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EXHIBIT 10.10
Confidential Treatment Request
ASSET PURCHASE AGREEMENT
SELLER
SCC Communications Corp.
BUYER
Printrak International Inc.
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is made as of July 18,
1997, by and between Printrak International Inc., a Delaware corporation
("Buyer"), and SCC Communications Corp., a Delaware corporation ("SCC" or
"Seller").
R E C I T A L S
A. Seller owns and operates the Computer-Aided Dispatch and Records
Management Division (the "CAD/RMS Division") of SCC and its foreign subsidiary,
Public Safety Technologies of Australia (Pty), Ltd., which develop and market a
computer-aided dispatch and records management software product line (the
"Business").
B. Buyer desires to purchase, and Seller desires to sell and transfer to
Buyer, substantially all of the assets of the CAD/RMS Division and all of the
stock of the Foreign Subsidiary all upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing premises, the terms,
covenants, and conditions hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. ASSETS AND LIABILITIES BEING PURCHASED AND ASSUMED.
1.1 PURCHASED ASSETS. Buyer hereby agrees to purchase from Seller,
and Seller hereby agrees to sell, transfer and assign to Buyer, free and clear
of any and all mortgages, liens, security interests, encumbrances, pledges,
leases, equities, claims, charges, restrictions, conditions, conditional sale
contracts and any other adverse interests of any kind whatsoever (other than
those securing any Assumed Obligations), all of the assets, wherever located,
which are owned by Seller, or in which Seller has any right, title or interest,
and used in connection with the Business (collectively referred to herein as the
"Purchased Assets"). The Purchased Assets shall include, but shall not be
limited to, the following:
(a) The tangible personal property, machinery, equipment, hones,
tools, machine and electric parts, supplies and computers, wherever located,
owned or used by Seller solely or primarily in connection with the Business
(collectively, the "Tangible Assets"), all the items of which are identified in
Schedule 1.1(a) attached hereto;
(b) All of the rights, tangible and intangible, and leasehold
interests in personal property, of Seller existing under any contracts,
agreements, leases, licenses, instruments or commitments, all of which are
listed on Schedule 4.6 attached hereto, and under any contracts, agreements,
leases, licenses, instruments and commitments which are entered into by Seller
in connection with the Business after the date hereof and prior to the "Closing"
(as defined below) with the prior written consent of Buyer (collectively, the
"Assumed Contracts");
(c) All rights in and to any governmental and private permits,
licenses, franchises and authorizations, to the extent assignable, used in
connection with the Business;
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(d) All rights in and to any requirements, processes,
formulations, methods, technology, know-how, formulae, trade secrets, trade
dress, designs, inventions and other proprietary rights and all documentation
embodying, representing or otherwise describing any of the foregoing, owned or
held by Seller in connection with the Business (the assets described in Sections
1.1(d) through 1.1(g) are referred to as the "Intangible Property Rights");
(e) All patents, copyrights, tradenames, trademarks and service
marks of Seller used in the Business (other than "SCC" or "SCC Communications
Corp."), all of which are set forth on Schedule 1.1(e), and all applications
therefor, and all documentation embodying, representing or otherwise describing
any of the foregoing;
(f) All rights in and to the customer lists, promotion lists,
marketing data and other compilations of names and data developed in connection
with the Business, and which shall be delivered by or on behalf of Seller to
Buyer at or prior to the Closing;
(g) All of Seller's rights in and to the computer software
programs (including software licensed to Seller) used in connection with the
Business or developed or under development by, or on behalf of, Seller in
connection with the Business, all of which are identified on Schedule 4.15,
including the source code, object code and documentation for such software, in
each case to the extent that Seller possesses and has a right to possess and
transfer the same;
(h) All accounts and notes receivable and unbilled project
revenues generated in connection with the Business from and after July 1, 1997
(other than the account receivable from Xxxxxx County, which is excluded), and
all cash received upon the billing and collection thereof, whether on hand, in
banks or other depository accounts, or transit, and all negotiable instruments
of or made payable to Seller, advanced payments, claims for refunds and deposits
and other prepaid items of Seller;
(i) All accounts receivable schedules, lists, files, books,
publications, and other records and data used in connection with the Business;
and
(j) All causes of action, claims, suits, proceedings, judgments
or demands, of whatsoever nature, of or held by Seller against any third parties
with respect to the Business.
1.2 ASSUMED OBLIGATIONS. Buyer hereby agrees to assume, honor and
discharge when due only: (a) those liabilities, obligations and commitments
(including bonding obligations) specifically set forth on Schedule 1.2 (the
"Assumed Liabilities"); and (b) those liabilities and obligations arising after
the "Closing Date" (as defined below) under the Assumed Contracts (which,
together with the Assumed Liabilities, shall sometimes be referred to herein
collectively as the "Assumed Obligations"). The Assumed Obligations shall not
include, and Seller covenants that Buyer shall not be liable or responsible for,
any obligations or liabilities to the extent arising out of any act or omission
of Seller under any Assumed Contract, regardless of when such liability or
obligation is asserted. Seller represents and warrants that, except as set forth
on Schedule 1.2, Seller is not in default under any Assumed Obligation, and
Buyer shall not be obligated to assume any Assumed Obligation which is in
default as of the Closing Date, or any obligation relating to periods prior to
the Closing Date.
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1.3 OPTION TO PURCHASE STOCK OF SUBSIDIARY. Seller hereby grants to
Buyer an option to purchase all of the issued and outstanding stock of
Subsidiary (the "Subsidiary Stock") for a purchase price of One Hundred Dollars
($100.00). Such option shall be exercisable by written notice to Seller within
thirty (30) days following the Closing Date, and Seller shall deliver to Buyer
certificates representing the Subsidiary Stock, duly endorsed for transfer, as
well as all corporate records of Subsidiary, within ten (10) days following
receipt of such notice (the "Option Closing Date"). In the event that such
option is exercised, the representations and warranties contained in this
Agreement with respect to Subsidiary shall be deemed to have been made again as
of the Option Closing Date, and Seller shall deliver to Buyer a certificate of
an officer of Seller, certifying as to the accuracy thereof. The Subsidiary
Stock shall be transferred to Buyer, free and clear of any and all mortgages,
liens, securing interests, encumbrances, pledges, claims and any other adverse
interests of any kind whatsoever.
2. LIABILITIES NOT ASSUMED.
Except for the Assumed Obligations, Seller agrees that Buyer will not
assume or perform, and Seller shall remain responsible for and shall indemnify,
hold harmless and defend Buyer from and against, any and all liabilities and
obligations of Seller, whether known or unknown, and regardless of when such
liabilities or obligations arise or are asserted, including, without limitation,
any obligations or liabilities of Seller with respect to the following:
(a) Any compensation or benefits payable to employees of Seller,
including, but not limited to, any liabilities arising under any employee
pension or profit sharing plan or other employee benefit plan, any severance pay
or other termination costs due to employees of Seller as a result of the
transactions contemplated by this Agreement or any of Seller's obligations to
its employees for salaries and vacation and holiday pay accrued and unpaid as of
the Closing Date;
(b) All federal, state, local, foreign or other taxes applicable
to Seller for periods prior to the Closing Date;
(c) Injuries to or the death of any person, or any employee of
Seller, that has occurred or may occur, prior to Closing, in connection with the
Business or any other operations engaged in by Seller, even if not discovered
until after the Closing Date;
(d) All liens, claims and encumbrances on any of the Purchased
Assets and all obligations and liabilities secured thereby;
(e) All obligations of Seller for borrowed money, or incurred in
connection with the purchase, lease or acquisition of any assets, and any
obligations of a similar nature incurred by Seller;
(f) Any accounts or notes payable or similar indebtedness
incurred by Seller;
(g) Any claims, demands, actions, suits, legal proceedings,
obligations or liabilities arising from Seller's operation of the Business prior
to the Closing, or arising from any other business or operations of Seller
conducted prior to the Closing, whether such claims, demands,
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actions, suits, legal proceedings, obligations or liabilities are presently
pending or threatened or are threatened or asserted at any time after the date
hereof and whether before or after the Closing; and
(h) Any liabilities arising out of the termination by Seller of
any of its employees in anticipation or as a consequence of, or following,
consummation of the transactions contemplated hereby.
3. PURCHASE PRICE AND TERMS OF PAYMENT.
3.1 PURCHASE PRICE. As consideration for the sale to Buyer of the
Purchased Assets, Buyer agrees to pay to Seller the aggregate sum of [ ],
representing the net book value of the Purchased Assets as of June 30, 1997,
(calculated in accordance with GAAP, provided that the reserve for anticipated
project losses has been increased to [ ] and all capitalized software has
been written off), and to assume the Assumed Obligations in Section 1.2 (the
"Purchase Price"). The Purchase Price shall be paid by wire transfer of
immediately available funds to Seller's bank account per written instructions of
Seller.
3.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Purchased Assets as determined by Buyer in its sole
discretion. The parties hereto shall report consistent with Buyer's allocation
on all income tax returns, and will comply with, and furnish the information
required by Section 1060 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any regulations thereunder.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Except as disclosed in
the Schedules delivered concurrently herewith by reference to the specific
Section or Sections hereof to which the disclosure pertains, Seller hereby
represents and warrants to Buyer, as of the date hereof and as of the Closing
Date, as follows:
4.1 AUTHORITY AND BINDING EFFECT. Seller has the full corporate power
and authority to execute and deliver this Agreement and each agreement
referenced herein (the "Related Agreements") to which it is a party and to
consummate the transactions contemplated by, and comply with its obligations
under, such agreements. This Agreement and the Related Agreements to which
Seller is a party, and the consummation by Seller of its obligations herein and
therein, have been duly authorized by all necessary corporate action of Seller,
including, without limitation, the approval of its shareholders in accordance
with applicable law. This Agreement and the Related Agreements have been duly
executed and delivered by the Seller and upon their execution and delivery will
be, the binding and valid agreements of the Seller. This Agreement and the
Related Agreements shall be enforceable against the Seller, in each such case in
accordance with their respective terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally and (ii) general principles of equity
relating to the availability of equitable remedies. No further action is
required to be taken by the Seller, nor is it necessary for the Seller to obtain
any action, approval or consent by or from any third persons, governmental or
other, to enable the Seller to enter into or perform its obligations under this
Agreement and the Related Agreements to which it is a party, except for the
consents of third parties to the assignment and assumption of the Assumed
Contracts which Seller shall use its best efforts to obtain following the
Closing (unless waived in writing by Buyer). Such consents are set forth in
Schedule 4.6 hereto.
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4.2 ORGANIZATION AND GOOD STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Subsidiary is a company duly organized, validly existing and in good
standing under the laws of Australia. Each of Seller and Subsidiary is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which such qualification is necessary under applicable law
as a result of the conduct of its business or the ownership or leasing of its
assets and the failure to be so qualified would have a material adverse effect
on such entity or the Business. Seller has the legal right, corporate power and
authority, and all licenses and other permits, required to operate the Business
as now conducted and to own, use and sell the Purchased Assets. Seller has
delivered to, or made available for inspection by, Buyer or its counsel true,
correct and complete copies of (i) Seller's and Subsidiary's charter documents
and all amendments thereto; (ii) Seller's and Subsidiary's Bylaws and all
amendments thereto, duly certified by its corporate secretary; and (iii)
Seller's and Subsidiary's minute and stock books. No actions, proceedings or
transactions have been commenced or undertaken by the Seller which give or would
give rights to any person, other than Buyer, in any of the Purchased Assets or
Purchased Stock or interfere with the consummation of the transactions
contemplated by this Agreement.
4.3 FINANCIAL STATEMENTS. Seller has delivered to Buyer unaudited
financial statements of Seller and Subsidiary relating to the Business
consisting of (i) an unaudited balance sheet as of June 30, 1997 (the "June
Balance Sheet"), and (ii) an unaudited balance sheet, and a related statement of
operating expenses, as of and for the period ended December 31, 1996, (the
"December 31, 1996 Financial Statements") (the June Balance Sheet and the
December 31, 1996 Financial Statements are collectively referred to herein as
the "Financial Statements"). True, correct and complete copies of the Financial
Statements are attached as Schedule 4.3A hereto. The Financial Statements fairly
present the financial condition of the Business and the results of its
operations as of the relevant dates thereof and for the respective periods
covered thereby, and have been prepared in accordance with generally accepted
accounting principles. Except as set forth in Schedule 4.3B, Schedule 1.2 and
Schedule 4.6 neither Seller nor Subsidiary has any debts, obligations,
liabilities or commitments of any nature relating to the Business, whether due
or to become due, absolute, contingent or otherwise, that, in accordance with
GAAP, are required to be disclosed in a balance sheet or the footnotes thereto,
and are not shown on the June Balance Sheet delivered pursuant hereto, other
than liabilities incurred after June 30, 1997 in the ordinary course of business
and consistent with past practice. Such post-June 30, 1997 liabilities have not
had, and are not expected to have, individually or in the aggregate, a material
adverse effect on the financial condition or results of operations or prospects
of Subsidiary or the Business. As to each liability, debt, obligation or
commitment, fixed or contingent, that is set forth on Schedule 4.3B and is
included in the Assumed Obligations, Seller shall provide the following
information, in writing as an attachment to such Schedule: (i) a summary
description of the liability, debt, obligation or commitment, together with
copies of all relevant documentation relating thereto, the amounts claimed and
any other action or relief sought and, if in connection with a claim, suit or
proceeding, the name of the claimant and all other parties involved therewith
and the identity of the court or agency in which such claim, suit or proceeding
is being prosecuted, and (ii) the best estimate of Seller of the maximum amount,
if any, which is likely to become payable with respect to any contingent
liability. For purposes hereof, if no written estimate is provided, such best
estimate shall be deemed to be zero.
4.4 ABSENCE OF CERTAIN CHANGES. During the period from June 30, 1997
to the date hereof, there has not been with respect to or affecting Seller,
Subsidiary or the Business: (i) any
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amendment, termination or revocation, or any threat known to the Seller of any
amendment, termination, or revocation, of any material contract or agreement to
which Seller or Subsidiary is, or was, a party which relates to Subsidiary or
the Business, or of any license, permit or franchise required for the continued
operation of the Business in substantially the same manner as it has been
conducted since its incorporation; (ii) except for the transactions contemplated
hereby, any sale, transfer, mortgage, pledge or subjection to lien, charge or
encumbrance of any kind, of, on or affecting any of the Purchased Assets, except
sales that have been made in the ordinary course of the Business and consistent
with past practices, and liens for current taxes not yet due and payable; (iii)
other than as contemplated in connection with the transactions contemplated
hereby, any increase in the compensation paid or payable or in the fringe
benefits provided to any employees of the CAD/RMS Division or Subsidiary; (iv)
any damage, destruction or loss, whether or not covered by insurance, of any of
the Purchased Assets; (v) the incurrence of any indebtedness, either for
borrowed money or in connection with any purchase of assets, or otherwise on
behalf of the Business, that is not reflected in the June 30, 1997 balance sheet
and individually or in the aggregate involves more than $5,000; (vi) any
purchase or lease, or commitment for the purchase or lease, of equipment,
machinery, leasehold improvements or other capital items for use in the Business
not disclosed in the June 30, 1997 Financial Statements which involves amounts
exceeding $5,000 individually or $10,000 in the aggregate or which is in excess
of or represents a departure from the normal, ordinary and usual requirements of
the Business; (vii) the execution by Seller or Subsidiary of any agreement or
contract relating to the Business that obligates Seller or Subsidiary to pay
more than $10,000 per year or which is materially disadvantageous to Seller,
Subsidiary or the Business; or (viii) the occurrence subsequent to June 30, 1997
of any other event or circumstance which, could reasonably be expected to
materially and adversely affect the Subsidiary, any of the Purchased Assets, the
Business, or the ability of the Seller to consummate the transactions
contemplated hereby.
4.5 THE PURCHASED ASSETS.
(a) TITLE TO AND ADEQUACY OF PURCHASED ASSETS. Except as
disclosed on Schedule 4.5 hereto, Seller has, and at the Closing Seller will
convey and transfer to Buyer, good, complete and marketable title to all of the
Purchased Assets, free and clear of all mortgages, liens, security interests,
encumbrances, pledges, leases, equities, claims, charges, restrictions,
conditions, conditional sale contracts and any other adverse interests. Except
as set forth on Schedule 4.5, all of the Purchased Assets are in the exclusive
possession and control of Seller and Seller has the unencumbered right to use
and sell to Buyer all of the Purchased Assets without interference from others.
The Purchased Assets constitute all the assets, properties, rights, privileges
and interests necessary for Buyer to own and operate the Business substantially
in the same manner as it has been conducted by Seller during the period
immediately preceding the execution of this Agreement.
(b) TANGIBLE ASSETS. Schedule 1.1(b) is a list of all of the
Tangible Assets used in the Business, other than any Tangible Asset the
replacement cost of which would be less than $1,000.00 and which is not of
material importance to Seller's operations. The Tangible Assets are in good
working order and condition, ordinary wear and tear excepted, have been
maintained in accordance with generally accepted industry standards, are
suitable for the uses for which they are being utilized in the Business and
comply with all requirements under applicable laws, regulations and licenses
which govern the use and operation thereof.
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(c) INTANGIBLE PROPERTY RIGHTS. The Intangible Property Rights
are the only material intangible property used by Seller in the Business, and
from and after the Closing Date, Buyer shall have the right to use all of the
Intangible Property Rights in the Business consistent with Seller's use of the
Intangible Property Rights in the Business. Seller owns, or holds adequate
licenses, or other rights to use, all of the Intangible Property Rights, such
use does not conflict with, infringe on or otherwise violate any rights of any
other person. Except as disclosed in Schedule 4.5, all of such licenses and
rights are transferable to Buyer without cost or liability to Buyer and will be
included in the Purchased Assets being sold to Buyer hereunder. Except as set
forth on Schedule 4.5, Seller has not granted, transferred or assigned any
right, license or interest in any of its Intangible Property Rights. In no
instance has the eligibility of any copyright to any material property included
in the Intangible Property Rights been forfeited to the public domain by
omission of any required notice or any other action. All personnel, including
employees, agents, consultants and contractors, who have contributed to or
participated in the conception and development of any of the Intangible Property
Rights on behalf of Seller either (i) in the case of any copyright, have been
party to a "work-for-hire" arrangement or agreement with Seller, in accordance
with applicable federal and state law, that has accorded Seller full, effective,
exclusive and original ownership of all United States copyrights thereby arising
or (ii) shall, prior to the Closing, have executed appropriate instruments of
assignment in favor of Seller as assignee that convey to Seller full, effective
and exclusive ownership of all Intangible Property Rights thereby arising.
Except as set forth in Schedule 4.5, Seller has not infringed, is not now
infringing and has not received notice of any infringement, on any patent, trade
name, trademark, service xxxx, copyright, trade secret, trade dress, design,
invention, technology, know-how, process or other proprietary right belonging to
any other person, firm or corporation, which infringement would have an adverse
effect on any of the Purchased Assets or the Business. To the best of Seller's
knowledge, there is no infringement by any other person of any Intangible
Property Right.
(d) LEASES. Schedule 4.5(d) is a list of each of the facilities
or real properties used in the Business. Schedule 4.5(d) also contains a list of
all leases under which Seller possesses or uses personal property in connection
with the conduct or operation of the Business. The personal property leases set
forth in Schedule 4.5(d) are sometimes collectively referred to as the "Personal
Property Leases." True, correct and complete copies of the real property leases
set forth in Schedule 4.5(d), the Real Property Leases and Personal Property
Leases (collectively, the "Leases") have been delivered to Buyer. Seller is not,
and as of the Closing Date will not be, in default, and no facts or
circumstances have occurred, or on or prior to the Closing will occur, which
through the passage of time or the giving of notice, or both, would constitute a
default, under any of the Leases. Subject to any consents required therefor, the
assignment of any of the Real Property Leases and the personal property leases
set forth in Schedule 4.5(d) shall not adversely affect Buyer's quiet enjoyment
and use, without disturbance, of all real and personal properties and assets
that are the subject of such leases. None of the Leases contains any provisions
which, after the Closing Date, would (i) hinder or prevent Buyer from continuing
to use any of the properties or assets which are the subject of the personal
property leases set forth in Schedule 4.5(d) in the manner in which they are
currently used or (ii) impose any additional costs (other than scheduled rental
increases) or additional burdensome requirements as a condition to their
continued use. Except as otherwise set forth in Schedule 4.5(d) hereto, none of
the Purchased Assets are held under, or used by Seller in connection with the
Business pursuant to, any lease or conditional sales contract.
(e) ACCOUNTS RECEIVABLE. Attached hereto as Schedule 4.5(e) are
(i) an accurate list of all accounts and notes
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receivable of Seller, including any accounts or notes receivable not reflected
in the June 30, 1997 balance sheet, and (ii) an aging of all such accounts and
notes receivable showing amounts due in 30-day aging categories. All such
accounts and notes receivable on such listing arose from, and all accounts and
notes receivable of Seller created between June 30, 1997 and the Closing will
have arisen from, the sale of Seller's products or the provision of services by
Seller in the ordinary course of business. The Seller has not received any
notice or knows of any counterclaim or set-off with respect to any such accounts
or notes receivable, or any facts or circumstances that would be the basis for
any such counterclaim or set-off, which is not reflected or taken into account
in the contractual allowance or bad debt reserves set forth in the June 30, 1997
balance sheet.
4.6 CONTRACTS, AGREEMENTS AND COMMITMENTS. Schedule 4.6 hereto
contains an accurate and complete list of all contracts, agreements, leases,
licenses and instruments to which Seller or Subsidiary is a party or is bound or
which relate to or affect any of the Purchased Assets or the Business. Schedule
4.6 includes, without limitation, all contracts and agreements and all leases,
licenses and instruments, which (i) grant a security interest or permit or
provide for the imposition of any lien, mortgage, security interest or other
encumbrance on, or provide for the disposition of, any of the Purchased Assets;
(ii) require the consent of any third party to the consummation by Seller of the
transactions contemplated by this Agreement, as noted on such schedule; (iii)
would restrict the use or disposition by Buyer after the Closing of any of the
Purchased Assets; or (iv) pertain to the sale or lease of CAD/RMS Products to
third parties (including the status of the contract, the contract price, the
amount collected to date and whether the CAD/RMS Product has been accepted.
True, correct and complete copies of all items so listed in Schedule 4.6 have
been furnished to Buyer. Each of such contracts, agreements, leases, licenses
and instruments so listed, or required to be so listed, in Schedule 4.6 is a
valid and binding obligation of Seller and/or Subsidiary and the other parties
thereto, enforceable in accordance with its terms, except as may be affected by
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally and general principles of equity relating to the availability of
equitable remedies. Except as otherwise set forth in Schedule 4.6 hereto, there
have not been any defaults by Seller or Subsidiary or, to the best knowledge of
the Seller, defaults or any claims of default or claims of nonenforceability by
the other party or parties which, individually or in the aggregate, would have a
material adverse effect on Subsidiary, the Business or any of the Purchased
Assets, and there are no facts or conditions that have occurred or that are
anticipated to occur which, through the passage of time or the giving of notice,
or both, would constitute a default by Seller, or to the best knowledge of the
Seller, by the other party or parties, under any of such contracts, agreements,
leases, licenses and instruments or would cause a creation of a lien, security
interest or encumbrance upon any of the Purchased Assets or otherwise materially
and adversely affect Subsidiary, any of the Purchased Assets or the Business.
4.7 LABOR AND EMPLOYMENT AGREEMENTS; FRINGE BENEFIT PLANS.
(a) Schedule 4.7 sets forth the name of each director and officer
of Subsidiary and of each employee of Seller or Subsidiary who is engaged in the
Business, together with a description of all compensation and benefits that are
payable to such individuals as a result of their employment by or association
with Seller or Subsidiary. Schedule 4.7 includes a description of all employment
or personnel policies of Seller relating to vacation or other employee benefits.
(b) Schedule 4.7 hereto contains a list of any collective
bargaining or other labor, employment, deferred compensation, bonus, retainer,
consulting, or incentive agreement, plan or contract, and all written or other
personnel policies, of Seller or Subsidiary or to
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which Seller or Subsidiary is subject or bound. True, correct and complete
copies of any such agreements, plans, contracts and policies listed in Schedule
4.7 hereto have been furnished to Buyer. Except to the extent set forth in
Schedule 4.7, (i) there has been no strike or other work stoppage by, nor to the
best knowledge of Seller has there been any union organizing activity among, any
of the employees of Seller or Subsidiary; (ii) Seller and Subsidiary are in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice; and (iii)
there is no unfair labor practice complaint pending or, to the best knowledge of
the Seller, threatened against Seller or Subsidiary, nor, to the best knowledge
of the Seller, is there any factual basis for any such complaint.
(c) Schedule 4.7 hereto also contains a complete list of Seller's
and Subsidiary's Employee Plans. True, correct and complete copies or
descriptions of such Employee Plans have been delivered to Buyer. For purposes
of this Section 4.7, the term "Employee Plan" includes all past or present
plans, programs, agreements, arrangements, and methods of contribution or
compensation (including all amendments to and components of the same, such as a
trust with respect to a plan) maintained by Seller or Subsidiary or to which
Seller or Subsidiary has an obligation to contribute which provide any
remuneration or benefits, other than current cash compensation, to any current
or former employee of Seller or Subsidiary or to any other person who provides
services to Seller or Subsidiary. The term Employee Plan includes, but is not
limited to, pension, retirement, profit sharing, stock option, stock bonus, and
nonqualified deferred compensation plans and includes any Employee Plan that is
a multiemployer plan as defined in Section 3(37) of ERISA. The term Employee
Plan also includes, but is not limited to, disability, medical, dental, health
insurance, life insurance, incentive plans, vacation benefits, and fringe
benefits. Except as set forth on Schedule 4.7, none of the Employee Plans are
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or are qualified under the Code. Except as set forth in Schedule 4.7,
all Employee Plans are now, and have always been, established, maintained and
operated in all material respect in accordance with all applicable laws
(including, but not limited to, ERISA and the Code) and all regulations and
governing guidelines promulgated thereunder and in accordance with their plan
documents. Each funded Employee Plan providing for payment of deferred
compensation (a "Qualified Plan") is and always has been qualified under Section
401 of the Code. The Internal Revenue Service has issued one or more
determination letters with respect to each Qualified Plan stating that each such
Qualified Plan is qualified under Section 401 of the Code and each trust
maintained in connection with each such Qualified Plan has been and is exempt
under Section 501 of the Code. Except as set forth in Schedule 4.7, there is no
unfunded liability for vested or nonvested benefits under any funded Employee
Plan, and all contributions required to be made to or with respect to each
Employee Plan have been completely and timely paid. All reports, forms and other
documents required to be filed with any governmental entity with respect to any
Employee Plan have been timely filed and, to the best knowledge of the Seller,
are accurate. There have been no filings with respect to any Employee Plan with
the Pension Benefit Guaranty Corporation ("PBGC"). No liability to the PBGC has
been incurred or is expected with respect to any Employee Plan except for
insurance premiums, and all insurance premiums incurred or accrued up to and
including the Closing Date have been or will be timely paid by Seller. No amount
is, and as of the Closing Date no amount will be, due or owing from Seller or
Subsidiary to any "multiemployer plan" (as defined in Section 3(37) of ERISA) on
account of any withdrawal therefrom. There has been no event or condition, nor
is any event or condition expected, that would present a risk of termination of
any Employee Plan, or which would constitute a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations and
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interpretations thereunder. There has been no merger, consolidation, or transfer
of assets or liabilities (including, but not limited to, a split-up or
split-off) with respect to any Employee Plan. There is and there has been no
actual or, to the best knowledge of the Seller, anticipated, threatened or
expected litigation or arbitration concerning or involving any Employee Plan. No
complaints to or by any governmental entity have been filed or, to the best
knowledge of the Seller, have been threatened or are expected with respect to
any Employee Plan. No Employee Plan or any other person has any liability to any
plan participant, beneficiary or other person under any provision of ERISA, the
Code or any other applicable law by reason of any action or failure to act in
connection with any Employee Plan. There has been no prohibited transaction as
described in Section 406 of ERISA and Section 4975 of the Code with respect to
any Employee Plan. No Employee Plan provides medical benefits to one or more
former employees (including retirees), other than benefits required to be
provided under Section 4980B of the Code. There is no contract, agreement or
benefit arrangement covering any employee of Seller or Subsidiary, the payments
under which, individually or collectively, would constitute an "excess parachute
payment" under Section 280G of the Code.
4.8 CONFLICTS. Except as described on Schedule 4.6 hereto, neither
the execution and delivery of, nor the consummation of the transactions
contemplated by, this Agreement or the Related Agreements to which Seller is a
party will or could result in any of the following: (i) a default or an event
that, with notice or lapse of time, or both, would be a default, breach or
violation of the respective charter, bylaws or other governing instruments of
Seller or Subsidiary, or any contract, lease, license, franchise, promissory
note, conditional sales contract, commitment, indenture, mortgage, deed of
trust, security or pledge agreement, or other agreement, instrument or
arrangement to which the Seller or Subsidiary is a party or is bound which
relates to the Business or which affects any of the Purchased Assets; (ii) the
termination of any contract, lease, agreement, or commitment, or the
acceleration of the maturity of any indebtedness or other obligation of the
Seller or Subsidiary; (iii) the creation or imposition of any lien, charge or
encumbrance on any of the respective assets or properties of the Seller or
Subsidiary, including any of the Purchased Assets; (iv) a violation or breach of
any writ, injunction or decree of any court or governmental instrumentality to
which the Seller or Subsidiary is a party or is bound or which affects any of
their respective properties or any of the Purchased Assets or the Business; (v)
a loss or adverse modification of any license, franchise, permit, other
authorization or right (contractual or other) to operate, granted to or
otherwise held by Seller or Subsidiary or used in the Business, which would have
a material adverse effect on the Business or Buyer; or (vi) the cessation or
termination of any other business relationship or arrangement between Seller or
Subsidiary and any third party that is material to the Business, or its
operating results, condition (financial or other) or prospects or any of the
Purchased Assets. Except as set forth in Schedule 4.6 hereto, the Seller does
not know of any business relationship or arrangement between it or Subsidiary
and any third party (governmental or other) that is material to the Business,
its operating results, condition or prospects and that will cease or is likely
to be terminated as a result of the consummation of the transactions
contemplated by this Agreement.
4.9 INSURANCE. Schedule 4.9 contains an accurate list (including
liability limits, deductibles and coverage exclusions) of all policies of
insurance maintained by or on behalf of Seller or Subsidiary in connection with
the Business as protection for the Purchased Assets and the Business. Except as
set forth in Schedule 4.9 hereto, all of such policies are now in full force and
effect and policies covering the same risks and in substantially the same
amounts have been in full force and effect continuously since inception. Neither
Seller nor Subsidiary has received any notice
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of cancellation or material amendment of any such policies; no coverage
thereunder is being disputed; and all material claims thereunder have been filed
in a timely fashion.
4.10 TAXES AND TAX RETURNS. Each of Seller and Subsidiary has duly
filed all tax reports and returns which are required by law to be filed by it
and has duly paid all foreign, federal, state and local taxes due or claimed to
be due from such authorities, and there are no assessments or claims for payment
of taxes now pending or, to the best knowledge of the Seller, threatened, nor is
any audit of Seller's or Subsidiary's records presently being made by any taxing
authority. Each of Seller and Subsidiary has properly withheld and paid, or
accrued for payment when due, to appropriate state and/or federal authorities,
all amounts required to be withheld from its employees' wages, salaries and
other compensation and has also paid all employment taxes as required under
applicable laws.
4.11 COMPLIANCE WITH LAW/PERMITS.
(a) Seller and Subsidiary are in compliance with all, and are not
in violation of any, law, ordinance, order, decree, rule or regulation of any
governmental agency or authority, the violation of or noncompliance with which
could reasonably be expected to have a material adverse effect on the Business
or any of the Purchased Assets. Without limiting the generality of this Section
4.11(a), there are no unresolved (i) proceedings or investigations instituted
or, to the best knowledge of the Seller, threatened, by any such governmental
authorities against Seller or Subsidiary relating to the Business, or (ii)
citations issued or, to the best knowledge of the Seller, threatened against
Seller, Subsidiary or the Business by any governmental authorities, or (iii)
other notices of deficiency or charges of violation brought or, to the best
knowledge of the Seller, threatened against Seller, Subsidiary or the Business,
including under any federal or state regulation or otherwise, which could
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Business or any of the Purchased Assets, or interfere with
the maintenance, or the transfer or reissuance to Buyer, of the permits,
licenses, franchises, certificates, authorizations or any right to operate held
by Seller or Subsidiary; and, to the best knowledge of Seller, there are no
facts or circumstances upon which any such proceedings, investigations,
citations, notices, disallowances or charges may be instituted, issued or
brought hereafter.
(b) Schedule 4.11(b) contains a true, correct and complete list
of all governmental licenses, permits, authorizations, franchises, or
certificates or rights (contractual or other) to operate the Business, that are
held by Seller or Subsidiary (collectively, "Licenses and Permits"). Such
Licenses and Permits are the only licenses, permits, authorizations, franchises,
certificates and rights to operate required for operation of the Business, as it
has been conducted since its inception, and all of such Licenses and Permits are
in full force and effect at the date hereof and will be as of the Closing. The
Seller has provided Buyer with true, correct and complete copies of each License
and Permit listed in Schedule 4.11(b). Seller and Subsidiary are in compliance
in all material respects with all conditions or requirements imposed by or in
connection with such Licenses and Permits and with respect to its use of the
Purchased Assets and operation of the Business, and neither Seller nor
Subsidiary has received any notice, nor does Seller have any knowledge or reason
to believe, that any governmental authority intends to cancel, terminate or
materially modify any of such Licenses or Permits or that valid grounds for any
such cancellation, termination or material modification currently exist, except
that, by reason of change of ownership of the Business, certain
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of the Licenses and Permits listed in Schedule 9.1 will have to be transferred
or reissued to Buyer, and certain of such Licenses and Permits will have to be
reapplied for by Buyer.
4.12 LITIGATION AND PROCEEDINGS. There is neither (a) any action,
suit, proceeding or investigation, nor (b) any counter or cross-claim in an
action brought by or on behalf of the Seller or Subsidiary, whether at law or in
equity, or before or by any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind, that is pending or, to the best knowledge of the Seller, threatened,
against Seller or Subsidiary, which (i) could reasonably be expected to affect
adversely Seller's ability to perform its obligations under this Agreement or
the Related Agreements or complete any of the transactions contemplated hereby
or thereby, or (ii) involves the reasonable possibility of any judgment or
liability, or which may become a claim, against Buyer, the Business, the
Purchased Stock or any of the Purchased Assets prior to or subsequent to the
Closing Date. Neither Seller nor Subsidiary is subject to any judgment, order,
writ, injunction, decree or award of any court, arbitrator or governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over Seller, any of its assets, Subsidiary or the Business, which
may reasonably be expected to affect the Business.
4.13 CERTAIN TRANSACTIONS. Except as set forth in Schedule 4.13 ,
there are no existing or pending transactions, nor are there any agreements or
understandings, with any shareholders, officers, directors, or employees of
Seller or Subsidiary, or any person or entity affiliated with any of them
(collectively, "Affiliates"), relating to, arising from or affecting the
Business, or any of the Purchased Assets, including, without limitation, any
transactions, arrangements or understandings relating to the purchase or sale of
goods or services, the lending of monies, or the sale, lease or use of any of
the Purchased Assets, with or without adequate compensation, in any amount
whatsoever. Except as set forth in Schedule 4.13 , no existing or former
shareholder, director, officer or employee of Seller or Subsidiary has any
claims against or disputes with Seller which could result in the imposition of
any liability or judgment against the Business or any of the Purchased Assets.
4.14 ENVIRONMENTAL AND SAFETY MATTERS. Seller and Subsidiary have
complied with, and the operation of the Business and the use of the Purchased
Assets are in compliance with, in all material respects, all federal, state,
local and regional statutes, laws, ordinances, rules, regulations and orders
relating to the protection of human health and safety, natural resources or the
environment, including, but not limited to, air pollution, water pollution,
noise control, on-site or off-site hazardous substance discharge, disposal or
recovery, toxic or hazardous substances, training, information and warning
provisions relating to toxic or hazardous substances, and employee safety
relating to or adversely affecting any of the Purchased Assets (collectively the
"Environmental Laws"); and no notice of violation of any Environmental Laws or
of any permit, license or other authorization relating thereto has been
received, nor is any such notice pending or, to the best knowledge of the
Seller, threatened.
4.15 INTELLECTUAL PROPERTY.
(a) Attached hereto as Schedule 4.15 is an accurate list and
description of all patents, patent applications, patent licenses, copyrights,
copyright licenses, trademarks, trademark applications and trademark licenses,
and other trade secrets, know-how or intellectual property rights (the
"Intellectual Property") owned, held, utilized or applied for by Seller in
connection with the
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Business, other than the "SCC" and "SCC Communications" trademarks, and other
than as set forth on Schedule 1.1(e). Except as set forth on Schedule 4.15
hereto:
(i) Seller owns all right, title and interest in and to all
Intellectual Property used in or necessary for, and as to Third Party Technology
(as defined below) has sufficient rights necessary for, the conduct of the
Business as presently conducted, or as planned to be conducted, including,
without limitation, all Intellectual Property developed or discovered in
connection with or contained in or related to the CAD/RMS Products (as defined
below), free and clear of all liens, mortgages, charges, pledges, claims and
encumbrances (including without limitation any distribution rights and royalty
rights) (including Third Party Technology, the "Seller Rights").
(ii) Solely as to Third Party Technology (as defined below),
the representations in Section 4.15 are limited to Seller's interest pursuant to
the Third Party Licenses (as defined below), all of which are valid and
enforceable and in full force and effect. "Third Party Licenses" means all
licenses and other agreements with third parties relating to any Intellectual
Property or products that Seller is licensed or otherwise authorized by such
third parties to use, market, distribute or incorporate into products marketed
and distributed by Seller in connection with the Business. "Third Party
Technology" means all Intellectual Property and products owned by third parties
and licensed pursuant to Third Party Licenses. Notwithstanding the foregoing,
Third Party Technology shall not include any "off-the-shelf" software program if
the use of such program by Seller is in accordance with any applicable shrink
wrap license and no portion of such program is distributed or licensed by Seller
to third parties or incorporated into products distributed by Seller or licensed
to third parties.
(iii) For purposes of this Agreement, the term "CAD/RMS
Products" shall mean the computer assisted dispatch and records management
systems and related products developed by the business, including any
Intellectual Property related thereto.
(iv) All of the Intellectual Property which is in the public
domain and is used in or necessary for the conduct of Seller's business as
presently conducted or contemplated is listed on Schedule 4.15, attached hereto.
(b) Except as set forth in Schedule 4.15, Seller has the
exclusive right to use, sell, license and dispose of, and has the right to bring
actions for infringement of, all Seller Rights, other than Third Party
Technology.
(c) Schedule 4.15 contains an accurate and complete description
of: (i) all patents, trademarks, servicemarks (with separate listings of
registered and unregistered trademarks and servicemarks), tradenames, and
registered copyrights in or related to the Seller Rights, all applications and
registration statements therefor, and a list of all licenses and other
agreements relating thereto.
(d) All of Seller's copyright registrations related to any and
all of Seller's copyrights are valid and in full force and effect. If the
copyright has not been registered, then it is not part of the foregoing
representation. Seller has valid copyrights in all material copyrightable
material whether or not registered with the U.S. copyright office, including all
copyrights in all
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CAD/RMS Products containing material copyrightable material. Consummation of the
transactions contemplated hereby will not alter or impair the validity of any
copyrights or copyright registrations.
(e) No claims have been asserted against Seller by any person
challenging Seller's use or distribution (including manufacture, marketing
license, or sale) of any Seller Right or products utilized by Seller (including,
without limitation, the CAD/RMS Products and Third Party Technology) or
challenging or questioning the validity or effectiveness of any license or
agreement relating thereto (including, without limitation, the Third Party
Licenses). There is no valid basis for any claim of the type specified in this
Section 4.15(e).
(f) The execution, delivery and performance of this Agreement and
the consummation of the Merger and the transactions contemplated hereby and by
the other Transaction Documents will not (i) breach, violate or conflict with
any instrument, agreement or other right governing any Seller Right or portion
thereof, (ii) cause the forfeiture or termination, or give rise to a right of
forfeiture or termination, of any Seller Right or portion thereof, (iii) in any
way impair the right of Seller to use (including distribute, manufacture,
marketing, license, sale or other disposition) of any Seller Right or portion
thereof, or (iv) give rise to any right to bring any action for infringement of,
any Seller Right or any portion thereof.
(g) Except as set forth on Schedule 4.15, there are no royalties,
honoraria, fees or other payments that would be payable by Seller to any person
by reason of the ownership, use, license, sale, distribution, or disposition of
any Seller Right, other than sales commissions that would be payable in the
ordinary course of business
(h) No Seller Right and no use by Seller of any Seller Right in
its prior, current or contemplated business (including distribution,
manufacture, marketing, license or sale), violates any rights of any third
party, including (i) infringement of or misappropriation of Intellectual
Property, (ii) unfair competition, (iii) defamation, (iv) contractual rights, or
(v) rights of privacy or publicity. Solely with respect to claims of
infringement of a third party patent or unregistered trademark or infringement
of Third Party Technology, the foregoing representations in this Section are
made to the best knowledge of Seller.
(i) To the best knowledge of Seller, no third party is violating,
infringing, or misappropriating any Seller Right or contract of Seller.
(j) Seller is not in default under or in breach or violation of,
nor, is there, to the best of Seller's knowledge, any valid basis for any claim
of default by Seller under, or breach or violation by Seller of, any contract,
commitment or restriction relating to any Seller Right, including any Third
Party License (each, an "Intellectual Property Contract"). No other party is in
default under or in breach or violation of, nor, to the best of Seller's
knowledge, is there any valid basis for any claim of default by any other party
under or any breach or violation by any other party of, any Intellectual
Property Contract. Each Intellectual Property Contract is valid, binding, in
full force and effect, and enforceable by Seller in accordance with its terms.
To the best knowledge of Seller, no party to any Intellectual Property Contract
intends to cancel, withdraw, modify or amend such contract.
(k) No shareholder or employee of Seller, nor any of their
respective affiliates, has any right, title or interest in or to any Seller
Right, other than rights pertaining to Third
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Party Technology obtained from the third party licensor, and other than a
nonexclusive right to use CAD/RMS Products pursuant to Seller's standard
end-user license terms.
(l) Except as set forth in Schedule 4.15: (i) no third party
(including any OEM or site license customer) has any right to manufacture,
reproduce, distribute, sell, sublicense, market or exploit any of the Seller
Rights or any adaptations, translations, or derivative works based on the Seller
Rights, or any portion thereof, other than rights pertaining to Third Party
Technology obtained from the third party licensor; (ii) Seller has no
agreements, contracts or commitments that provide for the manufacture,
reproduction, distribution, sale, sublicensing, marketing, development,
exploitation, or supply by Seller of any Seller Right or any adaptation,
translation, or derivative work based on the Seller Rights, or any portion
thereof or otherwise material to the continued business of Seller; (iii) Seller
has not granted to any third party any exclusive rights of any kind with respect
to any of the Seller Rights, including territorial exclusivity or exclusivity
with respect to particular versions, implementations or translations of any of
the Seller Rights; and (iv) Seller has not granted any third party any right to
market any product utilizing any Seller Right under any "private label"
arrangements pursuant to which Seller is not identified as the source of such
goods. Each document or instrument identified pursuant to this Section is listed
in Schedule 4.15 and true and correct copies of such documents or instruments
have been furnished to Buyer. Except with respect to the rights of third parties
to the Third Party Technology, no third party has any right to manufacture,
reproduce, distribute, sublicense, market or exploit any works or materials of
which any of the Seller Rights are a derivative work.
(m) Each CAD/RMS Product: (i) substantially complies with all
specifications set forth therefor in any contract, agreement, advertisement or
other promotional material for such products and with all other warranty
requirements, other than bugs or fixes required or expected in the ordinary
course of business as historically experienced in the Business; (ii) has been
created in a professional manner considering its present stage of development;
and (iii) can be recreated from its associated source code without undue burden.
(n) All designs, drawings, specifications, source code, object
code, documentation, flow charts and diagrams incorporating, embodying or
reflecting any Seller Rights, other than Third Party Technology, at any stage of
their development were written, developed and created solely and exclusively by
employees of Seller without the assistance of any third party or entity.
(o) Seller has not knowingly altered its data, or any Seller
Rights, in a manner that may damage data, whether stored in electronic, optical,
or magnetic or other form.
(p) Seller has furnished Buyer with true and accurate copies of
all end user documentation relating to the use, maintenance or operation of each
CAD/RMS Product.
(q) Seller has not disclosed or otherwise dealt with any aspect
of any Seller Rights, other than Third Party Technology, that would constitute a
trade secret if not injected into the public domain or if treated as secret, in
such a manner as to cause such aspect not to constitute a trade secret.
(r) No employee of Seller is in violation of any term of any
employment contract, patent disclosure agreement or any other contract or
agreement relating to the relationship
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of any such employee with Seller or, to Seller's best knowledge, any other party
because of the nature of the business conducted by Seller or proposed to be
conducted by Seller. Neither the execution or delivery of any of the foregoing
agreements, nor the carrying on of Seller's business as employees by such
persons, nor the conduct of Seller's business as currently anticipated, will
conflict with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract, covenant or instrument under which any
of such persons is obligated; provided that, solely as the foregoing
representation relates to any agreement between an employee and any party other
than Seller, such representation is limited to Seller's best knowledge.
(s) No product liability or warranty claims have been
communicated to or threatened against Seller nor, to the best of Seller's
knowledge, is there any specific situation, set of facts or occurrence that
provides a basis for such claim.
(t) Each employee or contractor of Seller at any time engaged in
the Business has executed and delivered to the Seller a proprietary information
and invention assignment agreement in the form provided to the Buyer.
4.16 OPERATIONAL RESTRICTIONS. Neither the Seller nor Subsidiary is a
party to any undisclosed agreement or instrument or subject to any undisclosed
charter or other corporate restriction or any undisclosed judgment, order, writ,
injunction, decree, or order, which materially adversely affects, or in the
future could adversely affect, the Business, or any of the Purchased Assets or
the ability of Seller to transfer the Purchased Assets to Buyer pursuant to the
terms of this Agreement. The Seller does not know knows of any facts,
circumstances or events which result, or with the passage of time may result, in
any material adverse change in the condition (financial or other), operating
results, business or prospects of the Business or which might adversely affect
any of the Purchased Assets.
4.17 ILLEGAL OR IMPROPER PAYMENTS. To the best knowledge of the
Seller, neither Seller, Subsidiary nor any of their respective directors,
officers or employees have, in connection with the operation of the Business:
(i) made any illegal political contribution from assets; (ii) been involved in
the disbursement or receipt of corporate funds outside normal internal control
systems of accountability; (iii) made or received payments, whether direct or
indirect, to or from government officials, employees or agents for purposes
other than the satisfaction of lawful obligations, or been involved in any
transaction that has or had as its intended effect the transfer of funds or
assets of Seller or Subsidiary other than for the satisfaction of lawful
obligations of Seller or Subsidiary; or (iv) been involved in the willfully
inaccurate recording of payments and receipts on the books of Seller or
Subsidiary or any other matter of a similar nature involving disbursements of
funds or assets, and they are not aware of any material inaccurate recording of
any payment or receipt on the books of Seller or Subsidiary.
4.18 TITLE TO PURCHASED STOCK. Seller has, and at the Closing Seller
will convey and transfer to Buyer, good, complete and marketable title to all of
the Purchased Stock, free and clear of all mortgages, liens, security interests,
encumbrances, pledges, leases, equities, claims, charges, restrictions,
conditions, conditional sale contracts and any other adverse interests. There
are no outstanding options or warrants to purchase, nor any securities
convertible or exercisable into, shares of capital stock of Subsidiary, nor are
there any agreements, commitments or understandings, oral or written, providing
for the grant of, subscriptions, options or other rights to purchase or
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receive, or obligating Subsidiary to issue, sell or otherwise transfer or to
repurchase or redeem, any shares of capital stock of Subsidiary.
4.19 BULK SALE NOTICES. Seller represents and warrants that the
Purchased Assets will bet transferred to the Buyer free and clear of any
encumbrances or transferee liability that may be imposed by the Bulk Sales Law
or such similar laws.
4.20 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Seller contained herein and the materials contained in the
Schedules attached hereto do not contain any statement of a material fact that
was untrue when made nor, to the best knowledge of Seller, do they omit any
material fact necessary to make the information contained therein not
misleading. For purposes of this Section 4, wherever there is a reference to
"knowledge" or "best knowledge" of Seller, Seller will be charged with knowledge
of facts, circumstances, conditions, occurrences and events known to any of the
individuals named on Schedule 4.20 attached hereto. Information in any one
Schedule delivered pursuant hereto need not be repeated in any other Schedule;
provided, that an appropriate specific cross-reference is made in the other
Schedule to such information contained elsewhere in the Schedules.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to the Seller, as of the date hereof and again as of the Closing Date,
as follows:
5.1 ORGANIZATION AND RELATED MATTERS. a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the requisite corporate power and authority to carry on its
business as now being conducted and to execute and deliver Agreement and the
Related Agreements and each of the agreements referenced herein to which Buyer
is a party.
5.2 NECESSARY ACTIONS; BINDING EFFECT. Prior to the Closing Date,
Buyer will have taken all corporate action necessary to authorize the execution
and delivery of, and the performance of its obligations under, this Agreement
and the Related Agreements to which a party. This Agreement and the
Related Agreements constitutes, and upon their execution and delivery each of
the Related Agreements will constitute, valid obligations of Buyer that are
legally binding on and enforceable against Buyer in accordance with their
respective terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights, and (ii) general principles of equity relating to the availability of
equitable remedies.
5.3 NO CONFLICTS. Neither the execution and delivery, nor the
performance of, this Agreement or the Related Agreements by Buyer will result in
any of the following: (i) a default or an event that, with notice or lapse of
time, or both, would constitute a default, breach or violation of the Articles
of Incorporation or Bylaws of Buyer; or (ii) a violation or breach of any writ,
injunction or decree of any court or governmental instrumentality to which Buyer
is a party or by which any of its properties are bound or a violation of any
laws or regulations applicable to Buyer, where the violation would have a
material adverse effect on Buyer.
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6. CONDUCT OF BUSINESS PENDING THE CLOSING. Between the date hereof and
the Closing, and except as otherwise consented to by Buyer in writing, or
permitted pursuant to Section 7 below, Seller covenants as follows:
6.1 FULL ACCESS. Subject to the provisions of Section 14 below,
Seller shall afford to Buyer, its counsel, accountants, lenders and investors
(and their respective accounting and legal and other authorized
representatives), upon reasonable prior notice by Buyer of the identity of such
representatives, full access during normal business hours to all properties,
personnel and information of Seller involved with the Business, including,
without limitation, financial statements and records, leases and agreements and
tax returns of Seller, to determine that the purchase of the Purchased Assets
can be consummated in accordance with applicable statutes and regulations, to
verify the accuracy of the representations and warranties made herein and to
fully investigate the affairs of the Business as fully as Buyer may desire.
Seller shall furnish to Buyer and its representatives such information and data
concerning the Purchased Assets and the operation of Business as Buyer or any
such representative shall reasonably request.
6.2 CONDUCT OF SELLER'S BUSINESS. Unless Buyer gives its prior
written consent for actions to be taken to the contrary, from the date of
execution of this Agreement and until the Closing or termination of this
Agreement, whichever first occurs, Seller shall:
(a) OPERATION OF BUSINESS. Operate and conduct the Business
diligently and only in the ordinary course of business consistent with past
practices. Seller shall not: (i) incur any new indebtedness on behalf of the
Business; (ii) increase the compensation or benefits of any employee,
independent contractor or agent of the Business, or adopt or amend any
commission plan or arrangement or any employee benefit plan or arrangement of
any type, affecting any employee, independent contractor or agent of the
Business, which results or may result in an increase in costs or liabilities
thereunder above those existing on the date hereof; or (iii) lend or advance any
sum or extend credit to any employee, director or shareholder of the Business or
any of their respective affiliates;
(b) VENDORS. Use commercially reasonable efforts to retain the
services of all vendors, suppliers, manufacturers, agents and consultants used
in the Business, commensurate with the requirements of the Business;
(c) INSURANCE. Maintain all insurance polices set forth in
Schedule 4.9, consistent with past practices and, unless comparable insurance is
substituted therefor, not take any action to terminate or modify, nor permit the
lapse or termination of, the present insurance policies and coverages of Seller
as set forth in Schedule 4.9 hereto;
(d) LAWSUITS, CLAIMS. Promptly notify Buyer of, and diligently
defend against, all lawsuits, claims, proceedings or investigations that are, or
which any officers of the Seller, as a result of events or circumstances
actually known to them, has reason to believe may be, threatened, brought,
asserted or commenced against Seller or any of its shareholders, officers or
directors, involving or affecting in any way the Business, any of the Purchased
Assets or the transactions contemplated hereby; and not settle any action or
proceeding which would materially adversely affect the Business or any of the
Purchased Assets or the consummation of the transactions contemplated hereby;
and not release, settle, compromise or relinquish any claims, causes of action
or rights of the Business involving more than $5,000 individually or $15,000 in
the aggregate which
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Seller may have against any other persons;
(e) CERTAIN CHANGES. Not sell or otherwise dispose, or enter into
any agreement for the sale, of any of the Purchased Assets, except for sales of
inventory and obsolete equipment in the ordinary course of business and
consistent with past practices, and not permit or allow, or enter into any
agreements providing for or permitting, any of the Purchased Assets to be
subjected to any mortgage, security interest, pledge, option, lien, charge or
encumbrance ;
(f) CONDITION OF ASSETS. Maintain in good working order and
condition, ordinary wear and tear excepted, and in compliance in all material
respects with all applicable laws and regulations, all of the Purchased Assets;
(g) AGREEMENTS AND COMMITMENTS. Observe and perform, in all
material respects, all terms, conditions, covenants and obligations contained in
all existing agreements between Seller and third parties the violation of which
would have, individually or in the aggregate, a material adverse effect on the
Business or any of the Purchased Assets; not take any action which would cause a
breach or violation of or default under any material agreement, lease, contract,
or other written instrument, commitment or arrangement, or under any License or
Permit, judgment, writ or order, applicable to or affecting the Business or any
of the Purchased Assets, and promptly notify Buyer in writing of the occurrence
of any such breach or default; and not enter into any transaction with any
shareholder, director or officer or any person or entity related to or
affiliated with any Selling Party;
(h) CONSENTS; COMPLIANCE WITH LAWS. Use its best efforts to
obtain and maintain all consents, assignments or approvals of, and Licenses and
Permits granted by, governmental authorities and agencies and other third
parties, in form and substance reasonably satisfactory to Buyer, the absence or
loss of which would have a material adverse effect on the Business or any of the
Purchased Assets either prior to or following the Closing; and not take any
action which would result in a violation of or the noncompliance with any laws,
regulations, consents or approvals applicable to the Business or any of the
Purchased Assets, where such violation or noncompliance could have a material
adverse effect on the Business or any of the Purchased Assets, or result in the
incurrence of any material liability against the Business or any of the
Purchased Assets or in the revocation, modification or loss of any License or
Permit or other right needed for the operation of the Business as presently
conducted by Seller;
(i) TAXES. Pay all federal, state, local and foreign taxes
assessed against Seller, the Business or any of the Purchased Assets, when due,
and in any event prior to the imposition or assessment of any liens against the
Business or any of the Purchased Assets, unless Seller is contesting such taxes
or the imposition of any such liens in good faith, it being understood that
not assuming any liability for such taxes and that Seller shall cause
any such liens to be removed prior to the Closing;
(j) CORPORATE MATTERS. No change or amendment shall be made in
the Articles of Incorporation, Bylaws or other governing instruments of Seller
or in the ownership of the outstanding capital stock or other equity interests
of Seller in a manner which could interfere with the consummation of the
transactions contemplated by this Agreement, nor shall Seller terminate or
modify, or take any actions which it has reason to believe would result in
termination or
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modification of, any of the material agreements, contracts, leases, licenses or
rights included in the Purchased Assets;
(k) LIABILITIES AND EXPENSES. Not create or incur (whether as
principal, surety or otherwise) any actual or contingent liabilities or expenses
of the Business other than liabilities and expenses incurred in the ordinary
course of business consistent with past practices.
6.3 FURNISHING OF CERTAIN INFORMATION. If requested by Buyer, Seller
(i) shall make, or cause to be made, available to Buyer true, correct and
complete copies of the historical financial statements of the Business for any
periods prior to the Closing Date and such other information concerning Seller
or the Business as Buyer may request; (ii) shall permit Buyer's independent
public accountants to have access to the books and records of the Business so
that any unaudited historical financial statements and other financial
information of the Business and Subsidiary, if any, can be reviewed or audited;
and (iii) shall permit such financial statements and other information
concerning the Business to be disclosed in any public filing by Buyer under or
pursuant to the Securities Act or the Securities Exchange Act of 1934, as
amended ("Securities Filings"). In addition, the Seller shall use commercially
reasonable efforts to cause Seller's independent public accountants to provide
such information and assistance, including the execution and delivery of
opinions and consents with respect to the historical financial statements of the
Business, as may be required by Buyer for inclusion in any such Securities
Filings, and the reasonable out-of-pocket expenses of the Seller and such
accountants in connection therewith shall be paid by Buyer, provided the
incurring of such expenses has been approved in advance and in writing by Buyer.
Disclosure of such financial statements and information furnished hereunder in
any Securities Filing shall not constitute a breach or violation of the
confidentiality provisions of Section 14 of this Agreement.
7. OBLIGATIONS PENDING AND FOLLOWING THE CLOSING.
7.1 TERMINATION OF SECURITY INTERESTS AND LIENS. At no cost or
expense to Buyer, Seller shall cause, as of the Closing Date, all security
interests, liens, claims, encumbrances and adverse interests to which any of the
Purchased Assets are subject (other than those securing any of the Assumed
Obligations) to be terminated and all indebtedness or obligations secured
thereby (other than the Assumed Obligations) to be paid.
7.2 CONSENTS. Except as may otherwise be agreed by the parties, each
party to this Agreement shall use commercially reasonable efforts to obtain or
cause to be obtained at the earliest practicable date, all consents, approvals
and Licenses and Permits, if any, which such party requires to permit it to
consummate the transactions contemplated hereby without violating any agreement,
contract, instrument or applicable law or regulation or any License or Permit to
which it is a party or to which it or its assets are subject. The parties hereto
shall cooperate with each other in their efforts to obtain all such consents,
approvals and Licenses and Permits.
7.3 FURTHER ASSURANCES. Each party hereto shall execute and deliver,
both before and after the Closing, such instruments and take such other actions
as the other party or parties, as the case may be, may reasonably request in
order to carry out the intent of this Agreement or to better evidence or
effectuate the transactions contemplated herein.
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7.4 NOTICE OF BREACH. Each party to this Agreement will notify the
other parties of the occurrence of any event, or the failure of any event to
occur, that results in or constitutes a breach by it of any representation or
warranty or a failure by it to comply with or fulfill any covenant, condition or
agreement contained herein, within two (2) business days after learning of such
breach or failure.
7.5 EXCLUSIVITY/OTHER OFFERS. Unless and until this Agreement has
been terminated in accordance with Section 12 below, the Seller or its
respective representatives, agents, officers, directors, shareholders, partners
or employees, will not solicit or accept offers from, provide information or
assistance to, or negotiate or enter into any agreement or understanding
(written or oral) with, any other person or entity regarding (i) the sale,
merger or reorganization of Seller, where such transaction does not contemplate
the earlier consummation of the transactions set forth in this Agreement; (ii)
the sale or other disposition of, or the granting of any security interest, lien
or encumbrance on, any of the Purchased Assets; or (iii) any other transaction
which would cause or result in any change, other than of an immaterial nature,
in or adversely affect the Business or any of the Purchased Assets or otherwise
interfere with the consummation of the transactions contemplated herein.
7.6 EMPLOYEES.
(a) Seller hereby authorizes Buyer to offer employment to any or
all of its employees associated with the Business, conditioned on the
consummation of the sale of the Purchased Assets pursuant hereto; and waives any
rights Seller may have to prohibit such employees from being employed by Buyer;
(b) Seller will use its best efforts to retain all current
employees of the CAD/RMS division during the transition period, including
resolution of stock option issues;
(c) Seller will not solicit any current employees of the CAD/RMS
division who are offered employment by Buyer for a period of one year after the
Closing Date, without the prior written consent of Buyer; and
(d) Buyer shall offer employment to each of the employees of the
Business listed on Schedule 7.6 hereto.
7.7 TAXES. Seller shall pay all taxes (other than income taxes of
Buyer) of any kind or nature arising from (i) the conduct of Seller's business
or operations, whether prior to or after the Closing Date, and (ii) the
consummation of the transactions contemplated hereby, including, without
limitation, all sales, use or similar taxes, if any, that may arise from or be
assessed by reason of the sale of the Purchased Assets by Seller to Buyer. If
any taxes required under this Section 7.7 to be borne by Seller are assessed
against Buyer, Buyer shall notify Seller in writing promptly thereafter and
Seller shall be entitled to contest, in good faith, such assessment or charge.
Notwithstanding the foregoing, Buyer may, but shall not be obligated to, pay any
such taxes assessed against it but payable by Seller pursuant hereto, if Buyer's
failure to do so, in the reasonable judgment of Buyer, could result in the
imposition of a lien or attachment on any of the Purchased Assets or any other
assets of Buyer or would constitute a violation of any agreement to which Buyer
is subject, or if Seller fails to contest such assessment or charge in good
faith. In the event Buyer
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pays any taxes which pursuant hereto are required to be borne by Seller, Buyer
shall be entitled to reimbursement thereof from Seller, on demand.
7.8 SCHEDULE OF ACCOUNTS RECEIVABLE. At the Closing, Seller shall
deliver or cause to be delivered to Buyer a detailed schedule of all unpaid
accounts receivable of Seller as of the close of business on June 30, 1997. This
schedule shall set forth all of the accounts receivable of Seller outstanding as
of the end of such day, together with an aging thereof setting forth the amounts
due in respect of such receivables in 30-day aging categories up to 180 days.
The Seller represents and warrants that the schedule to be delivered pursuant to
this Section 7.8 shall be a true, correct and accurate representation of the
facts set forth in such schedule.
7.9 ACCOUNTS AND NOTES RECEIVABLE COLLECTIONS. In the event the
Seller receives any payment after the Closing of or in respect of any accounts
or notes receivable included in the Purchased Assets, such Selling Party shall
promptly deliver such payment to Buyer, after subtracting from the amount of
such payment any amounts paid by Seller on behalf of Buyer in payment of
accounts payable of the Business following July 1, 1997. The Seller further
agrees to cooperate with Buyer in notifying account obligors of the transfer of
such accounts and notes receivable and instructing them to make all payments in
respect thereof following the Closing to Buyer.
7.10 SUBLEASE OF SCC FACILITY. SCC will permit the Buyer to conduct
the Business from the existing premises occupied by the Business (the "Business
Premises") through October 31, 1997 at a rental rate not to exceed $20,000 per
month (prorated for partial months), plus expenses such as phone charges and
other similar items, which shall be billed separately by Seller, without
xxxx-up. Buyer may cause employees to vacate all or any portion of the Business
Premises at any time and in one or more stages, and its rental obligation shall
cease upon its full vacation of the Business premises.
7.11 MAPPING SERVICES AND SOFTWARE LICENSE AGREEMENT. As soon as
practicable following the Closing, Buyer and Seller shall negotiate in good
faith and shall enter into a Mapping Services and Software License Agreement,
which shall reflect the terms set forth in EXHIBIT D, among others (the "Service
Agreement").
7.12 9-1-1/CAD INTEGRATION AGREEMENT. As soon as practicable
following the Closing, Buyer and Seller shall negotiate in good faith and shall
enter into a 9-1-1 XA/CAD Integration Agreement, which shall reflect the terms
set forth in EXHIBIT E, among others (the "Integration Agreement").
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of the
representations and warranties set forth in this Agreement or in any
certificates delivered pursuant hereto, as the same have been modified by the
information contained in the Schedules to this Agreement delivered on the date
hereof by Seller to Buyer, or by Buyer to Seller, and all covenants which by
their terms require performance or compliance following the Closing, shall
remain in full force and effect and shall survive the Closing until (i) in the
case of the representations and warranties, the expiration of the periods
following the Closing Date applicable to such representations and warranties as
set forth in Section 13(d) hereof, regardless of any investigation or
verification by any party hereto or by anyone or on behalf of any party hereto,
and (ii) in the case of any such covenants, until they have been fully performed
and no further performance is required
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with respect thereto pursuant to this Agreement, unless the party for whose
benefit such covenant, representation or warranty was made waives the same in
writing.
9. CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction, or the waiver in writing by Buyer, at or before the Closing,
of all the conditions set out below in this Section 9.
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES/COMPLIANCE WITH
COVENANTS. All of the representations and warranties of Seller contained in this
Agreement and the Schedules hereto, were true and correct when made and remain
true and correct as of the Closing Date. The Seller shall, in all material
respects, have performed, satisfied and complied with all covenants, agreements
and conditions required by this Agreement to have been performed or complied
with by any or all of them on or before the Closing Date.
9.2 NO MATERIAL ADVERSE CHANGES. Subsequent to June 30, 1997 there
shall not have occurred nor shall there exist (i) any material adverse change in
the financial condition, properties, assets, business or operating results or
prospects of the Business from that reflected in the June 30, 1997 Balance
Sheet, except for changes disclosed in this Agreement or in the Schedules hereto
delivered with this Agreement on the date hereof; (ii) any material breach or
default by any party thereto of any of the Assumed Contracts or Assumed
Liabilities or any other material contracts or agreements relating to or
affecting any of the Purchased Assets or the Business, the existence of which
breach or default is not disclosed in this Agreement or in the Schedules
delivered with this Agreement on the date hereof; (iii) any damage or loss,
whether or not insured, to any of the Purchased Assets; or (iv) any other event
or condition or state of facts of any character which could reasonably be
expected to materially adversely affect the Business or any of the Purchased
Assets.
9.3 ABSENCE OF LITIGATION. No action, suit, investigation or other
proceeding before any court or by any governmental body or other authority,
whether brought against the Seller or Buyer, shall have been instituted or
threatened, seeking to prevent the consummation of the transactions contemplated
by this Agreement, and no such litigation shall have been threatened nor shall
there be in effect any order restraining or prohibiting the consummation of the
transactions contemplated by this Agreement nor any proceedings pending with
respect thereto. There shall be no pending or threatened litigation, or asserted
or unasserted claims, assessments, or other loss contingencies, materially and
adversely affecting the Business or any of the Purchased Assets, other than as
disclosed in the Schedules delivered pursuant hereto as of the date of this
Agreement.
9.4 CERTIFICATES. Buyer shall have received the following:
(a) Certificates of Good Standing, as of a recent date, from the
Delaware and Colorado Secretaries of State , indicating that Seller is not
delinquent in the payment of income, franchise, sales or other state taxes or
the filing of any tax returns;
(b) A certificate signed by Seller, dated as of the Closing Date,
certifying that (i) all representations and warranties of the Seller were true
and correct in all material respects when made and remain true and correct in
all material respects as of the Closing Date; (ii) all of the respective
covenants, agreements, obligations and conditions of the Seller required to have
been performed as of or prior to the Closing have been fully performed and
complied with; and (iii) all of
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the conditions to Buyer's obligations under this Agreement required to be
satisfied by the Seller by the Closing Date have been satisfied and fulfilled;
and
(c) A certificate signed by the Secretary of Seller, and dated as
of the Closing Date, as to the incumbency of each officer of Seller executing
this Agreement and the other agreements being delivered pursuant hereto, and
certifying the effectiveness, accuracy and completeness of the copies attached
to such certificate of resolutions duly adopted by Seller's Board of Directors
and all of its shareholders, as the case may be, authorizing the execution and
delivery of this Agreement by Seller, and the performance by Seller of its
obligations hereunder and the consummation of the transactions contemplated
hereby.
9.5 UCC TERMINATION STATEMENTS. Seller shall have delivered or caused
to be delivered to Buyer, at or before the Closing, UCC Termination Statements
and such other releases as Buyer may reasonably request, duly completed and
executed by each person having any security interest, lien, claim or other
encumbrances or adverse interests in or on any of the Purchased Assets which are
required to be terminated pursuant to Section 7.1 above, in order to evidence
the termination thereof.
9.6 LEGAL OPINION. On the Closing Date, Seller shall have delivered
or caused to be delivered to Buyer a legal opinion of Ireland, Xxxxxxxxx, Xxxxx
& Xxxxxx, P.C., counsel to Seller, in the form of EXHIBIT F hereto.
9.7 OTHER CONSENTS AND APPROVALS. Receipt of all consents and
approvals required for the consummation of the transactions contemplated by this
Agreement and to permit Buyer in writing to acquire all of the Purchased Assets
pursuant hereto, without thereby violating any laws, government regulations or
agreements to which subject or is a party, in form and substance
acceptable to Buyer.
9.8 XXXX OF SALE. Seller shall have executed and delivered to Buyer a
Xxxx of Sale, in the form attached hereto as EXHIBIT A, transferring title to
the Purchased Assets to Buyer.
9.9 ASSIGNMENT AND ASSUMPTION AGREEMENT. Seller shall have executed
and delivered to Buyer an Assignment and Assumption Agreement in the form of
EXHIBIT B hereto with Buyer (the "Assignment Agreement"), pursuant to which
Seller shall assign, and Buyer shall assume, all of the Assumed Obligations.
9.10 OTHER DOCUMENTS. Seller shall have delivered to Buyer all
instruments, consents, deeds, assignments and other documents called for in this
Agreement, including, without limitation, assignments and certificates of title
for any and all vehicles included in the Purchased Assets, properly executed and
acknowledged for transfer, and such other documents and instruments as Buyer or
its counsel reasonably requests to better evidence or effectuate the
transactions contemplated hereby.
9.11 NON-COMPETITION AGREEMENT. The Seller shall have executed and
delivered to the Buyer a Non-Competition Agreement substantially in the form
attached hereto as EXHIBIT C.
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10. CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligations of Seller
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction, or the waiver by Seller, at or before the Closing, of each
of the following conditions:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES/COMPLIANCE WITH
COVENANTS. All of the representations and warranties of Buyer contained in this
Agreement and in the Schedules hereto were true and correct when made and remain
true and correct as of the Closing Date. Buyer shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by them
on or prior to the Closing.
10.2 ABSENCE OF LITIGATION. No action, suit, investigation or other
proceeding before any court or by any governmental body or other authority,
whether brought against the Seller or Buyer, shall have been instituted or
threatened, seeking to prevent the consummation of the transactions contemplated
by this Agreement, and no such litigation shall have been threatened nor shall
there be in effect any order restraining or prohibiting the consummation of the
transactions contemplated by this Agreement nor any proceedings pending with
respect thereto.
10.3 CERTIFICATES. Seller shall have received the following:
(a) Good Standing Certificates of Buyer, as of a recent date,
from the Delaware and California Secretaries of State;
(b) A certificate signed by the President or Chief Financial
Officer of Buyer, dated as of the Closing Date, certifying that (i) all
representations and warranties of Buyer were true and correct when made and
remain, in all material respects, true and correct as of the Closing; (ii) all
of the respective covenants, agreements, obligations and conditions of Buyer
required to have been performed by Buyer as of or prior to the Closing have been
fully performed and complied with; and (iii) all of the conditions to Seller's
obligations under this Agreement and the Related Agreements required to be
satisfied by the Closing Date by Buyer have been satisfied and fulfilled; and
(c) A certificate signed by the Secretary of Buyer, dated as of
the Closing Date, as to the incumbency of each officer of Buyer that has
executed this Agreement or the Related Agreements being delivered pursuant
hereto, and certifying the effectiveness, accuracy and completeness of the
copies attached to such certificate of resolutions duly adopted by the Board of
Directors of Buyer authorizing the execution and delivery of this Agreement and
the performance by Buyer of its obligations hereunder and the consummation of
the transactions contemplated hereby.
10.4 OTHER DOCUMENTS. Buyer shall have delivered to Seller all
instruments, consents, deeds, assignments and other documents called for in this
Agreement and the Related Agreements.
10.5 ASSIGNMENT AND ASSUMPTION AGREEMENT. Buyer shall have executed
and delivered to Seller an Assignment and Assumption Agreement in the form of
EXHIBIT B hereto with Buyer (the "Assignment Agreement"), pursuant to which
Seller shall assign, and Buyer shall assume, all of the Assumed Obligations.
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11. CLOSING.
11.1 TIME, DATE AND PLACE OF CLOSING. The closing of the sale and
purchase of the Purchased Assets contemplated by this Agreement (the "Closing")
shall take place at the offices of Stradling, Yocca, Xxxxxxx & Xxxxx, in Newport
Beach, California at 1:00 P.M., on July 18, 1997, or at such other location or
time or on such other date as the parties may agree to in writing (the "Closing
Date").
11.2 SELLER'S OBLIGATIONS AT CLOSING. Subject to the satisfaction, or
Seller's waiver, of the conditions precedent contained in Section 9 hereof, at
the Closing, the Seller shall deliver, or cause to be delivered to Buyer, the
following documents and instruments, in form and substance satisfactory to Buyer
and its counsel:
(a) Each of the certificates, opinions and other documents and
instruments required to be delivered by the Seller to satisfy the conditions set
forth in Section 10 above;
(b) The UCC Termination Statements, and such instruments and
other documents as Buyer may request, from all persons holding security
interests, liens, claims or encumbrances or any other adverse interests on any
of the Purchased Assets, terminating and discharging all of such security
interests, liens, claims, encumbrances and adverse interests;
(c) All checks and other negotiable instruments in the possession
of Seller evidencing or constituting payment of any accounts or notes receivable
included in the Purchased Assets, endorsed for payment to Buyer; and
(d) Such other documents and instruments as Buyer or Buyer's
counsel may reasonably request to better evidence or effectuate the transactions
contemplated hereby.
11.3 OBLIGATIONS OF BUYER AT THE CLOSING. Subject to the
satisfaction, or Buyer's written waiver, of the conditions precedent contained
in Section 9 hereof, at the Closing, Buyer shall do the following:
(a) Buyer shall deliver each of the certificates and other
documents and instruments required to be delivered by Buyer to Seller pursuant
to Section 10 above; and
(b) Buyer shall deliver such other documents and instruments as
Seller or Seller's counsel may reasonably request to better evidence or
effectuate the transactions contemplated hereby.
12. TERMINATION.
12.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time, without liability
to the terminating party:
(a) By mutual written consent of Buyer and Seller; or
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(b) By either Buyer or Seller, if the Closing has not occurred by
August ___, 1997; provided, that the party so terminating is not in breach of
any of its material obligations under this Agreement.
12.2 PROCEDURE UPON TERMINATION. In the event of termination of this
Agreement by Buyer or Seller or by both Buyer and Seller pursuant to Section
12.1 hereof, written notice thereof shall forthwith be given to the other party
or parties hereto and the transactions contemplated herein shall be abandoned
without further action by Buyer or the Seller. In addition, if this Agreement is
terminated as provided herein:
(a) Each party will redeliver all documents, workpapers and other
material of any other party relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same;
(b) The confidentiality of all information of a confidential
nature received by any party hereto with respect to the business of any other
party (other than information which is a matter of public knowledge or which has
heretofore been or is hereafter published in any publication for public
distribution or filed as public information with any governmental authority)
shall be maintained in accordance with Section 14 hereof which shall survive
termination of this Agreement; and
(c) Except as hereinabove provided in this Section 12.2, the
respective obligations of the parties hereto under this Agreement shall
terminate; provided, that if any party hereto has breached any of its material
obligations or representations or warranties under this Agreement prior to the
termination of this Agreement, termination of this Agreement shall not release
such party from liability therefor to the other party. For purposes this
Section, the Seller shall be deemed to be a single and the same party.
13. INDEMNIFICATION.
(a) Seller (in the case of indemnification obligations of the
Seller, Seller shall hereinafter be referred to in this Section 13 as the
"Indemnifying Party") hereby agrees that it will indemnify, hold harmless and
defend Buyer and its directors, officers, shareholders, employees, agents and
successors and assigns (in the case of indemnification obligations of Seller,
such persons shall hereinafter be referred to collectively in this Section 13 as
the "Indemnified Parties") from and against any and all Liabilities (as
hereinafter defined) that arise from or are in connection with: (i) any facts,
circumstances or events, the existence or happening of which constitutes a
breach of or inaccuracy in any of the representations or warranties of Seller
contained in this Agreement or in any Exhibits or Schedules hereto or any
certificates or other documents delivered hereunder by or on behalf of Seller;
(ii) any breach or default by Seller of any of its covenants or agreements
contained in this Agreement; and (iii) any legal actions or proceedings that
have arisen or may hereafter arise out of the business or operations of Seller,
whether before or after the Closing, including, without limitation, any of the
pending or threatened legal actions described in Schedule 4.13 hereto; and (iv)
any and all liabilities of Seller which may be asserted by third parties against
Buyer as a result of non-compliance with the Bulk Sales laws of any
jurisdiction. The liability of the Seller to the Indemnified Parties pursuant to
this Section 13(a) shall be limited, in the aggregate, to the Purchase Price.
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(b) Buyer (in the case of indemnification obligations of Buyer,
Buyer shall hereinafter be referred to in this Section 13 as the "Indemnifying
Party") hereby agrees that it will indemnify, hold harmless and defend the
Seller and its directors, officers, shareholders, employees, agents and
successors and assigns (in the case of indemnification obligations of Buyer,
such persons shall hereinafter be referred to collectively in this Section 13 as
the "Indemnified Parties") from and against any and all Liabilities that arise
from or are in connection with: (i) any facts, circumstances or events, the
existence or happening of which constitutes a breach of or inaccuracy in any of
the representations or warranties of Buyer contained in this Agreement or in any
Exhibits or Schedules hereto or any certificates or other documents delivered
hereunder by or on behalf of Buyer; or (ii) any breach or default by Buyer of
any of its covenants or agreements contained in this Agreement, including its
agreement to assume and perform the Assumed Obligations. The liability of the
Buyer to the Indemnified Parties pursuant to this Section 13(b), other than
liability arising out of Buyer's failure to perform the Assumed Obligations
(which shall be limited to the amounts set forth on Schedule 1.3 plus any legal
fees and expenses payable pursuant to subsection (d) below) shall be limited, in
the aggregate, to $100,000.
(c) "Liabilities," as used in this Agreement, shall mean: (i)
demands, claims, actions, suits, and legal or other proceedings brought against
any "Indemnified Party" (as hereinafter defined), and any judgments rendered
therein or settlements thereof, and (ii) all liabilities, damages, losses,
taxes, costs and expenses, including, without limitation, reasonable attorneys'
fees, incurred by any Indemnified Party, whether or not they have arisen from or
were incurred in or as a result of any demand, claim, action, suit, assessment
or other proceeding or any settlement or judgment, and whether sustained before
or after the Closing Date.
(d) No claim for indemnification under this Section 13 may be
made by an Indemnified Party (i) until the aggregate amount of such claims
exceeds $25,000, or (ii) more than eighteen (18) months after the Closing Date;
provided, that any claim by an Indemnified Party for indemnification relating to
any taxes or tax returns or reports may be made at any time within the statute
of limitations relating to such taxes or tax returns or reports. To be
effective, any claim for indemnification under this Section 13 by an Indemnified
Party must be made by a written notice (a "Notice of Claim") to the Indemnifying
Party, given in accordance with the provisions of Section 16 hereof, accompanied
by documentation supporting the claim; provided, however, that if the
Indemnified Party has made such claim prior to such expiration date, such
Indemnified Party shall be entitled to recover the full amount of the
Liabilities incurred by it even if that amount is not finally determined until
after such expiration date. In the event of the assertion, in writing, of a
third-party claim or dispute which, if adversely determined would entitle an
Indemnified Party to indemnification hereunder, the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing. The Indemnifying
Party may elect, by written notice to the Indemnified Party, to assume and
direct, at their sole expense, the defense of any such third-party claim, and
may, at their sole expense, retain counsel in connection therewith, provided
that such counsel is reasonably acceptable to the Indemnified Party. After the
assumption of such defense by the Indemnifying Party with counsel reasonably
acceptable to the Indemnified Party, and for so long as the Indemnifying Party
conduct such defense on a diligent and timely basis, the Indemnifying Party
shall not be responsible for the payment of legal fees incurred thereafter by
the Indemnified Party (who may, however, continue to participate in the defense
thereof with separate counsel); provided, that, the Indemnifying Party shall be
responsible for paying the fees and expenses of one separate counsel for the
Indemnified Party if the Indemnifying Party and the Indemnified Party have
conflicting positions with respect to such third-party claim or dispute or if
the Indemnifying Party, on the one hand, or the
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Indemnified Party, on the other hand, have defenses not available to the other.
If the Indemnifying Party fail to and until the Indemnifying Party undertake the
defense of any such third-party claim or dispute, or if the Indemnifying Party
discontinue the diligent and timely conduct thereof, the Indemnified Party may
undertake such defense and the Indemnifying Party shall be responsible for
reimbursing the Indemnified Party for its legal fees and expenses as and when
incurred by the Indemnified Party. No Indemnifying Party hereto may settle or
compromise any such third-party claim or dispute without the prior written
consent of the Indemnified Parties hereto, which consent shall not be
unreasonably withheld.
(e) Upon receipt of a Notice of Claim, the Indemnifying Party
shall have fifteen (15) calendar days to contest their indemnification
obligation with respect to such claim, or the amount thereof, by written notice
to the Indemnified Party (a "Contest Notice"); provided, however, that if, at
the time a Notice of Claim is submitted to the Indemnifying Party the amount of
the Liability in respect thereof has not yet been determined, such fifteen (15)
day period shall not commence until a further written notice (a "Notice of
Liability") has been sent or delivered by the Indemnified Party to the
Indemnifying Party setting forth the amount of the Liability incurred by the
Indemnified Party that was the subject of the earlier Notice of Claim. Such
Contest Notice shall specify the reasons or bases for the objection of the
Indemnifying Party to the claim, and if the objection relates to the amount of
the Liability asserted, the amount, if any, which the Indemnifying Party believe
is due the Indemnified Party. If no such Contest Notice is given with such
15-day period, the obligation of the Indemnifying Party to pay to the
Indemnified Party the amount of the Liability set forth in the Notice of Claim,
or subsequent Notice of Liability, shall be deemed established and accepted by
the Indemnifying Party. If, on the other hand, the Indemnifying Party contest a
Notice of Claim or Notice of Liability (as the case may be) within such 15-day
period, the Indemnified Party and the Indemnifying Party shall thereafter
attempt in good faith to resolve their dispute by agreement. If they are unable
to so resolve their dispute within the immediately succeeding thirty (30) days,
such dispute shall be resolved by binding arbitration in Los Angeles County,
California, as provided in Section 17(i) below. The award of the arbitrator
shall be final and binding on the parties and may be enforced in any court of
competent jurisdiction. Upon final determination of the amount of the Liability
that is the subject of an indemnification claim (whether such determination is
the result of the Indemnifying Party's acceptance of, or failure to contest, a
Notice of Claim or Notice of Liability, or of a resolution of any dispute with
respect thereto by agreement of the parties or binding arbitration), such amount
shall be payable, in cash by the Indemnifying Party to the Indemnified Party who
have been determined to be entitled thereto within five (5) days of such final
determination of the amount of the Liability due by the Indemnifying Party. Any
amount that becomes due hereunder and is not paid when due shall bear interest
at the maximum legal rate per annum from the date due until paid.
14. CONFIDENTIALITY. Each party acknowledges that it may have access to
various items of proprietary and confidential information of the other in the
course of investigations and negotiations prior to Closing. Except as otherwise
provided in Section 6.3 above, each party agrees that any such confidential
information received from the other party shall be kept confidential and shall
not be used for any purpose other than to facilitate the arrangement of
financing for and the consummation of the transactions contemplated herein.
Confidential information shall include any business or other information which
is specifically marked by the party claiming confidentiality as being
confidential, unless such information (i) is already public knowledge, (ii)
becomes public knowledge through no fault, action or inaction of the receiving
party, or (iii) was known by the receiving party, or any of its directors,
officers, employees, representatives, agents or advisors prior to
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the disclosure of such information by the disclosing party to the receiving
party. No party hereto, nor its respective officers, directors, employees,
accountants, attorneys, or agents shall intentionally disclose the existence or
nature of, or any of the terms and conditions relating to, the transaction
referred to herein, to any third person; provided, however, that such
information may be disclosed in applications or requests required to be made to
obtain any Licenses and Permits, approvals or consents needed to consummate the
transactions contemplated herein or in any Securities Filings.
15. EXPENSES AND BROKER'S FEES.
15.1 EXPENSES/PRORATIONS. Each of the parties shall pay all costs and
expenses incurred or to be incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of its respective obligations
under this Agreement and the Related Agreements.
15.2 BROKER'S FEES. Each party represents and warrants that it has
not utilized the services of, and that it does not and will not have any
liability to, any broker or finder in connection with this Agreement or the
transactions contemplated hereby. The Seller jointly and severally agree to
indemnify and hold harmless Buyer, and Buyer agrees to hold harmless Seller,
against any loss, liability, damage, cost, claim or expense incurred by reason
of any brokerage commission or finder's fee alleged to be payable as a result
of, or in connection with, this Agreement or the transactions contemplated
hereby by reason of any act, omission or statement of the indemnifying party.
16. NOTICES. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered in person or by a nationally recognized courier service, if sent by
facsimile machine ("fax") or mailed, certified, return-receipt requested,
postage prepaid:
If to Printrak to:
Printrak International Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. XxXxxxxxx
With a copy to:
Stradling, Yocca, Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
If to SCC to:
SCC Communications Corp.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Ms. Xxxxx Xxxxxxxx
With a copy to:
Ireland, Xxxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
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Any party hereto may from time to time, by written notice to the other parties,
designate a different address, which shall be substituted for the one specified
above for such party. If any notice or other document is sent by certified or
registered mail, return receipt requested, postage prepaid, properly addressed
as aforementioned, the same shall be deemed served or delivered seventy-two (72)
hours after mailing thereof. If any notice is sent by fax to a party, it will be
deemed to have been delivered on the date the fax thereof is actually received,
provided the original thereof is sent by certified or registered mail, in the
manner set forth above, within twenty-four (24) hours after the fax is sent. If
the notice is delivered in person or is sent by a nationally recognized courier
service, it shall be deemed to have been delivered on the date received by the
recipient of such notice.
17. MISCELLANEOUS.
17.1 BINDING EFFECT. Subject to the terms of Section 17.2 below, this
Agreement shall be binding upon the heirs, executors, representatives,
successors and assigns of the respective parties hereto.
17.2 ASSIGNMENT. No party may assign this Agreement, or assign their
respective rights or delegate their respective duties hereunder, without the
prior written consent of the other party.
17.3 COUNTERPARTS. This Agreement may be executed in facsimile and in
any number of counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
17.4 HEADINGS. The subject headings of the sections and subsections
of this Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
17.5 WAIVERS. Any party to this Agreement may waive any right, breach
or default which it has the right to waive; provided, that such waiver will not
be effective against the waiving party unless it is in writing and specifically
refers to this Agreement and notice thereof is promptly given to all parties in
the manner provided in Section 16 of this Agreement. No waiver will be deemed to
be a waiver of any other matter, whenever occurring and whether identical,
similar or dissimilar to the matter waived.
17.6 ENTIRE AGREEMENT. This Agreement, including the Schedules,
Exhibits and other documents referred to herein which form a part hereof,
embodies the entire agreement and understanding of the parties hereto, and
supersedes all prior or contemporaneous agreements or understandings (whether
written or oral) among the parties, in respect to the subject matter contained
herein, including, without limitation, the Letter Agreement.
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17.7 GOVERNING LAW. This Agreement is deemed to have been made in the
State of California, and its interpretation, its construction and the remedies
for its enforcement or breach are to be applied pursuant to, and in accordance
with, the laws of California for contracts made and to be performed in that
state.
17.8 ARBITRATION. All disputes between the parties hereto shall be
determined solely and exclusively by arbitration under, and in accordance with
the rules then in effect of, the American Arbitration Association, or any
successors thereto ("AAA"), in Los Angeles, California, unless the parties
otherwise agree in writing. The parties shall, in connection with such
arbitration, in addition to any discovery permitted under AAA rules, be
permitted to conduct discovery in accordance with Section 1283.05 of the
California Code of Civil Procedure, the provisions of which are incorporated
herein by this reference. The parties shall jointly select an arbitrator. In the
event the parties fail to agree upon an arbitrator within ten (10) days, then
each party shall select an arbitrator and such arbitrators shall then select a
third arbitrator to serve as the sole arbitrator; provided, that if either
party, in such event, fails to select an arbitrator within seven (7) days, such
arbitrator shall be selected by the AAA upon application of either party.
Judgment upon the award of the agreed upon arbitrator or the so chosen third
arbitrator, as the case may be, shall be binding and shall be entered into by a
court of competent jurisdiction.
17.9 SEVERABILITY. Any provision of this Agreement which is illegal,
invalid or unenforceable shall be ineffective to the extent of such illegality,
invalidity or unenforceability, without affecting in any way the remaining
provisions hereof.
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IN WITNESS WHEREOF, the undersigned corporations have caused this
Agreement to be executed by officers thereunto duly authorized, on the date
first above stated.
SELLER:
SCC COMMUNICATIONS CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Its: CFO
-------------------------------------
BUYER:
PRINTRAK INTERNATIONAL INC., a Delaware
corporation
By: /s/
-------------------------------------
Its: PRESIDENT AND CEO
-------------------------------------
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EXHIBITS
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Assignment and Assumption Agreement
Exhibit C Form of Non-Competition Agreement
Exhibit D Form of Mapping Services and Software License Agreement
Exhibit E Form of Demonstration Site Agreement
Exhibit F Form of Opinion of Counsel for the Seller
Exhibit G Form of Opinion of Counsel for Buyer
SCHEDULES
Schedule 1.1(a) Tangible Assets
Schedule 1.1(b) Personal Property Contracts
Schedule 1.1(d) Intangible Property Rights
Schedule 1.1(g) Computer Software Programs
Schedule 1.2 Assumed Liabilities
Schedule 4.3A Financial Statements
Schedule 4.3B Financial Statement Exceptions
Schedule 4.4 Certain Changes
Schedule 4.5 Exceptions to Title
Schedule 4.5(d) Leases
Schedule 4.6 Contracts and Commitments
Schedule 4.7 Labor and Employment Matters
Schedule 4.8 Conflicts
Schedule 4.9 Insurance Policies
Schedule 4.11(a) Compliance With Laws
Schedule 4.11(b) Permits and Licenses
Schedule 4.12 Litigation
Schedule 4.13 Certain Transactions
Schedule 4.14 Environmental and Safety Matters
Schedule 4.15 Intellectual Property Rights
Schedule 4.16 Operational Restrictions
Schedule 4.18 Individuals with Knowledge of Seller's Operations
Schedule 5.3 Conflicts of Buyer
