EXHIBIT 2.2
SHARE PURCHASE AGREEMENT
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This Share Purchase Agreement (the "Agreement") is entered into by and among the
following:
1. XXX-SEMANTICA (TESTING METHODS) LIMITED,
formally XXX SOFTWARE LIMITED,
a company formed according to the laws
of Ireland registration number 221998,
having its principal office at
00 Xxxxxxx Xxxxxx, Xxxxxx, XXX OHR
(hereinafter "XXX LTD").
2. SOFTWARE IDEAS, INC.,
a company formed according to the
laws of Nevis, a Caribbean Island,
formed on October 16, 1995
having its principal offices at
Xxxxxxx. Xxxxxxxx. 0/000, X-0000 Xxxx
(hereinafter "the Seller).
3. MERCURY INTERACTIVE (ISRAEL) LTD.,
a company formed according to the
laws of the State of Israel, registered
company number 00-00000-0, having
its principal offices at 0 Xxxxxxxxx Xxxxxx,
Xx-Xxxxxx 00000, Xxxxxx
(hereinafter "the Buyer").
WHEREAS XXX LTD. is the legal owner of the rights in and to the know-how and
technology owned, as described in Appendix 1 attached to this Agreement and
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hereinafter to be known as the "Technology"; and
WHEREAS the Seller is the legal owner of 100% of the outstanding ordinary shares
of XXX LTD. (hereinafter the "Shares") and is interested in selling all of the
Shares to the Buyer; and
WHEREAS the Buyer is interested in acquiring the Shares to become the sole legal
owner of XXX LTD. for the main purpose of acquiring the rights to the
"Technology".
NOW THEREFORE, in consideration of the representations, warranties, covenants,
and agreements of the parties hereinafter set forth, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Sale and Purchase of Shares
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1.1 Sale and Purchase of Shares
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(a) The Seller is selling the Shares at the price of US $3,000 dollar
per Share for an aggregate purchase price of US $ 3,000,000,
("the Purchase Price"). The Buyer agrees to such purchase of the
Shares and receiving ownership of XXX LTD. as a going concern,
paying no more than the Purchase Price and subject to the Seller
paying all existing debt, liabilities and obligations of XXX LTD.
and subject to Section 6.7 herein.
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1.2 Escrow of Purchase Price
------------------------
At the Closing, the Buyer shall cause the Purchase Price to be
deposited with Advocate Xxxxxx Xxxxxx, who agrees to act as escrow
agent (the "Escrow Agent"), under an escrow agreement in the form
attached hereto as Appendix 2 (the "Escrow Agreement"). The Escrow
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Agent shall hold and distribute the Purchase Price in accordance with
the provisions of the Escrow Agreement.
1.3 Closing
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(a) Subject to satisfaction or waiver of the conditions precedent to
the obligations of the parties hereto and the execution and
delivery of this Agreement and all other documents required by
this Agreement, the sale and purchase of the Shares shall take
place at the offices of Zysman, Aharoni, Xxxxx, 00 Xxxxxx XxXxxx
Xxxxxx, Xxx-Xxxx 00000, Xxxxxx, on or before January 15, 1996, or
other time and place as the Buyer and Seller designate orally or
in writing (which time and place are designated as the
"Closing").
(b) At the Closing the Seller shall deliver (i) properly executed
transfer xxxx of shares certificates signed by the Seller
representing the Shares the Buyer is purchasing, to be given to
the Escrow Agent, (ii) written technical documentation of the
know-how and source codes of the Technology appearing in Appendix
1 herein, to be given prior to or at the Closing to the Buyer,
(iii) a copy of two respective resolutions of the Seller and XXX
LTD.'s board of directors approving the Agreement and the
transfer of the Shares to the Buyer, (iv) a letter of resignation
of Seller's representatives as directors and managers of XXX LTD.
to be effective upon the Buyer receiving the Shares from the
Escrow Agent, such letter to be held by the Escrow Agent, and (v)
the written opinion of the Seller's and XXX LTD.'s counsel as
described herein to be given to the Buyer at the Closing. Within
ten days from the signing of this Agreement at Closing, the Buyer
shall make the payment of the Purchase Price by bank transfer of
the Purchase Price to the Escrow Agent's bank account as follows:
To the main branch of B.A.W.A.G (BLZ 14000), 0 Xxxxxxxxxxx,
Xxxxxx, Xxxxxxx, account no. 00000-000-000.
(c) Payment shall be made to the Seller by the Buyer in U.S. dollars.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND XXX LTD
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The Seller and XXX LTD. hereby jointly and severally represent and warrant
that the representations and warranties of the Seller and XXX LTD. in this
Section 2 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing (as though made then and as
though the Closing were substituted for the date of this Agreement in this
Section 2), except as set forth in the disclosure schedule delivered by the
Seller and XXX LTD. to the Buyer on the date hereof, a copy of which is
attached as Appendix 3 (hereinafter the "Disclosure Schedule").
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The Disclosure Schedule will specifically identify the relevant
subparagraph contained in Section 2, provided that any information or
disclosure contained in the Disclosure Schedule shall be deemed to qualify
each of the representations and warranties set forth in this Section 2. The
Seller and XXX LTD. jointly and severally represent and warrant as follows:
2.1 Organization, Good Standing and Qualification
---------------------------------------------
The Seller and XXX LTD. are duly organized, validly existing and in
good standing under the laws of Ireland and the Island of Nevis,
respectively, and have all requisite corporate power and authority to
carry on business as now conducted in each of the jurisdictions listed
in the Disclosure Schedule and are not required to be so qualified by
applicable law or regulation in any other jurisdiction based on the
nature of each of their operations or the ownership of each of their
assets. XXX LTD. does not own, directly, or indirectly, any interest
or investment (whether equity or debt) in any corporation,
partnership, business, trust or other entity. XXX LTD.'s Memorandum
and Articles of Association are attached as Appendix 4 herein, and are
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complete and correct.
2.2 Capitalization and Voting Rights
--------------------------------
(a) The authorized capital of XXX LTD. consists immediately prior to
the Closing, of one million Ordinary Shares, par value one Irish
Sterling per share ("Ordinary Shares"), of which one thousand
Ordinary Shares are issued and outstanding and one hundred
percent owned by the Seller.
(b) No additional shares of XXX LTD. have been reserved to be issued,
either directly or indirectly, upon exercise of options, warrants
or other arrangements to employees, officers, directors and
consultants of the Seller and/or XXX LTD., or third parties. The
Seller is the owner, beneficially and of record, of all the
Shares, free and clear of all liens, encumbrances, security
agreements, equities, options, claims, charges and restrictions,
and has full power to transfer the Shares to the Buyer without
obtaining the consent or approval of any other person or
government entity. The Seller will convey to the Buyer good,
valid and marketable title to the Shares.
2.3 Employees; Officers
-------------------
(a) There are no officers or employees of XXX LTD. as of the date of
the Closing. XXX LTD. will be required to pay any compensation,
payments and benefits associated with the termination and/or
transfer of the employees and officers. Any employees and
officers hired in the future from XXX LTD. will be required to
sign confidentiality and non-competition agreements as deemed
necessary by the Buyer.
2.4 Authorization
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All corporate action on the part of the Seller and XXX LTD. directors
and shareholders necessary for the authorization,
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execution and delivery of this Agreement, the performance of all
obligations of the Seller and XXX LTD. hereunder, and the
authorization, issuance and delivery of the Shares has been taken or
will be taken prior to the Closing. This Agreement constitutes a valid
and legally binding obligation of Seller and XXX LTD. enforceable in
accordance with its terms.
2.5 Valid Purchase of Shares
------------------------
The Shares being purchased by the Buyers hereunder, when transferred,
sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be fully paid and nonassessable.
2.6 Litigation
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(a) There are no claims, actions, suits, proceedings or
investigations pending or currently threatened against the Seller
and/or XXX LTD. and/or its directors and officers, which question
the validity of this Agreement or the right to enter into it, or
to consummate the transaction contemplated hereby, or which might
result either individually or in the aggregate in any material
adverse changes in the assets, conditions, affairs or prospects
of XXX LTD., except as described on the Disclosure Schedule, if
any.
(b) The foregoing includes, without limitation, actions pending or
threatened involving the prior employment of any of the Seller's
and/or XXX LTD.'s employees and/or consultants,, their use in
connection with their business of any information or techniques
allegedly proprietary to any of their former employers or
consultancy arrangements, or their obligations under any
agreements with prior employers or consultancy arrangements.
(c) The Seller and/or XXX LTD. is not a party or subject to the
provisions of any order, writ, injunction, judgement or decree of
any court or government agency or instrumentality and there is no
action, suit, proceeding or investigation against either, by any
government agency or instrumentality currently pending or which
any one of them intends to initiate.
2.7 Technology
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(a) XXX LTD. owns all right, title and interest in or to the
Technology.
(b) The Seller shall provide to the Buyer a package of written
technical information describing the Technology in detail as used
for the Seller's own use and in enough detail that the Buyer is
satisfied that it has received the Technology acquired. Such
package shall be furnished by the Seller in the form of one copy
in the English language. Seller shall not retain any trade secret
or confidential materials constituting the technology.
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(c) The Seller shall have its management representatives stay in
contact from time to time with the Buyer's. Whenever reasonably
requested by the Buyer, the Seller will review with the Buyer the
scope and content of the written information and documentation of
the Technology, of interest to the Buyer, and work out practical
procedures for promptly disclosing any item of Technology not
clear to the Buyer.
(d) The Technology is sufficient for its business as now conducted
and as proposed to be conducted and such Technology does not
conflict with, or infringe upon, the rights of others, including
on any copyrights, patents, trademarks, trade names, trade
secrets or other intellectual property rights of others. No
shareholder, officer, director or, to the best of the knowledge
of the Seller and XXX LTD., no employee of XXX LTD., nor any
spouse, child or other relative of any of these persons owns or
has any interest, directly or indirectly in the Technology.
(e) XXX LTD. has exclusive ownership rights to the Technology, is the
owner of all the software (including without limitation, source
code, object code, data, files, tables, and documentation), and
other copyrighted or copyrightable materials included in the
Technology. The Seller and XXX LTD. have obtained, where
required, the right to use, copy, modify and distribute any
third-party programming and materials contained in the Technology
and any technical documentation pursuant to any licenses from
third parties.
(f) The Seller and XXX LTD. have not received any communications
alleging that it or they, has or have, violated, or by conducting
the business of XXX LTD. as proposed by the Buyer, would violate
any of the copyrights, patents, trade secrets or other
proprietary rights of any other person or entity, nor are the
Seller and XXX LTD. aware of any infringement of the foregoing
rights by others.
(g) XXX LTD. is not obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or
subject to any judgement, decree or order of any court or
administrative agency, that would interfere with the use of its
respective best efforts to promote the interests of itself or
that would conflict with it's business as proposed to be
conducted by the Buyer.
2.8 Compliance with Other Instruments and Laws
------------------------------------------
(a) XXX LTD. is not in default of any provisions of its respective
Memorandum, Articles of Association or Protocols, of any
instrument, judgement, order, writ, decree or contract to which
it is a party or by which it is bound or, of any provision of law
applicable to it.
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(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not result
in any such violation of applicable statutes, laws and regulations, or
be in conflict with or constitute, with or without the passage of time
and giving of notice, either a default under any such provision,
instrument, judgement, order, writ, decree or contract or an event
which results in the creation of any lien, charge or encumbrance upon
any assets of XXX LTD..
2.9 Agreements; Default
------------------
(a) The Appendices, including the Disclosure Schedule contain all outstanding
contracts, licenses, agreements or understandings to which XXX LTD. is a
party or by which XXX LTD. or any of XXX LTD.'s assets are bound. There are
no agreements, understandings or proposed transactions between XXX LTD.
and/or the Seller (regarding the Seller's involvement with XXX LTD.), any
of its officers, directors, shareholders, affiliates, or any affiliate
thereof, except as identified in the Disclosure Schedule, if any. There is
no default, or event that with notice or lapse of time, or both, would
constitute a default, by XXX LTD., or to the best knowledge and belief of
XXX LTD. or the Seller, any other party to any of the contracts, agreements
or understandings listed in the Disclosure Schedule.
(b) The consummation of the transactions contemplated by this Agreement will
not result in or constitute any of the following: (i) a default, breach or
violation or an event that, with notice or lapse of time or both, would
constitute a default, breach or violation of the Memorandum and Articles of
Association of XXX LTD., or any contract, license, agreement or
understanding to which XXX LTD. or the Seller is a party or by which XXX
LTD. or its property is bound; (ii) an event that would permit any party to
terminate any or to accelerate the maturity of any indebtedness or other
direct or indirect obligation of XXX LTD.; or (iii) the creation or
imposition of any lien, charge or encumbrance on any of the properties of
XXX LTD.
2.10 Disclosure
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(a) The Seller and XXX LTD. have fully provided the Buyer with all the
information which the Buyer has requested for deciding whether or not
to purchase the Shares and all information which they believe is
reasonably necessary to enable the Buyer to make such a decision.
(b) None of the statements or certificates made or delivered by the Seller
or XXX LTD. in connection with this Agreement contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statement herein or therein misleading.
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2.11 Title to Property and Assets
----------------------------
XXX LTD. owns its property and assets including without limitation the
Technology and all rights in such Technology, free and clear of all
mortgages, liens, loans and encumbrances. With respect to the property and
assets it leases, XXX LTD. is in compliance with such leases and, to the
best of its knowledge, holds valid leaseholds interest free of any liens,
claims or encumbrances.
2.12 Tax Returns, Payments and Elections
-----------------------------------
XXX LTD. has timely filed all tax returns and reports as required by law
and the returns and reports are true and correct in all material respects,
and paid all taxes and other assessments as due in all jurisdictions and
residences in which it operates and resides. XXX LTD. has duly paid,
deposited or accrued on its books of account, any and all taxes it is
required to pay or which is obligated to withhold from amounts owing to any
employee. No current or deferred liability for taxes attributable to any
period ending (or the portion of such period ending) after the Closing Date
has been incurred by XXX LTD. other than in the ordinary course of
business. There is no action, suit, proceeding, investigation, audit,
claim, demand, deficiency or additional assessment in progress, pending or
threatened against XXX LTD. with respect to any tax nor is there any basis
thereof. XXX LTD. is not a party to any tax sharing, allocation or
indemnity agreement. XXX LTD. has not waived any statute or limitations in
respect of any taxes or agreed to any extension of time with respect to an
assessment of deficiency with respect to such taxes. For purposes of this
Agreement, the terms "tax" and "taxes" shall mean all taxes and any tax
including, without limitation, all income, sales, value added, employment,
profit, payroll, use, trade, property, excise, unitary, transfer,
registration, transferee or secondary liability for taxes, penalties,
interests, fines, duties, withholdings, assessments and charges assessed or
imposed by any governmental authority.
2.13 Labor Agreements and Actions
----------------------------
(a) XXX LTD. is not bound by or subject to (and none of its assets or
properties are bound by or subject to) any written or oral, express or
implied, contract, commitment or arrangement with any labor union, and
no labor union has requested or has sought to represent any of the
employees, representatives or agents of XXX LTD.
(b) There is no strike or other labor dispute involving XXX LTD. pending,
or to the best knowledge threatened, which could have a material
adverse effect on the assets, properties, financial condition,
operating results, or business of XXX LTD. (as such business is
presently conducted and as it is proposed to be conducted), nor is XXX
LTD. aware of any labor organization activity involving its employees.
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2.14 Financial Statements
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(a) If the Buyer does not exercise the option under Section 7 of this
Agreement, the Buyer will receive from the Escrow Agent as per
the Escrow Agreement herein attached as Appendix 2, a copy of the
balance sheet and income statement of XXX LTD. at November 30,
1995, presented in U.S. Dollars according to U.S. generally
accepted accounting principles, ("the Financial Statements"). The
Financial Statements will be complete and correct in all material
respects and fairly represent the financial position of XXX LTD.
as of the date thereof, and there will be no material changes in
the Financial Statements to be attached and incorporated in this
Agreement as Appendix 5 from the date of the Financial Statements
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dated November 30, 1995 until receipt of the Financial Statements
to be given to the Buyer.
(b) As of the signing of this Agreement, the date of the Financial
Statements of November 30, 1995 to be given to the Nuyeras stated
herein this Agreement, and up to the time the Shares are
transferred to the Buyer from the Ecrow Agent, XXX LTD. has no or
will not have any debt, liability or obligation of any nature,
whether accrued, absolute, contingent or otherwise, and whether
due or to become due, that is not or will not be reflected or
adequately reserved against in the November 30, 1995 balance
sheet, expect for those (i) that have been incurred in the
ordinary course of business after November 30, 1995, in an
individual amount of less than $5,000 or in an aggregate amount
of less than $15,000 or (ii) that are not required by generally
accepted accounting principles to be included in the November 30,
1995 balance sheet.
2.15 Applicable Securities Laws
--------------------------
The Shares being sold to the Buyer will not require registration with
the Securities and Exchange Commission or any governmental agency of
any country. It is understood by the Seller and XXX Ltd. that the
Buyer will be required under the regulations of the Securities and
Exchange Commission to make a disclosure concerning the acquisition of
the Shares and to file a copy of this Agreement with the Securities
and Exchange Commission.
2.16 Power of Attorney or Suretyship
-------------------------------
XXX LTD. has no power of attorney outstanding nor any other agreement
of agency (whether as principal or agent) nor has it any obligation or
liability, either actual, accrued, accruing or contingent, as
guarantor, surety, consignor, endorser, co-maker, indemnitor or
otherwise in respect of any person, corporation, partnership, joint
venture, association, organization or other entity.
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2.17 Insurance
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The Disclosure Schedule contains a true and correct list of insurance
policies held by XXX LTD. concerning its business and properties. XXX
LTD. has provided to the Buyer copies of all such insurance policies.
Such insurance or comparable insurance will be maintained in full
force and effect to and including the Closing.
2.18 Banks
-----
The Disclosure Schedule lists the names and addresses of all banks or
other financial institutions at which XXX LTD. has an account, deposit
or safe deposit, together with a list of names of all persons
authorized to draw on these accounts or deposits or to have access to
these boxes.
2.19 Environmental Matters
---------------------
XXX LTD. has no liability, actual or contingent, for any claims,
costs, suits or damages of any kind or nature arising out of the
presence of any hazardous materials, in under or on any property that
XXX LTD. has at any time owned, operated, occupied or leased. There
are no environmental proceedings against the Seller or XXX LTD., nor
are they subject to any claim, investigation, action, proceeding,
injunction or decree relating to environmental issues. All
environmental permits held by XXX LTD. are listed in the Disclosure
Schedule, if any.
2.20 Representations Complete
------------------------
The Seller and XXX LTD have disclosed all material information
relating specifically to the business, operations and prospects of XXX
LTD. None of the representations and warranties made by the Seller
and/or XXX LTD. herein or in any appendix, exhibit, schedule or
certificate furnished by either of them, or on their behalf, pursuant
to this Agreement, contains or at the Closing, will contain any untrue
statement of a material fact, or omits to state any material fact
required to be stated therein or necessary in order to make the
statements made, in the light of the circumstances under which they
were made, to be considered misleading.
3. Representations and Warranties of the Buyer
-------------------------------------------
The Buyer represents and Warrants to the Seller that:
3.1 Company Existence; Authorization
--------------------------------
The Buyer is duly organized and properly registered in the
jurisdiction of their organization. All action on the part of the
Buyer, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, and the
performance of all obligations hereunder has been taken or will be
taken prior to the Closing, and this Agreement constitutes a valid and
legally binding obligation of the Buyer enforceable in accordance with
its terms, subject only to laws affecting the rights and remedies of
creditors.
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The execution, delivery and performance of this Agreement will not
violate any provision of the charter documents of the Buyer, or of any
instrument, judgment, order, writ, decree or contract to which it is a
party or by which it is bound or, to its knowledge, of any provision
of law, rule or regulation applicable to the Buyer.
3.2 Disclosure of Information
-------------------------
It believes it has received all the information it considers necessary
or appropriate for deciding whether to purchase the Shares. The Buyer
further represents that it had an opportunity to ask questions and
receive answers from the Seller and XXX LTD. regarding the terms and
conditions of the purchase of the Shares and has reviewed the relevant
written documents of XXX LTD.. The foregoing, however, does not limit
or modify the representations and warranties of the Seller and XXX
LTD. in Section 2 of this Agreement or the right of the Buyer to rely
thereon.
4. Conditions Precedent to the Buyer's Obligations at Closing
----------------------------------------------------------
The obligations of the Buyer to enter into the transaction contemplated by
this Agreement are subject to the satisfaction, or waiver in writing by the
Buyer, at or before the Closing of each of the following conditions.
4.1 Representations and Warranties
------------------------------
The representations and warranties of the Seller and XXX LTD.
contained in this Agreement, the covenant not to compete and the
appendices hereto, or any written statement delivered by the Seller or
XXX LTD. under this Agreement, shall be true and correct on the date
hereof and on and as of the Closing as though made on such date,
except as amended by the Seller and XXX Ltd. at the Closing and which
amendment shall be specifically approved by the Buyer.
4.2 Performance
-----------
The Seller and XXX LTD. shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed, satisfied or complied
with by it on or before the Closing.
4.3 Proceedings, Documents and Certificates
---------------------------------------
All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to the
Buyer's counsel, and the Buyer and/or the Escrow Agent shall have
received all such counterpart, original and certified or other copies
of such documents as they may reasonably request. The Escrow Agent
shall receive and hold on behalf of the Buyer the following documents:
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(i) a certificate, dated the Closing, signed by the Seller, and
President and Chief Financial Officer of XXX LTD. certifying that the
conditions set forth in this Section 4 have been fulfilled, (ii) a
certificate as to the good standing of XXX LTD. and (iii) certificates
of no outstanding tax liability of XXX LTD. from the appropriate
authorities of Ireland and the United Kingdom.
4.4 Written Opinion of the Seller's and XXX LTD.'s Legal Counsel
------------------------------------------------------------
A written legal opinion from the legal counsel(s) of the Seller and
XXX LTD., to be addressed to the Buyer and to be permitted to be read
by relevant third parties, dated the day of the Closing, will be given
stating the following:
(a) The Seller and XXX LTD. has been duly incorporated, where and
when, and list of the present shareholders;
(b) Statement of the existing capitalization of the Seller and XXX
LTD.;
(c) Shares to be sold to and purchased by the Buyer are validly
issued and are outstanding shares of XXX LTD.;
(d) Whereby at Closing, the Buyer's purchase of the Shares from the
Seller will result in the Buyer acquiring 100% ownership and
control of XXX LTD..
(e) Legal counsel knows of no litigation, proceeding or investigation
which might result in any material adverse change in the business
of the Seller and XXX LTD. and ownership of the Shares at
closing;
(f) The sale of the Shares does not require the approval of any
government or third party approval other than the shareholders of
the Seller and will not violate any securities laws in the
U.S.A., Israel or elsewhere in the world;
(g) The total payment of the Purchase Price will be used to pay two
existing obligations of XXX LTD. as follows: (1) The Seller,
Software Ideas, Inc., will receive $2,875,000 with respect to the
agreement dated October 18, 1995, between XXX LTD. and the
Seller, and (2) Fiering & Xxxxxx Handelsgesellschaft m.b.H. will
receive $125,000 with respect to an agreement dated November 29,
1995. After such payments, XXX LTD. has no current or deferred
liability to the Seller, XXX LTD.'s employees, or any third
party.
(h) XXX LTD. owes no current or deferred taxes anywhere in the world
as of the Closing.
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4.5 Necessary Consents
------------------
All necessary agreements and consents of any third parties to the
consummation of the transactions contemplated by this Agreement, or
otherwise pertaining to the matters covered by it, shall have been
obtained by the Seller and XXX LTD. and delivered to the Buyer
including, without limitation, any and all required consents of any
foreign or state securities law commissioner.
4.6 Resignations of Officers and Directors
--------------------------------------
All directors and officers of XXX LTD. shall have delivered to the
Escrow Agent their resignation as officers and directors of XXX LTD.,
effective as of the release of the Shares to the Buyer, and such
resignations shall be given to the Buyer, simultaneously upon release
of the Shares.
4.7 Escrow Agreement
----------------
The Seller and XXX LTD. shall have executed and delivered the Escrow
Agreement in the form attached hereto as Appendix 2.
4.8 Technology Acquisition Agreements
---------------------------------
The Buyer has been supplied an executed copy of the agreement dated
October 18, 1995, between XXX LTD. and the Seller, and an executed
copy of the agreement dated November 29, 1995, between XXX LTD. and
Fiering & Xxxxxx Handelsgesellschaft m.b.H., regarding acquisition of
the Technology in Appendix 1. Such agreements constitute valid and
legally binding obligations of the parties and enforceable in
accordance with their terms.
5. Conditions Precedent to the Seller's Obligations at Closing
-----------------------------------------------------------
The obligations of the Seller to enter into the transactions contemplated
by this Agreement, are subject to the satisfaction, or waiver in writing by
the Seller, at or before the Closing of each of the following conditions:
5.1 Representations and Warranties
------------------------------
The representations and warranties of the Buyer contained in this
Agreement shall be true and as of the Closing with the same effect as
though such representations and warranties had been made on and as of
the Closing.
5.2 Payment of Consideration
------------------------
The Buyer shall have delivered the consideration specified in Section
1 of this Agreement.
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6. Obligations of the Seller After Closing
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6.1 Survival of Representations, Warranties and Covenants
-----------------------------------------------------
The representations, warranties and covenants of the Seller and XXX
LTD. contained in this Agreement or in any certificate, document or
instrument delivered pursuant hereto, shall survive the Closing for a
period of three (3) years.
6.2 Indemnification
---------------
(a) For the period set forth in Section 6.1, the Seller shall
indemnify, defend, and hold harmless the Buyer and XXX LTD. and
their respective affiliates, successors and assigns, against and
in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries, and
deficiencies, including interest, penalties and attorneys fees
(collectively referred to as "Losses") that XXX LTD. or the Buyer
shall directly or indirectly incur or suffer and which arise out
of, or are caused or occasioned by, the incorrectness, untruth,
or breach of any warranty, representation, covenant or agreement
made in this Agreement, or the other exhibits hereto, and all
actions and suits incident thereto including any and all personal
debts, liabilities or obligations of The Seller, whether past,
future, fixed, contingent or otherwise. Notwithstanding for
foregoing liability of The Seller under this Section 6.2 shall be
limited as set forth in Sections 6.2(b) and 6.2(c).
(b) Except with respect to claims based on fraud, the rights of The
Buyer and XXX LTD. under this Article VII shall be the exclusive
remedy under this Agreement for claim based on the incorrectness,
untruth or breach of any warranty, representation, covenant or
agreement in this Agreement, or the other exhibits to this
Agreement and all actions and suits incident thereto including
any and all personal debts, liabilities or obligations of the
Seller, whether past, future, fixed, contingent or otherwise and
the Seller shall in any event have no liability with respect to
any other claim (whether in contract, tort, or otherwise) with
respect to or relating to this Agreement, to Escrow Agreement, or
the other exhibits to the Agreement.
(c) The Buyer will give notice pursuant to Section 11.6 as soon as
reasonably practicable to the Seller of any claim by the Buyer
for indemnification under this Section or any action or suit
against the Buyer or XXX LTD. which, if successfully prosecuted,
would result in the proof of incorrectness, untruth or breach of
any warranty, representation or agreement made under this
Agreement, the Escrow Agreement, or other exhibits or appendices
to the Agreement hereto by such persons. Any such notice shall
include a description of the basis for the claim or the action or
suit in sufficient detail so that the Seller can adequately
evaluate the nature of the Buyer's claim.
- 14 -
The failure promptly to notify the Seller shall not relieve the
Seller of its obligations hereunder except to the extent that the
failure to so notify materially prejudices the Seller's ability
to defend such claim, action or suit. The Seller shall be
entitled to control the defense, settlement or other disposition
of any such claim, and the Buyer agrees to cooperate with, and to
cause XXX LTD. to cooperate with the Seller in any such defense,
including, without limitation, by revealing all information
pertinent thereto within such person's control and by testing for
and on behalf of the Buyer, XXX LTD. or the Seller. The Seller
shall have the right, but not the obligation, to compromise or
settle any such claim:
(i) with the prior consent of the Buyer which consent shall not
be unreasonably withheld; or
(ii) without the prior consent of the Buyer if the consent of the
Buyer was solicited in writing prior to settlement or
compromise and such consent was unreasonably withheld.
The Seller, in the defense of any such claim, except with the
consent of the Buyer, shall not consent to the entry of any
judgement or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to the Buyer and XXX LTD. of a release from all
liability in respect to such claim or litigation.
(d) Notwithstanding any provision to the contrary in this Agreement,
the Buyer and XXX LTD., at their sole option, and at their sole
expense, shall have the right but not the obligation, to
participate in, though not control, the defense, settlement or
other disposition of any action or suit against the Buyer or XXX
LTD. which, if successfully prosecuted, could give rise to a
claim of indemnification against the Seller hereunder.
6.3 Further Assurances
------------------
At the request of the Buyer, the Seller and his respective successors
and assigns, at any time after the Closing, shall execute, acknowledge
and deliver any further deeds, assignments, conveyances and other
assurances, documents, and instruments of transfer, reasonably
requested by the Buyer, and will take any other action consistent with
the terms of this Agreement that may reasonably be requested by the
Buyer for the purpose of assigning, transferring, granting, conveying,
and confirming or reducing to possession or quiet enjoyment the Shares
to be conveyed and transferred to the Buyer by this Agreement or any
rights assumed by or granted to the Buyer hereunder.
- 15 -
6.4 Waiver of Intellectual Property Claims
--------------------------------------
The Seller covenants and agrees that it will not now, or at any time
in the future, directly or indirectly claim or assert in any action
that the products, conduct or operations of XXX LTD. or the Buyer or
any of its affiliates, or the practice of the Technology by any of
them, infringes or otherwise violates any intellectual property rights
of the Seller or any of its affiliates or licensees.
6.5 Waiver of Contribution
----------------------
The Seller expressly acknowledges and agrees that XXX LTD. is becoming
a wholly-owned subsidiary of the Buyer on the Closing and although XXX
LTD. is a party to this Agreement and has joined in the
representations, warranties and covenants made hereunder, the purpose
of the representations, warranties and covenants and the
indemnification provisions contained herein are primarily, but not
exclusively, intended to confer upon the Buyer the right to proceed
against the Seller and the Seller shall not allege or seek
contribution from XXX LTD. for claims made by the Buyer hereunder and
the Seller hereby waives all rights to so allege or so seek.
6.6 Covenant Not To Compete
-----------------------
The Seller agrees that after the Closing, the Seller or its associates
will not compete, directly or indirectly, engage in the development,
manufacture, market or service in the software testing and
verification markets dealing with the Technology described in Appendix
1.
6.7 Use of Purchase Price
---------------------
The Seller agrees that after Closing and upon the date of release of
the Purchase Price by the Escrow Agent to the Seller, to pay within
five days, the amount of $125,000 to Fiering & Xxxxxx
Handelsgesellschaft m.b.H. ("Fiering & Xxxxxx") with respect to the
agreement dated November 29, 1995, between XXX LTD. and Fiering &
Xxxxxx, and to accept the remainder of the Purchase Price, $2,875,000,
as payment in full for the outstanding obligation between the Seller
and XXX LTD. based on the agreement dated October 18, 1995.
7. Option to Acquire Technology
----------------------------
7.1 For 120 days from the Closing, upon written notice to XXX LTD. and the
Seller, the Buyer may, at its sole discretion, elect to rescind its
purchase of the Shares of XXX LTD. under this Agreement in exchange
for the acquisition from XXX LTD. and the Seller of all Technology.
XXX LTD. and the Seller agree to execute such a technology purchase
agreement attached as Appendix 6 herein, and that the Purchase Price
----------
paid to the Seller at the Closing under this Agreement will constitute
full payment for the Technology under such technology purchase
agreement.
- 16 -
7.2 Failure of the Seller and XXX LTD. to pass all documents to the Buyer
as required under this Agreement would be considered good reason and
cause for the Buyer, at the Buyer's choice, not to exercise the option
herein described above.
8. Confidentiality
---------------
8.1 It is agreed by the parties to this Agreement that the nature of the
transaction herein is confidential, and as such information herein
will only be disclosed on an as needed basis to facilitate the
transaction and on an as required basis.
8.2 Such confidential information specifically includes all source code,
system and user documentation, and other technical documentation
pertaining to the Technology and software programs, including any
proposed design and specifications for future products and products in
development, marketing plans, and all other technical and business
information concerning the Technology and the Buyer's business.
8.3 Notwithstanding Sections 8.1 and 8.2, the parties may disclose
confidential information where necessary to any regulatory authorities
or governmental agencies pursuant to legal process or if required by
court order or decree.
8.4 For purposes of this Agreement, information shall not be deemed
confidential if such information is available in full from public
sources, if such information is received from a third party not under
an obligation to keep such information confidential, or if the
recipient can conclusively demonstrate that such information was
independently developed by the recipient.
8.5 The parties agree that money damages will not be a sufficient remedy
for any breach of this Section 8 and that, in addition to all other
remedies, the non breaching party shall be entitled to specific
performance and injunctive relief or other equitable relief as
remedies for any breach or threatened breach.
8.6 In the event that the transactions contemplated by this Agreement
shall not be consummated, all such information which shall be in
writing shall be returned to the party furnishing the same, including
to, to the extent reasonably practicable, all copies or reproductions
thereof which may have been prepared and such information will be kept
confidential.
8.7 The parties hereto will mutually agree in advance on the form, timing
and contents of announcements and disclosures regarding the
transactions contemplated by this Agreement. The parties agree that
the Buyer may issue a press release announcing the execution of this
Agreement. Following the Closing, the Buyer shall have the right to
make public disclosures of the terms of this Agreement and the
consummation of the transactions contemplated hereby without the
written consent of the Seller.
-17-
9. Taxes Liabilities and Foreign Exchange
--------------------------------------
The consideration to be paid by the Buyer to the Seller for the Shares will
be according to Section 1 of this Agreement and each party will be
responsible for its own tax liabilities and government approvals such as
foreign exchange regulations.
10. Termination Prior to Closing
----------------------------
This Agreement may be terminated at any time prior to the Closing as
follows:
10.1 By the mutual consent of the Parties in writing.
10.2 Without liability, if Closing shall not have occurred on or before
January 15, 1996.
10.3 Without liability, if a party shall fail to perform any material
aspect of this Agreement or materially breach its representations,
warranties, agreements, or covenants contained herein, provided such
breach shall not be cured within ten days after such party has been
notified in writing of the other party's intent to terminate this
Agreement pursuant hereto.
10.4 Termination of this Agreement pursuant to this Section 10 shall
terminate all obligations of the parties hereunder, except for the
obligations of Confidentiality set forth herein.
11. Miscellaneous
-------------
11.1 Survival
--------
The representations and warranties of the parties to this Agreement,
contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of the parties.
11.2 Successors and Assigns
----------------------
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and
assigns, any rights, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
- 18 -
11.3 Settlement of Disputes; Arbitration; Governing Law
--------------------------------------------------
(a) In the event of an occurrence of any dispute of disagreement, the
Parties shall first exert their best efforts in good faith to resolve
the matter amicably between themselves as provided for in this
Section. Within 30 days after written demand by either party, the
Parties shall each designate a representative from among those
personnel acquainted with the work involved who shall discuss and
attempt to resolve the dispute or disagreement at the offices of the
Buyer in Israel, or such other place agreeable to the Parties.
If a resolution has not been reached within 90 days from the date on
which the written demand for such working-level discussions was
originally made, then the Parties may go to binding arbitration, to
the Israeli Institute of Commerical Arbitration Association. The award
of such arbitration shall be binding upon the parties.
(b) It is agreed that the substantive law governing this Agreement will be
the law of the State of Israel and any disputes resolved in
arbitration will be governed as such.
11.4 Counterparts
------------
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.5 Titles, Subtitles, Preamble and Appendices
------------------------------------------
The Titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in interpreting this Agreement. The
Preamble and Appendices are an integral and inseparable part of this
Agreement.
11.6 Notices
-------
Unless otherwise provided, any notice required or permitted under this
Agreement with respect to parties shall be given in writing and shall be
deemed effectively given upon personal delivery to the party to be
notified or fourteen (14) business days after deposit with a National Post
Office, for dispatch by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address set forth in this
section as follows:
For the Seller and XXX LTD.:
Xx. Xxxxxxx Xxxxxx, Advocate
Xxxxxxxxxxxxxxxxx 0/0
0000 Xxxx
Telephone: (0000) 0000000
Fax: (0000) 000 0000000
For the buyer:
Xx. Xxxxx Xxxxxxxx
Mercury Interactive (Israel) Ltd.
0 Xxxxxxxxx Xxxxxx
Xx-Xxxxxx 00000, Xxxxxx
Telephone: (00) 0000000
Fax: (00) 0000000
or at such other address as such party may designate by written notice
to the other parties; if by facsimile transmission within 48 hours of
receipt; in the case of an internationally recognized overnight courier,
on the next business day after the date when sent. Any party may change
its address for purposes of this paragraph by giving notice of the new
address to each of the other parties in the manner set forth above.
11.7 Expenses
--------
Irrespective of whether the Closing is effected, the Buyer to this
Agreement shall bear the costs and expenses incurred with respect to the
negotiation, execution, delivery and performance of this Agreement. The
Seller shall pay all such costs and expenses incurred by XXX LTD. and
the Seller, provided, however, that the Buyer shall pay, promptly after
the Closing, the reasonable itemized legal fees and costs of counsel to
the Seller and XXX LTD., up to an aggregate maximum amount of $60,000.
There are no finder's fees or broker's fees regarding this Agreement.
The Seller and the Buyer each agree to indemnify and hold harmless the
other against any loss, liability, damage, cost, claim, or expense
incurred by reason of any brokerage commission, or finder's fee alleged
to be payable because of any act, omission or statement of the
indemnifying party.
11.8 Assignment
----------
The Seller and XXX LTD. shall not assign this Agreement without first
obtaining the written consent of the Buyer. The Buyer shall not assign
this Agreement to any entity without first obtaining the written consent
of the Seller and XXX LTD., which consent shall not be unreasonably
held, provided, however that the Buyer may assign its rights and
obligations hereunder to any successor or successors of the Buyer by way
of reorganization, merger or consolidation and any assignee of all or
substantially all of its business and assets or more than 50% of its
shares of outstanding capital stock.
11.9 Entire Agreement, Amendments and Waivers
----------------------------------------
This Agreement and the appendices hereto constitute the entire agreement
between the parties pertaining to the agreements, representations,
warranties, covenants and understandings of the parties and expressly
supersedes the Letter of Intent between the parties dated October 19,
1995. No supplement, modification, or amendment of this Agreement shall
be binding unless executed by all the parties. Any term of this
Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a
19
- 20 -
particular instance and either retroactively or prospectively), only
with the written consent of all the parties hereto. No waiver of any
of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver.
11.10 Severability
------------
Should any provision of this Agreement be determined to be invalid, it
shall be severed from this Agreement and the remaining provisions
shall remain in full force and effect.
11.11 Parties in Interest
-------------------
Nothing in this Agreement, express or implied, is intended to confer
any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective and
permitted successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provision
give any third persons any right of subrogation or action over against
any party to this Agreement.
11.12 Advice of Legal Counsel
-----------------------
Each party to this Agreement acknowledges and represents that it has
been represented by its own legal counsel in connection with the
transactions contemplated by this Agreement, with the opportunity to
seek advice as to its legal rights from such counsel. Each party
further represents that it has been independently advised as to the
tax consequences of the transactions contemplated by this Agreement
and is not relying on any representations or statements made by any
other party as to such consequences.
IN ATTESTING THERETO, THE PARTIES BELOW STATE THAT THEY ARE PROPERLY EMPOWERED
AND AUTHORIZED BY THEIR RESPECTIVE ENTITIES AND/OR AS INDIVIDUALS, TO EXECUTE
THIS AGREEMENT AND HAVE SIGNED THIS AGREEMENT AS OF THE DATE SO INDICATED.
***** 12.12.95 ***** *****
---------------------------- -----------------------------
The Seller date The Buyer date
By: Lissovskaia Tatiana By:__________________________
-------------------------
Title:______________________ Title:_______________________
***** 12-12-95
----------------------------
XXX LTD. date
By: Leopold Sperhl
-------------------------
Title:______________________
