Exhibit 2.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
SAI (IRELAND) LIMITED,
SAI RECRUITMENT LIMITED,
x0XXXXXX.XXX LIMITED,
AND
SAI AMERICA LIMITED
(the "COMPANIES "),
THE SHAREHOLDERS OF THE COMPANIES
(the "SELLERS")
AND
CLARUS CORPORATION
("BUYER")
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS............................................. 1
ARTICLE 2 PURCHASE AND SALE OF SHARES............................. 6
2.1 Purchase and Sale.................................. 6
2.2 Purchase Price..................................... 6
2.3 Ancillary Agreements............................... 7
2.4 Assumption of Option Plan.......................... 7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES CONCERNING SELLERS....... 7
3.1 Investment Intent.................................. 7
3.2 Legend............................................. 8
3.3 Disclosure Memorandum.............................. 8
3.4 Authority of Sellers............................... 8
3.5 No Conflict or Breach.............................. 8
3.6 Share Ownership.................................... 9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES CONCERNING COMPANY....... 9
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER................. 9
5.1 Organization and Good Standing..................... 9
5.2 Authority.......................................... 9
5.3 No Conflict or Breach.............................. 10
5.4 Governmental Approvals............................. 10
5.5 Brokers............................................ 10
ARTICLE 6 COVENANTS OF SELLERS AND EACH COMPANY................... 10
6.1 Access and Information............................. 10
6.2 Tax Matters........................................ 10
6.3 Sellers' Release................................... 11
ARTICLE 7 MUTUAL COVENANTS........................................ 12
7.1 Best Efforts....................................... 12
7.2 Confidentiality.................................... 12
7.3 No Other Solicitations............................. 13
7.4 SFADCO Consent..................................... 13
ARTICLE 8 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS............. 13
8.1 Representations and Warranties..................... 13
8.2 Compliance with Covenants.......................... 13
8.3 Absence of Litigation.............................. 14
8.4 Absence of Change.................................. 14
8.5 Consents and Approvals............................. 14
8.6 Removal of Encumbrances............................ 14
8.7 No Claim Regarding Shares.......................... 14
ARTICLE 9 CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS............ 14
9.1 Representations and Warranties..................... 14
9.2 Compliance with Covenants.......................... 15
9.3 Absence of Litigation.............................. 15
9.4 Consents and Approvals............................. 15
ARTICLE 10 CLOSING.................................................. 15
10.1 Closing............................................ 15
10.2 Deliveries by Sellers.............................. 15
10.3 Deliveries by Buyer................................ 16
10.4 Capital Contribution............................... 16
10.5 Further Assurances................................. 17
ARTICLE 11 INDEMNIFICATION.......................................... 17
11.1 Indemnification by Sellers and the Company......... 17
11.2 Tax Indemnification................................ 17
11.3 Indemnification by Buyer........................... 17
11.4 Notice of Claim.................................... 18
11.5 Defense............................................ 18
11.6 Limitations........................................ 19
ARTICLE 12 TERMINATION.............................................. 19
12.1 Termination........................................ 19
12.2 Effect on Obligations.............................. 19
ARTICLE 13 MISCELLANEOUS............................................ 20
13.1 Survival of Representations........................ 20
13.2 Expenses........................................... 20
13.3 Publicity.......................................... 20
13.4 Best Efforts....................................... 20
13.5 Designation and Appointment........................ 21
13.6 Notices............................................ 21
13.7 Counterparts....................................... 22
13.8 Assignment......................................... 22
13.9 Third Party Beneficiaries.......................... 22
13.10 Headings........................................... 22
13.11 Recitals........................................... 22
13.12 Amendments......................................... 22
13.13 Specific Performance............................... 23
13.14 Governing Law...................................... 23
13.15 Jurisdiction; Service of Process................... 23
13.16 Remedies........................................... 23
13.17 Severability....................................... 23
13.18 Entire Agreement................................... 23
13.19 Construction....................................... 24
13.20 Time of Essence.................................... 24
13.21 Waiver............................................. 24
EXHIBITS
Exhibit "A" Employment Agreement
Exhibit "B" Noncompetition Agreement
Exhibit "C" Registration Rights Agreement
Exhibit "D" Post-Closing Escrow Agreement
Exhibit "E" Legal Opinion of Counsel to Sellers
Exhibit "F" Representations and Warranties
Exhibit "G" Representations and Warranties Related to U.S. entities
Exhibit "H" Designation of Sellers' Agent
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (together with all Schedules and Exhibits, this
"Agreement"), dated as of May 31, 2000, is entered into by and among Xxxxxxx
X'Xxxxxxx and Xxxxxxxxxxx X. Xxxxx, both residents of Ireland and the
individuals listed on Schedule I hereto (collectively, Xx. X'Xxxxxxx, Xx. Xxxxx
and such individuals are referred to as "Sellers" and, individually, a
"Seller"), SAI (IRELAND) LIMITED, SAI RECRUITMENT LIMITED, x0XXXXXX.XXX LIMITED,
and SAI AMERICA LIMITED, each a limited company incorporated under the laws of
Ireland, and CLARUS CORPORATION, a Delaware corporation ("Buyer"). SAI
(IRELAND) LIMITED, SAI RECRUITMENT LIMITED, x0XXXXXX.XXX LIMITED, and SAI
AMERICA LIMITED corporation, are individually referred to herein as a "Company"
and collectively as the "Companies" (which term shall also include each
Subsidiary unless otherwise specified).
STATEMENT OF PURPOSE
Sellers are the beneficial and registered owners of all of the issued share
capital of SAI (Ireland) Limited. The Principal Sellers are the beneficial and
registered owners of SAI Recruitment Limited, x0Xxxxxx.xxx Limited, and SAI
America Limited. SAI America LLC is a wholly owned subsidiary of SAI America
Limited, and Software Architects International Limited and Redeo Technologies,
Inc. are each wholly owned subsidiaries of SAI (Ireland) Limited. Sellers desire
to sell, and Buyer desires to buy, the outstanding capital stock of the
Companies on the terms and conditions set forth in this Agreement.
THEREFORE, for and in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings
specified or referred to in this Article 1:
"Accounts" shall mean for each Company (i) the audited
balance sheet as at the Accounting Date, (ii)
the audited profit and loss account for the
period ended on the Accounting Date and (iii)
the internally prepared balance sheet and
profit and loss statement for each full month
following the Accounting Date, including in
respect of (i) and (ii) only, the directors
and auditor's reports and notes thereto.
"Accounting Date" shall mean December 31, 1999.
"Ancillary Agreements" the agreements referred to herein which are
executed by a party hereto and delivered at
Closing.
"Best Efforts" the efforts that a prudent person desirous of
achieving a result would use in similar
circumstances to ensure that such result is
achieved as expeditiously as possible.
"Buyer" as defined in the first paragraph of this
Agreement.
"Buyer Stock" Common Stock of the Buyer, par value $.0001
per share.
"Closing" the consummation of the purchase and sale of
the Shares by the Sellers to the Buyer.
"Closing Date" the date and time as of which the Closing
actually takes place.
"Company" or "Companies" as defined in the first paragraph of this
Agreement.
"Contemplated Transactions" all of the transactions contemplated by this
Agreement, including:
(a) the sale of the Shares by the Sellers to
Buyer;
(b) the payment of the Purchase Price by
Buyer to Sellers;
(c) the performance by Buyer, Sellers and the
Companies of their respective covenants
and obligations under this Agreement; and
(d) the execution, delivery and performance
of the Ancillary Agreements
"Documents" shall mean this Agreement and all Ancillary
Agreements.
"Employment Agreements" Employment Agreements in the form attached
hereto as Exhibit "A", between Software
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Architects International Limited and each
Principal Seller.
"Encumbrance" any charge, claim, community property
interest, condition, equitable interest, lien,
option, pledge, security interest, mortgage,
right of first refusal, title retention,
encumbrance or restriction of any kind,
including any restriction on use, voting,
transfer, receipt of income, or exercise of
any other attribute of ownership.
"Environmental Law" any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities,
employees, and the public of intended or
actual releases of pollutants or
hazardous substances or materials,
violations of discharge limits, or other
prohibitions and of the commencements of
activities, such as resource extraction
or construction, that could have
significant impact on the environment;
(b) preventing or reducing to acceptable
levels the release of pollutants or
hazardous substances or materials into
the environment;
(c) reducing the quantities, preventing the
release, or minimizing the hazardous
characteristics of wastes that are
generated;
(d) assuring that products are designed,
formulated, packaged, and used so that
they do not present unreasonable risks to
human health or the environment when used
or disposed of;
(e) protecting resources, species, or
ecological amenities;
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(f) reducing to acceptable levels the risks
inherent in the transportation of
hazardous substances, pollutants, oil, or
other potentially harmful substances;
(g) cleaning up pollutants that have been
released, preventing the threat of
release, or paying the costs of such
clean up or prevention; or
(h) making responsible parties pay private
parties, or groups of them, for damages
done to their health or the environment,
or permitting self-appointed
representatives of the public interest to
recover for injuries done to public
assets
"Governmental Authority" means any:
(a) nation, state, county, city, town,
village, district, or other jurisdiction
of any nature;
(b) federal, state, local, municipal,
foreign, or other government;
(c) governmental or quasi-governmental
authority of any nature (including any
governmental agency, branch, department,
official, or entity and any court or
other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise,
any administrative, executive, judicial,
legislative, police, regulatory, or
taxing authority or power of any nature.
"Hazardous Materials" any waste or other substance that is listed,
defined, designated, or classified as, or
otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any
Environmental Law, including any admixture or
solution thereof, and specifically including
petroleum and all derivatives thereof or
synthetic substitutes therefor and asbestos or
asbestos-containing materials.
"Intellectual Property" "Intellectual Property" shall mean each of the
following owned or used by any or all of the
Companies and all goodwill associated
therewith:
(i) the names "SAI" and "Software Architects
International," "i2Mobile", "Redeo,"
"Redeo Technologies" and all derivatives
thereof, all fictional business names,
logos, trading names, URL addresses,
registered and unregistered trademarks,
service marks, and applications for any
of the foregoing (collectively,
"Marks");
(ii) all patents, patent applications, and
all inventions and discoveries created
prior to or in existence as of the
Closing Date that may be patentable,
including all applications therefor and
reissues, divisions, renewals, and
continuations thereof (collectively,
"Patents");
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(iii) all copyrights and any copyrighted
materials in both published works and
unpublished works created prior to or in
existence as of the Closing Date;
(iv) all software products, including the
object and source code thereof, and all
software under development, whether for
internal use or licensing to third
parties ("Software"); and
(v) all know-how, inventions, trade secrets,
confidential information, customer
lists, software, technical information,
data, process technology, plans,
drawings, and blue prints (collectively,
"Trade Secrets"); owned, used, or
licensed by any Company as licensee or
licensor.
"Knowledge" an individual will be deemed to have
"Knowledge" of a particular fact or other
matter if:
(a) such individual is actually aware of
such fact or other matter; or
(b) a prudent individual could be expected
to discover or otherwise become aware of
such fact or other matter in the course
of conducting a reasonably comprehensive
investigation concerning the existence
of such fact or other matter.
A person (other than an individual) will be
deemed to have "Knowledge" of a particular
fact or other matter if any individual who is
serving, or who has at any time served, as a
director, officer, partner, executor, or
trustee of such person (or in any similar
capacity) has, or at any time had, Knowledge
of such fact or other matter.
"Legal Requirement" any federal, national. state, local,
municipal, foreign, international,
multinational, or other administrative order,
constitution, law, ordinance, principle of
common law, regulation, statute, or treaty.
"Marks" as defined under "Intellectual Property"
definition.
"Noncompetition
Agreements" Noncompetition Agreements in the form attached
hereto as Exhibit "B" to be executed and
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delivered to the Buyer by each Seller.
"Ordinary Course of
Business" an action taken by a person will be deemed to
have been taken in the "Ordinary Course of
Business" only if:
(a) such action is consistent with the past
practices of such person and is taken in
the ordinary course of the normal day-to-
day operations of such person;
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(b) such action is not required to be
authorized by the board of directors of
such person (or by any person or group of
persons exercising similar authority);
and
(c) such action is similar in nature and
magnitude to actions customarily taken,
without any authorization by the board of
directors (or by any person or group of
persons exercising similar authority), in
the ordinary course of the normal day-to-
day operations of other persons that are
in the same line of business as such
person.
"Patents" as defined under "Intellectual Property"
definition.
"Post-Closing Escrow
Agreement" the Escrow Agreement in the form attached as
Exhibit "D" hereto.
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"Principal Sellers" collectively, Xxxxxxxxxxx X. Xxxxx and Xxxxxxx
X'Xxxxxxx, residents of Ireland.
"Purchase Price" as defined in Section 2.2.
"Registration Rights
Agreement" the Registration Rights Agreement in the form
attached hereto as Exhibit "C".
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"Sellers" as defined in the first paragraph of this
Agreement.
"Sellers' Agent as defined in Section 13.5 of this Agreement.
"Shares" collectively, the issued share capital of each
of the Companies.
"Software" as defined under "Intellectual Property"
definition.
"Subsidiary" each entity owned in whole or in part by
either of the Companies including without
limitation, Software Architects International
Limited, an Irish incorporated limited
liability company, wholly owned by SAI
(Ireland) Limited, Redeo Technologies, Inc., a
Delaware corporation, wholly owned by SAI
(Ireland) Limited, and SAI America LLC, a
limited liability company under the laws of
Delaware, wholly owned by SAI America Limited.
"Tax" all forms of taxation and includes (without
limiting the generality of the foregoing)
sales tax, corporation tax, advance
corporation tax ("ACT"), capital gains tax,
development land tax, rates, water rates,
capital transfer tax, inheritance tax, capital
acquisitions tax, value added tax, income tax,
employment related tax, dividend withholding
tax, pay related social insurance or national
insurance contributions, amounts due under the
PAYE or PRSI system, income or other levies,
customs and excise duties, any other import
duties, stamp duty, stamp duty reserve tax,
companies capital duty and all other taxes,
rates, levies, duties or other fiscal
impositions of
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any kind whatsoever, whether imposed by
government, municipal or local authority or
otherwise, or other sums payable in respect of
Tax (including in particular but without
derogating from the generality of the
foregoing any interest, fine, charge,
surcharge or penalty) whether arising under
the laws of Ireland, or United States, or
those of any other jurisdiction and whether
incurred as principal, agent, trustee or
indemnitor and regardless of whether such
taxes, penalties, charges, levies, surcharges
and interest as are directly or primarily
chargeable against or attributable to any of
the Companies or any other person, firm or
company or for which any of the Companies is
or may be held liable.
ARTICLE 2
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale.
Sellers agree to sell to Buyer, and Buyer agrees to buy from Sellers, at
the Closing all, and not less than all, of the Shares free and clear of all
Encumbrances together with all rights of any nature whatsoever now or after
the date of this Agreement attaching or accruing to them.
2.2 Purchase Price.
The aggregate purchase price to be paid for the Shares shall be Thirteen
Million Six Hundred Eighty Thousand US Dollars (US$13,680,000) plus One
Million One Hundred Thirty Eight Thousand Five Hundred Twenty (1,148,000)
shares of the Buyer Stock (the "Purchase Price"). The Purchase Price shall
be allocated among the Companies and further allocated among the Sellers in
proportion to their respective holdings of the Shares, with each Seller to
receive the cash amount and number of shares of Buyer Stock set forth
opposite such Seller's name on Schedule 2.2.1.
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The Purchase Price shall be payable as follows: (a) US$13,680,000 shall be
paid on the Closing Date, by wire transfer of US$11,622,852 to Xxxxx
X'Xxxxxxx & Partners for the benefit of each Seller other than Xxx
Xxxxxxxx, and the sum of US$2,057,148 shall be paid by wire transfer to the
account of Xxx Xxxxxxxx; (b) 1,038,000 shares of the Buyer Stock issued to
the Sellers shall be delivered to the Sellers' Agent at Closing, and (c)
110,000 shares of the Buyer Stock issued to the Principal Sellers shall be
delivered by the Buyer to U.S. Bank Trust National Association, who shall
hold such shares in escrow for a period of 18 months following the Closing
Date in accordance with the Post-Closing Escrow Agreement, which will be
executed and delivered at the Closing.
The parties acknowledge that the Purchase Price has been calculated, in
part, based upon the Purchaser's expectation that the trade payables of the
Companies as of May 31, 2000 shall not exceed IR(Pounds)200,000. Sellers
shall cause consolidated Accounts of the Companies as of May 31, 2000 to be
prepared and submitted to Buyer not later than June 21, 2000. Each
Principal Seller warrants to the Buyer that such Accounts shall be true,
correct and complete in all respects of said date. To the extent the
trades payables as reflected on such May 31, 2000 consolidated Accounts
exceed IR(Pounds)200,000 then each Seller agrees promptly to reimburse ( as
a Purchase Price adjustment) to the Buyer (or such of the Companies as
Buyer shall nominate) in cash, the amount of such excess, if any.
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2.3 Ancillary Agreements.
In order to ensure to Buyer the full benefits of the Companies, each Seller
will execute and deliver to the Buyer at the Closing a Noncompetition
Agreement. The Buyer has agreed to provide each Seller with certain rights
with respect to the registration and resale of their shares of Buyer Stock
issued hereunder, as set forth in the Registration Rights Agreement to be
delivered by the Buyer to the Sellers at Closing. In addition, each
Principal Seller will enter into an Employment Agreement simultaneously
with the Closing.
2.4 Assumption of Option Plan
At Closing, Buyer will assume the Software Architects International Limited
Stock Incentive Plan and all options that have been granted thereunder (an
"SAI Option"); provided that each option holder shall have executed and
delivered to the Buyer prior to the Closing a waiver of any change of
control or accelerated vesting of such options as a result of the
Contemplated Transactions. Principal Sellers represent and warrant that
options for a total of 163,200 shares of capital stock have been granted
under such plan through the Closing Date to the persons and in the amounts
set forth on Schedule 2.4. From and after the Closing, each SAI Option
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assumed by Buyer may be exercised solely for shares of Buyer Stock; the
number of shares of Buyer Stock subject to such SAI Option shall be equal
to the number of shares of stock of Software Architects International
Limited available to be purchased thereunder, converted into Buyer Stock on
a one-for-one basis; the vesting schedule set forth in the SAI Option shall
remain in effect, without any acceleration thereof resulting from the
Contemplated Transactions; and the per share exercise price as set forth in
the SAI Option shall be the per share exercise price for the Buyer Stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES CONCERNING SELLERS
Each Seller, individually and not jointly, represents and warrants to Buyer,
with respect to himself, as follows:
3.1 Investment Intent.
The Sellers understand that the shares of Buyer Stock to be issued to the
Sellers have not been registered under United States securities laws in
reliance on an exemption for transactions not involving a public offering
and in reliance on similar exemptions under applicable state securities
laws. Each Seller is acquiring the shares of Buyer Stock for his or her
own account, for investment purposes only and not with a view to sale or
distribution thereof, in whole or in part. No Seller will sell or otherwise
transfer any shares of Buyer Stock unless (a) a registration statement
under federal and/or state securities laws with respect to such securities
shall then be in effect, or (b) the availability of exemptions from
registration under federal and/or state securities laws with respect to
such transaction shall be established to the satisfaction of the Buyer, or
(c) it is established to the satisfaction of the Buyer that such
transaction is otherwise in compliance with federal and/or state securities
laws. Each Seller acknowledges that the shares of Buyer Stock were not
offered and sold to the Seller by means of any form of general solicitation
or general advertising, or publicly disseminated advertisements or sales
literature. Each Seller represents and warrants that his principal
residence or place of business, as the case may be, is located within the
Republic of Ireland, other than Xxx Xxxxxxxx, who is a California resident,
and Vico Limited, which is an Irish corporation.
3.2 Legend.
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Each Seller understands that all certificates representing the Buyer Stock,
or any replacements therefor, will bear a legend substantially in the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES FEDERAL AND STATE SECURITIES LAWS AND ARE BEING
OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE FEDERAL AND STATE SECURITIES LAWS OF THE UNITED STATES.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT IN A
TRANSACTION WHICH IS REGISTERED UNDER, EXEMPT FROM, OR OTHERWISE IN
COMPLIANCE WITH THE UNITED STATES FEDERAL AND STATE SECURITIES LAWS, AS TO
WHICH THE ISSUER HAS RECEIVED SUCH ASSURANCES AS THE ISSUER MAY REQUEST,
WHICH MAY INCLUDE, A SATISFACTORY OPINION OF ITS COUNSEL.
3.3 Disclosure Memorandum.
Each Seller acknowledges receipt of Buyer's Disclosure Memorandum,
including certain documents previously filed by Buyer with the US
Securities and Exchange Commission, and that such Seller has had the
opportunity to ask questions of and receive additional information
concerning the Buyer and the Buyer Stock as such Seller has deemed
necessary in connection with his agreement to sell the Shares to the Buyer
for the Purchase Price set forth herein, which includes in part, shares of
the Buyer Stock.
3.4 Authority of Sellers.
Each Seller has full power and authority to execute, deliver and perform
this Agreement and the Ancillary Agreements to which it is a party and to
consummate the Contemplated Transactions. This Agreement has been duly
executed and delivered by each Seller, and the Ancillary Agreements, when
executed and delivered, will be duly executed and delivered by each such
Seller, and each such agreement is, or upon execution and delivery will be,
a valid and binding obligation of each Seller, enforceable against each
Seller in accordance with its terms.
3.5 No Conflict or Breach.
The execution, delivery and performance of this Agreement and consummation
of the Contemplated Transactions do not and will not (a) conflict with or
constitute a violation of any law, statute, judgment or regulation of any
legislative body, court, administrative agency, Governmental Authority or
arbitrator applicable to any Seller, or (b) constitute or cause a breach or
violation of any covenant, agreement or obligation binding upon any Seller
or affecting any of his properties.
3.6 Share Ownership.
Each Seller is the owner, beneficially and of record, of all right, title
and interest in and to the number of issued and outstanding Shares set
forth opposite his name on Schedule 2.2.1. Each Seller has, and will have
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at the Closing, good and marketable title to all such shares and the
absolute right to sell, assign and transfer the same to Buyer, free and
clear of all Encumbrances. No Seller is party to any option, warrant,
right, contract, call, put or other agreement or
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commitment providing for the disposition or acquisition of any of the
Shares (other than this Agreement). No Seller is party to any voting trust,
proxy or other agreement or understanding with respect to any of the
Shares.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANIES
Principal Sellers jointly and severally, represent and warrant to Buyer that
each of the representations and warranties set forth on Exhibit F hereto is true
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and correct, subject only to the specific items set forth on the Schedules
referenced in Exhibit F.
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In addition, Principal Sellers and Xxx Xxxxxxxx, a California resident, jointly
and severally represent and warrant to Buyer that each of the additional
representations and warranties set forth on Exhibit G is true and correct with
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respect to Redeo Technologies, Inc. For purposes of the warranties set forth on
Exhibit G with respect to Redeo Technologies, Inc., the term "Principal Sellers"
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shall include Xxx Xxxxxxxx. The Principal Sellers further jointly and severally
represent and warrant to Buyer that each of the representations and warranties
set forth on Exhibit G is true and correct with respect to SAI America, LLC,
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subject only to the specific items set forth on the Schedules referenced on
Exhibit G.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers and the Companies as follows:
5.1 Organization and Good Standing.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
5.2 Authority.
Buyer has the requisite corporate power and authority to execute, deliver
and perform this Agreement and any Ancillary Agreement to which it is a
party, and to consummate the Contemplated Transactions required to be
performed by the Buyer. The execution, delivery and performance of this
Agreement and the Ancillary Agreements to which the Buyer is a party, and
the consummation of the Contemplated Transactions to be performed by the
Buyer, have been duly and validly authorized by all necessary corporate
action on the part of Buyer. This Agreement and the Ancillary Agreements
to be executed by the Buyer at the Closing has been or will be, duly
executed and delivered by Buyer and each constitutes, or will constitute
when executed and delivered, a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the rights and remedies of creditors, and subject to the further
qualification that the remedy of specific performance or injunctive relief
is discretionary with the court before which any proceeding therefor may be
brought.
5.3 No Conflict or Breach.
The execution, delivery and performance of this Agreement and the
Ancillary Agreements to which the Buyer is a party, do not and will not (a)
conflict with or constitute a violation of the Certificate of Incorporation
or Bylaws of Buyer; or (b) conflict with or constitute a violation of any
Legal Requirement applicable to or relating to Buyer.
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5.4 Governmental Approvals.
No consent, approval, authorization, registration or filing with any
federal, state or local judicial or governmental authority or
administrative agency is required in connection with the valid execution
and delivery by Buyer of this Agreement, the Ancillary Agreements to which
it is a party, or the consummation by Buyer of the Contemplated
Transactions to be performed by Buyer.
5.5 Brokers.
No finder, broker, agent or other intermediary has acted for or on behalf
of Buyer in connection with the transactions contemplated by this
Agreement, and there are no claims for any brokerage commission, finder's
fee or similar payment due from Buyer.
ARTICLE 6
COVENANTS OF SELLERS AND EACH COMPANY
Sellers and each Company, jointly and severally, covenant and agree with Buyer
as follows:
6.1 Access and Information.
Principal Sellers and each Company shall permit Buyer and its counsel,
accountants and other representatives full access during normal business
hours to all the properties, assets, books, records, agreements and other
documents of each Company. Principal Sellers and each Company shall
furnish to Buyer and its representatives all information concerning each
Company as Buyer may reasonably request. Principal Sellers and each
Company shall permit and facilitate communications between Buyer and each
Company's suppliers, customers, landlords and other persons having
relationships with the Company.
6.2 Tax Matters.
(a) Section 338 Election. Each Seller agrees, if so directed by Buyer, to
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join with Buyer in making an election under Section 338 of the
Internal Revenue Code (and any corresponding elections under state,
local or foreign tax law) with respect to the purchase and sale of the
Shares.
(b) Tax Periods Ending On or Before the Closing Date. Buyer shall prepare
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or cause to be prepared and file or cause to be filed all Tax Returns
for each of the Companies for all periods ending on or prior to the
Closing Date which are to be filed after the Closing Date, other than
income Tax Returns with respect to periods for which a consolidated,
unitary or combined income Tax Return of Sellers will include the
operations of the Companies. Sellers shall reimburse Buyer for Taxes
of each Company with respect to such periods within fifteen (15) days
after payment by Buyer or each Company of such Taxes to the extent
such Taxes are not reflected in the reserve for Taxes (excluding any
reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the April 30, 2000 balance
sheet.
(c) Tax Periods Beginning Before and Ending After the Closing Date. Buyer
--------------------------------------------------------------
shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of each Company for Tax periods which begin before the
Closing Date and end after the Closing Date. Sellers
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shall pay to Buyer within fifteen (15) days after the date on which
Taxes are paid which relate to the period from the beginning of such
Tax period to the Closing Date to the extent such Taxes are not
reflected in the reserve for Taxes (excluding any reserve for deferred
Taxes established to reflect timing differences between book and Tax
income) shown on the face of the April 30, 2000 balance sheet.
(d) Cooperation on Tax Matters. Buyer, the Companies and Sellers shall
--------------------------
cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns pursuant to
this Section and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and
(upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder.
(e) Tax Sharing Agreements. All tax sharing agreements or similar
----------------------
agreements with respect to or involving either Company shall be
terminated as of the Closing Date and, after the Closing Date, the
Companies shall not be bound thereby or have any liability thereunder.
(f) Stamp Taxes. All stamp taxes required to register the transfer of the
-----------
Shares shall be paid by Buyer when due.
6.3 Sellers' Release.
Effective as of the Closing Date, each Seller, on behalf of himself and his
heirs, successors and assigns, hereby fully, completely and forever
releases and discharges Buyer and each of the Companies, and each of their
respective individual, joint or mutual, past or present representatives,
accountants, agents, affiliates, attorneys, stockholders, controlling
persons, officers, directors, employees, subsidiaries, successors and
assigns (individually, a "Releasee" and collectively, "Releasees") from any
and all claims, demands, causes of action, orders, obligations, contracts,
agreements, debts and liabilities whatsoever, whether known or unknown,
suspected or unsuspected, both at law and in equity ("Claims"), which
Seller now has, has ever had or may hereafter have against any one or more
of the Releasees arising on, at, or any time prior to the Closing Date on
account of or arising out of any matter, cause, event, circumstance or
condition occurring or existing contemporaneously with or at any time prior
to the Closing Date, including, but not limited to:
(i) any and all Claims arising out of or related to Seller's
ownership of capital stock of the Companies,
(ii) any and all Claims for reimbursement from any of the
Companies, whether pursuant to the Company's Articles of
Association, Articles of Incorporation, Bylaws, Memorandum
of Association, contracts or otherwise;
(iii) any and all Claims for payment for any rent, notes due, or
other indebtedness of any of the Companies to Seller (other
than the notes payable by SAI (Ireland) Limited to the
Principal Sellers in the aggregate principal amount of
$1,320,000);
(iv) any and all Claims for compensation or other payment
arising out of Seller's status as an employee, officer,
director, shareholder, owner, agent,
11
representative, independent contractor, consultant or
affiliate of the Companies; and
(v) any and all Claims relating to or arising out of any
inventions, discoveries, patents, copyrights, trade
secrets, know how, works, derivative works, documentation,
computer programs, computer codes and all other proprietary
rights of the Companies.
The parties acknowledge that the foregoing release is not intended to
release any claims Seller may have against the Buyer arising out of any breach
of this Agreement by Buyer or act or event occurring after the Closing Date.
Each Seller hereby irrevocably covenants to refrain from, directly or
indirectly, asserting any claim or demand, or commencing, instituting or causing
to be commenced, any proceeding of any kind against any Releasee, based upon any
matter released or purported to be released hereby.
ARTICLE 7
MUTUAL COVENANTS
Each of Buyer, Sellers and the Companies covenants and agrees with the other as
follows:
7.1 Best Efforts.
Each of Buyer, Sellers and the Companies shall use its Best Efforts to make
or obtain all consents, registrations and filings with all Governmental
Authorities as are required in connection with the consummation of the
Contemplated Transactions. In addition, Principal Sellers shall use their
Best Efforts to obtain as promptly as possible all other consents required
by Sellers or the Companies to consummate the Contemplated Transactions.
7.2 Confidentiality.
In recognition of the confidential nature of certain of the information
which will be provided to each party by the others, each of Buyer, Sellers
and each Company agrees to retain in confidence, and to require its
directors, officers, employees, consultants, professional representatives
and agents (collectively, its "Representatives") to retain in confidence
all information transmitted or disclosed to it by another party to this
Agreement, and further agrees that it will not use for its own benefit and
will not use or disclose to any third party, or permit the use or
disclosure to any third party of, any information obtained from or revealed
by the other, except that each of Buyer, Sellers and the Companies may
disclose the information to those of its Representatives who need the
information for the proper performance of their assigned duties with
respect to the consummation of the transactions contemplated by this
Agreement. In making such information available to its Representatives,
each of Buyer, Sellers and the Companies shall take any and all precautions
necessary to ensure that its Representatives use the information only as
permitted by this Agreement.
Notwithstanding anything to the contrary in the foregoing provisions, such
information may be disclosed (a) where it is necessary to any regulatory
authorities or governmental agencies; (b) if it is required by court order
or decree or applicable law; (c) if it is ascertainable or obtained from
public or published information; (d) if it is received from a third party
not known to the recipient to be under an obligation to keep such
information confidential; or (e) if the recipient can demonstrate that such
information was in its possession prior to disclosure of the information in
connection with this Agreement. If any party shall be required to make
disclosure of any such
12
information by operation of law, such disclosing party shall give the party
from whom such information was received prior notice of the making of such
disclosure and shall use all reasonable efforts to afford such other party
an opportunity to contest the making of such disclosure. In the event that
the Closing shall not occur, each of Buyer, Sellers and the Companies shall
immediately deliver, or cause to be delivered, to the party from whom such
information was received (without retaining any copies) any and all
documents, statements or other written information obtained from the other
that contain confidential information. The provisions of this Section 7.2
shall survive the termination of this Agreement for a period of three years
or such longer period as such information may be protected as a trade
secret under applicable law.
7.3 No Other Solicitations.
Each of the Sellers, the Companies and the Buyer each acknowledge and
affirm the covenants and agreements made by such parties in that certain
Agreement dated as of April 21, 2000 between Software Architects
International Limited and the Buyer with respect to the exclusivity of the
negotiations concerning the Contemplated Transactions, and acknowledge that
such agreement shall survive the execution hereof, notwithstanding anything
to the contrary herein.
7.4 SFADCO Consent
The Principal Sellers agree to deliver to the Buyer within ten (10) days
after the date hereof, the written consent of the Xxxxxxx Free Airport
Development Company to the sale of the Shares of the Companies to the
Buyer.
ARTICLE 8
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions on or
before the Closing Date, unless specifically waived in writing by Buyer prior to
the Closing Date:
8.1 Representations and Warranties.
The representations and warranties of Sellers contained in this Agreement
shall have been true and correct on the date of this Agreement and shall be
true and correct on the Closing Date as though made on and as of the
Closing Date.
8.2 Compliance with Covenants.
Sellers and each Company shall have duly performed and complied with all
covenants, agreements and obligations required by this Agreement to be
performed or complied with by each on or prior to the Closing.
8.3 Absence of Litigation.
No action or proceeding shall be pending by or before any court or other
Governmental Authority seeking to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or which would adversely affect
the right of Buyer to own the Shares, or to operate or control any of the
Companies after the Closing Date.
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8.4 Absence of Change.
Between the date of this Agreement and the Closing, no material adverse
change shall have occurred in the business, assets, operations, prospects
or financial or other condition of any Company, nor shall there have
occurred any casualty loss or destruction of, or damage to, any Company's
assets.
8.5 Consents and Approvals.
All (a) consents; (b) licenses; (c) other orders or notifications of, or
registrations, declarations or filings with, or expiration of waiting
periods imposed by, any applicable governmental or judicial authority; and
(d) consents, approvals, authorizations or notifications of any other third
parties, all as required in connection with consummation of the
transactions contemplated by this Agreement, including the ownership and
operation of any Company by Buyer, shall have been made or obtained or
shall have occurred. Any condition or restriction imposed in connection
with any of the foregoing shall not have a material adverse effect on the
Buyer's right to own the Shares, or to operate or control a Company after
the Closing Date.
8.6 Removal of Encumbrances.
All Encumbrances shall have been removed, and Principal Sellers and each
Company shall have provided evidence satisfactory to Buyer of such removal.
8.7 No Claim Regarding Shares.
No claim shall have been made or threatened that any person or entity
(other than Sellers) (a) is the holder or beneficial owner of, or has the
right to acquire or to obtain beneficial ownership of, any of the Shares or
any other voting, equity or ownership interest in any of the Companies; or
(b) is entitled to all or any portion of the Purchase Price.
ARTICLE 9
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
The obligations of Sellers to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of each of the following conditions on
or before the Closing Date, unless specifically waived in writing by Sellers
prior to the Closing.
9.1 Representations and Warranties.
The representations and warranties of Buyer contained in this Agreement
shall have been true and correct on the date of this Agreement, and shall
be true and correct on the Closing Date as though made on and as of the
Closing Date.
9.2 Compliance with Covenants.
Buyer shall have duly performed and complied with all covenants, agreements
and obligations required by this Agreement to be performed or complied with
by it on or before the Closing Date.
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9.3 Absence of Litigation.
No action or proceeding shall be pending by or before any court or other
governmental body or agency seeking to restrain, prohibit or invalidate the
transactions contemplated by this Agreement.
9.4 Consents and Approvals.
All consents required to be obtained by Buyer to consummate the
Contemplated Transactions shall have been obtained prior to or at the
Closing.
ARTICLE 10
CLOSING
10.1 Closing.
The Closing shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxxx &
Rice, PLLC in Atlanta, Georgia, at 10:00 a.m., local time, on May 31,
2000, or such other date as may be mutually agreed upon by the parties to
this Agreement; provided, however, as follows: (a) if one or more
conditions to this Agreement is not satisfied by such date, the party
benefiting from such condition may elect, in its sole discretion, one or
more postponements of the Closing for the purpose of enabling such
condition to be satisfied; and (b) notwithstanding the provisions of the
preceding clause (a), in no event may the Closing be postponed beyond June
15, 2000.
10.2 Deliveries by Sellers.
At the Closing, Sellers shall deliver or cause to be delivered to Buyer the
following:
(a) duly executed transfers in respect of the Shares in favour of Buyer or
its nominee(s) together with the share certificates in respect of the
Shares
(b) the Employment Agreements duly executed by each party thereto;
(c) the Noncompetition Agreements duly executed by the Sellers;
(d) the Registration Rights Agreement duly executed by the Sellers;
(e) the Post-Closing Escrow Agreement duly executed by the Principal
Sellers;
(f) a certificate of the Principal Sellers that true, correct and complete
copies of all bank books, financial and bank records, bookkeeping and
accounting records, copies of all Tax Returns and amendments to all of
the foregoing and all other books and records of or relating to each
Company are located at the premises of the Companies;
(g) if Buyer so requests, a duly executed power of attorney in favour of
Buyer or its nominee(s) generally in respect of the Shares and in
particular to enable Buyer or its nominee(s) to attend and vote at
general meetings of the Company;
(h) the common seal and all registers, minute books, and other statutory
books, required to be kept by the Companies pursuant to the Irish
Companies Acts 1963-1999 or other applicable law made up to the
Closing Date and all certificates of incorporation and certificates on
change of name for each Company incorporated in Ireland shall be
delivered to Xxxxxx Xxx, Dublin, and for each U.S. company shall be
delivered to Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC.;
(i) share certificates in respect of all issued shares in the capital of
any Subsidiary together with duly executed transfers in blank and
declarations of trust in respect of all such shares as are
beneficially owned by but not registered in the name of a Company;
15
(j) a copy of a letter to each Company from its auditors resigning their
office as such with effect from the Closing Date confirming that it
has no claims against such Company;
(k) letters in the agreed form duly executed under seal from each of the
present directors and secretary of each Company in each case resigning
from their respective offices and acknowledging that the writer has no
claim against the relevant Company for compensation for loss of
office, redundancy, unfair dismissal or otherwise;
(l) copies of all bank mandates of each Company together with copies of
statements of all bank accounts as at a date not earlier than two
Business Days before the Closing Date and all credit cards in the name
of any of the Companies issued to any of the Sellers or the Directors;
(m) a copy of all corporate resolutions authorizing the execution,
delivery and performance of this Agreement by the Companies, and the
consummation of the transactions contemplated in this Agreement,
accompanied by the certification of the Secretaries of the Companies
to the effect that such resolutions are in full force and effect and
have not been amended, modified or rescinded;
(n) the opinion of Sellers' counsel in the form of Exhibit "E" regarding
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inapplicability of the Mergers Act to the Contemplated Transactions;
(o) good standing certificates from the Secretary of State of the state of
incorporation or organization of Redeo Technologies Inc. and SAI
America, LLC, and each of the states in which such entities is
authorized to do business; and
(p) evidence that all required consents, if any, have been obtained or
satisfied.
10.3 Deliveries by Buyer.
At the Closing, Buyer shall deliver or cause to be delivered to Sellers
the following:
(a) a copy of all corporate resolutions authorizing the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated in this Agreement, accompanied by the
certification of the Secretary of Buyer to the effect that such
resolutions are in full force and effect and have not been amended,
modified or rescinded;
(b) the cash portion of the Purchase Price as provided in Section 2.2;
(c) the Noncompetition Agreements duly executed by the Buyer;
(d) the Registration Rights Agreements duly executed by the Buyer;
(e) the Post-closing Escrow Agreement duly executed by the Buyer; and
(f) the stock portion of the Purchase Price, delivered in part to the
Sellers' Agent and in part to the escrow agent, as provided in Section
2.2.
10.4 Capital Contributions.
Immediately following the Closing, the Buyer shall procure that SAI
(Ireland) Limited shall pay the amount of US$660,000 to each of the
Principal Sellers in full satisfaction of indebtedness owed to such parties
by SAI (Ireland) Limited.
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10.5 Further Assurances.
Sellers shall, at any time on or after the Closing Date, take any and all
steps requested by Buyer to transfer to Buyer ownership of the Shares, and
will do, execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as
may be requested for the more effective transfer to Buyer, or its
successors or assigns, ownership and operating control of the Companies.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification by Principal Sellers and the Company.
The Principal Sellers (the "Seller Indemnitors") shall jointly and
severally indemnify, defend and hold harmless Buyer and its officers,
directors and affiliates (the "Buyer Indemnitees") from, against and with
respect to any and all loss, damage, claim, obligation, liability, cost and
expense (including, without limitation, reasonable attorneys' fees and
costs and expenses incurred in investigating, preparing, defending against
or prosecuting any litigation, claim, proceeding or demand), of any kind or
character (a "Loss"), arising out of or in connection with any of the
following:
(a) any breach of any of the representations or warranties of the Sellers
or the Principal Sellers contained in this Agreement or any transfer
instrument or other certificate or document delivered by any of the
Sellers pursuant to this Agreement; and
(b) any failure by any of the Sellers or any of the Companies to perform
or observe, or to have performed or observed, in full, any covenant,
agreement, obligation or condition to be performed or observed by such
party pursuant to this Agreement.
11.2 Tax Indemnification.
The Seller Indemnitors, jointly and severally, undertake to discharge all
stamp duty (other than stamp duty owing on the transfer of the shares to
the Buyer as provided under Section 6.2(f)), and shall indemnify, defend
and hold harmless Buyer and each of the Companies and their respective
officers, directors and affiliates from, against and with respect to any
Tax resulting from the structure of the Contemplated Transactions and any
Tax resulting from any transaction entered into or action taken by any of
the Companies prior to the effective time of the Closing, to the extent not
reserved against in the Accounts of said Company. Notwithstanding any
other section of this Agreement, including Section 11.6, the
indemnification provided for in this Section 11.2 shall not be subject to
any maximum or minimum dollar limitations, whether related to individual
claims or in the aggregate, and the Buyer and the Companies shall be
entitled to recover the full amount of any Loss related hereto.
Additionally, any amounts paid pursuant to this Section 11.2 shall not
reduce or count towards the maximum indemnification limitation described in
Section 11.6.
11.3 Indemnification by Buyer.
Buyer shall indemnify, defend and hold harmless Sellers (collectively, the
"Seller Indemnitees") from, against and with respect to any Loss arising
out of or in connection with any of the following:
17
(a) any breach of any of the representations and warranties of Buyer
contained in this Agreement; and
(b) any failure by Buyer to perform or observe, or to have performed or
observed, in full, any covenant, agreement or condition to be
performed or observed by it pursuant to this Agreement.
11.4 Notice of Claim
Any party seeking to be indemnified hereunder (the "Indemnified Party")
shall promptly notify the party from whom indemnity is sought (the
"Indemnity Obligor") in writing of any claim for recovery, specifying in
reasonable detail the nature of the Loss. The Indemnified Party shall
provide to the Indemnity Obligor as promptly as practicable thereafter all
information and documentation reasonably requested by the Indemnity Obligor
to verify the claim asserted. The failure of the Indemnified Party to
notify the Indemnity Obligor on a timely basis will not relieve the
Indemnity Obligor of any liability that it may have to the Indemnified
Party, except to the extent that the Indemnified Party demonstrates that
the defense of such action is prejudiced by the Indemnity Obligor's failure
to give such notice.
11.5 Defense.
If the facts pertaining to a Loss arise out of the claim of any third
party, or if there is any claim against a third party available by virtue
of the circumstances of the Loss, the Indemnity Obligor may, by giving
written notice to the Indemnified Party within 15 days following its
receipt of the notice of such claim, elect to assume the defense or the
prosecution of such claim, including the employment of counsel or
accountants at its cost and expense. The Indemnified Party shall have the
right to employ counsel separate from counsel employed by the Indemnity
Obligor in any such action and to participate in such action, but the fees
and expenses of such counsel shall be at the Indemnified Party's own
expense, unless (a) the Indemnity Obligor failed to assume the defense or
prosecution thereof within such 15-day period; or (b) the Indemnified Party
determines there is a conflict of interest in the representation by counsel
selected by the Indemnity Obligor, in which case the fees and expenses of
counsel selected by the Indemnified Party shall be at the expense of the
Indemnity Obligor. If the Indemnity Obligor assumes the defense of a
proceeding, (i) it will be conclusively established for purposes of the
Agreement that the claims made in that proceeding are within the scope of
and subject to indemnification; (ii) no compromise or settlement of such
claims may be effected by the Indemnity Obligor without the Indemnified
Party's consent unless (A) there is no finding or admission of any
violation of applicable laws or any violation of the rights of any person
and no effect on any other claims that may be made against the Indemnified
Party, and (B) the sole relief provided is monetary damages that are paid
in full by the Indemnity Obligor; and (iii) the Indemnified Party will have
no liability with respect to any compromise or settlement of such claims
effected without its consent. Notwithstanding the foregoing, the filing of
any answer by the Indemnity Obligor in order to preserve the rights of the
Indemnified Party due to a filing deadline shall not in itself constitute
its election to assume the defense of a claim hereunder. Whether or not
the Indemnity Obligor chooses so to defend or prosecute such claim, all the
parties to this Agreement shall cooperate in the defense or prosecution of
such claim and shall furnish such records, information and testimony and
shall attend such conferences, discovery proceedings and trials as may be
reasonably requested in connection therewith. The Indemnity Obligor shall
not be liable for any settlement of any such claim effected without its
prior written consent, which shall not be unreasonably withheld.
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11.6 Limitations
The maximum aggregate liability of the Seller Indemnitors on the one hand,
and the Buyer on the other hand, shall not exceed the sum of US$30,000,000
plus the dollar amount determined by multiplying 1,138,520 (subject to
----
adjustment for any additional shares of Buyer Stock issued by Buyer or
relinquished by the Principal Sellers pursuant to Section 2.2 above) times
the closing sales price for the Buyer Stock on the date hereof. In
addition, neither the Buyer Indemnitees nor the Seller Indemnitees shall
make a claim hereunder until the amount of the Loss claimed by such party
exceeds, individually or collectively with other Losses of such party, the
sum of Fifty Thousand US Dollars (US$50,000). The intent of the parties is
to establish an initial threshold of $50,000 for the making of an initial
claim or claims by a party hereto in order to avoid the administration of
non-material claims. For clarity, the parties also acknowledge that the
initial $50,000 threshold is not intended to be a deductible amount, but
once a claim or claims in the aggregate equal the sum of $50,000, such
party shall be entitled to recover the full amount thereof.
ARTICLE 12
TERMINATION
12.1 Termination.
This Agreement may be terminated at any time prior to the Closing:
(a) By the mutual written consent of Sellers and Buyer;
(b) By Sellers and each Company (if Sellers and each Company are not then
in breach of any term of this Agreement), if Buyer shall (i) fail to
perform or observe any covenant, agreement or condition contained in
this Agreement required to be performed or observed on or prior to the
Closing Date; or (ii) breach any of its representations or warranties
contained in this Agreement, which failure or breach is not cured to
the Sellers' satisfaction within ten days after Sellers have notified
Buyer of their intent to terminate this Agreement pursuant to this
subparagraph;
(c) By Buyer (if Buyer is not then in breach of any term of this
Agreement), if Sellers and the Companies shall (i) fail to perform or
observe any covenant, agreement or condition contained in this
Agreement required to be performed or observed by any or all of them
on or prior to the Closing Date; or (ii) breach any of their
representations or warranties contained in this Agreement, which
failure or breach is not cured to the Buyer's satisfaction within ten
days after Buyer has notified Sellers of its intent to terminate this
Agreement pursuant to this subparagraph; or
(d) By Sellers and the Companies or by Buyer, if there shall be any order,
writ, injunction or decree of any court or governmental or regulatory
agency binding on Sellers or the Companies, or on Buyer, which
prohibits or restrains any party from consummating the transactions
contemplated by this Agreement.
12.2 Effect on Obligations.
Termination of this Agreement pursuant to this Article shall terminate all
obligations of the parties hereunder, except for the obligations under this
Section 12.2 and Sections 13.2 (with respect to expenses), 13.3 (with
respect to publicity), 7.2 (with respect to confidentiality) and 7.3
19
(with respect to exclusivity); provided, however, that termination pursuant
to subparagraphs (b) or (c) of Section 12.1 shall not relieve the
defaulting or breaching party from any liability to any other party under
this Agreement.
ARTICLE 13
MISCELLANEOUS
13.1 Survival of Representations.
All representations and warranties of the parties contained in this
Agreement or otherwise made in writing in connection with the transactions
contemplated by this Agreement shall survive the execution and delivery of
this Agreement as follows: the representations and warranties of the
Principal Sellers in Sections 4.3.1, 4.6.3, 4.6.4, 4.6.5, 4.6.6 and 4.6.9
of Exhibit F hereto shall survive indefinitely without time limitation; the
---------
representations and warranties of Sellers contained in Sections 4.23
through 4.31 of Exhibit F and Section 4.2 of Exhibit G hereto shall survive
--------- ---------
for a period of seven (7) years, and the remainder of the representations
and warranties contained in Exhibit F, Exhibit G and Articles 3 and 4 shall
--------- ---------
survive for a period of twenty four (24) months following the Closing Date.
All covenants contained herein shall survive the Closing without
limitation. The right to indemnification, payment of damages, or other
remedy based on the representations are warranties of Sellers and each
Company and on covenants, agreements, and obligations herein of Sellers and
each Company will not be affected by any investigation conducted with
respect to, or any Knowledge acquired (or capable of being required) at any
time, whether before or after the execution and delivery of this Agreement
or the Closing Date, with respect to the accuracy or inaccuracy of or
compliance with any such representation, warranty, covenant, agreement or
obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant, agreement, or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representation, warranty, covenant, agreement or obligation.
13.2 Expenses.
Except as otherwise provided herein, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such expense, whether or not
the sale of the Shares is consummated. Sellers agree that no Company has
paid nor will it pay or be responsible for any of Sellers' costs or
expenses (including any legal fees or expenses) in connection with this
Agreement or any of the transactions contemplated by this Agreement.
13.3 Publicity.
Each of the Companies, the Sellers and Buyer agrees it will not make any
press releases or other announcements prior to the Closing with respect to
the transactions contemplated by this Agreement, except as required by
applicable law, without the prior approval of the other party.
13.4 Best Efforts.
Each party to this Agreement agrees to use its Best Efforts to satisfy the
conditions to the Closing set forth in this Agreement and otherwise to
consummate the transactions contemplated by this Agreement.
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13.5 Designation and Appointment.
Sellers agree to execute, contemporaneously with the execution of this
Agreement, a designation and appointment in the form of attached Exhibit
"H," pursuant to which Sellers irrevocably designate and appoint Xxxxxxx X.
X'Xxxxxxx ("Sellers' Agent") as Sellers' exclusive agent and attorney-in-
fact for all purposes under this Agreement.
13.6 Notices.
All notices, demands and other communications made hereunder shall be in
writing and shall be given either by personal delivery, by nationally
recognized overnight courier (with charges prepaid) or by facsimile (with
telephone confirmation), and shall be deemed to have been given or made
when personally delivered, the day following the date deposited with such
overnight courier service or when transmitted to facsimile machine and
confirmed by telephone, addressed to the respective parties at the
following addresses (or such other address for a party as shall be
specified by like notice):
If to a Company: If to the Sellers
c/o Sellers' Agent
SAI (Ireland) Limited Xxxxxxx X. X'Xxxxxxx
SAI America Limited 5 Hermitage, Castleconnell
SAI Recruitment Limited Co Limerick, Ireland
xXxxxxx.xxx Limited Telephone: 000 000 00 000000
XXX Xxxxx
Xxx Xxxxxxxx Xxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx
Telephone: 000 00 000000
Fax: 000 00 000000
With a copy (which shall not constitute notice) to:
Xxxxx X'Xxxxxxx & Partners
00 Xxxxxxx Xxxxxx
Xxxxxx 0, Xxxxxxx
Attn: Xxxxx X. X'Xxxxxxx, Esq.
Telephone: 000 0 000 0000
Fax: 000 0 000 0000
If to Buyer:
Clarus Corporation
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000 XXX
Phone: 000 000 0000
Fax: 000 000 0000
Attn: Chief Operating Officer
21
With a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
13.7 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
13.8 Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties to this
Agreement without the prior written consent of all other parties to this
Agreement, and any purported assignment without such consent shall be
void; provided, however, that Buyer may assign its rights, interest and
obligations under this Agreement to any subsidiary that is wholly owned
by Buyer.
13.9 Third Party Beneficiaries.
Except as otherwise specifically provided in Article 11 above, none of
the provisions of this Agreement or any document contemplated by this
Agreement is intended to grant any right or benefit to any person or
entity which is not a party to this Agreement.
13.10 Headings.
The article and section headings contained in this Agreement are solely
for the purpose of reference, are not part of this Agreement and shall
not in any way affect the meaning or interpretation of this Agreement.
13.11 Recitals.
The recitals set forth at the beginning of this Agreement are
incorporated by reference in, and made a part of, this Agreement.
13.12 Amendments.
Any waiver, amendment, modification or supplement of or to any term or
condition of this Agreement shall be effective only if in writing and
signed by all parties hereto, and the parties to this Agreement waive the
right to amend the provisions of this Section orally.
22
13.13 Specific Performance.
Sellers acknowledge that if either Seller fails to consummate the
transactions contemplated by this Agreement such failure will cause
irreparable harm to Buyer for which there will be no adequate remedy at
law. Buyer shall be entitled, in addition to its other remedies at law,
to specific performance of this Agreement if such Seller shall, without
cause, refuse to consummate the transactions contemplated by this
Agreement.
13.14 Governing Law.
This Agreement shall be governed by the laws of the Ireland, without
regard to conflicts of laws principles.
13.15 Jurisdiction; Service of Process.
Each of the parties to this Agreement submits to the jurisdiction of any
state or federal court of the United States sitting in Atlanta, Georgia,
USA in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court. Each of the
parties to this Agreement waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond,
surety or other security that may be required of any party with respect
thereto. Any party may make service on any other party by sending or
delivering a copy of the process to the party to be served at the address
and in a manner provided in Section 13.6 above; provided, however, that
nothing in this Section 13.15 will affect the right of any party to serve
legal process in any other manner permitted by law or at equity. Each
party agrees that a final judgment in any action or proceeding so brought
shall be conclusive and may be enforced by suit on the judgment or in any
other manner provided by law or at equity.
13.16 Remedies.
In the event litigation shall be necessary to enforce, interpret or
rescind the provisions of this Agreement or any related matter, the
prevailing party shall be entitled to recover from the adverse party, in
addition to any other relief, the prevailing party's reasonable
attorneys' fees for services before trial, at trial, and on any
subsequent appeal by the adverse party.
13.17 Severability.
In the event that any provision in this Agreement shall be determined to
be invalid, illegal or unenforceable in any respect, the remaining
provisions of this Agreement shall not be in any way impaired, and the
illegal, invalid or unenforceable provision shall be fully severed from
this Agreement and there shall be automatically added a replacement
provision as similar in terms and intent to such severed provision as may
be legal, valid and enforceable.
13.18 Entire Agreement.
This Agreement and the Schedules and Exhibits to this Agreement, together
with the documents and instruments delivered pursuant to this Agreement,
constitute the entire contract between the parties to this Agreement
pertaining to the subject matter of this Agreement, and supersede all
prior and contemporaneous agreements and understandings between the
parties with respect to such subject matter, other than that certain
Agreement referred to in Section 7.3 hereof.
23
13.19 Construction.
Each party to this Agreement and its counsel have reviewed and revised
this Agreement. The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or of any amendments,
schedules or exhibits to this Agreement. Any reference to any federal,
state, local or foreign statute or law shall be deemed also to refer to
all rules and regulations promulgated under such statute or rule, unless
the context requires otherwise. The word "including" shall mean including
without limitation. The parties to this Agreement intend that each
representation, warranty and covenant in this Agreement shall have
independent significance. If any party has breached any representation,
warranty or covenant in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has
not breached shall not detract from or mitigate the fact that the party
is in breach of the first representation, warranty or covenant. Each of
the Schedules to this Agreement shall apply and constitute an exception
only to the enumerated specific representation and warranty to which such
Schedule makes reference, and shall apply only to the Company or
Subsidiary to which such Schedule makes specific reference.
13.20 Time of Essence.
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
13.21 Waiver.
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of
such right, power, or privilege or the exercise of any other right,
power, or privilege.
24
IN WITNESS WHEREOF, each of the parties has signed this Agreement, or has
caused this Agreement to be signed under seal by its duly authorized attorney or
officers, as of the date first above written.
SELLERS
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxxx X. X'Xxxxxxx
------------------------- ----------------------------------
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxx Xxxxxxxx /s/ Xxxxxxxxxxx X. Xxxxx
------------------------- ----------------------------------
Xxxxxxxxxxx X. Xxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxx Xxxxxxxx
------------------------- ----------------------------------
Xxx Xxxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxx
------------------------- ----------------------------------
Xxxxxxx Xxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxxx XxXxxxxxx
------------------------- ----------------------------------
Xxxxxxx XxXxxxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxxx
------------------------- ----------------------------------
Xxxxxx Xxxxxxxx by her attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxx Xxxxx
------------------------- ----------------------------------
Xxxxx Xxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxxxxx
------------------------- ----------------------------------
Xxxxxx Xxxxxxxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxx
------------------------- ----------------------------------
Xxxxxx Xxxxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxx Xxxxxx
------------------------- ----------------------------------
Xxxxx Xxxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxx Xxxxx
------------------------- ----------------------------------
Xxxxx Xxxxx by her attorney,
Xxxxxxx X. X'Xxxxxxx
25
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxx X'Xxxxxx
------------------------- ----------------------------------
Xxxxx X'Xxxxxx by her attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxx
------------------------- ----------------------------------
Xxxxxx Xxxxxxx by her attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxx XxXxxxxx
------------------------- ----------------------------------
Xxxxx XxXxxxxx by her attorney,
Xxxxxxx X. X'Xxxxxxx
Witness /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxxxxx Xxxxx
------------------------- ----------------------------------
Xxxxxxxxx Xxxxx by her attorney,
Xxxxxxx X. X'Xxxxxxx
Witness: /s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxx Xxxxxxxx
------------------------- -----------------
Xxxx Xxxxxxxx by his attorney,
Xxxxxxx X. X'Xxxxxxx
VICO LIMITED
ATTEST:
By: /s/ Xxxxxxx Xxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxx, Director Name: Xxxxxxx Xxxxx
Title: pursuant to Power of Attorney
[SEAL]
SAI (IRELAND) LIMITED
ATTEST:
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxx, Director Name: Xxxxxxx X. X'Xxxxxxx
Title: Director
[SEAL]
SAI AMERICA LIMITED
ATTEST:
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxx, Director Name: Xxxxxxx X. X'Xxxxxxx
Title: Director
[SEAL]
26
SAI RECRUITMENT LIMITED
ATTEST:
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxx, Director Name: Xxxxxxx X. X'Xxxxxxx
Title: Director
[SEAL]
x0XXXXXX.XXX LIMITED
ATTEST:
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxx, Director Name: Xxxxxxx X. X'Xxxxxxx
Title: Director
[SEAL]
SOFTWARE ARCHITECTS INTERNATIONAL
ATTEST:
By: /s/ Xxxxxxx X. X'Xxxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxx, Director Name: Xxxxxxx X. X'Xxxxxxx
Title: Director
[SEAL]
BUYER
CLARUS CORPORATION
ATTEST:
By: /s/ Xxxx X. Xxxxx
--------------------------
Name: Xxxx X. Xxxxx
Title: Chief Operating Officer/
Chief Financial Officer
[SEAL]
27
SCHEDULE I
Xxx Xxxxxxxx
Xxxxxxx Xxxxx
Xxxxxxx XxXxxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx X'Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx XxXxxxxx
Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxx
VICO LIMITED
28
SCHEDULE 2.2.1
Shareholder No. of Clarus Shares Cash receivable
-------------------- -------------------- ---------------
Xxxxxxxxxxx Xxxxx 481,360 4,440,000
Xxxxxxx X'Xxxxxxx 481,360 4,440,000
Xxx Xxxxxxxx 79,406 2,057,148
Vico Ltd. 52,937 1,371,426
Xxxx Xxxxxxxx 1,766 45,716
Xxxxxx Xxxxxxxxxx 5,294 137,144
Xxxxx XxXxxxxx 3,529 91,428
Xxxxxx Xxxxxxxx 3,529 91,428
Xxxxx X'Xxxxxx 3,529 91,428
Xxxxxx Xxxxxxx 3,529 91,428
Xxxxxxxxx Xxxxx 3,529 91,428
Xxxxx Xxxxx 3,529 91,428
Xxxxxxx XxXxxxxxx 3,529 91,428
Xxx Xxxxxxx 3,529 91,428
Xxxxx Xxxxxx 3,529 91,428
Xxxxx Xxxxx 3,529 91,428
Xxxxxxx Xxxxx 10,587 274,286
29
SCHEDULE 2.2.2
[INTENTIONALLY LEFT BLANK]
30
SCHEDULE 2.4
Xxxxx Xxxxx Product Manager 6500
Xxxxxxx Xxxxx Technical Director 10,000
Xxxxx Xxxxxx Project Manager 10,000
Xxxxxxxxx Xxxxx Support/Impl. Mgr. 5000
Xxxxxx Xxxxxxx Global Accts. Mgr. 3000
Xxxxxxx XxXxxxxxx Global Accts. Mgr. 7500
Xxxxxx Xxxxxxxx Finance & Admin 6500
Xxxxxx Xxxxxx SAI Recruitment 3000
Xxx Xxxxxxxx VP SAI America 15,000
Xxxxxxx Xxxxxx Educ. & Train. Mgr 3000
Xxxxxxx Xxxxxxx Tech Support 3000
Xxxxxx Xxxxxxx Support Team Leader 1000
Xxxxxxx Xxxxx Assoc. Acct. Mgr. 1500
Xxxxxx Xxxxx VP Client Services & ASP 15,000
J. Xxxx Xxxxx Technical Account Mgr 6000
Xxxxx XxXxxxxx Executive Asst. 1000
Xxxxxx XxXxxxxxx Admin Asst. 750
Xxxxxx Xxxxxxx Executive Asst. 1000
Xxxxx Xxxxx Personnel Asst 900
Xxxxx Xxxxx AS/400 Developer 2500
Xxxxxx X'Xxxxxxxx AS/400 Developer 2500
Con X'Xxxxxxx AS/400 Developer 2500
Xxx Xxxxxx CS Programmer 1500
Xxxxxx X'Xxxxx CS Programmer 1500
Xxxxxx Xxxxx CS Programmer 1500
Xxxxx X'Xxxxxx Network Admin 1000
Xxxxx Xxxxxx Application Cons. 1500
Xxxxxx Xxxxxxxxxx Technical Proj. Ldr. 2500
Xxx Xxxxxx Systems Architect 7500
Xxxxxx XxXxxxxxx Web Master 1500
Xxxx Xxxx Help Desk 1000
Xxxxx X'Xxxxxx Product Consultant 1000
Xxxxx Xxxx QA Consultant 1000
Xxxx Xxxxxxx AS/400 Programmer 3000
Xxxx X'Xxxxx Application Consul. 1500
Xxxx Xxxxxxx Application Consul. 1500
Xxxxx X'Xxxxx Consultant 1500
Xxxx Xxxxxxxx Consultant 1500
Xxx X'Xxxxxxxx Consultant 1500
31
Xxxxx Xxxxxxx Sales Director 7500
Xxxxxx Xxxxx C S Programmer 1500
Xxxxxx XxXxxxxxx Sales 2000
Xxxxxx Xxxxx Marketing Assistant 900
Xxxxxx X'Xxxxxx Xx. Accounts Assist. 900
Xxxx Xxxxxxx Client Manager 5000
32
