold the Escrow Amount
and all interest and other amounts earned thereon (the "Escrow Fund") in escrow
pursuant to the terms and conditions of this Agreement. By its execution and
delivery of this Agreement, Escrow Agent hereby acknowledges receipt of the
Escrow Amount. Buyer and Seller each confirms to Escrow Agent and to each other
that the Escrow Fund is free and clear of all encumbrances, except as may be
created by this Agreement.
4. Purpose of the Escrow Fund. The Escrow Amount will be
deposited with Escrow Agent and will be held by Escrow Agent to secure the
obligations of Seller to make payments to
Buyer with respect to the indemnification obligations of Seller contained in
Article VIII of the Purchase Agreement.
5. Indemnification Payments from the Escrow Fund.
(a) In the event that it is determined, at any time or from time to
time prior to the Expiration Date (as defined in Section 6 below), that Buyer
(or another Buyer Indemnified Party) has incurred a Loss and is entitled to
indemnification therefor from Seller under Article VIII of the Purchase
Agreement, Buyer may request in writing that Escrow Agent make a distribution
to Buyer out of the Escrow Fund (a "Request for Distribution"). Each Request
for Distribution shall (i) set forth the amount of Loss incurred by a Buyer
Indemnified Party for which such distribution is being requested, (ii) set
forth a detailed description of the facts which gave rise to such Loss and
(iii) be accompanied by a notarized certificate signed by an officer of Buyer
to the effect that the Buyer Indemnified Party is entitled to said distribution
pursuant to the provisions of Article VIII of the Purchase Agreement. No
Request for Distribution may be delivered by Buyer after 5:00 p.m. New York
City time on the Expiration Date. A copy of each Request for Distribution and
accompanying certificate shall be sent to Seller by Buyer concurrently with
Buyer's delivery of a Request for Distribution to Escrow Agent. In addition,
promptly upon receipt of a Request for Distribution, Escrow Agent shall forward
a copy thereof and a copy of the accompanying certificate to Seller. In the
event that Escrow Agent does not receive written notice (a copy of which shall
be forwarded to Buyer) from Seller within 20 business days after the date
notice is deemed given by the Escrow Agent to Seller stating that Seller
disputes in good faith the Buyer Indemnified Party's entitlement to all or a
part of the distribution requested by Buyer, Escrow Agent shall promptly pay
said amount (or the amount not disputed) to Buyer, from the Escrow Fund by wire
transfer in immediately available funds to an account designated in writing by
Buyer. In the event that Escrow Agent does receive written notice (with a copy
sent to Buyer) from Seller within such 20 business day period stating that
Seller disputes in good faith the Buyer Indemnified Party's entitlement to all
or any part of the distribution requested by Buyer, Escrow Agent shall continue
to hold the disputed amount, as part of the Escrow Fund, pending receipt of (i)
written instructions signed by both Seller and Buyer or (ii) the final, binding
and non-appealable decision of an arbitrator pursuant to Section 10.9(b) of the
Purchase Agreement (an "Arbitration Order"). Escrow Agent may rely upon any
such Arbitration Order.
(b) On one or more occasions on or prior to the Expiration Date, Buyer
may send to Escrow Agent (concurrently with Buyer's delivery to Seller of
notice of an indemnification claim pursuant to the Purchase Agreement) a notice
in writing (a "Notice of Claim") stating that Buyer (or another Buyer
Indemnified Party) has received notice of a third party claim for which such
Buyer Indemnified Party is entitled to assert a claim for indemnification
pursuant to Article VIII of the Purchase Agreement and as to which claim Buyer
reasonably believes it will be entitled to deliver a Request for Distribution
within a reasonably foreseeable period of time. Each Notice of Claim shall (i)
set forth the amount of the reasonably anticipated Loss which may be incurred
by a Buyer Indemnified Party and which Buyer estimates will be set forth in
such Request for Distribution, (ii) set forth a detailed description of the
facts which give rise to such reasonably anticipated Loss and (iii) be
accompanied by a notarized certificate signed by an officer of Buyer to the
effect that Buyer reasonably believes that a Buyer Indemnified Party will
become entitled
2
to a distribution out of the Escrow Fund of a specified amount of Loss pursuant
to the provisions of Article VIII of the Purchase Agreement within a reasonably
foreseeable period of time. No Notice of Claim may be delivered by Buyer after
5:00 p.m. New York City time on the Expiration Date. A copy of each Notice of
Claim and accompanying certificate shall be sent to Seller by Buyer
concurrently with Buyer's delivery of a Notice of Claim to Escrow Agent. In
addition, promptly upon receipt of such Notice of Claim, Escrow Agent shall
forward a copy thereof and a copy of the accompanying certificate to Seller. In
the event that Escrow Agent does not receive written notice (a copy of which
shall be forwarded to Buyer) from Seller within 20 business days after the date
notice is deemed given by the Escrow Agent to Seller stating that Seller
disputes in good faith Buyer's Notice of Claim, and stating in reasonable
detail the reasons therefor, Escrow Agent shall deem as final the amount
specified in such Notice of Claim (or the amount specified in such Notice of
Claim that is not disputed) and shall continue to hold such amount as part of
the Escrow Fund pending receipt of a Request for Distribution; provided,
however, Seller's failure to deliver a written notice of objection to a Notice
of Claim shall not prevent Seller from delivering a written notice of objection
to a Request for Distribution with respect to the same Loss to which a Notice
of Claim related. In the event Escrow Agent does receive written notice (with a
copy to Buyer) from Seller within such 20 business day period stating that
Seller disputes in good faith Buyer's Notice of Claim, and stating in
reasonable detail the reasons therefor, Escrow Agent shall treat any disputed
amounts as subject to a Notice of Claim pending receipt of (i) written
instructions signed by both Seller and Buyer or (ii) an Arbitration Order.
6. Distributions to Seller from the Escrow Fund. On the date twelve
months after the date of this Agreement (the "Expiration Date"), Escrow Agent
shall release and distribute to Seller the amount, if any, by which the balance
of the Escrow Fund exceeds the sum of (i) the amount of all Requests for
Distribution theretofore made by Buyer pursuant to Section 5(a) of this
Agreement (other than such amounts that have been paid out of the Escrow Fund
or otherwise disposed of pursuant to Section 5(a) of this Agreement) plus (ii)
the amount of all Notices of Claim theretofore made by Purchaser pursuant to
Section 5(b) of this Agreement (other than such amounts that have been
converted into a Request for Distribution or otherwise disposed of pursuant to
Section 5(b) of this Agreement). Any part of the Escrow Fund held by Escrow
Agent after the Expiration Date shall continue to be held by Escrow Agent and
shall be distributed by Escrow Agent in accordance with the provisions of this
Agreement. Upon distribution of all of the Escrow Fund pursuant to this Section
6, this Agreement shall terminate and Escrow Agent shall be discharged from all
obligations under this Agreement and shall have no further duties or
responsibilities in connection herewith.
7. Liquidation of the Escrow Fund; Wire Transfers. Whenever Escrow
Agent shall be required to make payment from the Escrow Fund, Escrow Agent
shall pay such amounts by liquidating the investments of the Escrow Fund to the
extent necessary to pay such amounts in full in cash. Whenever Escrow Agent
shall be required to make a wire transfer to a party hereto, Escrow Agent shall
utilize the appropriate wire instructions set forth on Schedule A or such other
instructions for such party delivered in a notice pursuant to Section 13
hereof.
3
8. Investment of Escrow Fund. Upon receipt of the Escrow Amount,
Escrow Agent shall initially invest the Escrow Fund in Permitted Investments
having maturities of 60 days. Thereafter, Escrow Agent shall invest and
reinvest moneys on deposit in the Escrow Fund in accordance with the specific
joint written instructions received from Buyer and Seller. In the event moneys
on deposit in the Escrow Fund become available for reinvestment and joint
written instructions regarding reinvestment are not received by the Escrow
Agent, the Escrow Agent shall reinvest such moneys in the manner provided in
the most recent joint written instructions, or if none have been received, in
Permitted Investments. "Permitted Investments" means (i) U.S. government
securities such as certificates of indebtedness, notes and bonds and issues of
agencies and instrumentalities thereof; (ii) any money market fund
substantially all of which is invested in direct obligations of the United
States of America or obligations the principal and interest on which are
unconditionally guaranteed by the United States of America, including any such
money market fund managed by the Escrow Agent or any of its affiliates; and
(iii) insured interest bearing depository accounts.
9. Reporting by Escrow Agent. Escrow Agent shall furnish to
Seller and Buyer monthly itemized summaries of the Escrow Fund, including all
transactions made with respect thereto during such month.
10. Assignment of Rights to the Escrow Fund; Assignment of
Obligations; Successors. This Agreement may not be assigned by operation of law
or otherwise without the express written consent of the other parties hereto
(which consent may be granted or withheld in the sole discretion of such other
parties); provided, however, that (i) Buyer may assign, for collateral
security, its rights hereunder to one or more lenders providing financing to
Buyer in connection with the Asset Purchase and (ii) Buyer may assign this
Agreement to any Person who purchases or acquires by merger, the assets and
business as a going concern of Buyer. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their permitted assigns.
11. Escrow Agent.
(a) Except as expressly contemplated by this Agreement or by joint
written instructions from Buyer and Seller, Escrow Agent shall not sell,
transfer or otherwise dispose of in any manner all or any portion of the Escrow
Fund, except pursuant to an Arbitration Order.
(b) The duties and obligations of Escrow Agent shall be determined
solely by this Agreement, and Escrow Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Agreement.
(c) In the performance of its duties hereunder, Escrow Agent shall be
entitled to rely upon any document, instrument or signature believed by it in
good faith to be genuine and signed by any party hereto or an authorized
officer or agent thereof, and shall not be required to investigate the truth or
accuracy of any statement contained in any such document or instrument
including without limitation the office or agency claimed by such signatory.
Escrow Agent may assume that any Person purporting to give any notice in
accordance with the provisions of this Agreement has been duly authorized to do
so.
4
(d) At any time Escrow Agent may request in writing an instruction in
writing from Seller and Buyer, and may at its own option include in such
request the course of action it proposes to take and the date on which it
proposes to act, regarding any matter arising in connection with its duties and
obligations hereunder. Escrow Agent shall not be liable for acting without the
consent of Seller and Buyer in accordance with such a proposal on or after the
date specified therein, provided that the specified date shall be at least five
business days after Seller and Buyer receive Escrow Agent's request for
instructions and its proposed course of action, and provided further that,
prior to so acting, Escrow Agent has not received the written instructions
requested.
(e) Escrow Agent shall not be liable for any loss that is the result
of any error of judgment, or any action taken, suffered or omitted to be taken,
hereunder unless, and to the extent that, a court of competent jurisdiction
determines the Escrow Agent's gross negligence, bad faith or willful misconduct
was the primary cause of such loss to or suffered by Buyer or Seller. Escrow
Agent may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
(f) As compensation for its services to be rendered under this
Agreement, Escrow Agent shall be entitled to receive fees in the amount and
payable at the times specified in Schedule B to this Agreement and shall be
reimbursed upon request for all expenses, disbursements and advances, including
reasonable fees and expenses of outside counsel, if any, incurred or made by it
in connection with the preparation of this Agreement and the carrying out of
its duties under this Agreement. Buyer and Seller shall be jointly and
severally responsible for all amounts to be paid to Escrow Agent pursuant to
this subparagraph (f), but as between themselves agree to share such costs
equally.
(g) Buyer and Seller, jointly and severally, shall reimburse and
indemnify Escrow Agent for, and hold it harmless against, any loss, liability
or expense, including, without limitation, reasonable attorneys' fees and
expenses, incurred without gross negligence, bad faith or willful misconduct on
the part of Escrow Agent arising out of, or in connection with the acceptance
of, or the performance of, its duties and obligations under this Agreement.
Specifically and without limiting the foregoing, Escrow Agent shall in no event
have any liability in connection with its investment, reinvestment or
liquidation, in good faith and in accordance with the terms hereof, of any part
of the Escrow Fund held by it hereunder, including without limitation any
liability for any delay not resulting from gross negligence, bad faith or
willful misconduct in such investment, reinvestment or liquidation, or for any
loss of income incident to any such delay. In no event shall Escrow Agent be
liable (i) for acting in accordance with joint instructions from Seller and
Buyer, (ii) for special or consequential damages, or (iii) for any amount in
excess of the value of the Escrow Fund.
(h) In the event of any ambiguity in the provisions of this Agreement
or any dispute between or conflicting claims by or among the undersigned and/or
any other person or entity with respect to the Escrow Fund, Escrow Agent shall
be entitled, at its sole option, to refuse to comply with any and all claims,
demands or instructions with respect to such property or funds
5
so long as such dispute or conflict shall continue, and Escrow Agent shall not
be or become liable in any way to the undersigned for its failure or refusal to
comply with such conflicting claims, demands or instructions. Escrow Agent
shall be entitled to refuse to act until, at its sole option, either (i) such
conflicting or adverse claims or demands shall have been finally determined by
an Arbitration Order or settled by agreement between the conflicting parties as
evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall
have received security or an indemnity satisfactory to Escrow Agent sufficient
to save Escrow Agent harmless from and against any and all loss, liability or
expense which Escrow Agent may incur by reason of its acting. Escrow Agent may
in addition elect in its sole option to tender into the registry of custody of
any court of competent jurisdiction or arbitration tribunal all the Escrow
Funds in its hands under this Agreement. Any such legal action may be brought
in any court of competent jurisdiction. Upon filing of such legal action or
arbitration, the Escrow Agent shall be entitled to reasonable attorneys' fees
and expenses associated with such legal proceedings or arbitration.
(i) No provision of this Agreement shall require Escrow Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
(j) The provisions of Sections 11(f) and 11(g) shall survive
termination of this Agreement and/or the resignation or removal of Escrow
Agent.
(k) Escrow Agent may at any time resign by giving 20 business days'
prior written notice of resignation to Seller and Buyer. Seller and Buyer may
at any time jointly remove Escrow Agent by giving 10 business days' written
notice signed by each of them to Escrow Agent. If Escrow Agent shall resign or
be removed, a successor Escrow Agent, which shall be a bank or trust company
having assets in excess of $1 billion, and which shall be reasonably acceptable
to Seller and Buyer, shall be appointed by Seller and Buyer by written
instrument jointly executed by Seller and Buyer and delivered to Escrow Agent
and to such successor Escrow Agent and, thereupon, the resignation or removal
of the predecessor Escrow Agent shall become effective and such successor
Escrow Agent, without any further act, deed or conveyance, shall become vested
with all right, title and interest to all cash and property held hereunder of
such predecessor Escrow Agent, and such predecessor Escrow Agent shall, on the
written request of Seller, Buyer or the successor Escrow Agent, and upon the
payment of all amounts owed to such predecessor Escrow Agent hereunder execute
and deliver to such successor Escrow Agent all the right, title and interest
hereunder in and to the Escrow Fund of such predecessor Escrow Agent and all
other rights hereunder of such predecessor Escrow Agent. If no successor Escrow
Agent shall have been appointed within 20 business days of a notice of
resignation by Escrow Agent, Escrow Agent's sole responsibility shall
thereafter be in its sole discretion to (i) hold the Escrow Fund until the
earlier of its receipt of designation of a successor Escrow Agent or a joint
written instruction by Seller and Buyer or (ii) apply to a court of competent
jurisdiction for appointment of a successor Escrow Agent.
12. Termination. This Escrow Agreement shall terminate on the
date on which there are no funds remaining in the Escrow Fund.
6
13. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or facsimile, by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 13):
if to Buyer:
Manhattan Associates, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Telecopier: 000-000-0000
with copies to:
Xxxxx X. Xxxxxxxx, Esq.
Manhattan Associates, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: 000-000-0000
and
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
if to Seller:
Xxxxxxxxx.xxx, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention:
Telecopier:
with copies to:
Internet Capital Group, Inc.
000 Xxxxx Xxxx Xxxxx
0
Xxxxxxxx 000
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Nassau, Esq.
and
Dechert
Xxxx Atlantic Tower, 40th Floor
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Telecopier: 215.994.2222
if to Escrow Agent:
X.X. Xxxxxx Trust Company, N.A.
One Oxford Center
Suite 1100
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: XxXxxx Xxxxxx
Telecopier: 412.291.2070
14. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws (whether of New York or any other
jurisdiction).
15. Amendments. This Agreement may not be amended or modified
except by an instrument in writing signed by, or on behalf of, Seller, Buyer
and Escrow Agent.
16. Waiver. Any party hereto may (i) extend the time for the
performance of any obligation or other act of any other party hereto or (ii)
waive compliance by any other party with any agreement or condition contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of any
subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
17. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as
8
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
fullest extent possible.
18. Entire Agreement. This Agreement (and, solely with respect to
Buyer and Seller, the Purchase Agreement) constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among Buyer, Seller,
and Escrow Agent with respect to the subject matter hereof.
19. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other person or
entity any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
20. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all of which when
taken together shall constitute one and the same agreement.
[SIGNATURES ON FOLLOWING PAGE]
9
IN WITNESS WHEREOF, the parties have executed or caused this Escrow
Agreement to be executed by duly authorized officers as of the day and year
first written above.
MANHATTAN ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
XXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive
Officer
X.X. XXXXXX TRUST COMPANY, N.A.
By: /s/ Jo Xxxx Xxxxxxx
----------------------------------------
Name: Jo Xxxx Xxxxxxx
Title: Assistant Vice President
EXHIBIT 7.3(A)
FORM OF
XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
This Xxxx of Sale, Assignment and Assumption Agreement (this
"Agreement") is made as of December 31, 2002 by and among Manhattan Associates,
Inc., a Georgia corporation ("Buyer"), and Xxxxxxxxx.xxx, Inc., a Delaware
corporation ("Seller").
WHEREAS, Seller and Buyer have entered into that certain
Asset Purchase Agreement dated as of December 13, 2002 (the "Purchase
Agreement").
NOW, THEREFORE, the parties do hereby agree as follows:
1. Sale and Transfer of Purchased Assets. For good and valuable
consideration, the receipt, adequacy and legal sufficiency of which are hereby
acknowledged, and as contemplated by Section 2.1.1 of the Purchase Agreement,
Seller hereby absolutely and irrevocably sells, transfers, conveys, assigns,
grants, confirms and delivers to Buyer, its successors and assigns, effective
as of the Closing Date, all of Seller's right, title and interest in and to all
the Purchased Assets, to have and to hold all said rights, title and interest
hereby assigned, transferred and conveyed unto Buyer, its successors and
assigns, forever.
2. Assumption of Obligations. For good and valuable
consideration, the receipt, adequacy and legal sufficiency of which are hereby
acknowledged, and as contemplated by Section 3.1 of the Purchase Agreement,
Buyer hereby assumes and shall be responsible for the Assumed Obligations.
3. Power of Attorney. Seller hereby constitutes and appoints
Buyer, its successors and assigns, the true and lawful attorney of Seller, with
full power of substitution for Seller and in its name and stead or otherwise,
by and on behalf and for the benefit of Buyer, its successors and assigns, to
demand and receive from time to time any and all of the Purchased Assets, and
to give receipts and releases for and in respect of the same and any part
thereof, provided, however, that such power of attorney shall not be
exercisable by Buyer unless Seller is no longer able to perform directly the
action sought to be performed by Buyer. Seller hereby declares that the
appointment made and the powers hereby granted are coupled with an interest,
and are and shall be irrevocable by Seller in any manner or for any reason.
4. Further Actions. Seller and Buyer covenant and agree to
execute and deliver after the date hereof any other instrument which may be
requested by Buyer and which is reasonably appropriate to perfect or evidence
the sale, transfer, conveyance, assignment and delivery of the Purchased Assets
hereby made, to take all steps reasonably necessary to establish the record of
Buyer's title to the Purchased Assets and to take such other action as Buyer
may reasonably request to more effectively transfer and assign to and vest in
Buyer each of the Purchased Assets.
5. Terms of the Purchase Agreement. The terms of the Purchase
Agreement are incorporated herein by this reference. In the event of any
conflict or inconsistency between the
terms of the Purchase Agreement and the terms hereof, the terms of the Purchase
Agreement shall govern.
6. Defined Terms. Capitalized terms used herein but not defined
shall have the respective meanings assigned to such terms in the Purchase
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first written above.
MANHATTAN ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
[Seal]
XXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive
Officer
[Seal]
-2-
