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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
Dated as of February 13, 1998
by and among
Manugistics Nova Scotia Company,
a Nova Scotia unlimited company,
ProMIRA Software Incorporated,
a Nova Scotia limited company,
Insight Venture Partners I, L.P.
a Delaware limited partnership,
Wexford Insight Canada, L.P.,
a Delaware limited partnership,
Arca Investments Inc., Capital d'Amerique CDPQ Inc.,
CBC Pension Board of Trustees, Gee & Co.,
The Canada Trust Company a/c 000-000000-0,
XxXxxx University Pension Fund,
Royal Trust Corporation of Canada in Trust for Account No. 083166009,
Royal Trust Corporation of Canada in Trust for Account No. 029361001,
Association de bienfaisance et de retraite des policiers de
la Communaute urbaine de Montreal,
Ontario Hydro in Trust for the
Pension Fund,
Sun Life Assurance Company of Canada,
The Canada Trust Company Account No. 000-000000-0, and
Altacap Investors Inc.,
Xxxxxx Xxxxx, Xxx XxXxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx, and Xxxxx Xxxx,
Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxx Xxxxx, The Xxxxx Family Trust, Xxxxx XxXxxxxx,
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Laurentian Bank of
Canada ITF Xxxxxxx X. Xxxxxxx, RBC Dominion Securities ITF Xxxxxx Xxxxx, RBC
Dominion Securities ITF Xxx XxXxxxxx, RBC Dominion
Securities ITF Xxxxx Xxxxxx, Xxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxx and Xxxx Xxxx in
Trust for Xxxxxxx Xxxx, and Xxxxx and Xxxx Xxxx in
Trust for Xxxxxxx Xxxx,
Xxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxx
Xxxxxxx, Xxxxxx Xxxxxxxx, Xxx Xxxx, Xxxxx Xxxxxxxxx,
Xxxxxx Xxxxxxxx, Xxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxx XxXxxxxxxx, Xxxxxx Xxxx,
Xxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx Xxxxx, Xxx
Xxxx, Xxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxx XxxXxxxxx, Xxxxx XxXxxxx, Xxxx XxXxxxx,
Xxx XxXxxxxx, Xxxxx Xxxxx, Xxxxxx Removic, Xxxx
Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxx Saint-Laurent, Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxx, Xxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxx, Xxxx van Galder, Xxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxx Xxxx, Xxxx
Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxx, RBC Dominion
Securities ITF Xxxxx XxXxxxx and Xxxxx Xxxxxx XXX c/f Xxxxxx XxXxxxxxxx,
Xxx Xxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxx
Xxxxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxxx, Xxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxx Xxxxxxxx,
Xxxxx Xxxxx and Hie Xxxx Xxxx
and
Xxxxxx Xxx and Xxxxxxxxxxx Xxxx, or either of them acting alone,
as paying agent
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TABLE OF CONTENTS PAGE
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1. Sale and Purchase of Shares; Acknowledgment and
Cancellation of Options; Delivery of Certificates................................ 2
1.1 Sale and Purchase of Shares; Acknowledgment
of Cancellation of Options ........................................... 2
1.2 Delivery of Certificatess ............................................ 2
2. Closing; Closing Date 2
3. Purchase Price .................................................................. 3
3.1 Purchase Price ....................................................... 3
3.2 Payment of the Purchase Price ........................................ 3
3.3 Appointment and Duties of the Escrow Agent,
the Custodian and the Paying Agent.................................... 5
4A. Representations and Warranties of the Company ................................... 17
4A.1 Organization ......................................................... 18
4A.2 Capitalization ....................................................... 18
4A.3 Share Purchase Rights ................................................ 19
4A.4 Title to the Shares .................................................. 19
4A.5 Power and Capacity ................................................... 19
4A.6 Freedom to Contract .................................................. 20
4A.7 Subsidiary and Affiliates ............................................ 22
4A.8 Charter and Organizational Documents ................................. 22
4A.9 Financial Statements ................................................. 22
4A.10 Absence of Undisclosed Liabilities ................................... 24
4A.11 Title to Properties .................................................. 25
4A.12 Real Property ........................................................ 25
4A.13 Machinery and Equipment .............................................. 25
4A.14 Inventory ............................................................ 25
4A.15 Leases and Licenses .................................................. 25
4A.16 Patents, Copyrights and Trademarks ................................... 26
4A.17 Contracts ............................................................ 27
4A.18 Absence of Default ................................................... 29
4A.19 Insurance ............................................................ 30
4A.20 Third-Party Options .................................................. 30
4A.21 Distributions, Satisfactions, Obligations ............................ 30
4A.22 Capital Expenditures ................................................. 31
4A.23 Litigation ........................................................... 31
4A.24 Compliance with Law .................................................. 32
4A.25 Transactions with Affiliates ......................................... 33
4A.26 Prohibited Payments .................................................. 33
4A.27 Tax Matters .......................................................... 33
4A.28 Benefit Plans ........................................................ 36
4A.29 Employees ............................................................ 37
4A.30 Environmental Laws ................................................... 41
4A.31 Bank Accounts, Letters of Credit and Powers
of Attorney .......................................................... 42
4A.32 No Barter Receivables or Obligations ................................. 43
4A.33 Accounts and Notes Receivable ........................................ 43
4A.34 Accounts Payable, Outstanding Obligations,
and Liabilities ...................................................... 43
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4A.35 Customers, Suppliers, Licensees and
Consulting Agreements................................................. 43
4A.36 Security Deposits; Claims Against Third
Parties ............................................................. 44
4A.37 Minute Books ......................................................... 44
4A.38 Residence ............................................................ 44
4A.39 Software Matters ..................................................... 44
4A.40 Full Disclosure ...................................................... 45
4A.41 Accuracy and Completeness of Information
in Offering Memorandum................................................ 45
4B. Representations and Warranties of the Sellers
4B.1 Title to the Shares and the Options .................................. 46
4B.2 Power and Capacity ................................................... 46
4B.3 Freedom to Contract .................................................. 47
4B.4 Litigation ........................................................... 47
4B.5 Residence ............................................................ 47
4B.6 Investment Risks ..................................................... 47
4B.7 Patents, Copyrights and Trademarks.................................... 52
4B.8 Confidentiality Agreements............................................ 53
4B.9 Waiver of Share Purchase Rights....................................... 53
4B.10 Full Disclosure ...................................................... 53
5. Representations and Warranties of Buyer.......................................... 54
5.1 Organization ......................................................... 54
5.2 Authorization ........................................................ 54
5.3 Freedom to Contract................................................... 54
5.4 Litigation ........................................................... 54
5.5 Title to Manugistics Group Shares..................................... 55
6. Covenants of the Company, the Sellers and the
Paying Agent ............................................. 55
6.1 Conduct of Business Pending Closing .................................. 55
6.2 Prohibited Actions Pending Closing 55
6.3 Access ............................................................... 57
6.4 No Shop .............................................................. 57
6.5 Trade Secrets ........................................................ 58
6.6 Restrictions on Transfer of Manugistics
Group Shares ......................................................... 61
6.7 Waiver of Rights ..................................................... 66
6.8 Waiver of Rights to Xxx the Company................................... 66
6.9 Tax Returns for the Company and the
Subsidiary ........................................................... 66
6.10 Tax Returns for Miralta............................................... 66
6.11 Subordination of Miralta Debentures................................... 67
6.12 Withholding Tax ...................................................... 67
6.13 Waiver of Rights to Xxx the Custodian
and/or the Escrow Agent............................................... 70
7. Conditions Precedent to Buyer's Obligations...................................... 71
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7.1 Representations and Warranties True as of
Closing Date ......................................................... 70
7.2 Compliance with this Agreement........................................ 71
7.3 Sellers' and the Company's Certificates............................... 71
7.4 Opinion of Counsel ................................................... 71
7.5 Information Furnished ................................................ 71
7.6 No Damage to Business ................................................ 71
7.7 No Litigation ........................................................ 71
7.8 Notifications and Consents ........................................... 71
7.9 Resignations ......................................................... 72
7.10 Certificates ......................................................... 72
7.11 Northern Telecom Ltd.................................................. 72
7.12 Due Diligence ........................................................ 73
7.13 Continuance of the Company............................................ 73
7.14 Receipt of Certificates............................................... 73
7.15 Board of Directors Approval........................................... 73
7.16 Employees and Consultants............................................. 73
7.17 Exercise of Share Purchase Rights..................................... 73
7.18 Escrow Agreement ..................................................... 74
7.19 Custodian Agreement................................................... 74
7.20 Paying Agent Agreement................................................ 74
7.21 Registration Rights Agreement......................................... 74
7.22 Tender of Shares; Cancellation of Options............................. 74
7.23 Form W-9 ............................................................. 74
7.24 Certificates Regarding Miralta Liabilities............................ 74
7.25 Subordination of Debentures........................................... 74
8. Conditions Precedent to Sellers' and the
Company's Obligations ........................................................... 75
8.1 Representations and Warranties True as
of Closing Date ...................................................... 75
8.2 Compliance with this Agreement ....................................... 75
8.3 Officers' Certificates ............................................... 75
8.4 Opinion of Counsel ................................................... 75
8.5 Secretary's Certificate .............................................. 75
8.6 No Litigation ........................................................ 75
8.7 Notifications and Consents............................................ 75
8.8 Manugistics Group Options............................................. 76
8.9 Registration Rights Agreement......................................... 76
9. Further Assurances............................................................... 76
10. Indemnification ................................................................. 76
10.1 Exclusive Remedy ..................................................... 76
10.2 Definitions .......................................................... 76
10.3 Indemnification by the Sellers Collectively .......................... 77
10.4 Indemnification by a Seller Individually ............................. 79
10.5 Indemnification by Miralta Shareholders .............................. 79
10.6 Indemnification by Buyer ............................................. 80
10.7 Indemnification by the Paying Agent .................................. 80
10.8 Indemnification Floor ................................................ 80
10.9 Period of Indemnity................................................... 81
10.10 Limitation on Indemnification; Recourse
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to Escrow Funds ...................................................... 81
10.11 Procedural Joinder of Sellers......................................... 82
10.12 Notice to the Indemnitor.............................................. 82
10.13 Rights of Parties to Settle or Defend................................. 82
10.14 Reimbursement ........................................................ 84
11. Survival of Representations and Warranties....................................... 84
12. Brokers' and Finders' Fees....................................................... 85
12.1 Sellers .............................................................. 85
12.2 Buyer ................................................................ 85
13. Additional Covenants and Acknowledgments ........................................ 86
13.1 Expenses ............................................................. 86
13.2 Press Releases ....................................................... 86
13.3 Confidentiality ...................................................... 86
13.4 Rights to Undeclared Dividends........................................ 87
13.5 Acknowledgment ....................................................... 87
14. Contents of Agreement ........................................................... 87
15. Assignment and Binding Effect ................................................... 87
16. Waiver .......................................................................... 88
17. Termination ..................................................................... 88
17.1 Mutual Consent ....................................................... 89
17.2 By Buyer ............................................................. 89
17.3 By Sellers ........................................................... 89
18. Notices ......................................................................... 89
19. Governing Law ................................................................... 92
20. Consent to Jurisdiction and Service.............................................. 92
21. No Benefit to Others ............................................................ 92
22. Section Headings ................................................................ 92
23. Schedules and Exhibits .......................................................... 92
24. Interpretation .................................................................. 93
25. Business Day .................................................................... 93
26. Preparation of Agreement ........................................................ 93
27. Schedules ....................................................................... 93
28. Counterparts .................................................................... 93
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of
this 13th day of February, 1998, by and among MANUGISTICS NOVA SCOTIA COMPANY,
a Nova Scotia unlimited company, with registered offices at Xxxxx 000-0000
Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxxxx, Xxxxxx X0X 0X0 ("Buyer"), PROMIRA
SOFTWARE INCORPORATED, a Nova Scotia limited company, with offices at 0000
Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 (the "Company"),
INSIGHT VENTURE PARTNERS I, L.P., a Delaware limited partnership ("Insight"),
WEXFORD INSIGHT CANADA, L.P., a Delaware limited partnership ("Wexford"), and
ARCA INVESTMENTS INC., CAPITAL D'AMeRIQUE CDPQ INC., CBC PENSION BOARD OF
TRUSTEES, GEE & CO., THE CANADA TRUST COMPANY A/C 000-000000-0, XXXXXX
UNIVERSITY PENSION FUND, ROYAL TRUST CORPORATION OF CANADA IN TRUST FOR ACCOUNT
NO. 083166009, ROYAL TRUST CORPORATION OF CANADA IN TRUST FOR ACCOUNT NO.
029361001, ASSOCIATION DE BIENFAISANCE ET DE RETRAITE DES POLICIERS DE LA
COMMUNAUTe URBAINE DE MONTReAL, ONTARIO HYDRO IN TRUST FOR THE PENSION FUND,
SUN LIFE ASSURANCE COMPANY OF CANADA, THE CANADA TRUST COMPANY ACCOUNT NO.
000-000000-0, and ALTACAP INVESTORS INC. (collectively, the "Miralta
Shareholders"), and XXXXXX XXXXX, XXX XXXXXXXX, XXXXX XXXXXXX, XXXXX XXXXXX,
and XXXXX XXXX (collectively, the "Managing Shareholders"), and XXXXX XXXXX,
XXX XXXXX, XXXXXX XXXXX, THE XXXXX FAMILY TRUST, XXXXX XXXXXXXX, XXXXX XXXXXXX,
XXXXXXX XXXXXX, LAURENTIAN BANK OF CANADA ITF XXXXXXX X. XXXXXXX, RBC DOMINION
SECURITIES ITF XXXXXX XXXXX, RBC DOMINION SECURITIES ITF XXX XXXXXXXX, RBC
DOMINION SECURITIES ITF XXXXX XXXXXX, XXXX XXXX, XXXXXX XXXXXXXX, XXXXX AND
XXXX XXXX IN TRUST FOR XXXXXXX XXXX, AND XXXXX AND XXXX XXXX IN TRUST FOR
XXXXXXX XXXX (collectively, the "Principal Shareholders"), and XXXX XXXXX,
XXXXX XXXXXX, XXXXXX XXXXXXXX, XXXXX XXXXXX, XXXXX XXXXXX, XXXXXX XXXXXXX,
XXXXXX XXXXXXXX, XXX XXXX, XXXXX XXXXXXXXX, XXXXXX XXXXXXXX, XXXX XXXXX, XXXX
XXXXXXXXXX, XXXXXX XXXXXXXXXX, XXXXXX XXXX, XXXXXXX XXXXXXXXX, XXXX XXXXX,
XXXXXXX XXXXX, XXX XXXX, XXXXXX XXXXXX, XXX XXXXXX, XXXXXX XXXXXXXXX, XXXXX
XXXXXXX, XXXX XXXXXXX, XXX XXXXXXXX, XXXXX XXXXX, XXXXXX REMOVIC, XXXX XXXXX,
XXXXXX XXXXX, XXXX XXXXX, XXXXXXXX SAINT-LAURENT, XXXXXX XXXXXXX, XXXXXX
XXXXXX, XXX XXXXXX, XXXXX XXXXXXXXX, XXXXX XXXXXX, XXXXXXX XXXXXX, XXXX VAN
GALDER, XXXXX XXXXXXX, XXXXXXX XXXXX, XXX XXXX, XXXX XXXXXXXX, XXXXX XXXXXX,
XXXXXX XXXXX, RBC DOMINION SECURITIES ITF XXXXX XXXXXXX and XXXXX XXXXXX XXX
C/F XXXXXX XXXXXXXXXX (collectively the "Employee Shareholders"), and XXX
XXXXX, XXXXX XXXXXXX, XXXXX XXXXXX, XXX XXXXXXX, XXXXX XXXXXXXXX, XXXX XXXXXXX,
XXXX XXXXXX, XXXX XXXXXX, XXX XXXXXX, XXXXX XXXXXXX, XXXXX XXXXXXXXX, XXXX
XXXX, XXX XXXXXX, XXXXX XXXXXXXX, XXXX XXXXXXXX, XXXXX XXXXX and HIE XXXX XXXX
(collectively, the "Option Holders" and, together with Wexford, Insight, the
Miralta Shareholders, the Managing Shareholders, the Principal Shareholders,
and the Employee Shareholders, individually, a "Seller," and collectively, the
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"Sellers"), and XXXXXX XXX AND XXXXXXXXXXX XXXX, or either of them acting
alone, as paying agent (the "Paying Agent").
B A C K G R O U N D:
A. The Company is engaged in the research, development and
marketing of manufacturing planning simulation software.
B. The Sellers (excluding the Option Holders) are the owners
of all of the issued and outstanding shares of capital stock of the Company
(all of the shares described in this Paragraph B hereinafter collectively, the
"Shares") and the Option Holders are the owners of all of the issued and
outstanding options for the purchase of shares of the Company (collectively,
the "Options"), which Shares and Options are owned by each of the Sellers, as
set forth opposite each such Seller's name on Schedule 1 hereto.
X. Xxxxxxx desire to sell to Buyer, and Buyer desires to
purchase from Sellers, the Shares on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing background
and of the respective promises, representations, warranties and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. SALE AND PURCHASE OF SHARES; ACKNOWLEDGEMENT OF
CANCELLATION OF OPTIONS; DELIVERY OF CERTIFICATES.
1.1 SALE AND PURCHASE OF SHARES; ACKNOWLEDGEMENT
OF CANCELLATION OF OPTIONS. Subject to the terms and conditions of this
Agreement, on the Closing Date (as defined in Section 2 hereof), each Seller
will sell, transfer, convey and assign to Buyer, and Buyer will purchase from
each Seller, all of the Shares owned by such Seller as set forth opposite such
Seller's name on Schedule 1 hereto, and each Seller shall acknowledge the
cancellation of all Options owned by such Seller, as set forth opposite such
Seller's name on Schedule 1 hereto.
1.2 DELIVERY OF CERTIFICATES. At the Closing (as
defined in Section 2 hereof), each of the Sellers shall deliver to the Paying
Agent certificates representing all of the Shares owned by such Seller
(collectively, the "Certificates"), each Certificate duly endorsed in blank or
with stock powers annexed thereto duly executed in blank by the Sellers, in
proper form for transfer of the Shares to the Buyer upon delivery. Upon
receipt of the Certificates, Paying Agent shall deliver same to Buyer.
2. CLOSING; CLOSING DATE. The closing hereunder (the
"Closing") shall take place at 5:00 p.m. at the offices of Xxxxxxxx Xxxxxx LLP,
3200 Mellon Bank Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
on the date hereof, or as soon
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as practicable after all conditions to the respective obligations of the
parties have been satisfied or waived, or on such other date as the parties may
mutually agree (the "Closing Date").
3. PURCHASE PRICE.
3.1 PURCHASE PRICE. As consideration for the purchase
and sale of the Shares and the cancellation of the Options as provided herein,
Buyer shall pay the purchase price (the "Purchase Price") which shall consist
of:
(a) cash in the amount of Seven Million Six
Hundred Thirty-three Thousand Three Hundred Thirty Dollars (Cdn. $7,633,330.00)
(the "Cash Purchase Price"); and
(b) 1,550,000 shares of the common stock of
Manugistics Group, Inc., a Delaware corporation ("Manugistics Group"), $.002
par value per share (collectively, the "Manugistics Group Shares"). The
parties acknowledge that the number of Manugistics Group Shares which may
actually be received by the Sellers may be reduced as a result of payment of
claims for indemnification from the One Year Escrow Fund and/or the Two Year
Escrow Fund pursuant to the terms of Section 3.3(a) hereof.
3.2 PAYMENT OF THE PURCHASE PRICE. The Purchase
Price shall be payable at the Closing, as follows:
(a) Cash Purchase Price. Buyer shall pay the
Cash Purchase Price to the Paying Agent to be allocated by the Paying Agent
among Insight, Wexford and those Miralta Shareholders owning preferred shares
of the capital stock of the Company on the Closing Date, as specified on
Schedule 1 hereto (collectively, the "Preferred Shareholders"), in the manner
provided in Column No. 1 on EXHIBIT I hereto, as follows: Cdn. $1.00 per Class
B Preferred Share of the Company; Cdn. $2.00 per Class C Preferred Share of the
Company; and Cdn. $10.00 per Class D-Series 1 Preferred Share of the Company.
The Cash Purchase Price shall be payable by wire transfer to a single bank
account maintained by the Paying Agent at Canadian Imperial Bank of Commerce
and designated by the Paying Agent at least five (5) days prior to the Closing
Date. Immediately upon receipt of the Cash Purchase Price by the Paying Agent,
Buyer shall have no further liability to the Paying Agent or any of the Sellers
with respect to payment of the Cash Purchase Price.
(b) Manugistics Group Shares.
(i) The Manugistics Group Shares shall be
allocated among the Sellers in the manner provided in Column Nos. 2, 3 and 4 on
EXHIBIT I hereto.
(ii) At the Closing, Buyer shall, by
written instructions, substantially in the form attached hereto
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as EXHIBIT II, direct Boston EquiServe Limited Partnership (the "Transfer
Agent") to register the Manugistics Group Shares as follows:
(A) Manugistics Group Shares to the
Paying Agent at the Closing.
(1) 746,868 shares of the Manugistics
Group Shares (the "Group A Distributable Shares") in the name of the Paying
Agent, which Group A Distributable Shares shall be allocated among the Sellers
in the manner provided in Column No. 6 on EXHIBIT I hereto;.
(2) 5,439 shares of the Manugistics
Group Shares (the "Group B Distributable Shares") in the name of the Paying
Agent, which Group B Distributable Shares shall be allocated among the Sellers
in the manner provided in Column No. 7 on EXHIBIT I hereto.
(3) 3,144 shares of the Manugistics
Group Shares (the "Group C Distributable Shares") in the name of the Paying
Agent, which Group C Distributable Shares shall be allocated among the Sellers
in the manner provided in Column No. 8 on EXHIBIT I hereto.
(B) Manugistics Group Shares to the
Custodian at the Closing.
(1) 432,065 shares of the Manugistics
Group Shares (the "Group 1 Custodian Shares") in the name of the Custodian (as
defined in Section 3.3(b)(i) hereof), which Group 1 Custodian Shares shall be
allocated among the Sellers in the manner provided in Column No. 9 on EXHIBIT I
hereto.
(2) 16,047 shares of the Manugistics
Group Shares (the "Group 2 Forfeitable Custodian Shares") in the name of the
Custodian, which Group 2 Forfeitable Custodian Shares shall be allocated among
the Sellers in the manner provided in Column No. 10 on EXHIBIT I hereto (such
Sellers hereinafter referred to individually, a "Group 2 Employee" and
collectively, the "Group 2 Employees").
(3) 36,440 shares of the Manugistics
Group Shares (the "Group 3 Forfeitable Custodian Shares") in the name of the
Custodian, which Group 3 Forfeitable Custodian Shares shall be allocated among
the Sellers in the manner provided in Column No. 11 on EXHIBIT I hereto.
(C) Manugistics Group Shares to the
Escrow Agent at the Closing.
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(1) 155,003 shares of the Manugistics
Group Shares (the "One Year Escrow Shares") in the name of the Escrow Agent (as
defined in Section 3.3(a)(i) hereof), which One Year Escrow Shares shall be
allocated among the Sellers in the manner provided in Column No. 12 on EXHIBIT
I hereto.
(2) 154,994 shares of the Manugistics
Group Shares (the "Two Year Escrow Shares") in the name of the Escrow Agent,
which Two Year Escrow Shares shall be allocated among the Sellers in the manner
provided in Column No. 14 on EXHIBIT I hereto.
Immediately upon ascertaining that the Transfer Agent has complied with its
written instructions to register the Group A Distributable Shares, the Group B
Distributable Shares and the Group C Distributable Shares in the name of the
Paying Agent, the Group 1 Custodian Shares, the Group 2 Forfeitable Custodian
Shares and the Group 3 Forfeitable Custodian Shares in the name of the
Custodian, and the One Year Escrow Shares and the Two Year Escrow Shares in the
name of the Escrow Agent, as aforesaid, and its providing written notice of
such compliance to the Paying Agent (with respect to the Group A Distributable
Shares, the Group B Distributable Shares and the Group C Distributable Shares),
the Custodian (with respect to the Group 1 Custodian Shares, the Group 2
Forfeitable Custodian Shares and the Group 3 Forfeitable Custodian Shares) and
the Escrow Agent (with respect to the One Year Escrow Shares and the Two Year
Escrow Shares), Buyer shall have no further liability to the Paying Agent or
any of the Sellers with respect to the delivery of Manugistics Group Shares.
(iii) Following the Closing, the Manugistics
Group Shares will be registered with the United States Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act") pursuant to the terms of a Registration Rights Agreement,
substantially in the form attached hereto as EXHIBIT III (the "Registration
Rights Agreement"), which registration shall be effected in accordance with the
time schedule set forth in the Registration Rights Agreement.
3.3 APPOINTMENT AND DUTIES OF THE ESCROW AGENT,
THE CUSTODIAN AND THE PAYING AGENT.
(a) Appointment and Duties of Escrow Agent.
(i) At the Closing, Buyer and the Paying Agent
shall enter into an escrow agreement substantially in the form attached hereto
as EXHIBIT IV (the "Escrow Agreement"), pursuant to which Buyer shall appoint
State Street Bank and Trust Company (the "Escrow Agent") for the purposes set
forth in this Section 3.3(a).
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(ii) (A) The Escrow Agent shall hold
the One Year Escrow Shares, together with all cash and non-cash dividends and
other amounts payable after the Closing Date with respect to such One Year
Escrow Shares and all interest accrued thereon (collectively the "One Year
Escrow Fund"), in escrow, in accordance with the terms of the Escrow Agreement.
The Escrow Agent shall hold the One Year Escrow Fund to secure any and all
claims for indemnification brought by Buyer and/or any of its affiliates and
their respective officers, directors, agents and employees pursuant to Sections
10.3, 10.4, 10.5 and 10.7 hereof; provided, however, that Buyer, its affiliates
and their respective officers, directors, agents and employees shall not make
any claims against the One Year Escrow Fund until the Losses (as defined in
Section 10.2(a) hereof) incurred by Buyer and/or its affiliates, either
individually or in the aggregate, exceed Two Hundred Fifty Thousand Dollars (US
$250,000.00) (the "Indemnification Floor"), whereupon any claim for
indemnification in excess of the Indemnification Floor may be brought at the
discretion of Buyer and/or its affiliates and their respective officers,
directors, agents and employees. In addition, the Escrow Agent shall hold the
One Year Escrow Fund as security for the indemnity claims of Buyer and or its
affiliates for all costs and expenses incurred by the Company payable before or
after the Closing Date in connection with the negotiation and preparation of
this Agreement and the transactions contemplated hereby, which costs and
expenses (the "Excess Expenses") exceed the Expense Fund (as defined in Section
13.1 hereof); it being acknowledged and understood that the rights of Buyer
and/or its affiliates and their respective officers, directors, agents and
employees to indemnity for the Excess Expenses shall not be subject to the
Indemnification Floor.
(B) Subject to the terms of the
Escrow Agreement, upon the first anniversary of the Closing Date, the Escrow
Agent shall, by written instructions, as provided in the Escrow Agreement,
direct the Transfer Agent to register in the name of the Paying Agent,the
balance of the One Year Escrow Shares, if any, held in the name of the Escrow
Agent at the expiration of the One Year Escrow Fund after payment of claims to
Buyer and maintenance of reserves as provided in the Escrow Agreement, and
shall disburse all cash dividends and other amounts paid after the Closing Date
with respect to the One Year Escrow Shares and all interest accrued thereon
(such One Year Escrow Shares, cash dividends and other amounts referred to
herein collectively as the "Distributable One Year Escrow Balance") to the
Paying Agent for disbursement to the Sellers in the manner provided in Column
No. 13 on EXHIBIT I hereto; it being acknowledged and understood, however,
that to the extent that claims paid to the Buyer from the One Year Escrow Fund
arise from the breach or non-fulfillment of the respective obligations of only
some but not all of those Sellers whose shares comprise the One Year Escrow
Fund, the Paying Agent shall make corresponding adjustments to the percentages
of the Distributable
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One Year Escrow Balance reflected in Column No. 13 on EXHIBIT I hereto.
(iii) (A) The Escrow Agent shall hold
the Two Year Escrow Shares, together with all cash and non-cash dividends and
other amounts payable after the Closing Date with respect to such Two Year
Escrow Shares and all interest accrued thereon (collectively the "Two Year
Escrow Fund" and, together with the One Year Escrow Fund collectively, the
"Escrow Funds"), in escrow, in a separate account from the One Year Escrow
Fund, in accordance with the terms of the Escrow Agreement. The Escrow Agent
shall hold the Two Year Escrow Fund to secure claims for indemnification
brought by Buyer and/or any of its affiliates and their respective officers,
directors, agents and employees against any and all of the Sellers for the
breach or non-fulfillment of any representation, warranty or covenant of the
Company and/or the Sellers contained in Sections 4A.16, 4A.27, 4A.29(h), 4A.30,
4A.39(b), 4B.8, 6.5, 6.6 and 6.12 of this Agreement, for any act or omission of
the Paying Agent arising under this Agreement, the Escrow Agreement, the
Custodian Agreement, the Paying Agent Agreement and/or the Registration Rights
Agreement (collectively, the "Transaction Agreements"), for any and all claims
against the Miralta Shareholders with respect to Miralta under Section 4A.27
hereof and against the Miralta Shareholders under Section 6.11 hereof, and for
any and all claims against any of the Sellers for withholding tax obligations
of Buyer or its affiliates and their respective officers, directors, agents and
employees under Section 116 of the Income Tax Act (Canada), or otherwise,
including, without limitation, state, local, FICA and medicare tax and
withholding obligations. Notwithstanding anything contained in this Section
3.3(a)(iii) to the contrary, to the extent that the One Year Escrow Shares and
any other amounts in the One Year Escrow Fund are insufficient to meet any of
the claims which are not otherwise covered by the Two Year Escrow Fund pursuant
to this Section 3.3(a)(iii), namely claims against the Sellers arising during
the first year following the Closing Date for the breach or non-fulfillment of
any representation, warranty or covenant pursuant to Sections 4B.1, 4B.2, 4B.3,
4B.4, 4B.5, 4B.6, 4B.7, 4B.9 and/or 4B.10 hereof by reason of claims or
payments made pursuant to Section 10.3 hereof, Buyer and its affiliates and
their respective officers, directors, agents and employees may seek recourse
against the Two Year Escrow Fund for such claims to the extent of any
deficiency in the One Year Escrow Fund as a result of any claims or payments
having been made pursuant to Section 10.3 hereof.
(B) Subject to the terms of the
Escrow Agreement, the Escrow Agent shall, by written instructions, as provided
in the Escrow Agreement, direct the Transfer Agent to register in the name of
the Paying Agent the balance of the Two Year Escrow Shares, if any, held in the
name of the Escrow Agent at the expiration of the Two Year Escrow Fund
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after payment of claims to Buyer and maintenance of reserves as provided in the
Escrow Agreement, and shall disburse all cash dividends and other amounts paid
after the Closing Date with respect to the Two Year Escrow Shares and all
interest accrued thereon (such Two Year Escrow Shares, cash dividends and other
amounts referred to herein collectively as the "Distributable Two Year Escrow
Balance") to the Paying Agent for disbursement to the Sellers in the manner
provided in Column No. 15 on EXHIBIT I hereto; it being acknowledged and
understood, however, that to the extent that claims paid to the Buyer from the
Two Year Escrow Fund arise from the breach or non-fulfillment of the respective
obligations of only some but not all of those Sellers whose shares comprise the
Two Year Escrow Fund, the Paying Agent shall make corresponding adjustments to
the percentages of the Distributable Two Year Escrow Balance reflected in
Column No. 15 on EXHIBIT I hereto.
(b) Appointment and Duties of the Custodian.
(i) At the Closing, Buyer and the Paying Agent
shall enter into a custodian agreement substantially in the form attached
hereto as EXHIBIT V (the "Custodian Agreement"), pursuant to which Buyer, with
the consent of the Paying Agent, shall appoint State Street Bank and Trust
Company (the "Custodian") as custodian hereunder for the purposes set forth in
this Section 3.3(b).
(ii) The Custodian shall hold the Group 1
Custodian Shares in accordance with the terms of the Custodian Agreement
following the registration thereof in the name of the Custodian. Subject to the
terms of the Custodian Agreement, the Custodian shall, by written instructions,
as provided in the Custodian Agreement, direct the Transfer Agent to register
twenty-five percent (25%) of the Group 1 Custodian Shares in the name of the
Paying Agent for disbursement to the Sellers in the manner provided in Column
No. 9 on EXHIBIT I hereto, on each of the following dates (each, a
"Disbursement Date"):
(A) within three (3) business
days after the date that is ninety (90) days after the first anniversary of the
Closing Date; and
(B) within three (3) business
days after the date that is one hundred-eighty (180) days after the first
anniversary of the Closing Date; and
(C) within three (3) business
days after the date that is two hundred-seventy (270) days after the first
anniversary of the Closing Date; and
(D) within three (3) business
days after the date that is three hundred-sixty (360) days after the first
anniversary of the Closing Date.
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(iii) The Custodian shall hold the Group 2
Forfeitable Custodian Shares in accordance with the terms of the Custodian
Agreement following the registration thereof in the name of the Custodian.
Subject to the terms of the Custodian Agreement and, except as otherwise
provided in this Section 3.3(b)(iii), the Custodian shall, by written
instructions, as provided in the Custodian Agreement, direct the Transfer Agent
to register the Group 2 Forfeitable Custodian Shares in the name of the Paying
Agent for disbursement to the Group 2 Employees in the manner provided in
Column No. 10 on EXHIBIT I hereto and in accordance with the same disbursement
schedule applicable to the Group 1 Custodian Shares set forth in Section
3.3(b)(ii) hereof.
(A) Notwithstanding anything to the
contrary contained in this Section 3.3(b)(iii), in the event the employment
with the Company of any Group 2 Employee entitled to Group 2 Forfeitable
Custodian Shares shall be terminated either by the Company "for cause" or by
such Group 2 Employee upon the resignation of such Group 2 Employee (an
"Employment Termination"), in either case at any time after the Closing Date
but with an effective date before a Disbursement Date (as defined in Section
3.3(b)(ii) hereof), such Group 2 Employee shall forfeit any and all right,
title and interest in and to any and all remaining undisbursed Group 2
Forfeitable Custodian Shares as of the effective date of such Employment
Termination. Upon receipt of written notice from Buyer that the employment
with the Company of any Group 2 Employee entitled to any of the Group 2
Forfeitable Custodian Shares shall have been subject of an Employment
Termination, as aforesaid, the Custodian shall, by written instructions, as
provided in the Custodian Agreement, direct the Transfer Agent to register in
the name of Buyer or its designee the Group 2 Forfeitable Custodian Shares
otherwise distributable to the Paying Agent for such Group 2 Employee, as
provided in Column No. 10 in EXHIBIT I hereto, and shall provide a copy of such
instructions to the Paying Agent. For purposes of this Agreement, a Group 2
Employee's employment by the Company shall be deemed to have been terminated
"for cause" if such termination is predicated upon the gross misconduct by such
Group 2 Employee or for the breach by such Group 2 Employee of any of the terms
of any agreement between such Group 2 Employee and the Company with respect to
such Group 2 Employee's employment with the Company, which breach is
detrimental to the business of the Company including, without limitation, any
of the following:
(1) such Group 2 Employee's
intentional disclosure of trade secrets or other confidential information of
the Company or any breach of such Group 2 Employee's obligations pursuant to
Section 6.5(a) hereof;
(2) such Group 2 Employee's commission
of any act of fraud or theft with respect to the affairs of the Company;
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(3) the making by such Group 2
Employee of any material misrepresentation to the Company or the commission by
such Group 2 Employee of any willful act inconsistent with and detrimental to
the interests of the Company; and/or
(4) the conviction by such Group 2
Employee of any felony or indictable offense (other than impaired driving).
Nothing herein shall preclude any Group 2 Employee from disputing an Employment
Termination. Further, an Employment Termination of any individual Group 2
Employee shall be deemed to also constitute an Employment Termination with
respect to any Group 2 Employee which is a trust fund or other investment
account for the benefit of such individual Group 2 Employee.
(B) Notwithstanding anything to
the contrary contained in this Section 3.3(b)(iii), Buyer may at any time, at
its sole discretion, by written notice, direct the Custodian to accelerate the
disbursement schedule of any or all of the Group 2 Forfeitable Custodian
Shares. Within three (3) business days after receipt of such written notice,
the Custodian shall, by written instructions, as provided in the Custodian
Agreement, direct the Transfer Agent to register in the name of the Paying
Agent the number of Group 2 Forfeitable Custodian Shares which are subject of
such written notice, and shall provide a copy of such instructions to the
Paying Agent.
(iv) The Custodian shall hold the Group 3
Forfeitable Custodian Shares in accordance with the terms of the Custodian
Agreement following the registration thereof in the name of the Custodian.
Subject to the terms of the Custodian Agreement, the Custodian shall, by
written instructions, as provided in the Custodian Agreement, direct the
Transfer Agent, unless the Custodian has been otherwise instructed by Buyer in
accordance with the terms of this Section 3.3(b)(iv), to register the Group 3
Forfeitable Custodian Shares in the name of the Paying Agent for disbursement
to the Sellers in the manner provided in Column No. 11 on EXHIBIT I hereto,
within three (3) business days after the first anniversary of the Closing Date.
Notwithstanding the foregoing, in the event the employment of any employee to
the Company or engagement by the Company of any consultant to the Company who,
as a Seller, is entitled to Group 3 Forfeitable Custodian Shares shall have
been subject of an Employment Termination at any time after the Closing Date
but with an effective date before the first anniversary of the Closing Date,
such Seller shall forfeit any and all right, title and interest in and to any
and all of the Group 3 Forfeitable Custodian Shares. Within three (3) business
days after receipt of written notice from Buyer that any Seller entitled to any
of the Group 3 Forfeitable Custodian Shares shall have been subject of an
Employment Termination, as aforesaid, the Custodian shall,
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by written instructions, as provided in the Custodian Agreement, direct the
Transfer Agent to register in the name of Buyer or its designee the Group 3
Forfeitable Custodian Shares otherwise distributable to the Paying Agent for
such Seller, as provided in Column No. 11 on EXHIBIT I hereto, and shall
provide a copy of such notice to the Paying Agent. Nothing herein shall
preclude any Seller entitled to any of the Group 3 Forfeitable Custodian Shares
from disputing an Employment Termination.
(v) Notwithstanding anything to
the contrary contained in this Section 3.3(b), with respect to each of the
Group 2 Employees entitled to Group 2 Forfeitable Custodian Shares and each of
the Sellers entitled to Group 3 Forfeitable Custodian Shares residing in the
United States, as identified in Column No. 16 on EXHIBIT I hereto
(individually, a "US Seller" and collectively, the "US Sellers"), Buyer may,
upon receipt of the written request of any US Seller entitled to any of the
Group 2 Forfeitable Custodian Shares or Group 3 Forfeitable Custodian Shares,
at Buyer's sole discretion, direct the Custodian to accelerate the disbursement
schedule of any or all of the Group 2 Forfeitable Custodian Shares allocated to
such US Seller, as set forth in Column No. 10 on EXHIBIT I hereto, or Group 3
Forfeitable Custodian Shares allocated to such US Seller, as set forth in
Column No. 11 on EXHIBIT I hereto, to the Paying Agent for disbursement to such
US Seller; provided, however, such written request shall include a
certification by such US Seller that the accelerated disbursement of those
Group 2 Forfeitable Custodian Shares or Group 3 Forfeitable Custodian Shares
subject of such notice is necessary in order to enable such US Seller to
satisfy his, her or its liability for all United States federal income taxes
owing by such US Seller and arising solely by virtue of the issuance of the
Manugistics Group Shares allocated to such US Seller pursuant to this
Agreement, which certification shall include the calculation of such United
States federal income taxes. Within three (3) business days after receipt of
such written notice from Buyer to do so, the Custodian shall, by written
instructions, as provided in the Custodian Agreement, direct the Transfer Agent
to register in the name of the Paying Agent the number of Group 2 Forfeitable
Custodian Shares or Group 3 Forfeitable Custodian Shares which are subject of
such written request from Buyer, and shall provide a copy of such instructions
to the Paying Agent.
(vi) Notwithstanding anything to
the contrary contained in this Section 3.3(b), Buyer may, at its sole
discretion, direct the Custodian to accelerate the disbursement schedule of any
or all of the Group 2 Forfeitable Custodian Shares or Group 3 Forfeitable
Custodian Shares allocated to any US Seller for the benefit of Buyer and/or its
affiliates in order to satisfy (1) the withholding tax obligations of Buyer
and/or its affiliates with respect to such US Seller under Section 116 of the
Income Tax Act (Canada), as provided in Section 6.12(f) of this Agreement; and
(2) all state, local, FICA and medicare tax
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and withholding obligations of Buyer and/or its affiliates with respect to any
US Seller arising in connection with the disbursement of any Manugistics Group
Shares to the Paying Agent for the benefit of such US Seller. Within three (3)
business days after receipt of such written notice from Buyer to do so, the
Custodian shall, by written instructions, as provided in the Custodian
Agreement, direct the Transfer Agent to register in the name of the Paying
Agent the number of Group 2 Forfeitable Custodian Shares or Group 3 Forfeitable
Custodian Shares which are subject of such written request from Buyer, and
shall provide a copy of such instructions to the Paying Agent; whereupon,
within ten (10) business days after receipt of such written instructions from
the Custodian, the Paying Agent shall, by written instructions, as provided in
the Paying Agent Agreement, direct the Transfer Agent to register in the name
of Buyer and/or its affiliates such Group 2 Forfeitable Custodian Shares or
such Group 3 Forfeitable Custodian Shares.
(vii) In the event Buyer directs the
Custodian to accelerate the disbursement schedule of all of the Group 2
Forfeitable Custodian Shares or Group 3 Forfeitable Custodian Shares allocated
to any US Seller, as provided in Section 3(b)(vi) hereof and in the event the
aggregate of such Group 2 Forfeitable Custodian Shares or Group 3 Forfeitable
Custodian Shares and all Manugistics Group Shares to be registered in the name
of the Paying Agent at the Closing for disbursement to such US Seller are
insufficient to satisfy (x) all state, local, FICA and medicare tax and
withholding obligations of Buyer and/or its affiliates with respect to such US
Seller, and/or (y) the Escrowed Share Amount (as defined in Section 6.12(b)
hereof) and the Escrowed Cushion (as defined in Section 6.12(b) hereof), as
provided in Section 6.12 hereof, Buyer and/or its affiliates shall be entitled
to indemnification from such US Seller pursuant to Section 10.4 hereof.
(c) Appointment and Duties of the
Paying Agent.
(i) At the Closing, the Sellers
and the Paying Agent shall enter into a paying agent agreement in the form
attached hereto as EXHIBIT VI (the "Paying Agent Agreement"), pursuant to which
Sellers shall appoint, and Sellers do hereby appoint, Xxxxxx Xxx and
Xxxxxxxxxxx Xxxx, or either of them acting alone (the "Paying Agent"), to act
as their agent and attorney-in-fact and representative under the Transaction
Agreements with full power and authority to act in the name, place and stead
and for and on behalf of each Seller, to receive on behalf of each Seller
service of process in any suit, action or other legal proceeding arising out of
or relating to the Transaction Agreements and the transactions contemplated
thereby, and for the purposes set forth therein, and Paying Agent does hereby
accept such appointment under the terms and conditions set forth therein.
Pursuant to this Section 3.3(c), Paying Agent shall have such power, as
aforesaid, including, without
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limitation, the power:
(A) to receive from each Seller
the Transaction Agreements and other materials sent to each Seller in
connection with the Stock Purchase Agreement, to insert signature pages into
the Transaction Agreements as provided by each Seller, to insert the date and
Closing Date into the Transaction Agreements as determined by the Paying Agent
and to make changes to the Transaction Agreements which individually or in the
aggregate are not materially adverse to the Sellers and to otherwise take such
actions as are necessary to complete the transactions contemplated under this
Agreement;
(B) to take any and all actions
which are necessary for the Paying Agent to effectuate the Paying Agent's
obligations under the Transaction Agreements which individually or in the
aggregate are not materially adverse to the Sellers including, without
limitation, the distribution of Cash Purchase Price and the Manugistics Group
Shares to the Sellers hereunder, the delivery of Prospectuses to the Sellers
pursuant to the Registration Rights Agreement, and all obligations with respect
to transfers to Buyer or its designee of Group 2 Forfeitable Custodian Shares
and Group 3 Forfeitable Custodian Shares following an Employment Termination
pursuant to Sections 3.3(b)(iii)(A) and 3.3(b)(iv) hereof and/or to Buyer
and/or its affiliates for United States withholding taxes for US Sellers and
Canadian withholding taxes, as described in Section 6.12 hereof, pursuant to
Sections 3.3(b)(v), 3.3(b)(vi) and 3.3(c)(iii) hereof;
(C) to sell, transfer, or
assign any of the Manugistics Group Shares to be issued to or for the benefit
of each Seller as necessary to effectuate the Paying Agent's obligations under
the Transaction Agreements which individually or in the aggregate are not
materially adverse to the Sellers;
(D) to execute and deliver any
agreement, certificate, notice, request or other document or instrument as
necessary to effectuate the Paying Agent's obligations under the Transaction
Agreements;
(E) to deal with any
Disbursement Notices under the Escrow Agreement and to negotiate and settle any
and all disputes arising under the Transaction Agreements including, without
limitation, the negotiation, settlement and agreement to the payment of any
indemnification claims asserted against the Sellers under any of the
Transaction Agreements or on behalf of the Sellers against the Buyer;
(F) to retain legal counsel in
connection with any and all matters under the Transaction Agreements as
necessary to effectuate the Paying Agent's
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obligations under the Transaction Agreements;
(G) to do all other things, take any and
all steps and perform all other acts required, contemplated by or deemed
advisable, in the sole reasonable judgment of Paying Agent, in connection with
the Transaction Agreements as necessary to effectuate the Paying Agent's
obligations under the Transaction Agreements which individually or in the
aggregate are not materially adverse to the Sellers;
(H) to retain legal counsel, accountants
and other professionals in connection with any and all matters referred to
herein (such counsel and other professionals may, but need not be, the counsel
and other professionals for the Company); and
(I) to exercise such other rights,
powers and authority as are incidental to any of the foregoing.
(ii) Subject to the terms of the Paying Agent
Agreement, the Paying Agent shall:
(A) distribute the Cash Purchase Price
among the Preferred Shareholders within ten (10) business days after receipt
thereof from Buyer in the manner provided in Column No. 1 on EXHIBIT I hereto;
(B) by written instructions, as
provided in the Paying Agent Agreement, direct the Transfer Agent to register
the Manugistics Group Shares in the name of the Sellers, as follows:
(1) within ten (10) business days
after receipt of written notice from Buyer that the Transfer Agent has
registered the Group A Distributable Shares in the name of the Paying Agent,
the Paying Agent shall, by written instructions, as provided in the Paying
Agent Agreement, direct the Transfer Agent to register the Group A
Distributable Shares in the name of those of the Sellers entitled thereto in
the manner provided in Column No. 6 on EXHIBIT I hereto;
(2) within ten (10) business days
after receipt of written notice from Buyer that the Transfer Agent has
registered the Group B Distributable Shares in the name of the Paying Agent,
the Paying Agent shall, by written instructions, as provided in the Paying
Agent Agreement, direct the Transfer Agent to register the Group B
Distributable Shares in the name of those of the Sellers entitled thereto in
the manner provided in Column No. 7 on EXHIBIT I hereto;
(3) within ten (10) business days
after receipt of written notice from Buyer that the Transfer Agent has
registered the Group C Distributable Shares in the name
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of the Paying Agent, the Paying Agent shall, by written instructions, as
provided in the Paying Agent Agreement, direct the Transfer Agent to register
the Group C Distributable Shares in the name of those of the Sellers entitled
thereto in the manner provided in Column No. 8 on EXHIBIT I hereto;
(4) within ten (10) business days
after receipt of written notice from the Custodian on each occasion that the
Transfer Agent has registered any of the Group 1 Custodian Shares in the name
of the Paying Agent, the Paying Agent shall, by written instructions, as
provided in the Paying Agent Agreement, direct the Transfer Agent to register
such of the Group 1 Custodian Shares in the name of those of the Sellers
entitled thereto in the manner provided in Column No. 9 on EXHIBIT I hereto;
(5) within ten (10) business days
after receipt of written notice from the Custodian on each occasion that the
Transfer Agent has registered any of the Group 2 Forfeitable Custodian Shares
in the name of the Paying Agent, the Paying Agent shall, by written
instructions, as provided in the Paying Agent Agreement, direct the Transfer
Agent to register such of the Group 2 Forfeitable Custodian Shares in the name
of the Group 2 Employees in the manner provided in Column No. 10 on EXHIBIT I
hereto, other than those of the Group 2 Forfeitable Custodian Shares which the
Custodian has directed the Transfer Agent to register in the name of Buyer or
its designee with respect to any Group 2 Employee entitled to any such Group 2
Forfeitable Custodian Shares who shall have been subject of an Employment
Termination as provided in Section 3.3(b)(iii)(A) hereof, and other than those
of the Group 2 Forfeitable Custodian Shares which the Custodian has directed
the Transfer Agent to register in the name of the Paying Agent for disbursement
to any US Seller for United States federal income pursuant to Section 3.3(b)(v)
hereof and/or for disbursement to Buyer and/or its affiliates for United States
withholding taxes pursuant to Section 3.3(b)(vi) and 3.3(c)(iii) hereof and/or
for Canadian withholding taxes, as described in Section 6.12 hereof, pursuant
to Section 3.3(b)(vi) hereof;
(6) within ten (10) business days
after receipt of written notice from the Custodian that the Transfer Agent has
registered any of the Group 3 Forfeitable Custodian Shares in the name of the
Paying Agent, the Paying Agent shall, by written instructions, as provided in
the Paying Agent Agreement, direct the Transfer Agent to register the Group 3
Forfeitable Custodian Shares in the name of those of the Sellers entitled
thereto in the manner provided in Column No. 11 on EXHIBIT I hereto, other than
those of the Group 3 Forfeitable Custodian Shares which the Custodian has
directed the Transfer Agent to register in the name of Buyer or its designee
with respect to any Seller entitled to any such Group 3 Forfeitable Custodian
Shares who shall have been subject of an Employment
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Termination as provided in Section 3.3(b)(iv) hereof, and other than those of
the Group 3 Forfeitable Custodian Shares which the Custodian has directed the
Transfer Agent to register in the name of the Paying Agent for disbursement to
any US Seller for United States federal income taxes pursuant to Section
3.3(b)(v) hereof and/or for disbursement to Buyer and/or its affiliates for
United States withholding taxes pursuant to Sections 3.3(b)(vi) and 3.3(c)(iii)
hereof and/or for Canadian withholding taxes, as described in Section 6.12
hereof, pursuant to Section 3.3(b)(vi) hereof;
(7) within ten (10) business days
after receipt of written notice from the Escrow Agent that the Transfer Agent
has registered all Manugistics Group Shares included in the Distributable One
Year Escrow Balance in the name of the Paying Agent, the Paying Agent shall, by
written instructions, as provided in the Paying Agent Agreement, direct the
Transfer Agent to register all Manugistics Group Shares and other amounts, if
any, included in the Distributable One Year Escrow Balance in the name of the
Sellers in the manner provided in Column No. 13 on EXHIBIT I hereto, except for
such adjustments as provided for in Section 3.3(a)(ii)(B) hereof, and that
portion of the One Year Escrow Fund which Escrow Agent has directed the
Transfer Agent to register in the name of the Paying Agent for disbursement to
Buyer and/or its affiliates for United States withholding taxes pursuant to
Sectiona 3.3(b)(vi) and 3.3(c)(iii) hereof and/or for Canadian withholding
taxes, as described in Section 6.12 of this Agreement, pursuant to Section
3.3(b)(vii) hereof; and
(8) within ten (10) business days
after receipt of written notice from the Escrow Agent that the Transfer Agent
has registered all Manugistics Group Shares included in the Distributable Two
Year Escrow Balance in the name of the Paying Agent, the Paying Agent shall, by
written instructions, as provided in the Paying Agent Agreement, direct the
Transfer Agent to register all Manugistics Group Shares and other amounts, if
any, included in the Distributable Two Year Escrow Balance in the name of the
Sellers in the manner provided in Column No. 15 on EXHIBIT I hereto, except for
such adjustments by Paying Agent as provided for in Section 3.3(a)(iii)(B)
hereof, other than and that portion of the Two Year Escrow Fund which Escrow
Agent has directed the Transfer Agent to register in the name of the Paying
Agent for disbursement to Buyer and/or its affiliates for United States
withholding taxes pursuant to Sections 3.3(b)(vi) and 3.3(c)(iii) hereof and/or
for Canadian withholding taxes, as described in Section 6.12 of this Agreement,
pursuant to Section 3.3(b)(vii) hereof; and
(iii) Notwithstanding anything to the contrary
contained in this Section 3.3(c), on each occasion that the Transfer Agent
registers any of the Manugistics Group Shares in the name of the Paying Agent
for disbursement to any of the US
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Sellers, the Paying Agent shall obtain from Manugistics, Inc. a schedule of all
state, local, FICA and medicare tax and withholding obligations of Buyer and/or
its affiliates with respect to each US Seller arising in connection with the
disbursement of such Manugistics Group Shares (a "Schedule of Withholdings"),
and Manugistics, Inc. shall provide a Schedule of Withholdings to the Paying
Agent within two (2) business days after receipt of a request therefor,
whereupon the Paying Agent shall, by written instructions, as provided in the
Paying Agent Agreement, direct the Transfer Agent to register in the name of
Buyer and/or its affiliates a sufficient number of such Manugistics Group
Shares allocable to each US Seller, based upon the market value of Manugistics
Group's common stock, par value $.002 per share, as established by the Nasdaq
Exchange closing price on the Closing Date (with respect to Manugistics Group
Shares distributed to the Paying Agent at the Closing) and as of the date of
all subsequent distributions to the Paying Agent of Manugistics Group Shares by
the Escrow Agent and the Custodian, as the case may be (with respect to such
subsequent distributions), rounded up to the next full share, for the
satisfaction of all state, local, FICA and medicare tax and withholding
obligations of Buyer and/or its affiliates with respect to each US Seller
arising in connection with the disbursement of such Manugistics Group Shares,
as set forth in such Schedule of Withholdings, whereupon Buyer and/or its
affiliates, as applicable, shall make all remittances to the applicable taxing
authorities with respect thereto.
4A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to Buyer as follows:
4A.1 ORGANIZATION. The Company is a limited
company duly amalgamated, continued, validly existing and in good standing
under the laws of the Province of Nova Scotia, and ProMIRA Software
Corporation, a Delaware corporation (the "Subsidiary"), is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Both the Company and the Subsidiary have all requisite corporate
power and authority and all necessary licenses and permits to carry on their
respective businesses as they have been and are now being conducted and to own,
lease and operate the properties used in connection therewith. The Company and
the Subsidiary are duly qualified or licensed and in good standing to do
business in the jurisdictions set forth on Schedule 4A.1 hereto, which
constitute each jurisdiction where the conduct of their respective businesses
or the ownership, leasing or operation of their respective properties require
such qualification or licensing, except where the failure to be so duly
qualified or licensed and in good standing, individually or in the aggregate,
would not have an adverse effect on the respective businesses of the Company or
the Subsidiary. Except as set forth on Schedule 4A.1 hereto, neither the
Company nor the Subsidiary has any corporate predecessors, and neither the
Company nor any such
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corporate predecessors has any previous corporate names or business name
registrations.
4A.2 CAPITALIZATION. The Company's entire authorized
capital stock consists of: (i) 100,000,000 Class B Preferred Shares, 1,300,000
of which are presently issued and outstanding; (ii) 100,000,000 Class C
Preferred Shares, 1,500,000 of which are presently issued and outstanding;
(iii) 400,000 Class D Preferred Shares - Series 1, 333,333 of which are
presently issued and outstanding; (iv) 100,000,000 Non-Voting Common Shares,
264,173 of which are presently issued and outstanding; (v) 100,000,000 Voting
Common Shares, 12,257,375 of which are presently issued and outstanding; and
(vi) 476,000 options, all of which will be cancelled upon the Closing in
exchange for the Manugistics Group Shares allocated to such Seller as provided
in Column No. 5 on EXHIBIT I hereto. All of the Shares have been duly and
validly authorized and issued, are fully paid and nonassessable and, except as
set forth on Schedule 1 hereto are free of preemptive rights. None of the
Shares have been issued in violation of the preemptive rights of any
shareholder or option holder of the Company. The Shares were issued in
compliance with all applicable federal, provincial, state and foreign
securities laws and regulations. The Shares shall constitute one hundred
percent (100%) of the issued and outstanding shares of the capital stock of the
Company and the Options shall constitute one hundred percent (100%) of the
outstanding options for the purchase of shares of the capital stock of the
Company on the Closing Date.
4A.3 SHARE PURCHASE RIGHTS. Except as set forth on
Schedule 4A.3 hereto, which Schedule shall include, without limitation, a list
of the Option Holders, the form of Option Agreement between the Company and
such Option Holder, and the number of Options granted pursuant to such Option
Agreement, and the Stock Option Plan dated May 5, 1997 maintained by the
Company for the benefit of its employees, there are no existing agreements,
subscriptions, options, warrants, calls, commitments, trusts (voting or
otherwise), or rights of any kind whatsoever granting to any person or entity
any interest in or the right to purchase or otherwise acquire from the Company
or the Subsidiary or, to the knowledge of the Company, any other person or
entity, including, without limitation, any of the Sellers, any securities so
convertible or exchangeable, nor are there any proxies, agreements or
understandings with respect to the voting of the capital stock of the Company
or the Subsidiary (collectively, "Share Purchase Rights"). All of the Share
Purchase Rights, including, without limitation, all of the Options, shall have
been terminated, and all rights against the Company and/or the Subsidiary with
respect thereto shall have been waived and relinquished as of the Closing Date.
Except as set forth on Schedule 4A.3 hereto, there are no proxies, agreements
or understandings with respect to the voting of the Shares or the capital stock
of the Subsidiary.
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4A.4 TITLE TO THE SHARES. Each of the Sellers is
the lawful record owner of, and, to the knowledge of the Company, each of the
Sellers has good and marketable title to the number of Shares set forth
opposite his name on Schedule 1 hereto. The Shares set forth opposite each
Seller's name on Schedule 1 hereto represent all of the Shares of such Seller
as of the date hereof. To the knowledge of the Company, the Shares are owned
by the Sellers free and clear of any and all liens, claims, charges, pledges,
security interests or other encumbrances of any nature, kind or description
whatsoever ("Liens"), other than as set forth in that certain Amended and
Restated All Shareholders Agreement dated October 4, 1994 among Miralta Capital
Inc. ("Miralta"), Monenco AGRA Inc., the Company (f/k/a FastMAN Software
Systems Inc.) and specified employees of the Company, and/or that certain
Amended and Restated Major Shareholders Agreement dated December 30, 1996 among
Miralta, Wexford, Insight and the Company (collectively the "Shareholders
Agreements"). The Sellers and the Company hereby terminate, with full waiver,
all of their rights under the Shareholders Agreements. To the knowledge of the
Company, no order has been given under the Family Law Act (Ontario) or any
similar legislation in Ontario or elsewhere nor is there any application
pending under the Family Law Act (Ontario) or any similar legislation in
Ontario or elsewhere by the spouse of any Seller which would or does affect the
Shares or the Options in any manner whatsoever. For purposes of this Section
4A.4, "to the knowledge of the Company" shall mean to the knowledge of Xxx
XxXxxxxx in his capacity as Secretary and Vice-President Finance and
Administration of the Company, without specific inquiry.
4A.5 POWER AND CAPACITY. To the knowledge of the
Company, each of the Sellers has full right, power and capacity to execute,
deliver and perform this Agreement, to sell, transfer and deliver the Shares
owned by him to Buyer hereunder and to perform all of the other transactions
contemplated to be performed by him hereby. The Company has full right, right,
power and authority and is duly authorized to execute, deliver and perform its
obligations under this Agreement by all necessary corporate action on the part
of the Company and to consummate the transactions contemplated hereby. To the
knowledge of the Company, each of the Sellers which is a corporation,
partnership, trust or other entity has full power and capacity and is duly
authorized to execute, deliver and perform this Agreement by all necessary
actions on the part of such Seller, and the person signing this Agreement on
behalf of such Seller has been duly authorized to do so. This Agreement is a
valid and binding obligation of the Company and, to the knowledge of the
Company, the Sellers, enforceable against the Company and, to the knowledge of
the Company, each of the Sellers in accordance with its terms. At the Closing,
to the knowledge of the Company, each of the Sellers will transfer to Buyer
good and marketable record and beneficial title to the Shares and, to the
knowledge of the Company, at the Closing, the Shares will be free and clear of
any
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and all Liens. For purposes of this Section 4A.5, "to the knowledge of the
Company" shall mean to the knowledge of Xxx XxXxxxxx in his capacity as
Secretary and Vice-President Finance and Administration of the Company, without
specific inquiry.
4A.6 FREEDOM TO CONTRACT.
(a) The execution and delivery of this
Agreement by the Company and, to the knowledge of the Company, by each of the
Sellers does not, and the performance by each of them of their respective
obligations hereunder and thereunder will not, (i) violate or conflict with any
provision of the Memorandum and Articles of Association of the Company, the
Certificate of Incorporation or By-laws of the Subsidiary, or the charter and
governing documents applicable to any of the Sellers that is a corporation,
partnership or trust, or any amendments thereto or restatements thereof, (ii)
subject only to the fulfillment of the requirements to (A) give notice to
Investment Review Branch, Industry Canada under the Investment Canada Act
(Canada) and (B) give notice to the Director of Investigation and Research,
Competition Bureau of Industry Canada and have expire all delays under the
Competition Act (Canada) if the assets in Canada or revenues in, from or into
Canada of Buyer, the Company and their respective affiliates are in excess of
Four Hundred Million Dollars (Cdn. $400,000,000.00) where the aggregate of the
assets in Canada or revenues of annual sale in or from Canada from such assets
in Canada, is in excess of Thirty-five Million Dollars (Cdn. $35,000,000.00),
violate any of the terms, conditions or provisions of any law, rule,
regulation, order, writ, injunction, judgment or decree of any court,
governmental authority, or regulatory agency, or (iii) except with respect to
that certain Lease Agreement dated April 29, 1997 between the Company and
Metcalfe Realty Company Limited and with respect to the Company's financing
arrangements with Royal Bank of Canada, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, indenture, debenture,
security agreement, trust agreement, lien, mortgage, lease, agreement, license,
franchise, permit, guaranty, joint venture agreement, or other agreement,
instrument or obligation, oral or written, to which the Company, the Subsidiary
or, to the knowledge of the Company, any Seller is a party (whether as an
original party or as an assignee or successor) or by which any of them or any
of their respective properties is bound, or otherwise subject the Company to
any penalty or liability or otherwise adversely affect the Company.
(b) Except with respect to (i) a notice to
Investment Review Branch, Industry Canada required under the Investment Canada
Act (Canada), and (ii) notice to the Director of Investigation and Research,
Competition Bureau of Industry Canada if required under the Competition Act
(Canada), no
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governmental authorization, approval, order, license, permit, franchise or
consent, and no registration, declaration or filing with any court,
governmental department, commission, authority, board, bureau, agency or other
instrumentality is required in connection with the execution, delivery and
performance of this Agreement by the Sellers and the Company and the
consummation of the transactions contemplated hereby, and no applicable law,
statute, rule, regulation, order or code which, because of any characteristic
of or criteria applicable to any of the Sellers or the Company, would require
Buyer to obtain the consent, approval or permission of, or to give notice to,
any court, governmental department, commission, authority, board, bureau,
agency or other instrumentality in order for Buyer to execute, deliver and/or
perform this Agreement and/or to consummate the transactions contemplated
hereby.
(c) Neither the assets in Canada nor
the gross revenues from sales in, from or into Canada of the Company and any of
its affiliates, as determined as of the time, for the period and in the manner
referred to in Section 109 of the Competition Act (Canada), exceed Twenty
Million Dollars (Cdn. $20,000,000.00).
(d) Neither the aggregate of the assets
in Canada or revenues of annual sale in or from Canada from the assets of the
Company in Canada, as described in Section 4A.6(a) hereof, as determined as of
the time, for the period and in the manner referred to in Xxxxxxx 000 xx xxx
Xxxxxxxxxxx Xxx (Xxxxxx), exceed Thirty-five Million Dollars (Cdn.
$35,000,000.00).
(e) The provisions of the Land Transfer
Tax Act (Ontario) are inapplicable to the transactions contemplated hereby, and
neither Buyer, the Company nor any other person or entity will have any
liability under the Land Transfer Tax Act (Ontario) for the payment of tax or
otherwise as a result of the execution, delivery and/or performance of this
Agreement, or for the consummation of the transactions contemplated hereby.
(f) In connection with the
Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976, as amended (the "HSR
Act"), the Company and all entities which the Company controls (as defined
under the HSR Act) does not hold assets located in the United States having an
aggregate book value of Fifteen Million Dollars (US $15,000,000.00) or more,
and has not made aggregate sales in or into the United States of Twenty-five
Million Dollars (US $25,000,000.00) or more in its most recent fiscal year.
For purposes of this Section 4A.6, "to the knowledge of the Company" shall mean
to the knowledge of Xxx XxXxxxxx in his capacity as Secretary and
Vice-President Finance and Administration of the Company, without specific
inquiry.
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4A.7 SUBSIDIARY AND AFFILIATES.
(a) (i) The Subsidiary is the only
corporation of which the Company owns, directly or indirectly, capital stock;
(ii) the Subsidiary does not own, directly or indirectly, capital stock of any
corporation; (iii) of the 1,500 authorized common shares of the Subsidiary, the
Company owns one hundred (100) common shares, representing all of the issued
and outstanding shares of the Subsidiary; and (iv) a complete list of the
directors and officers of the Company and the Subsidiary is attached hereto as
Schedule 4A.7. All of the issued and outstanding shares of the Subsidiary have
been duly and validly authorized and issued and are fully paid, nonassessable
and free of preemptive rights. The shares of the Subsidiary were issued in
compliance with all applicable federal, provincial, state and foreign
securities laws and regulations, and are owned by the Company, free and clear
of any and all Liens.
(b) Neither the Company (other than
with respect to the Subsidiary) nor the Subsidiary, directly or indirectly, has
any ownership or other interest in, or control of, any person, corporation,
partnership, joint venture, business association or other entity, nor is the
Company or the Subsidiary controlled by, or under common control with, any
person, corporation, partnership, joint venture, business association or other
entity.
4A.8 CHARTER AND ORGANIZATIONAL DOCUMENTS. Attached
hereto as Schedule 4A.8 is a certified copy of the Memorandum and Articles of
Association of the Company and of the Certificate of Incorporation and By-laws
of the Subsidiary.
4A.9 FINANCIAL STATEMENTS.
(a) The Company has previously furnished to
Buyer true, correct and complete copies of the following financial statements
of the Company and the Subsidiary (the "Financial Statements"), together with a
reconciliation of generally accepted accounting principles in Canada ("Canadian
GAAP") to generally accepted accounting principles in the United States:
(i) audited consolidated and consolidating
statements of earnings and deficit, balance sheet and changes in financial
position for (A) the six-month period ended December 31, 1994; (B) for the
fiscal year ended December 31, 1995; (C) for the fiscal year ended December 31,
1996; and (D) for the eleven month period ended November 30, 1997, each
certified by Deloitte & Touche; and
(ii) unaudited financial results (A) on a
quarterly basis for the period of January 1, 1995 through December 31, 1997,
inclusive; (B) the six month period ended June 30, 1997; and (C) for the month
ending December 31, 1997,
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inclusive, each prepared by management of the Company, and unaudited financial
statements of Miralta subsequent to distribution to Miralta Capital II Inc., a
Canadian corporation ("Miralta II"), but prior to its amalgamation with ProMIRA
Software Inc., prepared by management of Miralta (collectively, the "Management
Reports").
(b) The Financial Statements (excluding
the Management Reports) were prepared in accordance with Canadian GAAP, and the
Financial Statements (including the Management Reports) were prepared on a
basis consistent with that of preceding accounting periods (except as may be
indicated therein or in the notes thereto). The Financial Statements are true,
correct and complete in all material respects and are in accordance with the
books and records of the Company and the Subsidiary. As of the date hereof,
all the accounts, books, ledgers and financial and other records of whatever
kind of the Company and the Subsidiary have been properly and accurately kept,
are true, correct and complete in all material respects and there are no
inaccuracies or discrepancies contained or reflected therein. The Financial
Statements fairly present the consolidated and consolidating financial position
of the Company and the Subsidiary as of the dates thereof and the consolidated
and consolidating results of operations and changes in financial position of
the Company and the Subsidiary for each of the periods then ended (except as
may be indicated in the notes thereto). The Financial Statements include or
otherwise account for all liabilities of the Company and the Subsidiary as of
the dates thereof.
(c) At the Closing Date, there will be
no restrictions on the availability of the cash in banks and on hand of the
Company and the Subsidiary, except clearance of checks in the ordinary course
of business.
(d) The accounts and other receivables
as set forth on the balance sheet dated December 31, 1997 included in the
Financial Statements (the "Balance Sheet"), or arising since the date thereof,
have or shall have arisen in the ordinary course of the business of the Company
and the Subsidiary for goods sold and invoiced or services performed. All said
receivables are collectible in amounts aggregating not less than the full
recorded amounts thereof (less allowance for doubtful accounts set forth in the
Financial Statements, if any) and are subject to no offsets, except for normal
trade discounts.
(e) The prepaid expenses, unbilled
revenue and refundable investment tax credits receivable, as set forth on the
Balance Sheet, or arising since the date thereof, represent amounts of a
benefit to future periods.
(f) The Balance Sheet and the notes
thereto correctly and completely set forth all liabilities of the Company
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and the Subsidiary as of the date thereof (i) pursuant to all Plans (as defined
in Section 4A.28 hereof), including all unfunded past service costs; (ii)
pursuant to all bonus, incentive, compensation, insurance, deferred
compensation, severance and other fringe benefit plans, contracts, agreements,
arrangements and programs of any type, coverage or form, including, without
limitation, any employee welfare benefit program; and (iii) for vacation pay
and compensatory time.
(g) Since November 30, 1997, there has
been no material adverse change in the financial condition, business properties
or assets of the Company or the Subsidiary or the transactions contemplated
hereby, and no adverse change (material or otherwise) and no event, condition
or circumstance exists or has occurred which might give rise to any adverse
change (material or otherwise) to the financial condition, business, properties
or assets of the Company and/or the Subsidiary or the transactions contemplated
hereby. The financial condition of the Company and the Subsidiary, considered
as a whole, is and will be through the Closing Date similar to or better in all
material respects to such condition as of November 30, 1997.
4A.10 ABSENCE OF UNDISCLOSED LIABILITIES. Except
as disclosed on Schedule 4A.10 hereto, the Company and the Subsidiary do not
have any liabilities or obligations (whether known or unknown, absolute,
accrued, contingent or otherwise), except (a) liabilities, obligations or
contingencies which are accrued or reserved against in the Balance Sheet or in
the notes thereto, and (b) normally recurring liabilities incurred after the
date of the Balance Sheet in the ordinary course of business and consistent
with past practice. Immediately prior to the amalgamation of Miralta with
ProMIRA Software Inc. under the Canada Business Corporations Act, Miralta had
no unpaid liabilities or obligations (whether known or unknown, absolute,
accrued, contingent or otherwise), whether or not assumed by any third parties
including, without limitation, any and all tax liabilities.
4A.11 TITLE TO PROPERTIES. The Company and the
Subsidiary have good and marketable title to all properties and assets
reflected on the Balance Sheet or acquired after the date thereof (except for
properties and assets sold or otherwise disposed of in the ordinary course of
business since the date of the Financial Statements) absolutely, and with
respect to any real property in fee simple absolute (except for leasehold
interests or licenses, in which event the entity directly holding such interest
has a valid leasehold interest or license), subject only to (a) statutory liens
arising or incurred in the ordinary course of business with respect to which
the underlying obligations are not delinquent; (b) with respect to personal
property, the rights of customers of the Company or the Subsidiary with respect
to inventory or work in progress under orders or contracts entered into by the
Company or the Subsidiary
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in the ordinary course of business; (c) Liens reflected on the Balance Sheet or
notes thereto; (d) Liens for taxes not yet delinquent; (e) Liens set forth in
Schedule 4A.11(e) hereto; and (f) those dispositions of properties and assets
not in the ordinary course of business since November 30, 1997 which are set
forth on Schedule 4A.11(f) hereto.
4A.12 REAL PROPERTY. Neither the Company nor the
Subsidiary owns beneficially or of record any land, buildings or fixed
structures.
4A.13 MACHINERY AND EQUIPMENT. Attached hereto as
Schedule 4A.13 is a true, correct and complete list of each item of machinery
and equipment owned by the Company and the Subsidiary and material to the
operation of their respective businesses, which list shall include the current
location of each such item of machinery and equipment. All items listed on
Schedule 4A.13 hereto are in good operating condition and repair, subject to
normal wear and use, and are usable in the ordinary course of business
conducted by the Company and the Subsidiary.
4A.14 INVENTORY. Attached hereto as Schedule 4A.14
is a true, correct and complete description of all material classes of
inventory items owned by the Company and the Subsidiary. All items of
inventory described on Schedule 4A.14 hereto are usable in the ordinary course
of business conducted by the Company and the Subsidiary.
4A.15 LEASES AND LICENSES. Attached hereto as
Schedule 4A.15 is a true, correct and complete list of all outstanding leases
or licenses (whether written or oral) pursuant to which the Company or the
Subsidiary have (a) obtained the right to use or occupy any real or personal
property obligating the Company or the Subsidiary to pay more than Cdn.
$10,000.00, or (b) granted to any other party the right to use any real or
personal property described on Schedule 4A.13 or 4A.15 hereto. The Company has
heretofore delivered to Buyer a true, correct and complete copy of each written
lease and license described on Schedule 4A.15 hereto, together with all
amendments thereto, and a description of the terms of each such oral agreement.
4A.16 PATENTS, COPYRIGHTS AND TRADEMARKS.
(a) Attached hereto as Schedule
4A.16(a) is a true, correct and complete listing of all patents, trademarks and
registered copyrights included, without limitation, among the Proprietary
Rights (as defined in this Section 4A.16), and all applications, filings and
registrations with respect thereto, and all of the registered Proprietary
Rights listed on Schedule 4A.16(a) are valid and in full force and effect. The
Company has previously provided Buyer with a copy of all documents described on
Schedule 4A.16(a) hereto.
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(b) Except as set forth on Schedule
4A.16(b) hereto, the Company and the Subsidiary are the sole owners of all
patents, trademarks, trade names, copyrights, licenses, trade secrets, source
codes and object codes, inventions, intellectual property rights, know-how, and
other rights embodied in the works and products used, sold and/or distributed
by the Company and/or the Subsidiary (as identified on Schedule 4A.16(a)
hereto) or that are necessary for the operation of their respective businesses
as presently conducted or as proposed to be conducted (each, a "Proprietary
Right" and collectively, the "Proprietary Rights").
(c) Except as set forth on Schedule
4A.16(c) hereto,
(i) no work or product or any
Proprietary Right presently being used, licensed or embodied in any work or
product used, licensed, sold or distributed, or contemplated to be used,
licensed, sold or distributed, by the Company infringes on any rights owned or
held by any other person or entity, and the Proprietary Rights are sufficient
to, and include all intellectual property rights necessary to, operate the
respective businesses of the Company and the Subsidiary as presently conducted;
(ii) there is no pending or, to the
Company's or the Subsidiary's knowledge, threatened claim or litigation against
the Company, the Subsidiary or any other person or entity contesting or, if
decided adversely, affecting the right of the Company or the Subsidiary to use,
license or sell any Proprietary Right;
(iii) to the knowledge of the
Company, no work or product and no present or proposed patent, trademark, trade
name, copyright, license, trade secret, invention, intellectual property
rights, know-how or other right presently being licensed, sold or employed or
proposed to be licensed, sold or employed, by any person or entity infringes
on, or may infringe on, or adversely affect, or may adversely affect, any
Proprietary Right, nor, to the Company's or the Subsidiary's knowledge, is
there any pending or proposed statute, law, rule, regulation, standard or code
that may adversely affect any Proprietary Right presently being used, licensed
or sold, or proposed to be used, licensed or sold, by the Company or the
Subsidiary; and
(iv) the Company and the Subsidiary
have used their respective best efforts to secure and maintain their right,
title and interest in and to the Proprietary Rights listed on Schedule 4A.16(a)
hereto. Without limiting the generality of the foregoing, except as set forth
on Schedule 4A.29(h) hereto, each of the current and former employees and
consultants of the Company and the Subsidiary (collectively, the "Employees")
has
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executed an agreement providing that (A) such Employee will hold in confidence
and will not disclose to any other person or entity in any way, or otherwise
use in any way, trade secrets of the Company or the Subsidiary or products or
other proprietary, secret or confidential information of the Company or the
Subsidiary, and (B) any ideas, inventions or intellectual property rights
conceived, created, developed or enhanced while such Employee was employed by
or otherwise associated with the Company or the Subsidiary or with any
affiliate or customer of the Company or the Subsidiary, whether by or with the
help of such Employee or otherwise, will be the sole and exclusive property of
the Company or the Subsidiary, as the case may be, or of a customer of the
Company or the Subsidiary in cases where such customer has a written agreement
with the Company or the Subsidiary so providing. Each such agreement is valid
and enforceable and in full force and effect and, to the knowledge of the
Company, none has been violated by any Employee. True and complete copies of
each such agreement including, without limitation, all amendments and
modifications thereof have been delivered to Buyer prior to the date hereof and
are identified on Schedule 4A.29(h) hereto.
4A.17 CONTRACTS. Attached hereto as Schedule 4A.17
is a listing of each and every:
(a) contract to which the Company or
the Subsidiary is a party, other than contracts and commitments listed in any
other Schedule hereto; it being acknowledged and understood that contracts
obligating the Company or the Subsidiary to pay less than Cdn. $10,000.00 need
not be listed;
(b) contract with or commitment to
which the Company or the Subsidiary is a party with any and all employees,
advisors and consultants;
(c) debt instrument, including, without
limitation, any loan agreements, promissory notes, security agreements or other
evidences of indebtedness, where the Company or the Subsidiary is a lender or
borrower;
(d) contract, commitment or arrangement
restricting the Company or the Subsidiary or any of their respective employees
from engaging in business, from competing in any line of business with any
other parties, or from divulging any confidential information (as defined in
Section 6.5 hereof);
(e) contract, agreement or arrangement
to which the Company or the Subsidiary is a party (whether as an original party
or an assignee or successor) for a line of credit or guarantee, pledge or
undertaking of the indebtedness of any other person or entity;
(f) contract or commitment to which the
Company
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or the Subsidiary is a party (whether as an original party or an assignee or
successor) for any charitable or political contribution;
(g) loan agreement, security agreement,
note, debenture, or other contract or commitment (except for this Agreement and
the Exhibits and other documents executed in connection herewith) limiting or
restraining the Company or the Subsidiary from declaring, setting aside,
authorizing or making payment of any dividend or any distribution, whether in
cash or property;
(h) joint venture or partnership
agreement to which the Company or the Subsidiary is, directly or indirectly, a
party (whether as an original party or as an assignee or successor);
(i) written agreement or agreements to
which the Company or the Subsidiary is a party (whether as an original party or
as an assignee or successor) with respect to any assignment, discounting or
reduction of any receivables, other than normal trade discounts, of the Company
or the Subsidiary;
(j) distributorship, sales agency,
sales representative or marketing agreement to which the Company or the
Subsidiary is a party (whether as an original party or an assignee or
successor);
(k) any license pursuant to which the
Company or the Subsidiary has any liability or obligation or is receiving or
will become entitled to receive any benefits, and any permit pursuant to which
the Company or the Subsidiary currently operates its business;
(l) existing agreements, options,
commitments or rights with, to or in any third party to acquire any assets or
properties, real, personal or mixed, or any interest therein, of the Company or
the Subsidiary, except for those contracts for the sale of inventory entered
into in the ordinary course of business; and
(m) a list of all clients and customers
of the Company and the Subsidiary for the past five (5) years to whom the
Company and the Subsidiary have sold any product or provided any services.
The Company has heretofore delivered to Buyer true, correct and complete copies
of all documents or otherwise provided a written description of all oral
agreements described in Schedule 4A.17 hereto.
4A.18 ABSENCE OF DEFAULT. Except as set forth in
Schedule 4A.18 hereto, the Company, the Subsidiary and the
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Sellers (to the extent that any of the Sellers are parties to a contract with
the Company or the Subsidiary) have complied with and performed all of their
respective obligations required to be performed under all contracts, agreements
and leases to which any of them is a party (whether as an original party or as
an assignee or successor) as of the date hereof (including, without limitation,
all such contracts, agreements and leases identified on Schedule 4A.17 hereto),
and are not in default in any respect under any such contract, agreement,
lease, undertaking, commitment or other obligation; and no event has occurred
which, with or without the giving of notice, lapse of time or both, would
constitute a default thereunder. Neither the Company, the Subsidiary nor, to
the knowledge of the Company, the Sellers have any knowledge that any party has
failed to comply with or perform all of its obligations required to be
performed under any material contract, agreement or lease to which the Company
or the Subsidiary is a party (whether as an original party or as an assignee or
successor) as of the date hereof (including, without limitation, all such
contracts, agreements and leases identified on Schedule 4A.17 hereto), or that
any event has occurred which, with or without the giving of notice, lapse of
time or both, would constitute a default by such party thereunder. In
addition, except as disclosed in Schedule 4A.18 hereto, neither the Company,
the Subsidiary nor, to the knowledge of the Company, the Sellers have (a) any
reason to believe that the products and services called for by an unfinished
contract cannot be supplied by or to the Company or the Subsidiary, as the case
may be, in accordance with the time specifications of such contract, or (b) any
knowledge of any facts or circumstances which make a default by any party to
any contract, agreement, lease, undertaking, commitment or other obligation
likely to occur subsequent to the date hereof.
4A.19 INSURANCE. Attached hereto as Schedule 4A.19
is a true, correct and complete description of all insurance policies or
binders of insurance held by or on behalf of the Company and the Subsidiary on
all of their respective properties or assets (specifying the insurer, the
amount of the coverage, the type of insurance, the risks insured, the
expiration date, the policy number, the premium and any agent or broker). No
notice of cancellation or nonrenewal with respect to, or disallowance of any
claim under, any such policy or binder has been received by the Company or the
Subsidiary from December 31, 1996 to the date hereof, and the Company has no
knowledge of any state of facts or the occurrence of any event which reasonably
might form the basis of any claim against or relating to their businesses or
operations or any of their assets or properties which are covered by any of the
policies or binders listed on Schedule 4A.19 hereto and which might
substantially increase the insurance premiums payable under any such policy or
binder. Schedule 4A.19 hereto also contains a true, correct and complete
description of all outstanding performance bonds which have been delivered to
any person or entity in connection with the business
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and operations of the Company or the Subsidiary.
4A.20 THIRD-PARTY OPTIONS. There are no existing
agreements, options, commitments or rights with, to or in any third party to
acquire any assets or properties, real, personal or mixed, or any interest
therein, of the Company or the Subsidiary, except for those contracts entered
into by any of them in the ordinary course of business or otherwise disclosed
in this Agreement or the Schedules hereto.
4A.21 DISTRIBUTIONS, SATISFACTIONS, OBLIGATIONS.
Since the date of the Balance Sheet, neither the Company nor the Subsidiary
has, except as and to the extent reflected in this Agreement or otherwise
disclosed on Schedule 4A.21 hereto:
(a) issued any stock, bonds or other
corporate securities;
(b) incurred any obligations or
liabilities for money borrowed;
(c) incurred any material obligations
or liabilities, absolute or contingent;
(d) discharged or satisfied any lien,
encumbrance or obligation, or paid any material liabilities, absolute or
contingent, other than in the ordinary course of business;
(e) declared or made any dividend
payment or distribution to any shareholder of the Company or the Subsidiary;
(f) purchased or redeemed any shares of
the capital stock of the Company or the Subsidiary;
(g) mortgaged or pledged or subjected
to lien, charge or other encumbrance, any of its material assets, tangible or
intangible;
(h) sold, transferred or disposed of
any of its assets except assets used or consumed in the ordinary course of
business and obsolete equipment and equipment which has been replaced in the
ordinary course of business;
(i) suffered any adverse change,
damage, disruption of business or losses, whether covered by insurance or not,
or waived any rights of substantial value;
(j) increased compensation payable to
or to become payable by the Company or the Subsidiary to any of their
respective employees, except as may be granted in the ordinary course of
business to an employee on the anniversary date of his employment, or upon his
annual award date, and which does not
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exceed ten percent (10%) of the base salary of such employee, or otherwise
agreed to any severance compensation payable to or to become payable by the
Company or the Subsidiary to any of their respective employees;
(k) incurred any liabilities or
obligations or entered into any contracts or other arrangements involving any
Seller or any of Sellers' respective affiliates; or
(l) operated its business in any way
other than in the ordinary course.
4A.22 CAPITAL EXPENDITURES. Except as set forth in
Schedule 4A.22 hereto, neither the Company nor the Subsidiary has currently
made or budgeted for any capital expenditures or commitments, whether of not
contracted for, in an aggregate amount exceeding Ten Thousand Dollars (Cdn.
$10,000.00).
4A.23 LITIGATION.
(a) Except as set forth in Schedule
4A.23 hereto, as of the date hereof, there are no actions, suits, demands,
claims, hearing notices or demand letters, labor disputes or arbitrations,
legal or administrative proceedings or investigations (civil or criminal),
bankruptcy, insolvency or receivership proceedings, any proceeding relating to
an environmental matter or any other matter whatsoever, pending against the
Company or the Subsidiary, and, to the knowledge of the Company, no actions,
suits, demands, claims, hearing notices or demand letters, labor disputes or
arbitrations, legal or administrative proceedings or investigations (civil or
criminal), bankruptcy, insolvency or receivership proceedings, any proceedings
relating to an environmental matter or any other matter whatsoever are
contemplated or threatened against the Company or the Subsidiary or any of
their respective assets, properties or businesses, nor is any basis known by
the Company to exist for any such action or for any investigation relating to
the Company or the Subsidiary or their respective properties or businesses.
(b) Except as set forth in Schedule
4A.23 hereto, neither the Company, the Subsidiary nor, to the knowledge of the
Company, any of the Sellers is a party to any suit, action, arbitration or
legal, administrative, governmental or other proceeding or investigation
pending or, to the knowledge of the Company, threatened which might have an
adverse effect or restrict the ability of any Seller and/or the Company to
consummate the transactions contemplated hereby or to perform their obligations
hereunder.
4A.24 COMPLIANCE WITH LAW.
(a) The Company and the Subsidiary:
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(i) have complied in all material
respects with each, and is not in violation of any, law, ordinance or
governmental rule or regulation to which either of them or their respective
businesses are subject, and
(ii) have not failed to obtain any
license, permit, certificate or other governmental authorization or inspection
necessary to the ownership or use of their respective assets and properties or
to the conduct of their respective businesses as currently operated, which, in
the event of any noncompliance, violation or failure to obtain, as the case may
be, would have an adverse effect on the business, operations, prospects,
properties, assets or condition (financial or otherwise) of the Company or the
Subsidiary.
(b) Except as set forth in Schedule
4A.24 hereto, neither the Company nor the Subsidiary has received any claim or
notice of any violation of any applicable building, zoning, fire, health and
safety, environmental or employment laws, ordinances, rules or regulations
relating to the properties, premises, business or any Employee or the conduct
of their respective businesses which, in the event of any noncompliance or
violation, would have an adverse effect on the business, operations, prospects,
properties, assets or condition (financial or otherwise) of the Company or the
Subsidiary.
4A.25 TRANSACTIONS WITH AFFILIATES. No current
director or officer of the Company or the Subsidiary or, to the knowledge of
the Company, any of the Sellers controls or has controlled, directly or
indirectly, any business, corporate or otherwise, which is or was a party to
any agreement, business arrangement or course of dealing with the Company or
the Subsidiary or any property or asset which was the subject of any agreement,
business arrangement or course of dealing with the Company or the Subsidiary.
4A.26 PROHIBITED PAYMENTS. Neither the Company,
the Subsidiary nor, to the knowledge of the Company, the Sellers, nor any of
their respective officers, directors, employees, agents or affiliates, has
offered, paid, or agreed to pay to any person or entity, including any
governmental official, or solicited received or agreed to receive from any such
person or entity, directly or indirectly, any money or anything of value for
the purpose or with the intent of obtaining or maintaining business for the
Company or the Subsidiary or otherwise affecting the business, operations,
prospects, properties, or condition (financial or otherwise) of the Company or
the Subsidiary, and which is or was in violation of any applicable ordinance,
regulation or law, or not properly and correctly recorded or disclosed on the
books and records of the Company or the Subsidiary, as the case may be.
Neither the Company nor the Subsidiary has engaged in any transaction,
maintained any bank account or used any other funds except for transactions,
bank
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accounts and funds which have been and are properly and correctly reflected in
the normally maintained books and records of the Company or the Subsidiary.
4A.27 TAX MATTERS.
(a) For the purposes of this Agreement,
unless otherwise expressly provided, the term "Governmental Charges" means and
includes all taxes, estimated taxes, customs duties, and similar related duties
with respect to the importation of goods, rates, levies, assessments,
reassessments, deductions and other payments and other charges, together with
all penalties, interest and fines with respect thereto, payable to any federal,
provincial, state, municipal, county, local or other government or governmental
agency, authority, board, bureau or commission, domestic or foreign. For
purposes of this Agreement, the term "Income Tax Act" means the Income Tax Act,
R.S.C. 1985, 5th Supplement, as amended, being the federal income tax
legislation of Canada. All references herein to the "Code" are to the Internal
Revenue Code of 1986, as amended (Title 26 of the United States Code).
(b) Except as set forth on Schedule
4A.27(b) hereto, the Company, the Subsidiary and Miralta have each duly and on
a timely basis prepared and filed all tax returns and other documents required
to be filed by each of them in respect of all Governmental Charges and such
returns and documents are true, complete and correct. The Company, the
Subsidiary and Miralta have paid or, with respect to the 1997 tax year, will
pay all Governmental Charges shown to be due or which become due on such
returns and reports pursuant to any assessment, reassessment, deficiency
notice, 30-day letter or similar notice to the Closing Date. The liabilities
for Governmental Charges on the Balance Sheet are sufficient for the payment of
all Government Charges attributable to all periods through the date hereof and
include adequate provision for all deferred Governmental Charges in accordance
with Canadian GAAP. There are no Liens for Governmental Charges upon any
property of the Company, the Subsidiary or Miralta, except for Liens for
Governmental Charges not yet due. The Company, the Subsidiary and Miralta have
no liability for Governmental Charges other than those provided for in the
Balance Sheet and those arising in the ordinary course of the operation of
their respective businesses since the date of the Balance Sheet.
(c) The Company, the Subsidiary and
Miralta have each withheld from each amount paid or credited to any person the
amount of Governmental Charges required to be withheld therefrom and have
remitted such Governmental Charges to the proper tax or other receiving
authorities within the time required under applicable legislation including
applicable extensions.
(d) Except as set forth in Schedule
4A.27(d)
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hereto, none of the federal, provincial, state, county, local or foreign income
or other tax returns of the Company, the Subsidiary or Miralta has been audited
by any governmental agency within the past five (5) years, and none of these
entities have executed extensions of the statute of limitations on assessment
or collection.
(e) Except as set forth on Schedule 4A.27(e)
hereto, neither the Company, the Subsidiary nor Miralta is a party to any
pending action by any governmental authority for assessment or collection of
Governmental Charges asserted by such authority, or party to any dispute or
threatened dispute in which an adverse determination would have an adverse
effect on the business, operations, properties, or financial condition of the
Company, the Subsidiary or Miralta, and no claim for assessment, reassessment
or collection of Governmental Charges has been made upon the Company or the
Subsidiary, nor, to the knowledge of the Company, is there any basis for such
action or claim. All net operating losses and research credits for the
Company, the Subsidiary and Miralta are proper and accurately reported in the
tax returns of those entities.
(f) Attached hereto as Schedule
4A.27(f) is a true, correct and complete listing, for purposes of the Income
Tax Act, of the paid-up capital of all issued and outstanding shares in capital
for each of the Company as of the date of this Agreement and Miralta as of the
date of its amalgamation with the Company.
(g) The Company is a
Canadian-controlled private corporation, as defined in the Income Tax Act, and
has been one since at least January 1, 1996.
(h) The Subsidiary is not liable for:
"back-up withholding" taxes, as provided in Section 3406 of the Code or other
withholding taxes as provided in Section 1461 of the Code.
(i) Set forth on Schedule 4A.27(i)
hereto is a true, correct and complete list of:
(i) all federal, provincial,
state, local, county, foreign and other income and franchise tax returns and
reports filed individually or on a consolidated basis by the Company, the
Subsidiary and Miralta within the past five (5) years; and
(ii) Governmental Charges to which
the Company, the Subsidiary and Miralta are currently subject with respect to
their respective businesses, assets or income, showing the name of the taxing
authority, the assessment date, and the date on which the return is required to
be filed; and
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(iii) all currently effective or
proposed agreements, consents, elections and waivers filed or made with
federal, provincial, state, county, local, foreign or other taxing authorities
relating to the Company, the Subsidiary and Miralta including, without
limitation, any tax sharing agreement between the Company, the Subsidiary and
Miralta.
The Company has heretofore delivered to
Buyer true, correct and complete copies of all federal, provincial, state,
local, county, foreign and other income tax returns filed within the past five
(5) years referred to on Schedule 4A.27(i) hereto, and have made available to
Buyer access to all other income tax returns referred to on such Schedule.
(j) Except as set forth on Schedule
4A.27(j) hereto, the Company, the Subsidiary and Miralta (i) have made all
payments of estimated taxes required to be made; (ii) have not taken any action
that could have the effect of deferring any liability for Governmental Charges
from any taxable period ending on or before the Closing Date to any taxable
period ending thereafter; (iii) has not made any payment which will be or may
be characterized as an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Code; and (iv) have no net operating loss carryovers
available as reflected on its returns arising in years after 1994, which are
restricted as of the Closing Date by Sections 382, 383 or 384 of the Code,
except to the extent affected by this Agreement and the transactions evidenced
hereby.
(k) All methods of accounting utilized
by the Company, the Subsidiary and Miralta, together with the book/tax
adjustments made by them in preparing their tax returns, comply with the Code
and the Income Tax Act and associated regulations, and the Company, the
Subsidiary and Miralta have made all proper elections which support the methods
of accounting utilized by them.
4A.28 BENEFIT PLANS.
(a) For purposes of this Agreement, the term
"Benefit Plan" means all bonus, deferred compensation, disability, incentive
compensation, share purchase, share option, stock appreciation, phantom stock,
savings, profit sharing, severance or termination pay (except if such payments
are required by applicable law), health or other medical, life, disability or
other insurance, supplementary unemployment benefit, pension, retirement and
any other benefit plan, agreement, program or arrangement (whether oral or
written) for the benefit of any current employee or former employee of the
Company or the Subsidiary or their beneficiaries maintained or contributed to
by the Company and/or the Subsidiary or under which the Company and/or the
Subsidiary has any actual or contingent liability.
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(b) Schedule 4A.28 hereto lists all
Benefit Plans. Except for those Benefit Plans identified on Schedule 4A.28
hereto,
(i) all Benefit Plans have been
duly registered where required by, and are in good standing under, all
applicable legislation including, without limitation, the Income Tax Act, the
Pension Benefits Act (Ontario), the Pension Plan Act (Quebec) and the
Employment Pension Plan Act (Alberta), and all required employer and employee
contributions under such Benefit Plans have been made and the applicable funds
have been funded in accordance with the terms thereof and no past service
funding liabilities exist thereunder;
(ii) the Company has delivered to
Buyer true, complete and up-to-date copies of all documents embodying and
summarizing all Benefit Plans applicable to the Employees including, without
limitation, all amendments thereto, the funding agreements or arrangements of
such Benefit Plans, the most recent financial statements for such Benefit
Plans, and all annual reports and actuarial reports prepared within the past
five (5) years with respect to such Benefit Plans;
(iii) each investment of a Benefit
Plan is a qualified or eligible investment; no investment by such Benefit Plan
is a prohibited investment under the terms of the Benefit Plan or applicable
legislation; and each Benefit Plan has (or had) the requisite authority to make
each investment and may hold such investment under its terms and any applicable
legislation;
(iv) there are no outstanding
defaults or violations by the Company and/or the Subsidiary (or allegations
thereof) of any obligation required to be performed by them in connection with
any Benefit Plan, and no order has been made or notice given pursuant to any
laws requiring the Company and/or the Subsidiary to take (or refrain from
taking) any action in respect of any Benefit Plan;
(v) all of the Benefit Plans that
are pension plans meet, and since their inception have met, the requirements
of, and have been operated in material compliance with, the provisions of such
Benefit Plans, the Income Tax Act and the regulations thereunder, applicable
Revenue Canada Information Circulars and their predecessors, all pension
benefits legislation and any other applicable legislation;
(vi) all returns, filings, reports
and disclosures relating to the Benefit Plans required by such Benefit Plans or
by any regulatory authority have been filed or distributed in accordance with
applicable legislation;
(vii) there are no actions, suits,
claims, trials, demands, investigations, arbitrations, or other
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proceedings pending, or, to the knowledge of the Company, threatened with
respect to any of the Benefit Plans against the Company and/or the Subsidiary,
the funding agent, insurer or the fund of any Benefit Plan;
(viii) all Benefit Plans are funded
in accordance with their rules and all laws and all required contributions or
premiums in respect of such Benefit Plans have been remitted to the funding
agents, except current contributions or premiums not in arrears; and
(ix) except for the Benefit Plans
listed in Schedule 4A.28 hereto, no additional Benefit Plans or Benefit Plan
improvements have been promised or held out to the Employees or have been
established by a course of conduct.
4A.29 EMPLOYEES.
(a) Attached hereto as Schedule
4A.29(a) is a true, correct, complete and up-to-date list of the names, titles
and current annual salary rates of and bonuses paid or payable to all present
officers, directors, employees, consultants and independent contractors of the
Company and the Subsidiary (collectively, the "Current Employees").
(b) Except as set forth in Schedules
4A.17 or 4A.28 hereto, neither the Company nor the Subsidiary has any
employment agreement with, or maintains any Benefit Plan with respect to, any
Current Employees.
(c) Attached hereto as Schedule
4A.29(c) is a true, correct and complete list of all labor and collective
bargaining agreements (whether written or oral) to which the Company or the
Subsidiary is a party or by which any of them is bound, and all employment,
profit sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consultant, retirement, severance, welfare or incentive
agreements, plans or contracts (other than those identified in Schedules 4A.17
or 4A.28 hereto) to which the Company or the Subsidiary is a party or by which
any of them is bound. The Company has delivered copies of all such agreements,
contracts and plans to Buyer. Neither the Company nor the Subsidiary is in
default with regard to any of such agreements, plans or contracts.
(d) There are no controversies (other
than routine grievances) pending or threatened between the Company or the
Subsidiary and any of the Current Employees or labor unions or other collective
bargaining units representing any of the Current Employees. No unfair labor
practice complaints have been filed against the Company or the Subsidiary with
the National Labor Relations Board, any provincial Labor Relations Board
located in Canada or any other instrumentality within the United
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States or Canada, and neither the Company nor the Subsidiary has received any
notice or communication reflecting an intention or a threat to file any such
complaint. Neither the Company nor the Subsidiary is a party to or bound by
any labor or collective bargaining agreement. No attempts have been made to
organize the Current Employees into a collective bargaining agreement and
neither the Company nor the Subsidiary have received notice form any of their
Current Employees or any other third party with respect to any such Current
Employee regarding any labor or employment issue. Neither the Company nor the
Subsidiary have received any notice from any labor union or group of employees
that such union or group represents or believes or claims it represents or
intends to represent any of the Current Employees.
(e) Neither the Company nor the
Subsidiary has committed or been found by any court or governmental department,
commission, board, agency or instrumentality to have committed any act of
sexual, religious, age or racial discrimination, any act of sexual harassment,
or any other similar act which violates any federal, provincial, state or local
law or regulation. Except as disclosed in Schedule 4A.29(e) hereto, and
without limiting the generality of the representations and warranties made
under Sections 4A.23 and 4A.24 hereof,
(i) there are no agreements for
the employment of any Current Employees which cannot be terminated by the
Company or the Subsidiary upon giving notice or pay in lieu of notice together
with severance in accordance with applicable law;
(ii) there are no threatened or
actual complaints filed by any of the Current Employees against the Company
claiming that the Company has violated the Employment Standards Act (Ontario),
the Labour Standards Act (Quebec) and/or the Employment Standards Code
(Alberta);
(iii) there are no threatened or
actual complaints filed by any of the Current Employees against the Company
claiming that the Company has violated the Human Rights Code (Ontario), the
Charter of Human Rights and Freedoms (Quebec) and/or the Human Rights,
Citizenship and Multiculturalism Act (Alberta);
(iv) there are no threatened or
outstanding orders or complaints against the Company under the Pay Equity Act
(Ontario) and the Company is in full compliance with the requirements of the
Pay Equity Act (Ontario), and comparable statutory and regulatory requirements
as found in Quebec and Alberta legislation;
(v) there are no threatened or
actual complaints or other proceedings of any kind involving the Company
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or any of the Current Employees before the Ontario Labour Relations Board or
involving the Labour Relations Act (Ontario), the Labour Code (Quebec) and/or
the Labour Relations Code (Alberta);
(vi) there are no threatened or
actual complaints or other proceedings of any kind involving the Company or any
of the Current Employees before the Pension Commissions of Ontario, Quebec
and/or Alberta;
(vii) there are no actual or
threatened actions for wrongful and/or constructive dismissal involving any of
the Employees;
(viii) there are no threatened or
outstanding orders or charges against the Company under the Occupational Health
& Safety Act (Ontario), the Occupational Health & Safety Act (Quebec), and/or
the Occupational Health & Safety Act (Alberta);
(ix) all orders or reports issued
by representatives of the Occupational Health & Safety Branch of the Ministry
of Labour pursuant to the Occupational Health & Safety Act (Ontario), the
Occupational Health & Safety Act (Quebec) and/or the Occupational Health &
Safety Act (Alberta) have been complied with;
(x) none of the Current Employees
are presently off work or receiving Workers' Compensation benefits pursuant to
the Workers' Compensation Act (Ontario), An Act Respecting Industrial Accidents
And Occupational Diseases (Quebec) and/or the Workers' Compensation Act
(Alberta);
(xi) the Company has not at any
time in the past been assessed or penalized under the Workers' Compensation Act
(Ontario), the Workers' Compensation Act (Quebec) and/or the Workers'
Compensation Act (Alberta) and there are no such assessments or penalties
pending;
(xii) none of the Current Employees
are on leave of absence, including pregnancy leave or parental leave;
(xiii) none of the Current Employees
are receiving short term disability benefits, weekly indemnity benefits or long
term disability benefits or are on lay-off; and
(xiv) except for remuneration paid
by the Company and the Subsidiary to any of the Current Employees in the usual
and ordinary course of business and made at current rates of remuneration, no
payments have been made or authorized since November 30, 1997 by the Company to
any of the Current Employees.
(f) Neither the Company nor the
Subsidiary is
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delinquent in payment to any of the Employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed by
them to the date hereof or amounts required to be reimbursed to such Employees.
In the event of termination of the employment of any of the Current Employees,
neither the Company nor the Subsidiary will, by reason of anything done prior
to the Closing Date, be liable to any of the Current Employees for severance
compensation, vacation pay or any other payments, except as required by
applicable law. Since November 30, 1997, neither the Company nor the
Subsidiary has terminated any Current Employee and, therefore, there are no
severance obligations outstanding to any Current Employee by contract, statute
or otherwise.
(g) No person or entity has asserted
or, to the knowledge of the Company, may assert any valid claim against any
continued employment by the Company or the Subsidiary of any employee or
engagement by the Company and/or the Subsidiary of any consultant of the
Company and/or the Subsidiary under the terms of any employment contract,
consulting agreement, covenant not to compete, patent disclosure agreement or
otherwise. To the knowledge of the Company, no Current Employee intends to
terminate his employment or engagement with the Company or the Subsidiary.
(h) Except as set forth on Schedule
4A.29(h) hereto, each current and former officer, director, employee,
consultant and independent contractor of the Company and the Subsidiary has
executed and delivered to the Company a Non-Disclosure Agreement and a
Confidentiality and Inventions Agreement (the "Confidentiality Agreements"),
substantially in the forms attached hereto as Schedule 4A.29(h), prior to the
date hereof, and no current or former officer, director, employee, consultant
or independent contractor of the Company or the Subsidiary is in default in any
respect under his respective Confidentiality Agreements, and no event has
occurred which, with or without the giving of notice, lapse of time or both,
would constitute a default thereunder. To the knowledge of the Company, no
current or former officer, director, employee, consultant or independent
contractor of the Company has failed to comply with or perform all of his
obligations required to be performed by him under his respective
Confidentiality Agreements, and no event has occurred which, with or without
the giving of notice, lapse of time or both, would constitute a default by such
party thereunder. In addition, to the knowledge of the Company, no facts or
circumstances which make a default by any current or former officer, director,
employee, consultant or independent contractor of the Company under any of his
respective Confidentiality Agreements is likely to occur subsequent to the date
hereof.
4A.30 ENVIRONMENTAL LAWS.
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(a) The Company and the Subsidiary have
obtained, currently hold and are in full compliance with all permits, licenses,
certificates, approvals and other authorizations which are required with
respect to the operation of their respective businesses under federal,
provincial, state, local, and foreign laws or regulations heretofore or
currently in effect relating to pollution or protection of the environment,
including laws, regulations, plans, rules and norms relating to emissions,
discharges, releases or threatened releases or pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals, or industrial
toxic or hazardous substances or wastes (the "Environmental Laws"), except any
permits, licenses and other authorizations the absence of which would not,
individually or in the aggregate, have an adverse affect on the business,
operations, prospects, properties, assets or condition (financial or otherwise)
of the Company or the Subsidiary. Such permits, licenses, certificates,
approvals and other authorizations are current, valid and in full force and
effect and will remain so throughout the duration thereof, and will not be
terminated or otherwise adversely affected by the consummation of the
transactions contemplated hereby.
(b) The Company and the Subsidiary are
in full compliance with all Environmental Laws, including all limitations,
restrictions, conditions, standards, prohibitions, requirements, policies,
obligations, schedules and timetables contained in the Environmental Laws or
contained in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder.
Except for any waste, hazardous or toxic materials or other substances properly
handled and disposed of in the ordinary course of the respective businesses of
the Company and the Subsidiary and in full compliance with all Environmental
Laws, there is no environmental pollution on or affecting any of the properties
owned or leased by the Company or the Subsidiary including, without limitation,
any contaminant, irritant or pollutant from any spill, discharge, leak,
emission, escape, injection, dumping or release of any kind whatsoever or any
substance or exposure of any type in any work places or to any medium
including, without limitation, air, land, surface waters or ground waters or
from any generation, transportation, treatment, discharge, storage or disposal
of waste materials, raw materials, hazardous materials, toxic materials or
products of any kind or from the storage, use or handling of any waste,
hazardous or toxic materials or other substances.
4A.31 BANK ACCOUNTS, LETTERS OF CREDIT AND POWERS
OF ATTORNEY. Attached hereto as Schedule 4A.31 is a true, complete
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and correct list of (a) all bank accounts, lock boxes and safe deposit boxes
relating to the business and operations of the Company and the Subsidiary
(Schedule 4A.31 also sets forth, opposite the identification of each such
account or box, the name of the bank or other institution where such account or
box is located, and the name of each authorized signatory thereto); (b) all
outstanding letters of credit issued by financial institutions for the account
of the Company or the Subsidiary (setting forth, in each case, the financial
institution issuing such letter of credit, the maximum amount available under
such letter, the terms (including the expiration date) of such letter of credit
and the party or parties in whose favor such letter of credit was issued); and
(c) the name and address of each person who has a power of attorney to act on
behalf of the Company or the Subsidiary. The Company has heretofore delivered
to Buyer true, correct and complete copies of each letter of credit and each
power of attorney described on Schedule 4A.31 hereto.
4A.32 NO BARTER RECEIVABLES OR OBLIGATIONS.
Neither the Company nor the Subsidiary is a party to any "barter" agreements,
nor are either of them liable for any outstanding barter obligations nor are
either of them the owners of any outstanding barter receivables.
4A.33 ACCOUNTS AND NOTES RECEIVABLE. Attached
hereto as Schedule 4A.33 is a true, correct and complete list, as of December
31, 1997, setting forth, by customer or obligor (which Schedule also includes
the address, telephone number and contact person for each such customer and
obligor), an aging of the accounts and notes receivable of the Company and the
Subsidiary in categories of less than 30 days due, 30 to 59 days due, 60 to 89
days due and 90 days or greater due. Written agreements exist to support the
right to payment for all receivables identified on Schedule 4A.33 hereto, and
reserves are adequate to support the net realizable value of those receivables
as set forth on the Financial Statements.
4A.34 ACCOUNTS PAYABLE, OUTSTANDING OBLIGATIONS,
AND LIABILITIES. Attached hereto as Schedule 4A.34 is a true, correct and
complete list, as of December 31, 1997, by vendor or payee (which Schedule also
includes the address, telephone number and contact person for each such vendor
or payee), an aging of all of the accounts payable, outstanding obligations and
all other liabilities (including contingent liabilities) of the Company and the
Subsidiary in categories of less than 30 days due, 30 to 59 days due, 60 to 89
days due and 90 days or greater due.
4A.35 CUSTOMERS, SUPPLIERS, LICENSEES AND
CONSULTING AGREEMENTS. Attached hereto as Schedule 4A.35 is a true, correct
and complete list of the names, addresses, telephone numbers and contact
persons of (a) all customers of the Company and the Subsidiary during the last
three (3) years; (b) the ten (10)
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largest suppliers of the Company and the Subsidiary during the fiscal year
ended December 31, 1997; (c) all licensees of the Company and the Subsidiary
during the last three (3) years; and (d) all persons for whom the Company and
the Subsidiary have performed services during the last three (3) years, the
performance of which entitles or entitled the Company and/or the Subsidiary to
payment of more than Cdn. $10,000.00. Schedule 4A.35 hereto includes the total
sales to, purchases by, or fees paid by each customer or licensee, the total
purchases by the Company and the Subsidiary from each supplier, and the
salesperson assigned to each such customer, licensee and supplier. Except as
set forth on Schedule 4A.35 hereto, no supplier, customer or licensee
identified on Schedule 4A.35 hereto has advised the Company or the Subsidiary,
formally or informally, that it intends to terminate, discontinue or
substantially modify or reduce its business with the Company or the Subsidiary
by reason of the transactions contemplated by this Agreement or otherwise.
Except as set forth on Schedule 4A.35 hereto, neither the Company nor the
Subsidiary has any obligations or made any undertaking to perform work for
customers, licensees or any other person or entity other than on a billable
basis.
4A.36 SECURITY DEPOSITS; CLAIMS AGAINST THIRD
PARTIES. Attached hereto as Schedule 4A.36 is a true, correct and complete
listing of all the Company's and the Subsidiary's security deposits and claims
against third parties. Schedule 4A.36 hereto sets forth the party with whom
security has been deposited or the party against whom claims have been
asserted, the amount of the claim and the present status or the resolution of
the claim.
4A.37 MINUTE BOOKS. The minute books of the
Company and the Subsidiary, copies of which have been delivered to Buyer,
contain true, complete and accurate records of all meetings and accurately
reflect all other corporate action of the stockholders and boards of directors
of the Company and the Subsidiary. The stock certificate books and stock
transfer ledgers of the Company and the Subsidiary, copies of which have been
delivered to Buyer, are true, correct and complete. All stock transfer taxes
levied or payable with respect to all transfers of shares of the Company and
the Subsidiary prior to the date hereof have been paid and appropriate transfer
tax stamps affixed.
4A.38 RESIDENCE. Except as set forth on Schedule
4A.38 hereto, to the knowledge of the Company, each of the Sellers is not a
"non-resident" as that term is defined in the Income Tax Act and is not a
"non-Canadian" as that term is defined in the Investment Canada Act. The
Company is a "Foreign Issuer" as that term is defined in the HSR Act and the
regulations promulgated pursuant to the HSR Act.
4A.39 SOFTWARE MATTERS.
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(a) With respect to all
software/computer applications owned or licensed from others by the Company
and/or the Subsidiary, including all source codes and related documentation
(the "Software Materials"), all of which are contained in Schedule 4A.39
hereto, there are no bugs, errors or defects of any kind in said
software/computer applications which could materially adversely affect the
value, utility, marketability, operability or any other aspect of such
software/computer applications, or which render the software/computer
applications unable to substantially conform to the Software Materials
contained in Schedule 4A.39 hereto.
(b) The Company and the Subsidiary have
conducted "year 2000" audits with respect to all software/computer applications
owned or licensed from others by the Company and/or the Subsidiary as of the
Closing Date, including the Software Materials contained in Schedule 4A.39
hereto (the "Software Applications"), and all Software Applications comply with
and account for the fact of the arrival of the "year 2000" and will not be
materially adversely affected with respect to value, utility, marketability,
operability or any other aspect by virtue of the arrival of the "year 2000".
Without limiting the generality of the foregoing, except as set forth on
Schedule 4A.39 hereto, the Software Applications:
(i) will operate prior to, during
and after the calendar year 2000 A.D., and more specifically, will operate
during each such time period without error relating to date data, including any
error relating to, or the product of, date data which represents or references
different centuries or more than one century;
(ii) will not abnormally end or
provide invalid or incorrect results as a result of date data, including date
data which represents or references different centuries or more than one
century; and
(iii) are capable of date data
century recognition, calculations which accommodate same century and
multi-century formulas and date values, and date data interface values that
reflect the century.
(c) The Company and the Subsidiary are
in compliance with all licenses from others for all software/computer
applications used in or relating to the business of the Company and the
Subsidiary as of the Closing Date, including any such licenses with respect to
the Software Materials contained in Schedule 4A.39 hereto, and the Company and
the Subsidiary have obtained all necessary licenses for use of
software/computer applications used in or relating to the business of the
Company and the Subsidiary.
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4A.40 FULL DISCLOSURE. No representation or
warranty by the Company in this Agreement, in any Schedule hereto, or in any
list, certificate, document or written statement delivered by the Company to
Buyer pursuant hereto (and, if corrected or updated, as so corrected or
updated), contains any untrue statement of a material fact or omits to state
any material fact necessary to make any statement herein or therein, in the
light of the circumstances under which it was made, not misleading.
4A.41 ACCURACY AND COMPLETENESS OF INFORMATION IN
OFFERING MEMORANDUM. The information that appears in the Offering Memorandum
defined in Section 4B.6(a)(iv)(B) hereof regarding the Company, the Subsidiary,
Miralta, and the Sellers (including, without limitation, the Company's
financial statements) (the "ProMIRA Information"): (a) is accurate and complete
at and as of the Closing Date, and (b) satisfies the disclosure requirements of
Regulation D under the Securities Act regarding the Company (including, without
limitation, the requirements of Item 17(b) and 21(b) of Form S-4 of the
Securities Act). The Company acknowledges and agrees that Manugistics Group
will rely on the ProMIRA Information in preparing reports required to be filed
with the Commission, including a Current Report on Form 8-K to be filed by
Manugistics Group after Closing in connection with the transactions
contemplated by this Agreement, and to effect the registration of the
Manugistics Group Shares pursuant to Section 3.2(b)(iii) hereof.
4B. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each of the Sellers severally as to himself (and not jointly) represents and
warrants to Buyer as follows:
4B.1 TITLE TO THE SHARES AND THE OPTIONS. Such
Seller is the lawful record and beneficial owner of, and has good and
marketable title to, the number of Shares and the Options set forth opposite
his name on Schedule 1 hereto. Each of the Shares and the Options set forth
opposite such Seller's name on Schedule 1 are fully paid and, except as set
forth on Schedule 1 hereto, free of preemptive rights. The Shares and the
Options set forth opposite such Seller's name on Schedule 1 hereto represent
all of the Shares and the Options of such Seller as of the date hereof, which
Shares and Options are owned by such Seller free and clear of any and all
Liens, other than as set forth in either or both of the Shareholders
Agreements. No order has been given under the Family Law Act (Ontario) or any
similar legislation in Ontario or elsewhere nor is there any application
pending under the Family Law Act (Ontario) or under any similar legislation in
Ontario or elsewhere by the spouse of such Seller which would or does affect
the Shares or the Options in any manner whatsoever.
4B.2 POWER AND CAPACITY. Such Seller has full
right, power and capacity to execute, deliver and perform this Agreement, to
sell, transfer and deliver the Shares owned by him to Buyer hereunder, to
cancel all Options held by such Seller,
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and to perform all other transactions contemplated to be performed by him
hereby. Such Seller, if a corporation, partnership, trust or other entity, is
duly authorized to execute, deliver and perform this Agreement by all necessary
actions on the part of such Seller, and the person signing this Agreement on
behalf of such Seller has been duly authorized to do so. This Agreement is a
valid and binding obligation of each of the Sellers, enforceable against each
of them in accordance with its terms. At the Closing, each Seller will
transfer to Buyer good and marketable record and beneficial title to the
Shares, free and clear of any and all Liens.
4B.3 FREEDOM TO CONTRACT. The execution and
delivery of this Agreement by such Seller does not, and the performance by such
Seller of its respective obligations hereunder will not violate or conflict
with the charter and other governing documents applicable to or governing such
Seller if such Seller is a corporation, partnership, trust or other entity, or
any amendments thereto or restatements thereof. The execution and delivery of
this Agreement does not, and the performance by such Seller of its respective
obligations hereunder will not (a) violate any of the terms, conditions or
provisions of any law, rule, regulation, order, writ, injunction, judgement or
decree of any court, governmental authority, or regulatory agency, or (b)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
or any note, bond, indenture, debenture, security agreement, trust agreement,
lien, mortgage, lease, agreement, license, franchise, permit, guaranty, joint
venture agreement, or other agreement, instrument or obligation, oral or
written, to which such Seller is a party (whether as an original party or as an
assignee or successor) or by which such Seller or any of its respective
properties is bound.
4B.4 LITIGATION. Each Seller is not and, to the
knowledge of such Seller, neither the Company nor the Subsidiary is, a party to
any suit, action, arbitration or legal, administrative, governmental or other
proceeding or investigation pending or threatened which might have an adverse
effect or restrict the ability of such Seller to consummate the transactions
contemplated hereby or to perform his obligations hereunder.
4B.5 RESIDENCE. Except as set forth on Schedule
4A.38 hereto, each Seller represents and warrants, as to himself, that such
Seller is not a "non-resident" as that term is defined in the Income Tax Act
and is not a "non-Canadian" as that term is defined in the Investment Canada
Act.
4B.6 INVESTMENT RISKS.
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(a) Each Seller, whether residing in
the United States, Canada, the United Kingdom or elsewhere, represents and
warrants to Buyer as to himself only:
(i) Such Seller, alone or together
with his advisors and/or Purchaser Representative (as defined in Rule 501 under
the Securities Act), if any, has such knowledge and experience in financial and
business matters and, in particular, concerning investments, as is necessary to
enable him to evaluate the merits and risks of making an investment in the
Manugistics Group Shares.
(ii) Such Seller has no immediate
need for liquidity in the Manugistics Group Shares and is able to bear the risk
of making an investment in the Manugistics Group Shares for an indefinite
period. Each such Seller's present financial condition is such that he is under
no present or contemplated future need to dispose of any portion of the
Manugistics Group Shares to satisfy any existing or contemplated undertaking,
need or indebtedness.
(iii) The Manugistics Group Shares
being issued to such Seller pursuant to this Agreement are being acquired by
such Seller for investment purposes only, for such party's own account and not
with a view to the offer, sale or distribution thereof, provided, however,
that, in the event that such Manugistics Group Shares are registered on a
registration statement under the Securities Act for resale by the Sellers as
contemplated by the Registration Rights Agreement, the Seller may, at its sole
discretion, offer and sell all or any portion of such shares pursuant to such
registration statement, subject, however, to compliance with any applicable
state, provincial or other law. No Seller has taken, nor will any Seller take
or cause to be taken any action, that would cause such Seller to be deemed to
be an "underwriter," as defined in Section 2(11) of the Securities Act, with
respect to those Manugistics Group Shares, except in connection with the offer
and sale of such shares pursuant to such registration statement.
(iv) (A) Buyer has afforded, or
otherwise caused Manugistics Group to afford, to such Seller and such Seller's
professional advisors and Purchaser Representative (if any) full and complete
access to all information with respect to Manugistics Group, and its business,
operations, financial condition and management which the Seller, such advisors
and/or Purchaser Representative (if any) have deemed necessary and material for
an evaluation of the merits and risks of the Seller acquiring and making an
investment in the Manugistics Group Shares hereunder. The Seller, such
advisors and/or Purchaser Representative (if any) have had adequate opportunity
to ask questions of, and receive answers from, persons acting on behalf of
Manugistics Group regarding the terms and conditions of the issuance and sale
of the Manugistics Group Shares hereunder and
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to obtain any additional information which Manugistics Group possesses or can
acquire without unreasonable effort or expense that is necessary to verify the
accuracy of the information furnished to the Seller, his professional advisors
and or Purchaser Representative, if any, including, without limitation, the
information set forth in the Documents (as defined in Section 4B.6(a)(iv)(B)
hereof. All such questions have been answered to the full satisfaction of the
Seller, his professional advisors and/or Purchase Representative (if any).
(B) Such Seller, either alone
or with his professional advisors and/or his respective Purchaser
Representative, if any, has received, has read and understands the documents,
financial statement and other material, including the Joint Information
Statement and Offering Circular dated February 6, 1998 (the "Offering
Memorandum"), relating to Manugistics Group, the Manugistics Group Shares, the
Company, this Agreement and the transactions contemplated by this Agreement,
identified on Schedule 4B.6 hereto (the "Documents").
(v) In evaluating the merits and risks of making an
investment in the Manugistics Group Shares hereunder, each Seller has relied on
the advice of his own personal legal, financial and accounting advisors and/or
Purchaser Representative (if any).
(vi) If such Seller is an individual, the
permanent address set forth for such Seller on Schedule 4B.6(a)(vi) hereto is
the true residence of such Seller, and such Seller has no present intention of
becoming a resident of any other state, province or other jurisdiction. If
such Seller is a corporation, trust, partnership or other entity, such Seller
has its principal place of business at the address set forth for such Seller on
Schedule 4B.6(a)(vi) hereto and was not organized for the specific purpose of
acquiring any of the Manugistics Group Shares. The foregoing representation is
made under penalty of perjury.
(vii) Such Seller understands that there are
substantial risks pertaining to the making of an investment in the Manugistics
Group Shares hereunder, including risks set forth in the Documents. Each Seller
is fully able to bear the economic risk of an investment in the Manugistics
Group Shares for an indefinite period of time and can afford a complete loss of
such investment.
(viii) Such Seller understands and acknowledges that
the Manugistics Group Shares have not been registered for offer or sale under
the Securities Act or registered or qualified under any state, provincial or
other securities act, and are being sold on the basis of exemptions from
registration under the federal and applicable state, provincial or other
securities laws. Reliance on such exemptions
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is based in part on the accuracy of the representations, warranties and
agreements made by each Seller herein, and such Seller acknowledges and agrees
that Manugistics Group has relied on such representations, warranties and
agreements. Such Seller further understands and acknowledges that the
Manugistics Group Shares may not be sold, assigned or otherwise transferred
unless so registered or qualified or unless, in the opinion of counsel to the
Seller, which opinion is acceptable to Manugistics Group, an exemption from
registration and any such qualification is available.
(ix) Such Seller understands that
neither the Commission nor any other federal, state, provincial or other
governmental authority has approved the Manugistics Group Shares, nor have any
of the foregoing authorities made any recommendation, findings or determination
relating to the merits of making an investment in the Manugistics Group Shares
hereunder.
(x) Such Seller understands and
acknowledges that, as more fully set forth in Sections 4B.6(a)(viii) and 6.6(b)
hereof, there are significant restrictions on the transfer of the Manugistics
Group Shares. Accordingly, there can be no assurance that any Seller will be
able to liquidate the Manugistics Group Shares held by such Seller.
(xi) The information provided by
such Seller herein, and any other information provided by such Seller to Buyer
or Buyer's agents or representatives, is true and correct in all respects as of
the date hereof and will be true at and as of Closing (or, if there have been
any changes in such information since the date such information was furnished,
the undersigned has advised counsel to Manugistics Group in writing of such
changes).
(xii) Each Seller which is a
corporation, partnership or other entity was not organized for the specific
purpose of acquiring the Manugistics Group Shares.
(xiii) No Seller shall have any
preemptive rights or any similar rights to subscribe for any additional
Manugistics Group Shares or any other security issued by or interest in or
obligation of Manugistics Group.
(x) Unless such Seller has
otherwise requested that such information be provided to him in hard copy
format, such Seller acknowledges that he has received by e-mail and reviewed
the following documents pertaining to Manugistics, which documents have been
filed by Manugistics with the Commission: (A) Annual Report on Form 10-K for
the fiscal year ended February 28, 1997; (B) first, second and third quarter
reports on Form 10-Q for the first three quarters of the fiscal
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year ended February 28, 1998; (C) current report on Form 8-K dated May 12,
1997; (D) proxy materials for annual meeting of stockholders held on July 25,
1997; and (E) prospectus dated August 13, 1997 filed with the SEC as part of a
registration statement on Form S-3. Any such Seller who has not requested such
information in hard copy format further acknowledges that he: (V) consents to
the receipt of such information by electronic delivery; (W) has complete access
to all such information; (X) has received all such information; (Y) has had an
opportunity to review such information; and (Z) has been able to download
and/or print any and all such information. If such Seller has requested such
information in hard copy format, such Seller acknowledges that he has received
and reviewed such information.
(b) Each Seller who resides in the
United States represents and warrants, as to himself only, that if such Seller
checks "Yes" in response to any of the classifications following such Seller's
signature line at the end of this Agreement, such Seller is an "accredited
investor," as defined in Rule 501(a) of Regulation D under the Securities Act,
by virtue of such classification.
(c) Each Seller who resides in Canada
represents and warrants, as to himself only:
(i) Such Seller was not created or
established solely to acquire securities, or to permit purchases of securities
without a prospectus, in reliance on an exemption from the prospectus
requirements of applicable securities legislation.
(ii) If such Seller is not a
corporation or an individual (including, without limitation, a syndicate,
partnership (general or limited), trust, association or other form of
unincorporated organization), such Seller is either (A) a pension plan; (B) a
group of pension plans under common management; (C) an organization of members
of a family fund formed to make investments of family funds; (D) a testamentary
trust and estate; (E) an organization which has primary ongoing business
activities other than investing in securities; (F) a mutual fund other than a
private mutual fund (as defined in clause (a) of the definition of "private
mutual funds" in subsection 1(1) of the Securities Act (Ontario) or subsection
1(q) of the Securities Act (Alberta); (G) a group registered retirement savings
plan or a group deferred profit sharing plan; or (H) a partnership, interests
in which are offered by prospectus, where the partnership invests in securities
in reliance upon clause 72(1)(d) of the Securities Act (Ontario) and subsection
27(1) of the Regulation made thereunder or upon subsection 14(f) of the
Regulation made thereunder.
(iii) Such Seller will execute and deliver
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all documentation as may be required by applicable Canadian securities
legislation to permit the purchase of the Manugistics Group Shares on the terms
herein set forth.
(iv) In addition, each Seller has
received a copy of the Offering Memorandum. Each Seller acknowledges that it
has taken cognizance of the Offering Memorandum and, in particular, the section
thereof entitled "Restrictions on Resale", and further agrees to comply with
any relevant securities legislation, order or policy concerning the purchase
and holding of the Manugistics Group Shares and concerning any resale thereof.
Each Seller shall have the rights set forth in the Offering Memorandum for the
applicable province of residence of such Seller under the headings "Rights of
Action for Damages or Rescission" as if such rights were fully set forth herein
and such rights are hereby incorporated herein by reference.
(v) If such Seller is a resident
of: (A) the Province of Ontario, either (1) such Seller is a Current Employee
of the Company and is not being induced to acquire any of the Manugistics Group
Shares by expectations of employment or continued employment, or (2) the
aggregate acquisition cost of any Manugistics Group Shares acquired by such
Seller as principal is not less than Cdn. $150,000.00; (B) the Province of
Alberta, either (1) the Seller is a Current Employee of the Company and is not
being induced to acquire any of the Manugistics Group Shares by expectation of
employment or continued employment, or (2) the aggregate acquisition cost of
any Manugistics Group Shares acquired by such Seller as principal is not less
than Cdn. $150,000.00; or (C) the Province of Quebec, either (1) such Seller is
a "sophisticated purchaser" as defined in Sections 44 and 45 of the Securities
Act (Quebec), or (2) the total cost of any Manugistics Group Shares acquired by
such Seller as principal exceeds Cdn. $150,000.00.
(vi) Such Seller, at the time of
execution and delivery of the Agreement and, if later, at the time of Closing,
will be outside the territorial boundaries of the United States and its
territories and possessions.
4B.7 PATENTS, COPYRIGHTS AND TRADEMARKS. Except
as set forth on Schedule 4B.7 hereto, to the knowledge of such Seller:
(a) No work or product or any
Proprietary Right (as defined in this Section 4B.7) presently being used,
licensed, sold or distributed, or contemplated to be used, licensed, sold or
distributed, by the Company or the Subsidiary infringes on any rights owned or
held by any other person or entity, and the Proprietary Rights are sufficient
to, and include all intellectual property rights necessary to, operate the
respective businesses of the Company and the Subsidiary as presently conducted;
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(b) There is no pending or, to such Seller's
knowledge, threatened claim or litigation against the Company, the Subsidiary
or any other person or entity contesting or, if decided adversely, affecting
the right of the Company or the Subsidiary to use, license or sell any
Proprietary Right; and
(c) No work or product and no present or
proposed patent, trademark, trade name, copyright, license, trade secret,
invention, intellectual property rights, know-how or other right presently
being licensed, sold or employed or proposed to be licensed, sold or employed,
by any person or entity infringes on, or may infringe on, or adversely affect,
or may adversely affect, any Proprietary Right, nor is there any pending or
proposed statute, law, rule, regulation, standard or code that may adversely
affect any Proprietary Right presently being used, licensed or sold, or
proposed to be used, licensed or sold, by the Company or the Subsidiary.
For purposes of this Agreement, the terms "Proprietary Right", or "Proprietary
Rights" shall mean all patents, trademarks, trade names, copyrights, licenses,
trade secrets, source codes and object codes, inventions, intellectual property
rights, know-how, and other rights embodied in the works and products used,
sold and/or distributed by the Company and/or the Subsidiary, as identified on
Schedule 4B.7 hereto, or that are necessary for the operation of their
respective businesses as presently conducted or as proposed to be conducted.
4B.8 CONFIDENTIALITY AGREEMENTS. Each Seller,
if an Employee, has executed and delivered the Confidentiality Agreements to
the Company and/or the Subsidiary, as applicable, and such Seller has not
failed to comply with or perform all of his obligations required to be
performed by him or is otherwise in default in any respect under his respective
Confidentiality Agreements, and no event has occurred which, with or without
the giving of notice, lapse of time or both, would constitute a default
thereunder.
4B.9 WAIVER OF SHARE PURCHASE RIGHTS. Each Seller
hereby duly and validly waives and relinquishes all rights against the Company,
the Subsidiary, Buyer and its affiliates with respect to any and all Share
Purchase Rights including, without limitation all Options and such Seller's
rights to vesting and exercise of such Share Purchase Rights and any other
rights with respect thereto, and further acknowledges the cancellation of all
Share Purchase Rights including, without limitation all Options whether vested
or non-vested, and whether or not exercised as of the Closing Date.
4B.10 FULL DISCLOSURE. No representation or
warranty by any Seller in this Agreement, in any Schedule hereto, or in any
list, certificate, document or written statement delivered by such Seller to
Buyer pursuant hereto (and, if corrected or
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updated, as so corrected or updated), contains any untrue statement of a
material fact or omits to state any material fact necessary to make any
statement herein or therein, in the light of the circumstances under which it
was made, not misleading. In addition, all information set forth in Schedule
4B.6(a)(vi) and Schedule 1 hereto pertaining to such Seller's name, address and
ownership of Shares and/or Options is true and correct.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer
represents and warrants to Sellers as follows:
5.1 ORGANIZATION. Buyer is an unlimited company
duly organized, validly existing and in good standing under the laws of the
Province of Nova Scotia, and has all requisite corporate power and authority to
enter into and perform this Agreement and the transactions contemplated hereby
to be performed by it.
5.2 AUTHORIZATION. The execution and delivery by
Buyer of this Agreement, and the performance by it of its obligations
hereunder, have been duly authorized by all necessary corporate actions of
Buyer.
5.3 FREEDOM TO CONTRACT. The execution and
delivery of this Agreement by Buyer do not, and the performance by it of its
obligations hereunder will not, (a) violate or conflict with any provision of
the Memorandum and Articles of Association of Buyer or any amendments thereto
or restatements thereof, (b) violate any of the terms, conditions or provisions
of any applicable law, rule, regulation, order, writ, injunction, judgment or
decree of any court, governmental authority, or regulatory agency, or (c)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, indenture, debenture, security agreement, trust agreement,
lien, mortgage, lease, agreement, license, franchise, permit, guaranty, joint
venture agreement, or other agreement, instrument or obligation, oral or
written, to which Buyer is a party (whether as an original party or as an
assignee or successor) or by which it or any of its properties is bound. No
approval from any governmental department, commission, authority, board,
bureau, agency or other instrumentality is required in connection with Buyer's
execution, delivery and performance of this Agreement and the consummation of
the transactions required hereby, nor is Buyer required to give notice to any
court, governmental department, commission, authority, board, bureau, agency or
other instrumentality in order for Buyer to execute, deliver and/or perform
this Agreement and/or to consummate the transactions contemplated hereby.
5.4 LITIGATION. Buyer is not a party to any
suit, action, arbitration or legal, administrative, governmental or other
proceeding or investigation pending or, to the knowledge of
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Buyer, threatened, which might adversely affect or restrict the ability of
Buyer to consummate the transactions contemplated by this Agreement or to
perform its obligations hereunder.
5.5 TITLE TO THE MANUGISTICS GROUP SHARES. Buyer
is the lawful record and beneficial owner of and has good and marketable title
to the Manugistics Group Shares, free and clear of any liens, encumbrances and
claims, at law or in equity, with the exception of those liens, encumbrances
and claims which may arise pursuant to or be made under any of the Transaction
Agreements, and has full right, power and authority to effect the sale and
delivery of the Manugistics Group Shares. Upon the delivery of the Manugistics
Group Shares to or for the benefit of the Sellers, such Sellers will acquire
good and marketable title thereto, free and clear of any liens, encumbrances
and claims, at law or in equity.
6. COVENANTS OF THE COMPANY,THE SELLERS AND THE PAYING
AGENT. The Company (with respect to the matters set forth in Sections 6.1,
6.2, 6.3, 6.4 and 6.9 hereof), the Sellers (with respect to the matters set
forth in Sections 6.5, 6.6, 6.7, 6.8, 6.12 and 6.13 hereof), the Miralta
Shareholders (with respect to the matters set forth in Sections 6.10 and 6.11),
and the Paying Agent (with respect to the matters set forth in Section 6.12
hereof) hereby covenant and agree with Buyer as follows:
6.1 CONDUCT OF BUSINESS PENDING CLOSING. From
the date hereof until the Closing Date, the Company shall, and shall cause the
Subsidiary to,:
(a) maintain their respective
existences in good standing;
(b) maintain the general character of
their respective businesses and conduct their respective businesses in the
ordinary and usual manner;
(c) maintain proper business and
accounting records;
(d) maintain their respective
properties in good repair and condition; and
(e) use its best efforts to preserve
their respective businesses intact, to keep available to the Company and the
Subsidiary the services of their present officers and employees and to preserve
for the Company and the Subsidiary the goodwill of their subscribers, customers
and others having business relations with the Company and the Subsidiary.
6.2 PROHIBITED ACTIONS PENDING CLOSING. Unless
otherwise provided for herein or approved by Buyer in writing, from the date
hereof until the Closing Date, the Company shall
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not, and shall not permit the Subsidiary to,:
(a) amend or otherwise change their
respective Memorandum and Articles of Association, Certificate of Incorporation
or other governing documents;
(b) issue or sell or authorize for
issuance or sale, or grant any options or make other agreements with respect
to, any shares of their capital stock or any other of their securities;
(c) authorize or incur any additional
debt for money borrowed, or incur any additional debt other than trade debt;
(d) mortgage, pledge or subject to lien
or other encumbrance any of their properties or agree to do so;
(e) enter into or agree to enter into
any material agreement, contract or commitment other than sales agreements
entered into in the ordinary course of business;
(f) declare, set aside, make or pay any
dividend or other distribution to Sellers, or redeem, purchase or otherwise
acquire, directly or indirectly, any of their capital stock, or authorize or
effect any split-up or any recapitalization or make any changes in its
authorized or issued capital stock;
(g) enter into any new employment,
severance, consulting or other compensation agreement with any of the Current
Employees or any other person or entity; increase or agree to increase the
compensation of any of the Current Employees, by means of salary increase,
bonus or otherwise, except as hereinbefore noted in Section 4A.29 hereof, or
otherwise agree to any severance compensation payable or to become payable to
any of the Current Employees;
(h) establish or adopt any Benefit
Plan; modify, amend, restate, terminate or revise any Benefit Plan; take any
action to deplete any asset of any Benefit Plan; or distribute any
communication to any Current Employee relating to a Benefit Plan;
(i) sell or otherwise dispose of, or
agree to sell or dispose of any of their assets or properties, except in the
ordinary course of business;
(j) amend or terminate any lease,
contract, undertaking or other commitment listed in any of the Schedules to
this Agreement to which either the Company or the Subsidiary is a
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party, or to take action or fail to take any action, constituting any event of
default thereunder;
(k) assume, guarantee or otherwise
become responsible for the obligations of any other party or agree to so do;
(l) invest any of their assets which
are to be sold and transferred to Buyer, except the reinvestment of cash or
cash equivalents in U.S. Treasury Bills and/or Certificates of Deposit;
(m) except as otherwise expressly
provided herein, pay any attorneys, accountants, finders or investment bankers'
fees or other expenses in connection with the transactions contemplated by this
Agreement (the foregoing covenant shall not prohibit the payment of any fees or
expenses for services rendered to the Company and the Subsidiary by any such
parties); or
(n) take any action prior to the
Closing Date which would breach any of the representations and warranties
contained in this Agreement.
6.3 ACCESS. From and after the date hereof until
the Closing, the Company shall afford, and, with respect to clause (b) below,
the Company shall cause the independent certified public accountants for the
Company to afford, (a) to the officers, independent certified public
accountants, counsel and other representatives of Buyer free and full access at
all reasonable times to the properties, books and records (including tax
returns filed and those in preparation) of the Company and the right to consult
with the officers, employees, accountants, counsel and other representatives of
the Company in order that Buyer may have full opportunity to make such
investigations as it shall reasonably desire to make of the affairs of the
Company including, without limitation, the taking by independent certified
public accountants of Buyer of a physical inventory of the Company and the
Subsidiary, (b) to the independent certified public accountants of Buyer free
and full access at all reasonable times to the work papers and other records of
the accountants relating to the Company and the Subsidiary and (c) to Buyer and
its representatives such additional financial and operating data and other
information as to the business and properties of the Company and the Subsidiary
as Buyer shall from time to time reasonably require; provided, however, that
any such investigation shall not affect or otherwise diminish or obviate in any
way any of the representations and warranties of the Company or the Sellers
hereunder.
6.4 NO SHOP. Notwithstanding anything to the
contrary contained in that certain Agreement dated December 22, 1997 between
Manugistics, Inc., a Delaware corporation, and the
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Company, as amended by Agreement dated February 6, 1998 (the "No Shop
Agreement"), from and after the date hereof until the Closing, the Company
shall not, except with respect to the transactions contemplated by this
Agreement, directly or indirectly, through any broker, finder, consultant,
shareholder or other intermediary, solicit, initiate, or encourage any
inquiries or proposals regarding the acquisition of any of Shares or the
capital stock of the Subsidiary or any of the Company's and/or the Subsidiary's
respective assets, whether by merger, sale of assets, liquidation, tender offer
or other business combination (other than sales of inventory in the ordinary
course of business), or participate in any negotiations concerning, or provide
any information or otherwise take any action or make any commitment or
agreement in connection with, any such acquisition proposal. The Company and
the Company's officers and directors shall promptly communicate to Buyer the
terms of any such acquisition proposal of which any of them has knowledge or
which the Company or the Subsidiary or which any officer or director of the
Company may receive.
6.5 TRADE SECRETS.
(a) From and after the Closing Date and
for such period thereafter as each Seller shall hold trade secrets or other
confidential information (as defined below), such Seller shall not use for his
own benefit, or divulge to any other person, firm or corporation, any
confidential information or trade secrets which the Company or the Subsidiary
may have imparted to him, and upon the Closing Date will deliver to Buyer all
lists of customers, books, records and all other property constituting
confidential information belonging to the Company and the Subsidiary; provided,
however, that the restrictions or obligations set forth in this Section 6.5(a)
shall not extend to any confidential information or trade secrets which, at the
time such information was disclosed to any Seller (a "Disclosing Party"), was
in the public domain or thereafter entered the public domain other than through
disclosure by such Disclosing Party or was or becomes readily ascertainable
from public sources. If at any time a Disclosing Party is requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoenas or similar legal process) to disclose any such
information, he (to the extent reasonably practical) shall notify Buyer
immediately and shall refrain from making such disclosure so that Buyer may, at
its own expense, seek an appropriate protective order and/or waive compliance
with the provisions hereof. If, in the absence of a protective order or the
receipt of a waiver hereunder, in the reasonable opinion of the relevant
Disclosing Party's counsel, he is compelled to disclose such information to any
tribunal or any governmental agency to avoid being liable for contempt or
suffering any other penalty, such Disclosing Party may disclose such
information to such tribunal or agency without liability hereunder; provided,
however, that he gives Buyer prompt notice of such decision.
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Each Seller which is a corporation, partnership, trust or other entity shall
use its best efforts to prevent the respective directors and officers of such
entities, as applicable, from violating the provisions of this Section 6.5(a).
For the purposes of this Agreement, the term "confidential information" means
information related to the following: (i) any and all versions of the software
and related documentation owned or marketed by the Company or the Subsidiary,
as well as the software and documentation owned by the Company's or the
Subsidiary's suppliers and used internally by the Company or the Subsidiary,
other than generally commercially available software, including all related
algorithms, concepts, data, designs, flow charts, ideas, programming
techniques, specifications and source code listings; (ii) information regarding
the Company's or the Subsidiary's business operations, methods and practices,
including marketing strategies, product pricing, margins, hourly rates, per
diems and information regarding the financial affairs of the Company and the
Subsidiary; (iii) the names of the Company's and the Subsidiary's clients and
the names of the suppliers of computer services and software to the Company and
the Subsidiary,and the nature of the Company's and the Subsidiary's
relationships with these clients and suppliers; (iv) technical and business
information of or regarding the clients of the Company and the Subsidiary
obtained in order for the Company and the Subsidiary to provide such clients
with software products and services, including information regarding the data
processing requirements and the business operations, methods and practices and
product plans of such clients; and (v) any other trade secret or confidential
or proprietary information in the possession or control of the Company or the
Subsidiary.
(b) For a period of three (3) years after
the Closing Date, none of the Managing Shareholders shall compete with the
Company. As used herein, to "compete" means to be involved in any manner,
whether directly or indirectly, on a worldwide basis, for his own account or
for the account of another, as owner, principal, stockholder, director,
employee, officer, consultant, agent, independent contractor, partner, joint
venturer, creditor or in any other manner, with any of the following persons,
businesses or entities: i2 Technologies, Numetrix, Logility, American Software,
SAP, Oracle, Baan, PeopleSoft and/or SSA, and any successors thereto whether by
a purchase of assets, stock or otherwise (all such persons, businesses and
entities collectively, the "Competitors"). Notwithstanding the foregoing,
nothing herein shall prohibit any of the Managing Shareholders from owning not
more than one percent (1%) of any class of securities of any publicly-traded
Competitor. Each of the Managing Shareholders acknowledges that, because the
Company's business is highly competitive, price sensitive and capital
intensive, and because the Company conducts its business and offers products
throughout the world and the information he may have acquired about the conduct
of the Company's business during the course of his employment by the
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Company and/or the Subsidiary and/or his stock ownership in the Company is
important to the entire breadth of the Company's business, it is appropriate to
define such restriction broadly as relevant to the fair protection of the
Company's goodwill and substantial economic investment in same.
(c) For a period of three (3) years
following the Closing Date, none of the Managing Shareholders shall in any
manner, directly or indirectly, contact, divert or solicit any account,
customer or supplier with whom the Company or the Subsidiary has conducted any
business or for whom the Company or the Subsidiary has performed any services
or sold any products during the period of such Seller's ownership of any of the
Shares or the Options including, without limitation, any person or entity who
was a potential account, client or customer of the Company or the Subsidiary as
a result of contacts, including, without limitation, the exchange of proposals,
having been made between the Company and/or the Subsidiary and such person or
entity prior to the date of this Agreement. As used herein, to "solicit"
means, directly or indirectly, to provide, offer to provide, or communicate
with in any way to induce any interest in using for the account of such
Managing Shareholder or another, as owner, principal, stockholder, director,
employee, officer, consultant, agent, independent contractor, partner,
joint-venturer, creditor or in any other manner, services or products provided
by the Company or the Subsidiary.
(d) For a period of three (3) years
following the Closing Date, none of the Managing Shareholders shall solicit,
employ or retain, or otherwise participate in the employment or retention of,
in any capacity, any Current Employee of the Company or any employee of Buyer
and/or its affiliates (where, if such person or entity were so employed or
retained, Buyer and/or its affiliates, the Company or the Subsidiary would be
put at a competitive disadvantage).
(e) As to Section 6.5(a) hereof, each
Seller acknowledges, and as to Sections 6.5(c) and (d) hereof, each of the
Managing Shareholders acknowledges, that a violation of the foregoing covenants
may cause irreparable injury to the Company, the Subsidiary and Buyer and that
the Company, the Subsidiary and Buyer will be entitled, in addition to any
other rights and remedies it may have, to seek injunctive relief.
(f) In the event the covenants
contained in this Section 6.5 should be held by any court or other constituted
legal authority to be void or otherwise unenforceable in any particular
jurisdiction or with respect to any particular activity, then Sellers and Buyer
shall consider this Section 6.5 to be amended and modified so as to eliminate
therefrom that particular jurisdiction or activity as to which such covenants
are so held to be void or otherwise unenforceable, and, as to all other
jurisdictions and activities covered hereby, the terms and
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provisions hereof shall remain in full force and effect.
(g) Sellers acknowledge and agree that
the consideration to be paid to Sellers by Buyer on the Closing Date pursuant
to the terms of Section 3 hereof constitutes good and valuable consideration
for the covenants set forth in this Section 6.5.
The obligations of the Sellers set forth in this Section 6.5 shall survive the
Closing.
6.6 RESTRICTIONS ON TRANSFER OF MANUGISTICS GROUP
SHARES.
(a) (i) Each Seller hereby covenants
and agrees that such Seller will not, other than by operation of law, directly
or indirectly, sell, offer for sale, pledge or otherwise dispose of or transfer
(other than a Permitted Transfer as such term is defined in the Registration
Rights Agreement and subject to all of the terms and conditions of the
Registration Rights Agreement) (each, a "Transfer") the Group 1 Custodian
Shares allocated to such Seller, as set forth in Column No. 9 on EXHIBIT I
hereto, and delivered to the Custodian at the Closing, or any interest in any
such Group 1 Custodian Shares, until the first anniversary of the Closing Date;
thereafter, each Seller may Transfer twenty-five percent (25%) of such Group 1
Custodian Shares commencing only upon each Disbursement Date as provided in
Section 3.3(b)(ii) hereof; whereupon following receipt of such Group 1
Custodian Shares from the Paying Agent, such Seller may Transfer such Group 1
Custodian Shares, subject to all of the terms and conditions of the
Registration Rights Agreement.
(ii) Each Seller hereby covenants
and agrees that such Seller will not, directly or indirectly, Transfer the
Group 2 Forfeitable Custodian Shares allocated to such Seller, as set forth in
Column No. 10 on EXHIBIT I hereto, and delivered to the Custodian at the
Closing, or any interest in any such Group 2 Forfeitable Custodian Shares,
until the first anniversary of the Closing Date; thereafter, each Seller may
Transfer twenty-five percent (25%) of such Group 2 Forfeitable Custodian Shares
commencing only upon each Disbursement Date as provided in Section 3.3(b)(iii)
hereof (as defined in Section 3.3(b)(ii) hereof); whereupon each such Seller
may Transfer such Group 2 Forfeitable Custodian Shares, subject to all of the
terms and conditions of the Registration Rights Agreement. Notwithstanding the
foregoing, the restrictions on Transfer applicable to the Group 2 Forfeitable
Custodian Shares provided in this Section 6.6(a)(ii) shall not apply to any
Group 2 Forfeitable Custodian Shares which shall have been disbursed to any
Group 2 Employee pursuant to Section 3.3(b)(iii)(B) hereof to any US Seller
for United States federal income taxes pursuant to Section 3.3(b)(v) hereof or
to Buyer and/or its affiliates for United States withholding taxes pursuant to
Sections 3.3(b)(vi)
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and 3.3(c)(iii) hereof and/or for Canadian withholding taxes, as described in
Section 6.12 hereof, pursuant to Section 3.3(b)(vi) hereof; however, other than
with respect to Group 2 Custodian Shares disbursed to Buyer and/or its
affiliates, as aforesaid, such Group 2 Forfeitable Custodian Shares remain
subject to all of the terms and conditions of the Registration Rights
Agreement.
(iii) Each Seller hereby covenants
and agrees that such Seller will not, directly or indirectly, Transfer the
Group 3 Forfeitable Custodian Shares allocated to such Seller, as set forth in
Column No. 11 on EXHIBIT I hereto, and delivered to the Custodian at the
Closing, or any interest in such Group 3 Forfeitable Custodian Shares, until
the first anniversary of the Closing Date; whereupon each such Seller may
Transfer such Group 3 Forfeitable Custodian Shares, subject to all of the terms
and conditions of the Registration Rights Agreement. Notwithstanding the
foregoing, the restrictions on Transfer applicable to the Group 3 Forfeitable
Custodian Shares provided in this Section 6.6(a)(iii) shall not apply to any
Group 3 Forfeitable Custodian Shares which shall have been disbursed to any US
Seller for United States federal income taxes pursuant to Section 3.3(b)(v)
hereof or to Buyer and/or its affiliates for United States withholding taxes
pursuant to Sections 3.3(b)(vi) and 3.3(c)(iii) hereof and/or for Canadian
withholding taxes, as described in Section 6.12 hereof, pursuant to Section
3.3(b)(vi) hereof; however, other than with respect to Group 3 Forfeitable
Custodian Shares disbursed to Buyer and/or its affiliates, as aforesaid, such
Group 3 Forfeitable Custodian Shares shall remain subject to all of the terms
and conditions of the Registration Rights Agreement.
(iv) Each Seller hereby covenants
and agrees that such Seller will not, directly or indirectly, Transfer the One
Year Escrow Shares allocated to such Seller, as set forth in Column No. 12 on
EXHIBIT I hereto, and delivered to the Escrow Agent at Closing and, thereafter,
to the extent delivered to the Paying Agent, if at all, unless otherwise
provided in the Escrow Agreement, upon the first anniversary of the Closing
Date, or any interest in any such One Year Escrow Shares, until such Seller
receives such One Year Escrow Shares from the Paying Agent; thereafter, each
Seller may Transfer such One Year Escrow Shares to the extent of such Seller's
Pro Rata Share (as defined in Section 10.2(b) hereof) of the Distributable One
Year Escrow Balance, subject to all of the terms and conditions of the
Registration Rights Agreement. Notwithstanding the foregoing, the restrictions
on Transfer applicable to the One Year Escrow Shares provided in this Section
6.6(a)(iv) shall not apply to any One Year Escrow Shares which shall have been
disbursed to Buyer and/or its affiliates for United States withholding taxes
pursuant to Sections 3.3(b)(vi) and 3.3(c)(iii) hereof and/or for Canadian
withholding taxes, as described in Section 6.12 of this Agreement, pursuant to
Section 3.3(b)(vi)
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hereof; however, other than with respect to One Year Escrow Shares disbursed to
Buyer and/or its affiliates, as aforesaid, such One Year Escrow Shares shall
remain subject to all terms and conditions of the Registration Rights
Agreement.
(v) Each Seller hereby covenants
and agrees that such Seller will not, directly or indirectly, Transfer the Two
Year Escrow Shares allocated to such Seller, as set forth in Column No. 14 on
EXHIBIT I hereto, and delivered to the Escrow Agent at the Closing and,
thereafter, to the extent delivered to the Paying Agent, if at all, unless
otherwise provided in the Escrow Agreement, upon the second anniversary of the
Closing Date, or any interest in any such Two Year Escrow Shares, until such
Seller receives such Two Year Escrow Shares from the Paying Agent; thereafter,
each Seller may Transfer such Two Year Escrow Shares to the extent of such
Seller's Pro Rata Share of the Distributable Two Year Escrow Balance, subject
to all of the terms and conditions of the Registration Rights Agreement.
Notwithstanding the foregoing, the restrictions on Transfer applicable to the
Two Year Escrow Shares provided in this Section 6.6(a)(v) shall not apply to
any Two Year Escrow Shares which shall have been disbursed to Buyer and/or its
affiliates for United States withholding taxes pursuant to Sections 3.3(b)(vi)
and 3.3(c)(iii) hereof and/or for Canadian withholding taxes, as described in
Section 6.12 of this Agreement, pursuant to Section 3.3(b)(vi) hereof; however,
other than with respect to Two Year Escrow Shares disbursed to Buyer and/or its
affiliates, as aforesaid, such Two Year Escrow Shares shall remain subject to
all terms and conditions of the Registration Rights Agreement.
The Manugistics Group Shares subject to the restrictions on Transfer set forth
in this Section 6.6(a), other than those Manugistics Group Shares that the
Custodian has directed the Transfer Agent to register in the name of Buyer or
its designee as a result of an Employment Termination or that the Paying Agent
has directed the Transfer Agent to register in the name of Buyer and/or its
affiliates (upon receipt thereof from the Custodian) for the payment of United
States and/or Canadian withholding taxes, will be held by the Custodian until
the expiration of the applicable restriction periods. Contemporaneously with
the expiration of such restriction periods, the Custodian will direct the
Transfer Agent to register the applicable number of Manugistics Group Shares so
released from restriction on Transfer in the name of the Paying Agent,
whereupon the Paying Agent shall direct the Transfer Agent to register such
Manugistics Group Shares in the name of the Sellers, as set forth in EXHIBIT I
hereto or, in such other names as the Paying Agent shall have directed upon
instruction from Sellers theretofore given in accordance with the provisions of
this Agreement and the Registration Rights Agreement. Following the expiration
of such restriction periods, the Manugistics Group Shares so registered
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in the name of the Paying Agent for distribution to the Sellers (or their
designees) shall be released from restriction on Transfer, subject to all of
the terms and conditions of the Registration Rights Agreement.
(b) Subject to Section 6.6(c), below,
each Seller hereby acknowledges and agrees that, commencing on the Closing
Date, each certificate representing Manugistics Group Shares shall be inscribed
with the following legends:
"The shares represented by this certificate have been acquired
for investment purposes only and have not been registered
under the Securities Act of 1993, as amended, or registered or
qualified under any applicable state, provincial or other
securities laws. Such shares may not be sold, assigned or
otherwise transferred unless so registered and qualified or
unless, in the opinion of counsel, which opinion is acceptable
to Manugistics Group, Inc., an exemption from such
registration and any such qualification is available."
"The shares represented by this certificate are subject to
certain restrictions on transferability and to the other terms
and conditions of that certain Stock Purchase Agreement dated
as of February __, 1998 by and among Manugistics Nova Scotia
Company, ProMIRA Software Incorporated, Xxxxxx Xxx and
Xxxxxxxxxxx Xxxx, or either of them acting alone, and the
holders of all of the issued and outstanding shares of the
capital stock and all of the issued and outstanding options
for the purchase of shares of the capital stock of ProMIRA
Software Incorporated, and the Registration Rights Agreement,
the Custodian Agreement, the Escrow Agreement and the Paying
Agent Agreement executed in connection therewith, copies of
which are on file and may be obtained upon written request
directed to the attention of the Secretary of Manugistics
Group, Inc. Under the aforesaid Stock Purchase Agreement and
Registration Rights Agreement, such shares may not be sold,
pledged, donated or otherwise transferred or encumbered except
as expressly permitted under such agreements."
"The shares represented by this certificate are subject to
certain restrictions on transferability and to the other terms
and conditions of that certain Registration Rights Agreement
dated as of February __, 1998, by and among Manugistics Group,
Inc., Xxxxxx Xxx and Xxxxxxxxxxx Xxxx, or either of them
acting alone, as Paying Agent, and the former holders of all
of the issued and outstanding shares of the capital stock and
all of the issued and outstanding options for the
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purchase of shares of the capital stock of ProMIRA Software
Incorporated, a copy of which is on file and may be obtained
upon written request directed to the attention of the
Secretary of Manugistics Group, Inc. Under said Agreement,
such shares may not be sold, pledged, donated or otherwise
transferred or encumbered except as expressly permitted
thereunder."
(c) Each Seller hereby acknowledges and
agrees that, upon the effectiveness of the Registration Statement (as defined
in the Registration Rights Agreement), the restrictive legend referring to the
Securities Act of 1933 set forth in Section 6.6(b), above, shall be removed
from each certificate representing the Manugistics Group Shares.
(d) Each Seller hereby acknowledges and
agrees that, upon registration of the Manugistics Group Shares in the name of
the Paying Agent, provided the Registration Statement shall have been declared
effective and shall remain in effect at such time, each certificate
representing the Manugistics Group Shares shall be inscribed with the following
legend:
"The shares represented by this certificate are subject to
certain restrictions on transferability and to the other terms
and conditions of that certain Registration Rights Agreement
dated as of February __, 1998, by and among Manugistics Group,
Inc., Xxxxxx Xxx and Xxxxxxxxxxx Xxxx, or either of them
acting alone, as Paying Agent, and the former holders of all
of the issued and outstanding shares of the capital stock and
all of the issued and outstanding options for the purchase of
shares of the capital stock of ProMIRA Software Incorporated,
a copy of which is on file and may be obtained upon written
request directed to the attention of the Secretary of
Manugistics Group, Inc. Under said Agreement, such shares may
not be sold, pledged, donated or otherwise transferred or
encumbered except as expressly permitted thereunder."
(e) Each Seller hereby acknowledges and
agrees that, upon registration of the Manugistics Group Shares in the name of
the Paying Agent, in the event the Registration Statement shall have been
declared effective but is not in effect at such time, each certificate
representing the Manugistics Group Shares shall be inscribed with the following
legend:
"The shares represented by this certificate have been acquired
for investment purposes only and have not been registered
under the Securities Act of 1933, as amended, or registered or
qualified under any applicable state, provincial or other
securities laws. Such shares may not be sold, assigned or
otherwise transferred unless so registered and qualified or
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unless, in the opinion of counsel, which opinion is acceptable
to Manugistics Group, Inc., an exemption from such
registration and any such qualification is available."
"The shares represented by this certificate are subject to
certain restrictions on transferability and to the other terms
and conditions of that certain Registration Rights Agreement
dated as of February __, 1998, by and among Manugistics Group,
Inc., Xxxxxx Xxx and Xxxxxxxxxxx Xxxx, or either of them
acting alone, as Paying Agent, and the former holders of all
of the issued and outstanding shares of the capital stock and
all of the issued and outstanding options for the purchase of
shares of the capital stock of ProMIRA Software Incorporated,
a copy of which is on file and may be obtained upon written
request directed to the attention of the Secretary of
Manugistics Group, Inc. Under said Agreement, such shares may
not be sold, pledged, donated or otherwise transferred or
encumbered except as expressly permitted thereunder."
The obligations of the Sellers set forth in this Section 6.6 shall survive the
Closing.
6.7 WAIVER OF RIGHTS. Each of the Sellers hereby
waives, for himself and his heirs, legal representatives, successors and
assigns, the right to exercise any and all statutory and/or contractual rights
of redemption with respect to any of the Shares and/or Options owned of record
or beneficially by such Seller, including without limitation, any such rights
provided in either or both of the Shareholders Agreements, as well as the right
to exercise any and all statutory and/or contractual rights of appraisal with
respect to any of the Shares or the Options.
6.8 WAIVER OF RIGHTS TO XXX THE COMPANY. Each
Seller hereby waives any and all rights such Seller may have to xxx the Company
at any time from and after the Closing Date to the extent that such Seller is
held liable for any breach by the Company of any of its representations,
warranties and/or covenants pursuant to this Agreement.
6.9 TAX RETURNS FOR THE COMPANY AND THE
SUBSIDIARY. The Company shall provide, or cause to be provided, to Buyer a
copy of the Company's and the Subsidiary's 1997 and 1998 income tax returns
with respect to all Governmental Charges no later than the earlier of (a) ten
(10) days prior to their being filed with the appropriate jurisdictions and (b)
October 31, 1998, which obligation shall survive the Closing.
6.10 TAX RETURNS FOR MIRALTA. The Miralta
Shareholders shall provide, or cause to be provided, to Buyer a
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copy of Miralta's 1997 and 1998 income tax returns with respect to all
Governmental Charges no later than the earlier of (a) ten (10) days prior to
their being filed with the appropriate jurisdiction and (b) October 31, 1998,
which obligation shall survive the Closing.
6.11 SUBORDINATION OF MIRALTA DEBENTURES. Each of
the Miralta Shareholders acknowledges and agrees that it has duly and validly
subordinated and postponed in favor of the Company all of the debts,
liabilities, present and future, of Miralta II, owing at any time to such
Miralta Shareholder pursuant to the terms of the Debenture issued to such
Miralta Shareholder by Miralta II up to an amount equal to such Miralta
Shareholder's Proportionate Share of the amount necessary to maintain a net
worth in Miralta II equal to at least Five Million Dollars (Cdn. $5,000,000.00)
during the Survival Period (as defined in that certain Amalgamation Agreement
dated February 6, 1998 by and among ProMIRA Software, Inc., a Canadian
corporation, predecessor by way of amalgamation of the Company, Miralta and
Miralta II). A copy of each of the Debentures referred to in this Section 6.11
is attached hereto as Schedule 6.11. For purposes of this Section 6.11 and
Section 7.25 of this Agreement "Proportionate Share" shall mean the proportion
which the principal amount of such Debenture bears to the aggregate principal
amount of all of the then outstanding debentures issued in a series by Miralta
II in the aggregate principal amount of Cdn. $32,462,700.00, of which such
Debenture is a part.
6.12 WITHHOLDING TAX.
(a) At the Closing, each Seller
identified on Schedule 4A.38 hereto (each, a "116 Seller") shall deliver to
Buyer a certificate (a "116 Certificate") issued pursuant to Section 116 of the
Income Tax Act in respect of the sale of the Shares and cancellation of the
Options owned by such Seller, as set forth opposite such 116 Seller's name on
Schedule 1 hereto.
(b) Notwithstanding anything to the
contrary contained in this Agreement, in the event any 116 Seller fails to
deliver a 116 Certificate to Buyer, as aforesaid, the Paying Agent shall
withhold (i) all of the Cash Purchase Price, if any, payable to such 116 Seller
at the Closing, as set forth in Column No. 1 on EXHIBIT I hereto (the "Escrowed
Cash Amount"), (ii) the number of Manugistics Group Shares to be registered in
the name of the Paying Agent at the Closing for disbursement to such 116
Seller, as set forth in Column Nos. 6, 7 and 8 on EXHIBIT I hereto, such that
the market value of such Manugistics Group Shares, based upon the closing price
on the Nasdaq Exchange of Manugistics Group's common stock, par value $.002 par
value per share, on the Closing Date (the "Closing Market Value"), together
with the Escrowed Cash Amount allocable to such 116 Seller, if any, is equal to
the sum of (A) 33 1/3% of the portion of the Cash Purchase Price payable to
such 116 Seller at the Closing, if
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any, as set forth in Column No. 1 on EXHIBIT I hereto, and (B) 33 1/3% of the
Closing Market Value of all Manugistics Group Shares allocated to such 116
Seller, as set forth in Column No. 5 on EXHIBIT I (the "Escrowed Share
Amount"), which Escrowed Share Amount shall be satisfied from those Manugistics
Group Shares to be registered in the name of the Paying Agent at the Closing
for disbursement to such 116 Seller, as set forth in Column Nos. 6, 7 and 8 on
EXHIBIT I hereto, and (iii) an additional number of Manugistics Group Shares to
be registered in the name of the Paying Agent at the Closing for disbursement
to such 116 Seller, as set forth in Column Nos. 6, 7 and 8 on EXHIBIT I hereto,
so that the Closing Market Value of such additional Manugistics Group Shares is
equal to 15% of the Closing Market Value of the Escrowed Share Amount (the
"Escrowed Cushion"), which Escrowed Cushion shall be satisfied from those
Manugistics Group Shares to be registered in the name of the Paying Agent at
the Closing for disbursement to such 116 Seller, as set forth in Column Nos. 6,
7 and 8 on EXHIBIT I hereto. The Escrowed Cash Amount, if any, the Escrowed
Share Amount and the Escrowed Cushion shall be held by the Paying Agent as
security for such 116 Seller's obligations to Revenue Canada in respect of the
sale of the Shares and cancellation of the Options owned by such 116 Seller.
The Paying Agent shall invest the Escrowed Cash Amount allocable to each 116
Seller in Canadian Treasury Bills or in such other accounts or investments
which are not subject to withholding taxes as the Paying Agent may determine
from time to time.
(c) If any such 116 Seller delivers the
116 Certificate to Buyer within thirty (30) days after the end of the month in
which the Closing takes place (the "Remittance Date"), which 116 Certificate
indicates that no withholding is required, the Paying Agent shall, upon receipt
of written notice from Buyer to do so, (i) disburse the Escrowed Cash Amount to
such 116 Seller, and (ii) by written instructions, direct the Transfer Agent to
register all Manugistics Group Shares allocable to such 116 Seller and
comprising the Escrowed Share Amount and the Escrowed Cushion allocated to such
116 Seller in the name of such 116 Seller.
(d) If any such 116 Seller fails to
deliver the 116 Certificate to Buyer on or before the Remittance Date or
delivers a 116 Certificate on or before the Remittance Date which indicates
that withholding is required in a specified amount, (i) the Paying Agent shall,
upon receipt of written notice from Buyer to do so, disburse the Escrowed Cash
Amount allocable to such 116 Seller, if any, to Revenue Canada, and (ii) Buyer
shall remit an additional amount of cash to Revenue Canada on behalf of such
116 Seller ("Buyer's Tax Payment") so that the aggregate amount of cash
disbursed to Revenue Canada on behalf of such 116 Seller pursuant to Sections
6.12(d)(i) and (ii) hereof is equal to the sum of 33 1/3% of the portion of the
Cash Purchase Price, if any, payable to such 116 Seller at the Closing, as set
forth in Column No. 1 on EXHIBIT I hereto, and 33 1/3% of the Closing Market
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Value of all Manugistics Group Shares allocated to such 116 Seller pursuant to
this Agreement, as set forth in Column No. 5 on EXHIBIT I hereto, or such
lesser amount indicated by such 116 Certificate. Following delivery of Buyer's
Tax Payment to Revenue Canada, Buyer shall, by written notice, direct the
Paying Agent to instruct the Transfer Agent to register a number of shares from
the Escrowed Share Amount and the Escrowed Cushion, the market value of which,
based upon the closing price on the Nasdaq Exchange of Manugistics Group's
common stock, par value $.002 per share, on the date such shares are registered
in the name of Buyer (the "Transfer Market Value"), is equal to Buyer's Tax
Payment, whereupon the Paying Agent shall instruct the Transfer Agent to
register the balance of the Escrowed Share Amount, if any, and the balance of
the Escrowed Cushion, if any, then held by the Paying Agent in the name of such
116 Seller. If, however, the Transfer Market Value of the Escrowed Share
Amount and the Escrowed Cushion attributable to such 116 Seller is then less
than Buyer's Tax Payment on behalf of such 116 Seller, Buyer shall be entitled
to indemnification from such 116 Seller pursuant to Section 10.4 hereof.
Notwithstanding anything to the contrary contained in this Section 6.12(d), if
any 116 Seller has failed to deliver a 116 Certificate to Buyer prior to the
Remittance Date but Buyer has received a written request from Revenue Canada
instructing Buyer not to remit Buyer's Tax Payment with respect to such 116
Seller, which written request remains in effect as of the Remittance Date, the
Paying Agent shall continue to hold the Escrowed Cash Amount, if any, the
Escrowed Share Amount and the Escrowed Cushion allocable to such 116 Seller
after the Remittance Date and until receipt of a 116 Certificate with respect
to such 116 Seller.
(e) In the event any such 116 Seller
delivers the 116 Certificate to Buyer at any time after the Remittance Date,
provided the Paying Agent continues to hold the Escrowed Cash Amount, the
Escrowed Share Amount and the Escrowed Cushion at such time, and further
provided that such 116 Seller shall have indemnified Buyer for such 116
Seller's failure to deliver the 116 Certificate to Buyer on or before the
Remittance Date, Buyer shall, by written notice, direct the Paying Agent to (i)
remit the Escrowed Cash Amount to such 116 Seller and (ii) instruct the
Transfer Agent to register the Escrowed Share Amount and the Escrowed Cushion
in the name of such 116 Seller.
(f) Notwithstanding anything to the
contrary contained in this Agreement, with respect to each 116 Seller entitled
to the Group C Distributable Shares, as set forth in Column No. 8 on EXHIBIT I
hereto, following delivery of Buyer's Tax Payment, Buyer may, by written
notice, direct the Custodian to instruct the Transfer Agent, by written
instructions ("Custodian's Written Instructions"), as provided in the Custodian
Agreement, to register in the name of the Paying Agent a sufficient number of
the Group 3 Forfeitable Custodian Shares allocable to such 116 Seller, as set
forth in Column No. 11 on
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EXHIBIT I hereto, so that the aggregate Closing Market Value of (i) such Group
3 Forfeitable Custodian Shares, (ii) the Escrowed Share Amount allocable to
such 116 Seller, and (iii) the Escrowed Cushion allocable to such 116 Seller,
is equal to Buyer's Tax Payment. Within ten (10) business days after receipt
of Custodian's Written Instructions, the Paying Agent shall, by written
instructions, as provided in the Paying Agent Agreement, direct the Transfer
Agent to register in the name of Buyer and/or its affiliates such Group 3
Forfeitable Custodian Shares. If, however, the aggregate Transfer Market Value
of such (x) Group 3 Forfeitable Custodian Shares, (y) the Escrowed Share Amount
allocable to such 116 Seller, and (z) the Escrowed Cushion allocable to such
116 Seller is less than Buyer's Tax Payment for such 116 Seller, Buyer shall be
entitled to indemnification from such 116 Seller pursuant to Section 10.4
hereof.
(g) In the event Buyer directs the
Custodian to accelerate the disbursement schedule of all of the Group 3
Forfeitable Custodian Shares allocated to any 116 Seller, as provided in
Section 6.12(f) hereof, and in the event the aggregate of such Group 3
Forfeitable Custodian Shares and all Manugistics Group Shares to be registered
in the name of the Paying Agent at the Closing for disbursement to such 116
Seller, as set forth in Column Nos. 7, 8 and 9 on EXHIBIT I hereto, are
insufficient to satisfy the Escrowed Share Amount, the Escrowed Cushion, and
all state, local, FICA and medicare tax and withholding obligations of Buyer
and/or its affiliates with respect to such 116 Seller, as provided in Section
3.3(c)(iii) hereof, Buyer and/or its affiliates shall be entitled to
indemnification from such Seller pursuant to Section 10.4 hereof.
6.13 WAIVER OF RIGHTS TO XXX THE CUSTODIAN AND/OR
THE ESCROW AGENT. Each Seller hereby waives any and all rights such Seller may
have to xxx the Custodian and/or the Escrow Agent at any time from and after
the Closing Date with respect to the actions or omissions of the Custodian
under the Custodian Agreement and/or the Escrow Agent under the Escrow
Agreement or with respect to taking any action inconsistent with the actions of
the Paying Agent under the Custodian Agreement or the Escrow Agreement; it
being acknowledged and understood that any such claims and actions shall be
brought by the Paying Agent as sole agent and attorney-in-fact and
representative for the Sellers under this Agreement, the Custodian Agreement
and the Escrow Agreement.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. All
obligations of Buyer under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent (any of which may be waived in writing in whole or in part by Buyer):
7.1 REPRESENTATIONS AND WARRANTIES TRUE AS OF
CLOSING DATE. Sellers', the Company's and the Miralta Shareholders'
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representations and warranties contained in this Agreement, the Schedules
hereto and in any list, certificate, document or written statement specifically
referred to herein or furnished by such parties to Buyer at the Closing shall
be true on and as of the date hereof and shall be true on and as of the Closing
Date with the same effect as though such representations and warranties were
made on and as of the Closing Date.
7.2 COMPLIANCE WITH THIS AGREEMENT. Sellers and
the Company shall have performed and complied with all agreements and
conditions contained in this Agreement that are required to be performed or
complied with by them prior to or at the Closing.
7.3 SELLERS' AND THE COMPANY'S CERTIFICATES.
Buyer shall have received a certificate dated the Closing Date and signed by
Sellers and the President and Secretary of the Company, certifying that the
conditions specified in Sections 7.1, 7.2, 7.6, 7.7 and 7.8 have been
fulfilled.
7.4 OPINION OF COUNSEL. Buyer shall have
received the written opinion dated the Closing Date of Fraser & Xxxxxx, the
Company's and Sellers' counsel, substantially in the form of EXHIBIT VII
hereto.
7.5 INFORMATION FURNISHED. Sellers and the
Company shall have furnished Buyer with all information reasonably requested by
Buyer pursuant hereto.
7.6 NO DAMAGE TO BUSINESS. The properties or
business of the Company and the Subsidiary shall not have been and shall not be
threatened to be adversely affected as a result of fire, explosion, earthquake,
disaster, accident, flood, drought, embargo, riot, civil disturbance, uprising,
activity of armed forces or act of God or public enemy. There shall not be
pending or threatened any strike or any action by any governmental authority
which would have an adverse effect on the properties or business of the Company
or the Subsidiary.
7.7 NO LITIGATION. No suit, action, proceeding,
or investigation shall have been instituted or threatened by any governmental
agency or third party, and no injunction or other complaint shall have been
issued and then outstanding, to restrain, prohibit or otherwise challenge or
adversely affect the legality, validity or consummation of the transactions
contemplated by this Agreement.
7.8 NOTIFICATIONS AND CONSENTS.
(a) Sellers and the Company shall have
timely given notice required to be given by them to any third party in
connection with the consummation of the transactions contemplated hereby
including, without limitation, required notices to the holders of any
indebtedness of the Company and the Subsidiary,
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the lessors of any real or personal property leased by the Company or the
Subsidiary, and any governmental bodies or regulatory agencies including,
without limitation, all notices required under the Investment Canada Act, the
Competition Act, the Securities Act (Ontario), the Securities Act (Quebec)
and/or the Securities Act (Alberta) where, in the reasonable judgment of Buyer,
the failure to give such notice would have an adverse effect on the businesses
of the Company or the Subsidiary.
(b) Sellers and the Company shall have
received each consent or approval required to be given by any such third party
in connection with the consummation of the transactions contemplated hereby
including, without limitation, all consents required under the Investment
Canada Act, the Competition Act, the Securities Act (Ontario), the Securities
Act (Quebec) and/or the Securities Act (Alberta), where, in the reasonable
judgment of Buyer, the failure to receive such consent or approval would have
an adverse effect on the businesses of the Company or the Subsidiary, without
resulting in the acceleration or renegotiation of any debt, the modification,
cancellation or termination of any material lease, license, permit,
authorization or other operating right or the subjection of Buyer to any law,
ordinance, rule, regulation or condition which, in the reasonable judgment of
Buyer, shall be unduly burdensome.
(c) Buyer shall have timely given all
notices required to be given by it to, and received all consents or approvals
required to be given in connection therewith by, any third party in connection
with the consummation of the transactions contemplated hereby including,
without limitation, all notices, consents and/or approvals required under the
Investment Canada Act, the Competition Act, the Securities Act (Ontario), the
Securities Act (Quebec) and/or the Securities Act (Alberta).
7.9 RESIGNATIONS. The Company shall have
delivered to Buyer the written resignation of each director and officer of the
Company and the Subsidiary as shall be requested by Buyer. The Company also
shall have delivered to Buyer the written resignation of all Trustees of each
of the Benefit Plans as shall be requested by Buyer.
7.10 CERTIFICATES. Buyer shall have received such
certificates or other documentation from Sellers and the Company as reasonably
requested by Buyer certifying to the appropriate authorizations for the
execution, delivery and performance of this Agreement by, and the incumbency of
persons executing this Agreement on behalf of, those Sellers that shall be
corporations or trusts or partnerships.
7.11 NORTHERN TELECOM LTD. The Company shall have
delivered to Buyer a fully executed copy of a license agreement between
Northern Telecom Ltd. ("Nortel") and the Company, in form
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and substance satisfactory to Buyer, which license agreement, among other
things, secures the Company's rights to certain configurator technology owned
by Nortel, and clarifies to Buyer's satisfaction that royalties payable to
Nortel apply only with respect to the sale of a stand-alone configurator
product, and 'that the use of the configurator engine by the Company inside
other products (whether or not accomplished by a reverse engineering,
disassembly, or decompilation of the source code) will not be subject to any
royalty payments.
7.12 DUE DILIGENCE. Buyer shall be satisfied with
the results of its due diligence investigation of the Company and the
Subsidiary.
7.13 CONTINUATION OF THE COMPANY. ProMIRA
Software Inc., a Canadian corporation, shall have continued its corporate
existence under the Nova Scotia Companies Act, as the Company, on or before the
Closing Date.
7.14 RECEIPT OF CERTIFICATES. Buyer shall have
received from the Paying Agent each of the Certificates, duly endorsed in blank
or with stock powers annexed thereto and duly executed in blank, in proper form
for transfer of the Shares represented thereby to Buyer upon delivery.
7.15 BOARD OF DIRECTORS APPROVAL. The separate
boards of directors of Manugistics Group, Buyer and the Company shall have
approved the transactions contemplated by this Agreement by all necessary
corporate action.
7.16 CURRENT EMPLOYEES.
(a) None of the Current Employees set
forth on Schedule 7.16(a) hereto shall have advised the Company or the
Subsidiary that they do not intend to remain as employees and consultants of
the Company or the Subsidiary, as the case may be, from and after the Closing
Date.
(b) The employment and consulting
agreements with the persons identified on Schedule 7.16(b) hereto shall have
been terminated, and the Company and the Subsidiary shall have delivered a
written confirmation from each person identified on such Schedule of their
waiver or relinquishment of all rights against the Company, the Subsidiary,
Buyer and its affiliates.
7.17 EXERCISE OF SHARE PURCHASE RIGHTS. None of the
Share Purchase Rights including, without limitation, any of the Options shall
have been exercised, or attempt at exercise made, between the date hereof and
the Closing Date.
7.18 ESCROW AGREEMENT. Buyer shall have received
an original executed Escrow Agreement executed by the Paying Agent and the
Escrow Agent.
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7.19 CUSTODIAN AGREEMENT. Buyer shall have
received an original executed Custodian Agreement executed by the Custodian and
the Paying Agent on behalf of each of the Sellers.
7.20 PAYING AGENT AGREEMENT. Buyer shall have
received an original executed Paying Agent Agreement executed by the Sellers
and the Paying Agent.
7.21 REGISTRATION RIGHTS AGREEMENT. Buyer shall
have received an original executed Registration Rights Agreement executed by
each of the Sellers and the Paying Agent.
7.22 TENDER OF SHARES; CANCELLATION OF OPTIONS.
Buyer shall have received certificates endorsed for transfer of one hundred
percent (100%) of the issued and outstanding shares of capital stock of the
Company and acknowledgements of cancellation of one hundred percent (100%) of
the outstanding options for the purchase of shares of capital stock of the
Company.
7.23 FORM W-9. Buyer shall have received a
completed and executed Form W-9 from each Seller which is a resident of the
United States.
7.24 CERTIFICATES REGARDING MIRALTA LIABILITIES.
Buyer shall have received a Certificate from an officer of each of Miralta and
Miralta II, in form and substance reasonably satisfactory to Buyer, certifying
as to the status of all liabilities of Miralta as of the Closing Date.
7.25 SUBORDINATION OF DEBENTURES. Buyer shall
have received from each Miralta Shareholder a copy of a letter from such
Miralta Shareholder to Miralta and the Company, and acknowledged by the
Company, Miralta and Miralta II, confirming such Miralta Shareholder's
agreement to subordinate and postpone in favor of the Company all of the debts,
liabilities, present and future, of Miralta II owing at any time to such
Miralta Shareholder pursuant to the terms of the Debenture issued to such
Miralta Shareholder up to an amount equal to such Miralta Shareholder's
Proportionate Share (as defined in Section 6.11 hereof) of the amount necessary
to maintain a net worth in Miralta II equal to at least Five Million Dollars
(Cdn. $5,000,000.00) during the Survival Period (as defined in that certain
Amalgamation Agreement referenced in Section 6.11 hereof.) A true and complete
copy of such Debenture, executed by Miralta II, shall be attached to such
letter.
8. CONDITIONS PRECEDENT TO SELLERS' AND THE COMPANY'S
OBLIGATIONS. All obligations of Sellers and the Company under this Agreement
are subject to the fulfillment or satisfaction, prior to or at the Closing, of
each of the following conditions precedent (any of which may be waived in
writing in whole or in part by Sellers and the Company):
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8.1 REPRESENTATIONS AND WARRANTIES TRUE AS OF
CLOSING DATE. The representations and warranties of Buyer contained in this
Agreement, the Schedules hereto, and in any list, certificate, document or
written statement specifically referred to herein and furnished by Buyer to
Sellers and the Company at the Closing in connection with the negotiation,
execution or performance of this Agreement shall be true at and as of the date
hereof and shall be true at and as of the Closing Date with the same effect as
though such representations and warranties were made on and as of the Closing
Date.
8.2 COMPLIANCE WITH THIS AGREEMENT. Buyer shall
have performed and complied with all agreements and conditions contained in
this Agreement that are required to be performed or complied with by it prior
to or at the Closing.
8.3 OFFICERS' CERTIFICATES. Sellers shall have
received a certificate dated the Closing Date and signed by the President or a
Vice President of Buyer, certifying that the conditions specified in Sections
8.1 and 8.2 hereof have been fulfilled in all material respects.
8.4 OPINION OF COUNSEL. The Company shall have
received the written opinion dated the Closing Date of Xxxxxxxx Xxxxxx LLP,
counsel to Buyer, substantially in the form of EXHIBIT VIII hereto.
8.5 SECRETARY'S CERTIFICATE. Sellers shall have
been furnished with a certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of Buyer, setting forth (i) the names,
signatures and positions of the officers of Buyer who have executed this
Agreement or any other document executed by Buyer and delivered to Sellers as a
Closing document hereunder, and (ii) a copy of the resolutions adopted by the
board of directors of Buyer authorizing the execution, delivery and performance
of this Agreement.
8.6 NO LITIGATION. No suit, action, proceeding
or investigation shall have been instituted or threatened by any governmental
agency or any third party, and no injunction or other complaint shall have been
issued and then be outstanding to restrain, prohibit or otherwise challenge or
adversely affect the legality, validity or consummation of any of the
transactions contemplated by this Agreement.
8.7 NOTIFICATIONS AND CONSENTS. Buyer shall
have timely given all notices required to be given by it to, and received all
consents or approvals required to be given in connection therewith by, any
third party in connection with the consummation of the transactions
contemplated hereby including, without limitation, all notices, consents and/or
approvals required under the Investment Canada Act, the Competition Act,
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the Securities Act (Ontario) and/or the Securities Act (Quebec).
8.8 MANUGISTICS GROUP OPTIONS. On or before the
Closing Date, Buyer and/or its affiliates shall have delivered a letter
granting to those Sellers designated by the Company options to purchase shares
of the common stock of Manugistics Group, $.002 per value per share, at the
fair market value of such shares on the Closing Date, not to exceed 100,000
such options in the aggregate, which options shall be subject to all of the
terms of Manugistics Group's Fifth Amended and Restated Employee Stock Option
Plan effective April 30, 1996, as amended (the "Option Plan"), a copy of which
shall have been delivered to each of such Sellers on or before the Closing
Date.
8.9 REGISTRATION RIGHTS AGREEMENT. Manugistics
Group shall have delivered to the Paying Agent an original executed
Registration Rights Agreement executed by Manugistics Group.
9. FURTHER ASSURANCES. From and after the
Closing, Sellers and the Paying Agent, on the one hand, and Buyer, on the other
hand, agree to execute and deliver such further documents and instruments and
to do such other acts and things as Buyer or Sellers, as the case may be, may
reasonably request in order to effectuate the transactions contemplated by this
Agreement including, without limitation, the filing of any and all notices and
the obtaining of any and all third party consents in the event the transactions
contemplated by this Agreement are deemed to constitute, in whole or in part,
an assignment of any Proprietary Rights.
10. INDEMNIFICATION.
10.1 EXCLUSIVE REMEDY. Each of the parties hereto
acknowledges and agrees that its sole and exclusive recourse for any breach by
the parties of their respective representations, warranties, covenants and
obligations hereunder (excluding claims pursuant to the terms of the
Registration Rights Agreement) shall be a claim for indemnification pursuant to
this Section 10 and that any such claim shall be satisfied exclusively as
provided in this Section 10.
10.2 DEFINITIONS. In this Section 10, the
following terms shall have the following meanings:
(a) "Losses" shall mean any and all damages,
losses, liabilities, tax re-assessments, obligations, claims, actions, suits,
proceedings, demands, assessments, judgments, encumbrances, deficiencies, costs
and expenses including, without limitation, reasonable attorneys' fees and
other costs and expenses incident to any action, investigation, claim or
proceeding (including, without limitation, any Losses of any kind with respect
to a breach of Section 4A.16 and 4B.7) suffered, sustained, incurred or
required to be paid by a party and/or its
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affiliates and their respective officers, directors, agents and employees; it
being acknowledged and understood that if the Buyer and/or its affiliates are
the parties incurring the Losses, such Losses shall include the Losses
suffered, sustained or incurred by the Company or the Subsidiary.
(b) "Pro Rata Share" with respect to a
Seller shall mean:
(i) in the case where a claim is
made against the One Year Escrow Fund or Two Year Escrow Fund as hereinafter
provided, the number of Manugistics Group Shares held by the Escrow Agent in
the One Year Escrow Fund or Two Year Escrow Fund, as the case may be, on behalf
of such Seller relative to the total number of Manugistics Group Shares held by
the Escrow Agent in the One Year Escrow Fund or Two Year Escrow Fund, as the
case may be, on behalf of all Sellers; and
(ii) in the case where a claim is not
made against the One Year Escrow Fund or the Two Year Escrow Fund, the number
of Manugistics Group Shares to be issued to such Seller hereunder as set forth
in Column No. 5 of EXHIBIT I hereto relative to the total number of Manugistics
Group Shares to be issued to all the Sellers hereunder as set forth in Column
No. 5 of EXHIBIT I hereto.
10.3 INDEMNIFICATION BY THE SELLERS COLLECTIVELY.
The Sellers shall collectively (but severally to the extent of each Seller's
Pro Rata Share and not jointly) indemnify Buyer and its affiliates and their
respective officers, directors, agents and employees and hold them harmless at
all times from and after the Closing Date against and in respect of any Losses
by reason of any of the following:
(i) any breach or failure of
observance or performance of any representation, warranty, covenant, agreement
or commitment made by the Company hereunder or as a result of any such
representation, warranty, covenant, agreement or commitment being untrue or
incorrect in any respect;
(ii) any claims or litigation relating
to the Company or the Subsidiary which may hereafter be brought against the
Company or the Subsidiary based on conditions existing or events occurring
prior to the Closing Date but which are asserted against Buyer or any of its
affiliates, or their respective officers, directors, agents and employees, the
Company or the Subsidiary after the Closing Date in respect of the following:
(A) any claims asserted by Risk Data Corporation and/or Mid-America Consulting
Group, Inc. alleging that the Company's and/or the Subsidiary's use of any
Proprietary Rights infringes upon the rights of such third party; (B) any
claims asserted by Xxxxxx Xxxxxxx; (C) any claims asserted by Microsoft,
Xxxxxxx and/or Cplex for license violations by the Company as
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referenced in that certain Software Licensing Report prepared by Xxxxxx Xxxxx,
a copy of which has been provided by the Company to Buyer; and (D) any claims
asserted by The Trane Company; provided, however, that nothing contained in
this Section 10.3(ii) shall be interpreted or construed to limit any claim that
Buyer, its affiliates and their respective officers, directors, agents and
employees may have pursuant to Sections 10.3(i) hereof;
(iii) any Losses arising from any act
or omission of the Paying Agent under this Agreement, the Paying Agent
Agreement, the Registration Rights Agreement, the Escrow Agreement and/or the
Custodian Agreement;
(iv) any Losses arising from any
claims asserted by any third party alleging that the use by Buyer and/or its
affiliates within six (6) months after the Closing Date of any of the Company's
trademarks, trade names and/or service marks infringes upon the rights of any
such third party; notwithstanding the foregoing, in the event that a claim of
infringement is asserted during such six (6) month period, Buyer shall use
commercially reasonable efforts to desist from further use of the trademark,
trade name or service xxxx in respect of which such claim was asserted; and
further provided that, nothing contained in this Section 10.3(iv) shall be
interpreted and construed to limit any claim that Buyer and/or its affiliates
and their respective officers, directors, agents and employees may have
pursuant to Section 10.3(i) and (ii) above;
(v) any Transaction Expenses in
excess of the Expense Fund (as such terms are defined in Section 13.1 hereof)
for which any claim may be made by a third party against Buyer, Company or
Subsidiary;
(vi) any breach or failure of
observance or performance of any representation, warranty, covenant, agreement
or commitment made by any of the Sellers under the Paying Agent Agreement; and
(vii) any and all Losses incident to
the foregoing including, without limitation, reasonable legal and accounting
fees and disbursements, incidental to or in respect of the foregoing.
Notwithstanding the foregoing, the Sellers, other than the Miralta
Shareholders, shall have no liability for matters covered by the indemnity set
forth in Section 10.5 below.
10.4 INDEMNIFICATION BY A SELLER INDIVIDUALLY. Each
Seller individually (severally to the extent of his Pro Rata Share) shall
indemnify Buyer and its affiliates and the respective officers, directors,
agents and employees, the Company and the Subsidiary and hold them harmless at
all times from and
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after the Closing Date against and in respect of any Losses by reason of any of
the following:
(i) any breach or failure of
observance or performance of any representation, warranty, covenant, agreement
or commitment made by such Seller individually but not collectively with the
other Sellers hereunder or as a result of any such representation, warranty,
covenant, agreement or commitment being untrue or incorrect in any respect; and
(ii) any payment that Buyer and/or
its affiliates is required to make in respect of U.S. or Canadian withholding
taxes pursuant to Section 116 of The Income Tax Act (Canada) or otherwise,
including, without limitation, state, local, FICA and Medicare tax and
withholding obligations;
(iii) any and all Losses incident to
the foregoing including, without limitation, reasonable legal and accounting
fees and disbursements, incidental to or in respect of the foregoing.
10.5 INDEMNIFICATION BY MIRALTA SHAREHOLDERS. The
Miralta Shareholders shall severally (but not jointly), in addition to any
indemnification obligations they may have pursuant to Sections 10.3 or 10.4
hereof, indemnify the Buyer and its affiliates and their respective officers,
directors, agents and employees, the Company and the Subsidiary and hold them
harmless at all times from and after the Closing Date against and in respect of
any and all Losses by reason of any of the following:
(i) any breach or failure of
observance or other performance by the Miralta Shareholders of their respective
representations, warranties and covenants, agreements or commitments arising
under Section 6.11 and with respect to Miralta under Sections 4A.9, 4A.10 and
4A.27 of this Agreement, or as a result of such representation, warranty,
covenant, agreement or commitment being untrue or incorrect in any respect; and
(ii) any and all Losses incident to
the foregoing including, without limitation, reasonable legal and accounting
fees and disbursements, incidental to or in respect of the foregoing.
10.6 INDEMNIFICATION BY BUYER. Buyer indemnifies
each of the Sellers and holds each of them harmless at all times from and after
the Closing Date against and in respect of any Losses by reason of any of the
following:
(i) any breach or failure of
observance or performance of any representation, warranty, covenant, agreement
or commitment made by Buyer in this Agreement, or as a
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result of any such representation, warranty, covenant, agreement or commitment
being untrue or incorrect in any respect; and
(ii) any and all Losses incident to
any of the foregoing including, without limitation, reasonable legal and
accounting fees and disbursements incidental to or in respect of the foregoing.
10.7 INDEMNIFICATION BY THE PAYING AGENT. The
Paying Agent indemnifies Buyer and its affiliates and their respective
officers, directors, agents and employees, the Company and the Subsidiary and
holds them harmless at all times from and after the Closing Date against and in
respect of any Losses by reason of any of the following:
(i) any breach or failure of
observance or performance by the Paying Agent of its representations,
warranties or covenants under any of the Transaction Agreements or as a result
of any such representation, warranty or covenant, agreement or commitment being
untrue or incorrect in any respect; and
(ii) any and all Losses incident to
the foregoing including, without limitation, reasonable legal and accounting
fees and disbursements, incidental to or in respect of the foregoing.
10.8 INDEMNIFICATION FLOOR. Notwithstanding any
provision of this Agreement or the Escrow Agreement to the contrary, an
indemnitor (an "Indemnitor")) shall only be required to indemnify and hold
harmless an indemnified party (an "Indemnified Party") under this Agreement,
whether pursuant to claims from the One Year Escrow Fund or the Two Year Escrow
Fund, or otherwise, other than claims pursuant to Section 10.3(v), to the
extent that the Losses (as defined in Sections 10.2(a) hereof) incurred by an
Indemnified Party, either individually or in the aggregate, exceed Two Hundred
Fifty Thousand Dollars (US $250,000.00) (the "Indemnification Floor"),
whereupon any claim for indemnification in excess of the Indemnification Floor
may be asserted at the discretion of the Indemnified Party; provided, however,
that the sum of Two Hundred Fifty Thousand Dollars (US $250,000.00) shall be
the entire amount of the Indemnification Floor for an Indemnified Party
regardless of whether the claim of such Indemnified Party is asserted against
the One Year Escrow Fund, the Two Year Escrow Fund, or otherwise
10.9 PERIOD OF INDEMNITY. The aforesaid
indemnities of the Sellers, Buyer, the Miralta Shareholders and the Paying
Agent shall remain in full force and effect as they relate to breaches of
representations, warranties or covenants made by the Sellers, the Miralta
Shareholders, Buyer and/or the Paying Agent, for the period provided in Section
11 hereof; provided, however, if at the expiration of the appropriate period
any claim or
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assessment for indemnification has been asserted but not fully determined, or
any audit or other proceeding with respect to any matter has been initiated,
such period will be extended as to such claim, assessment, audit or other
proceeding until it is finally determined or concluded.
10.10 LIMITATION ON INDEMNIFICATION; RECOURSE TO
ESCROW FUNDS.
(a) Except as set forth in Section
10.10(c) below, if the Indemnified Party is the Buyer, its affiliates and their
respective officers, directors, agents and employees, the Indemnified Party's
sole and exclusive recourse with respect to matters identified in Section 11 as
having a One Year Survival Period (as defined in Section 11 hereof) shall be
limited to the One Year Escrow Fund, except that with respect to matters
identified in Section 11 as having a Two Year Survival Period (as defined in
Section 11 hereof), such Indemnified Party shall, in addition, at its option,
also have recourse to the Two Year Escrow Fund.
(b) Notwithstanding anything to the
contrary contained in Section 10.10(a) hereof, to the extent that the One Year
Escrow Shares and any other amounts in the One Year Escrow Fund are
insufficient to meet any of the claims which are not otherwise covered by the
Two Year Escrow Fund pursuant to Section 3.3(a)(iii), namely claims against the
Sellers arising during the first year following the Closing Date for the breach
or non-fulfillment of any representation, warranty or covenant pursuant to
Sections 4B.1, 4B.2, 4B.3, 4B.4, 4B.5, 4B.6, 4B.7, 4B.9 and/or 4B.10 hereof by
reason of claims or payments made pursuant to Section 10.3 hereof, Buyer and
its affiliates and their respective officers, directors, agents and employees
may seek recourse against the Two Year Escrow Fund to the extent of any
deficiency in the One Year Escrow Fund, as a result of any claims or payments
having been made pursuant to Section 10.3.
(c) Notwithstanding anything to the
contrary contained in this Section 10.10, or in Section 11 with respect to the
One Year Survival Period and the Two Year Survival Period, Buyer, its
affiliates and their officers, directors, agents and employees shall also have
recourse at any time against (i) the Sellers outside of the One Year Escrow
Fund and the Two Year Escrow Fund but only for any and all Losses (as defined
in Sections 10.2(a) hereof) arising out of the acts or omissions of the Paying
Agent under any of the Transaction Agreements and any breach or failure of
observance or performance of any representation, warranty, covenant, agreement
or commitment made by the Sellers pursuant to Section 6.5 hereof, or as a
result of any such representation, warranty, covenant, agreement or commitment
being untrue in any respect; (ii) the Paying Agent for matters identified in
Section 10.7 hereof and (iii) any payments required pursuant to Section
10.4(ii) hereof.
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10.11 PROCEDURAL JOINDER OF SELLERS.
Notwithstanding the fact that the Sellers are severally (but not jointly)
liable to the Buyer and/or its affiliates and their respective officers,
directors, agents and employees under this Agreement, in the event Buyer and/or
its affiliates and their respective officers, directors, agents or employees
pursue any claim for indemnification against any of the Sellers under this
Agreement outside of the Escrow Funds pursuant to Section 10.3(iii) or the
Miralta Shareholders pursuant to Section 10.5, Buyer and/or its affiliates and
their respective officers, directors, agents and employees, as applicable, may,
at their option, procedurally join any number of Sellers in a single action for
purposes of determining their respective Pro Rata Share of liability, and each
Seller hereby consents and agrees to any such joinder.
10.12 NOTICE TO THE INDEMNITOR. As soon as
practicable after the assertion of any claim by a third party or the occurrence
of any event which may give rise to a claim for indemnification from an
Indemnitor under this Section 10, an Indemnified Party shall notify the
Indemnitor (notice shall be provided to the Paying Agent where a Seller is the
Indemnitor) in writing of such claim. Such notice shall also specify the
clause of the Agreement under which such claim is made and specify in
reasonable detail each item of Loss including the amount thereof, if reasonably
ascertainable, the date such Loss was incurred, properly accrued or is
reasonably anticipated and the basis for any anticipated Loss. The failure to
give notice shall not prevent claims for indemnity except to the extent that
the Indemnitor can demonstrate that it has been prejudiced by such failure.
10.13 RIGHTS OF PARTIES TO SETTLE OR DEFEND.
(a) Except as hereinafter provided, the
Indemnitor shall have the right to contest, defend or settle any claim by a
third party or resulting from the occurrence of any event which may give rise
to a claim for indemnification from an Indemnitor under this Section 10 and to
engage counsel in respect thereof. If the Indemnitor determines not to contest
such claim or shall fail to undertake the defense or carriage of such claim
within ten (10) days of being notified of such claim, or if, in the reasonable
opinion of the Indemnified Party, any such claim or demand involves an issue or
matter which could have a materially adverse effect on the business,
operations, assets, properties or prospects of the Indemnified Party and/or its
affiliates, the Indemnified Party shall have the right to contest and defend
against such claim and to be reimbursed for its reasonable costs and expenses
incurred in connection therewith. If the Indemnitor determines to contest such
claim, the Indemnified Party shall have the right to be represented, at its own
expense by its own counsel and accountants, their participation to be subject
to the reasonable direction of the Indemnified Party. In either case, the
party not assuming the
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defense or carriage of the claim (the "Other Party") shall make available to
the party assuming the defense or carriage of the claim (the "Defending Party")
and its attorneys and accountants, at all reasonable times during normal
business hours, all books, records, and other documents in its possession
relating to such claim. The Defending Party in any such claim shall be
furnished all reasonable assistance in connection therewith by the Other Party.
(b) The Defending Party shall forthwith
notify the Other Party in writing of all settlement offers proposed by a party
asserting a third-party claim. In the event the Defending Party receives such
settlement proposal or desires to settle any such third-party claim (whether or
not contested by the Indemnitor), the Defending Party shall advise the Other
Party of the amount of the proposed settlement (the "Proposed Settlement"). If
the Proposed Settlement is unsatisfactory to the Other Party, acting
reasonably, the Other Party shall have the right, at its expense, to contest
such claim by giving written notice of such election to the Defending Party
within ten (10) days after the Other Party has been advised of the Proposed
Settlement. If the Other Party does not deliver such written notice within ten
(10) days after the Other Party has been advised of the Proposed Settlement,
the Defending Party may offer the Proposed Settlement to the third party making
such claim, and the Other Party shall be deemed to have approved such Proposed
Settlement. If the Proposed Settlement is not accepted by the party making
such claim, any new Proposed Settlement which the Defending Party may wish to
present to the party making such claim shall first be presented to the Other
Party who shall have the right, subject to the conditions hereinabove set forth
in this Section, to contest such claim. In all such events, the Indemnitor
shall indemnify the Indemnified Party and hold it harmless against and from any
and all costs of defense, payment or settlement, including reasonable
attorneys' fees incurred in connection therewith. Notwithstanding the
foregoing, in the event that the Indemnified Party is the Other Party and it
refuses to approve any Proposed Settlement which the Indemnitor recommends
unless such recommendation is in the reasonable opinion of the Indemnified
Party,, not unduly prejudicial to the Indemnified Party, the Indemnitor shall
not be responsible for any Losses (which shall, for greater certainty, include
the legal expenses incurred by the Indemnified Party after the date of the
refusal of such Proposed Settlement) in excess of the amount of the Proposed
Settlement.
10.14 REIMBURSEMENT. At the time that any Loss
which is subject to indemnification hereunder or at the time the amount of any
liability on the part of the Indemnitor is determined (which in the case of
payments to third persons shall be the earlier of (i) the date of such payments
or (ii) the date that a court of competent jurisdiction shall enter a final
judgment, order or decree (after exhaustion of appeal rights establishing
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such liability), the Indemnitor shall forthwith, upon notice from the
Indemnified Party, pay to the Indemnified Party the amount of the indemnity
claim; provided, however, that unless the Indemnitor expressly denies in
writing its indemnity obligation hereunder, the Indemnitor shall pay the
reasonable attorneys' fees and other litigation expenses from time to time
incurred by the Indemnified Party promptly upon the submission of invoices
therefor by the Indemnified Party. If such amount and/or attorneys' fees and
other litigation expenses are not paid forthwith, then, regardless of any
denial of any indemnity obligation, the Indemnified Party may, at its option,
take legal action against the Indemnitor for reimbursement in the amount of its
indemnity claim and/or attorneys' fees and other litigation expenses. For
purposes hereof, the indemnity claim shall include the amounts so paid (or
determined to be owing) by the Indemnified Party, together with costs and
reasonable attorneys' fees and interest on the foregoing items at the rate of
twelve percent (12%) per annum from the date the obligation is due from the
Indemnified Party to the Indemnitor, as hereinabove provided, until the
indemnity claim shall be paid in full.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except
as specifically provided herein to the contrary, the representations,
warranties, covenants or agreements in this Agreement, in any Schedule hereto
or in any list, certificate, document or written statement furnished or
delivered by any such party pursuant hereto shall survive the Closing, and
shall remain in full force for a period of one (1) year after the Closing Date
(and any claim for indemnification in respect thereof shall be made within such
one (1) year period), notwithstanding any investigation conducted before or
after the Closing or the decision of any party to complete the Closing (the
"One Year Survival Period"). Notwithstanding the foregoing, (a) the respective
representations, warranties and covenants of the Company and the Sellers under
Sections 0X.00, 0X.00, 0X.00(x), 0X.00, 0X.00(x) and 4B.8, 6.5 and 6.12 of this
Agreement, and Sellers indemnity for any act or omission of the Paying Agent
arising under any of the Transaction Agreements, the representations and
warranties and covenants of the Miralta Shareholders under Section 6.11 and
with respect to Miralta under Section 4A.27 hereof, and any and all claims
against any of the Sellers for withholding tax obligations of Buyer or its
affiliates under Section 116 of the Income Tax Act (Canada), or otherwise,
including, without limitation, state, local, FICA and medicare tax and
withholding obligations, shall survive the Closing, and shall remain in full
force for a period of two (2) years after the Closing Date (and any claim for
indemnification in respect thereof shall be within such two (2) year period),
notwithstanding any investigation conducted before or after the Closing or the
decision of any party to complete the Closing (the "Two Year Survival Period").
Notwithstanding anything to the contrary contained herein, the representations,
warranties covenants and indemnities of the Sellers and the Paying Agent set
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forth in Section 10.10(c) hereof shall survive the Two Year Survival Period for
the applicable statute of limitations period. If, however, at the expiration
of the applicable survival period described in this Section 11 any claim or
assessment of indemnification has been asserted but not fully determined,
and/or any audit or other proceeding with respect to any matter has been
initiated, such period will be extended as to such claim, assessment, audit or
other proceeding until it is finally determined or concluded.
12. BROKERS' AND FINDERS' FEES.
12.1 SELLERS. Sellers represent and warrant to
Buyer that all negotiations relative to this Agreement have been carried on by
it directly without the intervention of any person or entity, other than
Xxxxxxxxx, Xxxxxx and Xxxxxxxx, who or which may be entitled to a brokerage fee
or other commission in respect of the execution of this Agreement or the
consummation of the transactions contemplated hereby, and Sellers severally
agree to indemnify and hold Buyer harmless against any and all claims, losses,
liabilities or expenses which may be asserted against Buyer and/or its
affiliates as a result of the Company's, Sellers' or any of their affiliates'
dealings, arrangements or agreements with any such other person or entity,
including, without limitation, to the extent of the amount, if any, not
provided for in Section 13.1 hereof with respect to Xxxxxxxxx, Lufkin and
Xxxxxxxx.
12.2 BUYER. Buyer represents and warrants to
Sellers that all negotiations relative to this Agreement have been carried on
by it directly without the intervention of any person or entity who or which
may be entitled to any brokerage fee or other commission in respect of the
execution of this Agreement or the consummation of the transactions
contemplated hereby, and Buyer agrees to indemnify and hold Sellers harmless
against any and all claims, losses, liabilities or expenses which may be
asserted against them as a result of Buyer's or any of its affiliates'
dealings, arrangements or agreements with any such other person or entity.
13. ADDITIONAL COVENANTS AND ACKNOWLEDGMENTS.
13.1 EXPENSES. Each party hereto shall pay its
own expenses incidental to the preparation of this Agreement, the carrying out
of the provisions of this Agreement and the consummation of the transactions
contemplated hereby. Notwithstanding the foregoing, at the Closing, Buyer
shall instruct its bank to wire transfer to an account designated by the
Company the sum of One Million Five Hundred Thousand Dollars (US $1,500,000.00)
(the "Expense Fund") for reasonable expenses (collectively, the "Transaction
Expenses") approved by Buyer (including, without limitation, legal and
accounting fees and the fees of Xxxxxxxxx, Lufkin and Xxxxxxxx) and incurred by
the
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Company in connection with the negotiation and preparation of this Agreement
and the transactions contemplated hereby and the amalgamation of Miralta and
ProMIRA Software Inc., a Canadian corporation, predecessor by way of
amalgamation of the Company. The Company shall disburse the Expense Fund as
soon as practicable following receipt of appropriate invoices for Transaction
Expenses. Immediately upon payment of all invoices approved by Buyer, Buyer
shall have no further liability to the Company or the Sellers or any of the
creditors who may assert claims for matters contemplated by this Section 13.1
with respect to payment of any Transaction Expenses. In the event the
Transaction Expenses, in the aggregate, are less than the full amount of the
Expense Fund, the Company will pay an amount equal to the lesser of (a) Ten
Thousand Dollars (US $10,000.00) and (b) such balance of the Expense Fund
remaining after payment of the Transaction Expenses to the Paying Agent for
disbursement to its professional advisors for those expenses reasonably
incurred by the Paying Agent in connection with the administration of his
duties under the Paying Agent Agreement, which amount shall be held by Paying
Agent pending disbursement thereof to such professional advisors from time to
time.
13.2 PRESS RELEASES. Except as required by a
judicial, regulatory or governmental authority with competent jurisdiction
including, without limitation, obligations of Manugistics Group to make public
disclosure under Federal and state securities laws, and except as required by
the rules of the National Association of Securities Dealers applicable to
Manugistics Group, no party hereto shall issue any press release or otherwise
make public any information with respect to this Agreement or the transactions
contemplated hereby prior to the Closing Date without the consent of all other
parties to this Agreement.
13.3 CONFIDENTIALITY. The parties agree that all
discussions, negotiations and transactions contemplated hereby, and all
information exchanged pursuant hereto and in connection with due diligence,
shall be kept strictly confidential, except as otherwise provided in this
Section 13.3. Further, Buyer agrees that all data and information furnished by
the Company to Buyer in connection with its due diligence shall be maintained
on a confidential basis and shall not be disclosed to any third parties not
employed by Buyer or its affiliates, other than their attorneys, accountants
and financial advisors; provided, however, that nothing in this Section 13.3
shall be construed to prevent Buyer or its affiliates from contacting the
Company's or the Subsidiary's customers set forth on Schedule 4A.35 hereto.
13.4 RIGHTS TO UNDECLARED DIVIDENDS. The
Preferred Shareholders hereby waive their respective rights to any and all
undeclared dividends payable with respect to any Class B Preferred Shares,
Class C Preferred Shares and Class D Preferred Shares - Series 1 owned by such
Preferred Shareholders including,
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without limitation, any such dividends that may otherwise be payable with
respect to the Class D Preferred Shares - Series 1, as set forth on Schedule
13.4 hereto.
13.5 ACKNOWLEDGEMENT. Each Seller hereby
acknowledges and agrees that the consideration payable hereunder for his
respective Shares as allocated to such Seller as provided in Schedule 1 hereto,
may not represent a pro rata allocation of the Purchase Price among all of the
Sellers, or even among those Sellers owning the same class of Shares or those
Sellers owning Options for the same class of shares of the Company. Further,
each Seller hereby acknowledges and agrees that such Seller has had a full and
fair opportunity to review the content of EXHIBIT I hereto and the allocation
of the Purchase Price provided thereby and has had a full and fair opportunity
to consult with such Seller's independent counsel with respect thereto. Based
upon the foregoing, each Seller hereby consents and agrees to the allocation of
the Purchase Price among the Sellers as provided in EXHIBIT I hereto and hereby
waives any and all rights such Seller may have under any federal, provincial or
other applicable legislation to require a distribution of the Purchase Price
among the Sellers other than as provided in EXHIBIT I hereto.
14. CONTENTS OF AGREEMENT. Except for the No Shop
Agreement, this Agreement, including the Exhibits and Schedules hereto, set
forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby. This Agreement shall not be amended except
by a written instrument duly executed by each of the parties hereto. Any and
all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement.
15. ASSIGNMENT AND BINDING EFFECT. This Agreement may
not be assigned by either party hereto without the prior written consent of the
other party; provided, however, Buyer may assign this Agreement to any of its
subsidiaries or affiliates, without Sellers' consent, as long as, in such
event, Buyer shall remain liable for its obligations hereunder. All of the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.
16. WAIVER. Any term or provision of this Agreement may
be waived at any time by the party entitled to the benefit thereof by a written
instrument duly executed by such party.
17. TERMINATION. This Agreement may be terminated as
follows:
17.1 MUTUAL CONSENT. By Buyer and by the Paying
Agent on behalf of Sellers mutually agreeing to terminate this
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Agreement; or
17.2 BY BUYER.
(a) If any of the conditions provided
in Section 7 hereof have not been met or have not been waived on or before the
Closing Date, except if such failure has resulted by reason of a breach by such
party of any of its material obligations hereunder; or
(b) If a material adverse change in the
business or operations (financial or otherwise) of the Company or the
Subsidiary occurs; or
(c) If the board of directors of
Manugistics Group or Buyer fails to approve the transactions contemplated by
this Agreement prior to the Closing Date or reasonably determines that its
fiduciary responsibilities to its shareholders requires that the Agreement be
terminated; or
17.3 BY SELLERS.
(a) If any of the conditions provided
in Section 8 hereof have not been met or have not been waived on or before the
Closing Date, except if such failure has resulted by reason of a breach by such
party of any of its material obligations hereunder; or
(b) If a material adverse change in the
business or operations (financial or otherwise) of Manugistics Group occurs;
provided, however, any fluctuation in the per share market price of the common
stock of Manugistics Group, par value $.002 per share, shall not constitute
such a material adverse change; or
(c) If the Company's board of directors
reasonably determines that its fiduciary responsibilities to its shareholders
requires that it recommend to its shareholders that this Agreement be
terminated because of a receipt of a higher offer to the Sellers for the
Shares; provided, however, Buyer has been afforded the opportunity for no less
than thirty (30) days following written notice of such higher offer to consider
whether or not it wishes to match such offer. If Buyer fails to elect to meet
such higher offer within such thirty-day period, Sellers shall cause the
Company to pay, and the Company shall pay, a break-up fee to Buyer equal to Two
Million Dollars (US $2,000,000.00) (the "Break-Up Fee").
Except as otherwise provided in this Section 17, any termination pursuant to
this Section 17 shall be without liability on the part of any party to the
other party hereto.
18. NOTICES. Any notice, request, demand, waiver,
consent,
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approval, or other communication which is required or permitted to be given to
any party hereunder shall be in writing and shall be deemed given only if
delivered to the party personally or sent to the party by overnight courier,
postage prepaid, addressed to the party at its address set forth below:
IF TO BUYER:
c/o Manugistics, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxxx, Esq.,
General Counsel
WITH COPIES TO:
Xxxxxxxx Xxxxxx LLP
3200 Mellon Bank Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esquire
IF TO THE COMPANY:
ProMIRA Software Incorporated
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Xxx XxXxxxxx
WITH COPIES TO:
Fraser & Xxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: X.X. Xxxxxxx
IF TO THE MIRALTA SHAREHOLDERS:
c/o Miralta Capital Inc.
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxxx Xxx, Vice President
WITH COPIES TO:
Xxxxxx Blaikie
1250 Xxxx - Xxxxxxxx Blvd. West
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Suite 2500
Montreal, Quebec
Canada H3B 4Y1
Attn: Xxxxxxx Xxxxx
IF TO WEXFORD:
000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxxx
WITH COPIES TO:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Nissan, Esquire
IF TO INSIGHT:
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
WITH COPIES TO:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Nissan, Esquire
IF TO THE MANAGING SHAREHOLDERS:
c/o Xxxxxx Xxxxx
ProMIRA Software Incorporated
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
WITH COPIES TO:
Fraser & Xxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: X.X. Xxxxxxx
IF TO PAYING AGENT:
Xxxxxx Xxx/Xxxxxxxxxxx Xxxx
Miralta Capital Inc.
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95
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxx X0X 0X0
Xxxxxx
WITH COPIES TO:
Fraser & Xxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: X.X. Xxxxxxx
IF TO THE TRANSFER AGENT:
Boston EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx, Account Manager
IF TO THE CUSTODIAN:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
Corporate Trust Department
IF TO THE ESCROW AGENT:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
Corporate Trust Department
or to such other address or person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request,
demand, waiver, consent, approval or other communication will be deemed to have
been given as of the date so delivered, telegraphed or mailed.
19. GOVERNING LAW. This Agreement, excluding the
Custodian Agreement and the Escrow Agreement, shall be governed by and
interpreted and enforced in accordance with the laws of the State of Delaware
as applied to contracts made and fully performed therein.
20. CONSENT TO JURISDICTION AND SERVICE. The parties
hereby absolutely and irrevocably consent and submit to the
90
96
jurisdiction of the courts of the State of Delaware and of any Federal court
located in said state in connection with any actions or proceedings brought
against any party hereto arising out of or relating to this Agreement. In any
such action or proceeding, the parties hereby absolutely and irrevocably waive
personal service of any summons, complaint, declaration or other process and
hereby absolutely and irrevocably agree that the service thereof may be made by
overnight courier directed to such parties at their respective addresses in
accordance with Section 18 hereof.
21. NO BENEFIT TO OTHERS. The representations,
warranties, covenants and agreements contained in this Agreement are for the
sole benefit of the parties hereto and their respective successors and assigns
and they shall not be construed as conferring, and are not intended to confer,
any rights on any other persons.
22. SECTION HEADINGS. All section headings are for
convenience only and shall in no way modify or restrict any of the terms or
provisions hereof.
23. SCHEDULES AND EXHIBITS. Unless otherwise expressly
provided herein, all Schedules and Exhibits referred to herein are intended to
be and hereby are specifically made a part of this Agreement. Notwithstanding
that the Schedules referenced in this Agreement are not attached hereto, as
specified herein, the parties acknowledge that each of such Schedules were
delivered at the Closing.
24. INTERPRETATION. The masculine (or neuter) pronoun
and the singular number shall include the masculine, feminine and neuter
genders and the singular and plural numbers. A reference to a person shall
mean a natural person, a trustee, a corporation, a partnership and any other
form of legal entity. All references in the singular or plural shall be deemed
to have been made, respectively, in the plural or singular number as well, as
the context may require.
25. BUSINESS DAY. For purposes of this Agreement, the
term "business day" shall mean any day during the year on which banks are not
authorized to be closed in the States of Delaware and Massachusetts, United
States of America or the Provinces of Xxxx Xxxxxx xxx Xxxxxxx, Xxxxxx.
26. PREPARATION OF AGREEMENT. The parties acknowledge
that they have requested and are satisfied that this Agreement be drawn up in
English. Les parties reconnaissent qu'elles ont exige que la presente
convention soit redigee en anglais et s'en declarent satisfaites.
27. SCHEDULES. For purposes of this Agreement, with
respect to any matter that is clearly disclosed in any schedule
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97
to this Agreement in response to the information called for by the
corresponding section of this Agreement in such a way as to make its relevance
to the information called for by another section of this Agreement clearly
apparent, such matter shall be deemed to have been included in the schedule
corresponding to such other section.
28. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, including, without limitation, execution by facsimile,
each of which shall be deemed an original, and Sellers, Buyer, the Company and
the Paying Agent may become a party hereto by executing a counterpart hereof.
This Agreement and any counterpart so executed shall be deemed to be one and
the same instrument. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have duly executed this Stock Purchase Agreement as of
the date first above written.
Attest: MANUGISTICS NOVA SCOTIA COMPANY
BY:
------------------------- ------------------------------
Title: Title:
Attest: PROMIRA SOFTWARE INCORPORATED
BY:
------------------------- ------------------------------
Title: Title:
------------------------------
XXXXXX XXX, Paying Agent
------------------------------
XXXXXXXXXXX XXXX, Paying Agent
Attest: ARCA INVESTMENTS INC.
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
Attest: CAPITAL D'AMERIQUE CDPQ INC.
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
[SIGNATURES CONTINUED ON NEXT PAGE]
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99
Attest: CBC PENSION BOARD OF TRUSTEES
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE FUND
Attest: GEE & CO.
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
Attest: THE CANADA TRUST COMPANY A/C
000-000000-0
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
[SIGNATURES CONTINUED ON NEXT PAGE]
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Attest: XXXXXX UNIVERSITY PENSION FUND
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE FUND
Attest: ROYAL TRUST CORPORATION OF CANADA
IN TRUST FOR ACCOUNT NO.
083166009
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
Attest: ROYAL TRUST CORPORATION OF CANADA
IN TRUST FOR ACCOUNT NO.
029361001
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
[SIGNATURES CONTINUED ON NEXT PAGE]
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101
Attest: ASSOCIATION DE BIENFAISANCE ET DE
RETRAITE DES POLICIERS DE LA
COMMUNAUTE URBAINE DE MONTREAL
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE FUND
Attest: ONTARIO HYDRO IN TRUST FOR THE
PENSION FUND
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE FUND
Attest: SUN LIFE ASSURANCE COMPANY
OF CANADA
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
[SIGNATURES CONTINUED ON NEXT PAGE]
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102
Attest: THE CANADA TRUST COMPANY
ACCOUNT NO. 000-000000-0
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
Attest: ALTACAP INVESTORS INC.
BY:
------------------------- ------------------------------
Title: Title:
BY:
------------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
---------------------------------
Xxxxx Xxxxx
---------------------------------
Xxxxxx Xxxxx
---------------------------------
Xxx Xxxxx
---------------------------------
Xxxxxx Xxxxx
[SIGNATURES CONTINUED ON NEXT PAGE]
97
103
The Xxxxx Family Trust
By:
------------------------------
Trustee
By:
------------------------------
Trustee
I/WE HAVE AUTHORITY TO BIND THE
TRUST
---------------------------------
Xxx XxXxxxxx
---------------------------------
Xxxxx XxXxxxxx
---------------------------------
Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxx
----------------------------------
Xxxxxxx Xxxxxx
Attest: Laurentian Bank of Canada
ITF Xxxxxxx X. Xxxxxxx
By:
------------------------ -----------------------------
Title: Title:
I HAVE AUTHORITY TO BIND THE
CORPORATION
[SIGNATURES CONTINUED ON NEXT PAGE]
98
104
Attest: RBC Dominion Securities
ITF Xxxxxx Xxxxx
BY:
------------------------- ----------------------------
Title: Title:
I HAVE AUTHORITY TO BIND THE
CORPORATION
Attest: RBC Dominion Securities
ITF Xxxxx Xxxxxx
BY:
-------------------------- ----------------------------
Title: Title:
I HAVE AUTHORITY TO BIND THE
CORPORATION
Attest: RBC Dominion Securities
ITF Xxx XxXxxxxx
BY:
--------------------------- -----------------------------
Title: Title:
I HAVE AUTHORITY TO BIND THE
CORPORATION
--------------------------------
Xxxxx Xxxx
--------------------------------
Xxxx Xxxx
--------------------------------
Xxxxxx Xxxxxxxx
[SIGNATURES CONTINUED ON NEXT PAGE]
99
105
XXXXX AND XXXX XXXX IN TRUST
FOR XXXXXXX XXXX
BY:
----------------------------
Xxxxx Xxxx, Trustee
BY:
-----------------------------
Xxxx Xxxx, Trustee
WE HAVE AUTHORITY TO BIND THE TRUST
XXXXX AND XXXX XXXX IN TRUST
FOR XXXXXXX XXXX
BY:
-----------------------------
Xxxxx Xxxx, Trustee
BY:
------------------------------
Xxxx Xxxx, Trustee
WE HAVE AUTHORITY TO BIND THE TRUST
--------------------------- ---------------------------
Xxxx Xxxxx Xxxxx Xxxxxx
--------------------------- ---------------------------
Xxxxxx Xxxxxxxx Xxxxx Xxxxxx
--------------------------- ---------------------------
Xxxxx Xxxxxx Xxxxxx Xxxxxxx
--------------------------- ---------------------------
Xxxxxx Xxxxxxxx Xxx Xxxx
[SIGNATURES CONTINUED ON NEXT PAGE]
100
106
--------------------------- ---------------------------
Xxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx
--------------------------- ---------------------------
Xxxx XxXxx Xxxx Xxxxxxxxxx
--------------------------- ---------------------------
Xxxxxx Xxxx Xxxxxxx Xxxxxxxxx
--------------------------- ---------------------------
Xxxx Xxxxx Xxxxxxx Xxxxx
--------------------------- ---------------------------
Xxx Xxxx Xxxxxx XxxXxxxxx
--------------------------- ---------------------------
Xxxxx XxXxxxx Xxxx XxXxxxx
--------------------------- ---------------------------
Xxx XxXxxxxx Xxxxx Xxxxx
--------------------------- ---------------------------
Sinisa Removic Xxxx Xxxxx
--------------------------- ---------------------------
Xxxxxx Xxxxx Xxxx Xxxxx
--------------------------- ---------------------------
Isabelle Saint-Laurent Xxxxxx Xxxxxx
--------------------------- ---------------------------
Sirpa Tarssanen Xxxxx Xxxxxx
--------------------------- ---------------------------
Xxxxxxx Xxxxxx Xxxx van Galder
--------------------------- ---------------------------
Xxxxx Xxxxxxx Xxxxxxx Xxxxx
[SIGNATURES CONTINUED ON NEXT PAGE]
101
107
--------------------------- ---------------------------
Xxx Xxxx Xxxxx Xxxxxx
--------------------------- ---------------------------
Xxxxxx Xxxxx Xxxxx Xxxxxxx
--------------------------- ---------------------------
Xxxx Xxxxxx Xxxxx Xxxxxxxxx
Attest: RBC Dominion Securities ITF
Xxxxx XxXxxxx
BY:
--------------------------- ---------------------------
Title: Title:
I HAVE AUTHORITY TO BIND THE
COMPANY
[SIGNATURES CONTINUED ON NEXT PAGE]
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108
INSIGHT VENTURE PARTNERS I, L.P.
Attest: BY: Insight Venture Associates, LLC,
a Delaware limited liability
company, Its General Partner
BY:
--------------------------- ---------------------------
Title: Title:
BY:
---------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
COMPANY
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
103
109
WEXFORD INSIGHT CANADA, L.P.
Attest: BY: Wexford Management LLC, a
Delaware limited liability
company, Its General Partner
BY:
--------------------------- ---------------------------
Title: Title:
BY:
---------------------------
Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
104
110
----------------------------
Xxxxxx XxXxxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
105
111
-------------------------------
Xxxxxx Xxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
106
112
------------------------------
Xxx Xxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
107
113
--------------------------------
Xxxxxx Xxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
108
114
--------------------------------------
Xxx Xxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
109
115
-------------------------------
Xxxx Xxxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
110
116
Attest: Xxxxx Xxxxxx, XXX
C/F Xxxxxx XxXxxxxxxx
BY:
--------------------------- --------------------------------
Title: Title:
I/WE HAVE AUTHORITY TO BIND THE
CORPORATION
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
111
117
-----------------------------------
Xxx Xxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
112
118
----------------------------
Xxxxx Xxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxx Xxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxx Xxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxxx Xxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxx Xxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxx Xxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxx Xxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxxx Xxxxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxxx Xxxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxx Xxxxxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Hie Xxxx Xxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
[SIGNATURES CONTINUED ON NEXT PAGE]
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Xxxxx Xxxxx
(a) The undersigned Seller is a natural person whose individual net worth, or joint net worth with his spouse,
presently exceeds US $1,000,000.00
Yes No
---- ----
(b) The undersigned Seller is a natural person whose individual income in each of 1996 and 1997 was in excess of US
$200,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(c) The undersigned Seller is a natural person whose joint income with his spouse in each of 1996 and 1997 was in
excess of US $300,000.00 and he reasonably expects to reach the same income level in 1998.
Yes No
---- ----
(d) The undersigned Seller is a trust, with total assets in excess of $5,000,000.00 (US) not formed for the specific
purpose of acquiring the Manugistics Group Shares, whose purchase is directed by an individual with such knowledge
and experience in financial and business matters that he is capable of evaluating the merit, and risks of an
investment in Manugistics Group.
Yes No
---- ----
(e) The undersigned Seller is an entity in which all of the equity owners are accredited investors.
Yes No
---- ----
(f) The undersigned Seller is a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Yes No
---- ----
(g) The undersigned Seller is a director, executive officer, or general partner of Manugistics Group.
Yes No
---- -----
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130
LIST OF EXHIBITS TO STOCK PURCHASE AGREEMENT
--------------------------------------------
Exhibit I Allocation of Purchase Price
Exhibit II Form of Notice to Transfer Agent
Exhibit III Registration Rights Agreement
Exhibit IV Escrow Agreement
Exhibit V Custodian Agreement
Exhibit VI Paying Agent Agreement
Exhibit VII Opinion of Counsel for the Company and Sellers
Exhibit VIII Opinion of Counsel for Buyer
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131
LIST OF SCHEDULES TO STOCK PURCHASE AGREEMENT
---------------------------------------------
Schedule 1 Capitalization
Schedule 4A.1 Jurisdictions
Schedule 4A.3 Share Purchase Rights
Schedule 4A.7 Officers and Directors
Schedule 4A.8 Charter and Organizational Documents
Schedule 4A.10 Undisclosed Liabilities
Schedule 4A.11(e) Liens
Schedule 4A.11(f) Dispositions of Properties and Assets
Schedule 4A.13 Machinery and Equipment
Schedule 4A.14 Inventory
Schedule 4A.15 Leases and Licenses
Schedule 4A.16(a) Proprietary Rights
Schedule 4A.16(b) Ownership of Proprietary Rights
Schedule 4A.16(c) Infringements Regarding Proprietary
Rights
Schedule 4A.17 Contracts
Schedule 4A.18 Defaults
Schedule 4A.19 Insurance
Schedule 4A.21 Distributions, Satisfactions,
Obligations
Schedule 4A.22 Capital Expenditures
Schedule 4A.23 Litigation
Schedule 4A.24 Notices of Violations
Schedule 4A.27(b) Tax Returns not Timely Filed
Schedule 4A.27(d) Tax Audits
Schedule 4A.27(e) Tax Assessments or Collections
126
132
Schedule 4A.27(f) Income Tax Act Information
Schedule 4A.27(i) Tax Returns and Reports; Taxes; Tax
Agreements
Schedule 4A.27(j) Payment of Taxes
Schedule 4A.28 Benefit Plans
Schedule 4A.29(a) Employees
Schedule 4A.29(c) Labor and Collective Bargaining
Agreements
Schedule 4A.29(e) Employee Matters
Schedule 4A.29(h) Confidentiality Agreements
Schedule 4A.31 Bank Accounts, Letters of Credit and
Powers of Attorney
Schedule 4A.33 Accounts and Notes Receivable
Schedule 4A.34 Accounts Payable, Outstanding
Obligations, and Liabilities
Schedule 4A.35 Customers, Suppliers, Licensees and
Consulting Agreements
Schedule 4A.36 Security Deposits; Claims Against
Third Parties
Schedule 4A.38 Residence
Schedule 4A.39 Company Source Code and Documentation
Schedule 4B.6 Disclosure Documents
Schedule
4B.6(a)(vi) Seller Addresses
Schedule 4B.7 Infringements Regarding Proprietary
Rights
Schedule 6.11 Debentures
Schedule 7.16(a) Retained Employees
Schedule 7.16(b) Terminated Employees
Schedule 13.4 Rights to Undeclared Dividends
127
