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EXHIBIT 2
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
TEMPLATE SOFTWARE, INC.
AND
XXXXX XXXXXX
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Dated as of February 19, 1997
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3 Assigned Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Assignment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Certificate of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.8 Distributorship Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.9 Final Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.11 Indemnification and Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.12 Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.13 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.14 Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.15 Xxxxxxx Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.16 Xxxxxxx Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.17 Lease Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.18 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.19 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.20 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.21 Principal Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.22 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.23 Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.24 Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.25 Template . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.26 Template Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
AGREEMENT FOR PURCHASE AND SALE OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1 Purchase and Sale of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3 Additional Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Section 3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.3 Subsidiaries and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.4 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.5 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.7 Absence of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.9 Employee Matters and Employee Benefit Plans . . . . . . . . . . . . . . . . . . . 7
Section 3.10 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.11 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.15 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.16 Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.17 Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.18 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.19 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.20 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.21 Brokerage Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.22 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.23 Purchase for Own Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.24 Disclosure of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.25 Investment Experience. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.26 Accredited Investor Status . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.27 Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.28 Further Limitations on Disposition . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.29 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TEMPLATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.2 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.3 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.5 Subsidiaries and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.7 Brokerage Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.8 Final Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
COVENANTS; CONCURRENT DELIVERABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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Section 5.1 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.2 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.3 Lease Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.4 Indemnification and Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.5 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.6 Assignment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.7 Certificate of Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.8 Conduct of Business of Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.9 No Solicitation, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.10 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.11 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.12 Delivery of Updated Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI
CONDITIONS PRECEDENT TO CONSUMMATION OF THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.1 Conditions Precedent to Each Party's Obligation to Effect the Acquisition . . . . 19
Section 6.2 Conditions Precedent to Obligations of Template . . . . . . . . . . . . . . . . . 20
Section 6.3 Conditions Precedent to Obligations of Seller . . . . . . . . . . . . . . . . . . 21
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.1 Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . 22
Section 8.2 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.5 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.6 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.8 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.10 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the 19th day of February,
1997, is entered into by and between TEMPLATE SOFTWARE, INC., a Virginia
corporation ("Template") and Xxxxx Xxxxxx (the "Seller"), the sole shareholder
of XXXXXXX INGENIERIE, S.A., a corporation organized under the laws of the
Republic of France ("Xxxxxxx").
RECITALS
A. Seller owns 2,500 shares of common stock of Xxxxxxx,
representing all of the issued and outstanding capital stock of Xxxxxxx (the
"Xxxxxxx Shares").
B. In exchange for an aggregate of up to 48,064 shares of
Template Common Stock (as defined below), Template wishes to acquire all of the
Xxxxxxx Shares and the Seller desires to sell such shares to Template.
C. In exchange for an aggregate of up to 45,686 additional shares
of Template Common Stock, the Seller also wishes to assign to Template certain
indebtedness of Xxxxxxx owed to such shareholder in the aggregate amount of FF
3,914,331.36 (the "Assigned Indebtedness").
D. The parties intend for the acquisition of the Xxxxxxx Shares
and the Assigned Indebtedness (collectively, the "Acquisition") to be effected
upon the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and of the mutual
representations, warranties, covenants, agreements and conditions set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 ACQUISITION. "Acquisition" shall have the meaning
given such term in the Recitals above.
Section 1.2 AGREEMENT. "Agreement" shall mean this Stock
Purchase Agreement together with the Exhibits and Schedules attached hereto, as
amended from time to time in accordance with the terms hereof.
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Section 1.3 ASSIGNED INDEBTEDNESS. "Assigned Indebtedness" shall
have the meaning given such term in the Recitals above.
Section 1.4 ASSIGNMENT OF INDEBTEDNESS. "Assignment of
Indebtedness" shall mean the Assignment of Indebtedness and Release of even
date herewith in the form attached as Exhibit A, pursuant to which the Seller
has assigned the Assigned Indebtedness to Template.
Section 1.5 CERTIFICATE OF TRANSFER. "Certificate of Transfer"
shall mean the Ordre De Mouvement in the form attached as Exhibit B, pursuant
to which the Seller has transferred the Xxxxxxx Shares to Template.
Section 1.6 CLOSING. "Closing" shall mean the conference held at
10:00 a.m., Eastern Time, on the Closing Date, at the offices of Hunton &
Williams, McLean, Virginia or, by mutual agreement, by teleconference and by
facsimile signature (with originals to follow by overnight mail), or at such
other time and place as the parties may mutually agree in writing.
Section 1.7 CLOSING DATE. "Closing Date" shall mean March 3,
1997 or the date that is ten (10) days following the date that all of the
conditions precedent to Closing set forth in Article VI below have been
satisfied or such other date as shall be established by mutual agreement of the
parties hereto.
Section 1.8 DISTRIBUTORSHIP AGREEMENT. "Distributorship
Agreement" shall mean that certain Distributorship Agreement between Template
and Xxxxxxx dated as of January 20, 1993.
Section 1.9 FINAL PROSPECTUS. "Final Prospectus" shall mean
Template's final prospectus, attached hereto as Exhibit C, which, as part of
Template's Registration Statement on Form S-1, was declared effective by the
United States Securities and Exchange Commission on January 28, 1997.
Section 1.10 GAAP. "GAAP" shall mean the Principles Comptables
Generalement Admis, as in effect in the Republic of France at the time of the
preparation of the subject financial statement.
Section 1.11 INDEMNIFICATION AND ESCROW AGREEMENT.
"Indemnification and Escrow Agreement" shall mean the indemnification and
escrow agreement of even date herewith in the form attached hereto as Exhibit
D, pursuant to which 18,750 shares of Template Common Stock (the "Escrow
Shares") issued to the Seller pursuant hereto have been escrowed to cover the
indemnification obligations of the Seller hereunder.
Section 1.12 INTANGIBLE ASSETS. "Intangible Assets" shall mean
the patents, copyrights, trade names, service marks, logos, slogans and
promotional materials listed on
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Schedule 3.16, and any registrations or applications for registration of any of
the same, together with associated good will.
Section 1.13 KNOWLEDGE. "Knowledge" as to any party hereto shall
mean the knowledge of any officer or director of such party after due
investigation.
Section 1.14 XXXXXXX. "Xxxxxxx" shall have the meaning given such
term in the Preamble above.
Section 1.15 XXXXXXX COMMON STOCK. "Xxxxxxx Common Stock" shall
mean the common stock, par value 100FF per share, of Xxxxxxx.
Section 1.16 XXXXXXX SHARES. "Xxxxxxx Shares" shall have the
meaning given such term in the Recitals above.
Section 1.17 LEASE EXTENSION. "Lease Extension" shall mean the
Lease Extension between Brial and Xxxxxxx in the form attached as Exhibit F.
Section 1.18 LICENSES. "Licenses" shall mean the licenses,
permits, authorizations, qualifications, orders, franchises, certificates,
consents and approvals issued to Xxxxxxx by any governmental or regulatory
agency or authority, including, without limitation, any of the foregoing issued
or used in connection with the development, marketing and distribution of the
products identified on Schedule 3.19 hereto.
Section 1.19 MATERIAL ADVERSE EFFECT "Material Adverse Effect"
shall mean, with respect to any Person, any event, fact, condition, occurrence
or effect, which is materially and substantially adverse to the business,
properties, assets, liabilities, capitalization, stockholders' equity,
financial condition, operations, licenses or other franchises or results of
operations of such Person, considered as a whole.
Section 1.20 PERSON. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation or trust, an
unincorporated organization or other entity, a group or a government or other
department or agency thereof.
Section 1.21 PRINCIPAL SHAREHOLDER. "Principal Shareholder" shall
mean Xxxxx Xxxxxx.
Section 1.22 REGISTRATION RIGHTS AGREEMENT. "Registration Rights
Agreement" shall mean the Registration Rights Agreement of even date herewith
by and between Template and the Seller in the form attached as Exhibit E.
Section 1.23 SELLER. "Seller" shall have the meaning given such
term in the Preamble above.
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Section 1.24 SOFTWARE. "Software" shall mean (i) the proprietary
computer software programs identified on Schedule 3.17 hereto as being owned by
Xxxxxxx, in source and object code form, and (ii) the associated technical and
user documentation identified on Schedule 3.17 (collectively, the "Software"),
owned by Xxxxxxx.
Section 1.25 TEMPLATE. "Template" shall have the meaning given
such term in the Preamble above.
Section 1.26 TEMPLATE COMMON STOCK. "Template Common Stock" shall
mean the common stock, par value $.01 per share, of Template.
ARTICLE II
AGREEMENT FOR PURCHASE AND SALE OF STOCK
Section 2.1 PURCHASE AND SALE OF CAPITAL STOCK. The Seller
agrees to sell, deliver, or cause to be delivered on the Closing Date to
Template, the Xxxxxxx Shares, by execution and delivery to Template of the
Certificate of Transfer.
Section 2.2 CONSIDERATION.
(a) At Closing, in exchange for all of the Xxxxxxx Shares,
contemporaneously with the execution and delivery hereof, Template has
delivered to the Seller a stock certificate evidencing 38,452 shares of
Template Common Stock as set forth on Appendix I, representing 48,064 shares of
Template Common Stock less approximately twenty percent (20%) of such shares to
be held in escrow pursuant to the Indemnification and Escrow Agreement.
(b) At Closing, in exchange for the conveyance of the Assigned
Indebtedness, contemporaneously with the execution and delivery hereof,
Template has delivered to the Seller a stock certificate number evidencing
36,548 shares of Template Common Stock, representing 45,686 shares of Template
Common Stock less approximately twenty percent (20%) of such shares to be held
in escrow pursuant to the Indemnification and Escrow Agreement.
Section 2.3 ADDITIONAL ACTIONS. If, at any time after the
Closing, Template shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in Template its
right, title or interest in, to or under any of the rights, properties or
assets of Xxxxxxx or otherwise carry out this Agreement, the Seller hereby
agrees to execute and deliver, in the name and on behalf of Xxxxxxx, the Seller
or otherwise, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of Xxxxxxx, the Seller or otherwise, all
such other actions and things as may be necessary or desirable to
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vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in Template or otherwise to carry out this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to Template as set forth in
this Article III. Nothing in this Article III shall be deemed to impose any
liability on the Seller (i) for any liability or obligation under the
Distributorship Agreement for which liability Template is ultimately
responsible pursuant to the terms and conditions of the Distributorship
Agreement, or (ii) for any Template product the Seller distributes for
Template.
Section 3.1 ORGANIZATION. Xxxxxxx is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Republic of France and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted. Xxxxxxx is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary.
Section 3.2 CAPITALIZATION.
(a) Krystal's entire equity capitalization consists of
2,500 shares of Xxxxxxx Common Stock, all of which 2,500 shares are issued and
outstanding and are owned by the Seller.
(b) All issued and outstanding shares of Xxxxxxx Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable and are free of preemptive rights. Except as set forth on
Schedule 3.2(b), Xxxxxxx has never declared or paid any dividend on, or
declared or made any distribution with respect to, or authorized or effected
any split-up or any other recapitalization of, any of its common stock, issued
any of its common stock or directly or indirectly redeemed, purchased or
otherwise acquired any of its outstanding common stock or agreed to take any
such action.
(c) There are no outstanding options, warrants,
subscriptions or other rights to purchase or acquire any shares of capital
stock of Xxxxxxx other than as set forth on Schedule 3.2(c), and there are no
contracts, commitments, understandings, arrangements or restrictions by which
Xxxxxxx is bound to sell or issue any shares of its capital stock or any such
options, warrants or rights. Xxxxxxx has delivered to Template complete and
correct copies of its Statuts, in each case as currently in effect and amended
to the date of this Agreement.
(d) Except as set forth on Schedule 3.2(d), all shares of
Xxxxxxx Common Stock have been issued in full compliance with the registration
and qualification requirements
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of all applicable securities laws of the Republic of France, including, without
limitation, anti-fraud provisions.
Section 3.3 SUBSIDIARIES AND AFFILIATES. Xxxxxxx does not own
any capital stock or other equity securities of any other corporation and does
not have any other type of ownership interest in any other corporation,
partnership, joint venture or other business organization or entity.
Section 3.4 AUTHORITY RELATIVE TO THIS AGREEMENT.
(a) The execution, delivery and performance of this Agreement
and of all of the other documents and instruments required hereby by the Seller
are within his power. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite action on the part of Xxxxxxx.
(b) This Agreement and all of the other documents and
instruments required hereby have been duly and validly executed and delivered
by the Seller and constitute valid and binding agreements of the Seller,
enforceable against the Seller in accordance with their terms, except to the
extent that the enforcement hereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, and (b) general principles of
equity, regardless of whether enforceability is considered in a proceeding in
equity or at law (the "Enforceability Exception").
Section 3.5 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Except as set forth on Schedule 3.5, no filing or
registration with, and no permit, authorization, consent or approval of, and no
notice to any public body or authority is necessary or required in connection
with the execution and delivery of this Agreement by the Seller or for the
consummation by the Seller of the transactions contemplated by this Agreement.
(b) Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby by the
Seller will (a) conflict with or result in any breach of any provision of the
Statuts of Xxxxxxx; (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 of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Xxxxxxx is a
party or by which it or any of its properties or assets may be bound; or (c)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Xxxxxxx or the Seller or any of their respective properties or
assets.
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Section 3.6 FINANCIAL STATEMENTS. The financial statements of
Xxxxxxx for the fiscal year ended June 30, 1996 (the "Balance Sheet Date"),
including all notes thereto, and the interim financial statements for the
period ended November 30, 1996, each of which is attached as Schedule 3.6
(collectively, the "Xxxxxxx Financial Statements"), taken as a whole, fairly
present the financial position and results of operations of Xxxxxxx as of the
dates thereof and for the periods then ended, except in the case of interim
statements which are subject to year end adjustments. The Xxxxxxx Financial
Statements have been prepared in accordance with GAAP, consistently applied
throughout and among the periods indicated.
Section 3.7 ABSENCE OF CERTAIN EVENTS.
(a) Except as set forth on Schedule 3.7, since the Balance
Sheet Date, Xxxxxxx has not suffered any adverse change in its business,
operations or financial condition which would have a Material Adverse Effect on
Xxxxxxx.
(b) Except as set forth on Schedule 3.7, there has not been
since the Balance Sheet Date: (a) any entry into any agreement or understanding
between Xxxxxxx on the one hand, and any of their respective executive officers
or key employees on the other hand, providing for employment of any such
officer or key employee or any general or material increase in the
compensation, severance or termination benefits payable or to become payable by
Xxxxxxx to any of their respective officers or key employees, or any increase
in any bonus, insurance, pension or other employee benefit plan, payment or
arrangement (including, without limitation, the granting of stock options or
stock appreciation rights or the award of restricted stock) made to, for or
with any such officer or key employee; (b) any employment or labor dispute
which is or is expected to be material to Xxxxxxx; (c) any entry by Xxxxxxx
into any material commitment, agreement, license or transaction (including,
without limitation, any borrowing or capital expenditure or sale of assets)
other than in the ordinary and usual course of business; (d) any change in the
accounting methods of Xxxxxxx; (e) any damage, destruction or loss, whether
covered by insurance or not, materially and adversely affecting the properties
or businesses of Xxxxxxx; (f) any agreement to do any of the foregoing; or (g)
any change in the financial position or operations of Xxxxxxx that would have a
Material Adverse Effect.
Section 3.8 LITIGATION. Except as set forth on Schedule 3.8,
there is no action, suit, proceeding or, investigation pending or, to the
Knowledge of the Seller, threatened against or relating to Xxxxxxx, at law or
in equity, or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, that is
expected, in the reasonable judgment of the Seller, to have a Material Adverse
Effect on Xxxxxxx. Xxxxxxx is not subject to any order, judgment or decree
that would materially limit the ability of Xxxxxxx to operate its business in
the ordinary course.
Section 3.9 EMPLOYEE MATTERS AND EMPLOYEE BENEFIT PLANS.
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(a) Schedule 3.9 contains a true and complete list of all
of the employees of Xxxxxxx, each such employee's title or capacity in which
employed, and such employee's annual salary or wages, and a complete list and
summary of Krystal's employee benefit plans and any bonus compensation plans or
policies. Except as set forth on Schedule 3.9, Xxxxxxx is not a party to any
collective bargaining agreement covering any of its employees.
(b) Xxxxxxx has complied in all respects with all
applicable statutes, regulations and orders relating to employment, wages,
hours, equal employment opportunity, collective bargaining, pension, welfare
and benefit plans, safety, health and the payment of social security,
unemployment, workers' compensation, disability and payment and withholding of
taxes, and Xxxxxxx is not in arrears with respect to any of such taxes.
Section 3.10 TAX MATTERS.
(a) Neither Xxxxxxx, nor any entity to whose liabilities
Xxxxxxx has succeeded, has filed or been included in a consolidated, unitary,
or combined tax return with another person.
(b) Except as disclosed on Schedule 3.10 hereto: (a) Xxxxxxx
has filed all tax returns and reports required to have been filed by or for it;
(b) all material information set forth in such returns or reports is accurate
and complete; (c) Xxxxxxx has paid or made adequate provision for all taxes,
additions to tax, penalties, and interest payable by the Xxxxxxx; (d) no unpaid
tax deficiency has been asserted against or with respect to Xxxxxxx by any
taxing authority; (e) Xxxxxxx has collected or withheld all amounts required to
be collected or withheld by it for any taxes, and all such amounts have been
paid to the appropriate governmental agencies or set aside in appropriate
accounts for future payment when due; (f) Xxxxxxx is in compliance with, and
its records contain all information and documents necessary to comply with, all
applicable information reporting and tax withholding requirements; (g) the
balance sheets contained in the Xxxxxxx Financial Statements fully and properly
reflect, as of the dates thereof, the liabilities of Xxxxxxx for all accrued
taxes, additions to tax, penalties, and interest; (h) for periods ending after
the date of the most recent Xxxxxxx Financial Statements, the books and records
of Xxxxxxx fully and properly reflect its liability for all accrued taxes,
additions to tax, penalties, and interest; and (i) Xxxxxxx has not granted, nor
is it subject to, any waiver of the period of limitations for the assessment of
tax for any currently open taxable period.
(c) Schedule 3.10 describes all material tax elections,
consents, and agreements affecting Xxxxxxx, and lists all types of taxes paid
and tax returns filed by Xxxxxxx.
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Section 3.11 REAL PROPERTY.
(a) Xxxxxxx owns no real property, nor any interest
therein. Schedule 3.11 contains a true and complete list of all real property
leased by Xxxxxxx (the "Real Property"). With respect to each such parcel of
Real Property, except as set forth on Schedule 3.11, there are no pending or,
to the Knowledge of the Seller, threatened condemnation proceedings, lawsuits
or administrative actions relating to the parcel or other matters affecting
adversely the current use, occupancy or value thereof; there are no contracts
for sale or leases, subleases, licenses, concessions or other agreements,
written or oral, granting to any party or parties the right of use or occupancy
of any portion of the parcel; and there are no parties (other than Xxxxxxx) in
possession of the parcel, other than tenants under any leases or subleases
listed in Schedule 3.11, who are in possession of space to which they are
entitled.
(b) Schedule 3.11 contains a true and complete list of
all leases, subleases, assignments, consents and other arrangements (true,
correct and complete copies of which have been provided to Template) pursuant
to which Xxxxxxx occupies or uses any Real Property or any buildings or other
structures, and sets forth in the case of each listed instrument a brief
description of the use to which such property is being put or the use to which
it is intended to be put if not currently used in the operations of Xxxxxxx, as
the case may be, has a valid leasehold interest under each lease or sublease
listed on Schedule 3.11. All such leases, subleases, assignments, consents and
other arrangements are in full force and effect and constitute legal, valid and
binding obligations of Xxxxxxx, as the case may be, and, to the Knowledge of
the Seller, of any other parties thereto, enforceable in accordance with their
respective terms. Except as set forth in Schedule 3.11, there is not on the
part of Xxxxxxx or, to the Knowledge of the Seller, on the part of any other
party thereto, under any of such instruments or arrangements, any existing
default or event which, with notice or lapse of time or both, would constitute
a default.
Section 3.12 ENVIRONMENTAL MATTERS. To the Knowledge of the
Seller, except as set forth on Schedule 3.12, Xxxxxxx has no material liability
(actual, contingent or otherwise) under applicable environmental laws.
Section 3.13 INSURANCE. Schedule 3.13 contains a true and
complete list of all insurance policies (by policy number, insurer, expiration
date and coverage) held by Xxxxxxx relating to its business, properties and
employees, including, without limitation, any (i) product liability insurance
covering any Xxxxxxx Products; (ii) directors' and officers' liability
insurance; (iii) errors and omissions insurance; and (iv) health, life or
disability insurance covering its employees. All such insurance policies are
in full force and effect and, to the Seller's Knowledge, in such amounts and
provide coverage that is reasonable and customary in light of the business,
operations and properties of Xxxxxxx.
Section 3.14 COMPLIANCE WITH LAWS. Except as set forth on
Schedule 3.14, Xxxxxxx is not in conflict with, or in default or violation of
any law, regulation, order, judgment or
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decree applicable to Xxxxxxx or by which any of its properties are bound or
affected, or any note, bond, mortgage, indenture, contract, lease, license,
permit, franchise or any other instrument or obligation to which Xxxxxxx is a
party or by which Xxxxxxx, or any of its properties, is bound or affected,
except for any such conflicts, defaults or violations that either (a) as set
forth on Schedule 3.14, have been waived or (b) would not, individually or in
the aggregate, have a Material Adverse Effect on Xxxxxxx.
Section 3.15 ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as set forth on Schedule 3.15, Xxxxxxx does
not have any liabilities or obligations of any kind, whether absolute, accrued,
asserted or unasserted, contingent or otherwise, except liabilities,
obligations or contingencies that are accrued or reserved against in the
balance sheet of Xxxxxxx included in the Xxxxxxx Financial Statements or
reflected in the notes thereto, or that were incurred after the date of such
balance sheet in the ordinary course of business and consistent with past
practices, and except for any such liabilities or obligations that,
individually or in the aggregate, would not have a Material Adverse Effect on
Xxxxxxx.
(b) Except as set forth on Schedule 3.15, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with any transactions or securities offering by
Xxxxxxx, or investment advice received by Xxxxxxx and all such amounts are
properly reflected on the Xxxxxxx Financial Statements.
Section 3.16 INTANGIBLE ASSETS. Schedule 3.16 contains a true and
complete list of all Intangible Assets and all agreements pursuant to which
Xxxxxxx licensed or authorized others to use such Intangible Assets. Except as
set forth on Schedule 3.16, there are no claims, demands or proceedings
instituted, pending or, to the Knowledge of the Seller, threatened by any third
party pertaining to or challenging the rights of Xxxxxxx to use any of the
Intangible Assets owned, licensed or under development by Xxxxxxx, there is no
Intangible Asset owned by a third party that Xxxxxxx is using without a license
to do so, and Xxxxxxx has not agreed to indemnify any Person for or against the
infringement of any Intangible Asset. None of the Intangible Assets infringes
any proprietary right of any Person.
Section 3.17 SOFTWARE.
(a) Schedule 3.17 contains a true and complete list of
all computer software owned or licensed by Xxxxxxx and used in the operation of
its business.
(b) All of the Software and every severable component
thereof performs in accordance with its applicable documentation and is free of
material defects in programming and operation. Xxxxxxx has delivered (or made
available) to Template complete and accurate copies of all user and technical
documentation related to the Software.
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(c) No employee of Xxxxxxx is, or is now expected to be,
in default under any employment contract, agreement or arrangement relating to
the Software or any noncompetition arrangement or restrictive covenant relating
to the Software or its development or exploitation. The Software was developed
exclusively by the employees of Xxxxxxx during such time as they were employed
by Xxxxxxx. The Software does not include any inventions or developments of
such employees made prior to the time that they became employees of Xxxxxxx and
the Software does not include any proprietary intellectual property of any
previous employer of any such employees.
(d) All right, title and interest in and to the Software
is owned by Xxxxxxx and the Software is free and clear of all liens, claims,
charges, encumbrances and rights of others and is fully transferable to
Template, and, except as set forth on Schedule 3.17, no Person other than
Xxxxxxx has any right, title or interest in or to the Software, including,
without limitation, any security interest, license, contingent interest or
otherwise. The development, use, sale and exploitation of the Software by
Xxxxxxx does not violate any material rights of any other person, and Xxxxxxx
has not received any written communication alleging such a violation. Except
as set forth on Schedule 3.17, Xxxxxxx has no obligation to compensate any
person for the development, use, sale or exploitation of the Software and
Xxxxxxx has not granted to any other person or entity any license, option or
other right to develop, use, sell or exploit in any manner the Software,
whether requiring the payment of royalties or not.
(e) Xxxxxxx has kept secret the source code for, and
other trade secret materials relating to, the Software and has not disclosed
any of such source code or materials to any person or entity other than certain
employees of Xxxxxxx. Xxxxxxx has taken all appropriate measures to protect
the confidential and proprietary nature of the Software, including, without
limitation, the use of confidentiality and intellectual property rights
agreements with all of its employees having access to the Software source and
object code. Except as set forth on Schedule 3.17, there have been no patents
applied for and no copyrights registered for any part of the Software. Except
as set forth in Schedule 3.17, there are no trademark rights of any person
relating to the Software.
(f) To the Knowledge of the Seller, (i) there are no
uncorrected defects in the Software; and (ii) no person is using the Software
in violation of any of the rights thereto of Xxxxxxx.
Section 3.18 TITLE TO ASSETS. Schedule 3.18 contains a true and
complete list of all machinery, computers, equipment, furniture and other
tangible assets of Xxxxxxx (the "Tangible Assets"). Except as set forth on
Schedule 3.18, Xxxxxxx has good and marketable title to the Tangible Assets,
the Intangible Assets and the Software, free of any lien, security interest or
encumbrance whatsoever. The Tangible Assets are in good operating condition,
subject to ordinary wear and tear, and are suitable for their intended uses.
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Section 3.19 LICENSES. Schedule 3.19 contains a true and complete
list of all of the Licenses. All of the Licenses are validly issued and in
full force and effect and are unimpaired by any act or omission of Xxxxxxx, or
any of its officers, directors or employees. Xxxxxxx has fulfilled and
performed all of its obligations with respect to the Licenses and has full
power and authority to operate thereunder. The Licenses constitute all of the
authorizations, licenses, permits and franchises of governmental, regulatory or
administrative agencies required for Xxxxxxx to conduct its business.
Section 3.20 CONTRACTS. Schedule 3.20 contains a true and
complete list of all written contracts, agreements, licenses and leases to
which Xxxxxxx is a party or by which it is bound (the "Contracts"). Except as
set forth on Schedule 3.20, neither Xxxxxxx, nor to the Knowledge of the
Seller, any other party thereto, is in default under the terms of any
Contracts. Each of the Contracts is in full force and effect and is
enforceable in accordance with its terms, subject to the Enforceability
Exception.
Section 3.21 BROKERAGE FEES AND COMMISSIONS. No broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Xxxxxxx.
Section 3.22 DISCLOSURE. All documents, schedules and exhibits
delivered or to be delivered by or on behalf of he Seller pursuant to this
Agreement, are true, complete and accurate in all material respects and all
such documents are authentic, valid, subsisting and binding on the parties
subscribing thereto in accordance with their terms, except as otherwise
specifically set forth herein or in any exhibit hereto. No representation or
warranty by the Seller to Template contained in this Agreement, and no
statement contained in the Schedules referred to in Article III hereto or any
certificate furnished to Template pursuant to the provisions hereof, contains
or will contain any untrue statement of a material fact or omits or will omit
to state a material fact necessary in order to make the statements herein or
therein not misleading.
Section 3.23 PURCHASE FOR OWN ACCOUNT. The shares of Template
Common Stock to be purchased by the Seller hereunder will be acquired for
investment for the Seller's own account, not as a nominee or agent, and not
with a view to the public resale or distribution thereof, and the Seller has no
present intention of selling, granting any participation in, or otherwise
distributing the same.
Section 3.24 DISCLOSURE OF INFORMATION. The Seller has received
or has had full access to all the information he considers necessary or
appropriate to make an informed investment decision with respect to the shares
of Template Common Stock. The Seller further has had an opportunity to ask
questions and receive answers from Template regarding the terms and conditions
of the offering of the shares of Template Common Stock and to obtain additional
information (to the extent Template possessed such information or could
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acquire it without unreasonable effort or expense) necessary to verify any
information furnished to the Seller or to which the Seller had access.
Section 3.25 INVESTMENT EXPERIENCE. The Seller understands that
the purchase of the shares of Template Common Stock involves substantial risk.
The Seller has experience as an investor in securities of privately-held
companies and acknowledges that he is able to fend for himself, can bear the
economic risk of his investment in the shares of Template Common Stock and has
such knowledge and experience in financial or business matters that he is
capable of evaluating the merits and risks of this investment in the shares of
Template Common Stock and protecting his own interests in connection with this
investment.
Section 3.26 ACCREDITED INVESTOR STATUS. The Seller is an
"accredited investor" within the meaning of Regulation D promulgated under the
United States Securities Act of 1933, as amended (the "1933 Act") and within
the meaning of the definition of such term set forth in any applicable state
securities laws.
Section 3.27 RESTRICTED SECURITIES. The Seller understands that
the shares of Template Common Stock are characterized as "restricted
securities" under the 1933 Act inasmuch as they are being acquired from
Template in a transaction not involving a public offering and that under the
1933 Act and applicable regulations thereunder such securities may be resold
without registration under the 1933 Act only in certain limited circumstances.
In this connection, the Seller represents that he is familiar with Rule 144 of
the rules and regulations promulgated under the 1933 Act ("Rule 144"), as
presently in effect, and understands such resale limitations imposed thereby
and by the 1933 Act. The Seller understands that Template is under no
obligation to register any of the securities sold hereunder, except as
expressly set forth in the Registration Rights Agreement of even date herewith
by and between Template and the Seller. The Seller understands that no public
market now exists for Template Common Stock (collectively, the "Restricted
Securities") and that it is uncertain whether a public market will ever exist
for any Restricted Securities.
Section 3.28 FURTHER LIMITATIONS ON DISPOSITION. Without in any
way limiting the representations set forth above, the Seller further agrees not
to make any disposition of all or any portion of the Restricted Securities
unless and until:
(a) there is then in effect a registration
statement under the 1933 Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or
(b) (i) the Seller shall have notified Template
of the proposed disposition and shall have furnished Template with a statement
of the circumstances surrounding the proposed disposition, and (ii) the Seller
shall have furnished Template, at the expense of the Seller or his transferee,
with an opinion of counsel, reasonably satisfactory to Template, that such
disposition will not require registration of such securities under the 1933
Act.
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Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required by Template:
(i) for any transfer of any Restricted Securities in compliance with Rule 144
or Rule 144A; or (ii) for the transfer by gift, will or intestate succession by
the Seller to his spouse or lineal descendants or ancestors or any trust for
any of the foregoing; provided that in each of the foregoing cases the
transferee agrees in writing to be subject to the terms of this Section 3.28 to
the same extent as if the transferee were the Seller.
Section 3.29 LEGENDS. It is understood that the instruments and
certificates evidencing the Restricted Securities will bear the legends set
forth below:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
The legend set forth above shall be removed by Template from any certificate or
instrument evidencing Restricted Securities upon delivery to Template of an
opinion by counsel, reasonably satisfactory to Template, that a registration
statement under the 1933 Act is at that time in effect with respect to the
legended security or that such security can be freely transferred in a public
sale without such a registration statement being in effect and that such
transfer will not jeopardize the exemption or exemptions from registration
pursuant to which Template issued the Restricted Securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TEMPLATE
Template hereby represents and warrants to the Seller as set forth in this
Article IV.
Section 4.1 ORGANIZATION. Template is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted.
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Section 4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution,
delivery and performance of this Agreement and of all of the documents and
instruments required hereby are within the corporate power of Template. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of Template and no other corporate proceedings on the part of
Template are necessary to authorize this Agreement or to consummate the
transactions contemplated herein. This Agreement and all of the other
documents and instruments required hereby have been or will be duly and validly
executed and delivered by Template and constitute or will constitute valid and
binding agreements of Template enforceable against Template in accordance with
their terms, subject to the Enforceability Exception.
Section 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS. No filing or
registration with, and no permit, authorization, consent or approval of, any
public body or authority is necessary or required in connection with the
execution and delivery of this Agreement by Template or for the consummation by
Template of the transactions contemplated by this Agreement. Neither the
execution, delivery and performance of this Agreement nor the consummation of
the transactions contemplated hereby by Template will (a) conflict with or
result in any breach of any provision of the Articles of Incorporation or
Bylaws of Template; (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 of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Template is a
party or by which Template or any of its properties or assets may be bound; or
(c) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Template or any of their respective properties or assets except,
in the case of subsection (b) and (c) above, for violations, breaches or
defaults that would not in the aggregate have a Material Adverse Effect on the
business, operations or financial condition of Template and that will not
prevent or delay the transactions contemplated hereby.
Section 4.4 CAPITALIZATION.
(a) Template's entire authorized equity capitalization
consists of (i) 17,000,000 shares of Template Common Stock, of which 4,222,008
shares are issued and outstanding, and (ii) 3,000,000 shares of Template
Preferred Stock, of which no shares are issued and outstanding.
(b) All issued and outstanding shares of Template Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable and are free of preemptive rights. Except as set forth on
Schedule 4.4(b), Template has never declared or paid any dividend on, or
declared or made any distribution with respect to, or authorized or effected
any split-up or any other recapitalization of, any of its capital stock, issued
any of its capital stock or directly or indirectly redeemed, purchased or
otherwise acquired any of its outstanding capital stock or agreed to take any
such action.
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(c) There are no outstanding options, warrants,
subscriptions or other rights to purchase or acquire any capital stock of
Template other than as set forth on Schedule 4.4(c), and there are no
contracts, commitments, understandings, arrangements or restrictions by which
Template is bound to sell or issue any shares of its capital stock or any such
options, warrants and rights. Except as set forth on Schedule 4.4(c), no
Person has any preemptive rights to acquire shares of Template Capital Stock.
Template has delivered to the Seller complete and correct copies of its
Articles of Incorporation and Bylaws, in each case as currently in effect and
amended to the date of this Agreement.
(d) All shares of Template Common Stock have been issued
in full compliance with the registration and prospectus delivery requirements
of the 1933 Act or in compliance with applicable exemption therefrom, the
registration and qualification requirements of all applicable securities laws
of states of the United States and all other provisions of applicable
securities laws of States of the United States, including, without limitation,
anti-fraud provisions.
Section 4.5 SUBSIDIARIES AND AFFILIATES. Except as set forth on
Schedule 4.5, Template does not own any capital stock or other equity
securities of any other corporation and does not have any other corporation and
does not have any other type of ownership interest in any other corporation,
partnership, joint venture or other business organization or entity.
Section 4.6 FINANCIAL STATEMENTS. The audited financial
statements of Template for the fiscal year ended November 30, 1995, including
all notes thereto, and the unaudited financial statements for the eleven months
ended October 31, 1996, each of which is attached hereto as Schedule 4.6
(collectively, the "Template Financial Statements"), taken as a whole, fairly
present the financial position and results of operations of Template as of the
dates thereof and for the periods then ended. The Template Financial
Statements have been prepared in accordance with the generally accepted
accounting principles, as in effect in the United States, consistently applied
throughout and among the periods indicated.
Section 4.7 BROKERAGE FEES AND COMMISSIONS. No broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Template.
Section 4.8 FINAL PROSPECTUS. The Final Prospectus is true and
complete in all material respects.
ARTICLE V
COVENANTS; CONCURRENT DELIVERABLES
Section 5.1 PUBLIC ANNOUNCEMENTS. Template and the Seller will
consult with each other before issuing any press release or otherwise making
any public statement with
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respect to this Agreement or the Acquisition and shall not issue any such press
release or make any such public statement prior to such consultation or as to
which the other party reasonably objects, except as may be required by law.
Section 5.2 NO SOLICITATION. For a period commencing on the date
hereof and ending on the earlier of (i) the date three (3) years after the date
of the Closing, and (ii) the date of the termination of this Agreement, the
Seller shall not directly or indirectly solicit, contract with or employ any
employee of Xxxxxxx.
Section 5.3 LEASE EXTENSION. Contemporaneously with the
execution and delivery hereof, Xxxxxxx has received from the Lease Extension.
Section 5.4 INDEMNIFICATION AND ESCROW AGREEMENT.
Contemporaneously with the execution and delivery hereof, Template and the
Seller have executed and delivered to each other the Indemnification and Escrow
Agreement.
Section 5.5 REGISTRATION RIGHTS AGREEMENT. Contemporaneously
with the execution and delivery hereof, Template and the Seller have executed
and delivered to each other the Registration Rights Agreement.
Section 5.6 ASSIGNMENT OF INDEBTEDNESS. Contemporaneously with
the execution and delivery hereof, the Seller has executed and delivered to
Template the Assignment of Indebtedness.
Section 5.7 CERTIFICATE OF TRANSFER. Contemporaneously with the
execution and delivery hereof, the Seller has executed and delivered to
Template the Certificate of Transfer.
Section 5.8 CONDUCT OF BUSINESS OF XXXXXXX.
(a) Except for actions specifically permitted by this
Agreement, during the period from the date of this Agreement to the Closing,
Seller will conduct the operations of Xxxxxxx according to its ordinary and
usual course of business and consistent with past practice, and will use,
Krystal's reasonable best efforts to preserve intact its business organization,
to keep available the services of its officers and employees and to maintain
satisfactory relationships with licensors, licensees, suppliers, contractors,
distributors, customers and others having material business relationships with
Xxxxxxx.
(b) Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement, prior to the Closing,
Seller will not, without the prior written consent of Template:
(i) amend the Statuts of Xxxxxxx;
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(ii) authorize for issuance or issue, sell or
deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or
otherwise) any capital stock of any class or any other
securities;
(iii) split, combine or reclassify any shares of
Krystal's capital stock, declare, set aside or pay any
dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of Krystal's
capital stock, or redeem or otherwise acquire any of Krystal's
securities;
(iv) except in the ordinary course of business (1)
incur or assume any indebtedness for borrowed money not
currently outstanding, (2) assume, guarantee, endorse or
otherwise become liable or responsible for the obligations of
any Person, (3) make any loans, advances or capital
contributions to, or investments in, any other Person (other
than customary loans or advances to employees in accordance
with past practice), or (4) enter into any contract or
agreement other than in the ordinary course of business or in
connection with the transactions contemplated by this
Agreement;
(v) make any tax election or settle or compromise
any material federal, state, local or foreign tax liability;
(vi) agree in writing or otherwise to take any of
the foregoing actions.
Section 5.9 NO SOLICITATION, ETC.
(a) Xxxxxxx shall not, after the date hereof, directly or
indirectly, through any officer, director, shareholder, employee, agent or
otherwise, solicit, initiate or encourage submission of proposals or offers
from any person relating to (i) any purchase or other acquisition of all or a
substantial portion of the assets of, or any equity interest in, Xxxxxxx, or
(ii) any business combination with Xxxxxxx (a "Competing Transaction"), or
participate in any negotiations regarding, or furnish to any other person any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt by any other
person to do or seek any of the foregoing.
(b) Notwithstanding anything in this Agreement to the
contrary, if Xxxxxxx shall receive a written proposal relating to a Competing
Transaction with a third party that, in the written opinion of counsel to
Xxxxxxx (a copy of which opinion shall concurrently be delivered to Template),
the Board of Directors of Xxxxxxx is obligated by principles of fiduciary duty
to consider, Xxxxxxx (i) may, without violating this Agreement, thereafter
furnish information to, and may enter into negotiations with, such third party,
and (ii) may, if Krystal's Board of Directors determines that such Competing
Transaction is in the best interests of the Sellers, terminate this Agreement
and enter into an agreement with respect to
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such Competing Transaction. Xxxxxxx immediately shall notify Template of any
proposal relating to a Competing Transaction, or if any inquiry or contact with
any person with respect thereto is made, and shall immediately deliver to
Template copies of any such written proposal or offer and any communications by
Xxxxxxx in response thereto.
Section 5.10 BEST EFFORTS. Subject to the terms and conditions
herein provided and, with respect to Template and Seller, subject to any
fiduciary obligations under applicable law as advised in writing by counsel,
each of the parties hereto agrees to use its best efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper and advisable under applicable laws and regulations, to consummate and
make effective the transactions contemplated by this Agreement.
Section 5.11 CONSENTS. Template and Seller each will use their
best efforts to obtain consents of all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement.
Section 5.12 DELIVERY OF UPDATED SCHEDULES. No earlier than ten
(10) nor fewer than five (5) days before the date scheduled for the Closing,
Seller and Template shall correct and supplement in writing any information
furnished on the Schedules that, to the Knowledge of Seller or Template,
respectively, is incorrect or incomplete, and promptly shall furnish such
corrected and supplemented information to the other, so that such information
shall be correct and complete at the time such updated information is so
provided. Thereafter, until the Closing, the Seller and Template shall notify
the other in writing of any changes or supplements to the updated information
needed, to the Knowledge of Seller or Template, respectively, to make such
information correct and complete at all times prior to and as of the Closing.
The parties acknowledge and agree that the furnishing of such corrected and
supplemental information, in and of itself, shall not create any presumption
that such information constitutes or evidences the existence of a material
change or any breach or violation by Seller or Template of any provision of
this Agreement, it being understood that any determination as to whether such a
breach or violation exists shall be made on the basis of any and all relevant
information, which may include information as is so furnished under this
Section 5.13.
ARTICLE VI
CONDITIONS PRECEDENT TO CONSUMMATION OF THE ACQUISITION
Section 6.1 CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATION TO
EFFECT THE ACQUISITION. The respective obligation of each party to consummate
the Acquisition is subject to the satisfaction at or prior to the Closing of
the following conditions precedent:
(a) no order, decree or injunction shall have been
enacted, entered, promulgated or enforced by any court of law of competent
jurisdiction or any French or United States governmental authority which
prohibits the consummation of the Acquisition;
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provided, however, that the parties hereto shall use their best efforts to have
any such order, decree or injunction vacated or reversed; and
(b) all necessary approvals, clearances and consents of
governmental and regulatory authorities required to be obtained by Seller or
Template in connection with the Acquisition and all material approvals and
consents of third parties that are required to be obtained in connection with
the transactions contemplated by this Agreement shall have been procured.
Section 6.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF TEMPLATE. The
obligations of Template to consummate the Acquisition are subject to the
satisfaction or waiver at or prior to the Closing of the following conditions
precedent:
(a) the representations and warranties of Xxxxxxx and the
Seller contained in Article III shall be true and correct in all material
respects when made and at and as of the Closing with the same force and effect
as if those representations and warranties had been made at and as of such time
(with such exceptions, if any, necessary to give effect to events or
transactions expressly permitted herein;
(b) Seller shall, in all material respects, have
performed all obligations and complied with all covenants contemplated herein
that are necessary to be performed or complied with by it on or before the
Closing;
(c) Template shall have received a certificate of the
President of Xxxxxxx, in form satisfactory to counsel for Template, certifying
fulfillment of the matters referred to in paragraphs (a) and (b) of this
Section 6.2;
(d) Template shall have (i) received all requisite
consents of third parties to the transactions contemplated by this Agreement;
and (ii) completed to its satisfaction a complete review of the matters
disclosed on the Schedules hereto;
(e) all proceedings, corporate or other, to be taken by
Seller in connection with the transactions contemplated by this Agreement, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Template and its counsel, and Seller shall have made available to
Template for examination the originals or true and correct copies of all
documents that Template shall have reasonably requested in connection with the
transactions contemplated by this Agreement;
(f) there shall be no liens, encumbrances, mortgages,
charges, claims, restrictions, pledges, security interests or other matters
affecting the assets of Xxxxxxx;
(g) the Seller shall have delivered to Template the
Certificate of Transfer and documentation with respect to the transfer of the
Assigned Indebtedness;
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(h) Xxxxxxx shall have received from Brial the Lease
Extension in form and substance reasonably acceptable to Template.
(i) Template shall have received the Indemnification and
Escrow Agreement duly executed by Seller.
Section 6.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The
obligation of the Seller to consummate the Acquisition is subject to the
satisfaction or waiver at or prior to the Closing of the following conditions
precedent:
(a) the representations and warranties of Template
contained in Article IV shall have been true and correct in all material
respects when made, and such representations and warranties shall be true and
correct in all material respects at and as of the Closing with the same force
and effect as if those representations and warranties had been made at and as
of such time (with such exceptions, if any, necessary to give effect to events
or transactions expressly permitted herein);
(b) Template shall, in all material respects, have
performed all obligations and complied with all covenants contemplated herein
that are necessary to be performed or complied with by it on or before the
Closing;
(c) the Seller shall have received a certificate of the
President of Template, in form satisfactory to counsel for the Seller,
certifying fulfillment of the matters referred to in paragraphs (a) and (b) of
this Section 6.3;
(d) all proceedings, corporate or other, to be taken by
Template in connection with the transactions contemplated by this Agreement,
and all documents incident thereto, shall be reasonably satisfactory in form
and substance to the Seller and Seller's counsel, and Template shall have made
available to Seller for examination the originals or true and correct copies of
all documents that Seller shall have reasonably requested in connection with
the transactions contemplated by this Agreement; and
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.1 TERMINATION. This Agreement may be terminated and
the Acquisition contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of Template and the Seller;
(b) by Template and the Seller, if the Closing shall not
have occurred on or before May 3, 1997 (provided that the right to terminate
this Agreement under this Section 7.1(b) shall not be available to any party
whose failure to fulfill any obligation under
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this Agreement has been the cause of or has resulted in the failure of the
Closing to occur on or before such date);
(c) by Template if prior to the Closing,the Board of
Directors of Xxxxxxx shall have withdrawn or modified in a manner adverse to
Template its approval or recommendation of the Acquisition, or shall have
recommended another offer or shall have resolved to do any of the foregoing;
(d) by Xxxxxxx pursuant to Section 5.9;
(e) by Template or the Seller, if any governmental or
regulatory consent or approval required for the consummation of the
transactions contemplated hereby is denied by or in a final order or other
final action issued or taken by the appropriate governmental or regulatory
authority, agency or similar body; or
(f) by Template or the Seller, if any court of competent
jurisdiction in the United States or other United States governmental body
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Acquisition and such order,
decree, ruling or other action shall have become final and nonappealable.
Section 7.2 EFFECT OF TERMINATION. If this Agreement is so
terminated and the Acquisition is not consummated, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or shareholders, other than the provisions
of the last sentence of Section 5.9 and this Section 7.2. Nothing contained in
this Section 7.2 shall relieve any party from liability for any breach of this
Agreement.
Section 7.3 AMENDMENT. This Agreement may not be amended except
by an instrument in writing signed on behalf of all of the parties.
Section 7.4 EXTENSION; WAIVER. At any time prior to the Closing,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto; (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto; or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations, warranties and covenants made herein shall
survive beyond the Closing for a
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period of six (6) months, unless a current and existing statute or law (e.g.
tax, social security and customs matters) extends that period; in which case
the claim will survive for the duration of the period as specified in the
statute or law. In any case, no claim shall survive more than ten (10) years.
Section 8.2 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties or any of them with respect to the
subject matter hereof, and (b) shall not be assigned by operation of law or
otherwise; provided, however, that Template may assign its rights and
obligations under this Agreement to any direct or indirect affiliate or
subsidiary of Template.
Section 8.3 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
if to Template:
Template Software, Inc.
00000 Xxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Mr. E. Xxxxxxx Xxxxxx
Chief Executive Officer
with a copy to:
Hunton & Xxxxxxxx
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esquire
if to the Seller:
Xxxxx Xxxxxx
0 xxxxxx Xxxxxx-Xxxxx
00000 Xxxxx
Xxxxxx
with a copy to:
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00
Xxxxxx Xxxx-Xxxxxxx XxXxxx
00 xxxxxx Xxxx Xxxxxx
00000 Xxxxx
Xxxxxx
Telecopier: 011-33-1-4503-1112
or to such other address or telecopier number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
Section 8.4 GOVERNING LAW; ARBITRATION. This Agreement and the
transactions contemplated thereby would be governed by the laws of the
Commonwealth of Virginia, except for matters relating to the corporate
existence and governance of Xxxxxxx and the taxation of the Seller which would
be governed by the laws of the Republic of France. All disputes between the
parties shall be formally settled in Belgium under the rules of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the state rules.
Section 8.5 DESCRIPTIVE HEADINGS. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
Section 8.6 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
Section 8.7 COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but both of
which together shall constitute one and the same agreement.
Section 8.8 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
Section 8.9 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
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Section 8.10 EXPENSES. Each party shall bear the burden of its
own expenses (including without limitation legal and accounting expenses) in
connection with the transactions contemplated by this Agreement.
[SIGNATURES PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed on its behalf by its duly authorized officer, all as of the
day and year first above written.
TEMPLATE
TEMPLATE SOFTWARE, INC.
By: /s/ E. XXXXXXX XXXXXX
----------------------------------
E. Xxxxxxx Xxxxxx
Chief Executive Officer
SELLER
By: /s/ XXXXX XXXXXX
----------------------------------
Xxxxx Xxxxxx
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EXHIBITS
Exhibit A Form of Assignment of Indebtedness
Exhibit B Form of Certificate of Transfer
Exhibit C Final Prospectus
Exhibit D Form of Indemnification and Escrow Agreement
Exhibit E Form of Registration Rights Agreement
Exhibit F Form of Lease Extension
XXXXXXX SCHEDULES
Schedule 3.2(b) Dividends, Distributions and Recapitalizations
Schedule 3.2(c) Warrants, Options and Grants
Schedule 3.2(d) Securities Law Compliance
Schedule 3.3 Subsidiaries
Schedule 3.5 Consents
Schedule 3.6 Xxxxxxx Financial Statements
Schedule 3.7 Absence of Certain Events
Schedule 3.8 Litigation
Schedule 3.9 Employee Matters; Employee Benefit Plans
Schedule 3.10 Tax Matters
Schedule 3.11 Real Property
Schedule 3.12 Environmental Matters
Schedule 3.13 Insurance
Schedule 3.14 Compliance with Laws
Schedule 3.15 Absence of Undisclosed Liabilities; Outstanding Brokerage Fees
Schedule 3.16 Intangible Assets
Schedule 3.17 Software
Schedule 3.18 Tangible Assets
Schedule 3.19 Licenses
Schedule 3.20 Contracts
TEMPLATE SCHEDULES
Schedule 4.4(b) Dividends, Distributions and Recapitalizations
Schedule 4.4(c) Warrants and Options
Schedule 4.5 Subsidiaries
Schedule 4.6 Financial Statements
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