1
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
AMONG
UPGRADE CORPORATION OF AMERICA,
SOFTBANK HOLDINGS INC.,
SB HOLDINGS (EUROPE) LTD.,
CUSTOMERONE HOLDING CORPORATION,
AND
SSG ACQUISITION CORP.
DATED SEPTEMBER 30, 1998
2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions ......................................................................... 2
ARTICLE II
THE STOCK PURCHASES
SECTION 2.1. Stock Purchases ..................................................................... 10
ARTICLE III
POST-CLOSING ADJUSTMENT
SECTION 3.1. Purchase Price Adjustments .......................................................... 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SOFTBANK HOLDINGS
SECTION 4.1. Organization and Qualification ...................................................... 13
SECTION 4.2. Authorization ....................................................................... 13
SECTION 4.3. No Violation ........................................................................ 13
SECTION 4.4. Capitalization of the Company and Ivy Group; Title to Shares ........................ 14
SECTION 4.5. Subsidiaries and Equity Investments ................................................. 15
SECTION 4.6. Consents and Approvals .............................................................. 16
SECTION 4.7. Financial Statements ................................................................ 16
SECTION 4.8. Absence of Undisclosed Liabilities .................................................. 17
SECTION 4.9. Absence of Certain Changes .......................................................... 17
SECTION 4.10. Litigation .......................................................................... 18
SECTION 4.11. Liens and Encumbrances .............................................................. 18
SECTION 4.12. Certain Agreements .................................................................. 19
SECTION 4.13. Employee Benefit Plans .............................................................. 19
SECTION 4.14. Taxes ............................................................................... 20
SECTION 4.15. Compliance with Applicable Law ...................................................... 22
(i)
3
Page
SECTION 4.16. Brokers' Fees and Commissions ....................................................... 22
SECTION 4.17. Proprietary Rights .................................................................. 22
SECTION 4.18. Year 2000 Compliance ................................................................ 24
SECTION 4.19. Privacy Matters ..................................................................... 24
SECTION 4.20. Labor Relations ..................................................................... 24
SECTION 4.21. Insurance ........................................................................... 25
SECTION 4.22. Real Estate ......................................................................... 25
SECTION 4.23. Personal Property ................................................................... 25
SECTION 4.24. Environmental Matters ............................................................... 26
SECTION 4.25. Customers and Suppliers ............................................................. 26
SECTION 4.26. Certain Business Practices; Potential Conflicts of Interest ......................... 00
XXXXXXX 0.00. Xxx Xxxxxxx - Xxxxxx Xxxxxxx ........................................................ 27
SECTION 4.28. Accounts Receivable ................................................................. 30
SECTION 4.29. Inventory ........................................................................... 30
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF CUSTOMERONE HOLDING AND SUB
SECTION 5.1. Organization and Qualification ...................................................... 31
SECTION 5.2. Authorization ....................................................................... 31
SECTION 5.3. No Violation ........................................................................ 31
SECTION 5.4. Consents and Approvals .............................................................. 32
SECTION 5.5. Brokers' Fees and Commissions ....................................................... 32
ARTICLE VI
COVENANTS
SECTION 6.1. All Reasonable Efforts .............................................................. 32
SECTION 6.2. Consents and Approvals .............................................................. 32
SECTION 6.3. Public Announcements ................................................................ 32
SECTION 6.4. The Merger .......................................................................... 33
SECTION 6.5. Professional Fees and Expenses ...................................................... 33
SECTION 6.6. Brokers' Fees and Commissions ....................................................... 33
(ii)
4
Page
ARTICLE VII
CLOSING
SECTION 7.1. Closing ............................................................................. 33
SECTION 7.2. Actions of Softbank Holdings, Softbank Europe and the Company at the Closing ........ 33
SECTION 7.3. Actions of CustomerONE Holding and Sub at the Closing ............................... 35
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
SECTION 8.1. Survival of Representations and Warranties .......................................... 35
SECTION 8.2. Limitations on Liability ............................................................ 35
SECTION 8.3. Indemnification ..................................................................... 36
SECTION 8.4. Tax Indemnification ................................................................. 38
SECTION 8.5. Advancement of Expenses; Defense of Claims; Insurance and Tax Benefit Adjustment .... 39
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendment and Modification .......................................................... 41
SECTION 9.2. Waiver of Compliance; Consents ...................................................... 41
SECTION 9.3. Validity ............................................................................ 42
SECTION 9.4. Expenses and Obligations ............................................................ 42
SECTION 9.5. Parties in Interest ................................................................. 42
SECTION 9.6. Tax Matters ......................................................................... 42
SECTION 9.7. Notices ............................................................................. 46
SECTION 9.8. Governing Law ....................................................................... 47
SECTION 9.9. Counterparts ........................................................................ 47
SECTION 9.10. Headings ............................................................................ 47
SECTION 9.11. Entire Agreement .................................................................... 47
SECTION 9.12. Assignment .......................................................................... 48
SECTION 9.13. Jurisdiction and Venue .............................................................. 48
SECTION 9.14. Certain Interpretive Matters ........................................................ 48
(iii)
5
Exhibits
Exhibit A Form of Certificate of Merger
Exhibit B-1 Form of Opinion of Xxxxxxxx & Xxxxxxxx
Exhibit B-2 Form of Opinion of Linklaters & Paines
Exhibit C Form of Legal Opinion of Weil, Gotshal & Xxxxxx LLP
(iv)
6
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated September
30, 1998, by and among Upgrade Corporation of America (d/b/a SOFTBANK Services
Group), a Delaware corporation (the "Company"), SOFTBANK Holdings Inc., a
Delaware corporation ("Softbank Holdings") that is the majority stockholder of
the Company and a wholly-owned subsidiary of SOFTBANK Corp., a Japanese
corporation ("Parent"), SB Holdings (Europe) Ltd., a company formed under the
laws of England and Wales and a wholly-owned subsidiary of Parent ("Softbank
Europe"), CustomerONE Holding Corporation, a Delaware corporation ("CustomerONE
Holding"), and SSG Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of CustomerONE Holding ("Sub"). The Company and its Subsidiaries (as
hereinafter defined) and The Ivy Group Limited, a company formed under the laws
of England and Wales and a wholly-owned subsidiary of Softbank Europe ("Ivy
Group"), and its Subsidiaries are sometimes collectively referred to herein as
the "SSG Companies".
RECITALS:
WHEREAS, Softbank Holdings owns 11,279,128 shares of the
Company's Common Stock, par value $0.01 per share (the "Company Common Stock"),
representing 95.21% of the issued and outstanding shares of Company Common
Stock, and 100,000 shares of the Company's Redeemable Preferred Stock (Series
1), par value $100.00 per share (the "Company Preferred Stock"), representing
all of the issued and outstanding shares of Company Preferred Stock;
WHEREAS, Softbank Europe owns all of the issued and
outstanding capital stock of the Ivy Group;
WHEREAS, CustomerONE Holding, through Sub, desires to acquire
all of the issued and outstanding shares of the Company Common Stock held by
Softbank Holdings and all of the issued and outstanding shares of the Company
Preferred Stock (the "Company Stock Purchase");
WHEREAS, CustomerONE Holding, through Sub, desires to acquire
all of the issued and outstanding shares of Ivy Group Stock (the "Ivy Stock
Purchase" and, collectively with the Company Stock Purchase, the "Stock
Purchases"); and
WHEREAS, immediately following the Stock Purchases, pursuant
to Section 253 of the DGCL, CustomerONE Holding will cancel or cause the
cancellation of all of the
7
Company Preferred Stock and retire or cause the retirement of all of the Company
Common Stock by way of a merger (the "Merger") of Sub with and into the Company,
pursuant to which the Minority Stockholders (as hereinafter defined) will
receive a cash payment in the amounts set forth below.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. For purposes of this Agreement, the term:
(a) "6-Year Look Back Date" has the meaning set forth in
Section 4.13(b);
(b) "Accounts" means the audited balance sheet and profit and
loss statement of the Ivy Group Companies for the last completed fiscal year of
the Ivy Group Companies;
(c) "Accounts Date" means December 31, 1996;
(d) "Adjusted Net Working Capital" means, as of the Closing
Date and derived from the audited closing date balance sheet of the SSG
Companies, prepared on a consolidated basis in accordance with Section 3.1(b),
an amount equal to the net working capital of the SSG Companies, adjusted to
exclude (i) intercompany accounts (other than those between any of the SSG
Companies and another SSG Company), (ii) accounts payable to affiliates of
Parent (other than an SSG Company), and (iii) accounts receivable from
affiliates of Parent (other than an SSG Company); provided, however, that no
such adjustment shall be made in respect of such intercompany accounts, accounts
payable to affiliates of Parent and accounts receivable from affiliates of
Parent representing amounts owing in respect of services provided by or to the
SSG Companies in the ordinary course of business, consistent with past practices
with, and on terms that are consistent with those negotiated on an arm's length
basis with, unaffiliated third parties;
(e) "affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, another person;
(f) "Affiliated Group" means any affiliated group within the
meaning of Section 1504 of the Code or any similar group defined under a similar
provision of state, local or foreign law, including but not limited to any
combined, consolidated or unitary group;
2
8
(g) "Agreement" has the meaning set forth in the introduction;
(h) "Applicable Federal Tax Rate" has the meaning set forth in
Section 9.6(e);
(i) "Business Day" means any day other than a Saturday, Sunday
or other day on which banking institutions in the City of New York, New York
shall be permitted or required by law or executive order to be closed;
(j) "Buyer Indemnitee" means any person entitled to
indemnification pursuant to Section 8.3(b), (c), (d), (e), (f) or (g) or Section
8.4 (a) or (b);
(k) "Capital Expenditure Impact" has the meaning set forth in
Section 9.6(e);
(l) "Certificate of Merger" has the meaning set forth in
Section 5.4;
(m) "Closing" has the meaning set forth in Section 7.1;
(n) "Closing Adjusted Net Working Capital Amount" means, as of
the Closing Date and derived from the audited closing date balance sheet of the
SSG Companies prepared on a consolidated basis in accordance with Section
3.1(b), an amount equal to the Adjusted Net Working Capital;
(o) "Closing Date" has the meaning set forth in Section 7.1;
(p) "Closing Debt" means, as of the Closing Date and derived
from the audited closing date balance sheet of the SSG Companies prepared on a
consolidated basis in accordance with Section 3.1(b), an amount equal to the
Designated Debt;
(q) "Closing Differential" means the Proposed Closing
Differential with such revisions, adjustments and changes thereto, if any, as
shall be effected pursuant to Section 3.1(b)(ii);
(r) "Code" means the United States Internal Revenue Code of
1986, as amended;
(s) "Company" has the meaning set forth in the introduction;
(t) "Company Common Stock" has the meaning set forth in the
recitals;
(u) "Company Common Stock Consideration" means the Purchase
Price, less the Ivy Group Consideration, less Designated Debt, less the Company
Preferred Stock
3
9
Consideration, less the Minority Stockholders' Consideration, less the
Optionholders' Consideration;
(v) "Company Preferred Stock" has the meaning set forth in the
recitals;
(w) "Company Preferred Stock Consideration" means $10,000,000,
plus all accrued and unpaid dividends on the Company Preferred Stock through the
Closing Date and all related charges, fees, expenses and penalties, including
prepayment penalties thereon or which become due as a result of the transactions
contemplated by this Agreement to the extent that any of the foregoing have not
been paid prior to the Closing Date;
(x) "Company Stock Purchase" has the meaning set forth in the
recitals;
(y) "Company Technology" has the meaning set forth in Section
4.17;
(z) "Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sales contract, mortgage, license,
franchise, insurance policy, commitment or other arrangement or agreement;
(aa) "Corel Damages" has the meaning set forth in Section
9.6(e);
(bb) "CPA Firm" has the meaning set forth in Section
3.1(b)(ii);
(cc) "CustomerONE Holding" has the meaning set forth in the
introduction;
(dd) "Debt Differential" means the Proposed Debt Differential
with such revisions, adjustments and changes thereto, if any, as shall be
effected pursuant to Section 3.1(b)(ii);
(ee) "Designated Debt" means any and all liabilities of the
SSG Companies on a consolidated basis immediately prior to the Closing (after
giving effect to the repayment of indebtedness under the Revolving Loan
Agreement, dated as of October 1, 1996, between the Company and Softbank
Holdings and under the Replacement Revolving Note, dated as of March 9, 1998,
held by Marine Midland Bank) (including all related charges, fees, expenses and
penalties, including prepayment penalties thereon or which become due as a
result of the transactions contemplated hereby, to the extent that any of the
foregoing have not been paid prior to the Closing), determined in accordance
with GAAP and in accordance with Section 3.1(b), whether or not such liabilities
appear on the most recently prepared balance sheets of any of the SSG Companies;
provided, that there shall be excluded from such liabilities (i) to the extent
included in net working capital, trade accounts payable, customer remittances,
accrued income taxes, accrued payroll expenses, client retainers and deposits,
deferred revenue, and, subject to CustomerONE Holding's review and satisfaction,
intercompany accounts payable representing amounts owing for services provided
by affiliates of Parent in
4
10
the ordinary course of business consistent with past practices with, and on
terms that are consistent with those negotiated on an arm's length basis with,
unaffiliated third parties and (ii) capital lease obligations;
(ff) "DGCL" means the General Corporation Law of the State of
Delaware;
(gg) "Disclosure Schedule" means the disclosure schedule
prepared by Softbank Holdings, Softbank Europe and the Company, attached hereto;
(hh) "DOJ" has the meaning set forth in Section 4.6;
(ii) "Employee Benefit Plans" has the meaning set forth in
Section 4.13(a);
(jj) "Environmental Law" means any foreign or United States
federal, state or local law (including common law), statute, code, ordinance,
rule, regulation, directive of the European Union, or other requirement relating
to the environment, natural resources, or public or employee health and safety;
(kk) "ERISA" has the meaning set forth in Section 4.13(a);
(ll) "Estimated Adjusted Net Working Capital Amount" means the
Company's and Softbank Holdings' good faith estimate of the Adjusted Net Working
Capital immediately prior to the Closing;
(mm) "Estimated Debt" means the Company's and Softbank
Holdings' good faith estimate of the Designated Debt immediately prior to the
Closing;
(nn) "Exemption Certificate" means a form or statement from a
customer of any of the SSG Companies indicating that the transaction covered by
a Contract is exempt from any sales, use or similar Tax;
(oo) "GAAP" means generally accepted accounting principles in
the United States;
(pp) "Governmental Authority" means any nation or government
or the European Union, any state or other political subdivision thereof and an
entity exercising an executive, legislative, judicial, regulatory or
administrative function of or pertaining to government;
(qq) "HSR Act" has the meaning set forth in Section 4.6;
5
11
(rr) "Indemnifiable Losses" means any and all damages, losses,
liabilities, obligations, costs and expenses, and any and all claims, demands or
suits (by any person, including without limitation any Governmental Authority),
including without limitation the costs and expenses of any and all actions,
suits, proceedings, demands, assessments, judgments, settlements and compromises
relating thereto and including without limitation reasonable attorneys' and
experts' fees and expenses in connection therewith incurred by an Indemnitee;
(ss) "Indemnitee" means a Buyer Indemnitee or a Seller
Indemnitee, as the case may be;
(tt) "Indemnifying Party" means any person or entity required
to provide indemnification under this Agreement;
(uu) "Indemnity Payment" means any amount of Indemnifiable
Losses required to be paid pursuant to this Agreement;
(vv) "Intellectual Property" has the meaning set forth in
Section 4.17;
(ww) "Interim Financial Statements" has the meaning set forth
in Section 4.7;
(xx) "Ivy Group" has the meaning set forth in the
introduction;
(yy) "Ivy Group Companies" means Ivy Group and its
subsidiaries, Professional Support Centre Limited and Avalan Technology Limited,
and "Ivy Group Company" means any one of the foregoing.
(zz) "Ivy Group Consideration" shall mean $1,700,000 million
in cash;
(aaa) "Ivy Stock Purchase" has the meaning set forth in the
recitals;
(bbb) "Legal Proceedings" means any judicial, administrative,
mediation or arbitral actions, suits, proceedings (public or private) or
governmental proceedings;
(ccc) "Leased Real Property" has the meaning set forth in
Section 4.22;
(ddd) "Liens" means any title defects, liens, pledges, claims,
security interests, restrictions, mortgages, tenancies and other possessory
interests, conditional sale or other title retention agreements, assessments,
easements, rights of way, covenants, restrictions, rights of first refusal,
encroachments and other burdens, options or encumbrances of any kind;
(eee) "Litigation" has the meaning set forth in Section 4.10;
6
12
(fff) "Material Adverse Effect" means a material adverse
effect on the condition (financial or otherwise), properties, assets,
liabilities, businesses, prospects, earnings or operations of the SSG Companies
taken as a whole;
(ggg) "Merger" has the meaning set forth in the recitals;
(hhh) "Minority Stockholders" has the meaning set forth in
Section 4.4(d);
(iii) "Minority Stockholders' Consideration" means
$2,390,471.68 million in aggregate cash consideration to be delivered to the
Minority Stockholders pursuant to the Merger;
(jjj) "NOL Excess" has the meaning set forth in Section
9.6(e);
(kkk) "NOLs" means all Tax net operating loss carryforwards of
the SSG Companies, as determined by the Code, that are or should be reflected in
the Interim Financial Statements and all such net operating loss carryforwards
of the SSG Companies arising in connection with the operation of the SSG
Companies between the date of the Interim Financial Statements and the Closing
Date;
(lll) "Optionholders" means the persons listed in Section 4.4
of the Disclosure Schedule as being a holder of a stock option who shall not
have exercised his or her respective stock options on or prior to the Closing;
(mmm) "Optionholders' Consideration" means $1,344,407.41,
which is the amount of cash necessary to pay the difference between the exercise
price of each stock option held by an Optionholder and $4.21;
(nnn) "Order" means any order, injunction, judgment, decree,
ruling, assessment or arbitration award;
(ooo) "Parent" has the meaning set forth in the introduction;
(ppp) "PAYE" means pay as you earn;
(qqq) "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or, as
applicable, any other entity;
(rrr) "Post-Closing Statement" has the meaning set forth in
Section 3.1(b);
(sss) "Pre-Closing Statement" has the meaning set forth in
Section 3.1(a);
7
13
(ttt) "Proposed Closing Differential" means, as set forth in
the Post-Closing Statement, the amount (whether a positive difference or
negative difference) equal to (x) the Estimated Adjusted Net Working Capital
Amount less (y) the Closing Adjusted Net Working Capital Amount;
(uuu) "Proposed Debt Differential" means, as set forth in the
Post-Closing Statement, the amount (whether a positive difference or negative
difference) equal to (x) the Estimated Debt less (y) the Closing Debt;
(vvv) "Purchase Price" means $73 million, subject to
adjustment pursuant to Section 3.1;
(www) "Seller Indemnitee" means any person entitled to
indemnification pursuant to Section 8.3(a) or Section 8.4(c);
(xxx) "Softbank Europe" has the meaning set forth in the
introduction;
(yyy) "Softbank Holdings" has the meaning set forth in the
introduction;
(zzz) "SSG Companies" has the meaning set forth in the
introduction;
(aaaa) "SSG Companies' Other Pre-Closing Date Tax Liability"
means the aggregate liability, as determined prior to payment thereof, of any of
the SSG Companies for any Taxes (other than a Tax payable or chargeable to
CustomerONE Holding pursuant to Section 9.6(f)) imposed upon Parent, Softbank
Holdings and Softbank Europe (in addition to any of the SSG Companies) not
included in SSG Companies' Pre-Closing Date Federal Tax Liability and: (i)
attributable to a period which ends on or before the Closing Date or assessed as
the result of a transaction which occurs prior to the Closing; (ii) assessed as
of a date following the Closing Date with respect to a Tax year or period which
includes but ends after the Closing Date; or (iii) attributable to a period
which includes the Closing Date but does not begin on that day. In the case of
Taxes giving rise to any liability pursuant to clause (ii) or (iii) of the
preceding sentence, the portion of such Tax liability includable within this
definition shall be that portion of the total tax liability for such period as
is attributable to the portion of that period which ends with the Closing Date
determined on the basis of an interim closing of the books as of the Closing
Date; provided that exemptions, allowances or deductions that are calculated on
an annual basis (including but not limited to depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
such period;
(bbbb) "SSG Companies' Pre-Closing Date Federal Tax Liability"
means the aggregate liability, as determined prior to payment thereof, for all
federal Taxes payable by any of the SSG Companies with respect to any "taxable
year" (within the meaning of Section 7701 of the Code) of any of the SSG
Companies which ends on or before the Closing Date,
8
14
including, but not limited to, (i) any liability of any Affiliated Group of
which any of the SSG Companies was a member on or prior to the Closing Date
including but not limited to any liability for Taxes resulting from a "deferred
intercompany transaction" within the meaning of Treasury Regulation Section
1.1502-13(a)(2) that occurred on or prior to the Closing Date and any liability
of any of the SSG Companies pursuant to Treasury Regulation Section 1.1502-6(a),
and (ii) any federal excise Tax imposed upon Parent, Softbank Holdings or
Softbank Europe (in addition to any of the SSG Companies);
(cccc) "SSG Companies' Total Pre-Closing Date Tax Liability"
means an amount equal to the sum of: (i) SSG Companies' Pre-Closing Date Federal
Tax Liability and (ii) SSG Companies' Other Pre-Closing Date Tax Liability;
(dddd) "Stock Purchases" has the meaning set forth in the
recitals;
(eeee) "Sub" has the meaning set forth in the introduction;
(ffff) "Subsidiary" has the meaning set forth in Section
4.5(a);
(gggg) "Tax" means all taxes, charges, withholdings, fees,
levies, penalties, additions, interest or other assessments imposed by any
foreign, United States federal, state, or local or other taxing authority on any
of the SSG Companies (including, without limitation, as a result of being a
member of an affiliated, combined or unitary group or as a result of any
obligation arising out of an agreement to indemnify any other person), and
including, but not limited to, those related to income, gross receipts, gross
income, sales, use, occupation, salary or wages, services, leasing, valuation,
transfer, license, customs duties or franchise;
(hhhh) "Taxation" means all forms of taxation and statutory,
governmental, state, provincial, local governmental or municipal impositions,
duties, contributions and levies, in such case whether of the United Kingdom or
elsewhere in the world whenever imposed and whether chargeable directly or
primarily against or attributable directly or primarily to the SSG Companies or
any other persons and all penalties, charges, costs and interest relating
thereto;
(iiii) "Taxes Act" means the Income and Corporation Taxes Act
of 1988;
(jjjj) "TCGA" means the United Kingdom Taxation of Chargeable
Gains Act of 1992;
(kkkk) "Third Party Claim" means any claim, action or
proceeding made or brought by any person who or which is not a party to this
Agreement or an affiliate of a party to this Agreement;
(llll) "Third Party Licenses" has the meaning set forth in
Section 4.17;
9
15
(mmmm) "Transfer Taxes" means any sales, use, stamp,
documentary, filing, recording, transfer or similar fees or Taxes or
governmental charges as levied by any taxing authority in connection with the
transactions contemplated by this Agreement (other than income taxes imposed on
Parent, Softbank Holdings or Softbank Europe;
(nnnn) "UCA&L" has the meaning set forth in Section 4.7;
(oooo) "VAT" means the value added Tax of the United Kingdom,
the Republic of Ireland or any other country imposing such a Tax;
(pppp) "VATA" means the United Kingdom Value Added Tax Xxx
0000; and
(qqqq) "Working Capital Target" means $3,985,095.
ARTICLE II
THE STOCK PURCHASES
SECTION 2.1 Stock Purchases. Upon the terms and subject to the
conditions of this Agreement:
(a) Sub is purchasing from Softbank Holdings, and Softbank
Holdings is selling to Sub,
(i) 11,279,128 shares of Company Common Stock,
representing 95.21% of the issued and outstanding shares of the Company
Common Stock and all of the shares of Company Common Stock owned by
Softbank Holdings, against payment in cash of the Company Common Stock
Consideration, subject to adjustment after the Closing pursuant to
Section 3.1; and
(ii) 100,000 shares of Company Preferred Stock,
representing all of the issued and outstanding Company Preferred Stock,
against payment in cash of the Company Preferred Stock Consideration;
and
(b) Sub is purchasing from Softbank Europe, and Softbank
Europe is selling to Sub, all of the issued and outstanding shares of Ivy Group
Stock, against payment in cash of the Ivy Group Consideration.
10
16
ARTICLE III
POST-CLOSING ADJUSTMENT
SECTION 3.1 Purchase Price Adjustments.
(a) Pre-Closing Statement. (i) The Company has furnished to
CustomerONE Holding and Sub a statement of the Company (the "Pre-Closing
Statement"), prepared as of September 30, 1998, setting forth (x) the Estimated
Debt and (y) the Estimated Adjusted Net Working Capital Amount.
(ii) Based on the Pre-Closing Statement, the Purchase
Price has been reduced by $1,762,480 because the Estimated Adjusted Net Working
Capital Amount was $1,762,480 less than the Working Capital Target.
(b) Post-Closing Statement. (i) As soon as practicable, but in
no event more than 90 days after the Closing Date, CustomerOne Holding shall
deliver to Softbank Holdings a consolidated balance sheet of the SSG Companies
or their successors prepared in accordance with GAAP as of the Closing Date and
immediately prior to the Closing, without regard to any adjustments thereto in
respect of or relating to the transactions contemplated hereby or simultaneous
or subsequent action, and related statement (the "Post-Closing Statement")
setting forth the Closing Adjusted Net Working Capital Amount and the Closing
Debt and the corresponding Proposed Closing Differential and Proposed Debt
Differential. Section 3.1(b) of the Disclosure Schedule sets forth an example of
the calculation of Adjusted Net Working Capital and Designated Debt, as
calculated from the consolidated balance sheet of the SSG Companies as of June
30, 1998, prepared in accordance with GAAP. In preparing the Post-Closing
Statement, the principles applied in preparing Section 3.1(b) of the Disclosure
Schedule shall be utilized. Such balance sheet and related schedules supporting
the Post-Closing Statement shall be audited by Pricewaterhouse Coopers, L.L.P.
and shall be delivered together with their report thereon. Any currency
translation required in preparation of the Post-Closing Statement shall be made
as of the Closing Date.
(ii) Within 45 days after the delivery of the
Post-Closing Statement to Softbank Holdings, Softbank Holdings shall either
accept the amount of the Proposed Closing Differential and the Proposed Debt
Differential as set forth in the Post-Closing Statement as correct or object to
the Proposed Closing Differential and/or the Proposed Debt Differential,
specifying in reasonable detail in writing the nature of its objection(s). In
the event Softbank Holdings does not object to the Proposed Closing Differential
or the Proposed Debt Differential within said 45-day period, Softbank Holdings
shall be deemed to have accepted the Proposed Closing Differential as the
Closing Differential and the Proposed Debt Differential as the Debt
Differential. In the event Softbank Holdings objects to the Proposed Closing
Differential and/or the Proposed Debt Differential, then, during a 45-day period
subsequent to the receipt by CustomerONE Holding of notice of objection(s), the
parties shall attempt in good faith to resolve the differences respecting such
Proposed Closing Differential and/or Proposed Debt Differential. In the event
the parties are unable to resolve their differences within said 45-day period,
the parties agree that the matter shall be submitted to
11
17
KPMG Peat Marwick, LLP (the "CPA Firm"), which the parties acknowledge to be a
mutually acceptable firm of certified public accountants. The costs and expenses
of the CPA Firm shall be borne equally by CustomerONE Holding and Softbank
Holdings. The CPA Firm shall resolve any disputed amounts and shall determine a
final Closing Differential and/or a final Debt Differential as promptly as
practicable, but in any event within 60 days following submission of such matter
to the CPA Firm. The CPA Firm's calculation of the Closing Differential and/or
Debt Differential shall be delivered in writing to CustomerONE Holding and
Softbank Holdings. During the period from the date of delivery of the
Post-Closing Statement to Softbank Holdings through the date of resolution of
any dispute regarding the Proposed Closing Differential or the Proposed Debt
Differential as contemplated by this Section 3.1(b)(ii), CustomerONE Holding
shall provide Softbank Holdings, the CPA Firm, to the extent applicable, and
their respective agents and representatives reasonable access to all appropriate
books, work papers, records (including those supplemental schedules prepared in
connection with preparation of the Post-Closing Statement), facilities and
employees of the SSG Companies and their successors for purposes relevant to the
review of such Post-Closing Statement and the resolution of any related dispute.
If the CPA Firm determines the Closing Differential and/or the Debt
Differential, the determination of the final Closing Differential and/or the
final Debt Differential by the CPA Firm shall be final and binding on all
parties hereto.
(iii) Within five (5) Business Days after the final
determination of the Closing Differential and the Debt Differential, the
Purchase Price shall be adjusted as follows:
(1) If the amount of the Closing
Differential is a positive amount (i.e., the Closing Adjusted Net Working
Capital Amount represents a greater amount of Adjusted Net Working Capital than
the Estimated Adjusted Net Working Capital Amount), then the Purchase Price
shall be adjusted upward by an amount equal to the Closing Differential. In such
case, CustomerONE Holding shall pay, or cause to be paid, to Softbank Holdings
the increase of the Company Common Stock Consideration resulting from such
adjusted Purchase Price. Conversely, if the amount of the Closing Differential
is a negative amount, then the Purchase Price shall be adjusted downward by an
amount equal to the Closing Differential (expressed as a positive amount), which
amount shall be paid by Softbank Holdings to CustomerONE Holding, representing a
decrease in the Company Common Stock Consideration.
(2) If the amount of the Debt Differential
is a positive amount (i.e., the Estimated Debt represents a greater amount of
indebtedness than the Closing Debt), then the Purchase Price shall be adjusted
upward by an amount equal to the Debt Differential. In such case, CustomerONE
Holding shall pay, or cause to be paid, to Softbank Holdings the increase of the
Company Common Stock Consideration resulting from such adjusted Purchase Price.
Conversely, if the amount of the Debt Differential is a negative amount, then
the Purchase Price shall be adjusted downward by an amount equal to the Debt
Differential
12
18
(expressed as a positive amount), which amount shall be paid by Softbank
Holdings to CustomerONE Holding, representing a decrease in the Company Common
Stock Consideration.
Each of the Closing Differential and the Debt Differential shall accrue simple
interest at the most recently announced rate of interest per annum adopted from
time to time by Citibank, N.A., as its prime rate or reference rate in effect at
its principal office in New York, New York, from the Closing Date until the date
of payment of the Closing Differential or the Debt Differential, as the case may
be.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SOFTBANK HOLDINGS
Softbank Holdings represents and warrants to each of
CustomerONE Holding and Sub as set forth below. As used in this Article IV, any
reference to any event, change or effect as being "material" with respect to any
entity means a material event, change or effect related to the condition
(financial or otherwise), properties, assets, liabilities, businesses,
prospects, earnings or operations of such entity.
SECTION 4.1 Organization and Qualification. Except as set forth in
Section 4.1 of the Disclosure Schedule, each of Softbank Holdings, Softbank
Europe and the SSG Companies is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, and
each of the SSG Companies has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as it is now
being conducted. Except as set forth in Section 4.1 of the Disclosure Schedule
,the SSG Companies are qualified or licensed to do business and are in good
standing in the jurisdictions reflected opposite their respective names in
Section 4.1 of the Disclosure Schedule, which jurisdictions represent every
jurisdiction where the nature of the business conducted by any of them or the
properties owned or leased by any of them requires qualification, except where
the failure to be so qualified or licensed and in good standing would not have a
Material Adverse Effect. Softbank Holdings and Softbank Europe have delivered to
CustomerONE Holding complete and correct copies of the charters, bylaws or other
comparable organizational documents of each of the SSG Companies.
SECTION 4.2 Authorization. Each of the Company, Softbank Holdings and
Softbank Europe has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company, Softbank Holdings and
Softbank Europe, the performance by the Company, Softbank Holdings and Softbank
Europe of their obligations hereunder, and the consummation by each of them of
the transactions contemplated hereby, have been duly
13
19
authorized. This Agreement has been duly and validly executed and delivered by
the Company, Softbank Holdings and Softbank Europe and, assuming this Agreement
constitutes a valid and binding obligation of the other parties hereto,
constitutes a valid and binding obligation of the Company, Softbank Holdings and
Softbank Europe enforceable against each of them in accordance with its terms.
SECTION 4.3 No Violation. Except as set forth in Section 4.3 of the
Disclosure Schedule, neither the execution and delivery of this Agreement by the
Company, Softbank Holdings and Softbank Europe and the performance by the
Company, Softbank Holdings and Softbank Europe of their obligations hereunder
nor the consummation by the Company, Softbank Holdings and Softbank Europe of
the transactions contemplated hereby will (a) violate, conflict with or result
in any breach of any provision of the charters, bylaws or other comparable
organizational documents of Softbank Holdings, Softbank Europe or any of the SSG
Companies, (b) violate, conflict with or result in a violation or breach of, or
constitute a default (with or without due notice or lapse of time or both)
under, or permit the termination of, or require the consent of any other party
to, which consent has not been obtained, or result in the acceleration of, or
entitle any party to accelerate (whether as a result of a change in control of
any of the SSG Companies or otherwise) any material obligation, or result in the
loss of any material benefit, or give rise to the creation of any Liens upon any
of the material properties or assets of the SSG Companies under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture or deed
of trust, or any material license, lease, agreement or other instrument or
obligation to which Softbank Holdings, Softbank Europe or any of the SSG
Companies is a party or by which any of them or any of their properties or
assets may be bound or affected, or (c) violate any order, writ, judgment,
injunction, decree, statute, rule or regulation, of any court or Governmental
Authority applicable to Softbank Holdings, Softbank Europe or any of the SSG
Companies or any of their respective properties or assets.
SECTION 4.4 Capitalization of the Company and Ivy Group; Title to
Shares.
(a) The authorized capital stock of the Company consists of
15,000,000 shares of Company Common Stock and 500,000 shares of Company
Preferred Stock. As of the date hereof, the Company has, in the aggregate,
11,846,936 shares of Company Common Stock and 100,000 shares of Company
Preferred Stock issued and outstanding, all of which have been validly issued,
are fully paid and non-assessable and were not issued in violation of any
preemptive rights. Except as set forth in Section 4.4 of the Disclosure
Schedule, immediately prior to the Closing, there were no options, warrants,
calls, subscriptions, conversion or other rights, agreements or commitments
obligating the Company to issue any additional shares of capital stock of the
Company or any other securities convertible into, exchangeable for or evidencing
the right to subscribe for any shares of capital stock of the Company. All of
the stock options described in Section 4.4 of the Disclosure Schedule have been
exercised or cancelled prior to the Closing, without any liability, contingent
or otherwise, to any of the SSG Companies after the Closing Date. The Company
has no indebtedness
14
20
outstanding that has voting rights. The Company has not issued any stock
appreciation rights or other rights relating to equity participation. Set forth
in Section 4.4 of the Disclosure Schedule is a true and complete list of all
stockholders of the Company, including the number and type of shares held by
each such stockholder.
(b) Section 4.4(b) of the Disclosure Schedule lists all of the
shares of capital stock of Ivy Group (collectively, the "Ivy Group Stock") which
are, as of the Closing, (i) authorized and (ii) issued and outstanding. All of
the shares of Ivy Group Stock that are issued and outstanding are held
beneficially and of record by Softbank Europe. All of the issued and outstanding
shares of Ivy Group Stock have been duly authorized and validly issued, are
fully paid and non-assessable and were not issued in violation of any preemptive
rights. There are no options, warrants, calls, subscriptions, conversion or
other rights, agreements or commitments obligating Ivy Group to issue any
additional shares of capital stock or any other securities convertible into,
exchangeable for or evidencing the right to subscribe for any shares of such
capital stock. Ivy Group has no indebtedness outstanding that has voting rights.
Ivy Group has not issued any stock appreciation rights or other rights relating
to equity participation.
(c) Softbank Holdings is the holder of record and owns
beneficially that number of shares of Company Common Stock and Company Preferred
Stock and Softbank Europe is the holder of record and owns beneficially that
number of shares of Ivy Group Stock set forth opposite their respective names in
Section 4.4(c) of the Disclosure Schedule. Softbank Holdings owned 90.63% of the
issued and outstanding voting securities of the Company on a fully-diluted
basis, assuming exercise of all options and other rights or securities
convertible into Common Stock, immediately prior to the Closing, the Company
Preferred Stock owned by Softbank Holdings represented 100% of the issued and
outstanding Company Preferred Stock immediately prior to the Closing, and the
Ivy Group Stock owned by Softbank Europe represented 100% of the issued and
outstanding Ivy Group Stock immediately prior to the Closing. Each of Softbank
Holdings and Softbank Europe owns such shares free and clear of any Liens.
Neither Softbank Holdings nor Softbank Europe is a party to any voting trust,
proxy or other agreement with respect to the voting of any such shares.
(d) Section 4.4(d)(i) of the Disclosure Schedule sets forth a
true and complete list of all persons and entities owning shares of Company
Common Stock, and the number of shares owned by each such person or entity, as
of the Closing (such persons and entities (other than Softbank Holdings)
hereinafter referred to as the "Minority Stockholders"). Section 4.4(d)(ii) of
the Disclosure Schedule sets forth a true and complete list of all
Optionholders, including the number of shares of Company Common Stock into which
their respective stock options are exercisable and the exercise price of each
such stock option. Attached to Section 4.4(d) of the Disclosure Schedule as
Annexes 1 through 5 are forms of stock option award agreements, which forms are
the only agreements under which the Company has granted or awarded stock options
to employees, consultants, executives or any other person.
15
21
SECTION 4.5 Subsidiaries and Equity Investments.
(a) Section 4.5 of the Disclosure Schedule sets forth (i) the
name of each corporation of which the Company or Ivy Group directly or
indirectly owns shares of capital stock having in the aggregate 50% or more of
the total combined voting power of the issued and outstanding shares of capital
stock entitled to vote generally in the election of directors of such
corporation (individually, a "Subsidiary" and collectively, the "Subsidiaries");
(ii) the name of each corporation, partnership, joint venture or other entity
(other than the Subsidiaries) in which the Company or Ivy Group has, or pursuant
to any agreement has the right to acquire at any time by any means, an equity
interest or investment; (iii) in the case of each of the Subsidiaries and such
other corporations described in the foregoing clause (ii), (A) the jurisdiction
of incorporation and (B) the capitalization thereof and the percentage of each
class of voting stock owned by the Company or Ivy Group or by any of their
respective Subsidiaries; and (iv) in the case of each of such unincorporated
entities, the equivalent of the information provided pursuant to the preceding
clause (iii) with regard to corporate entities.
(b) All of the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable, have not been issued in violation of any preemptive rights, and,
except as specified in Section 4.5 of the Disclosure Schedule, are owned of
record and beneficially, directly or indirectly, by the Company or Ivy Group,
free and clear of any Liens.
(c) There are no options, warrants, calls, subscriptions,
conversion or other rights, agreements or commitments obligating any of the
Subsidiaries to issue any additional shares of capital stock of such Subsidiary
or any other securities convertible into, exchangeable for or evidencing the
right to subscribe for any shares of such capital stock. None of the
Subsidiaries has any indebtedness outstanding that has voting rights. None of
the Subsidiaries has issued any stock appreciation rights or other rights
relating to equity participation.
SECTION 4.6 Consents and Approvals. Except (i) as set forth in Section
4.6 of the Disclosure Schedule and (ii) any consents and approvals of or filings
or registrations with the Antitrust Division of United States Department of
Justice (the "DOJ") pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act") (all of which have been duly obtained or
made), no filing or registration with, no notice to and no permit,
authorization, consent or approval of any Governmental Authority is necessary
for the consummation by the Company, Softbank Holdings or Softbank Europe of the
transactions contemplated by this Agreement.
SECTION 4.7 Financial Statements. Softbank Holdings and Softbank
Europe have delivered to CustomerONE Holding (a) copies of the audited
consolidated balance sheets of the Company as of December 31, 1995, December 31,
1996 and December 31, 1997, together with the related audited consolidated
statements of income, stockholders' equity and changes in cash flow for the
fiscal years ended on such dates, and the notes thereto, accompanied by the
16
22
reports thereon of the applicable firm of independent public accountants, (b)
copies of the audited consolidated balance sheets of UCA&L Limited, a wholly
owned subsidiary of the Company (other than one share held by an Irish designee)
("UCA&L"), as of December 31, 1996 and December 31, 1997, together with the
related audited consolidated statements of income, stockholders' equity and
changes in cash flow for the fiscal years ended on such dates, and the notes
thereto, accompanied by the reports thereon of the applicable firm of
independent public accountants, (c) copies of the audited consolidated balance
sheets of the Ivy Group as of March 31, 1996 and December 31, 1996, together
with the related audited consolidated statements of income, stockholders' equity
and changes in cash flow for the period ended on such dates, and the notes
thereto, accompanied by the reports thereon of the applicable firm of
independent public accountants, and (d) copies of the unaudited consolidated
balance sheets of the Company, UCA&L and Ivy Group as of August 31, 1998,
together with the related unaudited consolidated statement of income,
stockholders' equity and changes in cash flow for the eight-month period ended
on such date, and the notes thereto, signed by the chief financial officers of
the Company and Ivy Group (the "Interim Financial Statements" and, together with
the audited financial statements referred to above, the "Financial Statements").
The Financial Statements, including the notes thereto, (i) were prepared in
accordance with GAAP throughout the periods covered thereby, except as otherwise
disclosed in Schedule 4.7 of the Disclosure Schedule, (ii) present fairly in all
material respects the consolidated financial position, results of operations and
changes in cash flows of the Company, UCA&L and Ivy Group as of such dates and
for the periods then ended (subject, in the case of the unaudited interim
Financial Statements, to normal year-end audit adjustments consistent with prior
periods that would not be material, individually or in the aggregate), and (iii)
in the case of the audited Financial Statements, have been audited in accordance
with generally accepted auditing standards.
SECTION 4.8 Absence of Undisclosed Liabilities. Except for matters
relating to the transactions contemplated by this Agreement, there are no
material liabilities or financial obligations of the SSG Companies of any kind
whatsoever (whether absolute, accrued, contingent or otherwise, and whether due
or to become due) other than liabilities and obligations: (a) disclosed,
provided for or reserved against in the Financial Statements, (b) arising after
December 31, 1997 in the ordinary course of business consistent with past
experience (other than management fees, if any, owed to any other person, the
existence and amount of which are disclosed in Section 4.8 of the Disclosure
Schedule), or (c) otherwise disclosed in Section 4.8 of the Disclosure Schedule.
SECTION 4.9 Absence of Certain Changes. Except as disclosed in Section
4.9 of the Disclosure Schedule or in the Interim Financial Statements, and
except for matters relating to the transactions contemplated by this Agreement,
since December 31, 1997, the SSG Companies have conducted their respective
businesses only in the ordinary course consistent with past practices and since
December 31, 1997 there has not occurred (a) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to the equity interests of any the SSG Companies, (b) any
forgiveness,
17
23
cancellation or waiver by any of the SSG Companies of material debts owed to any
of the SSG Companies or material claims or rights of any of the SSG Companies
against others, or any discharge by any of the SSG Companies of any material
Lien by any of the SSG Companies of any liability or obligation, other than, as
relates to all of the foregoing, in the ordinary course of business consistent
with past practices, (c) any material change in the credit practices of any of
the SSG Companies, (d) (i) any increase in the rate or terms of compensation
(including termination and severance pay) payable or to become payable by any of
the SSG Companies to any of their directors, officers or employees, or any
increase in the rate or terms of any bonus, insurance, pension or other employee
benefit plan, program or arrangement made to, for or with any such directors,
officers or employees, except, in each case, increases occurring in the ordinary
course of business consistent with past practices or as required by applicable
law, or (ii) any entry by any of the SSG Companies into any employment,
severance or termination agreement with any such person, (e) any entry into any
material agreement relating to the borrowing of money or any material agreement,
commitment or transaction by any of the SSG Companies, except any agreements,
commitments or transactions in the ordinary course of business consistent with
past practices, (f) any damage, destruction or theft or other casualty loss to
the properties or assets owned or leased by any of the SSG Companies with a book
or replacement value of $20,000 or more individually or $100,000 in the
aggregate, whether or not covered by insurance (other than damage, destruction
or theft or other casualty loss to any property or assets which property or
assets have been repaired or replaced and the cost of such repair or replacement
has been expensed by the SSG Companies), (g) any change by any of the SSG
Companies in their financial or tax accounting principles or methods, except
insofar as may be required by a change in GAAP, applicable law or circumstances
which did not exist as of the date of the Financial Statements, (h) any change
made or authorized in the charters, bylaws or other comparable organizational
documents of any of the SSG Companies, (i) any purchase, redemption, issue, sale
or other acquisition or disposition by any of the SSG Companies of any shares of
capital stock or other equity securities of any of the SSG Companies, or the
grant of any options, warrants or other rights to purchase, or convert any
obligation into, shares of capital stock or any evidence of indebtedness or
other securities of any of the SSG Companies, (j) any material sale, lease,
license, encumbrance or disposition by any of the SSG Companies of any of their
assets which is not in the ordinary course of business consistent with past
practices, or (k) an event or condition that has had or could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.10 Litigation. Except as set forth in Section 4.10 of the
Disclosure Schedule and except for matters primarily related to environmental
matters which are governed by Section 4.24, there is no action, suit, judicial
or administrative proceeding, arbitration or investigation where alleged damages
are either unspecified or in excess of $100,000 or could otherwise reasonably be
expected to result in a Material Adverse Effect ("Litigation") pending or, to
the knowledge of Softbank Holdings, Softbank Europe and the SSG Companies,
threatened against any of the SSG Companies or any of their respective
properties, assets or rights before any court, arbitrator or administrative or
Governmental Authority, nor is there any judgment, decree, injunction, or order
of any court, governmental department,
18
24
commission, agency, instrumentality or arbitrator outstanding against any of the
SSG Companies.
SECTION 4.11 Liens and Encumbrances. Except as set forth in Section
4.11 of the Disclosure Schedule, all properties and assets owned by each of the
SSG Companies are free and clear of all Liens except (a) statutory Liens not yet
delinquent, (b) purchase money Liens arising in the ordinary course of business
consistent with past practices, (c) Liens reflected in the Financial Statements
(which have not been discharged) and (d) Liens which in the aggregate do not
materially detract from the value or, in the case of personal property,
materially impair the use by any of the SSG Companies of properties or assets
subject thereto or, in the case of real property, materially impair the present
and continued use in the usual and normal conduct of the business of each of the
SSG Companies. Except as set forth on Section 4.11 of the Disclosure Schedule,
the material plant, property, equipment and other tangible assets and properties
which are owned or leased by the SSG Companies (i) are in good operating
condition, ordinary wear and tear excepted, and (ii) constitute all of the
assets and properties used in and necessary for the conduct of the businesses
presently conducted by the SSG Companies.
SECTION 4.12 Certain Agreements. Except as described in Section 4.12
of the Disclosure Schedule, none of the SSG Companies are parties to any oral or
written agreement, plan or arrangement with any officer, director or employee of
any of the SSG Companies (i) the benefits of which are contingent, or the terms
of which are materially altered, upon the occurrence of a transaction involving
any of the SSG Companies of the nature of any of the transactions contemplated
by this Agreement, (ii) under which any person may receive payments subject to
the tax imposed by Section 4999 of the Code, or (iii) any of the benefits of
which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement. Except as
disclosed in Section 4.12 of the Disclosure Schedule, none of the SSG Companies
are parties to any oral or written (i) material agreement, contract, indenture
or other instrument relating to the borrowing of money or the guarantee of, or
other form of assurance of payment of, any obligation for the borrowing of
money, (ii) agreement restricting any SSG Company from competing or otherwise
conducting its business in any jurisdiction, (iii) agreement relating to the
exclusive use by any SSG Company of any vendor, supplier or provider, or (iv)
other contract, agreement or commitment of any of the SSG Companies material to
any of the SSG Companies. Except as set forth in Section 4.12 of the Disclosure
Schedule, each agreement, contract or obligation described in Section 4.12 of
the Disclosure Schedule (which description includes a listing of all amendments
to such agreements, contracts or obligations), or required to be so described,
is a valid and binding obligation of the relevant SSG Company and is in full
force and effect. Except as set forth in the Section 4.12 of the Disclosure
Schedule, each of the relevant SSG Companies and, to the knowledge of Softbank
Holdings, Softbank Europe and the SSG Companies, the other party thereto has
performed in all material respects all material obligations required to be
performed by it through the date
19
25
hereof under the agreements so described and is not (with or without lapse of
time or giving notice, or both) in breach or default in any material respect
thereunder.
SECTION 4.13 Employee Benefit Plans.
(a) Section 4.13 of the Disclosure Schedule sets forth a true
and complete list of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, employment, collective bargaining, consulting,
severance or termination pay, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program, agreement, arrangement or understanding, and each
other "employee benefit plan" (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that is
maintained or contributed to by any of the SSG Companies ("Employee Benefit
Plans") as of the Closing Date.
(b) Except as set forth on Section 4.13(b) of the Disclosure
Schedule, none of the SSG Companies maintains or contributes to, or on or after
the date which is six years prior to the Closing Date (the "6-Year Look Back
Date") has maintained or contributed to, any "multiemployer plan," as such term
is defined in Section 3(37) of ERISA, or any single-employer defined benefit
plans subject to Title IV of ERISA. Each Employee Benefit Plan which is intended
to be qualified under Section 401(a) and, if applicable, Section 401(k) of the
Code, is so qualified, and, to the knowledge of Softbank Holdings, Softbank
Europe and the SSG Companies, no event has occurred or condition exists which
would cause any such plan to lose such qualified status.
(c) Except as disclosed in Section 4.13(c) of the Disclosure
Schedule, no action, suit, judicial or administrative proceeding, arbitration or
investigation relating to any Employee Benefit Plan (other than claims for
benefits for which the plan administrative procedures have not been exhausted
and "qualified domestic relations orders" as defined in Section 414(p) of the
Code) is pending or, to the knowledge of Softbank Holdings, Softbank Europe and
the SSG Companies, threatened against any of the SSG Companies or any Employee
Benefit Plan before any court, arbitrator or administrative or Governmental
Authority. None of the SSG Companies has failed to make contributions to any
Employee Benefit Plan that are required to be made on or after January 1, 1997
under the terms of such Employee Benefit Plans or under applicable law. None of
the SSG Companies or any of the Employee Benefit Plans which are subject to
ERISA, or any trusts created thereunder, or any trustee or administrator
thereof, has engaged in a "prohibited transaction", as such term is defined in
Section 4975 of the Code or under ERISA on or after the 6-Year Look Back Date,
which could reasonably subject any of the SSG Companies to any tax or penalty
imposed by Section 4975 of the Code or Section 502 of ERISA in any amount which
would be material. Each of the SSG Companies is in good faith material
compliance with the continuation coverage requirements applicable to each
Employee Benefit Plan that is a group health plan subject to Section 4980B of
the Code.
20
26
SECTION 4.14 Taxes. Except as set forth in Section 4.14 of the
Disclosure Schedule:
(a) each of the SSG Companies has, during the past three
years, timely filed or caused to be filed all federal, state, local and foreign
Tax returns required to be filed and has paid or caused to be paid, or has made
adequate provision or set up an adequate accrual or reserve on each of the books
of the SSG Companies for the payment of, all Taxes required to be paid in
respect of the periods for which returns are due, and has established an
adequate accrual or reserve under GAAP on each of the books of the SSG Companies
for the payment of all Taxes payable in respect of the period, including
portions thereof, subsequent to the last of said periods required to be so
accrued or reserved up to and including the Closing Date. For these purposes,
the Tax attributable to the period up to and including the Closing Date shall be
determined as if the taxable year of each of the SSG Companies ended as of the
Closing Date. There are no federal, state, and foreign income tax returns which
are due from any of the SSG Companies which have not been filed;
(b) there is no delinquency by any of the SSG Companies in the
payment of any Tax. No deficiencies for any Tax, assessment or governmental
charge have been claimed, proposed or assessed against any of the SSG Companies
or any of their assets, and to the knowledge of Parent, Softbank Holdings,
Softbank Europe and the SSG Companies, none have been threatened;
(c) no waiver or extension of time to assess any Taxes has
been given or requested. None of the SSG Companies has received notice of any
claim made by any taxing authority in any jurisdiction where any of the SSG
Companies do not file Tax returns that any of the SSG Companies are or may be
subject to taxation by that jurisdiction;
(d) the federal, state, local and foreign Tax returns that
include any of the SSG Companies have not been audited since the date of the
most recent audit set forth in Section 4.14 of the Disclosure Schedule by the
Internal Revenue Service or comparable federal, state, local or foreign agencies
or foreign taxing authority;
(e) at the Closing Date, the NOLs of the SSG Companies on a
consolidated basis is at least $11.5 million. None of the SSG Companies has
taken any action or failed to take any action that has had or could reasonably
be expected to have the effect of impairing or reducing such NOLs or impairing
or limiting CustomerONE Holding's ability to utilize such NOLs after the Closing
Date. Softbank Holdings will make any necessary elections to permit the NOLs and
any other tax attributes of the SSG Companies to be utilized by the SSG
Companies or CustomerONE Holding in the future;
(f) none of the SSG Companies has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code;
21
27
(g) none of the SSG Companies is a party to any tax sharing or
similar agreement or arrangement (whether or not written) pursuant to which it
will have any obligation to make any payments after the Closing Date;
(h) each of the SSG Companies has complied in all material
respects with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes and has duly and timely withheld from employee
salaries, wages and other compensation and has paid over to the appropriate
taxing authorities all amounts required to be so withheld and paid over for all
periods under all applicable laws;
(i) there is no contract, agreement, plan or arrangement
covering any person, individually or collectively, that could give rise to the
payment of any amount that would not be deductible by CustomerONE Holding or the
SSG Companies or any of their affiliates by reason of Section 280G of the Code,
or would constitute compensation in excess of the limitation set forth in
Section 162(m) of the Code;
(j) none of the SSG Companies has agreed, nor is required to
make, any adjustment under Code Section 481(a), or similar provision under
foreign law, by reason of a change in accounting method or otherwise;
(k) none of the SSG Companies is subject to any private letter
ruling of the Internal Revenue Service or comparable rulings of other taxing
authorities;
(l) there are no Liens as a result of any unpaid Taxes upon
any of the assets of the SSG Companies; and
(m) no property owned by the SSG Companies is (i) property
required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed property" within the
meaning of Section 168(g) of the Code.
SECTION 4.15 Compliance with Applicable Law. Except as set forth in
Section 4.15 of the Disclosure Schedule, each of the SSG Companies holds all
licenses, franchises, permits and authorizations necessary for the lawful
conduct of its businesses under and pursuant to, and the businesses of each of
the SSG Companies are not being conducted in violation in any material respect
of, any provision of any Federal, state, local or foreign statute, law,
ordinance, rule, regulation, judgment, decree, order, directive, concession,
grant, franchise, permit or license or other governmental authorization or
approval applicable to any of the SSG Companies.
22
28
SECTION 4.16 Brokers' Fees and Commissions. None of the SSG Companies,
Parent, Softbank Holdings and Softbank Europe, their directors or officers, or,
to the knowledge of Softbank Holdings, Softbank Europe and the SSG Companies,
any of their employees or agents, has employed any investment banker, broker, or
finder in connection with the transactions contemplated hereby.
SECTION 4.17 Proprietary Rights. Section 4.17 of the Disclosure
Schedule contains an accurate and complete list of all material patents, patent
applications, trade names, trademarks, service marks, trademark registrations
and applications, service xxxx registrations and applications and copyright
registrations and applications, trade secrets and all material software
developed by or for the SSG Companies owned by any of the SSG Companies
(collectively, the "Intellectual Property"). The SSG Companies own all title and
interest, free and clear of liens and encumbrances in and to the Intellectual
Property and all material software, technology, information and/or data used in
or necessary for its business as now conducted or heretofore conducted and as
proposed to be conducted, including without limitation all software described in
the Disclosure Schedule (collectively, the "Company Technology"), except such
material third party software and technology licensed by the SSG Companies as
set forth in the Disclosure Schedule (the "Third Party Licenses"). The
Intellectual Property, the Company Technology and the Third Party Licenses
constitute all such property necessary to conduct the business of the SSG
Companies as presently conducted. Upon consummation of the transactions
contemplated by this Agreement, each of the SSG Companies will be entitled to
continue to use all such property currently used by it without the payment of
any additional fees or charges, other than ordinary course licensing fees.
Except as set forth in Section 4.17 of the Disclosure Schedule, to the knowledge
of Softbank Holdings, Softbank Europe and the SSG Companies, the use of the
Intellectual Property and the Company Technology does not infringe any
copyrights, trade secret rights, patents, patent rights, trademarks, service
marks, trade names, or privacy or other proprietary rights of any third party.
Except as set forth in Section 4.17 of the Disclosure Schedule, there are no
pending claims, and the SSG Companies have not received any communications or
information, that: (i) challenge the scope, validity, enforceability, or the SSG
Companies' ownership of the Intellectual Property and/or the Company Technology;
or (ii) allege that the SSG Companies have violated or infringed or, by
conducting its business as proposed, would violate or infringe any copyrights,
trade secret rights, patents, patent rights, trademarks, services marks, trade
names, or privacy or other proprietary rights of any third party. Except as set
forth in Section 4.17 of the Disclosure Schedule, all material patents, and any
registration and/or certificates issued by any Governmental Authority relating
to any of the Intellectual Property and all Third Party Licenses are valid and
subsisting, have been properly maintained and neither the SSG Companies nor, to
the knowledge of Softbank Holdings, Softbank Europe and the SSG Companies, any
other person is in default or violation thereunder. To the knowledge of Softbank
Holdings, Softbank Europe and the SSG Companies, no employee of any SSG Company
is obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the
23
29
use of his or her best efforts to promote the interests of the SSG Companies or
that would conflict with the SSG Companies' business as proposed to be
conducted. Neither the carrying on of the SSG Companies' business by the
employees of the SSG Companies, nor the conduct of the SSG Companies' business
as proposed, will, to the knowledge of Softbank Holdings, Softbank Europe and
the SSG Companies, 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 employees is now obligated. To the knowledge
of Softbank Holdings, Softbank Europe and the SSG Companies, it is not and will
not be necessary to utilize any inventions of any employee of any SSG Company
(or people the SSG Companies currently intend to hire) made prior to their
employment by the SSG Companies. To the knowledge of Softbank Holdings, Softbank
Europe and the SSG Companies, no other person or entity has violated or
infringed or, by conducting its business as proposed, would violate or infringe
any copyrights, trade secret rights, patents, patent rights, trademarks, service
marks, trade names or privacy or other proprietary rights of the SSG Companies.
SECTION 4.18 Year 2000 Compliance. Except as set forth in Section 4.18
of the Disclosure Schedule (which includes a good faith estimate of any pending
compliance projects), the Company Technology and computing equipment operated by
the SSG Companies and third party software and other technology licensed to any
of the SSG Companies under Third Party Licenses are capable of recording,
storing, processing and presenting calendar dates falling on or after January 1,
2000 and date-dependent data in substantially the same manner and with
substantially the same functionality as such Company Technology, computing
equipment and software and other technology licensed under Third Party Licenses
records, stores, processes and presents calendar dates falling prior to January
1, 2000 and date-dependent data as of the date hereof.
SECTION 4.19 Privacy Matters. The SSG Companies are in compliance with
all applicable privacy laws governing the acquisition, maintenance and use of
information obtained through direct marketing activities. Section 4.19 of the
Disclosure Schedule contains a description of all complaints, orders, inquiries,
investigations and requests issued, made or undertaken by the Federal Trade
Commission, the Federal Communications Commission or any other regulatory body
or Governmental Authority with respect to the privacy of information obtained,
maintained or used by any of the SSG Companies.
SECTION 4.20 Labor Relations. Except as listed or described on Section
4.20 of the Disclosure Schedule, each of the SSG Companies (a) is, and has been
for the past three years, in compliance with all applicable laws regarding
employment and employment practices, terms and conditions of employment, wages
and hours, and plant closing, occupational safety and health and workers'
compensation, codes of conduct, collective agreements, orders or awards, and is
not engaged in any unfair labor practices, (b) has no, and has not had in the
past three years any, unfair labor practice charges or complaints pending or, to
the knowledge of Softbank Holdings, Softbank Europe and the SSG Companies,
threatened against it before the National Labor Relations Board or other
Governmental Authority, (c) has no, and has not had
24
30
in the past three years any, grievances pending or, to the knowledge of Softbank
Holdings, Softbank Europe and the SSG Companies, threatened against it that
could reasonably be expected to have a Material Adverse Effect, and (d) has no,
and has not had in the past three years any, charges pending before the Equal
Employment Opportunity Commission or any state or local agency or other
Governmental Authority responsible for the prevention of unlawful employment
practices. There is no labor strike, slowdown, work stoppage or lockout actually
pending or, to the knowledge of Softbank Holdings, Softbank Europe and the SSG
Companies, threatened against or affecting any of the SSG Companies. To the
knowledge of Softbank Holdings, Softbank Europe and the SSG Companies, no union
organizational campaign or representation petition is currently pending with
respect to the employees of any of the SSG Companies.
SECTION 4.21 Insurance. At all times during the three years prior to
the Closing the SSG Companies have had insurance policies in full force and
effect for such amounts as are sufficient for material compliance with all
requirements of law and of all agreements to which any of the SSG Companies have
been parties or by which they have been bound and which Softbank Holdings,
Softbank Europe and the SSG Companies believe have been otherwise sufficient for
companies of like size in the same industry. Set forth in Section 4.21 of the
Disclosure Schedule is a list of all fire, liability and other forms of
insurance and all fidelity bonds held by or applicable to each of the SSG
Companies or their businesses or properties immediately prior to the Closing,
setting forth in respect of each such policy the policy name, policy number,
carrier, term, type of coverage and annual premium. Except as set forth in
Section 4.21 of the Disclosure Schedule, no event relating to any of the SSG
Companies or their business has occurred which can reasonably be expected to
result in a retroactive upward adjustment in premiums under any such insurance
policies. Except as set forth in Section 4.21 of the Disclosure Schedule,
excluding insurance policies that have expired and been replaced in the ordinary
course of business consistent with past practices, no insurance policy has been
cancelled within the last three years and, to the knowledge of Softbank
Holdings, Softbank Europe and the SSG Companies, no threat has been made to
cancel any insurance policy of any of the SSG Companies during such period.
Except as set forth in Section 4.21 of the Disclosure Schedule, all such
insurance will remain in full force and effect with respect to periods before
the Closing Date after giving effect to the transactions contemplated hereby. No
event has occurred, including, without limitation, the failure by any of the SSG
Companies to give any notice or information or any of the SSG Companies giving
any inaccurate or erroneous notice or information, which limits or impairs the
rights of any of the SSG Companies under any such insurance policies.
SECTION 4.22 Real Estate. None of the SSG Companies owns any real
property. Except as set forth in Section 4.22 of the Disclosure Schedule, each
of the SSG Companies has good and transferable leaseholds in all real estate
leased by it, under valid and enforceable leases (the "Leased Real Property").
Except as disclosed in Section 4.22 of the Disclosure Schedule, none of the
Leased Real Property is subject to any easements, rights of way, licenses,
grants, building or use restrictions, exceptions, reservations, limitations or
other
25
31
impediments which materially and adversely affect the value thereof or which
interfere with or impair the present and continued use in the usual and normal
conduct of the business of each of the SSG Companies. Section 4.22 of the
Disclosure Schedule lists the street address of each parcel of Leased Real
Property. The SSG Companies have delivered to CustomerONE Holding true and
complete copies of the executed lease agreement, together with any amendments
thereto, with respect to each Leased Real Property.
SECTION 4.23 Personal Property. Except as set forth in Section 4.23 of
the Disclosure Schedule, each of the SSG Companies owns outright and has good
title to all the machinery, equipment, furniture, fixtures, inventory,
receivables and other tangible or intangible personal property reflected on the
latest balance sheets included in the Interim Financial Statements and all such
property acquired since the date of the Interim Financial Statements, except for
sales and other dispositions made in the ordinary course of business consistent
with past practices since such date.
SECTION 4.24 Environmental Matters. Except as set forth in Section
4.24 of the Disclosure Schedule: (a) the operations of each of the SSG Companies
have been and are in material compliance with all applicable Environmental Laws;
(b) no judicial or administrative proceedings are pending or, to the knowledge
of Softbank Holdings, Softbank Europe or the SSG Companies, threatened against
any of the SSG Companies or the Leased Real Property that alleges the violation
of, or which seek to impose liability against, any of the SSG Companies pursuant
to any Environmental Laws, and, there are no investigations pending or, to the
knowledge of Softbank Holdings, Softbank Europe or the SSG Companies, threatened
against the SSG Companies or affecting the Leased Real Property, which in any
case could result in any of the SSG Companies incurring material liabilities
under the Environmental Laws; (c) there are no facts, circumstances or
conditions relating to, arising from, or attributable to the SSG Companies that
are reasonably likely to result in any of the SSG Companies incurring material
liabilities under the Environmental Laws; and (d) Softbank Holdings and Softbank
Europe have provided CustomerONE Holding with copies of all environmentally
related audits, assessments, studies, reports, analyses, and results of
investigations of any of the real property currently or formerly owned, operated
or leased by any of the SSG Companies that are in the possession, custody or
control of Softbank Holdings, Softbank Europe or any of the SSG Companies.
SECTION 4.25 Customers and Suppliers. Except as described in Section
4.25 of the Disclosure Schedule, since January 1, 1998 there has not been any
material adverse change in the business relationship of any of the SSG Companies
with any material customer or supplier. Set forth in Section 4.25 of the
Disclosure Schedule is a list of the top ten customers by revenue of the SSG
Companies for the first eight months of 1998.
SECTION 4.26. Certain Business Practices; Potential Conflicts of
Interest. (a) None of the SSG Companies or any directors, officers, agents or
employees of any of the SSG Companies has (i) used any corporate funds for
unlawful contributions, gifts, entertainment or
26
32
other unlawful expenses relating to political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate funds or violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iii)
made any other unlawful payment.
(b) Except as set forth in Section 4.26 of the Disclosure
Schedule, none of Softbank Holdings or the executive officers or directors of
any of the SSG Companies or any entity controlled by any of the foregoing owns,
directly or indirectly, any significant interest in, or is a director, officer,
employee, consultant or agent of, any person which is a competitor, lessor,
lessee or customer of, or supplier of goods or services to, any of the SSG
Companies. Except as set forth in Section 4.26 of the Disclosure Schedule, none
of the stockholders, executive officers or directors of any of the SSG Companies
or any entity controlled by any of the foregoing (i) owns, directly or
indirectly, in whole or in part, any real property, leasehold interests or other
property with a fair market value of at least $25,000 in the aggregate the use
of which is necessary for the business of any of the SSG Companies, (ii) has any
cause of action or other suit, action or claim whatsoever against, or owes any
amount to any of the SSG Companies other than claims for travel and other
reimbursable expenses incurred in the ordinary course of business consistent
with past practices, (iii) has sold to, or purchased from, any of the SSG
Companies any assets or property for aggregate consideration in excess of
$25,000 since January 1, 1995, or (iv) is a party to any contract or
participates in any arrangement, written or oral, pursuant to which any of the
SSG Companies provides office space or services of any nature to any such
individual or entity, except to such individual in his capacity as an employee
of any of the SSG Companies.
SECTION 4.27 Tax Matters-United Kingdom.
(a) Returns and Information. All returns, computations,
notices and information which are or have been required to be made or given by
each Ivy Group Company for any Taxation purpose (i) have been made or given
within the requisite periods and on a proper basis and are up-to-date and
correct and (ii) none of them is the subject of any dispute with the Inland
Revenue or other Taxation authorities. Each Ivy Group Company is in possession
of sufficient information or has reasonable access to such information to enable
it to compute its liability to Taxation insofar as it depends on any transaction
occurring on or before the Closing Date.
(b) Taxation Liabilities. All Taxation of any nature
whatsoever whether of the United Kingdom or elsewhere to which any Ivy Group
Company is liable to account has been duly paid (insofar as such Taxation ought
to be have been paid) and without prejudice to the generality of the foregoing
each Ivy Group Company has made all such deductions and retentions as it was
obliged or entitled to make and all such payment as should have been made.
27
33
(c) Penalties and Interest. No Ivy Group Company has within
the past seven years paid or become liable to pay, nor are there any
circumstances by reason of which any Ivy Group Company is likely to become
liable to pay any penalty, fine, surcharge or interest whether charged by virtue
of the provisions of the Taxes Management Xxx 0000, the VATA or otherwise.
(d) Investigations. No Ivy Group Company has in the past
twelve months suffered an investigation, audit or visit by the Inland Revenue,
HM Customs & Excise, Department of Social Security or any other Taxation or
excise authority and neither Softbank Europe nor any Ivy Group Company is aware
of any such investigation, audit or visit plans for the next twelve months.
(e) Payments. All rent, annual payments and other sums of an
income nature paid or payable by any Ivy Group Company since the Accounts Date
or which any Ivy Group Company is under an obligation to pay in the future are
wholly allowable as deductions or charges for computing income for the purposes
of corporation Tax.
(f) Loan Relationships. All interest, discounts or premiums
payable by an Ivy Group Company in respect of its loan relationships within the
meaning of Chapter II of Part IV of the Finance Xxx 0000 are capable of being
brought into account as a debit for the purposes of that Chapter as and to the
extent that they are from time to time recognized in the Ivy Group Company's
accounts (assuming that the accounting policies and methods adopted for the
purposes of the Accounts continue to be so adopted).
(g) Capital Allowances. No balancing charge under the Capital
Allowances Act 1990 (or other legislation relating to any capital allowances)
will be made on any Ivy Group Company on the disposal of any pool of assets
(that is to say, all those assets and expenditure relating to which would have
been taken into account in computing whether a balancing charge would arise on a
disposal of any other of those assets) or of any asset not in such a pool, on
the assumption that the disposals are made for a consideration equal to the book
value shown in or adopted for the purposes of the Accounts for the assets in the
pool or (as the case may be) for the assets.
(h) Acquisition Costs. The book value shown in or adopted for
the purposes of the Accounts as the value of each of the assets of any Ivy Group
Company on the disposal of which a chargeable gain or allowable loss could arise
does not exceed the amount which on a disposal of such asset at the date of this
Agreement would be deductible under Section 38 of the TCGA.
(i) Transactions not at Arms Length. No Ivy Group Company has
acquired any asset in circumstances such that the provisions of Section 19(3)
Capital Gains Xxx 0000 or Section 17 TCGA could apply to such acquisition nor
given nor agrees to give any consideration to which Section 128(2)(b) TCGA could
apply.
28
34
(j) Compensation for Loss of Office. No Ivy Group Company is
under an obligation to pay nor has it since the Accounts Date paid or agreed to
pay any compensation for the loss of office or any gratuitous payment not
deductible in computing its income for the purposes of corporation Tax.
(k) Group Relief. Except as provided in the Accounts, no Ivy
Group Company is or will be under an obligation to make or have entitlement to
receive in respect of any period ending on or before the Accounts Date any
payment for group relief as defined in Section 402 of the Taxes Act or any
payment for the surrender of the benefit of an amount of advanced corporation
Tax or a repayment of such a payment.
(l) Treasury Consent for Migration of Companies. No Ivy Group
Company has carried out or caused or permitted to be carried out any of the
transactions (i) specified at the relevant time in Section 765(1) of the Taxes
Act otherwise than with the prior consent of HM Treasury and (in the case of a
special as opposed to general consent) full particulars of which are contained
in Section 4.27(l) of the Disclosure Schedule or (ii) specified at the relevant
time in Section 765 (A) of the Taxes Act without having duly provided the
required information to the Board of Inland Revenue.
(m) Tax Avoidance. No Ivy Group Company has been party to any
transaction the main purpose of which was Tax avoidance.
(n) Stamp Duty. All documents in the enforcement of which any
Ivy Group Company may be interested have been duly stamped.
(o) Taxation Claims, Liabilities and Reliefs. No relief
(whether by way of deduction, reduction, set-off, exemption, postponement,
roll-over, hold-over, repayment or allowances or otherwise) from, against or in
respect of any Taxation has been claimed and/or given to any Ivy Group Company
which could or might be effectively withdrawn, postponed, restricted, clawed
back or otherwise lost as a result of any act, omission, event or circumstance
arising or occurring in the ordinary course of business of the relevant Ivy
Group Company (as carried on at the Closing Date) at or on any time after the
Closing Date.
(p) Close Companies. No Ivy Group Company is, nor has ever
been, a close company.
(q) Company Residence. Each Ivy Group Company has been
resident for Tax purposes in the United Kingdom and nowhere else at all times
since its incorporation and is a resident at the Closing Date.
(r) Acquisitions from Members of the Same Group. The
consummation of the transactions contemplated by this Agreement will not result
in any profit or gain being
29
35
deemed to accrue to any Ivy Group Company for Taxation purposes, whether
pursuant to Section 179 of the TCGA or otherwise.
(s) Replacement of Business Assets. No claim has been made
under Section 152, 153 or 154 TCGA or Section 175 TCGA or any other Section
which would effect the amount of any gain accruing or being treated as accruing
on a disposal of an asset of any Ivy Group Company.
(t) Rebasing. No Ivy Group Company has made a disposal to
which Section 35 TCGA applies.
(u) PAYE and National Insurance. Each Ivy Group Company has
properly operated the PAYE and National Insurance contributions systems by
making such deductions as are required by law from all payments made or deemed
to be or treated as made by it or on its behalf, and by duly accounting to the
Internal Revenue for all sums as deducted and for all other amounts for which it
is required in account under the PAYE and National Insurance contributions
systems.
(v) Depreciatory Transactions and Value Shifting. No asset
owned by any Ivy Group Company has at any time since its acquisition by that or
any other Ivy Group Company or any Ivy Group Company which has at any time been
a member of a group (as defined from time to time for any Taxation purpose) of
which the Ivy Group Company has at any time been a member been subjected to a
reduction in value such that any allowable loss arising on its disposal is
likely to be reduced or eliminated or any chargeable gain existing on its
disposal is likely to be increased.
(w) Value Added Tax (VAT). Each Ivy Group Company has complied
fully with all statutory requirements, orders, provisions, directions or
conditions relating to VAT, including (for the avoidance of doubt) the terms of
any agreement reached with the Commissioners of Customs and Excise; no Ivy Group
Company is a developer as defined in paragraph 5 Schedule 6A VATA in relation to
any building or work within paragraph 5(2) of that Schedule or any
reconstructions, enlargements or extension within paragraph 5(8) of that
Schedule either currently being constructed, reconstructed, enlarged or extended
or whose construction, reconstruction, enlargement or extension was completed
with a 10-year period prior to the Closing. No Ivy Group Company is or was
partially exempt in its current or preceding value added tax year. No Ivy Group
Company is or has been treated for value added tax purposes as a member of any
group of companies (other than a group comprising the Group Companies alone). No
direction has been given under paragraph 1 of Schedule 9(A) of the VATA either
to an Ivy Group Company or in circumstances where an Ivy Group Company may be
liable for any value added tax assessed by that direction.
SECTION 4.28 Accounts Receivable. The accounts receivable of each of
the SSG Companies as set forth on the Interim Financial Statements or arising
since the date thereof are
30
36
valid and genuine; have arisen solely out of bona fide sales and deliveries of
goods, performance of services and other business transactions in the ordinary
course of business consistent with past practice; are not subject to valid
defenses, set-offs or counterclaims; and are collectible within 90 days after
billing at the full recorded amount thereof less, in the case of accounts
receivable appearing on the Interim Financial Statements, the recorded allowance
for collection losses on the Interim Financial Statements. The allowance for
collection losses on the Interim Financial Statements has been determined in
accordance with GAAP consistent with past practice.
SECTION 4.29 Inventory. All inventory of each of the SSG Companies,
including without limitation raw materials, supplies, work-in process and
finished goods, reflected on the Interim Financial Statements or acquired since
the date thereof was acquired and has been maintained in the ordinary course of
business of the SSG Companies; is of good and merchantable quality; consists
substantially of a quality, quantity and condition usable, leasable or saleable
in the ordinary course of business of the SSG Companies; is valued at the lower
of cost or market; and is not subject to any write-down or write-off. Each of
the SSG Companies is not under any liability or obligation with respect to the
return of inventory in the possession of wholesalers, retailers or other
customers.
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF CUSTOMERONE HOLDING AND SUB
CustomerONE Holding and Sub hereby jointly and severally represent and
warrant to Softbank Holdings and Softbank Europe that:
SECTION 5.1 Organization and Qualification. Each of CustomerONE Holding
and Sub is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, with all requisite
power and authority to own, lease and operate its respective properties and to
carry on its respective businesses as now being conducted.
SECTION 5.2 Authorization. Each of CustomerONE Holding and Sub has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. No other corporate proceeding,
including any shareholder vote, on the part of CustomerONE Holding or Sub is
necessary to authorize the execution and delivery of this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by CustomerONE Holding and Sub and, assuming
this Agreement constitutes a valid and binding obligation of each of the other
parties hereto, will constitute a valid and binding obligation of CustomerONE
Holding and Sub, enforceable against each of them in accordance with its terms.
31
37
SECTION 5.3 No Violation. Neither the execution and delivery of this
Agreement by CustomerONE Holding and Sub nor the performance by each of them of
their obligations hereunder nor the consummation by CustomerONE Holding or Sub
of the transactions contemplated hereby will (a) violate, conflict with or
result in any breach of any provision of the charter or bylaws of CustomerONE
Holding or Sub, (b) violate, conflict with or result in a violation or breach
of, or constitute a default (with or without due notice or lapse of time or
both) under, or permit the termination of, or require the consent of any other
party to, or result in the acceleration of, or entitle any party to accelerate
any obligation under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which CustomerONE Holding or Sub is a party or by
which they or any of their respective properties or assets may be bound or
affected, or (c) violate any order, writ, judgment, injunction, decree, statute,
rule or regulation of any court or domestic or foreign Governmental Authority
applicable to CustomerONE Holding or Sub or any of their respective properties
or assets.
SECTION 5.4 Consents and Approvals. Other than any consents and
approvals of or filings or registrations with the DOJ pursuant to the HSR Act
(all of which have been duly obtained or made) and the filing of the Certificate
of Ownership and Merger (in the form attached hereto as Exhibit A) (the
"Certificate of Merger") to effect the Merger pursuant to the DGCL, no filing or
registration with, no notice to and no permit, authorization, consent or
approval of any third party or any public or Governmental Authority is necessary
for the consummation by CustomerONE Holding or Sub of the transactions
contemplated by this Agreement.
SECTION 5.5 Brokers' Fees and Commissions. None of CustomerONE Holding,
Sub or their directors or officers, or, to the knowledge of CustomerONE Holding
or Sub, any of their employees or agents, has employed any investment banker,
broker or finder in connection with the transactions contemplated hereby.
ARTICLE VI
COVENANTS
SECTION 6.1 All Reasonable Efforts. If at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this
Agreement, including, without limitation, the execution of additional documents
or instruments, the parties to this Agreement and the proper officers and
directors of such parties shall take all such necessary action.
SECTION 6.2 Consents and Approvals. The parties hereto each will
cooperate with one another and use all reasonable efforts to prepare all
necessary documentation, to effect promptly all necessary filings and to obtain
all necessary permits, consents, approvals, orders and authorizations of or any
exemptions by, all third parties and Governmental Authorities
32
38
which may be necessary or desirable after the Closing Date to effect the
transactions contemplated hereby. Each party will keep the other party apprised
of the status of any inquiries made of such party by the DOJ or any other
Governmental Authority or members of their respective staffs with respect to
this Agreement or the transactions contemplated hereby.
SECTION 6.3 Public Announcements. Softbank Holdings and CustomerONE
Holding will consult with each other and will mutually agree (the agreement of
each party not to be unreasonably withheld) upon the content and timing of any
press release or other public statements with respect to the transactions
contemplated by this Agreement and shall not issue any such press release or
make any such public statement prior to such consultation and agreement, except
as may be required by applicable law or by obligations pursuant to any listing
agreement with any securities exchange or any stock exchange regulations,
provided, however, that Softbank Holdings and CustomerONE Holding will give
prior notice to the other party of the content and timing of any such press
release or other public statement required by applicable law or by obligations
pursuant to any listing agreement with any securities exchange or any stock
exchange regulations.
SECTION 6.4 The Merger. Within a reasonable period of time following
the consummation of the Stock Purchases, CustomerONE Holding will effect the
Merger by duly filing the Certificate of Merger with the Secretary of State of
the State of Delaware, providing for the conversion of each share of Company
Common Stock owned by the Minority Stockholders into the right to receive $4.21
per share.
SECTION 6.5 Professional Fees and Expenses. Softbank Holdings agrees
to pay all accounting, legal, consulting and other fees and expenses of the SSG
Companies and their affiliates related to this Agreement or the transactions
contemplated hereby.
SECTION 6.6 Brokers' Fees and Commissions. Softbank Holdings will pay
any and all fees and commissions payable to any investment banker, broker or
finder engaged by Parent, Softbank Holdings, Softbank Europe or the SSG
Companies, or any of their respective authorized employees or agents, in
connection with the sale of the SSG Companies. CustomerONE Holding will pay any
and all fees and commissions payable to any investment banker, broker or finder
engaged by CustomerONE Holding or Sub, or their parent corporations or
authorized employees or agents, in connection with the Stock Purchases.
ARTICLE VII
CLOSING
SECTION 7.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") is taking place at the offices of Weil, Gotshal &
Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on September 30, 1998
(the "Closing Date").
33
39
SECTION 7.2 Actions of Softbank Holdings, Softbank Europe and the
Company at the Closing. Softbank Holdings, Softbank Europe and the Company are
causing the following things to occur or be delivered to CustomerONE Holding and
Sub in connection with the Closing:
(a) Softbank Holdings is delivering all of the certificates
representing the Company Common Stock owned by Softbank Holdings and the Company
Preferred Stock, accompanied by duly executed stock powers in blank;
(b) Softbank Europe is delivering all of the certificates
representing the Ivy Group Stock, accompanied by duly executed stock powers in
blank;
(c) Softbank Holdings and Softbank Europe are delivering to
CustomerONE Holding opinions, dated the Closing Date, from Xxxxxxxx & Xxxxxxxx
and Linklaters & Xxxxx, in the forms attached hereto as Exhibits B-1 and B-2,
respectively;
(d) Softbank Holdings is furnishing CustomerONE Holding with
evidence of the payment in full of the Designated Debt and the release of all
(i) pledges, security interests, mortgages and other Liens securing such
indebtedness and (ii) pledges, security interests, mortgages and other Liens
identified with an asterisk on Section 4.11 of the Disclosure Schedule;
(e) Softbank Holdings and Softbank Europe are delivering
copies of all exercise notices or cancellation agreements with respect to all
options, warrants and other rights to acquire capital stock or otherwise have
any equity participation with respect to any of the SSG Companies, regardless of
whether such options, warrants or other rights are vested or unvested at the
Closing Date;
(f) Softbank Holdings is delivering an officer's certificate
certifying that, except as otherwise agreed to in writing prior to Closing by
CustomerONE Holding, all intercompany accounts of the SSG Companies (other than
those accounts between the Company and its wholly-owned Subsidiaries or between
Ivy Group and its wholly-owned Subsidiaries) have been eliminated and all
accounts payable and accounts receivable between any of the SSG Companies and
Parent or any affiliate of Parent (other than the SSG Companies and other than
accounts receivable from affiliates of Parent resulting from services rendered
by the Company or its wholly-owned Subsidiaries in the ordinary course of
business, consistent with past practices with, and on terms that are consistent
with those negotiated on an arm's length basis with, unaffiliated third parties)
have been repaid in full;
(g) Softbank Holdings is entering into an agreement with
CustomerONE Holding pursuant to which CustomerONE Holding and the SSG Companies
will be permitted to use the name Softbank Services Group and related trademarks
and service marks for a period of 180 days after the Closing Date;
34
40
(h) Softbank Holdings is delivering a duly executed release
evidencing that all accrued and unpaid management fees owed by any SSG Company
to Parent or affiliates of Parent have been repaid in full and any underlying
agreements with respect to such management fees have been cancelled and the SSG
Companies have been unconditionally released from any and all liabilities or
further obligations thereunder; and
(i) Softbank Holdings and Softbank Europe are delivering
resignations and releases of all officers and directors of each of the SSG
Companies, except such as have been designated in writing by CustomerONE
Holding, effective as of the Closing Date.
SECTION 7.3 Actions of CustomerONE Holding and Sub at the Closing.
CustomerONE Holding and Sub are causing the following things to occur or be
delivered to Softbank Holdings and Softbank Europe in connection with the
Closing:
(a) CustomerONE Holding is delivering to Softbank Holding an
opinion, dated the Closing Date, from Weil, Gotshal & Xxxxxx LLP, counsel to
CustomerONE Holding and Sub, covering the matters set forth in the form of
opinion attached hereto as Exhibit C;
(b) Sub is delivering the Company Common Stock Consideration
and the Company Preferred Stock Consideration in accordance with Section 2.1;
(c) CustomerONE Holding is delivering the Ivy Stock
Consideration in accordance with Section 2.1;
(d) CustomerONE Holding is segregating the Minority
Stockholders' Consideration in a separate internal account for payment to the
Minority Stockholders in connection with the Merger; and
(e) CustomerONE Holding is segregating the Optionholders'
Consideration in a separate internal account for payment to the Optionholders.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
SECTION 8.1 Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall survive the Closing
for 36 months, except for (i) the representations and warranties contained in
Sections 4.4(c) and 4.4(d), which shall survive for ten years after the Closing
Date, and (ii) the representations and warranties contained in Sections 4.14 and
4.27, which shall survive until the expiration of the applicable statute of
limitations with respect to the subject matter thereof, including any extensions
or tolling of any
35
41
applicable statute of limitations as may be requested by any Governmental
Authority. Any claim for indemnification with respect to any of such matters
which is not asserted by notice given as herein provided within the specified
period of survival may not be pursued and is hereby irrevocably waived after
such time. Any claim for an Indemnifiable Loss asserted within such period of
survival as herein provided will be timely made for purposes hereof.
SECTION 8.2 Limitations on Liability .
(a) Notwithstanding any other provision hereof, no Seller
Indemnitee will be entitled to indemnification pursuant to Section 8.3(a)(i)
unless and until the aggregate amount of Indemnifiable Losses under Section
8.3(a)(i) exceeds $500,000, in which event the Seller Indemnitee will be
entitled to indemnification for the entire amount of the Indemnifiable Loss,
including the first dollar of such Indemnifiable Loss, up to an aggregate of
$7.5 million.
(b) Notwithstanding any other provision hereof, no Buyer
Indemnitee will be entitled to indemnification pursuant to Section 8.3(b)(i)
unless and until the aggregate amount of Indemnifiable Losses under Section
8.3(b)(i) exceeds $500,000, in which event the Buyer Indemnitee will be entitled
to indemnification for the entire amount of the Indemnifiable Loss, including
the first dollar of such Indemnifiable Loss, up to an aggregate of $7.5 million;
provided, however, that the foregoing limitations shall not apply to any breach
of any representation or warranty set forth in Section 4.4(c), 4.4(d), 4.14 or
4.27.
SECTION 8.3 Indemnification.
(a) Subject to Sections 8.1 and 8.2, CustomerONE Holding
agrees to indemnify, defend and hold harmless Softbank Holdings from and against
any and all Indemnifiable Losses to the extent relating to, resulting from or
arising out of:
(i) any breach of representation or warranty of
CustomerONE Holding or Sub under the terms of this Agreement; and
(ii) any breach or nonfulfillment of any agreement or
covenant of CustomerONE Holding or Sub under the terms of this
Agreement.
(b) Subject to Sections 8.1 and 8.2, Softbank Holdings agrees
to indemnify, defend and hold harmless CustomerONE Holding, Sub and their
affiliates from and against any and all Indemnifiable Losses to the extent
relating to, resulting from or arising out of:
(i) any breach of representation or warranty of
Softbank Holdings under the terms of this Agreement; and
(ii) any breach or nonfulfillment of any agreement or
covenant of Softbank Holdings or Softbank Europe under the terms of
this Agreement.
36
42
(c) Softbank Holdings agrees to indemnify and hold harmless
CustomerOne Holding and its affiliates, and the SSG Companies, without regard to
Section 8.2, in respect of any and all Indemnifiable Losses relating to,
resulting from or arising out of liability incurred prior to the Closing Date
under Title IV of ERISA with respect to any pension plan maintained or
contributed to by Softbank Holdings or any corporation, trade or business under
common control or treated as a single employer (within the meaning of Section
4001 of ERISA or Section 414 of the Code) with Softbank Holdings with respect to
the period prior to the Closing Date.
(d) Softbank Holdings agrees to indemnify and hold harmless
CustomerONE Holding and its affiliates, and the SSG Companies, without regard to
Section 8.2, in respect of any and all Indemnifiable Losses relating to,
resulting from or arising out of the defense and disposition of that certain
lawsuit styled Xxxx X. Xxxxx v. Upgrade Corporation of America (d/b/a Softbank
Services Group) et al. (NY Sup. Ct. (Erie County) (index # 1998\926).
(e) Softbank Holdings agrees to indemnify and hold harmless
CustomerONE Holding and its affiliates, and the SSG Companies, without regard to
Section 8.2, in respect of any and all Indemnifiable Losses relating to,
resulting from or arising out of the pledge by Softbank Holdings of the shares
of capital stock of UCA&L to Marine Midland Bank and the termination of such
pledge arrangement.
(f) Softbank Holdings agrees to indemnify and hold harmless
CustomerONE Holding and its affiliates, and the SSG Companies, without regard to
Section 8.2, in respect of any and all Indemnifiable Losses relating to,
resulting from or arising out of the failure of Softbank Holdings to deliver
consents to assignment of the following real property lease agreement: Lease
Agreement dated as of June 29, 1995 by and between Trico Products Corporation
and the Company, as amended.
(g) Softbank Holdings agrees to indemnify and hold harmless
CustomerONE Holding and its affiliates, and the SSG Companies, without regard to
Section 8.2, in respect of any and all Indemnifiable Losses relating to,
resulting from or arising out of (i) the Merger or the Company's relationship to
any of the Optionholders or Minority Stockholders as such or any person or
entity claiming to have been a stockholder or holder of any option or other
right to acquire Common Stock prior to closing; provided, however, that the
parties acknowledge and agree that the payment of the Minority Stockholders'
Consideration to the Minority Stockholders and the Optionholders' Consideration
to the Optionholders in accordance with the terms of this Agreement shall not
constitute an Indemnifiable Loss; (ii) the exercise by any of the Minority
Stockholders of appraisal rights under the DGCL in connection with the Merger or
by any Optionholder who subsequently becomes a stockholder by virtue of exercise
of options outstanding at the time of Closing who is cashed out in any
subsequent merger; and (iii) the necessity to effect a subsequent merger to cash
out any Optionholder or Minority Stockholder that was not cashed out in
connection with the Merger, including any fees or expenses incurred in
connection with preparing and filing any documents relating thereto under
37
43
the DGCL or otherwise complying with law. To the extent that CustomerONE Holding
or any of its affiliates incurs any legal fees, costs or related expenses or
other Indemnifiable Losses in connection with eliminating any minority equity
interest, or claim of a minority equity interest, in the Company or the entity
surviving the Merger that arose as a result of any action of or actual or
asserted equity holding in, the Company prior to Closing, Softbank Holding
agrees to indemnify and hold harmless CustomerONE Holding and its affiliates as
a result thereof without regard to Section 8.2.
(h) This Section 8.3 shall not apply to any Indemnifiable Loss
to the extent that such Indemnifiable Loss is subject to indemnification under
Section 8.4.
SECTION 8.4. Tax Indemnification.
(a) Softbank Holdings agrees to indemnify and hold harmless
CustomerONE Holding and its affiliates (including, after the Closing, the
successors to any SSG Companies and all of the SSG Companies), and in each such
case their respective directors, officers, employees and agents, from and
against any and all Indemnifiable Losses resulting from, arising out of, based
on or relating to the SSG Companies' Total Pre-Closing Date Tax Liability if and
to the extent that such liability exceeds the sum of (i) all amounts actually
paid by any Person (including amounts actually paid by any of the SSG Companies
before the Closing, but excluding any amounts paid by CustomerONE Holding, its
affiliates, the successors to any SSG Companies and any of the SSG Companies
after the Closing) on behalf of any of the SSG Companies to the Internal Revenue
Service or to any other tax collecting agency or authority, with respect to the
SSG Companies' Total Pre-Closing Date Tax Liability, (ii) the amount of the
provision for current Taxes reflected on the Post-Closing Statement and (iii)
the amount of any liability reflected on the Post-Closing Statement as a reserve
for future tax disputes.
(b) Softbank Holdings agrees to indemnify and hold harmless
CustomerONE Holding and its affiliates (including, after the Closing, the
successors to any SSG Companies and all other SSG Companies), and in each such
case their respective directors, officers, employees and agents, from and
against any and all Indemnifiable Losses resulting from, arising out of, based
on or relating to any and all sales, use or other similar Taxes required to be
collected in respect of any Contract during the 12 months following the Closing
Date if (i) such Tax is not being collected by any of the SSG Companies in
respect of the Contract pursuant to their reliance on an applicable exemption
from such Tax, (ii) such exemption from Tax is dependent upon receipt by any of
the SSG Companies of a properly executed Exemption Certificate and (iii) within
12 months of the Closing Date, CustomerONE Holding or the successor to the SSG
Companies, as applicable, has notified Softbank Holdings that the applicable
Exemption Certificate neither is in any of the SSG Companies' nor such
successor's existing records or files nor obtainable from the particular
customer following reasonable commercial efforts of CustomerONE Holding or the
successor to the SSG Companies, to obtain such Exemption Certificate from the
customer.
38
44
(c) Except as otherwise set forth in this Section 8.4,
CustomerONE Holding and the successors to any SSG Companies shall indemnify and
hold harmless Softbank Holdings and its affiliates and their directors,
officers, employees and agents from and against any and all Indemnifiable Losses
resulting from, arising out of, based on or relating to, Taxes with respect to
the successors to any SSG Companies or any of the SSG Companies for any taxable
period beginning after the Closing Date and for the portion of any taxable
period beginning before the Closing Date that falls after the Closing Date.
SECTION 8.5. Advancement of Expenses; Defense of Claims; Insurance and
Tax Benefit Adjustment.
(a) Notwithstanding any other provision hereof, Softbank
Holdings agrees to promptly advance (or in any event within five days) to any
Buyer Indemnitee all costs and expenses related to Indemnifiable Losses or any
other matter subject to indemnification under clauses (c), (d), (e), (f) or (g)
of Section 8.3. If a claim for indemnification or advancement of expenses under
any such clause is not paid in full by Softbank Holdings within 60 days after a
written claim has been received by Softbank Holdings, the Buyer Indemnitee may
at any time thereafter bring suit against Softbank Holdings to recover the
unpaid amount of the claim, and if successful in whole or in part, the Buyer
Indemnitee shall be entitled to be paid also the expenses of prosecuting such
claim.
(b) If any Indemnitee receives notice of assertion or
commencement of any Third Party Claim against such Indemnitee with respect to
which an Indemnifying Party may be obligated to provide indemnification under
this Agreement, the Indemnitee will give such Indemnifying Party reasonably
prompt written notice thereof, but in any event not later than 30 days after
receipt of such notice of such Third Party Claim. Such notice will describe the
Third Party Claim in reasonable detail, will include copies of all material
written evidence thereof and will indicate the estimated amount, if reasonably
practicable, of the Indemnifiable Loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party will have the right to participate in or, by
giving written notice to the Indemnitee, to assume the defense of any Third
Party Claim at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel (reasonably satisfactory to the Indemnitee), and the
Indemnitee will cooperate in good faith in such defense; provided, however, that
if the Indemnitee is advised by counsel that there is or may be an actual or
potential conflict of interest in the event that the Indemnifying Party controls
such defense, the Indemnitee may participate in such defense with counsel of its
own choosing at the expense of the Indemnifying Party.
(c) If, within ten days after giving notice of a Third Party
Claim to an Indemnifying Party pursuant to Section 8.5(b), an Indemnitee
receives written notice from the Indemnifying Party that the Indemnifying Party
has elected to assume the defense of such Third Party Claim as provided in the
last sentence of Section 8.5(b), the Indemnifying Party will not be liable for
any legal expenses subsequently incurred by the Indemnitee in connection with
the defense thereof (unless the proviso of such sentence is applicable);
provided,
39
45
however, that if the Indemnifying Party fails to take reasonable steps necessary
to defend diligently such Third Party Claim within ten Business Days after
receiving written notice from the Indemnitee or if the Indemnifying Party has
not undertaken fully to indemnify the Indemnitee in respect of all Indemnifiable
Losses relating to the matter, the Indemnitee may assume its own defense, and
the Indemnifying Party will be liable for all reasonable costs or expenses paid
or incurred in connection therewith. The Indemnifying Party will not enter into
any settlement of any Third Party Claim without the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld. If a firm offer is
made to settle a Third Party Claim without leading to liability or the creation
of a financial or other obligation or burden on the part of the Indemnitee for
which the Indemnitee is not entitled to indemnification hereunder and the
Indemnifying Party desires to accept and agree to such offer, the Indemnifying
Party will give written notice to the Indemnitee to that effect. If the
Indemnitee fails to consent to such firm offer within ten days after its receipt
of such notice, the Indemnitee may continue to contest or defend such Third
Party Claim and, in such event, the maximum liability of the Indemnifying Party
as to such Third Party Claim will not exceed the amount of such settlement
offer, plus costs and expenses paid or incurred by the Indemnitee through the
end of such ten day period. The Indemnifying Party shall have no indemnification
obligation with respect to any Third Party Claim which shall be settled or
compromised by the Indemnitee without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld; provided,
however, that a Third Party Claim may be settled or compromised by the
Indemnitee without the prior written consent of the Indemnifying Party (and the
Indemnifying Party shall be liable therefor) if the Indemnifying Party shall not
have responded in writing to the Indemnitee within five days after notice of any
settlement or compromise proposal.
(d) A failure to give timely notice or to include any
specified information in any notice as provided in Section 8.5(b) or 8.5(c) will
not affect the rights or obligations of any party hereunder except and only to
the extent that, as a result of such failure, any party which was entitled to
receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise damaged as a result of such
failure.
(e) Except as otherwise expressly provided herein, the
Indemnifying Party will have a period of 30 days within which to respond in
writing to any claim by an Indemnitee on account of an Indemnifiable Loss which
does not result from a Third Party Claim (a "Direct Claim"). If the Indemnifying
Party does not so respond within such 30 day period, the Indemnifying Party will
be deemed to have rejected such claim, in which event the Indemnitee will be
free to pursue such remedies as may be available to the Indemnitee on the terms
and subject to the provisions of this Article VIII.
(f) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an Indemnity Payment, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or pursuant
to any claim, recovery, settlement or payment by or against any other person,
the amount of such reduction, less any costs, expenses,
40
46
premiums or taxes incurred in connection therewith, will be repaid by the
Indemnitee to the Indemnifying Party. Upon making any Indemnity Payment the
Indemnifying Party will, to the extent of such Indemnity Payment, be subrogated
to all rights of the Indemnitee against any third party that is not an affiliate
of the Indemnitee in respect of the Indemnifiable Loss to which the Indemnity
Payment related; provided, however, that (i) the Indemnifying Party shall then
be in compliance with its obligations under this Agreement in respect of such
Indemnifiable Loss and (ii) until the Indemnitee recovers full payment of its
Indemnifiable Loss, any and all claims of the Indemnifying Party against any
such third party on account of said Indemnity Payment will be subrogated and
subordinated in right of payment to the Indemnitee's rights against such third
party. Without limiting the generality or effect of any other provision hereof,
each such Indemnitee and Indemnifying Party will duly execute upon request all
instruments reasonably necessary to evidence and perfect the above-described
subrogation and subordination rights.
(g) In the event that any indemnification payment is made
under this Article VIII, then, within 30 days after the realization by the
recipient of such indemnification payment of any Tax benefit on account of its
realization of the Indemnifiable Loss for which the payment was made, such
recipient shall pay to the Indemnifying Party the amount of such Tax benefit.
For purposes of this Section 8.5(g), a Tax benefit shall be deemed to be
realized upon the later of the (i) the date on which income Taxes are due
(without regard to any extensions) for the period in which relevant deductions
on account of the Indemnifiable Loss may be claimed and (ii) the date on which
the indemnification payment is made. The amount and timing of any realization of
Tax benefit shall be determined by certification of an officer of the recipient
of the indemnification payment.
(h) With respect to a Third Party Claim for which Softbank
Holdings is the Indemnifying Party, CustomerONE Holding shall, and shall cause
the SSG Companies and their directors, officers, partners, employees, agents or
representatives to, make available to Softbank Holdings and its representatives
all books and records of CustomerONE Holding and the SSG Companies relating to
such Third Party Claim and shall render to Softbank Holdings or its
representatives such assistance and access to records and the representatives of
CustomerONE Holding or the SSG Companies as may be reasonably requested, except
that CustomerONE Holding and the SSG Companies shall not be required to make
available any books, records, documents or other information that CustomerONE
Holding reasonably determines to be confidential or subject to attorney-client
privilege unless and until Softbank Holdings shall have entered into such
agreements as CustomerONE Holding reasonably deems to be necessary in light of
all surrounding circumstances to protect such confidentiality or privilege.
41
47
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment and Modification. This Agreement may be amended
by a written instrument signed by each of the parties hereto.
SECTION 9.2 Waiver of Compliance; Consents. Any failure of CustomerONE
Holding or Sub, on the one hand, or Softbank Holdings and Softbank Europe, on
the other hand, to comply with any obligation, covenant, agreement or condition
contained herein may be waived in writing by Softbank Holdings or CustomerONE
Holding, respectively, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any other failure.
SECTION 9.3 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
SECTION 9.4 Expenses and Obligations. All costs and expenses incurred
in connection with the consummation of the transactions contemplated by this
Agreement by CustomerONE Holding or Sub (including, without limitation, any fees
and expenses required in connection with any filings required under the HSR Act
or similar Canadian laws) shall be paid by CustomerONE Holding or the SSG
Companies and all costs and expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement by any of the
SSG Companies, Softbank Holdings or Softbank Europe shall be paid by Softbank
Holdings.
SECTION 9.5 Parties in Interest. This Agreement shall be binding upon
and, except as provided below, inure solely to the benefit of each party hereto,
and, nothing in this Agreement, except as set forth below, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.6 Tax Matters.
(a) Preparation of Tax Returns; Payment of Taxes. (i) (A)
Softbank Holdings shall include, or cause to be included, the Company and its
Subsidiaries in, and shall file, the United States consolidated federal income
Tax return of Softbank Holdings for the taxable period of the Company and its
Subsidiaries ending on the Closing Date and (B) Softbank Holdings and Softbank
Europe shall include, or cause to be included, the SSG Companies in, and shall
file, all other consolidated, combined or unitary Tax returns of Softbank
Holdings, Softbank Europe or any of their respective affiliates for the taxable
periods of each of the SSG Companies ending on the Closing Date, and shall pay
any and all Taxes due with respect to the returns referred to in this clause (i)
or clause (ii) below. Softbank
42
48
Holdings and Softbank Europe also shall or shall cause each of the SSG Companies
to file all other Tax returns of or which include any of the SSG Companies
required to be filed (with regard to extensions) on or prior to the Closing Date
and shall pay any and all Taxes due with respect to such Tax returns.
(ii) Following the Closing, CustomerONE Holding shall
be responsible for preparing or causing to be prepared and filing or causing to
be filed all foreign, state and local Tax returns required to be filed by any of
the SSG Companies on a separate return basis after the Closing Date and, subject
to receiving the payments referred to in the last sentence of this Section
9.6(a)(ii), shall pay the Taxes shown due thereon; provided, however, that
nothing contained in the foregoing shall in any manner terminate, limit or
adversely affect any right of CustomerONE Holding or any of the SSG Companies to
receive indemnification pursuant to any provision in this Agreement. To the
extent any Taxes shown as due on such separate returns are indemnifiable by
Softbank Holdings or Softbank Europe, CustomerONE Holding shall provide such
party and its authorized representatives with copies of each such return at
least 15 days prior to its filing and such party shall have the right to review
and approve (which approval shall not be unreasonably withheld) such returns
prior to the filing thereof. Not later than five days before the due date for
payment of Taxes with respect to any such Tax returns, Softbank Holdings and
Softbank Europe, jointly and severally, shall pay to CustomerONE Holding an
amount equal to that portion of the Taxes shown on such return for which
Softbank Holdings or Softbank Europe have an obligation to indemnify CustomerONE
Holding pursuant to the provisions of Section 8.4.
(iii) For Federal income tax purposes, the taxable
year of each of the SSG Companies shall end as of the close of the Closing Date
and, with respect to all other Taxes, CustomerONE Holding, Softbank Holdings and
Softbank Europe will, unless prohibited by applicable law, elect with the
relevant taxing authority to close the taxable period of each of the SSG
Companies as of the close of the Closing Date. None of CustomerONE Holding,
Softbank Holdings or Softbank Europe shall take any position inconsistent with
the preceding sentence on any Tax return. In any case where applicable law does
not permit any of the SSG Companies to close its taxable year on the Closing
Date or in any case in which a Tax is assessed as of a date following the
Closing Date with respect to a taxable period which incudes the Closing Date,
then Taxes if any, attributable to the taxable period of such SSG Company
beginning on or before and ending after the Closing Date shall be allocated (A)
to Softbank Holdings or Softbank Europe, as applicable, for the period up to and
including the Closing Date, and (B) to CustomerONE Holding for the period
subsequent to the Closing Date. Any allocation of income or deductions required
to determine any Taxes attributable to any period beginning on or before and
ending after the Closing Date shall be made by means of a closing of the books
and records of each of the SSG Companies as of the close of the Closing Date,
provided that exemptions, allowances or deductions that are calculated on an
annual basis (including, but not limited to, depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
such period.
43
49
(b) Cooperation with Respect to Tax Returns. Softbank
Holdings, Softbank Europe and CustomerONE Holding agree to furnish or cause to
be furnished to each other, upon request, and each at their own expense, as
promptly as practicable, such information (including access to books and
records) and assistance relating to any of the SSG Companies as is reasonably
necessary for the filing of any Tax return, for the preparation for any audit,
and for the prosecution or defense of any claim, suit or proceeding relating to
any adjustment or proposed adjustment with respect to Taxes, including making
employees available on a mutually convenient basis to provide additional
information and explanations of any material provided hereunder. CustomerONE
Holding and each of the SSG Companies shall retain in their possession all Tax
returns, supporting books and records and any other materials that Softbank
Holdings or Softbank Europe may reasonably request in writing that might be
relevant to computations or payments required after the Closing Date with
respect to Tax matters relating to any taxable period ending on or prior to the
Closing Date until the relevant statute of limitations has closed. After such
period, CustomerONE Holding or any of the SSG Companies may dispose of such
materials, provided that prior to such disposition such entity shall give
Softbank Holdings and Softbank Europe a reasonable opportunity to take
possession of such materials.
(c) Tax Audits. (i) Whenever any taxing authority asserts a
claim, makes an assessment or otherwise disputes or affects the Tax reporting
position of any of the SSG Companies for taxable periods ending on or prior to
the Closing Date, CustomerONE Holding shall promptly, upon receipt by such
entity of notice thereof, inform Softbank Holdings and Softbank Europe thereof.
The failure of CustomerONE Holding or their affiliates to timely forward such
notification in accordance with the immediately preceding sentence shall not
relieve Softbank Holdings or Softbank Europe of their obligations to pay such
liability for Taxes except and to the extent that the failure to timely forward
such notification actually prejudices the ability of such entity to contest such
liability for Taxes or increases the amount of such Taxes.
(ii) Softbank Holdings and Softbank Europe shall have
the sole right to represent the interests of any of the SSG Companies in any Tax
audit or administrative or court proceeding relating to taxable periods of any
of the SSG Companies which end on or before the Closing Date; provided that if
the results of such Tax audit or proceeding could reasonably be expected to have
a Material Adverse Effect (or a material adverse effect on the condition
(financial or otherwise), properties, assets, liabilities, businesses,
prospects, earnings or operations of CustomerONE Holding) for taxable periods
ending after the Closing Date, then there shall be no settlement or closing or
other agreement with respect thereto without the consent of CustomerONE Holding,
which consent shall not be unreasonably withheld.
(iii) Softbank Holdings or Softbank Europe and
CustomerONE Holding jointly shall represent the interests of any of the SSG
Companies in any Tax audit or administrative or court proceeding relating to any
taxable period of any of the SSG Companies which includes (but does not begin
on) the Closing Date. Any disputes regarding the conduct
44
50
or resolution of any such audit or proceeding shall be resolved in an
arbitration to be conducted by the CPA Firm, whose fees shall be borne equally
by Softbank Holdings and CustomerONE Holding if the dispute involves the Company
or its Subsidiaries and by Softbank Europe and CustomerONE Holding if the
dispute involves the Ivy Group or its Subsidiaries. All of the parties shall be
bound by the decision of the CPA Firm in such arbitration.
(iv) CustomerONE Holding shall have the sole right to
represent the interests of Softbank Holdings, Softbank Europe and any of the SSG
Companies in all other Tax audits or administrative or court proceedings
relating to any taxable period of any of the SSG Companies that begins on or
after the Closing Date.
(d) Refund Claims. To the extent any determination of Tax
liability of any of the SSG Companies, whether as the result of an audit or
examination, a claim for refund, the filing of an amended return or otherwise,
results in any refund of Taxes paid attributable to (i) any period which ends on
or before the Closing Date or (ii) any period which includes the Closing Date
but does not begin on that day, any such refund shall belong to Softbank
Holdings or Softbank Europe, as applicable, (provided that in the case of any
Tax refund pursuant to clause (iii) of this subparagraph 9.6(d), the portion of
such Tax refund which shall belong to such party shall be that portion which
bears the same ratio to the total Tax refund attributable to the period as the
taxable income for the portion of that period which ends on the Closing Date
(determined on the basis of an interim closing of the books) bears to the
taxable income for the total period), and CustomerOne Holding shall promptly pay
upon receipt thereof any such refund, and the interest actually received
thereon, if any, to Softbank Holdings or Softbank Europe, as applicable. Any and
all other refunds shall remain the property of CustomerONE Holding. Any payments
made under this Section 9.6(d) shall be net of any Taxes payable with respect to
such refund, credit or interest thereon. Notwithstanding the foregoing, any
refunds of Taxes that were paid by any Person who is an obligor or lessee under
any Contract or by any other party shall belong to such party.
(e) Excess NOLs. In the event that the amount of the NOLs at
the Closing Date exceeds $11.5 million (the existence of which excess, if any,
to be certified to CustomerONE Holding by an officer of Softbank Holdings) and
CustomerONE Holding shall have utilized all or any portion of such excess to
reduce its United States federal income tax liability (such amount in excess of
$11.5 million which is actually utilized by CustomerONE Holding after the
Closing Date to reduce its United States federal income tax liability less any
Corel Damages being referred to herein as the "NOL Excess"), the following
provisions shall apply. If the Adjusted Net Working Capital was decreased as a
result of capital expenditures of the SSG Companies incurred in the ordinary
course of business from June 1, 1998 through September 30, 1998 and funded from
working capital (the "Capital Expenditure Impact"), then CustomerONE Holding
shall pay to Softbank Holdings an amount equal to the amount of such decrease;
provided, however, that any payment required pursuant to this section shall be
limited to the amount of the Capital Expenditure Impact and, provided further,
that in no event
45
51
shall CustomerONE Holding be required pursuant to this Section 9.6(e) to pay to
Softbank Holdings any amount in excess of the product of the NOL Excess times
the Applicable Federal Tax Rate. For purposes of this Section, (A) "Corel
Damages" means any loss or damages related to or arising from the failure to
collect, after the Closing Date, any accounts receivable owed by Corel
Corporation or its affiliates as of the Closing Date or accounts receivable or
other amounts arising prior to the second anniversary of the Closing Date in
connection with bona fide sales and deliveries of goods by the SSG Companies to
Corel Corporation and its affiliates, performance of services by the SSG
Companies for Corel Corporation and its affiliates and other business
transactions in the ordinary course of business between any of the SSG Companies
and Corel Corporation and its affiliates; (B) "Applicable Federal Tax Rate"
means the rate, expressed as a percentage, at which income of the SSG Companies
is taxed by the United States during the period in which the NOL Excess is
realized, and (C) the timing and amount of the utilization of such NOLs shall be
determined by certification by an officer of CustomerONE Holding.
(f) In any instance in which, pursuant to Section 9.6(e) or
Section 8.5(g) any amount or timing of an item of tax loss, deduction, benefit
or attribute is to be certified by an officer of one party, then the other party
shall have the right, at its sole cost and expense, to verify the accuracy of
such certification by retaining Pricewaterhouse Coopers, L.L.P. (or such other
nationally recognized accounting firm mutually agreed to by the parties) to
review the calculation and determination of such amount or timing and to confirm
the accuracy of such certification. In no event shall the right conferred
hereunder be construed to afford either party the right to review, or challenge
the accuracy of, the other parties' income tax returns. For purposes of this
Section 9.6(f) and the other provisions of this Agreement to which this Section
9.6(f) relates, the accuracy of the certification of an officer of a party shall
be determined taking into account (i) tax returns of such party as filed and
(ii) any adjustments to such returns as finally determined by the relevant
administrative or judicial authorities, or by operation of the expiration of any
relevant statutory periods for collection of the relevant Taxes.
SECTION 9.7 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon the earlier of delivery
thereof if by hand or upon receipt if sent by mail (registered or certified
mail, postage prepaid, return receipt requested) or on the second next Business
Day after deposit if sent by a recognized overnight delivery service or upon
transmission if sent by telecopy or facsimile transmission (with request of
assurance of receipt in a manner customary for communication of such type) as
follows:
(a) If to CustomerONE Holding or Sub, to:
Onex Corporation
000 Xxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 000
Xxxxxxx, XX X0X 0X0
Attention: Xxxx X. Xxxxxx
Facsimile No.: 416/362-5765
46
52
with copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile No.: 214/746-7777
Xxxxxx Xxxx & Xxxx
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 416/863-0871
(b) If to Softbank Holdings or Softbank Europe, to:
Softbank Holdings Inc.
00 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention:Xxxxxx Xxxxxx
Facsimile No.: 617/928-9301
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx, Esq.
Facsimile No.: 212/558-3997
SECTION 9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts-of-laws rules thereof.
47
53
SECTION 9.9 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 agreement.
SECTION 9.10 Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.11 Entire Agreement. This Agreement and the Disclosure
Schedule and Exhibits hereto embody the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein or therein.
There are no agreements, representations, warranties or covenants other than
those expressly set forth herein or therein. This Agreement and the Disclosure
Schedule and Exhibits hereto supersede all prior agreements and understandings
between the parties with respect to such subject matter.
SECTION 9.12 Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 9.13 Jurisdiction and Venue. The parties hereto agree that any
suit, action or proceeding arising out of or relating to this Agreement shall be
instituted only in the United States District Court for the District of New
York, United States of America or, in the absence of jurisdiction, the Supreme
Court of New York. Each party waives any objection it may have now or hereafter
to the laying of the venue of any such suit, action or proceeding, and
irrevocably submits to the jurisdiction of any such court in any such suit,
action or proceeding. EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY EXHIBIT HERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR
STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT.
SECTION 9.14 Certain Interpretive Matters. Unless the context
otherwise requires, (a) all references to Sections, Articles or Exhibits are to
Sections, Articles or Exhibits of or to this Agreement, (b) each term defined in
this Agreement has the meaning assigned to it, (c) each accounting term not
otherwise defined in this Agreement has the meaning assigned to it in accordance
with GAAP, (d) "or" is disjunctive but not necessarily exclusive and (e) words
in the singular include the plural and vice versa. All references to "$" or
dollar amounts are to lawful currency of the United States of America.
48
54
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed on its behalf by its duly authorized officers, all as of
the day and year first above written.
UPGRADE CORPORATION OF AMERICA
By: /s/ XXXX XXXXXX
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
SOFTBANK HOLDINGS INC.
By: /s/ XXXXXX X. XXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Director
----------------------------
SB HOLDINGS (EUROPE) LTD.
By: /s/ XXXXXX X. XXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Director
----------------------------
CUSTOMERONE HOLDING CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------------
Title:
----------------------------
49
55
SSG ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------------
Title:
----------------------------
50