LONGVIEW PURCHASE AGREEMENT
between
ARGENESIS CORPORATION
and
LINEDATA SERVICES
March 15, 2001
TABLE OF CONTENTS
Page
----
ARTICLE I PURCHASE AND SALE OF SHARES................................................................1
1.1 Purchase and Sale of Shares....................................................................1
1.2 Purchase Price.................................................................................1
1.3 Closing........................................................................................3
1.4 Deliveries at Closing..........................................................................3
1.5 Further Assurances.............................................................................5
1.6 Alternative Structure..........................................................................5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER...................................................5
2.1 Organization, Standing and Corporate Power.....................................................5
2.2 Authority of Seller; Noncontravention..........................................................6
2.3 Capitalization.................................................................................7
2.4 Equity Investments.............................................................................8
2.5 Foreign Qualification..........................................................................8
2.6 Title to Property; Condition; Sufficiency......................................................8
2.7 Contracts......................................................................................8
2.8 Insurance.....................................................................................10
2.9 Intellectual Property.........................................................................11
2.10 Government Permits............................................................................12
2.11 Taxes and Tax Returns.........................................................................13
2.12 Financial Statements; Liabilities.............................................................14
2.13 Absence of Certain Changes and Events.........................................................15
2.14 Employment Matters and Benefit Plans..........................................................16
2.15 Employment, Severance and Termination Agreements..............................................18
2.16 Litigation; Compliance with Law...............................................................19
2.17 No Brokers....................................................................................20
2.18 Relationships with Related Persons............................................................20
2.19 Bank Accounts.................................................................................20
2.20 Environmental Matters.........................................................................20
2.21 Trade Order Management System.................................................................20
2.22 Material Information..........................................................................21
2.23 No Other Representations......................................................................21
2.24 Insolvency....................................................................................21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................................21
3.1 Organization, Standing and Corporate Power....................................................21
3.2 Authority; Noncontravention...................................................................21
3.3 Investment....................................................................................22
3.4 Sophistication of Purchaser...................................................................22
3.5 No Brokers....................................................................................22
3.6 Material Information..........................................................................22
3.7 No Other Representations......................................................................22
-i-
TABLE OF CONTENTS
(continued)
Page
----
ARTICLE IV COVENANTS.................................................................................23
4.1 Notice of Certain Events......................................................................23
4.2 Ordinary Course of Business...................................................................23
4.3 Intercompany Obligations......................................................................25
4.4 Access to Properties and Records..............................................................25
4.5 Acquisition Proposals.........................................................................25
4.6 Non-Competition...............................................................................26
4.7 Consents and Approvals........................................................................26
ARTICLE V OTHER AGREEMENTS..........................................................................26
5.1 Employee Matters..............................................................................26
5.2 Payment of Certain Expenses After Closing.....................................................28
5.3 Section 338(h)(10) Election...................................................................29
5.4 Goodbye Letters; Retention Bonus Payment......................................................30
ARTICLE VI CONDITIONS PRECEDENT......................................................................30
6.1 Conditions to Obligations of Seller for the Closing...........................................30
6.2 Conditions to Obligations of Purchaser for the Closing........................................31
ARTICLE VII INDEMNIFICATION...........................................................................31
7.1 Survival of Representations and Warranties....................................................31
7.2 Indemnification by Seller.....................................................................32
7.3 Indemnification by Purchaser..................................................................32
7.4 Notice and Resolution of Claims...............................................................32
7.5 Deposit Agreement.............................................................................33
7.6 Limitations on Liability......................................................................33
7.7 Exclusive Remedy..............................................................................33
7.8 Adjustment to Purchase Price..................................................................33
7.9 Coordination with Tax Covenant................................................................34
ARTICLE VIII TERMINATION...............................................................................34
8.1 Termination...................................................................................34
8.2 Effect of Termination.........................................................................34
8.3 Extension; Waiver.............................................................................34
ARTICLE IX MISCELLANEOUS.............................................................................35
9.1 Costs and Expenses............................................................................35
9.2 Notices.......................................................................................35
9.3 Counterparts..................................................................................37
9.4 Entire Agreement..............................................................................37
9.5 Transfer Taxes................................................................................37
9.6 Captions......................................................................................37
9.7 Public Announcements..........................................................................37
9.8 Governing Law.................................................................................37
9.9 Dispute Resolution............................................................................37
ii
TABLE OF CONTENTS
(continued)
Page
----
9.10 No Third Party Rights.........................................................................38
9.11 Amendment and Waiver..........................................................................38
9.12 Construction and Representation by Counsel....................................................38
9.13 Severability..................................................................................38
9.14 Dollars.......................................................................................38
9.15 Binding Effect; Assignment....................................................................38
9.16 Definitions...................................................................................39
iii
EXHIBITS AND SCHEDULES
Exhibits
--------
Exhibit A Closing Balance Sheet
Exhibit B Transition Services Agreement
Exhibit C Form of Opinion by Xxxxxx, Xxxxxx & Xxxxx LLP
Exhibit D Deposit Agreement
Exhibit E Pledge Agreement
Schedules
---------
Schedule 2.1 Organization, Standing and Corporate Power
Schedule 2.2 Noncontravention
Schedule 2.5 Foreign Qualification
Schedule 2.6 Real Property
Schedule 2.7(a) Material Contracts
Schedule 2.7(b) Terminated Contracts
Schedule 2.7(c) LongView Events of Default
Schedule 2.7(d) Third Party Events of Default
Schedule 2.7(e) Loans to Employees
Schedule 2.7(f) Licenses
Schedule 2.8 Insurance
Schedule 2.9(a) Intellectual Property
Schedule 2.9(b) Proprietary Intellectual Property
Schedule 2.9(c) Software Products
Schedule 2.9(d) Exceptions to Software Products
Schedule 2.10 Permits
Schedule 2.11(a) Taxes
Schedule 2.11(b) Tax Proceedings
Schedule 2.11(c) Tax Collection, Withholding; Tax Agreements
Schedule 2.11(d) Member of Affiliated Group
Schedule 2.12(a) Financial Statements
Schedule 2.12(b) Undisclosed Liabilities
Schedule 2.13 Material Adverse Changes
Schedule 2.14 Benefit Plans
Schedule 2.15 Employment Matters
Schedule 2.16(a) Litigation
Schedule 2.16(b) Compliance with Laws
Schedule 2.18 Related Party Transactions
Schedule 4.3 Intercompany Obligations
Schedule 4.7 Consents
Schedule 5.1(a) Seller Employees
iv
TABLE OF DEFINED TERMS
Term Location Term Location
---- -------- ---- --------
Affiliate 9.16(b) Material Contracts 2.7(a)
Agreement Introduction Neutral Accountants 1.2(b)(v)
Ancillary Agreements 1.4 New Subsidiary 1.6
Basket 7.6(a) Non-Seller Employees 2.15
Cash Purchase Price 1.2 PBGC 2.14(e)
Closing 1.3 Permits 2.2(ii)
Closing Balance Sheet 1.2(b)(i) Person 2.2(ii)
Closing Date 1.3 Pledge Agreement 7.5
Code 2.14(a) Proposed Receivable Statement 1.2(b)(iii)
Confidentiality Agreement 2.9(e) Proprietary IP 2.9(b)
Consents 4.7 Purchaser Introduction
Deposit 1.2 Purchaser Indemnitees 7.2
Deposit Agent 7.5 Reimbursable Expenses 5.3
Deposit Agreement 7.5 Schedule 2.14 Plan 2.14(a)
Deposit Period 7.5 Section 338 Elections 5.3(a)
Dollars and $ 9.14 Section 338(g) Election 5.3(a)
ERISA 2.14(a) Section 338(h)(10) Election 5.3(a)
ERISA Affiliate 2.14(a) Securities Act 3.3
Final Receivable Statement 1.2(b)(v) Self-Insurance Limit 5.1(b)(i)
Financial Statements 2.12(a) Seller Introduction
Governmental Entity 2.2(ii) Seller Employees 5.1
Indemnifying Party 7.4(a) Seller Indemnitees 7.3
Indemnitee 7.4(a) Seller's Intercompany Obligation 4.3(b)
Intellectual Property 2.9(a) Share Purchase Price 1.2
Judgments 2.2(iv) Shares Recitals
Knowledge 9.16(a) Software Products 2.9(c)
Laws 2.2(iv) Tax 2.11(f)
Liens 1.1 Taxes 2.11(f)
London Lease 2.6(a) Tax Return 9.16(c)
LongView Recitals TenFold 1.4(a)(vi)
LongView Business Recitals Third Party Claim 7.4(b)
LongView Entities 2.1 TradeXpress Purchase Agreement 4.6
LongView Entity 2.1 Transition Services Agreement 1.4(a)(vi)
LongView UK Recitals Tufts HMO 5.1(b)(i)
Losses 7.2 UK Shares Recitals
Material Adverse Effect 2.5
v
LONGVIEW PURCHASE AGREEMENT
This LONGVIEW PURCHASE AGREEMENT (the "Agreement") dated as of March 15,
2001 by and between ARGENESIS CORPORATION, a Delaware corporation ("Seller"),
and LINEDATA SERVICES, a corporation organized under the laws of France
("Purchaser").
WHEREAS, Seller owns 100% of the issued and outstanding shares of capital
stock (the "Shares") of The LongView Group, Inc., a Massachusetts corporation
("LongView");
WHEREAS, LongView owns 100% of the ordinary shares ("the UK Shares") of
LongView (UK) Limited, a corporation organized under the laws of England and
Wales ("LongView UK");
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Shares, on the terms and subject to the conditions set
forth herein; and
WHEREAS, LongView owns a trade order management software application,
LongView 2000, f/k/a Landmark, which LongView licenses to various users in the
financial services industry (the "LongView Business").
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and undertakings of the parties hereto, and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions hereof, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale of Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined below), Seller hereby
sells, transfers, assigns and delivers to Purchaser, and Purchaser hereby
purchases, accepts and assumes, the Shares, free and clear of all liens, claims,
rights, charges, options, rights of third parties, encumbrances, security
interests or other restrictions or limitations of any nature whatsoever
("Liens") and any restrictions on transferability under applicable securities
laws.
1.2 Purchase Price.
(a) The purchase price (the "Share Purchase Price") for the Shares
is $29,000,000 to be delivered at the Closing as follows: (a) $26,100,000 (the
"Cash Purchase Price") to be paid to Seller in immediately available funds by
wire transfer to an account designated by Seller in writing at least two
business days prior to the Closing Date, and (b) $2,900,000 (the "Deposit") to
be delivered to the Deposit Agent in accordance with Section 7.5 and the Deposit
Agreement in immediately available funds by wire transfer to an account
designated by the Deposit Agent in writing prior to the Closing Date.
(b) Pre-Closing Intercompany Transactions.
(i) Attached hereto as Exhibit A is a balance sheet of
LongView as of March 15, 2001, mutually agreed to by Purchaser and
Seller (the "Closing Balance Sheet"). It is expressly agreed and
understood among the parties that, notwithstanding anything to the
contrary in Section 2.13 or 4.3 hereof, Seller has caused cash in an
amount equal to $903,000 ("Intercompany Payment") to be transferred,
by way of dividend, intercompany charge or otherwise, to Seller on
the Closing Date.
(ii) Purchaser shall cause LongView to exercise commercially
reasonable best efforts to collect the accounts receivables set forth
on the Closing Balance Sheet and agrees that all collections of
accounts receivable by LongView shall be applied first to the oldest
receivable outstanding of such account payor.
(iii) By July 15, 2001, the Purchaser shall prepare and
deliver to the Buyer a proposed statement setting forth the sum of
uncollectible accounts as of the Closing Date ("Proposed Statement").
The Proposed Statement shall be prepared on a basis consistent with
the accounting methods, treatments, principles and procedures used in
the preparation of the Closing Balance Sheet.
(iv) If the Seller, in good faith, disputes the Proposed
Statement, the Seller shall deliver to the Purchaser within 30 days
after receiving the Proposed Statement a notice setting forth the
basis for such dispute and a statement of what the Seller believes is
the correct Proposed Statement. The parties shall use reasonable
efforts to resolve such dispute for a period of 30 days after the
Seller has given the Dispute Notice. If the parties resolve such
dispute, the Proposed Statement agreed to by the parties shall be
deemed to be the Final Statement.
(v) If the parties do not reach a final resolution within 30
days after the Seller has given the Dispute Notice, unless the
parties mutually agree to continue their efforts to resolve such
differences, a mutually acceptable "big 5" accounting firm or such
other firm as the parties shall agree (the "Neutral Accountants")
shall resolve such dispute in the manner provided below. The parties
shall each be entitled to make a presentation to the Neutral
Accountants, pursuant to procedures to be agreed to among the parties
and the Neutral Accountants, advocating the merits of the position
espoused by such party; and the Neutral Accountants shall be required
to resolve the dispute between the parties and determine the final
receivable statement binding on the parties (the "Final Statement")
within 15 business days thereafter. The statement determined by the
Neutral Accountants shall be deemed to be the Final Statement. Such
determination by the Neutral Accountants shall be conclusive and
binding upon the Parties, absent fraud or manifest error.
(vi) The Seller, on the one hand, and the Purchaser, on the
other hand shall share equally the fees and expenses of the Neutral
Accountants.
2
(vii) Failure of the Seller to deliver the Dispute Notice
within 30 days after receiving the Proposed Statement shall
constitute acceptance of the Proposed Statement as the Final
Statement.
(viii) Subject to Section 1.2(b)(ix), Seller shall cause cash
in an amount equal to $318,000 to be retained by LongView (the
"Uncollectible Buffer"). Purchaser shall cause Longview to pay to
Seller an amount equal to the amount by which the Uncollectible
Buffer exceeds the amount set forth in the Final Statement or, if the
amount in the Final Statement exceeds the amount of Buffer, then no
amount shall be paid. Any payment shall be made by wire transfer or
other delivery of immediately available funds, within five business
days after the date on which the Final Statement is determined
pursuant to this Section 1.2(b) to an account or accounts designated
by the receiving party within two business days after such
determination date.
(ix) It is the intent of the parties in this Section 1.2(b)
that Seller will cause LongView to transfer $585,000 to Seller
($903,000 less the Uncollectible Buffer) on the Closing Date by wire
transfer or check. Notwithstanding that the transactions contemplated
by this Section 1.2(b) may cause LongView to have more or less than
$318,000 cash available at Closing, the amount of the Uncollectible
Buffer for purposes of the Final Statement shall be $318,000.
1.3 Closing. Subject to satisfaction or waiver of all of the
conditions to the closing contained in Article VI, the closing ("Closing") of
the purchase and sale of the Shares will take place at 10:00 a.m., New York City
time, on March 15, 2001 (the "Closing Date"). The Closing will be held at the
offices of Xxxxx, Day, Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other location as is agreed to by the parties
hereto. The Closing will be effective as of 11:59 p.m., New York City time on
the Closing Date.
1.4 Deliveries at Closing.
(a) Deliveries by Purchaser. At the Closing, Purchaser shall
deliver to Seller (and, in the case of (i), the Deposit Agent) the following:
(i) the Cash Purchase Price to Seller and the Deposit to the
Deposit Agent, in each case, by wire transfer of immediately
available funds to an account designated in writing no later than two
business days before the Closing Date;
(ii) [intentionally omitted];
(iii) the Deposit Agreement and the Pledge Agreement executed
by Purchaser;
(iv) a certificate of Purchaser, dated the Closing Date and
signed by an authorized officer of Purchaser, certifying that the
conditions set forth in Section 6.1(a) have been satisfied;
(v) a certificate of a duly authorized officer of Purchaser
certifying the truth, correctness and completeness of copies of
resolutions duly adopted by the Supervisory Board (Conseil de
Surveillance) of Purchaser approving the transactions contemplated
3
hereby and authorizing the execution and delivery of this Agreement
and the Ancillary Agreements to which Purchaser is a party;
(vi) a Transition Services Agreement, substantially in the
form attached hereto as Exhibit B (the "Transition Services
Agreement"), executed and delivered by Purchaser, pursuant to which
TenFold Corporation ("TenFold") will provide certain IT
infrastructure to Purchaser; and
(vii) such other documents, instruments or certificates as
Seller may reasonably request.
(b) Deliveries by Seller. At the Closing, Seller shall deliver to
Purchaser the following:
(i) a certificate issued by the Secretary of State of the
State of Delaware attesting that Seller is a corporation duly
organized and validly existing and in good standing under the laws of
the State of Delaware and a certificate issued by the Secretary of
State of the State of Massachusetts attesting that LongView is a
corporation duly organized and validly existing and is in good
standing under the laws of the State of Massachusetts;
(ii) one or more certificates representing the Shares, duly
endorsed in blank for transfer or accompanied by stock powers duly
endorsed in blank;
(iii) a certificate of Seller, dated the Closing Date and
signed by an authorized officer of Seller, certifying that the
conditions set forth in Section 6.2(a) have been satisfied;
(iv) written resignations, effective as of the Closing Date,
of each of the directors and officers of LongView and LongView UK;
(v) a certificate of the secretary or assistant secretary of
Seller certifying the truth, correctness and completeness of copies
of resolutions duly adopted by the Board of Directors of Seller
approving the transactions contemplated hereby and authorizing the
execution and delivery of this Agreement and the Ancillary
Agreements;
(vi) all books and records of LongView and LongView UK,
including, without limitation, all of the books, records, agreements
and other documents provided to Purchaser and its representatives
during the due diligence review meetings in Boston, Massachusetts;
(vii) the Deposit Agreement and the Pledge Agreement executed
by Seller and the Deposit Agent;
(viii) the TransitionAgreement, executed and delivered by
TenFold;
(ix) an opinion of Xxxxxx, Xxxxxx & Xxxxx LLP, counsel to
Seller, dated the Closing Date, substantially in the form attached
hereto as Exhibit C;
4
(x) a certificate representing the UK Shares issued in the
name of LongView;
(xi) all of the Consents set forth on Schedule 4.7;
(xii) such other documents, instruments or certificates as
Purchaser may reasonably request.
For purposes of this Agreement, the Management Agreement (if
applicable), the Deposit Agreement, the Pledge Agreement and the Transition
Services Agreement and all certificates, instruments, agreements and other
documents executed by any party in connection with the transactions contemplated
by this Agreement shall be referred to collectively as the "Ancillary
Agreements."
1.5 Further Assurances. Each party shall, at the request of the
other party, at any time and from time to time following the Closing, promptly
execute and deliver, or cause to be executed and delivered, to such requesting
party all such further instruments and take all such further action as may be
reasonably necessary or appropriate to more effectively transfer, assign,
convey, grant and confirm to Purchaser, or to perfect or record Purchaser's
title to or interest in the Shares or otherwise to confirm or carry out the
provisions of and transactions contemplated by this Agreement. Each of the
parties hereto agrees to defend vigorously against any actions, suits or
proceedings in which such party is named as a defendant which seeks to enjoin,
restrain or prohibit the transactions contemplated hereby or seeks damages with
respect to such transactions. For a period of 90 days following the Closing,
Seller agrees to provide to Purchaser, at Purchaser's request, assistance in
preparing any financial or similar reports relating to the revenue required to
be recognized by the LongView Entities under applicable accounting principles.
Purchaser agrees to reimburse Seller for Seller's reasonable expenses incurred
in connection with providing such assistance within five business days of
Purchaser's receipt of documentation evidencing the incurrence of such expenses
by Seller.
1.6 Alternative Structure. Purchaser may elect in its sole
discretion upon written notice to TenFold and Seller to purchase the Shares
through a newly formed direct or indirect wholly owned subsidiary of Purchaser
("New Subsidiary"), which will be incorporated under the laws of the State of
Delaware or another jurisdiction selected by Purchaser. If Purchaser makes this
election and New Subsidiary purchases and acquires the Shares, the term
"Purchaser" as used in this Agreement and in the Ancillary Agreements shall mean
New Subsidiary for all purposes herein and therein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser the following:
2.1 Organization, Standing and Corporate Power. Except as set forth
on Schedule 2.1, each of LongView, LongView UK (each a "LongView Entity" and,
together, the "LongView Entities") and Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation with full power and authority to own, lease and operate its assets
and to carry on its business as now conducted. Purchaser has been furnished
true, correct and complete copies of the articles of organization, articles of
5
association, by-laws, memorandum of association or other documents of
organization of each of the LongView Entities. Copies of all minutes of, or the
unanimous consents in lieu thereof, the meetings of the stockholders and board
of directors (and any committee thereof) of each of the LongView Entities have
been made available to Purchaser by Seller and are true, complete and accurate
records of all such meetings and consents that have been held or given by them.
All amendments to, and articles of merger, certificates of designation and other
filings with respect to, the articles of organization or articles of association
of the LongView Entities were made in accordance with the articles of
organization or articles of association of the applicable LongView Entity (as in
effect before the amendment of the articles or filings with respect thereto),
and the by-laws (or equivalent instrument) of the applicable LongView Entity and
all requirements of applicable law (including the giving of proper notice of
dissenter's and/or appraisal rights in connection with any such amendment or
other actions requiring such notice), without violation of any preemptive or
other rights, and each of the LongView Entities at all times has otherwise
complied with its articles of organization and by-laws as in effect at the
applicable time.
2.2 Authority of Seller; Noncontravention. Seller has all requisite power
and authority to enter into this Agreement and each of the Ancillary Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each of the Ancillary Agreements
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Seller.
This Agreement has been, and upon their execution, each of the Ancillary
Agreements will be, duly executed and delivered by Seller and, assuming due
execution and delivery by Purchaser, constitutes the legal, valid and binding
obligation of Seller enforceable against it in accordance with the terms
thereof, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in an action
at law or a suit in equity). Except as set forth on Schedule 2.2, the execution
and delivery of this Agreement or any Ancillary Agreement, the performance by
Seller of its obligations hereunder or thereunder and the consummation of the
transactions provided for hereby or thereby does not or will not:
(i) conflict with or violate any provision of the certificate of
incorporation, by-laws or any other document of organization of Seller or
either of the LongView Entities;
(ii) violate, conflict with or result in the breach or termination
of, or otherwise give any other person or entity (a "Person") the right to
accelerate, renegotiate or terminate or receive any payment, or require any
consent, or constitute a default, event of default (or an event which with
notice, lapse of time, or both, would constitute a default or event of
default), under the terms of, any Material Contracts (as defined below) or
any permits, authorizations, approvals, registrations or licenses
("Permits") granted by or obtained from any federal, state, local or
foreign governmental, administrative or regulatory authority ("Governmental
Entity") to which Seller or either of the LongView Entities is a party or
by which any of them or their respective securities, properties or
businesses are bound, other than consents which shall have been obtained on
or before the Closing Date;
6
(iii) result in the creation of any Liens upon Seller's or either of
the LongView Entities' respective securities (including without limitation
the Shares and the UK Shares), properties or businesses;
(iv) constitute a violation by Seller or either of the LongView
Entities of any laws, rules, ordinances or regulations of any Governmental
Entity ("Laws"), or any judgments, orders, decrees, injunctions, rulings or
awards of any court, arbitrator or other judicial authority or any
Governmental Entity ("Judgments"); or
(v) require any Consent, approval, waiver, order or authorization
of, or registration, declaration or filing with, any Governmental Entity on
the part of Seller or either of the LongView Entities, other than those
which shall have been obtained on or before the Closing Date.
2.3 Capitalization.
(a) The authorized capital stock of LongView consists of 5,000,000 shares
of common stock, no par value per share, of which 3,608,000 shares are issued
and outstanding and which constitute the Shares. All of the Shares are duly
authorized, validly issued, fully paid and nonassessable. Seller has good and
marketable title to, and is the lawful record owner of, all of the Shares, free
and clear of any Liens. Immediately following the delivery of the Shares to
Purchaser on the Closing Date, Purchaser shall have good and marketable title to
the Shares, free and clear of any Liens.
(b) The entire authorized capital stock of LongView UK consists of
300,000 ordinary shares, all of which are issued and outstanding. All of the UK
Shares are duly authorized, validly issued, fully paid and nonassessable.
LongView has good and marketable title to, and is the lawful record owner of,
all of the UK Shares, free and clear of any Liens.
(c) There are not authorized or outstanding any subscriptions, options,
conversion rights, warrants or other agreements, securities or commitments of
any nature whatsoever (whether oral or written and whether firm or conditional)
obligating either of the LongView Entities to issue, deliver or sell, or cause
to be issued, delivered or sold, any authorized or outstanding shares of capital
stock of any class or series, or any securities convertible into or exchangeable
for shares of capital stock of any class or series, of either of the Longview
Entities or obligating either of the LongView Entities to grant, extend or enter
into any such agreement or commitment.
(d) There are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the LongView Entities or the Shares or
the UK Shares. There are no voting trusts, proxies or any other agreements or
understandings with respect to the voting of any of the capital stock of either
of the LongView Entities. Neither of the LongView Entities is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire the Shares or the UK Shares or any other securities of any kind or class
of either of the LongView Entities.
(e) The corporate record books (including the stock records) of each of
the LongView Entities are current, complete and accurate in all material
respects with all necessary signatures
7
and set forth all meetings and actions taken by the shareholders and directors
of the LongView Entities as required by applicable law or the organizational
documents of each of the LongView Entities.
2.4 Equity Investments. Other than the UK Shares, neither of the LongView
Entities owns any shares of or equity or other investment interest, either of
record, beneficially or equitably, in any corporation, limited liability
company, association, partnership, joint venture or other business entity.
2.5 Foreign Qualification. Except as set forth in Schedule 2.5, each of
the LongView Entities is duly qualified and licensed to do business as a foreign
corporation, and is in good standing, in each jurisdiction where the character
of the properties it owns, operates or holds under lease or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified has not and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect (as defined below). Schedule 2.5
lists the jurisdictions in which each of the LongView Entities is qualified to
do business as a foreign corporation. "Material Adverse Effect" shall mean any
event, circumstance, change, development or effect which, individually or in the
aggregate, would have a material adverse effect on (i) the assets, business,
properties, liabilities, condition (financial or otherwise) or results of
operations of the LongView Entities, taken as a whole, or (ii) the ability of
Seller to perform its obligations under this Agreement or the Ancillary
Agreements.
2.6 Title to Property; Condition; Sufficiency.
(a) Neither of the LongView Entities owns any real property. Schedule 2.6
sets forth all of the real property leased, occupied or used by either of the
LongView Entities. Except as set forth on Schedule 2.6, each of the LongView
Entities has (i) with respect to the real property that is leased by it, a valid
and subsisting leasehold estate, free and clear of all Liens, and (ii) with
respect to all other assets owned by it, good and marketable title, in each
instance free and clear of all Liens. With respect to the real property located
in the United Kingdom as described on Schedule 2.6 (the "London Lease"), TenFold
has a valid and subsisting leasehold estate, free and clear of all Liens. Seller
will use its commercially reasonable best efforts to cause TenFold to transfer
the London Lease to LongView UK as soon as practicable after Closing.
(b) All properties and other assets owned or leased by the LongView
Entities are in good operating condition and repair and include all properties
and other assets reasonably necessary for the conduct of the LongView Entities'
businesses as conducted on the date hereof.
2.7 Contracts.
(a) Schedule 2.7(a) sets forth all of the agreements, contracts, leases,
commitments, arrangements and licenses to which either of the LongView Entities
is a party and sets forth all of the agreements, contracts, leases, commitments,
arrangements and licenses to which Seller is a party, or by which any of the
LongView Entities' assets or properties are bound or affected, and that are
material to the condition (financial or otherwise), assets, business or future
prospects of either of the LongView Entities, including without limitation:
8
(i) agreements relating to capital expenditures or the
acquisition of tangible or intangible property involving amounts in excess
of $50,000,
(ii) contracts or agreements prohibiting or limiting the ability
of either of the LongView Entities (A) to engage in any line of business,
(B) to compete with any Person, or (C) to carry on or expand the nature or
geographical scope of its business,
(iii) contracts, agreements or purchase orders with any supplier,
other than purchase orders in the ordinary course of business,
(iv) contracts or agreements relating to present or ongoing
software development or maintenance and support, as well as contracts or
agreements relating to past software development or maintenance and support
entered into on or after January 1, 1999.
(v) licenses granted by either of the LongView Entities, or
Seller on behalf of either of the LongView Entities, to any Person,
(vi) contracts or agreements that reasonably may be expected to
involve future obligations of or benefits to either of the LongView
Entities in excess of $50,000,
(vii) contracts or agreements with any Affiliate of the LongView
Entities,
(viii) loan agreements, letters of credit, guarantees or agreements
evidencing indebtedness for borrowed money,
(ix) leases of real property,
(x) contracts or agreements with current employees, consultants
or independent contractors, as well as contracts or agreements with former
employees, consultants or independent contractors entered into on or after
January 1, 1999,
(xi) powers of attorney,
(xii) other than as set forth above, contracts or agreements
entered into outside the course of ordinary business, and
(xiii) product or service warranties or other similar
undertakings.
All of the foregoing agreements, contracts and arrangements are referred to
as the "Material Contracts". Seller has made available to Purchaser a copy of
each Material Contract.
(b) Each Material Contract is a legal, valid and binding agreement of
LongView, Longview UK or Seller, as the case may be, enforceable against it in
accordance with its terms, and will continue as such following the Closing and
to the knowledge of Seller, is a legal, valid and binding agreement of each
other party thereto, enforceable in accordance with its terms (in each case,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of
9
whether enforcement is sought in an action at law or a suit in equity)). Except
as set forth on Schedule 2.7(b), no party to any Material Contract has given any
notice of termination, nor does Seller have any reason to believe that such a
notice will be given.
(c) Except as set forth on Schedule 2.7(c), no default or event of
default has occurred with respect to LongView or Seller and, to the knowledge of
Seller, there exists no condition or event which, after notice or lapse of time
or both, would constitute a default by either of the LongView Entities or
Seller, as the case may be, under any Material Contract, or would give to any
other Person any rights of termination, cancellation or acceleration of any
performance required thereunder or result in the creation of any Lien or any
additional or changed obligation of either of the LongView Entities or Seller.
Neither Seller nor either of the LongView Entities has waived any material right
under or with respect to any of the Material Contracts.
(d) Except as set forth on Schedule 2.7(d), to the knowledge of Seller,
none of the other parties to the Material Contracts is in default thereunder,
nor is Seller aware of any event which, with the passage of time, the giving of
notice or both, would constitute a default under such Material Contract by such
other party.
(e) Except as set forth in Schedule 2.7(e), neither Seller nor either of
the LongView Entities has provided or entered into any loans of money or
property to the officers or employees of LongView or LongView UK excluding
travel and similar advances made in the ordinary course of business.
(f) Schedule 2.7(f) sets forth true and correct summaries of the material
provisions of the licenses set forth in Items 24, 33, 61 and 64 of Schedule
2.7(a)(v), which were requested by Purchaser during its due diligence review.
Seller has not made available to Purchaser any copies of these licenses since
such licenses contain non-disclosure provisions that prohibit Seller and
LongView from disclosing the terms thereof.
2.8 Insurance. Schedule 2.8 hereto contains a complete and correct list
of all insurance policies (excluding any insurance described on Schedule 2.14)
maintained by the LongView Entities or by any Person for the benefit of the
LongView Entities. With respect to each insurance policy maintained, Seller has
made available to Purchaser a schedule of required premiums under each such
policy and complete and correct copies of all such policies together with all
riders and amendments thereto. Schedule 2.8 sets forth a summary of any policy
maintained by any Person other than Seller or the LongView Entities for the
benefit of the LongView Entities. All policies are in full force and effect, and
all premiums due thereon have been paid. The LongView Entities and Seller, as
the case may be, have complied in all material respects with the provisions of
such policies. No notice has been received canceling or threatening to cancel or
refusing to renew any of such insurance. Except as set forth on Schedule 2.8,
the rights of the insured under such policies will not be terminated or
adversely affected by the Closing or the consummation of the other transactions
contemplated hereby. To the knowledge of Seller, there is currently no basis for
any insurance claim by Seller or either of the LongView Entities.
10
2.9 Intellectual Property.
(a) Schedule 2.9(a) sets forth a true, complete and correct list of all
items of computer software, trademarks (whether domestic or foreign and whether
registered or at common law), trade names, brand names, domain names, fictitious
names, service marks, logos, patents and patent applications (whether domestic
or foreign and including any reissues, extensions, divisions, continuations and
continuations-in-part thereof) and copyrights and registrations of claim to
copyright, inventions and trade secrets in which either of the LongView Entities
has an interest, other than third party software that is subject to a
shrink-wrap license, and sets forth the nature of that interest (collectively,
the "Intellectual Property"). LongView or LongView UK, as the case may be, owns
or holds all of the rights to use, license and commercialize the Intellectual
Property in the manner currently used, licensed or commercialized by it. All
patents, trademark registrations and copyright registrations which are part of
the Intellectual Property are in good standing, are valid and subsisting, and
are in full force and effect in accordance with their terms. To the knowledge of
Seller, none of the Intellectual Property nor any of the products or services
sold or provided by the LongView Entities nor any of the processes used or the
business practices followed by the LongView Entities infringes or has infringed
upon any trademark, trade name, brand name, domain name, fictitious name,
service xxxx, trade dress, logo, patent, copyright or other intellectual
property right of any Person, or constitutes a misappropriation of trade
secrets. The Intellectual Property constitutes all intellectual property
necessary for the conduct immediately following the Closing of the LongView
Business in all material respects as conducted on the date hereof. Neither of
the LongView Entities is obligated to pay any license fee, royalty or other
payment with respect to any of the Intellectual Property, except as disclosed on
Schedule 2.9(a). To the knowledge of Seller, no Person is producing, providing,
selling or using products or services that would constitute an infringement upon
any of the Intellectual Property or a misappropriation of trade secrets in any
of the Intellectual Property.
(b) Schedule 2.9(b) identifies all Intellectual Property developed by or
on behalf of or otherwise owned by, or licensed to third Persons by, either of
the LongView Entities (the "Proprietary IP"). Except as set forth on Schedule
2.9(b), LongView owns the intellectual property included in the Proprietary IP,
free and clear of all Liens. Except as disclosed on Schedule 2.9(b), no Person
other than LongView, as the case may be, has any (i) ownership interest in the
Proprietary IP, (ii) right to use the Proprietary IP or (iii) right to prevent
the LongView Entities from using, licensing, creating derivative works of and
commercializing any of the Proprietary IP in the manner that the LongView
Entities is currently using, licensing, creating derivative works of and
commercializing such Proprietary IP or has committed to do so.
(c) Schedule 2.9(c) identifies all computer software and other products
(including maintenance and support services) that are marketed, offered,
licensed, sublicensed, sold, distributed or commercialized by or on behalf of
the LongView Entities (including products for which the LongView Entities may
have a contingent obligation to market, offer, license, sublicense, sell,
distribute or commercialize) (the "Software Products"). Except as set forth on
Schedule 2.9(c), LongView owns the intellectual property in and has the right,
directly and indirectly, to copy, publish, distribute, create derivative works
of, run, perform, license and commercialize the Software Products. For all the
Software Products for which Seller or LongView does not own the intellectual
property, LongView has valid and fully paid for all software and other licenses
necessary for the past and current use, licensing, creation of
11
derivative works and commercialization of the Software Products by LongView.
Except as set forth on Schedule 2.9(c), the Software Products comply, and enable
users to comply, with all federal, state and local laws and regulations.
(d) Except as set forth on Schedule 2.9(d), the Software Products
developed by either Seller on behalf of LongView or LongView have been developed
in a workmanlike manner.
(e) LongView has taken all appropriate measures to protect in all
material respects the confidential and proprietary nature of the source code,
object code and access codes for the Software Products. All employees, agents,
consultants, distributors and licensees of LongView who have had access to any
of the Software Products have been put on written notice of the confidential and
proprietary nature of the Software Products and, other than with respect to
employees, have been required to enter into a written agreement
("Confidentiality Agreement") acknowledging the confidential nature of and
agreeing not to disclose the Software Products other than as permitted by such
Confidentiality Agreement. To the knowledge of Seller, the Software Products are
not and have not been a part of the public knowledge or literature. LongView has
not disclosed, divulged or otherwise provided access to any part of the source
code for the Software Products to any Person other than to employees or
consultants of LongView, Seller or TenFold on a need to know basis who have
entered into a Confidentiality Agreement. To the knowledge of Seller, no Person
which is a party to a Confidentiality Agreement with LongView is in violation
of, or in default under, any term or provision of such Confidentiality
Agreement.
(f) Neither Seller nor either of the LongView Entities is a party to any
contract or agreement where a Person's right to receive any part of the source
code for the Software Products would be triggered by the transactions
contemplated by this Agreement or the Ancillary Agreements.
(g) LongView shall have at the Closing the source code of all versions
currently utilized by the LongView Entities and installations of their Software
Products. Seller has made available to Purchaser copies of all license
agreements for any computer programs licensed from Seller or third Persons and
used by the LongView Entities, other than computer programs that are subject to
a shrink-wrap license.
(h) Either Seller or LongView has fully paid for all licenses for third
party software that is subject to a shrink-wrap license used in the internal
operations of the LongView Entities, including the licenses appropriate for the
actual number of current and past users of such software. All such licenses are
valid and enforceable against LongView and, to the knowledge of Seller, are
valid and enforceable against each other party thereto.
2.10 Government Permits. The LongView Entities hold all Permits from a
Governmental Entity that are necessary or required for the conduct of the
LongView Business as it is currently conducted, other than those the failure of
which to obtain have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. All such Permits
are listed on Schedule 2.10 and are valid and in full force and effect, and no
proceeding is pending, or, to the knowledge of Seller, threatened, to modify,
suspend, revoke or otherwise limit any of such Permits and no action by any
Governmental Entity has been taken or,
12
to the knowledge of Seller, is threatened, in connection with the expiration,
revocation, modification or renewal of any of such Permits which if successful
would reasonably be expected to have a Material Adverse Effect.
2.11 Taxes and Tax Returns.
(a) Except as set forth in Schedule 2.11(a), Seller and the LongView
Entities have filed on a timely basis all Tax Returns (including information
returns) and reports of all Taxes (as defined below) required to be filed by
them in connection with the LongView Business and have timely given and
delivered all Tax notices, accounts and information required to be given by them
in respect of Taxes for which they may be liable in connection with the LongView
Entities' businesses. All information provided in such Tax Returns, reports,
notices, accounts and information was, when filed or given, complete and
accurate in all material respects. Except as set forth on Schedule 2.11(a), all
Taxes required to be paid by or on behalf of either of the LongView Entities
that were or are due and payable have been paid. Adequate provisions in
accordance with applicable generally accepted accounting principles consistently
applied have been made in the Financial Statements (as defined in Section
2.12(a)) for the payment of all Taxes for which either LongView Entity may be
liable for the periods covered thereby that were not yet due and payable as of
the dates thereof, regardless of whether the liability for such Taxes is
disputed.
(b) Except as set forth in Schedule 2.11(b), to the knowledge of Seller,
there are (i) no pending or threatened audits, investigations, claims, suits or
other proceedings for or relating to any Taxes for which either LongView Entity
may become, directly or indirectly, liable; (ii) no material deficiencies for
Taxes of either LongView Entity or for which either LongView Entity may become,
directly or indirectly, liable have been claimed, proposed or assessed by any
taxing or other governmental authority; (iii) no matters under discussion by or
on behalf of either LongView Entity with any Governmental Entities with respect
to Taxes that could result in any additional amount of Taxes; (iv) no extension
of a statute of limitations (whether arising by reason of a waiver, claim for
refund, or otherwise) relating to Taxes of either LongView Entity or for which
either LongView Entity may become, directly or indirectly, liable in effect nor
any requests for such are pending; (v) no requests for rulings or determinations
in respect of Taxes of either LongView Entity or for which either LongView
Entity may become, directly or indirectly, liable pending with any Governmental
Entity; and (vi) no examinations completed with respect to either LongView
Entities' Tax Returns that were filed on or after January 1, 1994 and before the
Closing Date.
(c) Seller has furnished or made available to Purchaser complete and
accurate copies of all Tax Returns and reports of all Taxes filed by or on
behalf of the LongView Entities on or prior to the date hereof. Except as set
forth on Schedule 2.11(c), the LongView Entities have collected or withheld all
Taxes that they are required to collect or withhold. Except as set forth on
Schedule 2.11(c), upon consummation of the transactions contemplated hereby,
neither LongView Entity will be a party to or bound by any Tax indemnity, Tax
sharing or Tax allocation agreement (whether written or unwritten or arising
under operation of federal law as a result of being a member of a group filing
consolidated Tax Returns, under operation of certain state laws as a result of
being a member of a unitary group or under comparable laws of other
13
states or foreign jurisdictions), or any other contractual obligation to pay the
Tax obligations of another person or to pay Tax obligations relating to
transactions of another person.
(d) LongView has never elected to be treated as an S corporation pursuant
to section 1362(a) of the Code. Except as set forth on Schedule 2.11(d),
LongView has never been a member of any affiliated group, within the meaning of
Code section 1504, other than the group of which Seller is the common parent.
LongView has never been a party to any transaction intended to qualify under
Code section 355 or any corresponding provision of state law. LongView is a
United States person within the meaning of the Code. LongView does not have, and
has not had, a permanent establishment in any foreign country, as defined in any
applicable tax treaty or convention between the United States of America and
such foreign country, nor has LongView engaged in a trade or business within any
foreign country. Except for an establishment in the United Kingdom, LongView UK
does not have and has not had a permanent establishment in any foreign country,
as defined in any applicable tax treaty or convention between the United States
of America and such foreign country, and LongView UK has not engaged in a trade
or business within any country except Great Britain. All material elections with
respect to the Taxes of Seller or LongView made during the fiscal years ending
January 31, 1996, 1997 and 1998 and August 31, 1998 and December 31, 1998, 1999
are reflected on its Tax Returns for such periods, copies of which have been
provided or made available to Purchaser. After the date of this Agreement, no
material election with respect to Taxes will be made without the prior written
consent of Purchaser, which consent will not be unreasonably withheld or
delayed. LongView is not a party to any joint venture, partnership or other
arrangement or contract that could be treated as a partnership for United States
federal income tax purposes. LongView will not be required to include any
material adjustment in taxable income for any Tax period (or portion thereof)
beginning after the Closing pursuant to Code section 481 or 263A or any
comparable provision under state or foreign Tax law as a result of transactions,
events, or accounting methods employed prior to the Closing Date.
(e) LongView is a member of a "selling consolidated group" as defined by
Treas. Reg. Section 1.338(h)(10)-1(b)(2). LongView UK is a corporation for
federal income tax purposes.
(f) "Tax" and "Taxes" shall mean (i) all taxes, assessments, levies,
imposts, duties, fees, withholdings, or other similar governmental charges,
including without limitation income taxes, franchise taxes, transfer taxes or
fees, sales taxes, excise taxes, ad valorem taxes, withholding taxes, minimum
taxes and social security taxes, and (ii) any interest, penalties or additions
to tax imposed on a Tax described in clause (i) hereof, imposed by any national,
regional, local or foreign government or subdivision or agency of any of the
foregoing.
2.12 Financial Statements; Liabilities.
(a) Seller has furnished Purchaser with the LongView Entities unaudited
statement of income and balance sheet as of and at December 31, 2000, which are
attached as Schedule 2.12(a) (the "Financial Statements"). The Financial
Statements and notes thereto have been prepared from the books and records of
the LongView Entities in accordance with generally accepted accounting
principles, practices and methods applicable to them, applied on a consistent
basis (except as otherwise disclosed therein) and present fairly the financial
condition and results
14
of operations of the LongView Entities as of the respective dates and for the
period specified therein.
(b) Neither of the LongView Entities has any liabilities or obligations
of any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, which are of a type required to be reflected on, or
described in a footnote to, an audited balance sheet prepared under generally
accepted accounting principles, practices or methods applicable to the LongView
Entities, except to the extent specifically disclosed or provided for in the
applicable Financial Statement or incurred since the date of such Financial
Statement in the ordinary and usual course of business consistent with past
practices or except as set forth on Schedule 2.12(b).
(c) The books of account and other records of the LongView Entities are
complete and correct and have been maintained in accordance with sound business
practices.
2.13 Absence of Certain Changes and Events. Except as set forth on
Schedule 2.13, since December 31, 2000 and through the date hereof, the LongView
Entities have conducted their businesses only in the ordinary and usual course
consistent with past practice and no event or development has occurred that has
had or would be reasonably expected to have a Material Adverse Effect. Without
limiting the generality of the first sentence of this Section 2.13, except as
set forth on Schedule 2.13 or permitted by Section 1.2(b) and 4.2 hereof, since
December 31, 2000 and through the date hereof, neither of the LongView Entities
has:
(a) Authorized for issuance, issued, delivered or sold any debt or equity
securities, or altered the terms of any outstanding securities issued by it;
(b) Declared, paid or set aside for payment any dividend or other
distribution (whether in cash, stock or property or otherwise) in respect of any
shares of capital stock, or redeemed, purchased or otherwise acquired such
shares, any securities convertible into or exchangeable for such shares or any
options, warrants or other rights to purchase or subscribe to any of the
foregoing;
(c) Paid, discharged or satisfied any liability or obligation or forgiven
or otherwise cancelled any debt or claims or waived any rights (whether accrued,
absolute, contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary and usual course of business and consistent with
past practice, of liabilities or obligations shown or reflected on the Financial
Statements or incurred in the ordinary and usual course of business since
December 31, 2000;
(d) Except in the ordinary and usual course of business and consistent
with past practice, permitted or allowed any assets (whether real, personal or
mixed, tangible or intangible) to be subjected to any Lien (other than purchase
money security interests granted in the ordinary course of business);
(e) Written off as uncollectible any notes or accounts receivable other
than in immaterial amounts or in the ordinary and usual course of business
consistent with past practice;
15
(f) Cancelled or waived any claims or rights of value or sold,
transferred, distributed or disposed of any assets other than in the ordinary
and usual course of business and consistent with past practice;
(g) Granted any increase in the compensation of any officer, director,
employee or agent, whether now or hereafter payable, or granted any severance or
termination pay in respect of any such person, or entered into or varied the
terms of any employment agreement with any such person or adopted, amended in
any material respect or terminated any Benefit Plan under ERISA, non-ERISA
arrangement, bonus, profit sharing or other employee benefit plan, agreement or
arrangement of general applicability for the benefit of its officers, directors
or employees;
(h) Made any material capital expenditure or material commitment for
additions to property or equipment or other capital expenditures, or leased or
agreed to lease any material assets;
(i) Made any material change in any method of accounting or keeping its
books of account or accounting practices, except as required as a result of
changes in the generally accepted accounting practices applicable to it;
(j) Incurred any material indebtedness for borrowed money or any other
material obligation or liability other than liabilities incurred in the ordinary
and usual course of business consistent with past practice;
(k) Amended its Articles of Organization, By-laws or other organizational
documents;
(l) Suffered any strike or other material employment-related problem;
(m) Suffered any loss of any key employee or key customer;
(n) Commenced or terminated any line of business;
(o) Amended or given any consents under any Material Contracts; or
(p) Taken any action or omitted to take any action that is reasonably
likely to result in the occurrence of, or agreed or committed to do, any of the
foregoing (other than as expressly contemplated by this Agreement).
It is expressly agreed and understood among the parties that, notwithstanding
anything to the contrary in Sections 2.13 or 4.3 hereof, Seller has caused cash
received by the LongView Entities after December 31, 2000 and prior to the
Closing Date to be transferred, by way of dividend, intercompany charge or
otherwise, to Seller.
2.14 Employment Matters and Benefit Plans.
(a) Schedule 2.14 sets forth a complete list of all employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended
16
("ERISA")), and all other employee benefit plans, programs, arrangements,
contracts or schemes, written or oral, statutory or contractual (each such plan,
a "Benefit Plan"), with respect to which a LongView Entity or any Person that,
together with a LongView Entity, would be considered a single employer within
the meaning of Section 4001 of ERISA or Section 414 of the Internal Revenue Code
of 1986, as amended (the "Code") (each such Person, an "ERISA Affiliate"), has
or has had in the six years preceding the date hereof any obligation or
liability or which are or were in the six years preceding the date hereof
maintained, contributed to or sponsored by a LongView Entity or any ERISA
Affiliate for the benefit of current or former officers or employees of a
LongView Entity or any ERISA Affiliate (each such Benefit Plan, a "Schedule 2.14
Plan"). Neither LongView Entity nor any ERISA Affiliate has made any express or
implied commitment, whether legally enforceable or not, to create, incur
liability with respect to or cause to exist any employee benefit plan, program,
arrangement, contract or scheme or to modify a Benefit Plan.
(b) With respect to each Schedule 2.14 Plan, (i) all material amounts
properly accrued to date as liabilities of Seller or a LongView Entity that have
not been paid have been properly recorded on the books of Seller or such
LongView Entity, (ii) except as set forth on Schedule 2.14(b)(ii), each LongView
Entity and each ERISA Affiliate has satisfied in all material respects all of
its statutory, regulatory, and contractual obligations, and each such Schedule
2.14 Plan is in compliance in all material respects with, and has always been
operated in all material respects in accordance with, its terms and the
requirements of all applicable Laws, (iii) there are no actions, suits or claims
pending or, to the knowledge of Seller, threatened with respect to any such
Schedule 2.14 Plan or against the assets of any such Schedule 2.14 Plan (other
than routine claims for benefits) and, to the knowledge of Seller, no fact or
event exists that could give rise to such action, suit or claim, and (iv) each
Schedule 2.14 Plan or trust which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service that it is so qualified or exempt and to the knowledge
of Seller, nothing has occurred since the date of such determination letter that
would adversely affect the qualified or exempt status of any Schedule 2.14 Plan
or trust.
(c) No Schedule 2.14 Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to any current
or former employee, officer or director of a LongView Entity or any ERISA
Affiliate beyond their retirement or other termination of service except to the
extent required by Law.
(d) No Schedule 2.14 Plan (i) is a plan that is or ever has been subject
to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code, or (ii)
is a "multiemployer plan" as defined in Section 3(37) of ERISA, (iii) is a plan
maintained in connection with Section 501(c)(9) of the Code, or (iv) provides
for payment of separation, severance, termination or similar type benefits to
any Person.
(e) With respect to each Schedule 2.14 Plan, Seller has made available to
Purchaser true and complete copies of each such Schedule 2.14 Plan (including
all amendments thereto) and each material document (including all amendments
thereto) prepared in connection with each such Schedule 2.14 Plan, including
without limitation and to the extent applicable, (i) all trust instruments and
insurance contracts; (ii) the three most recently filed IRS Forms 5500, 5500-C,
or 5500-R; (iii) the most recent actuarial report and financial statement; (iv)
the most
17
recent summary plan description and summary of material modifications; (v) any
and all forms filed with the Pension Benefit Guaranty Corporation ("PBGC"); and
(vi) the most recent determination letter issued by the Internal Revenue
Service.
(f) Neither LongView Entity nor any ERISA Affiliate, nor, to the
knowledge of Seller, any other party in interest (within the meaning of Section
3(14) of ERISA) has engaged in a non-exempt prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any
Schedule 2.14 Plan. Neither LongView Entity nor any ERISA Affiliate has incurred
any material liability for any excise tax arising under the Code with respect to
a Schedule 2.14 Plan, and no fact or event exists which could give rise to such
liability. Neither LongView Entity nor any ERISA Affiliate has incurred any
material liability relating to Title IV of ERISA (other than for the payment of
premiums to the PBGC), and, to the knowledge of Seller, no fact or event exists
which could give rise to such liability.
(g) All material contributions, premiums or payments required to be made
with respect to any Schedule 2.14 Plan have been made on or before their due
dates. All such contributions have been fully deducted for income tax purposes
and no such deduction has been challenged or disallowed by any Governmental
Entity, and, to the knowledge of Seller, no fact or event exists which could
give rise to any such challenge or disallowance.
(h) There has been no amendment to, written interpretation of or
announcement (whether or not written) by LongView or any ERISA Affiliate
relating to, or change in employee participation or coverage under, any Schedule
2.14 Plan that would increase materially the expense of maintaining such
Schedule 2.14 Plan above the level of the expense incurred in respect thereto
for the most recent fiscal year ended prior to the date hereof.
(i) Neither Seller nor any LongView Entity has violated any material
provision of any Law or arbitration award of any court, arbitrator or any
government agency regarding the terms and conditions of employment of employees,
former employees or prospective employees of the LongView Business or other
labor related matters, including without limitation Laws and awards relating to
discrimination, fair labor standards and occupational health and safety,
wrongful discharge or violation of the personal rights of employees, former
employees or prospective employee of the LongView Business.
(j) There is no labor strike, dispute, organizing effort, slowdown or
stoppage actually pending or, to the knowledge of Seller, threatened against or
involving any LongView Entity or collective bargaining agreement to which Seller
or any LongView Entity has been a party in the past five years.
(k) Neither Seller nor any LongView Entity is a party to any collective
bargaining agreement and there are no labor unions or other organizations
representing, purporting to represent, or to the knowledge of Seller, attempting
to represent any employee of a LongView Entity.
2.15 Employment, Severance and Termination Agreements. Schedule 2.15 lists
all employment, severance, "golden parachute" or termination or compensation
agreements, arrangements or understandings of any present director, officer,
employee, consultant or group of
18
employees of a LongView Entity, other than agreements (listed on Schedule 2.15)
terminable by such LongView Entity at will without expense or liability to such
LongView Entity. Except as disclosed on Schedule 2.15, no employee or former
employee of a LongView Entity or any ERISA Affiliate will become entitled to any
bonus, retirement, severance, job security or similar benefit or enhanced such
benefit (including acceleration of vesting or exercise of an incentive award) as
a result of the transactions contemplated hereby. Seller has delivered to
Purchaser a true and complete list of all of the officers, senior managers and
directors of each of the LongView Entities, specifying their respective office
and annual rate of compensation, and a true and complete list of the employees
of each of the LongView Entities employed as of March 15, 2001, setting forth
each such employee's compensation and date of hire. Except as disclosed in
Schedule 2.14 or Schedule 2.15, neither Seller nor either of the LongView
Entities has any material obligations, contingent or otherwise with respect to
employees employed by such LongView Entity: (a) under any employment contract,
agreement, commitment, undertaking or understanding, plan, program, policy or
arrangement; (b) under any bonus, incentive or deferred compensation contract,
agreement, commitment, undertaking or understanding, plan, program, policy or
arrangement (including one for severance or other payments conditioned upon a
change of control of a LongView Entity); (c) under any pension, profit-sharing,
stock purchase or any other such plan, program or arrangement; or (d) under any
arrangement that has resulted or could result in the payment of any "excess
parachute payment" as defined in Section 280G of the Code (without regard to
subsection (b)(4) thereof). Neither Seller nor TenFold has any liability for
accrued but unpaid salaries, wages, severance, sick pay or bonuses, deferred
compensation or incentive compensation, in respect of (i) the Seller Employees
or (ii) Seller Employees who do not accept employment with Purchaser
("Non-Seller Employees"). There are no actions, suits or claims pending or, to
the knowledge of Seller, threatened with respect to any officer or employee
associated with the LongView Business and, to the knowledge of Seller, no fact
or event exists that could give rise to such action, suit or claim.
2.16 Litigation; Compliance with Law.
(a) Except as set forth on Schedule 2.16(a) or Schedule 2.11(b), there is
no judicial, administrative, arbitral or alternative dispute resolution
proceeding, suit or investigation pending or, to the knowledge of Seller,
threatened by or against either of the LongView Entities including without
limitation with respect to or affecting the business or financial condition of
the LongView Entities or the consummation of the transactions contemplated
hereby. Neither LongView Entity is a party to, or subject to the provisions of,
any Judgment. Seller has made available to Purchaser copies of all available
audit response letters received by or with respect to the LongView Entities for
the fiscal year ended January 31, 1998 and thereafter. Neither LongView Entity
has tendered the defense of any claim to an insurance carrier.
(b) Except as set forth in Schedule 2.16(b), the LongView Business is
being conducted in compliance with all applicable Laws and Judgments of any
Governmental Entity, except for such noncompliance that, individually and in the
aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect.
(c) The Intercompany Payment was made in compliance with applicable Laws.
19
2.17 No Brokers. No Person has acted on behalf of Seller or either
LongView Entity in connection with the transactions contemplated by this
Agreement in such manner as to give rise to any valid claim against Purchaser or
either LongView Entity for any broker's or finder's fee or similar compensation
in connection with the transactions contemplated by this Agreement.
2.18 Relationships with Related Persons. Except as set forth in Schedule
2.18, no Person (other than the LongView Entities) has any interest in any
property used in or pertaining to the LongView Business. Except as set forth in
Schedule 2.18, no Affiliate of Seller (other than the LongView Entities) or
Affiliate of a LongView Entity has had since December 31, 2000 (a) business
dealings or a material financial interest in any transaction with either
LongView Entity or (b) engaged in any business in competition with either
LongView Entity within the past two years. Except as set forth in Schedule 2.18,
no Affiliate of Seller (other than the LongView Entities) or Affiliate of a
LongView Entity is a party to any contract with, or has a claim or right
against, either of the LongView Entities.
2.19 Bank Accounts. A list of all bank, money market, savings and similar
accounts and safe deposit boxes of the LongView Entities specifying the account
numbers and the authorized signatories or persons having access to them, has
been made available to Purchaser. No such account is overdrawn or subject to any
penalty. No draw on any such account has resulted in an extension of credit to
either of the LongView Entities that has not been repaid.
2.20 Environmental Matters. Neither of the LongView Entities has ever
generated, transported, used, stored, treated, disposed of or managed any
hazardous waste. No hazardous material has ever been or, to the knowledge of
Seller, is threatened to be spilled, released or disposed of by either LongView
Entity at any site presently or formerly owned, operated, leased or used by the
LongView Entities or has ever come to be located in the soil or groundwater at
any such site as a result of any action by a LongView Entity. To the knowledge
of Seller, neither Seller nor either LongView Entity presently owns, operates,
leases or uses, nor has any of them previously owned, operated, leased or used
any site on which underground storage tanks are or at any time were located and
used by a LongView Entity and no lien has ever been imposed by any Governmental
Entity on any property, facility, machinery or equipment owned, operated, leased
or used by a LongView Entity in connection with the presence of any hazardous
material. Neither Seller nor LongView has ever entered into or been subject to
any judgment, consent decree, compliance order or administrative order with
respect to any environmental or health or safety matter or received any request
for information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any law relating to the environment or to
health and safety, and Seller has no knowledge that any will be forthcoming.
2.21 Trade Order Management System. Except for the Trade Order Management
System Agreement by and among TenFold, Seller and Xxxxxxx, Xxxxx & Co. and their
current interests in the LongView Entities, if any, neither TenFold, Seller nor
any of their Affiliates (other than the LongView Entities) (a) have any interest
in any trade order management business relating to the investment management
industry, (b) have any current commitments to buy a trade order management
application or business relating to the investment management industry, and (c)
other than the TradeXpress and TradeXpress Lite applications, is developing,
designing,
20
manufacturing, producing a trade order management application relating to the
investment management industry.
2.22 Material Information. No representation or warranty by Seller in this
Agreement or in any Exhibit or Schedule furnished or to be furnished to
Purchaser pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact, or omits or will omit to state a material fact, necessary to
make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.
2.23 No Other Representations. Seller acknowledges that, except as set
forth in Article III, Purchaser has made no representation or warranty
whatsoever to Seller.
2.24 Insolvency. Seller represents that it is not insolvent within the
meaning of the California Uniform Fraudulent Transfer Act and that it will not
be rendered insolvent by the transactions contemplated herein. Seller is able,
and will continue to be able after giving effect to the transactions
contemplated herein, to pay its debts as they become due and have sufficient
cash flow or profits to properly maintain its businesses or operations and
remain financially stable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller the following:
3.1 Organization, Standing and Corporate Power. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization.
3.2 Authority; Noncontravention. Purchaser has all requisite power and
authority to enter into this Agreement and each of the Ancillary Agreements, to
the extent it is a party thereto, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each of the Ancillary Agreements, to the extent Purchaser is a party
thereto, and the consummation of the transactions provided for hereby and
thereby have been duly authorized by the Supervisory Board (Conseil de
Surveillance) of Purchaser and no other proceeding on the part of Purchaser is
necessary to authorize the execution or delivery of this Agreement or the
Ancillary Agreements or the consummation of any of the transactions contemplated
hereby or thereby. This Agreement has been, and when executed each of the
Ancillary Agreements to which Purchaser is a party will be, duly executed and
delivered by Purchaser and, assuming due execution and delivery by Seller,
constitutes a legal, valid and binding obligation of Purchaser enforceable
against it in accordance with the terms thereof, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in an action at law or a suit in equity). The
execution and delivery of this Agreement or any Ancillary Agreement, the
performance by Purchaser of its obligations hereunder or thereunder or the
consummation of the transactions provided for hereby or thereby does or will
not:
21
(i) conflict with or violate any provision of any document
of governance of Purchaser;
(ii) violate, conflict with or result in the breach or
termination of, or otherwise give any other person or entity the right to
accelerate, renegotiate or terminate or receive any payment, or require any
consent, or constitute a default, event of default (or an event which with
notice, lapse of time, or both, would constitute a default or event of
default), under the terms of, any material contract, agreement, commitment,
undertaking, lease, license, mortgage, bond, note or other instrument or
any Permit to which Purchaser is a party or by which it or its securities,
properties or business are bound;
(iii) result in the creation of any Liens upon any of its
securities, properties or business;
(iv) constitute a violation by Purchaser of any Law or Judgment; or
(v) require any Consent, approval, waiver, order or authorization
of, any Governmental Entity.
3.3 Investment. Purchaser hereby confirms that the Shares will be
acquired for investment for Purchaser's own account and not with a view toward
distribution within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"); provided, that it is understood that this representation and
warranty is made without prejudice to Purchaser's right at all times to resell,
transfer or otherwise dispose of all or any part of the Shares pursuant to
either registration or an exemption from registration under the Securities Act.
3.4 Sophistication of Purchaser. Purchaser is an "accredited investor"
within the meaning of Rule 501 under the Securities Act, has knowledge and
experience in financial and business matters and is capable of evaluating the
merits and risks of the purchase of the Shares. Seller has provided to Purchaser
the opportunity to ask questions of the officers and management of Seller and
LongView with respect to the LongView business and the Financial Statements, and
Purchaser has received all information with respect to such matters as it has
requested.
3.5 No Brokers. No Person has acted on behalf of Purchaser in connection
with the transactions contemplated by this Agreement in such manner as to give
rise to any valid claim against Seller for any broker's or finder's fee or
similar compensation in connection with the transactions contemplated by this
Agreement.
3.6 Material Information. No representation or warranty by Purchaser in
this Agreement or in any Exhibit or Schedule furnished or to be furnished to
Seller pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact, or omits or will omit to state a material fact, necessary to
make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.
3.7 No Other Representations. Purchaser acknowledges that except as set
forth in Article II, Seller has made no representation or warranty whatsoever to
Purchaser.
22
ARTICLE IV
COVENANTS
4.1 Notice of Certain Events. Seller, on the one hand, and Purchaser, on
the other hand, shall promptly notify the other party of (a) any event or
condition that would cause any of the representations and warranties made by it
contained herein no longer to be complete and accurate as of any date on or
before the Closing Date, (b) any failure on the part of it to comply with any of
its covenants or agreements contained herein at any time on or before the
Closing Date, and (c) any notice of, or other communication relating to, a
material default or other event, which with notice or the lapse of time or both
would become a material default, received by it subsequent to the date of this
Agreement and prior to the Closing under any Material Contract. No notice given
pursuant to this Section 4.1 shall reduce in any way a party's indemnification
obligations under Article VII.
4.2 Ordinary Course of Business. During the period from the date hereof
until the Closing except as expressly permitted in this Agreement or as
otherwise consented to in writing by Purchaser (which consent will not be
unreasonably withheld), Seller will, and until the Closing will cause each
LongView Entity to,
(i) carry on the LongView Business only in the ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent with such business, use all reasonable best efforts to preserve
intact its present business organization, keep available the services of
its present employees and preserve its relationships with clients,
suppliers, customers, distributors and others having business dealings with
it, perform its obligations under all Material Contracts and Permits,
conduct its business in compliance with all applicable Laws and Judgments,
maintain all assets other than those disposed of in the ordinary course of
business in good repair and condition, maintain its books of account and
records in the usual, regular and ordinary manner, and preserve its good
will and ongoing business;
(ii) not amend its certificate of incorporation, articles of
organization, by-laws or other organizational documents;
(iii) not acquire, by merger, consolidation, purchase of stock or
assets or otherwise, any interest in any corporation, partnership,
association or other business organization or division thereof;
(iv) not alter its outstanding capital stock or equity interests or
declare, set aside, make or pay any dividend or other distribution in
respect of its capital stock or equity interests (in cash or otherwise), or
purchase or redeem any shares of its capital stock or equity interests;
(v) not issue or sell (or agree to issue or sell) any of its
capital stock or equity interests or any options, warrants or other rights
to purchase any such stock or interests or any securities convertible into
or exchangeable for such stock or interests;
(vi) not incur any indebtedness for borrowed money (including
through the issuance of debt securities) or vary the terms of any existing
indebtedness or guarantee or
23
otherwise become liable for any material obligation or liability and not
incur any additional amounts under Seller's Intercompany Obligation;
(vii) not mortgage, pledge or subject to any Lien, any of its
properties;
(viii) not discharge or satisfy any material Lien or pay or satisfy
any material obligation or liability (fixed or contingent) or compromise,
settle or otherwise adjust any material claim or litigation or cancel or
waive any claims or rights of value;
(ix) not lease, acquire or dispose of any substantial assets or
rights, including without limitation any Proprietary IP, provided that
either LongView Entity shall be entitled to grant licenses to the
Proprietary IP in the ordinary course of its business;
(x) not make any change in its accounting procedures or practices
unless mandated by generally accepted accounting principles;
(xi) not grant to any officer, director, consultant or employee
any increase or modification of compensation or benefits, including without
limitation, any salary increases for 2001, or any severance or termination
pay, or make any loan to or enter into any new employment agreement or
arrangement with any such person;
(xii) not adopt, enter into, amend in any material respect,
announce any intention to adopt or terminate, any Benefit Plan, program or
arrangement;
(xiii) not reduce or eliminate any insurance coverage;
(xiv) not enter into any new Material Contract, or amend in any
material respect or grant any consent under any Material Contract;
(xv) not close any bank account;
(xvi) not write off as uncollectible any notes or accounts
receivable other than in immaterial amounts;
(xvii) not commence or terminate any line of business;
(xviii) not institute any judicial, administrative, arbitral or
alternative dispute resolution, proceeding, suit or investigation; and
(xix) not agree to take any of the actions set forth in the
foregoing subparagraphs (iii) through (xviii);
provided, however, that Seller shall not be liable for any breach of this
Section 4.2 to the extent that the action resulting in such breach was taken at
the direction of Purchaser or its representatives.
24
4.3 Intercompany Obligations.
(a) Waiver of LongView Obligations. Effective as of the Closing, Seller
hereby waives, and will cause Affiliates of Seller to waive, all amounts in the
nature of intercompany obligations that are payable, due or owing as of the
Closing by LongView to Seller or an Affiliate of Seller in a manner that will
not create any adverse Tax consequences (including loss or reduction of net
operating loss carryforwards) to Purchaser or LongView. From and after the
Closing, Seller shall defend, indemnify and hold harmless Purchaser from and
against all payments, damages, liabilities, costs, expenses and obligations
arising out of or in connection with any claim by any Affiliate of Seller with
respect any such intercompany obligation to the extent existing immediately
following the Closing.
(b) Waiver of Seller's Obligations. Effective as of the Closing, Seller
shall cause LongView to waive all amounts in the nature of intercompany
obligations that are payable, due or owing as of the Closing by TenFold, Seller
or any Affiliate of Seller to LongView ("Seller's Intercompany Obligation") as
set forth on Schedule 4.3.
4.4 Access to Properties and Records. From the date of this Agreement to
the Closing Date but subject to the confidentiality obligations binding on
Purchaser, Seller shall, and, until the Closing Date, shall cause the LongView
Entities to (a) provide to Purchaser and its authorized representatives
reasonable access to the premises and operations of the LongView Entities during
normal business hours and on reasonable notice to Seller, (b) permit Purchaser
and its authorized representatives to make such inspections of the premises and
operations as they may reasonably request and (c) cause the officers and
employees of the LongView Entities and Seller to furnish to Purchaser and its
authorized representatives such financial and operating data relating to the
LongView Business as they may from time to time reasonably request, including
without limitation any of TenFold's or Seller's key employees who may be
identified by Purchaser as being important to the success of the LongView
Entities. Neither Purchaser nor any of its authorized representatives shall (a)
direct or instruct any of the officers or employees to cause the LongView
Business or Seller to take any action listed in Section 4.2, without the prior
consent of Seller or (b) otherwise interfere in any way with the conduct of the
LongView Entities' or Seller's business. Upon the Closing, Seller shall deliver
all books and records and any other assets of LongView in its possession to
Purchaser or to such other Person identified in writing by Purchaser to Seller.
Notwithstanding the foregoing Seller may retain a copy of any such books and
records that it deems reasonably necessary to satisfy any applicable tax,
accounting, legal or regulatory obligations to which it is subject, provided
that Seller shall treat such books and records as confidential and shall not,
and shall cause its directors, officers, employees and representatives to not,
use or disclose the information contained therein except as permitted in this
Agreement or as may be required by applicable Law.
4.5 Acquisition Proposals. During the period from the date of this
Agreement until the Closing, neither Seller nor any of its directors, officers,
employees, agents or representatives shall (i) solicit or encourage, directly or
indirectly, any inquiries, discussions or proposals for, (ii) continue, propose
or enter into negotiations looking toward or (iii) enter into any agreement or
understanding providing for, any acquisition of the capital stock, assets or
business of the LongView Entities (other than the transactions contemplated
hereby), nor shall any of such entities provide any information to any Person
(other than to Purchaser and its representatives)
25
for the purpose of evaluating or determining whether to make or pursue any
inquiries or proposals with respect to any such transaction. Seller will
immediately advise Purchaser of, and communicate to Purchaser the terms of, any
such inquiry or proposal that TenFold or Seller may receive or of which either
of them may become aware.
4.6 Non-Competition. Seller agrees that for a period of 24 months
following the Closing Date, neither Seller nor any of Seller's Affiliates will,
directly or indirectly, without the prior written consent of Purchaser, (a)
induce or attempt to induce any employee or independent contractor of the
LongView Entities to leave the LongView Entities, or (b) in any way interfere
with the relationship between the LongView Entities and any of their current
employees or independent contractors. Other than as specifically set forth in
this Agreement or in the TradeXpress Purchase Agreement dated the date hereof
among TenFold, Seller and Purchaser (the "TradeXpress Purchase Agreement"),
Purchaser agrees that for a period of 24 months following the Closing Date,
neither Purchaser nor any of Purchaser's Affiliates will directly or indirectly,
without the prior written consent of Seller and TenFold, (a) induce or attempt
to induce any employee or independent contractor of Seller or any of Seller's
Affiliates to leave Seller or any of Seller's Affiliates, as the case may be, or
(b) in any way interfere with the relationship between Seller and Seller's
Affiliates and any of their respective current employees or independent
contractors.
4.7 Consents and Approvals. Seller shall use its reasonable best efforts
to obtain prior to the Closing all consents, authorizations and approvals of any
Governmental Entity or any other Person ("Consents") required to be obtained by
Seller in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including those consents set forth on Schedule 4.7 attached hereto.
ARTICLE V
OTHER AGREEMENTS
5.1 Employee Matters. Schedule 5.1(a) lists the employees used in the
LongView Business who are employed by TenFold, Seller or either of the LongView
Entities as of March 15, 2001 (the "Seller Employees"). It is the intention of
the parties to effect a smooth transition of transfer of the LongView Business
from Seller to Purchaser. Purchaser agrees to use all commercially reasonable
efforts to put in place personnel systems and employee benefit plans that will
enable it to offer the Seller Employees employment with Purchaser or a
subsidiary of Purchaser at the Closing. Prior to the Closing, upon reasonable
prior notice to Seller, Purchaser may communicate with any of the Seller
Employees.
(a) Responsibility for Employee Liabilities.
(i) Seller further covenants that any employment agreement or
relationship set forth on Schedule 2.15 or Schedule 5.1(a) will cease prior
to the Closing and that, to the extent the employees listed on Schedule
2.15 or Schedule 5.1(a) are employees of TenFold or Seller, Seller will so
notify such employees.
(ii) As of the Closing Date, Purchaser will cause LongView to offer
to each Seller Employee employment at wage or salary levels, as applicable,
that are substantially
26
equivalent to what such employee had as an employee in the LongView
Business. Seller shall remain solely responsible for any and all
liabilities, claims and obligations in respect of the Seller Employees, or
any other person employed by TenFold, Seller or either of the LongView
Entities prior to the Closing, and their beneficiaries and dependents,
relating to or arising in connection with or as a result of (A) their
employment prior to Closing, (B) the actual or constructive termination of
any Seller Employee by TenFold or Seller (including, without limitation, in
connection with the consummation of the transactions contemplated by this
Agreement), or (C) the participation in or accrual of benefits or
compensation under, or the failure to participate in or to accrue
compensation or benefits under, or in any other way arising out of or
relating to, any Benefit Plan of Seller or TenFold. Purchaser shall not
assume any liability of LongView for any accrued but unpaid severance, sick
pay or bonuses, deferred compensation or incentive compensation in respect
of the Seller Employees which relates to any periods prior to the Closing
Date. Notwithstanding anything herein to the contrary, (i) Purchaser shall
assume liabilities of TenFold, Seller or LongView for vacation payable to
the Seller Employees and (ii) from and after the Closing, Purchaser shall
be solely responsible for any and all liabilities, claims and obligations
relating to or arising in connection with events occurring after the
Closing for the Seller Employees.
Nothing contained in this Agreement will confer upon any Seller Employee
any rights or remedies, including, without limitation, any right to
employment, of any nature or kind whatsoever, for any specified period or
at any level of compensation or benefits, under or by reason of this
Agreement.
(b) Continued Benefit Plan Coverage. Notwithstanding the foregoing
provisions of this Section 5.1:
(i) Seller agrees to provide or to cause TenFold to provide
continuing medical benefit coverage under TenFold's current group medical
plan to Seller Employees (other than those Seller Employees who are
enrolled in the Tufts Associated Health Maintenance Organization (the
"Tufts HMO") as of the Closing) and their dependents, with such coverage to
continue until the earlier of the date Purchaser (or a subsidiary of
Purchaser) establishes a replacement plan for such Seller Employees or the
expiration of COBRA benefits. Purchaser acknowledges that TenFold is self-
insured under its current group medical plan up to an annual maximum of
$75,000 per covered employee (the "Self-Insurance Limit"). Purchaser agrees
to assume liability for the Self-Insurance Limit, reduced by 2001 claims
incurred prior to the Closing, for each Seller Employee covered after the
Closing by Seller or TenFold under this Section 5.1 and to reimburse Seller
or TenFold pursuant to Section 5.2 up to the Self-Insurance Limit per
Seller Employee, reduced by 2001 claims incurred prior to the Closing, for
any liabilities, claims and obligations incurred by such Seller Employees
after the Closing and subject to reimbursement under TenFold's group
medical plan. Purchaser agrees to use its reasonable best efforts to
continue medical coverage under the Tufts HMO to the Seller Employees and
their dependents enrolled in the Tufts HMO as of the Closing.
(ii) Seller agrees to provide or to cause TenFold to provide
continuing dental benefit coverage to Seller Employees and their dependents
under TenFold's current group
27
dental plan until the earlier of the date Purchaser establishes a
replacement plan, or April 30, 2001.
(iii) Seller agrees to provide or to cause TenFold to provide
continuing coverage to Seller Employees and their dependents under
TenFold's current vision plan with Colorado Vision Services, Inc. (Plan
Number 12027775) through the earlier of the date Purchaser establishes a
replacement plan for Seller Employees, or April 30, 2001.
(c) Purchaser Employee Benefit Programs. Purchaser agrees that under any
Benefit Plan made available after the Closing to the Seller Employees, such
Seller Employees will receive credit for the years of service credited to them
by TenFold, Seller or any LongView Entity prior to the Closing Date for purposes
of determining eligibility and vesting under such Benefit Plans and in
determining the amount of benefits under any applicable sick leave and vacation
policies of TenFold, Seller or any LongView Entity, provided, however, that such
crediting of service does not result in duplication of benefits and will not be
given for benefit accrual. No provision of this Section 5.1 will limit
Purchaser's right to terminate, amend, modify or discontinue, at any time, any
of Purchaser's employee benefit programs or arrangements for Seller Employees,
whether the foregoing are in existence on the date of this Agreement or
hereafter established. Purchaser acknowledges that, except as required by Law or
otherwise provided herein, medical, life insurance and disability benefits
provided by TenFold to the Seller Employees prior to the Closing Date will
terminate as of the effective time (as described in Section 1.3) on the Closing
Date.
(d) Cooperation. Subject to applicable legal restrictions, Purchaser and
Seller will provide each other, in a timely manner, with any information which
the other may reasonably request with respect to any Seller Employee, his or her
employment with and compensation from Seller, TenFold, either LongView Entity or
Purchaser, or rights or benefits under any Benefit Plan or any personnel policy
of Seller, TenFold, either LongView Entity or Purchaser relating to the LongView
Business, and each of Seller and Purchaser will use its respective reasonable
efforts to cooperate to cause any administrative or other service provider or
insurer with respect to any Benefit Plan to deal directly with Purchaser in its
efforts to establish plans or programs for its employees.
(e) Termination of Participation. Except as otherwise provided in this
Agreement, Seller will take all action necessary to cause the participation of
the LongView Entities in any Benefit Plan of the Seller or TenFold to terminate
effective as of the Closing Date.
5.2 Payment of Certain Expenses After Closing. Notwithstanding any other
provision of this Agreement, in order to provide Purchaser with sufficient time
to establish its own employee benefits programs and functions, after the Closing
Date and through the periods specified in Section 5.1(b), Seller or its
Affiliates will continue to provide the benefits described in Section 5.1(b)
("Reimbursable Expenses"), subject to the following presentment and payment
procedures (and any additional procedures as may be mutually agreed upon in
writing by the parties): (i) Seller or its Affiliates will as of the end of each
month present Purchaser with an invoice for the amount of Reimbursable Expenses
for the next bi-weekly payroll payment date; (ii) Purchaser will within two
business days after receipt of such invoice pay to Seller, by bank wire transfer
in next day clearinghouse funds to an account designated in writing by Seller,
the
28
aggregate amount of Reimbursable Expenses to be paid by Seller; (iii) Seller
will provide Purchaser with a right of access to its internal payroll computer
records or printout and related financial reports, with respect to the amounts
of Reimbursable Expenses.
5.3 Section 338(h)(10) Election.
(a) Seller and Purchaser shall join in making an election under Code
section 338(h)(10) with respect to LongView and corresponding elections under
state or local law where available (collectively, the "Section 338(h)(10)
Election"). Purchaser shall cause LongView to make an election under Code
section 338(g), and corresponding elections under state or local law where
available (collectively, the "Section 338(g) Election", which together with the
Section 338(h)(10) Election referred to herein as the "Section 338 Elections").
(b) Seller and LongView shall cooperate in the preparation of and shall
execute those forms and other documents necessary for the parties to properly
make the Section 338(h)(10) Election, including, without limitation, IRS Form
8023 and any required attachments to that form within 45 days after the Closing
Date. Purchaser shall prepare and tender to Seller and its accountant all
election forms as soon as practicable after the Closing Date. The parties also
agree that the Share Purchase Price shall be allocated to the assets based upon
their fair market value. The parties agree that all filings with any state or
federal agencies shall be consistent with the allocations made in the Section
338 Elections. In the event that any taxing authority disputes such allocations,
the party receiving notice of such dispute shall promptly notify and consult
with the other party concerning resolution of such dispute. Purchaser agrees to
pay any sales or use taxes associated with the elections under Section 338.
(c) Seller will file its consolidated federal income Tax Return for its
taxable year which includes the Closing Date, and will report thereon the income
of LongView and LongView UK up to and including the Closing Date as required by
applicable law. Seller will pay all Taxes required to be paid with respect to
such consolidated federal income Tax Return, but payment of such Taxes will not
be treated as a waiver of any rights of Seller under this Agreement. In order to
assist Seller in preparation of such consolidated federal income Tax Returns,
Purchaser will prepare and deliver to (or cause to be prepared and delivered to)
Seller the information which LongView and LongView UK have customarily provided
to Seller and other information necessary for preparation of such Tax Return
within 60 days of Seller's request therefor.
(d) Seller will prepare or will cause to be prepared any (i) Tax Returns
required by law to be filed by LongView or LongView UK for taxable years ending
on or before the Closing Date; and (ii) any Massachusetts or other income Tax
Returns required to be filed by LongView or LongView UK for taxable years ending
on or before the Closing Date, regardless of when filing is required. Except for
Taxes required to be paid with respect to all federal income Tax Returns
described in Section 5.3(c), which Seller shall pay, Seller, LongView or
LongView UK will pay all Taxes required to be paid with respect to the income
Tax Returns described in the preceding sentence consistent with past practices
and in the ordinary course of business. To the extent any Tax Return prepared by
Seller pursuant to this Section 5.3(d) has not been filed as of the Closing
Date, Purchaser will provide any additional information or assistance as may be
reasonably requested in connection with the finalization of such Tax Return and
will cause the
29
appropriate persons to sign and file such Tax Return provided that Seller
represents and warrants in writing that such Tax Return has been prepared in
good faith with all due care and is correct and complete in all material
respects.
(e) In accordance with Section 7.2 hereof, Seller agrees to indemnify
Purchaser from and against any losses that Purchaser may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any liability of
LongView or LongView UK under Section 1.1502-6 of the regulations promulgated by
the U.S. Department of the Treasury under the Code (or any similar provision of
state, local or foreign law or regulations).
(f) Except as otherwise provided in this Section 5.3, Purchaser will
control all audits, refund claims and other proceedings involving any Tax Return
filed by LongView and LongView UK. Purchaser will give prompt notice to Seller
of any audit, refund claim or other proceeding involving any Tax Return relating
(in whole or in part) to periods or transactions prior to the Closing Date, and
will consult with Seller and give due regard to Seller's interests in any
negotiations or discussions unless Purchaser reasonably concludes that Seller
will not be required to make any payment under this Agreement by reason of the
subject of the negotiation or discussion, which case Seller will have no further
liability under this Agreement with respect to such periods or transactions.
Purchaser and its Affiliates and agents will not concede, settle or compromise
any claim or deficiency related to such Tax Returns without the prior written
consent of Seller, which consent shall not be unreasonably withheld; failure to
obtain such consent will be treated as a waiver by Purchaser of any right to
indemnification with respect to Losses related to the matter conceded, settled
or compromised.
(g) Seller will control all audits, refund claims and other proceedings
related to (i) the federal consolidated income Tax Returns of Seller and (ii)
any Massachusetts or foreign income Tax Returns filed by LongView or LongView UK
with respect to periods ended at or prior to the Closing Date. Seller will give
prompt notice to the other party of any audit, refund claim or other proceeding
involving any such income Tax Return, and the parties will cooperate with each
other in good faith in the conduct of such audit, claim or proceeding.
5.4 Goodbye Letters; Retention Bonus Payment. Seller shall furnish
Purchaser within five business days of the Closing Date a copy of documentation
sent to Seller Employees notifying Seller Employees that (i) all stock options
held by Seller Employees to purchase stock of Seller have fully vested upon the
Closing and that Seller Employees shall have five days thereafter to exercise
such options, and (ii) all stock options held by Seller Employees to purchase
stock of TenFold shall cease vesting on the Closing Date, but Seller Employees
shall have through December 31, 2001 to exercise any vested TenFold options. On
September 15, 2001, Seller shall pay to Purchaser $200,000, which Seller intends
to use to pay bonuses to Seller Employees employed at LongView at such time.
5.5 Destruction or Return of Confidential and Proprietary TenFold
Information. Purchaser understands that Seller Employees are subject to Seller's
Proprietary Information and Inventions Agreement. Purchaser agrees to cooperate
in causing such Seller Employees to either destroy or return all Seller or
TenFold confidential and proprietary information, data, work product, non-public
financial information, applications development methods and processes, Universal
Application and other code ("Proprietary Information"), other than any such
30
Proprietary Information conveyed to Purchaser hereunder or in connection with
the acquisition of LongView.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Obligations of Seller for the Closing. The obligation
of Seller to consummate the transactions contemplated hereby in connection with
the Closing is subject to the satisfaction or written waiver on or prior to the
Closing Date of the following conditions:
(a) Representations, Warranties and Covenants. The representations and
warranties of Purchaser contained in this Agreement that are qualified as to
materiality shall be true and correct in all respects, and those that are not so
qualified shall be true and correct in all material respects, as of the date of
this Agreement and, except for any such representations and warranties that
speak as of an earlier specified date, as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date. Purchaser shall
have performed and complied in all material respects with all covenants and
agreements required to be performed or complied with by it hereunder on or prior
to the Closing Date.
(b) Closing Deliveries. Purchaser shall have made the deliveries required
to be made by it under Section 1.4(a).
6.2 Conditions to Obligations of Purchaser for the Closing. The
obligation of Purchaser to consummate the transactions contemplated hereby in
connection with the Closing is subject to the satisfaction or written waiver on
or prior to the Closing Date of the following conditions:
(a) Representations, Warranties and Covenants. The representations and
warranties of Seller contained in this Agreement that are qualified as to
materiality shall be true and correct in all respects, and those that are not so
qualified shall be true and correct in all material respects, as of the date of
this Agreement and, except for any such representations and warranties that
speak as of an earlier specified date, as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date. Seller shall have
performed and complied in all material respects with all covenants and
agreements required to be performed or complied with by it hereunder on or prior
to the Closing Date.
(b) No Material Adverse Effect. There shall not have occurred since
December 31, 2000 any Material Adverse Effect or any change, event or occurrence
which would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(c) Third Party Consents. Seller shall have furnished to Purchaser
satisfactory evidence that Seller has obtained the Consents described on
Schedule 4.7 hereto.
(d) Closing Deliveries. Purchaser shall have made the deliveries required
to be made by it under Section 1.4(b).
31
ARTICLE VII
INDEMNIFICATION
7.1 Survival of Representations and Warranties. The representations and
warranties of the parties to this Agreement shall survive the Closing Date
regardless of any investigation made by or on behalf of any party, for a period
of two years following the Closing Date. Notwithstanding the foregoing, (i) the
representations made in Section 2.11, 2.14 and 2.20 shall survive until the
applicable statutes of limitations (including any extensions thereof pursuant to
the delivery of waivers for the applicable period of limitations) have expired
and (ii) the representations and warranties made in Section 2.3 shall survive
indefinitely.
7.2 Indemnification by Seller. From and after the Closing Date and
subject to the provisions of this Article VII, Seller shall indemnify, defend
and hold harmless Purchaser and its subsidiaries and their respective officers,
directors, employees, agents, representatives, successors and permitted assigns
(collectively, the "Purchaser Indemnitees"), from and against any and all
actions, proceedings, costs, damages, claims, liabilities (absolute and
contingent), fines, penalties, payments, costs and expenses (including
reasonable counsel fees, interest, penalties and disbursements) (collectively,
"Losses"), that may be asserted against or suffered or incurred by the Purchaser
Indemnities arising out of, relating to any breach of any representation,
warranty, covenant or agreement by Seller made in this Agreement or the
Ancillary Agreements.
7.3 Indemnification by Purchaser. From and after the Closing Date and
subject to the provisions of this Article VII, Purchaser shall indemnify, defend
and hold harmless Seller and its officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the "Seller
Indemnitees"), from and against any and all Losses that may be asserted against
or suffered or incurred by the Seller Indemnities arising out of, relating to
any breach of any representation, warranty, covenant or agreement on the part of
Purchaser made in this Agreement or the Ancillary Agreements.
7.4 Notice and Resolution of Claims.
(a) Notice. Each Person entitled to indemnification pursuant to Section
7.2 or 7.3 (an "Indemnitee") shall give written notice to the Seller or
Purchaser, respectively, promptly after obtaining knowledge of any claim that it
may have under Section 7.2 or 7.3, as applicable. Such notice shall set forth in
reasonable detail the claim and the basis for indemnification. Failure to give
such notice in a timely manner shall not release the party from whom such
indemnification is sought (the "Indemnifying Party") from its obligations under
Section 7.2 or 7.3, as applicable, except to the extent that such failure
materially prejudices the ability of the Indemnifying Party to contest such
claim.
(b) Defense of Third Party Claims. If a claim for indemnification
pursuant to Section 7.2 or 7.3 shall arise from any action that might reasonably
be expected to result in an indemnifiable claim from a third party (a "Third
Party Claim"), the Indemnifying Party may assume the defense of such Third Party
Claim, provided the Indemnifying Party proceeds with diligence and in good faith
with respect thereto. If the Indemnifying Party assumes the defense of such
Third Party Claim, such defense shall be conducted by counsel chosen by the
Indemnifying Party, provided that the Indemnitee shall retain the right to
employ its own counsel
32
and participate in the defense of such Third Party Claim at its own expense
(which will not be recoverable from the Indemnifying Party under this Article
VII or otherwise). In addition, the Indemnitee may employ separate counsel, and
the Indemnifying Party shall bear the expenses of such separate counsel, if (i)
in the written opinion of counsel to the Indemnified Party reasonably
satisfactory to the Indemnifying Party, use of counsel of the Indemnifying
Party's choice would be expected to give rise to a conflict of interest, (ii)
the Indemnifying Party shall not have employed counsel to represent the
Indemnified Party within a reasonable time after notice of the assertion of any
such claim or institution of any such action or proceeding, or (iii) the
Indemnifying Party shall authorize the Indemnified Party in writing to employ
separate counsel at the expense of the Indemnifying Party. In no event shall the
Indemnifying Party be obligated to pay the fees and expenses of more than one
counsel for all Indemnified Parties with respect to any claim indemnified under
this Article VII. Notwithstanding the foregoing provisions of this Section
7.4(b), (i) no Indemnifying Party shall be entitled to settle any Third Party
Claim for which indemnification is sought under Section 7.2 or 7.3 without the
Indemnitee's prior written consent unless as part of such settlement the
Indemnitee is released from all liability with respect to such Third Party Claim
and such settlement does not impose any equitable remedy on the Indemnitee,
adversely affect the Indemnitee's business or require the Indemnitee to admit
any wrongdoing, and (ii) no Indemnitee shall be entitled to settle any Third
Party Claim for which indemnification is sought under Section 7.2 or Section 7.3
without the Indemnifying Party's prior written consent unless as part of such
settlement the Indemnifying Party is released from all liability with respect to
such Third Party Claim and such settlement does not impose any equitable remedy
on the Indemnifying Party, adversely affect the Indemnifying Party's business or
require the Indemnifying Party to admit any wrongdoing.
7.5 Deposit Agreement. In order to secure Seller's indemnification
obligations under Section 7.2 hereof, Seller shall, at the Closing, execute and
deliver a deposit account, escrow and control agreement substantially in the
form of Exhibit D hereto (the "Deposit Agreement") and a pledge and assignment
agreement substantially in the form of Exhibit E hereto (the "Pledge
Agreement"), and Purchaser shall deposit with Zions First National Bank (the
"Deposit Agent") the Deposit to be held for a period of 18 months (the "Deposit
Period"). The Deposit Agent shall administer the Deposit on behalf of Purchaser
and Seller in accordance with the Deposit Agreement. Any interest accrued with
respect to investment of the Deposit shall constitute a part of the Deposit and
shall be distributed to Seller or Purchaser pursuant to the terms of the Deposit
Agreement upon termination of the Deposit Period.
7.6 Limitations on Liability.
(a) Other than Claims made regarding Taxes or breaches of any
representations set forth in Sections 2.3(a), 2.14(b)(ii), 2.14(b)(iv), 2.16(a)
and 2.17, Seller's obligations to indemnify Purchaser for any Losses pursuant to
Section 7.2 shall not be effective until the aggregate amount of all such Losses
for which Seller is liable to Purchaser under Section 7.2 exceeds $250,000 (the
"Basket"), and thereafter Seller shall only be liable to Purchaser for any
amounts of Losses in excess of $100,000 (the "Deductible").
(b) Other than Claims made regarding breaches of any representations set
forth in Sections 2.3(a), 2.11, 2.14(b)(ii), 2.14(b)(iv), 2.16(a) or 2.17, in no
event shall Seller's liability under Section 7.2 exceed in the aggregate
$5,800,000.
33
7.7 Exclusive Remedy. The provisions of this Article VII shall constitute
the sole and exclusive remedy of Purchaser, on the one hand, and Seller, on the
other, for any Losses suffered by either of them on account of any breach by the
other of any representations, warranties, covenants or agreements contained in
this Agreement.
7.8 Adjustment to Purchase Price. All amounts paid pursuant to this
Article VII (other than interest payments) shall be treated by the parties
hereto on all Tax Returns as an adjustment to the Share Purchase Price.
7.9 Coordination with Tax Covenant. In the event any provision of this
Article VII is inconsistent with any provision of Section 5.3, the provisions of
Section 5.3 shall control.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing as
follows:
(a) by the mutual written consent of Seller and Purchaser;
(b) by Seller, if Purchaser shall have (i) breached any of its
representations or warranties contained in this Agreement that are qualified as
to materiality or (ii) breached in any material respect any of its
representations or warranties that are not so qualified or any of its covenants
contained in this Agreement, in each case which breach cannot be or has not been
cured within 30 days after the giving of written notice to Purchaser;
(c) by Purchaser, if Seller shall have (i) breached any of its
representations or warranties contained in this Agreement that are qualified as
to materiality or (ii) breached in any material respect any of its
representations or warranties that are not so qualified or any of its covenants
contained in this Agreement, in each case which breach cannot be or has not been
cured within 30 days after the giving of written notice to Seller; or
(d) by Purchaser, if TenFold shall commence a voluntary proceeding, or if
any involuntary proceeding shall be commenced against TenFold (and such
involuntary proceeding shall remain undismissed and unstayed for 30 days)
seeking liquidation or reorganization, or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect, or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official in an involuntary case or other proceeding
commenced against TenFold or TenFold shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they become due
or shall take any corporate action to authorize any of the foregoing.
8.2 Effect of Termination. In the event of the termination of this
Agreement and the abandonment of the transactions contemplated hereby pursuant
to Section 8.1, this Agreement shall forthwith become void and have no effect,
without any liability on the part of any party hereto or its directors,
officers, agents or representatives, and all rights and obligations of any party
hereto shall cease; provided, however, that (a) this Section 8.2 and Section 9.1
shall survive
34
any such termination and abandonment and (b) nothing contained in this Section
shall relieve any party from liability for any intentional breach of this
Agreement.
8.3 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, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance with any of the
agreements or conditions of the other parties contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in a written instrument executed and delivered by a duly
authorized officer on behalf of such party. Any waiver given by a party under
this Agreement as to any inaccuracy of a representation or warranty or to
noncompliance of an agreement or condition hereof shall not be deemed to
constitute a waiver of any other representation or warranty or compliance with
any other agreement or condition under this Agreement. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
ARTICLE IX
MISCELLANEOUS
9.1 Costs and Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties to this Agreement shall bear
its own expenses incurred in connection with the negotiation, preparation,
execution and closing of this Agreement and the transactions provided for
hereby.
9.2 Notices. Any notice, request, consent, approval or other document,
instrument or communication that may be required or permitted to be delivered or
served hereunder shall be effective upon delivery and shall be in writing and
may be delivered personally, sent by nationally recognized overnight delivery
service, or sent by facsimile (receipt confirmed) as follows (until notice of a
change thereof is given as provided herein):
If to Seller:
Argenesis Corporation
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Telephone (000) 000-0000
35
with copies to:
TenFold Corporation
000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
and
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to Purchaser:
Linedata Services
0, Xxx Xxxxx Xxxxxxx
XX 000-00000 Xxxxx-Xxxxxxxxx xxxxx
Xxxxx, Xxxxxx
Attention: Anvaraly Jiva
Facsimile: 00-0-0-00-00-0000
Telephone: 00-0-0-00-00-0000
with copies to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx Xxxxxx
Attention: Xxxx-Xxxx Xxxxxxxxxx
Facsimile: 00-0-0-00-00-0000
Telephone: 00-0-0-00-00-0000
36
And
Xxxxx, Day, Xxxxxx & Xxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall, for all purposes, be deemed an original
instrument.
9.4 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto, which are incorporated herein and made a part hereof), and the
Ancillary Agreements set forth the entire understanding and agreement between
the parties as to the matters covered herein and supersedes and replaces any
other prior understanding, agreement or statement of intent, in each case,
written or oral, including without limitation the Letter of Intent dated as of
February 2, 2001 between Purchaser and Parent, and other correspondence
heretofore exchanged between the parties.
9.5 Transfer Taxes. Seller shall be responsible for all sales, stamp,
conveyance, transfer, documentary, use, filing, value added and other similar
taxes and fees imposed with respect to the transfer of the Shares to be effected
pursuant to this Agreement.
9.6 Captions. All headings contained in this Agreement are for
convenience or reference only and shall not control or affect in any way the
meaning, construction or interpretation of any of the provisions hereof.
9.7 Public Announcements. Seller and Purchaser will consult with each
other before issuing, and provide each other the opportunity to review, comment
upon and concur with and use reasonable efforts to agree on, any press release
or other public statements and any internal communications with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement or internal communication prior to
such consultation, except as either party may determine is required by
applicable law, court process or by obligations pursuant to any listing
agreement with any national securities exchange.
9.8 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware (without regard to the conflicts of law principles thereof) as
to all matters, including but not limited to matters of validity, construction,
effect and performance.
9.9 Dispute Resolution.
(a) Any legal disagreement, dispute, controversy or claim arising out of
or relating to this Agreement, the interpretation hereof, the relationship
contemplated hereby, or the breach, termination or invalidity hereof shall be
finally resolved by arbitration conducted in accordance
37
with the then most current version of the Commercial Dispute Resolution
procedures of the American Arbitration Association.
(b) The parties agree to use all commercially reasonable efforts to
assure that the arbitration procedure set forth herein, once commenced, shall be
completed as expeditiously as possible. The arbitrators shall render their
decision to the parties in writing together with the underlying reasoning,
including separate statements of findings of facts and conclusions of law, no
later than 60 days after completion of hearings, but in no event later than 180
days from the date of appointment of the last of the arbitrators to be
appointed. The decision of the arbitrators shall be final and binding upon the
parties and judgment upon the award rendered may be entered in any court having
jurisdiction thereof.
9.10 No Third Party Rights. Nothing herein express or implied is intended
or shall be construed to confer upon or give any Person, other than the parties
hereto, any rights or remedies under or by reason of this Agreement.
9.11 Amendment and Waiver. This Agreement may be amended, modified or
superseded, and any of the terms, covenants or conditions hereof may be waived,
at any time by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure at any time of
any party hereto to require performance by another party of any responsibility
or obligation provided for in this Agreement shall in no way affect the full
right to require such performance at any time thereafter, nor shall the waiver
by any party of a breach of any provision of this Agreement by another party
constitute a waiver of the responsibility or obligation itself.
9.12 Construction and Representation by Counsel. The parties hereto
represent that in the negotiation and drafting of this Agreement they have been
represented by and relied upon the advice of counsel of their choice. The
parties affirm that their counsel have had a substantial role in the drafting
and negotiation of this Agreement and, therefore, the rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any Exhibit or
Schedule attached hereto.
9.13 Severability. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall not in any way be affected or impaired; provided, that the
economic and legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. In the case of any such
invalidity, illegality or unenforceability, the parties hereto agree to use all
commercially reasonable efforts to achieve the purpose of such provision by a
new legally valid and enforceable stipulation.
9.14 Dollars. All references in this Agreement to "Dollars" and "$" shall
mean the lawful money of the United States.
9.15 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not assignable by TenFold or Argenesis
without the prior written consent of
38
Purchaser. Purchaser may transfer and assign all or part of its rights and
obligations under this Agreement to one or more partnerships, corporations,
trusts or other organizations which have been created by, or controlled by,
control or are under common control with Purchaser without the consent of
Seller.
9.16 Definitions.
(a) "Knowledge". For purposes of this Agreement, an individual will be
deemed to have "knowledge" of a particular fact or other matter if such
individual is actually aware of such fact or other matter. A Person (other than
an individual) will be deemed to have "knowledge" of a particular fact or other
matter if any individual who is serving on the date hereof as a director,
officer, partner, executor, or trustee of such Person (or in any similar
capacity) has, or at any time had, knowledge of such fact or other matter.
(b) "Affiliate" of any Person means any officer, director, employee,
agent or representative of such Person or another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise.
(c) "Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
39
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the
parties hereto as of the date first above written.
"SELLER":
ARGENESIS CORPORATION
By:
------------------------------------------
Name:_____________________________________
Title:____________________________________
"PURCHASER":
LINEDATA SERVICES
By:
------------------------------------------
Name:_____________________________________
Title:____________________________________
40
