ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 28, 1999, between Dynamics
Research Corporation, a Massachusetts corporation ("Seller"), and Amdocs
Inc., a Delaware corporation ("Purchaser").
Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, substantially all the assets of Seller's telecommunications
fraud control business (the "Business") as described below, upon the
terms and subject to the conditions of this Agreement.
Accordingly, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.01 Purchase and Sale
On the terms and subject to the conditions of this Agreement, at the
Closing (as defined in Section 2.01), Seller shall sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser shall purchase
and receive from Seller all the right, title and interest as of the
Closing of Seller in, to and under the Acquired Assets (as defined in
Section 1.02(a)), for (i) eight hundred thousand dollars ($800,000) (the
"Purchase Price"), payable as set forth in Section 2.02 and Section
1.05, and (ii) the assumption of the Assumed Liabilities (as defined in
Section 1.03(a)). The purchase and sale of the Acquired Assets and the
assumption of the Assumed Liabilities is referred to in this Agreement as
the "Acquisition".
SECTION 1.02 Acquired Assets and Excluded Assets
(a) The term "Acquired Assets" shall include:
(i) all tangible personal property and interests therein,
including all machinery, computers, software programs, other
equipment, furniture, furnishings and vehicles, of Seller
that are listed in Schedule 3.07 (the "Personal Property");
(ii) all contracts, licenses, sublicenses, leases, subleases,
indentures, agreements, commitments and all other legally
binding arrangements, whether oral or written ("Assigned
Contracts"), to which Seller is a party or by which Seller
is bound that are listed in Schedule 3.06;
(iii) all Permits (as defined in Section 3.08) of Seller that are
used, held for use or intended to be used primarily in the
operation or conduct of the Business (the "Assigned
Permits");
(iv) all rights, claims and credits to the extent relating to
any other Acquired Asset or any Assumed Liability, including
any such items arising under insurance policies and all
guarantees, warranties, indemnities and similar rights in
favor of Seller in respect of any other Acquired Asset or any
Assumed Liability; and
(v) all personnel records, files, invoices, customers' and
suppliers' lists, other distribution lists, billing records,
sales and promotional literature, manuals, customer and
supplier correspondence (in all cases, in any form or
medium), of Seller that are used, held for use or intended to
be used primarily in, or that arise primarily out of, the
conduct or operation of the Business (the "Records").
(b) Notwithstanding the foregoing, Acquired Assets shall not include
cash and accounts receivable arising out of or related to the Business
and Seller shall retain the rights held by it prior to the Closing under
any Assigned Contract providing it continuing indemnity and exculpation
rights for pre-Closing occurrences for which Seller remains liable under
this Agreement.
SECTION 1.03 Assumption of Certain Liabilities
(a) Upon the terms and subject to the conditions of this Agreement,
Purchaser shall assume, effective as of the Closing, and from and
after the Closing shall perform and discharge when due, all of
Seller's maintenance obligations under the Assigned Contracts to
the extent such obligations relate to the period from and after the
Closing. For the assumption of such maintenance obligations, Seller
shall pay Purchaser at the Closing, five hundred thirty thousand
and two hundred and sixty dollars ($530,260) which is a pro-rata
portion of all maintenance fees paid, payable or due to Seller from
users of Sleuth for maintenance services under any Assigned
Contract with respect to the calendar year 1999 and thereafter. The
liabilities, obligations and commitments of Seller that Purchaser
is assuming pursuant to Sections 1.03(a) and 1.03(b) of this
Agreement are referred to herein as the "Assumed Liabilities".
(b) In addition to the liabilities assumed under Section 1.03(a)
above, upon the terms and subject to the conditions of this
Agreement, Purchaser shall assume, effective as of the Closing, and
from and after the Closing Purchaser shall pay, perform and
discharge when due, all liabilities, obligations and commitments of
Seller under the Assigned Contracts and Assigned Permits to the
extent such liabilities, obligations and commitments relate to the
period from and after the Closing;
(c) Except as expressly set forth in this Agreement, or in any other
agreements executed and delivered with this Agreement (the
"Ancillary Agreements"), and regardless of any disclosure to
Purchaser, Purchaser shall not assume any of the following
liabilities, obligations and commitments of Seller (the "Excluded
Liabilities"), all of which shall be retained and paid, performed
and discharged when due by Seller. The term "Excluded Liability"
means:
(i) any liability, obligation or commitment of Seller not
specifically described in Section 1.03(a) and 1.03(b);
(ii) any liability, obligation or commitment of Seller, whether
express or implied, liquidated, absolute, accrued, contingent
or otherwise, or known or unknown, matured or unmatured
arising primarily out of the operation or conduct by Seller
or any of its affiliates of any business other than the
Business;
(iii) any liability, obligation or commitment of Seller arising
out of any actual or alleged breach by Seller of, or
nonperformance by Seller under, any Assigned Contract prior
to the Closing;
(iv) any liability, obligation or commitment of Seller arising
out of (A) any suit, action or proceeding ("Proceeding")
pending or, to the knowledge of Seller, threatened as of the
Closing Date or relating to an event that occurred prior to
the Closing Date, or (B) any actual or alleged violation by
Seller or any of its affiliates of any Applicable Law (as
defined in Section 3.03) prior to the Closing;
(v) any liability, obligation or commitment for Taxes (as
defined in Section 3.09), whether or not accrued, assessed or
currently due and payable, (A) of Seller or (B) relating to
the operation or ownership of the Business or its assets for
any Tax period (or portion thereof) ending prior to the
Closing Date;
(vi) any liability, obligation or commitment for transfer,
documentary, sales, use, registration, value-added and other
similar Taxes (including all applicable real estate transfer
Taxes and real property transfer gains Taxes) and related
amounts (including any penalties, interest and additions to
Tax) incurred in connection with this Agreement, the
Ancillary Agreements, the Acquisition and the other
transactions contemplated hereby and thereby ("Transfer
Taxes");
(vii) any liability, obligation or commitment of Seller that
relates to, or that arises out of, the employment or the
termination of the employment with Seller of any employee or
former employee of the Business (including as a result of the
transactions contemplated by this Agreement).
(d) Purchaser shall acquire the Acquired Assets free and clear of all
liabilities, obligations and commitments of Seller, other than the
Assumed Liabilities, and free and clear of all Liens (as defined in
Section 3.05).
(e) Seller and Purchaser acknowledge that certain expenses of the
Business are paid on a periodic basis. Accordingly, the items listed
below shall be apportioned on a daily basis between Seller and
Purchaser, with Seller being responsible for all such expenses
attributable to periods prior to the Closing Date, and Purchaser
being responsible for all expenses attributable to periods on or
after the Closing Date:
(i) rent (including any advance rent payment made by Seller),
tenant utility payments and all other percentage or
additional rent, common area maintenance and sundry charges
(including any HVAC charges) and commissions paid by tenants;
(ii) utility company charges, including electricity, gas, fuel,
water and sewer charges;
(iii) real estate taxes, general and special assessments and other
public or private charges affecting the Business's premises;
(iv) all license and maintenance fees with respect to software
programs that are listed on Schedule 3.07;
(v) any other payment due under an Assigned Contract or Assigned
Permit.
SECTION 1.04 Consents of Third Parties
(a) Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any asset or
any claim or right or any benefit arising under or resulting from
such asset if an attempted assignment thereof, without the consent of
a third party, would constitute a breach or other contravention of
the rights of such third party, would be ineffective with respect to
any party to an agreement concerning such asset, or would in any way
adversely affect the rights of Seller or, upon transfer, Purchaser
under such asset. If any transfer or assignment by Seller to, or any
assumption by Purchaser of, any interest in, or liability, obligation
or commitment under, any asset requires the consent of a third party,
then such assignment or assumption shall be made subject to such
consent being obtained. To the extent any Assigned Contract may not
be assigned to Purchaser by reason of the absence of any such
consent, Purchaser shall not be required to assume any Assumed
Liabilities arising under such Assigned Contract.
(b) If any such consent is not obtained prior to the Closing, Seller and
Purchaser shall cooperate (at Seller's expense) in any lawful and
reasonable arrangement under which Purchaser shall obtain the
economic claims, rights and benefits under the asset, claim or right
with respect to which the consent has not been obtained in accordance
with this Agreement. Such reasonable arrangement may include (i) the
subcontracting, sublicensing or subleasing to Purchaser of any and
all rights of Seller against the other party to such third-party
agreement arising out of a breach or cancellation thereof by the
other party, and (ii) the enforcement by Seller of such rights. To
the extent, and only to the extent, Purchaser is able to receive the
economic claims, rights and benefits under such asset, Purchaser
shall be responsible for the Assumed Liabilities, if any, arising
under such asset. Seller hereby subcontracts to Purchaser and
Purchaser hereby accepts, the rights and obligations of Seller under
the maintenance agreements listed on Schedule 3.06, for which
consents to assignment have not been obtained by the Closing Date,
until such time as consents to the assignment of such agreements to
Purchaser have been obtained.
SECTION 1.05 Purchase Price Adjustment
Five (5) months after the Closing Date, Purchaser shall transfer to
Seller an amount of money equaling one hundred thousand dollars
($100,000) minus all reasonable out-of-pocket expenses Purchaser has
incurred in ensuring the full and complete functioning of the operation
site of the Business (including moving expenses) in accordance with
Purchaser's regular standard of operation (including without limitations
all out-of pocket expenses incurred by Purchaser in connection with the
tenant improvements under the lease for the premises at Westbrooke Office
Park, 0000 XX Xxxxxxx Xxxxx, Xxxxxxxx X, Xxxxxxxxx, XX 00000). Without
limiting the foregoing Seller acknowledges that it is Seller's obligation
to transfer to Purchaser a full and complete functioning site, however,
this liability is limited to the one hundred thousand dollars ($100,000)
holdback. Purchaser shall pay such amount of money in immediately
available funds to Seller's bank account specified in Section 2.02(a) or
such other account as Seller may specify by notice to Purchaser in
accordance with this Agreement.
ARTICLE II
The Closing
SECTION 2.01 Closing Date
Subject to the fulfillment of the conditions set forth in Article VI
hereof, the closing of the Acquisition (the "Closing") shall take place
at the offices of Amdocs (UK) Limited, at 10:00 a.m. on June 28, 1999 or
at such other place, time and date as shall be agreed between Seller and
Purchaser. The date on which the Closing occurs is referred to in this
Agreement as the "Closing Date".
SECTION 2.02 Transactions to be effected at the Closing
At the Closing:
(a) Seller shall deliver to Purchaser: (i) such appropriately executed
deeds (in recordable form), bills of sale, assignments and other
instruments of transfer relating to the Acquired Assets in form and
substance reasonably satisfactory to Purchaser and its counsel and
(ii) payment by wire transfer to a bank account designated in writing
by Purchaser (such designation to be made at least two business days
prior to the Closing Date) of immediately available funds in an
amount equal to the amounts payable under Section 1.03 (a) above, and
(iii) such other documents as are required pursuant to Article VI;
and
(b) Purchaser shall deliver to Seller: (i) payment, by wire transfer to
Seller's bank account at State Street Bank & Trust Company, 000
Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, A.B.A #000000000, for Dynamics
Research Corporation Account # 0000-000-0, of immediately available
funds in an amount equal to seven hundred thousand dollars
($700,000), plus an amount equal to the security deposit given by
Seller under the Business lease agreement in the amount of twenty
thousand seven hundred fifty four dollars and sixty cents
($20,754.60) plus an amount equal to the expenses payable by
Purchaser pursuant to Section 1.03(e) that have been paid by Seller;
(ii) such appropriately executed assumption agreements and other
instruments of assumption providing for the assumption of the Assumed
Liabilities in form and substance reasonably satisfactory to Seller
and its counsel and (iii) such other documents as are required
pursuant to Article VI.
SECTION 2.03 Risk of Loss
Until the Closing, any loss of or damage to the Acquired Assets from
fire, casualty or any other occurrence not covered by insurance payable
to Purchaser shall be the sole responsibility of Seller, as applicable.
ARTICLE III
Representations and Warranties of Seller
Seller hereby represents and warrants to Purchaser, as of the date of
this Agreement and as of the Closing Date, as follows:
SECTION 3.01 Organization, Standing and Power
Seller is duly organized, validly existing and in good standing under the
laws of The Commonwealth of Massachusetts and has full corporate power
and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own,
lease or otherwise hold its properties and assets relating to the
Business and to conduct the Business as presently conducted, other than
such franchises, licenses, permits, authorizations and approvals the lack
of which, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect (i) on the
Business or (ii) on the ability of Seller to perform its obligations
under this Agreement and the Ancillary Agreements (a "Seller Material
Adverse Effect"). Seller has delivered to Purchaser true and complete
copies of the articles of organization and by-laws of Seller, in each
case as amended through the date of this Agreement.
SECTION 3.02 Authority; Execution and Delivery; Enforceability
Seller has full power and authority to execute this Agreement and the
Ancillary Agreements to which it is a party and to consummate the
Acquisition and the other transactions contemplated hereby and thereby.
The execution and delivery by Seller of this Agreement and the Ancillary
Agreements to which it is a party and the consummation by Seller of the
Acquisition and the other transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on Seller's
part. Seller has duly executed and delivered this Agreement and prior to
the Closing will have duly executed and delivered each Ancillary
Agreement to which it is a party, and this Agreement constitutes, and
each Ancillary Agreement to which it is a party will after the Closing
constitute, a legal, valid and binding obligation, enforceable against it
in accordance with its terms.
SECTION 3.03 No Conflicts; Consents
Except as disclosed on Schedule 3.03, the execution and delivery by
Seller of this Agreement do not, the execution and delivery by Seller of
each Ancillary Agreement to which it is a party will not, and the
consummation of the Acquisition and the other transactions contemplated
hereby and thereby and compliance by Seller with the terms hereof and
thereof will not conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to
a right of termination, cancellation or acceleration of any obligation or
to loss of a material benefit under, or result in the creation of any
Lien (as defined in Section 3.05) upon any of the properties or assets of
the Business under, any provision of (i) the articles of organization or
by-laws of Seller, (ii) any contract to which Seller is a party or by
which any of its properties or assets is bound or (iii) any judgment,
order or decree ("Judgment") or statute, law, ordinance, rule or
regulation ("Applicable Law") applicable to Seller or its properties or
assets. Except as disclosed on Schedule 3.03, no consent, approval,
license, permit, order or authorization ("Consent") of, or registration,
declaration or filing with, any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency
or commission or other governmental authority or instrumentality,
domestic or foreign (a "Governmental Entity") or any third party, is
required to be obtained or made by or with respect to Seller in
connection with the execution, delivery and performance of this Agreement
or any Ancillary Agreement or the consummation of the Acquisition or the
other transactions contemplated hereby and thereby.
SECTION 3.04 Financial Condition
Except as disclosed on Schedule 3.04, the Business does not have any
liabilities or obligations of any nature (whether accrued, absolute,
contingent, unasserted or otherwise) that have had or could reasonably be
expected to have a Seller Material Adverse Effect.
SECTION 3.05 Assets other than Real Property Interests
Except as disclosed on Schedule 3.05, Seller has good and valid title to,
or a valid leasehold interest in, all the Acquired Assets, in each case
free and clear of all material mortgages, liens, security interests,
charges, leases, subleases, options, claims or encumbrances of any kind
(collectively, "Liens").
SECTION 3.06 Contracts
(a) Schedule 3.06 sets forth a list of each Assigned Contract,
indicating, in each case, the parties involved. In addition, Schedule
3.06 sets forth a complete list of all invoices paid or outstanding
for the Products maintenance fees for the year 1999. Except as set
forth in Schedule 3.06, Seller is not a party to or bound by any
contract that is used, held for use or intended for use primarily in,
or that arises primarily out of, the operation or conduct of the
Business and that is:
(i) a contract granting a Lien upon any Business property or any
other Acquired Asset;
(ii) a contract for the sale of any Acquired Asset or the grant of
any preferential rights to purchase any Acquired Asset or
requiring the consent of any party to the transfer thereof.
(b) Except as set forth in Schedule 3.06, all Assigned Contracts are
valid, binding and in full force and effect and are enforceable by
Seller in accordance with their terms, subject to general principles
of equity and insolvency, reorganization, moratorium, fraudulent
transfer and other laws relating to or affecting creditors' rights
generally. Seller has performed all material obligations required to
be performed by it to date under the Assigned Contracts, and it is
not (with or without the lapse of time or the giving of notice, or
both) in breach or default in any material respect thereunder and, to
the knowledge of Seller, no other party to any Assigned Contract is
(with or without the lapse of time or the giving of notice, or both)
in breach or default in any material respect thereunder. Complete
and correct copies of all written Assigned Contracts listed in
Schedule 3.06, together with all modifications and amendments
thereto, have been delivered to Purchaser.
(c) Schedule 3.06 sets forth each Assigned Contract with respect to which
the consent of the other party or parties thereto must be obtained by
virtue of the execution and delivery of this Agreement or the
consummation of the Acquisition to avoid the invalidity of the
transfer of such Assigned Contract, the termination thereof, a
breach, violation or default thereunder or any other change or
modification to the terms thereof.
SECTION 3.07 Business Assets
Schedule 3.07 sets forth a list of each item of equipment, machinery,
furniture, furnishings and vehicles used primarily in the Business,
indicating, in each case, the year of purchase and the current estimated
value thereof. Each such item is in good working order, subject to normal
wear and tear, is free from any known material defect and has been
maintained in all material respects in accordance with the past practice
of the Business and generally accepted industry practice, and no repairs,
replacements or regularly scheduled maintenance relating to any such item
has been deferred. All leased personal property of the Business is in all
material respects in the condition required of such property by the terms
of the lease applicable thereto.
SECTION 3.08 Permits
(a) Schedule 3.08 sets forth all material certificates, licenses,
permits, authorizations and approvals ("Permits") issued or granted
to Seller by Governmental Entities that are used or held for use in
the operation or conduct of the Business. Except as set forth in
Schedule 3.08, (i) all such Permits are validly held by Seller, and
Seller has complied in all material respects with all terms and
conditions thereof, (ii) Seller has not received notice of any
Proceedings relating to the revocation or modification of any such
Permits, and (iii) to the knowledge of Seller, none of such Permits
will be subject to suspension, modification, revocation or nonrenewal
as a result of the execution and delivery of this Agreement or the
consummation of the Acquisition.
(b) Seller possesses all material Permits to own or hold under lease and
operate the Acquired Assets and to conduct the Business as currently
conducted.
SECTION 3.09 Taxes
(a) For purposes of this Agreement:
"Tax" means (i) any tax or other like assessment or charge of any
kind whatsoever (including any tax imposed under Subtitle A of the
Code and any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, withholding tax on amounts
paid, payroll, employment, excise, severance, stamp, capital stock,
occupation, property, environmental or windfall profit tax, premium,
custom, duty or other tax), together with any interest, penalty,
addition to tax or additional amount due, imposed by any Governmental
Entity (domestic or foreign) responsible for the imposition of any
such tax (a "Taxing Authority"), (ii) any liability for the payment
of any amount of the type described in clause (i) above as a result
of a party to this Agreement being a member of an affiliated,
consolidated or combined group with any other corporation at any time
on or prior to the Closing Date and (iii) any liability of any person
with respect to the payment of any amounts of the type described in
clause (i) or (ii) above as a result of any express or implied
obligation of such person to indemnify any other person.
"Code" means the Internal Revenue Code of 1986, as amended.
(b) Except as set forth in Schedule 3.09, (i) Seller, and any affiliated
group, within the meaning of Section 1504 of the Code, of which
Seller is or has been a member, has filed or caused to be filed in a
timely manner (within any applicable extension periods) all material
income Tax returns, reports and forms required to be filed by the
Code or by applicable state, local or foreign Tax laws, (ii) all
Taxes shown to be due on such returns, reports and forms have been
timely paid in full or will be timely paid in full by the due date
thereof, and (iii) no material Tax Liens (other than Liens for
current Taxes not yet due and payable) have been filed and no
material claims are being asserted in writing with respect to any
Taxes.
(c) Except as set forth in Schedule 3.09, (i) neither Seller nor any of
its affiliates has made with respect to Seller, or any assets of the
Business, any consent under Section 341 of the Code, (ii) none of the
Acquired Assets is "tax exempt use property" within the meaning of
Section 168(h) of the Code, and (iii) none of the Acquired Assets is
a lease made pursuant to Section 168(f)(8) of the Internal Revenue
Code of 1954.
SECTION 3.10 Proceedings
There are no pending or to the knowledge of Seller, threatened
Proceedings or claims with respect to which Seller has been contacted in
writing by counsel for the plaintiff or claimant, arising out of the
conduct of the Business or against or affecting any Acquired Asset. To
the knowledge of Seller, Seller is not a party or subject to or in
default under any Judgment applicable to the conduct of the Business or
any Acquired Asset or Assumed Liability. There is not any Proceeding or
claim by Seller pending, or which Seller intends to initiate, against any
other Person arising out of the conduct of the Business.
SECTION 3.11 Compliance with Applicable Laws
The Business is in material compliance with all Applicable Laws,
including those relating to occupational health and safety or the
environment.
SECTION 3.12 Employee and Labor Matters
No employee of the Business is, to the knowledge of Seller, a party to or
bound by any contract, or subject to any Judgment that may interfere with
the use of such person's best efforts to promote the interests of the
Business, may conflict with the Business or the transactions contemplated
hereby or that has had or could reasonably be expected to have a Seller
Material Adverse Effect. To the knowledge of Seller, no activity of any
employee of the Business as or while an employee of the Business has
caused a violation of any employment contract, confidentiality agreement,
patent disclosure agreement or other contract to which such employee was
a party. To the knowledge of Seller, neither the execution and delivery
of this Agreement, nor the conduct of the Business by the employees of
the Business, will conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
under which any such employee is now obligated.
SECTION 3.13 Effect of Transaction
No employee, client, customer or other person having a material business
relationship with the Business has informed Seller that such person
intends to change such relationship in a material manner because of the
purchase and sale of the Business or the consummation of any other
transaction contemplated hereby.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller, as of the date of
this Agreement and as of the Closing Date, as follows:
SECTION 4.01 Organization, Standing and Power
Purchaser is duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals other than such franchises, licenses,
authorizations and approvals the lack of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a
material adverse effect on the ability of Purchaser to perform its
obligations under this Agreement and the Ancillary Agreements and to
consummate the Acquisition and the other transactions contemplated hereby
and thereby (a "Purchaser Material Adverse Effect").
SECTION 4.02 Authority; Execution and Delivery; and Enforceability
Purchaser has full power and authority to execute this Agreement and the
Ancillary Agreements to which it is a party and to consummate the
Acquisition and the other transactions contemplated hereby and thereby.
The execution and delivery by Purchaser of this Agreement and the
Ancillary Agreements to which it is a party and the consummation by
Purchaser of the Acquisition and the other transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action. Purchaser has duly executed and delivered this Agreement and each
Ancillary Agreement to which it is a party, and this Agreement
constitutes, and each Ancillary Agreement to which it is a party
constitutes, a legal, valid and binding obligation of Purchaser
enforceable against it in accordance with its terms.
SECTION 4.03 No Conflicts; Consents
The execution and delivery by Purchaser of this Agreement do not, the
execution and delivery by Purchaser of each Ancillary Agreement to which
it is a party will not, and the consummation of the Acquisition and the
other transactions contemplated hereby and thereby and compliance by
Purchaser with the terms hereof and thereof will not conflict with, or
result in any violation of or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any Lien upon any of the
properties or assets of Purchaser or any of its subsidiaries under, any
provision of (i) the certificate of incorporation or by-laws of the
Purchaser or any of its subsidiaries, (ii) any Contract to which
Purchaser or any of its subsidiaries is a party or by which any of their
respective properties or assets is bound or (iii) any Judgment or
Applicable Law applicable to Purchaser or any of its subsidiaries or
their respective properties or assets. No Consent of, or registration,
declaration or filing with, a Governmental Entity, is required to be
obtained or made by or with respect to Purchaser in connection with the
execution, delivery and performance of this Agreement or any Ancillary
Agreement or the consummation of the Acquisition or the other
transactions contemplated hereby and thereby.
SECTION 4.04 Availability of Funds
Purchaser has cash available or has existing borrowing facilities that
together are sufficient to enable it to consummate the Acquisition.
ARTICLE V
Covenants
SECTION 5.01 Covenants of Seller Relating to Conduct of Business
(a) Except for matters set forth in Schedule 5.01 or otherwise expressly
permitted by the terms of this Agreement, from the date of this
Agreement to the Closing Seller shall conduct the Business in the
ordinary course in substantially the same manner as previously
conducted (including with respect to research and development
efforts, advertising, promotions and capital expenditures) and use
all commercially reasonable efforts to keep intact the Business, keep
available the services of the current employees of the Business and
preserve in all material respects the relationships of the Business
with customers, suppliers, licensors, licensees, distributors and
others with whom the Business deals. In addition (and without
limiting the generality of the foregoing), except as set forth in
Schedule 5.01 or otherwise expressly permitted or required by the
terms of this Agreement, Seller shall not do any of the following in
connection with the Business without the prior written consent of
Purchaser:
(i) adopt or amend any Seller employee benefit plan relating to the
employees of the Business or enter into, adopt, extend (beyond
the Closing Date), renew or amend any collective bargaining
agreement or other contract with any labor organization, union
or association, except in each case as required by Applicable
Law;
(ii) grant to any executive officer or employee any increase in
compensation or benefits, except in the ordinary course of
business and consistent with past practice or as may be
required under existing agreements and except for any increases
for which Seller shall be solely obligated;
(iii) permit, allow or suffer any Acquired Asset to become subjected
to any Lien of any nature whatsoever; or
(iv) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or
other business organization or division thereof or otherwise
acquire any assets that are material, individually or in the
aggregate, to the Business;
(b ) Advise of Changes. Until the Closing, Seller shall promptly advise
Purchaser in writing of the occurrence of any matter or event that is
material to the Business.
(c) Affirmative Covenants. Until the Closing, Seller shall, and
Seller shall cause its affiliates to:
(i) maintain the Acquired Assets in the ordinary course of business
in good operating order and condition, normal wear and tear
excepted; and
(ii) upon any damage, destruction or loss to any Acquired Asset,
apply any and all insurance proceeds received with respect
thereto to the prompt repair, replacement and restoration
thereof to the condition of such Acquired Asset before such
event or, if required, to such other (better) condition as may
be required by Applicable Law.
(d) Consultation. In connection with the continuing operation of the
Business between the date of this Agreement and the Closing, Seller
shall use commercially reasonable efforts to consult in good faith
on a regular and frequent basis with the representatives for
Purchaser to report material operational developments and the
general status of ongoing operations pursuant to procedures
reasonably requested by Purchaser or such representatives. Seller
acknowledges that any such consultation shall not constitute a
waiver by Purchaser of any rights it may have under this Agreement,
and that Purchaser shall not have any liability or responsibility
for any actions of Seller or any of its officers or directors with
respect to matters that are the subject of such consultations
unless Purchaser expressly consents to such action in writing.
SECTION 5.02 No Solicitation
Seller shall not, nor shall it authorize or permit any officer, director
or employee of or any investment banker, attorney, accountant or other
representative retained by either of them to, (i) solicit, initiate or
encourage any "other bid", (ii) enter into any agreement with respect to
any other bid or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or
take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
other bid. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any
officer of Seller, whether or not such person is purporting to act on
behalf of Seller or otherwise, shall be deemed to be a breach of this
Section 5.02 by Seller. Seller promptly shall advise Purchaser orally and
in writing of any other bid or any inquiry with respect to or which could
lead to any other bid and the identity of the person making any such
other bid or inquiry. As used in this Section 5.02, "other bid" shall
mean any proposal to acquire in any manner any of the Acquired Assets,
other than in the ordinary course of business.
SECTION 5.03 Access to Information
Seller shall afford to Purchaser and its counsel and other
representatives reasonable access, upon reasonable notice during normal
business hours during the period prior to the Closing, to all the
personnel, properties, books, contracts, commitments and records of the
Business or relating thereto, and during such period shall furnish
promptly to Purchaser any information concerning the Business as
Purchaser may reasonably request.
SECTION 5.04 Confidentiality
(a) Purchaser acknowledges that the information being provided to it in
connection with the Acquisition and the consummation of the other
transactions contemplated hereby is subject to the terms of a Non-
Disclosure Agreement dated as of March 16, 1999, between Purchaser
and Seller (the "Non-Disclosure Agreement"), a copy of which is
attached hereto as Exhibit A. Effective upon, and only upon, the
Closing, the Non-Disclosure Agreement shall terminate (with respect
to information relating solely to the Business); provided, however,
that Purchaser acknowledges that any and all other information
provided to it by Seller or Seller's representatives concerning
Seller shall remain subject to the terms and conditions of the Non-
Disclosure Agreement after the Closing Date.
(b) Seller shall keep confidential, and cause its affiliates and their
officers, directors, employees and advisors to keep confidential, all
information relating to the Business, except as required by law or
administrative process and except for information that is available
to the public on the Closing Date, or thereafter becomes available to
the public other than as a result of a breach of this Section
5.04(b). The covenant set forth in this Section 5.04(b) shall
terminate seven years after the Closing Date.
SECTION 5.05 Reasonable Efforts
(a) On the terms and subject to the conditions of this Agreement,
each party shall use its commercially reasonable efforts to cause the
Closing to occur, including taking all commercially reasonable
actions necessary to comply promptly with all legal requirements that
may be imposed on it or any of its affiliates with respect to the
Closing. Each party shall use its commercially reasonable efforts to
cause the Closing to occur on or prior to Closing Date.
(b) Prior to the Closing and for a period of 12 months thereafter,
each party shall, and shall cause its affiliates to, use its
commercially reasonable efforts to obtain, and to cooperate in
obtaining, all consents from third parties necessary or appropriate
to permit the transfer of the Acquired Assets to, and the assumption
of the Assumed Liabilities by, Purchaser; provided, however, that the
parties shall not be required to pay or commit to pay any amount to
(or incur any obligation in favor of) any person from whom any such
consent may be required (other than nominal filing or application
fees).
SECTION 5.06 Expenses; Transfer Taxes
(a) Whether or not the Closing takes place, and except as set forth in
Sections 5.09 and 9.03 and Article VIII, all costs and expenses
incurred in connection with this Agreement and the Ancillary
Agreements and the transactions contemplated hereby and thereby shall
be paid by the party incurring such expense, including all costs and
expenses incurred pursuant to Sections 1.04 and 5.05.
(b) All Transfer Taxes applicable to the conveyance and transfer from
Seller to Purchaser of the Acquired Assets and any other transfer or
documentary Taxes or any filing or recording fees applicable to such
conveyance and transfer shall be paid by Seller.
SECTION 5.07 Brokers or Finders
Each of Purchaser and Seller represents, as to itself and its affiliates,
that no agent, broker, investment banker or other firm or person is or
will be entitled to any broker's or finder's fee or any other commission
or similar fee in connection with any of the transactions contemplated by
this Agreement.
SECTION 5.08 Employee Matters and Benefit Plan Matters
From the date of this Agreement to the Closing, Seller shall negotiate in
good faith the termination of the employment of all employees listed on
Schedule 6.03. Seller shall pay to each employee all amounts due to such
employee including redemption of unused annual sick leave and accumulated
annual vacation.
SECTION 5.09 Post-Closing Cooperation
Purchaser and Seller shall cooperate with each other and shall cause
their officers, employees, agents, auditors and representatives to
cooperate with each other, for a period of 180 days after the Closing to
ensure the orderly transition of the Business from Seller to Purchaser
and to minimize any disruption to the Business that might result from the
transactions contemplated hereby. After the Closing, upon reasonable
written notice, Purchaser and Seller shall furnish or cause to be
furnished to each other and their employees, counsel, auditors and
representatives access, during normal business hours, to such information
and assistance relating to the Business (to the extent within the control
of such party) as is reasonably necessary for financial reporting, tax
and accounting matters. After the Closing, at the request of Purchaser,
Seller will provide Purchaser a copy of all books of account, ledgers and
financial or accounting records that arise primarily out of the conduct
or operation of the Business.
SECTION 5.10 Publicity
No public release or announcement concerning the transactions
contemplated hereby shall be issued by either party without the prior
consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by law
or the rules or regulations of any United States or foreign securities
exchange, in which case the party required to make the release or
announcement shall allow the other party reasonable time to comment on
such release or announcement in advance of such issuance; provided,
however, that each of Seller and Purchaser may make internal
announcements to their respective employees that are consistent with the
parties' prior public disclosures regarding the transactions contemplated
hereby after reasonable prior notice to and consultation with the other.
Seller hereby acknowledges that Purchaser desires to make a public
announcement regarding the transaction contemplated under this Agreement.
Purchaser shall coordinate such public announcement with Seller.
SECTION 5.11 Records
Purchaser recognizes that certain Records may contain incidental
information relating primarily to subsidiaries or divisions of Seller
other than the Business and that Seller may retain copies of the relevant
portions thereof.
SECTION 5.12 Agreement Not to Compete
(a) Seller understands that Purchaser shall be entitled to protect
and preserve the going concern value of the Business to the extent
permitted by law and that Purchaser would not have entered into this
Agreement absent the provisions of this Section 5.12 and, therefore,
for a period of five years from the Closing, Seller shall not, and
shall cause each of its affiliates not to, directly or indirectly:
(i) engage in activities or businesses, or establish any new
businesses, worldwide that are substantially in competition
with the Business, including (A) selling goods or services of
the type sold or offered to for sale by the Business, (B)
soliciting any customer or prospective customer of the Business
to purchase any goods or services sold by the Business from
anyone other than Purchaser and its affiliates, and (C)
assisting any person in any way to do, or attempt to do,
anything prohibited by clause (A) or (B) above;
(ii) solicit, recruit or hire any employees of the Business or
persons who have worked for the Business;
(iii) solicit or encourage any current or future employee of the
Business or of any related business of the Purchaser to leave
the employment of Purchaser;
(iv) use confidential information relating to the Business for its
own benefit or the benefit of any other person; and
(v) defame the Business or any of the Sleuth or Integrity +
products.
(b) Notwithstanding any other provision of this Agreement, it is
understood and agreed that the remedy of indemnity payments pursuant
to Article VIII and other remedies at law would be inadequate in the
case of any breach of the covenants contained in Section 5.12(a).
Purchaser shall be entitled to equitable relief, including the remedy
of specific performance, with respect to any breach or attempted
breach of such covenants.
SECTION 5.13 Further Assurances
From time to time, as and when requested by any party, each party shall
execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such
further or other actions (subject to Section 5.05), as such other party
may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement, including, in the case of Seller,
executing and delivering to Purchaser such assignments, deeds, bills of
sale, consents and other instruments as Purchaser or its counsel may
reasonably request as necessary or desirable for such purpose.
In addition, Seller covenants it shall not issue any invoices with
respect to the Business after the Closing Date (other than for work
performed prior to the Closing Date, which invoices can only be issued
within thirty (30) days of the Closing Date). Notwithstanding the above,
Seller shall not issue any invoices after the Closing Date with respect
to licensee fees of the Products.
SECTION 5.14 Purchase Price Allocation
Pursuant to Section 1060 of the Code, Seller and Purchaser mutually agree
to allocate the Purchase Price among the Acquired Assets according to
their relative fair market values on the Closing Date (the
"Allocation"). The Allocation shall be substantially the same as the
allocation reflected in Exhibit B attached hereto, adjusted to take into
account any changes in the fair market values of such assets from the
date of this Agreement to the Closing Date. Seller and Purchaser shall
mutually agree to an adjustment of the Allocation to reflect any
adjustment to the Purchase Price pursuant to Section 1.05. Any such
adjustment shall be made in accordance with Section 1060 of the Code. The
Seller and Purchaser further agree that they will use the Allocation in
all Tax returns, including IRS Form 8594, and will not take any position
for Tax or financial reporting purposes that is inconsistent with the
Allocation without the express written consent of the other party. If
there is an adjustment to the Allocation as a result of an adjustment to
the Purchase Price after a party has filed IRS form 8594, such party
shall file a new IRS form 8594 reflecting the adjustments to the
Allocation.
ARTICLE VI
Conditions Precedent
SECTION 6.01 Conditions to Each Party's Obligation
The obligation of Purchaser to purchase and pay for the Acquired Assets
and the obligation of Seller to sell the Acquired Assets to Purchaser is
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Technology Transfer Agreement. The concurrent closing of the
Technology Transfer Agreement dated as of the date hereof between
Seller and Amdocs Development Limited, a copy of which is attached
hereto as Exhibit C.
(b) Governmental Approvals. All authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity necessary for the
consummation of the Acquisition shall have been obtained or filed or
shall have occurred.
(c) No Injunctions or Restraints. No Applicable Law or Injunction
enacted, entered, promulgated, enforced or issued by any Governmental
Entity or other legal restraint or prohibition preventing the
consummation of the Acquisition shall be in effect.
SECTION 6.02 Conditions to Obligation of Purchaser
The obligation of Purchaser to purchase and pay for the Acquired Assets
is subject to the satisfaction (or waiver by Purchaser) on or prior to
the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller in this Agreement shall be true and correct in all material
respects, as of the date hereof and as of the Closing Date as though
made on the Closing Date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case
such representations and warranties shall be true and correct in all
material respects, on and as of such earlier date). Purchaser shall
have received a certificate signed by an authorized officer of Seller
to such effect.
(b) Performance of Seller's Obligations. Seller has performed or complied
in all material respects with all obligations and covenants required
by this Agreement to be performed or complied with by Seller by the
time of the Closing, and Purchaser shall have received a certificate
signed by an authorized officer of Seller to such effect.
(c) RBOCs' Maintenance Assignment Agreements. The receipt by Purchaser
of letters addressed to each of Ameritech, US West and Xxxx Atlantic
assigning to Purchaser all maintenance obligations with respect to
Sleuth and an Assignment and Assumption Agreement signed by
Southwestern Xxxx Telephone Company assigning to Purchaser all
maintenance obligations with respect to Sleuth. Seller agrees to use
its commercially reasonable efforts to obtain after the Closing Date
an Assignment and Assumption Agreement signed by BellSouth assigning
to Purchaser all maintenance obligations with respect to Sleuth,
which Purchaser agrees to accept.
(d) Absence of Proceedings. There shall not be pending or threatened any
Proceeding (i) challenging or seeking to restrain or prohibit the
Acquisition or any other transaction contemplated by this Agreement
or the Ancillary Agreements or seeking to obtain from Purchaser or
any of its subsidiaries in connection with the Acquisition any
damages that are material in relation to Purchaser and its
subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by Purchaser or any of its subsidiaries of any
material portion of the Business, or to compel Purchaser or any of
its subsidiaries to dispose of or hold separate any material portion
of the Business, in each case as a result of the Acquisition or any
of the other transactions contemplated by this Agreement, (iii)
seeking to impose limitations on the ability of Purchaser to acquire
or hold, or exercise full rights of ownership of, the Acquired Assets
or (iv) seeking to prohibit Purchaser or any of its subsidiaries from
effectively controlling in any material respect the Business.
(e) Transfer Taxes. Seller has prepared, executed and filed all returns,
questionnaires, applications or other documents regarding any
Transfer Taxes that is required to be filed by Seller prior to
Closing and, when applicable, has paid all Transfer taxes required to
be paid by it.
(f) Consents. Seller shall have received, and delivered to Purchaser
copies of, written consents from all third parties necessary or
appropriate to effect the Acquisition (which consents the parties
acknowledge are listed on Schedule 3.03 hereto), other than such
consents the absence of which, individually or in the aggregate,
could not reasonably be expected to have a Seller Material Adverse
Effect.
(g) Other Documents. Seller has furnished to Purchaser such other
documents relating to Seller's corporate existence and authority
(including copies of resolutions of the board of directors of
Seller), as Purchaser or its counsel may reasonably request.
(h) Opinion of Seller's Counsel. Purchaser shall have received an
opinion dated the Closing Date of Ropes & Xxxx, counsel to Seller, in
substantially the form of Exhibit D attached hereto. Purchaser shall
have also received an opinion dated the Closing Date of Xxxxx Xxxxxxx
Xxxxxxx & Xxxxx LLP, New York counsel to Seller, as to the
enforceability of this Agreement under New York law.
(i) Acceptance by Purchaser's Counsel. The form and substance of all
legal matters contemplated herein and of all documents delivered
hereunder shall be reasonably acceptable to COUNSEL TO PURCHASER,
counsel to Purchaser.
SECTION 6.03 Conditions to Obligation of Seller
The obligation of Seller to sell, assign, convey, and deliver the
Acquired Assets is subject to the satisfaction (or waiver by Seller) on
or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Purchaser made in this Agreement and the Ancillary Agreement shall
be true and correct in all material respects, as of the date of
hereof and as of the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects, on and
as of such earlier date). Seller shall have received a certificate
signed by an authorized officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied
with by Purchaser by the time of the Closing, and Seller shall have
received a certificate signed by an authorized officer of Purchaser
to such effect.
(c) Transfer Taxes. Purchaser shall have prepared, executed and filed
all returns, questionnaires, applications or other documents
regarding any Transfer Tax that is required to be filed by Purchaser
prior to Closing.
(d) Employees. Purchaser shall have offered most of the employees listed
on Schedule 6.03 positions of employment at will with Purchaser
comparable to their positions with Seller. A position with Purchaser
shall be deemed to be comparable to a position with Seller if the
initial offer of employment with Purchaser will involve (i) no
reduction in compensation, (ii) no change in work shift and (iii) no
relocation of workplace by more than seventy five (75) miles from the
employees' current workplace.
(e) Acceptance by Seller's Counsel. The form and substance of all legal
matters contemplated herein and all documents delivered hereunder
shall be reasonably acceptable to counsel to Seller.
SECTION 6.04 Frustration of Closing Conditions
Neither Purchaser nor Seller may rely on the failure of any condition set
forth in this Article VI to be satisfied if such failure was caused by
such party's failure to act in good faith or to use its commercially
reasonable efforts to cause the Closing to occur, as required by Section
5.05.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01 Termination
(a) Notwithstanding anything to the contrary in this Agreement, this
Agreement may be terminated and the Acquisition and the other
transactions contemplated by this Agreement abandoned at any time
prior to the Closing:
(i) by mutual written consent of Seller and Purchaser;
(ii) by Seller if any of the conditions set forth in Sections 6.01
or 6.03 shall have become incapable of fulfillment, and shall
not have been waived by Seller;
(iii) by Purchaser if any of the conditions set forth in Sections
6.01 or 6.02 shall have become incapable of fulfillment, and
shall not have been waived by Purchaser; or
(iv) by Seller or Purchaser, if the Closing does not occur on or
prior to July 15, 1999;
provided, however, that the party seeking termination pursuant to
clause (ii), (iii) or (iv) is not primarily responsible for such
failure by itself being then in material breach of any of its
representations, warranties, covenants or agreements contained in
this Agreement.
(b) In the event of termination by Seller or Purchaser pursuant to
this Section 7.01, written notice thereof shall forthwith be given to
the other and the transactions contemplated by this Agreement shall
be terminated, without further action by any party. If the
transactions contemplated by this Agreement are terminated as
provided herein:
(i) Purchaser shall return all documents and other material
received from Seller relating to the transactions contemplated
hereby, whether so obtained before or after the execution
hereof, to Seller; and
(ii) all confidential information received by Purchaser with respect
to the businesses of Seller shall be treated in accordance with
the Non-disclosure Agreement, which shall remain in full force
and effect notwithstanding the termination of this Agreement.
SECTION 7.02 Effect of Termination
If this Agreement is terminated and the transactions contemplated hereby
are abandoned as described in Section 7.01, this Agreement shall become
null and void and of no further force and effect, except for the
provisions of (i) Section 5.04 relating to the obligation of Purchaser to
keep confidential certain information and data obtained by it from
Seller, (ii) Section 5.06 relating to certain expenses, (iii) Section
5.07 relating to finder's fees and broker's fees, (iv) Section 7.01 and
this Section 7.02 and (v) Section 5.10 relating to publicity. Nothing in
this Section 7.02 shall be deemed to release any party from any liability
for any breach by such party of the terms and provisions of this
Agreement or to impair the right of any party to seek specific
performance by any other party of its obligations under this Agreement.
SECTION 7.03 Amendments and Waivers
This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. By an instrument in
writing Purchaser, on the one hand, or Seller, on the other hand, may
waive compliance by the other party with any term or provision of this
Agreement that such other party was or is obligated to comply with or
perform.
ARTICLE VIII
Indemnification
SECTION 8.01 Indemnification by Seller
(a) Seller shall indemnify Purchaser and its affiliates and each of
their respective officers, directors, employees, stockholders, agents
and representatives against, and hold them harmless from, any loss,
liability, claim, damage or expense (including reasonable legal fees
and expenses) ("Losses"), as incurred, imposed or assessed (payable
promptly upon written request), arising from, in connection with or
otherwise with respect to:
(i) any breach of any representation or warranty of Seller that
survives the Closing and is contained in this Agreement or in
any certificate delivered in connection herewith (it being
agreed and acknowledged by the parties that for purposes of
Purchaser's right to indemnification pursuant to this Section
8.01 the representations and warranties of Seller shall be
deemed not qualified by any references therein to materiality
generally or to whether or not any breach results or may result
in a Seller Material Adverse Effect);
(ii) any breach of any covenant of Seller contained in this
Agreement;
(iii) any Excluded Liability;
(iv) the failure to comply with statutory provisions relating to
bulk sales and transfers, if applicable; and
(v) any fees, expenses or other payments incurred or owed by Seller
to any brokers, financial advisors or comparable other persons
retained or employed by it in connection with the transactions
contemplated by this Agreement.
(c) Seller shall be liable under this Section 8.01 in respect of Losses
only to the extent the aggregate of such Losses exceeds fifty
thousand dollars ($50,000), in which case Seller shall be liable
under this Section 8.01 for the amount of such Losses in excess of
fifty thousand dollars ($50,000) up to a maximum of seven hundred
thousand dollar ($700,000).
(d) This Article VIII shall provide the sole and exclusive remedy for
any and all Losses sustained or incurred by Purchaser or its
successors and permitted assigns.
SECTION 8.02 Termination of Indemnification
The obligations of Seller to indemnify and hold harmless Purchaser, (i)
pursuant to Section 8.01(a)(i), shall terminate at the end of the
survival period for the applicable representation or warranty pursuant to
Section 8.04 and (ii) pursuant to the other clauses of Section 8.01 shall
not terminate; provided, however, that such obligations to indemnify and
hold harmless shall not terminate with respect to any item as to which
Purchaser shall have, before the expiration of the applicable survival
period, previously made a claim by delivering a notice of such claim
(stating in reasonable detail the basis of such claim) pursuant to
Section 8.03 to Seller.
SECTION 8.03 Procedures
(a) Third Party Claims. In order for Purchaser to be entitled to any
indemnification provided for under this Agreement in respect of,
arising out of or involving a claim made by any person against
Purchaser (a "Third Party Claim"), Purchaser must notify Seller in
writing of the Third Party Claim promptly following receipt by
Purchaser of written notice of the Third Party Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent Seller shall
have been actually and materially prejudiced as a result of such
failure (except that Seller shall not be liable for any expenses
incurred during the period in which Purchaser failed to give such
notice). Thereafter, Purchaser shall deliver to Seller, promptly
following Purchaser's receipt thereof, copies of all notices and
documents (including court papers) received by Purchaser relating to
the Third party Claim.
(b) Assumption. If a Third Party Claim is made against Purchaser, Seller
shall be entitled to participate in the defense thereof and, if it so
chooses, to assume the defense thereof with counsel selected by
Seller; provided, however, that such counsel is not reasonably
objected to by Purchaser. Should Seller so elect to assume the
defense of a Third Party Claim, Seller shall not be liable to
Purchaser for any legal expenses subsequently incurred by Purchaser
in connection with the defense thereof. If Seller assumes such
defense, Purchaser shall have the right to participate in the defense
thereof and to employ counsel (not reasonably objected to by Seller),
at its own expense, separate from the counsel employed by Seller, it
being understood that Seller shall control such defense. Seller
shall be liable for the reasonable fees and expenses of counsel
employed by Purchaser for any period during which Seller has not
assumed the defense thereof. If Seller chooses to defend or
prosecute a Third Party Claim, Purchaser shall cooperate in the
defense or prosecution thereof. Such cooperation shall include the
retention and (upon Seller's request) the provision to Seller of
records and information that are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any
material provided hereunder. Whether or not Seller assumes the
defense of a Third Party Claim, Purchaser shall not admit any
liability with respect to, or settle, compromise or discharge, such
Third Party Claim without Seller's prior written consent (which
consent shall not be unreasonably withheld). If Seller assumes the
defense of a Third Party Claim, Purchaser shall agree to any
settlement, compromise or discharge of a Third Party Claim that
Seller may recommend and that by its terms releases Purchaser
completely in connection with such Third Party Claim and that would
not be likely to set a precedential custom or practice adverse to the
continuing business interest of Purchaser. Notwithstanding the
foregoing, Seller shall not be entitled to assume the defense of any
Third Party Claim (and shall be liable for the reasonable fees and
expenses of counsel incurred by Purchaser in defending such Third
Party Claim) if the Third Party Claim seeks an order, injunction or
other equitable relief or relief for other than money damages against
Purchaser that Purchaser reasonably determines, after conferring with
its outside counsel, cannot be separated from any related claim for
money damages. If such equitable relief or other relief portion of
the Third Party Claim can be so separated from that for money
damages, Seller shall be entitled to assume the defense of the
portion relating to money damages.
(c) Other Claims. In the event Purchaser should have a claim against
Seller under Section 8.01 that does not involve a Third Party Claim
being asserted against or sought to be collected from Purchaser,
Purchaser shall deliver notice of such claim with reasonable
promptness to Seller. Subject to Sections 8.02 and 8.04, the failure
by Purchaser so to notify Seller shall not relieve Seller from any
liability that it may have to Purchaser under Section 8.01, except to
the extent Seller has been actually and materially prejudiced by such
failure. If Seller does not notify Purchaser within ten (10)
business days following its receipt of such notice that Seller
disputes its liability to Purchaser under Section 8.01, such claim
specified by Purchaser in such notice shall be conclusively deemed a
liability of Seller under Section 8.01 and Seller shall pay the
amount of such liability to Purchaser on demand or, in the case of
any notice in which the amount of the claim (or any portion thereof)
is estimated, on such later date when the amount of such claim (or
such portion thereof) becomes finally determined.
SECTION 8.04 Survival of Representations
The representations and warranties contained in this Agreement and in any
certificate delivered in connection herewith shall survive the Closing
for two (2) years after the Closing Date; provided, however, that the
representation and warranty of Seller in Section 3.09 shall survive the
Closing and shall continue in full force and effect for five (5) years.
All covenants and agreements contained in this Agreement shall survive
the Closing and remain in full force and effect forever.
ARTICLE IX
General Provisions
SECTION 9.01 Assignment
This Agreement and the rights and obligations hereunder shall not be
assignable or transferable by a party (including by operation of law in
connection with a merger or consolidation of a party) without the prior
written consent of the other party hereto. Notwithstanding the
foregoing, Purchaser may assign its right to purchase the Acquired Assets
or any portion thereof hereunder to an affiliate of Purchaser without the
prior written consent of Seller, provided that Purchaser shall remain
liable for all obligations under this Agreement. Any attempted
assignment in violation of this Section 9.01 shall be null and void.
SECTION 9.02 No Third-Party Beneficiaries
Except as provided in Article VIII, this Agreement is for the sole
benefit of the parties hereto, their successors and their permitted
assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties hereto, their
successors and such assigns, any legal or equitable rights hereunder.
SECTION 9.03 Attorney Fees
A party in breach of this Agreement shall, on demand, indemnify and hold
harmless the other party for and against all reasonable out-of-pocket
expenses, including legal fees, incurred by such other party by reason of
the enforcement and protection of its rights under this Agreement. The
payment of such expenses is in addition to any other relief to which such
other party may be entitled.
SECTION 9.04 Investigation; No Additional Representation
Seller has not made and is not making any representation, warranty,
covenant or agreement, express or implied, with respect to the matters
contained in this Agreement other than the explicit representations,
warranties, covenants and agreements set forth herein. Purchaser
acknowledges and agrees that it (i) has made its own inquiry and
investigation into, and based thereon and on Seller representations,
warranties and covenants contained in this Agreement has formed an
independent judgment concerning the Acquired Assets and Business and (ii)
has been furnished with or given adequate access to such information
about the Acquired Assets and Business as it has requested.
SECTION 9.05 Notices
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or express
mail or reputable overnight courier service and shall be deemed given
when so delivered by hand or facsimile, or if mailed, three days after
mailing (one business day in the case of express mail or overnight
courier service), as follows:
(i) if to Purchaser
Amdocs Inc.
0000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxx
with a copy to:
Legal Department
(ii) if to Seller,
Dynamics Research Corporation
00 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxx, Chief Executive Officer
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
SECTION 9.06 Interpretation; Exhibits and Schedules; Certain Definitions.
(a) The headings contained in this Agreement, in any Exhibit or Schedule
hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Any
capitalized terms used in any Schedule or Exhibit but not otherwise
defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section, Exhibit or
Schedule, such reference shall be to a Section of, or any Exhibit or
Schedule to, this Agreement unless otherwise indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first
person.
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental
Entity or other entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority
of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such
first person or by another subsidiary of such person.
SECTION 9.07 Counterparts
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of
the parties and delivered to the other party.
SECTION 9.08 Entire Agreement
This Agreement, the Ancillary Agreements and the Non-Disclosure
Agreement, along with the Schedules and Exhibits hereto and thereto,
contain the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersede all prior or
contemporaneous agreements and understandings relating to such subject
matter. Neither party shall be liable or bound to any other party in any
manner by any representations, warranties or covenants relating to such
subject matter except as specifically set forth herein or in the
Ancillary Agreements or the Non-Disclosure Agreement.
SECTION 9.09 Severability
If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any person
or circumstance shall be held invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision hereof (or the
remaining portion thereof) or the application of such provision to any
other persons or circumstances.
SECTION 9.10 Consent to Jurisdiction
To the extent permitted by applicable law, each party irrevocably submits
to the exclusive jurisdiction of (a) the Supreme Court of the State of
New York, New York County, and (b) the United States District Court for
the Southern District of New York, for the purposes of any suit, action
or other proceeding arising out of this Agreement, any Ancillary
Agreement or any transaction contemplated hereby or thereby. To the
extent permitted by applicable law, each of Purchaser and Seller further
agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall
be effective service of process for any action, suit or proceeding in New
York with respect to any matters to which it has submitted to
jurisdiction in this Section 9.10. To the extent permitted by applicable
law, each of Purchaser and Seller irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement, any Ancillary Agreement or the
transactions contemplated hereby and thereby in (i) the Supreme Court of
the State of New York, New York County, or (ii) the United States
District Court for the Southern District of New York, and hereby and
thereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 9.11 Governing Law
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York applicable to agreements made and
to be performed entirely within such State, without regard to the
conflicts of law principles of such State.
SECTION 9.12 Waiver of Jury Trial
Each party hereby waives to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect to any
litigation directly or indirectly arising out of, under or in connection
with this Agreement, any Ancillary Agreement or any transaction
contemplated hereby or thereby. Each party (a) certifies that no
representative, agent or attorney of the other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges
that it has been induced to enter into this Agreement and the Ancillary
Agreements, as applicable, by, among other things, the mutual waivers and
certifications in this Section 9.12.
IN WITNESS WHEREOF, Seller and Purchaser have duly executed this
Agreement as of the date first written above.
Dynamics Research Corporation,
By /s/ Xxxxxx Xxxx
Xxxxxx Xxxx
President, Chief Executive Officer
AMDOCS, INC.,
By /s/ Xxxxxx X. X'Xxxxx
Xxxxxx X. X'Xxxxx
Treasurer
